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SECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549

Form 10-K

[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

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

For the transition period
from                
to

Commission file no. 0-23687

STOCKHOUSE INC.(Exact
name of registrant as specified in its charter)

|Colorado                                      | 84-1379282                         
|--------------------------------------------- | -----------------------------------
|(State or other jurisdiction of incorporation | (I.R.S. EmployerIdentification No.)
|or organization)                              |                                    

Suite 500-750 West Pender Street Vancouver British
Columbia Canada V6C 2T7(Address of principal executive offices,
including zip code)

(604) 331-0995(Registrants telephone
number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

|Title of Each Class | Name of Each Exchange on Which
      Registered
|------------------- | -----------------------------------------------
|N/A                 | N/A                                            

Securities registered pursuant to Section 12(g) of the
Act:

Title of Each ClassCommon Stock, no par value

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes[ ] No[ x
]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes[ ] No[ x ]

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

1

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was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes[ x ]    No[
]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K[ ]

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 definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

|Large accelerated filer [ ] |                                               | Non-accelerated filer [ ]      
|--------------------------- | --------------------------------------------- | -------------------------------
|Accelerated filer [ ]       | (Do not check if a smaller reporting company) | Smaller reporting company [ x ]

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

The aggregate market value of common stock held by
non-affiliates of the registrant, based upon the average bid and ask price of
the registrants common stock on June 30, 2008 as reported for such date by the
OTC Bulletin Board was approximately $13,000,000. Common stock held by each
executive officer and director of the registrant and by each person who owns 5%
or more of the outstanding common stock have been excluded from this computation
because such persons may be deemed affiliates of the registrant. This
determination of affiliate status for this purpose does not reflect a
determination that any persons are affiliates for any other purposes.

The number of shares of the registrants common stock
outstanding as of March 30, 2009, the most recent practicable date prior to
filing of this report, was 41,295,922 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None

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|STOCKHOUSE INC                      
|------------------------------------
|FORM 10-K                           
|For the year ended December 31, 2008
|                                    
|TABLE OF CONTENTS                   

|PART I              
|--------------------
|ITEM
          1    
|ITEM
          1A   
|ITEM
          1B   
|ITEM
          2    
|ITEM
          3    
|ITEM
          4    
|                    
|PART II             
|ITEM
          5    
|ITEM
          6    
|ITEM
          7    
|ITEM
          7A   
|ITEM
          8    
|ITEM
          9    
|ITEM
          9A(T)
|ITEM
          9B   
|                    
|PART III            
|ITEM
          10   
|ITEM
          11   
|ITEM
          12   
|ITEM
          13   
|ITEM
          14   
|                    
|PART IV             
|ITEM
          15   
|                    

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FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking
statements can be identified by the use of predictive, future-tense or
forward-looking terminology, such as "believes," "anticipates," "expects,"
"estimates," "plans," "may," "intends," or similar terms. These statements
appear in a number of places in this report and include statements regarding the
intent, belief or current expectations of the Company, its directors or its
officers with respect to, among other things: (i) trends affecting the Company's
financial condition or results of operations, (ii) the Company's business and
growth strategies, (iii) the Internet and Internet commerce and (iv) the
Company's financing plans. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various factors
set forth under "Risk Factors Affecting Our Business" and elsewhere in this
report. The Company disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments. The
managements discussion and analysis of the Company contained in this Annual
Report on Form 10-K should be read in conjunction with the consolidated audited
financial statements and notes related thereto included elsewhere in this
report.

In this annual report the terms, “Stockhouse”, the “Company”, “we”, “us” and “our” refer to Stockhouse Inc.

Foreign Currency and Exchange Rates

All amounts in this annual report are stated in United States
Dollars unless otherwise indicated. For purposes of consistency, Canadian
Dollars have been converted into United States currency at the following
rates:

Per 1 US DollarAverage for 2008
    C$ 1.06Rate at December 31, 2008
    C$ 1.21


GENERAL INFORMATION

Stockhouse maintains a corporate website on the Internet at
http://www.stockgroup.com. As part of the rebranding of the Company following
the change of the Companys name from Stockgroup Information Systems Inc. to
Stockhouse Inc. on July 21, 2008, the corporate website is expected to be
transferred to our media property website http://stockhouse.com during the year
ending December 31, 2009. The information on, or that can be accessed through,
our website is not part of this report. All Stockhouse brand and product names
are trademarks or registered trademarks of Stockhouse Inc, in the United States
and other countries. This Form 10-K also contains additional trade names,
trademarks and service marks of other companies. We do not intend our use or
display of other parties trademarks, trade names or service marks to imply a
relationship with, or endorsement or sponsorship of, us by these other parties.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-K in conjunction with
other reports and documents that we file from time to time with the SEC. In
particular, please read our Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K that we file from time to time. You may obtain copies of these
reports directly from us or from the SEC at the SECs Public Reference Room at
100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about
obtaining access to the Reference Room by calling the SEC at 1-

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800-SEC-0330. In addition, the SEC maintains information for
electronic filers (including Stockhouse) at its website http://www.sec.gov.
Through our Internet website located at http://www.stockgroup.com, we make our
SEC filings on Forms 10-K, 10-Q and 8-K and any amendments to those filings
available free of charge as soon as reasonably practicable after electronic
filing with the SEC. Additional information respecting the Company is available
at www. sedar.com

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PART I

|ITEM 1 | BUSINESS
|------ | --------

**Our Company**

Stockhouse is a financial
information media company. Our technology platform aggregates real-time and
delayed data for stocks, mutual funds, commodities, options and ETFs, plus
financial analytics, content, news and collaborative functions. Our
StockHouse.com website, is an online financial portal focused on community
contributed content such as message boards, blogs, and contributed articles
which provide a targeted venue for advertisers. Our Stockstream suite of PC
desktop and mobile phone financial information products is licensed to
intermediaries such as global brokerage firms and media publishers to offer to
their customers and for their internal use.

We are a United States and
Canadian reporting public company. We were incorporated in 1994 in the state of
Colorado. Our shares are quoted on the FINRA OTC Bulletin Board under the symbol
STKH and are listed on the TSX Venture Exchange under the symbol SHC. Our
head office is in Vancouver, Canada, with regional offices in Toronto and
London. Our corporate website is www.stockgroup.com.

***Products and
Services***

We generate revenue through two
main product lines:

- Licencing and subscriptions of the Stockstream suite of desktop and
  mobile portfolio management and realtime financial information tools.
- Advertising on the StockHouse.com website

The majority of our revenues are recurring in nature.

Stockstream Licensing and Subscriptions

Stockhouse aggregates realtime
data for stocks, mutual funds, commodities, options and ETFs, plus financial
analytics, third party and StockHouse proprietary content created at our online
media property, news and collaborative functions. This data is presented in a
suite of desktop and mobile tools, sold to clients in the media, banking, stock
brokerage, financial advisor, insurance and other industries. White-labeled
versions of Stockstream tools are provided to investment advisor firms to offer
to the investors customers to track stocks, manage portfolios, read news, blog,
and access subscribed content. The product utilizes Stockhouses collaboration
technology to enable multiple parties to simultaneously view an online portfolio
and set alerts.

Potential clients are identified
through telemarketing, tradeshows and speaking events. Relationships are
developed through a direct sales force in North America and Western Europe and
through channel partners. Stockstream services include:

- Stockstream: streaming real-time portfolio manager
- Stockstream Mobile: real-time streaming market data and news for mobile
  devices.
- Real-time or delayed stock quotes on major Global exchanges;
- Company Snapshot: fundamentals, chart, news and regulatory filings;
- Market Summary: daily major indices, stock market gainers, decliners, most
  actives;
- Mutual Funds Center: daily prices, performance and charts;
- Portfolio Management System: updating values, transaction handling, alert
  capabilities;

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Economies of scale allow
Stockhouse to provide a service that is efficiently delivered and customized, at
substantial cost savings over the client building and managing these systems
internally. From a competitive standpoint, we provide premium data products,
with proprietary filters, analytics and features that are aimed at providing
financial institutions with competitive advantage to improve customer retention.
Our clients gain advantage in a number of ways:

- A reduction of cost and complexity by having Stockhouse use proprietary
  filters and analytics to aggregate and transform raw market data feeds into
  informative and actionable information.
- Private-labeled versions of the tools enable our clients to offer a unique
  set of tools consistent with their brand and market differentiation.
- Through unique collaboration technologies that help financial institutions
  enhance advisor- client communications and increase customer retention. By
  encouraging their users to consolidate investment tracking in Stockstream
  tools, financial institutions can gain valuable customer intelligence
  including assets and portfolios under management at other financial
  institutions.

***Advertising Services
on the StockHouse.com web portal***

The StockHouse.com web portal and
related websites and microsites provide an advertising outlet for a wide range
of advertising clients such as small and large agencies, media buyers, and
smaller publicly traded companies that need a cost-effective method of creating
awareness of their company in the investment community. Client relationships are
developed through inside sales campaigns and an outside sales force.

StockHouse.com offers financial
content aggregation from hundreds of sources, a comprehensive equities database,
and the message forums Bullboards and StockHouse Blogs. StockHouse offers
advertising agencies and media buyers access to high traffic website with a
focused user demographics. We believe there will be ongoing growth in the
advertising market and an increasing shift in advertisers use of the internet
versus traditional media. Advertising services are categorized as follows:

Display Advertising services are
targeted at media agencies, and focus on standard online advertising formats
such as leaderboard, big box and skyscraper placements on the StockHouse
website.

Investor Relations Advertising
services are targeted at small public companies seeking awareness, and focus on
high-impact press release dissemination, generating qualified investor leads,
and maximizing exposure to the market via StockHouse.com and,
InvestorMarketPlace.com content, and through email marketing campaigns.

***Competition***

Stockhouses competitors are
providers of other online portfolio management and financial content products,
and financial media sites that cater to active investors. Our key competitive
differentiators are the collaborative technologies that we serve through our
platform, our product design strategy that adds functionality to meet the
strategic needs of our clients, and user generated content from the StockHouse
investor community, qualified and ranked by StockHouses patent pending
technology StReET (StockHouse Reputation Engine
Technology).

The financial portal competitors
to StockHouse can be categorized into major financial portals (such as Yahoo!
Finance, MSN Money, CNN Money) and financial portals with user generated content
(such as Motley Fool). Competitors to Stockstream include players like IDC
eSignal, and Globe Investor.

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We believe the landscape for
financial websites is well established, with very strong barriers to entry for
new participants, particularly the need for a critical mass of users in sites
that generate content from the users of the community which is a key driver of
building more volume of content.

***Intellectual
Property, Proprietary Rights and Domain Names***

We own the domain names
stockhouse.com, stockhouse.ca, stockhouse.tv, stockgroup.com smallcapcenter.com,
and investormarketplace.com. We believe our ownership of these domain names
gives us adequate protection over them and we intend to continue to keep them in
our possession.

We issued new identifying logo
marks and a tag line for StockHouse in 2007. We own or are in the process of
applying for trademark registrations for StockHouse and/or its related logos
in the United States, Canada, the United Kingdom, Australia and Hong Kong. We
own trademarks for @ The Bell in the United States, Australia and Hong Kong.
Bullboards is trademarked in Canada and Australia and Investors Click Here
is trademarked in the United States. We may pursue or acquire other trademarks
in the future in addition to any other common law trademark rights that we may
have.

We protect our other intellectual
property through a combination of trademark laws, trade secret laws and
confidentiality agreements with our employees, customers, independent
contractors, agents and vendors. We pursue the registration of our domain names,
trademarks and service marks in the United States and internationally. Effective
trademark, service mark, copyright and trade secret protection may not be
available in every country in which our services and products are made available
online. We create some of our own content and obtain the balance of our content
from third parties. It is possible that we could become subject to infringement
or defamation actions based upon the content obtained from these third parties.
In addition, others may use this content and we may be subject to claims from
our licensors.

In January 2007, we acquired the
intellectual property assets of the Mobile Finance Division (MFD) of
TeleCommunications Systems, Inc. (TCS), of Owings Mills, Maryland, USA. These
assets comprise trademarks and technology, relating to the TCSs Marketstream
product line, which distributes financial market data, news, and analytics, like
charting and portfolio functionality, via mobile devices. We also acquired all
assets and liabilities of TCSs European operations by means of a share purchase
transaction.

In May 2007, we acquired the
intellectual property assets of the Financial Data Business of Semotus
Solutions, Inc. of Los Gatos, California, USA (Semotus). These assets comprise
trademarks plus technology that allows mobile data users to schedule data
delivery at selected intervals or based on triggering events, as a
cost-effective alternative to realtime streaming data solutions for markets
where the cost of bandwidth and streaming data is price prohibitive.

We currently have one patent
application pending in the Canadian Intellectual Property Office.

We enter into confidentiality
agreements with our employees and independent consultants and have instituted
procedures to control access to and distribution of our technology,
documentation and other proprietary information and the proprietary information
of others from whom we license content. The steps we take to protect our
proprietary rights may not be adequate and third parties may infringe or
misappropriate our trademarks, service marks and similar proprietary rights. In
addition, other parties may assert claims of infringement of intellectual
property or alter proprietary rights against us. The legal status of
intellectual property on the Internet is currently subject to various
uncertainties as legal precedents have not been set and are still to be
determined in many areas of Internet law.

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***Regulatory
Issues***

We are subject to government
regulation in connection with securities laws and regulations applicable to all
publicly owned companies, as well as laws and regulations applicable to
businesses generally. We are also increasingly subject to government regulation
and legislation specifically targeting Internet companies, such as privacy
regulations adopted at the local, state, national and international levels and
taxes levied at the state level. Due to the increasing popularity and use of the
Internet, enforcement of existing laws, such as consumer protection regulations,
in connection with Web-based activities has become more aggressive, and it is
expected that new laws and regulations will continue to be enacted at the local,
state, national and international levels. Such new legislation, alone or
combined with increasingly aggressive enforcement of existing laws, could
inhibit the growth in use of the Internet and decrease the acceptance of the
Internet as a communications and commercial medium, which could in turn decrease
the demand for our services or otherwise have a material adverse effect on our
future operating performance and business. See Risk Factors  We Face
Government Regulation and Legal Uncertainties.

***Product
Development***

We believe that each new product
in our pipeline is developed to meet the needs to our growing corporate and
individual investor client base and remains centered upon helping investors
create and manage their wealth.

In 2008, we launched our new
mobile product offering Stockstream Mobile and our new version of a widely
updated StockHouse.com website. Our new mobile platform features global content,
up to 3000 symbols on 50 watch lists, real time news, commodity and FX
information. The new version of StockHouse includes a proprietary reputation
filtering system to delinate the quality of individual contributors who
contribute information to our StockHouse community. We believe this is the first
reputation system of its kind for user generated content in the financial
markets. The new StockHouse also includes new portfolio sharing, advanced
content ratings, upgraded market data tools and integrated social networking
features for individual investors.

Our product development group,
located in Vancouver, is responsible for the project management, design,
development, quality assurance and release of product enhancements, upgrades and
new products. Research and development expenses were $1,434,000 in 2008 and
$1,925,000 in 2007.

***Equipment***

We have made additional
investments in servers and computer equipment required for our websites,
streaming of data and hosting services. Part of this additional capacity was to
satisfy growing demand for our products and services, part to power the new
StockHouse.com website, and part to consolidate our worldwide wireless
operations. We also provisioned a remote data center to provide redundant
failover, and we have assigned additional staff towards maintenance and support
of these services.

***Employees***

In June 2008 in anticipation of a
slow down in the general financial markets we reduced our staff by 13 members or
15%. In October 2008, owing to a rapid deterioration in the financial markets
and our advertising revenue, we undertook a cost restructuring program, reducing
our staff by a further 19 members, or 27%, including three senior executive
roles. The total associated liability was $76,000, of which we paid had $61,000
at December 31, 2008. We paid the remaining liability of $15,000 by January 31,
2009. No leases for facilities or equipment were modified or terminated.

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As of December 31, 2008, we
employed 46 people on a full-time basis. None of our employees, worldwide, are
subject to collective bargaining agreements. We have executive employment
agreements with our executive officers as further described in Item 11.
Executive Compensation, under the heading Employment Contracts and Termination
of Employment and Change-in-Control Arrangements.

***Corporate Background
of Stockhouse***

From 1995 to 1999 we operated a
financial market information publishing business and website, aimed at public
company clients. We used the funds from a public offering in the spring of 1999
to provide the foundation for the development and mass marketing of our
services. In October 1999 we launched the website SmallCapCenter.com. At that
time we believed that a subscription/advertising model centering around small
cap content was viable. While parts of this business model did not prove to be
profitable, the exercise of building SmallCapCenter and its related investment
tools gave us certain experience and skills, and a suite of service products to
sell commercially. SmallCapCenter.com exists to this day.

We entered the financial software
and content market late in 2000 by licensing our proprietary content and
applications to clients who needed to improve their offering their financial
customers and users. Our licensed content model is attractive to clients because
it is a comprehensive and cost effective alternative to in-house development.

From 2001 to 2002 we expanded our
product suite to include market sector supplements and automated webpage tools
such as the IntegrateIR. We already had a public company customer base, so the
transition into this area was a natural extension. We acquired the website and
certain related assets to run the StockHouse brand in 2004. For 2005 and 2006,
we continued to grow our financial media business and in January 2007 made a
significant purchase of a provider of wireless solutions provider as described
below.

***Business Acquisition
 Mobile Finance Division of TeleCommunication Systems, Inc.***

On January 31, 2007, we closed a
transaction for the purchase of the Mobile Finance Division of TeleCommunication
Systems, Inc. Below is a description of the acquired business, known as MFD. We
believe that having a platform for mobile delivery of our content and the
StockStream product, is an important part of our strategy for growing enterprise
and retail customers. We further believe that adding this capability will
provide us with an additional channel of distribution to existing customers, and
scalability in distributing our content.

MFD acquires financial data and
news from global information companies, packages it, and delivers it to selected
Blackberry®1 phones and pagers. Non-pager services are marketed under
the MarketStream brand. Pager subscriptions are declining as newer mobile
devices become available; however, in many cases MFD pager customers convert to
the newer MarketStream and now Stockstream Mobile product. The customer base is
in North America and Europe and is serviced primarily out of the companys
offices in Vancouver, Canada and London, UK.

The product primarily serves
wealth management, capital markets and advisory companies. These institutions or
their employees purchase subscriptions, typically one year in length. Sales
efforts target financial institutions with large numbers of traders and
investment professionals. Our clients, including brokerages, banks, large news
websites and traditional media outlets, are encountering competitive pressures
to improve their financial content offerings. We believe that the continued
expansion of smart phone usage by investors and investment professionals continues
to drive demand for the services provided by our mobile finance business.

_________________________________1® BlackBerry
is the exclusive property and trademark of Research In Motion Limited.
BlackBerry is registered with the U.S. Patent and Trademark Office and may be
pending or registered in other countries.

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Acquisition of Semotus Solutions Inc.

On May 8, 2007, we entered into a
purchase agreement with Semotus Solutions Inc. (Semotus), whereby we agreed to
acquire the financial information services assets of Semotus, a California based
provider of mobile enterprise software solutions. We agreed to pay Semotus up to
$350,000.00. The purchase price of $150,000 was paid on closing of the
transaction. The remainder is payable at a rate of 30% of monthly gross revenues
earned from customer contracts purchased from Semotus until an additional
$200,000 is paid or within two years whichever occurs first. If the gross
revenues fall below 25% of prior revenue within the first nine months post
close, the amount payable monthly will decrease to 15% of monthly gross
revenues. Furthermore, should monthly gross revenues fall below $15,000 per
month at any time; the purchase price will be deemed paid in full. As of
December 31, 2008, monthly gross revenues were below $15,000 per month and the
purchase price was deemed paid in full.

The Semotus software targets the
individual investor, by employing a polling technology that allows users to
schedule data delivery at selected intervals or based on triggering events. We
believe the polling technology is a cost-effective alternative to streaming
market data solutions in markets where the cost of bandwidth and streaming data
is price prohibitive.

Late in 2008, the MarketStream
and Semotus products were replaced with Stockstream Mobile our new global mobile
platform.

|ITEM 1A | RISK FACTORS
|------- | ------------

Risk Factors Affecting Our Business

We operate in a rapidly changing environment that involves
numerous uncertainties and risks. The following section describes some, but not
all, of these risks and uncertainties that may adversely affect our business,
financial condition or results of operations. This section should be read in
conjunction with the unaudited consolidated financial statements and the
accompanying notes thereto including the cautionary statement on forward
looking statements of this annual report and other parts of Managements
Discussion and Analysis included in this Report on Form 10-K. Additional factors
and uncertainties not currently known to us or that we currently consider
immaterial could also harm our business, operating results and financial
condition.

Risks Factors Related to Our Business

We have a history of operating losses and we cannot
predict if or when we will be profitable

We have a history of operating
losses in the past years, including net losses of $6,296,000 for the year ended
December 31, 2008. At December 31, 2008, the Company held cash and cash
equivalents of $728,000 and had a net working capital deficit of $1,830,000. Net
working capital is defined as current assets minus current liabilities excluding
current deferred revenues. At March 30, 2009 the Company held cash and cash
equivalents of $489,018. These conditions raise doubt about the Companys
ability to continue as a going concern.

General economic conditions deteriorated during 2008 and the
Companys revenue, operating results and cash flows were significantly impacted
by the economic slowdown. The duration and depth of this economic slowdown in
markets in which the Company operates will continue to impact the Companys

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future advertising and subscription revenue. Management acted
to reduce the Companys operating costs in the second, third, and fourth
quarters of 2008, which included downsizing the number of staff and executives,
renegotiating contracts with significant vendors to reduce costs, and closing
unprofitable locations in Europe. Management believes that as a result of these
cost reductions the Company has sufficient resources for the next twelve months
to meet its obligations as they fall due in the ordinary course of business

We will also finance any further
cash requirements, if necessary, through further debt or equity financings.
There is no assurance, however, that additional can be obtained, or if obtained,
on terms that are acceptable to the Company. The accompanying consolidated
financial statements do not include any adjustments to reflect the possible
future effects on recoverability and classification of assets or liabilities
should the Company not be able to continue as a going concern.

Computer equipment problems and failures could adversely
affect business.

Problems or failures in Internet-related equipment, including
file servers, computers and software, could result in interruptions or slower
response times for our web-based services, which could reduce the attractiveness
of our website and financial tools to our customers and users. In addition, our
customers rely on us for time-sensitive, up-to-date data that is reliably
delivered. Our business is dependent on our ability to rapidly and efficiently
process substantial quantities of data on our computer-based networks and
systems. Should interruptions continue for an extended period we could lose
significant business and our reputation could be damaged. Equipment problems and
failures could result from a number of causes, including an increase in the
number of users of our website, computer viruses, outside programmers
penetrating and disrupting software systems, human error, fires, floods, power
and telecommunications failures and internal breakdowns. In addition, any
disruption in Internet access and data feeds provided by third parties could
have a material and adverse effect on our business. If we experience a major
disaster such as a fire, theft, or intentional destruction of our computer
equipment, we cannot be certain of the extent of the disruption to our business.

Our competitors may be successful in attracting the
clients that we are targeting for our advertising and media services, with the
result that our revenues and ability to generate profit from our operations may
be reduced.

We compete in the advertising and communications industry which
is highly competitive and which we believe will become more competitive as the
business of commercial communication and advertising advances. Our competitors
range from large multinational companies to smaller agencies that operate in our
target markets. These potential competitors also range from traditional
advertising agencies to new media companies that are integrating traditional
advertising services with new media advertising services, such as digital media
counseling. In addition, new competitors are emerging who will compete with our
business strategy of providing integrated media and advertising professional
services. Both existing and new competitors will likely seek to target the same
customers that we are targeting, both using traditional advertising models and
the integrated media services business model that we are pursuing. In addition,
many of these new competitors will have greater financial and operational
resources than we do. The ability of our existing and potential competitors to
attract the customers and advertising and media service work that we are
targeting will reduce the revenues that we are able to achieve from our business
activities, will reduce our market share and decrease our ability to generate
profit from our operations.

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We may have difficulty scaling and adapting our existing
architecture to accommodate increased traffic and technology advances or
changing business requirements, which could lead to the loss of customers and
advertisers, and cause us to incur expenses to make architectural
changes.

To be successful, our network infrastructure has to perform
well and be reliable. The greater the user traffic and the greater the
complexity of our products and services, the more computing power we will need.
We have spent and expect to incur costs related to the purchase of computer
equipment, the upgrade of our technology and network infrastructure to handle
increased traffic on our web sites and our servers, and to roll out new products
and services. This expansion is expensive and complex and could result in
inefficiencies or operational failures. If we do not expand successfully, or if
we experience inefficiencies and operational failures, the quality of our
products and services and our users and customers experience could decline.
This could damage our reputation and lead us to lose current and potential
users, customers and advertisers. Cost increases, loss of traffic or failure to
accommodate new technologies or changing business requirements could materially
harm our operating results and financial condition.

We may not be able to compete successfully against
current and future competitors.

We currently compete with several other companies offering
similar services. Many of these companies have significantly greater financial
resources, name recognition, and technical and marketing resources, and
virtually all of them are seeking to improve their technology, products and
services. We cannot assure that we will have the financial resources or the
technological expertise to meet this competition successfully.

We are dependent on activity levels in the securities
market. Negative worldwide economic conditions could result in a decrease in our
sales and revenue and an increase in our operating costs, which could adversely
affect our business and operating results.

Our business is dependent upon the health of the financial
markets as well as the financial health of the participants in those markets.
Some of the financial data and information market demand is dependent on
activity levels in the securities markets while other demand is static and is
not dependent on activity levels. Since October 2008, the U.S. and international
financial markets have taken as significant loss and continue to be very
volatile. In the event that the downturn in the U.S. or international financial
markets is prolonged and results in a significant decline in investor activity,
our revenue levels could be materially adversely affected. If the current
worldwide economic downturn continues, many of our current or potential future
customers may experience serious cash flow problems and as a result may, modify,
delay or cancel purchases of our services. Additionally, customers may not be
able to pay, or may delay payment of, accounts receivable that are owed to us.
Furthermore, the current downturn and market instability makes it difficult for
us to forecast our revenues.

We face government regulation and legal
uncertainties.

The growth and development of the market for Internet commerce
and communications has prompted both federal and state laws and regulations
concerning the collection and use of personally identifiable information
(including consumer credit and financial information under the
Gramm-Leach-Bliley Act), consumer protection, the content of online
publications, the taxation of online transactions and the transmission of
unsolicited commercial email, popularly known as spam. More laws and
regulations are under consideration by various governments, agencies and
industry self-regulatory groups. Although our compliance with applicable federal
and state laws, regulations and industry guidelines has not had a material
adverse effect on us, new laws and regulations may be introduced and
modifications to existing laws may be enacted that require us to make changes to
our business practices. Although we believe that our practices are in compliance
with applicable laws, regulations and policies, if we were required to defend
our practices against investigations of state or federal agencies or if our
practices were deemed to be violating applicable laws, regulations or policies,
we could be penalized and our activities enjoined.

13

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Any of the foregoing could increase the cost of conducting
online activities, decrease demand for our services, lessen our ability to
effectively market our services, or otherwise materially adversely affect our
business, financial condition and results of operations.

Our ability to comply with all applicable securities laws
and rules is largely dependent on our establishment and maintenance of
appropriate compliance systems (including proper supervisory procedures and
books and records requirements), as well as our ability to attract and retain
qualified compliance personnel.

Because we operate in an industry subject to extensive
regulation, new regulation, changes in existing regulation, or changes in the
interpretation or enforcement of existing laws and rules could have a material
adverse effect on our business, results of operations and financial condition.

We may be unable to protect the intellectual property
rights upon which our business relies.

We have or may pursue certain trademarks, and we have brand
names, Internet domain names, website designs, programs and certain subscriber
lists which make up the intellectual property we view as important to our
business. It may be possible for a third party to copy or otherwise obtain or
use our intellectual property without authorization or to develop similar
technology independently. There can also be no assurance that our business
activities will not infringe upon the proprietary rights of others, or that
other parties will not assert infringement claims against us, including claims
that by, directly or indirectly, providing hyperlink text links to websites
operated by third parties, we have infringed upon the proprietary rights of
other third parties. Due to the global nature of the Internet, there can be no
assurance that obtaining trademark protection in the United States will prevent
infringements on our trademarks by parties in other countries. We have not
sought or obtained any patents on our proprietary software and data processing
applications.

Litigation may be necessary in the future to enforce our
intellectual property rights, to protect trade secrets or patents that we may
obtain, or to determine the validity and scope of the proprietary rights of
others. Such litigation could result in substantial costs and diversion of
resources and could have a material adverse effect on our future operating
results.

An interruption in the supply of products and services
that we obtain from third parties could cause a decline in sales of the services
from our company, and products we purchase to avoid shortages may become
obsolete before we can use them.

In designing, developing and supporting the data services of
our company, we have relied on wireless carriers, wireless handheld device
manufacturers, content providers, software providers and companies that manage
some of our other services such as our internal IT operations and customer care
services. These suppliers may experience difficulty in supplying us products or
services sufficient to meet our needs or they may terminate or fail to renew
contracts for supplying us these products or services on terms we find
acceptable. Any significant interruption in the supply of any of these products
or services could cause a decline in sales of our services unless and until we
are able to replace the functionality provided by these products and services.
We also depend on third parties to deliver and support reliable products,
enhance our current products, develop new products on a timely and
cost-effective basis and respond to emerging industry standards and other
technological changes. In addition, we rely on the ability of our content
providers to continue to provide us with uninterrupted access to the news and
financial information we provide to our customers. The failure of third parties
to meet these criteria, or their refusal or failure to deliver the information
for whatever reason could materially harm our business and would also affect our
ability to sell our products.

14

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Our industry is a rapidly evolving market therefore our
product and service offerings could become obsolete unless we respond
effectively and on a timely basis to rapid technological changes.

The successful execution of our business strategy is contingent
upon wireless network operators launching and maintaining mobile location
services, our ability to create new software and adapt our existing software
products and website to rapidly changing technologies, industry standards and
customer needs. As a result of the complexities inherent in our product
offerings, new technologies may require long development and testing periods.
Additionally, new products may not achieve market acceptance or our competitors
could develop alternative technologies that gain broader market acceptance than
our products. If we are unable to develop and introduce technologically advanced
products that respond to evolving industry standards and customer needs, or if
we are unable to complete the development and introduction of these products on
a timely and cost effective basis, we will have incurred substantial resources
without realizing the anticipated revenues, which would have an adverse effect
on our results of operations and financial condition.

The applicability to the Internet of existing laws governing
issues such as intellectual property ownership and infringement, copyright,
trademark, trade secrets, taxation, obscenity, libel, employment and personal
privacy is uncertain and developing. Any new legislation or regulation, or the
application or interpretation of existing laws, may have a material adverse
effect on our business, results of operations and financial condition.
Additionally, modifications to our business plans or operations to comply with
changing regulations or certain actions taken by regulatory authorities may
increase our costs of providing our product and service offerings and materially
adversely affect our financial condition.

If mobile equipment manufacturers do not overcome capacity,
technology and equipment limitations, we may not be able to sell our products
and services.

The wireless technology currently in use by most wireless
carriers has limited bandwidth, which restricts network capacity to deliver
bandwidth-intensive applications like data services to a large number of users.
Because of capacity limitations, wireless users may not be able to connect to
their network when they wish to, and the connection is likely to be slow,
especially when receiving data transmissions. Data services also may be more
expensive than users are willing to pay. To overcome these obstacles, wireless
equipment manufacturers will need to develop new technology, standards,
equipment and devices that are capable of providing higher bandwidth services at
lower cost. We cannot be sure that manufacturers will be able to develop
technology and equipment that reliably delivers large quantities of data at a
reasonable price. If more capacity is not added, a sufficient market for our
products and services is not likely to develop or be sustained and sales of our
products and services would decline and our business would suffer.

Some mobile operators charge fees for data
usage.

Our wireless service is a live streaming service which uses
continued bandwidth and wireless usage charges. In the event that some wireless
providers do not provide unlimited data at a flat rate, this may limit market
acceptance of our product due to the cost of data service when used on a
sustained basis. Some wireless providers who do offer flat rates do not allow
the continuous data stream functionality on Blackberry® devices to be activated
may limit our sales.

We depend on Key Personnel. The Loss of Key Personnel and
Difficulty Attracting and Retaining Qualified Personnel Could Harm Our Business.

We depend on the continued contributions of our executive
officers, sales, technical and other critical personnel to execute our business
plan. We believe our success depends heavily on the contributions of our
employees and on attracting, motivating and retaining our officers and other
management and technical personnel. Competition for such personnel is intense
and there can be no assurance that we will

15

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be able to attract and retain such personnel. The loss of the
services of any key personnel, the inability to attract and retain qualified
personnel in the future, or any delays in hiring required personnel,
particularly technical engineers and sales personnel, could have a material
adverse affect on our business, results of operations and financial
condition.

We may fail to support our anticipated growth in
operations which could reduce demand for our services and materially adversely
affect our revenue.

Our business strategy is based on the assumption that the
number of customers, the amount of information they want to receive and the
number of services we offer will all increase. We must continue to develop and
expand our systems and operations to accommodate this growth. In addition,
information technology has dropped dramatically in price over the past years and
is expected to continue to drop, such that more customers will be required to
maintain the same levels of revenue. The expansion and adaptation of our systems
operations requires substantial financial, operational and management resources.
Due to the limited deployment of our services to date, the ability of our
systems and operations to connect and manage a substantially larger number of
customers while maintaining superior performance is unknown. Any failure on our
part to develop and maintain our wireless data services as we experience rapid
growth could significantly reduce demand for our services and materially
adversely affect our revenue.

We may be held liable for online information or services
provided by third parties or us.

Because materials may be downloaded by the public on Internet
services offered by us or the Internet access providers with whom we have
relationships, and because third party information may be posted by third
parties on our website through discussion forums and otherwise, there is the
potential that claims will be made against us for defamation, negligence,
copyright or trademark infringement or other theories. Such claims have been
brought against providers of online services in the past. To date we have been
named in at least one lawsuit in which defamation is alleged to have occurred on
our Internet discussion forum called Bull Boards. The imposition of liability
based on such claims could materially and adversely affect us.

Even to the extent such claims do not result in liability, we
could incur significant costs in investigating and defending against such
claims. The imposition on us of potential liability for information or services
carried on or disseminated through our website could require implementation of
measures to reduce exposure to such liability, which may require the expenditure
of substantial resources and limit the attractiveness of services to members and
users.

We post news clippings from other news websites on the
Stockhouse and SmallCapCenter websites with links to the source site. Most
publishers currently encourage this practice, although certain publishers have
requested that we cease posting their stories. We have complied with their
request in each case. To the extent that a large majority of news publishers
prohibit posting of their stories on our websites or begin charging royalty fees
for such stories, our website traffic could decrease or our costs could
increase, thereby adversely impacting our profitability.

We generally purchase data including trademarked and
copy-written data that may or may not be under contract. The advancement in
technologies and increased sophistication of systems is resulting in increased
scrutiny of data and costs. We attempt to stay current with all vendors however
the timing of identifying the vendors and costs of data may cause significant
increase in cost of rates.

Our general liability insurance will not cover all potential
claims to which we are exposed or may not be adequate to indemnify us for all
liability that may be imposed. Any imposition of liability that is not covered
by insurance or is in excess of insurance coverage could have a material adverse
effect on our business, results of operations and financial condition.

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We may pursue strategic acquisitions and investments that
could have an adverse effect on our business if they are
unsuccessful.

As part of our business strategy, we have acquired companies
and may continue to acquire companies, technologies and product lines to
complement our internally developed products. In January 2007, we acquired the
Mobile Finance Division of TeleCommunication Systems Inc. The benefits of this
acquisition have not fully materialized to date and we have incurred greater
costs than anticipated in integrating the acquired division into our business.
It is possible that the contemplated benefits of future acquisitions may not
materialize within the time periods or to the extent anticipated. Critical to
the success of this strategy in the future and, ultimately our business as a
whole, is the orderly, effective integration of acquired businesses,
technologies, product lines and employees into our organization. If this
integration is unsuccessful, our business will suffer. There is also the risk
that our valuation assumptions and models for the acquired product or business
may be overly optimistic or inaccurate if customers do not demand the acquired
companys products to the extent we expect, the technology does not function as
we expect or the technology we acquire is the subject of infringement or trade
secret claims by third parties.

The identification of acquisition candidates is difficult and
we may not correctly assess the risks related to such acquisitions and
investments. In particular, our determinations and assessments of acquisition
candidates involve assessments of the financial performance of the acquisition
candidates and past financial performance that we observe may not be indicative
of future financial performance. In addition, acquisitions could be effected on
terms less satisfactory to us than expected and the newly acquired companies may
not be successfully integrated into our cohesive operations or in a way that
produces the synergies or other benefits we hope to achieve. If these risks
materialize, the benefit that we derive from businesses that we acquire may be
less than the costs to us of acquiring these businesses, with the result that
our operating losses could increase.

Because our product and service offerings are sold
internationally, we are subject to risks of conducting business in foreign
countries.

During the year ended December 31, 2008, our primary customer
base was in North America and Europe. In addition, a portion of the revenue
historically generated by our company has typically been generated outside the
United States. We believe our revenue will be increasingly dependent on business
in foreign countries, and we will be subject to the social, political and
economic risks of conducting business in foreign countries, including:

- inability to adapt our products and services to local business practices,
  language, customs and mobile user preferences;
- costs of adapting our product and service offerings for foreign markets;
- inability to locate qualified local employees, partners and suppliers;
- reduced protection of intellectual property rights;
- the potential burdens of complying with a variety of U.S. and foreign
  laws, trade standards and regulatory requirements, including the regulation of
  wireless communications and the Internet and uncertainty regarding liability
  for information retrieved and replicated in foreign countries;
- general geopolitical risks, such as political and economic instability and
  changes in diplomatic and trade relations; and
- unpredictable fluctuations in currency exchange rates.

Any of the foregoing risks could have a material adverse effect
on our business by diverting resources toward addressing them or by reducing or
eliminating sales in such foreign countries.

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The Wireless Industry is Experiencing Rapid Technological
Change, and We May Lose Customers If We Fail to Keep Up With These Changes.

The wireless communications industry is experiencing
significant technological change, as evidenced by the ongoing improvements in
the capacity and quality of digital technology, the development and commercial
acceptance of wireless data services, shorter development cycles for new
products and enhancements and changes in end-user requirements and preferences.
The cost of implementing or competing against future technological innovations
may be prohibitive to us, and we may lose customers if we fail to keep up with
these changes.

Our legacy pager business is deteriorating
rapidly.

Through the purchase of MFD, we acquired their legacy business
of providing financial information to pager devices. Pagers represented the
majority of the revenue of the Mobile Finance Division at acquisition. Most
customers have been with the company for years but are changing to other types
of wireless devices. The company has seen a rapid loss of subscribers for its
pager service and there can be no assurance that the Company can convert the
subscribers to its Marketstream wireless offering. In addition,
telecommunication companies are shutting down their pager networks and rendering
the service inoperable. If this occurs in countries we operate in, we would be
unable to service our pager customers.

Involvement in Certain Legal Proceedings.

We are involved in various legal matters which arise from
time-to-time in the ordinary course of business, none of which we believe is
material to our results of operations, liquidity or financial condition at this
time. We cannot reasonably estimate at this time whether a monetary settlement
will be reached or predict the ultimate resolution of these legal matters.

Our Business and Stock Price May Be Adversely Affected If
Our Internal Controls Are Not Effective.

Section 404 the Sarbanes-Oxley Act of 2002 requires companies
to conduct a comprehensive evaluation of their internal control over financial
reporting. To comply with this statute, we are required to document and test our
internal control over financial reporting and our management is required to
assess and issue a report concerning our internal control over financial
reporting. Our independent registered public accounting firm is not required to
report on the effectiveness of our internal control over financial reporting.

As described in Part II  Item 9A. Controls and Procedures of
our Form 10-K for the year ended December 31, 2008 our Chief Executive Officer
and Chief Financial Officer concluded, as discussed below, that a material
weakness existed in our control over financial reporting as of December 31, 2008
and as a result, that our disclosure controls and procedures were not
effective.

Management has and continues to evaluate its key financial
processes to assess risk of material weaknesses. As a result of finalizing the
Companys annual consolidated financial statements, management has identified
several significant deficiencies in the effectiveness of internal controls over
financial reporting in its financial close and reporting processes. Management
believes that, when considered in the aggregate, these significant deficiencies
constitute a material weakness

Although we believe we are taking appropriate actions to
remediate the control deficiencies we have identified and to strengthen our
internal control over financial reporting, we cannot assure you that we will not
discover other material weaknesses in the future. The existence of one or more
material weaknesses could result in errors in our financial statements, and
substantial costs and resources may be required to rectify these or other
internal control deficiencies. If we cannot produce reliable financial

18

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reports, investors could lose confidence in our reported
financial information, the market price of our common stock could decline
significantly, we may be unable to obtain additional financing to operate and
expand our business, and our business and financial condition could be
harmed.

Risk Factors Related to Ownership of Our Common
Stock

We are significantly influenced by our officers,
directors and entities affiliated with them.

In the aggregate, beneficial ownership of our shares by our
directors and officers represents approximately 19% of issued and outstanding
shares of our common stock at March 30, 2009. These shareholders, if acting
together, will be able to influence significantly all matters requiring approval
by shareholders, including the election of directors and the approval of mergers
or other business combinations transactions.

Trading of our stock may be restricted by the SECs penny
stock regulations, which may limit a shareholders ability to buy and sell our
stock.

The Securities and Exchange Commission (the SEC) has adopted
regulations which generally define penny stock to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and accredited investors. The term accredited investor refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

Future issuances of shares may adversely impact the value
of our stock.

We may attempt to raise additional capital through the sale of
common stock and issuance of preferred shares in the future. Future issuances of
common stock may dilute your position in us.

Our stock price is vulnerable to buying and selling
pressures.

As there is a limited market for our common stock, there may be
considerable volatility in our stock price due to selling and buying pressures.
Future sales of shares by our existing or future shareholders could cause the
market price of our common stock to decline. At March 30, 2009, there were
41,295,922 issued and outstanding shares of our common stock; however, a portion
of these shares are subject to trading restrictions in the United States.

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Our Board of Directors may authorize and issue preferred
shares.

Our Board of Directors have the authority to issue preferred
shares with rights, preferences and/or privileges senior to or on parity with
the rights of the holders of common stock. Our Board of Directors approved the
issuance of 5,000,000 preferred shares and the Company issued 3,000 of these
shares in May 2008. The potential consequences to our investors include a loss
of perceived value of the stock in the market and a loss of future earnings and
dividends, if and when dividends are declared.

Some of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of their assets are located outside the United States. As a result, you
may have no effective recourse against the management for misconduct and it may
be difficult for investors to enforce within the United States, any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any U.S. state.

|ITEM 1B | UNRESOLVED STAFF COMMENTS
|------- | -------------------------

None

|ITEM 2 | PROPERTIES
|------ | ----------

We do not own any real property or any rights to acquire any
real property. Our head office is located at Suite 500  750 West Pender St.,
Vancouver, B.C. V6C 2T7 Canada. Our corporate offices are composed of one floor
of leased space located in the center of Vancouvers business community. We also
lease premises in Toronto.

The following is a summary of our lease commitments:

Location
    Term
    Square Feet
    Monthly Commitment(in thousands of Dollars)Vancouver, B.C.
    4 years
    9,475
    $ 30,000Toronto, Ont.
    5 years
    3,340
    $ 5,400


|ITEM 3 | LEGAL PROCEEDINGS
|------ | -----------------

The Company was the plaintiff in a lawsuit filed in Ontario
Superior Court of Justice against Hollinger Inc. and Hollinger Canadian
Publishing Holdings Co in which the Company sought to recover approximately
$457,000 from the defendant. The defendant was a vendor to the Company and the
amount sought by the Company consisted of unused advertising credits which were
prepaid by the Company in 1999. The case was resolved by a negotiated settlement
during the first quarter of 2008 and the defendant paid $340,000 to the Company
in full settlement.

The Company was the defendant in a lawsuit filed in the Supreme
Court of British Columbia by the plaintiff, Tanis Churchill. The Plaintiff, a
former employee of the Company, sought damages, interest and costs in the order
of approximately $218,000 for alleged wrongful dismissal from her employment
with the Company. The matter was heard by the Supreme Court of British Columbia
in a trial which began on December 3, 2007 and ended on December, 2007. On May
8, 2008 the Supreme Court found in favor of the plaintiff and awarded damages in
the amount of $11,000, plus costs.

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The Company is the plaintiff in a lawsuit filed in the
Commercial & Equity Division of the County Court of Victoria in Melbourne,
Australia against The Eight Black Partnership Pty and Simon Chen, in which the
Company seeks to recover approximately $435,000 from the defendant. The
defendant was a reseller of the Companys Marketstream service in Australia and
the amount sought by the Company consists of unpaid Marketstream subscription
fees from July 2006 to May 2007, plus interest. The case is currently pending
final resolution and there is uncertainty as to what value, if any, will be
derived from the lawsuit. No provision has been made for recovery of these
credits in the financial statements in any period.

During 2008, an employee of the Companys Dutch subsidiary made
an application to the District Court of Amsterdam, the Netherlands requesting
the Court to order the Company to restore his access to Company systems and
continue paying his salary. He further requested that the Court order the
temporary restriction of funds then held in the Subsidiarys Benelux bank
accounts, until the terms of his employment could be determined. The Court
granted this application and ordered the transfer of €89,110 ($131,000) from the
operating bank accounts to a restricted account. This amount is classified as
restricted cash on the consolidated balance sheet at December 31, 2008.
Subsequent to the year end the matter was resolved by negotiation and the
restriction on the Companys funds lifted.

In addition to the above, the Company is involved in various
other legal matters which arise from time-to-time in the ordinary course of the
Companys business, none of which is believed to be material to its results of
operations, liquidity or financial condition at this time. Unless otherwise
noted, the Company cannot reasonably estimate at this time whether a monetary
settlement will be reached or predict the ultimate resolution of these legal
matters.

|ITEM 4 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
|------ | ---------------------------------------------------------

None

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PART II

|ITEM 5 | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------ | ------------------------------------------------------------------------------------------------------------------

Our common stock was quoted for trading on Over-the-Counter
Bulletin Board quotation service operated by The Financial Industry Regulatory
Authority (FINRA) from March 17, 1999 under the symbol SWEB, and on the TSX
Venture Exchange (TSX-V) from December 17, 2002 under the symbol SWB. On
July 21, 2008, following the change of our name from Stockgroup Systems Inc. to
Stockhouse Inc., our FINRA symbol changed to STKH and our TSX Venture Exchange
symbol changed to SHC

The following table sets forth the range of high and low sales
prices in U.S. dollars for our common shares on the FINRA OTCBB and in Canadian
dollars for our common shares on the TSX-V for each quarter within the last two
fiscal years. Prices on the FINRA OTCBB represent quotations between dealers
without adjustment for retail markup, markdown or commission and may not
represent actual transactions.

Price per Common Share
    
    Price per Common Shareon FINRA OTCBB
    
    on TSX-VHigh
    
    Low
    
    High
    
    Low2008:Fourth Quarter
    $ 0.15
    
    $ 0.04
    
    C$ 0.16
    
    C$ 0.05Third Quarter
    $ 0.41
    
    $ 0.14
    
    C$ 0.34
    
    C$ 0.13Second Quarter
    $ 0.45
    
    $ 0.32
    
    C$ 0.43
    
    C$ 0.33First Quarter
    $ 0.65
    
    $ 0.37
    
    C$ 0.62
    
    C$ 0.362007Fourth Quarter
    $ 1.10
    
    $ 0.51
    
    C$ 1.05
    
    C$ 0.47Third Quarter
    $ 1.29
    
    $ 0.80
    
    C$ 1.35
    
    C$ 0.89Second Quarter
    $ 1.45
    
    $ 0.90
    
    C$ 1.68
    
    C$ 0.99First Quarter
    $ 1.18
    
    $ 0.38
    
    C$ 1.32
    
    C$ 0.41


Holders

As of December 31, 2008, there were 41,295,922 shares of common
stock issued. As of December 31, 2008, there were 94 holders of record, which
does not include beneficial owners of our common stock whose shares are held in
the names of various dealers, clearing agencies, banks, brokers and other
fiduciaries.

Dividends

We have not declared nor distributed any cash dividends on our
common shares. We do not anticipate paying any cash dividends on our commons
shares in the foreseeable future.

Recent Issue of Unregistered Securities

On January 26, 2007, we issued 1,500,000 of our common shares
to TeleCommunication Systems Inc. These common shares are restricted from
resale. The issuance of the shares was exempt from registration requirements
under Section 4(2) of the Securities Act, or Regulation D of the Securities Act,
as a transaction by an issuer not involving a public offering. The shares are
offered with piggyback registration rights. In July 2008, 400,000 shares were
returned to the Company and cancelled to settle an indemnification issue between
the Company and TCS.

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Preferred stock

On May 13, 2008, we closed a private placement according to the
terms of a stock purchase agreement entered on April 30, 2008 with PEAK6 Capital
Management LLC (PEAK6). Under the terms of the agreement we issued 3,000
shares of Series A convertible preferred stock at a price of $1,000 per share to
PEAK6 for net proceeds to the Company of $2,969,000. Issue costs of $31,000 were
allocated to preferred shares. In the event of any liquidation, dissolution or
winding up of the affairs of the Company, the preferred shareholders are
entitled to be paid first out of the assets of the Company up to $1,000 per
share, subject to certain adjustments. Holders of preferred shares are entitled
to receive dividends when, as, and if declared by the Company at a rate of 7%.
Each preferred share is convertible to 2,200 common shares of the Company. The
preferred shares are non-voting until conversion, are convertible 180 days after
issuance, and automatically convert into common shares at the end of twenty four
months from date of issuance at a price of $0.4545 per common share. We may
redeem the preferred shares at any time after 90 days by paying 110% of their
value.

Debenture financing

In November 2008, we entered into
debenture purchase agreements with six subscribers pursuant to which we issued
to the subscribers a total of $550,000 (C$672,000) of secured unregistered 18%
debentures which mature on November 14, 2009 (the debentures) pursuant to the
exemptions provided in Rule 506 of Regulation D and/or Regulation S of the
Securities Act of 1933. Of this amount, $450,000 is denominated in Canadian
dollars and $163,000 (C$200,000) was subscribed for by The Companys Chief
Executive Officer. Interest accrues on the debentures at a rate of 18% per
annum, calculated monthly, and is payable at the end of each of the
30th calendar day of January, April, July and October. Subscribers
may choose to receive all accrued interest on the maturity date in lieu of the
quarterly payments of interest. Our obligations under these debentures are
secured by the assets of the Companys wholly-owned subsidiary Stockgroup Media
Inc., pursuant to a general security agreement. We may redeem all or any portion
of the debentures and any accrued interest thereon, at any time from April 30,
2009 until maturity. Our future liquidity requirements related to these
debentures will include approximately $99,000 in interest payments. The Company
intends to use the proceeds from the sale of debentures for internal working
capital purposes.

Securities Authorized for Issuance under Equity
Compensation Plans

The Company grants stock options pursuant to shareholder
approved stock option plans. The Companys 1999, 2000, 2001, 2002, 2003 and 2007
Stock Option Plans (collectively the Plans) authorize a total of 8,520,600
common shares for issuance. The Plans entitle employees, non-employee directors,
and consultants to purchase common shares of the Company on the exercise of
stock options. Options immediately become exercisable once vested. Any options
that do not vest as the result of a grantee leaving the Company are forfeited
and the common shares underlying them are returned to the reserve if they were
granted under the 2003 Stock Option Plan.

The Company ceased granting of stock options under its 1999,
2000, 2001 and 2002 Stock Option Plans in December 2002. Stock options
outstanding to purchase common shares under these plans continue to be
exercisable as vested until exercised or forfeited, and if forfeited, they are
no longer available for future grants. In June 2007 we adopted the 2007 Stock
Option Plan, which authorizes the issuance of a maximum of 3,300,000 shares of
our common stock granted to directors, officers, employees, consultants or
advisors of our Company or any of our parents, subsidiaries or any other entity
in which we, our parent or subsidiary hold a substantial ownership interest. All
of the shares issuable under the 2007 Stock Option Plan have been registered
under a registration statement on Form S-8 filed with the SEC on June 14, 2007
(SEC File No. 333-143763). A total of 3,300,000 shares of common stock of
Stockhouse were registered in connection with our 2003 Stock Option Plan by a
registration statement on Form S-8 filed on April 15,

23

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2004 (SEC File No. 333-114481). In April 2004, our Board of
Directors approved the amendment of the 2003 Stock Option Plan to decrease the
minimum vesting period from two years to one year and to increase the maximum
percentage of options that may vest in any given financial quarter from 12.5% to
25%.

In 2008, 779,000 options were exercised for proceeds of
$170,000. In 2007, 732,175 options were exercised for proceeds of $182,000.
Subsequent to December 31, 2008, an additional 836,000 options have been granted
under the 2007 Option Plan at an exercise price of $0.08.

The following table provides information as of December 31,
2008 with respect to our common shares that may be issued under our existing
Stock Option Plans upon the exercise of stock options by our employees,
consultants and members of our Board of Directors under all of our existing
equity compensation plans, all of which have been approved by our
shareholders.

|                                                             |                         |  | Weighted-average       |  |                           | 
|------------------------------------------------------------ | ----------------------- |  | ---------------------- |  | ------------------------- | 
|                                                             | Number of securities to |  | exercise price of      |  | Number of                 | 
|                                                             | be issued upon exercise |  | outstanding            |  | securities                | 
|                                                             | of outstanding options, |  | options, warrants      |  | remaining available       | 
|                                                             | warrants and rights     |  | and
      rights (USD) |  | for
      future issuance | 
|Equity compensation plans approved by
      security holders | 3,735,625               |  | $0.33                  |  | 2,262,775                 | 

|ITEM 6 | SELECTED FINANCIAL DATA
|------ | -----------------------

Not applicable

24

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|ITEM 7 | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
|------ | -------------------------------------------------------------------------------------------

*The following discussion and
analysis should be read together with our Consolidated Financial Statements and
the Notes to those statements included elsewhere in this Annual Report on Form
10-K and the Consolidated Financial Statements and the Notes to those statements
included in our Form 10-K for the year ended December 31, 2008. Certain
statements contained herein constitute forward-looking statements as defined
in the U.S. Private Securities Litigation Reform Act of 1995. In some cases
forward-looking statements can be identified by terminology, such as believes,
anticipates, expects, estimates, plans, may, intends, or similar
terms. These statements appear in a number of places in this Form 10-K and
include statements regarding the intent, belief or current expectations of our
company, its directors or its officers with respect to, among other things: (i)
trends affecting our financial condition or results of operations, (ii) our
business and growth strategies, (iii) the Internet and Internet commerce and
(iv) our financing plans. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors, that may
cause our companys or our industrys actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements.*

Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities
laws of the United States, we undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur.

Our consolidated financial
statements are prepared in accordance with United States generally accepted
accounting principles. In this discussion, unless otherwise specified, all
references to common stock refer to the shares in our capital stock and the
terms we, us and our mean Stockhouse Inc., a Colorado corporation.
Effective July 10, 2008, we changed our name from Stockgroup Information Systems
Inc. to Stockhouse Inc. (Stockhouse or the Company). As a result, effective
July 21, 2008, Stockhouse traded on the Over-the-Counter Bulletin Board
quotation service operated by FINRA under its new trading symbol STKH.OB
(previously since March 17, 1999 under the symbol SWEB) and on the TSX Venture
Exchange under its new trading symbol SHC.V (previously since December 17,
2002 under the symbol SWB).

All amounts in this annual report
are stated in United States (U.S.) dollars unless otherwise indicated.

25

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Overview

Our Business

Our services can be separated
into two categories: (i) Licensing and Subscriptions; and (ii) Advertising
Services. The basic commonalities between the two categories are that all of our
services relate to the financial markets and all are currently delivered over
the Internet or mobile devices.

Much of our sales are driven by
popular interest in the stock markets. Advertising services are in greater
demand when there is greater overall demand for online advertising across all
industries and interest in the financial markets. Our licensing and subscription
services are driven by our clients customers demand for market information.
Our audience levels on our Stockhouse websites are closely correlated with the
popularity of the stock market. We believe that greater audience levels on our
Stockhouse websites will translate into larger revenues over the long term.

Given the current stock market
volatility it is difficult to determine if individuals and companies will
continue to have a high level of interest in the markets, or whether given the
uncertainty over job security and stock market volatility, they will discontinue
certain of our services. We believe that despite the volatility there is still a
high interest in the markets; however, we are uncertain how our customers may
react in the future given the current economic situation. We believe that our
advertising from small publicly traded companies will continue to be very low
due to the rapid decline of the prices of smaller capitalized companies within
the general stock market decline and uncertain economic times which effects
their overall spending.

The Internet is the delivery
vehicle for all of our products. The Internet has not yet reached maturity and
continues to reach new levels of sophistication. Increasing numbers of people
are using the Internet as a source of stock market information. As a result,
financial content is becoming an expected standard offering for media and
financial services companies. Financial software and content systems clients,
including large news websites, brokerages, banks, and other media are
encountering competitive pressures to improve their financial content offerings.
This market expansion has driven demand for our services and has resulted in
continued sales growth.

We also receive financial
information from suppliers over the Internet and deliver it to mobile devices.
Adoption of mobile and smart phones continue to grow at a significant pace as
investors and investment professionals use mobile devices to stay connected to
the market when they are away from their desktops. In order to capture this
market, in January 2007 we acquired a business referred to in this document as
the Mobile Finance Division, or MFD, which provided us with the wireless
platform to deliver financial market data, news and limited analytics like
charting and portfolio functionality. Having a wireless platform for content
delivery, including our Stockstream product, is an important part of our
strategy for the growth of our enterprise and increase in our number of retail
customers.

On May 2007, we entered into a
purchase agreement with Semotus Solutions Inc. (Semotus) whereby we acquired
the financial information services assets of Semotus, a California based
provider of mobile enterprise software solutions. During October 2008, we
completed the transition of legacy Semotus customers to our new Stockstream
mobile platform.

The results of the MFD business
acquisition from February 1, 2007 and the assets acquired from Semotus on May 8,
2007 are included in the accompanying consolidated financial statements.

26

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Recent Corporate Developments

During the year ended December
31, 2008 we experienced the following significant corporate developments:

Launch of the redesigned website

On April 3, 2008, we launched our
redesigned website, www.Stockhouse.com. The new website uses enhanced social
networking and collaboration tools and technology to help users of the website
share information, opinions and insights. One of the key features of the new
website is a proprietary patent pending user reputation and content ranking
system which helps users of the website filter content posted on the website by
other users and to determine who the highest quality members of the community
are. The investor reputation and content ranking systems consists of human,
wisdom of crowd, performance, participation and algorithmic filters to determine
the highest quality contributors and content.

Appointment of New Director

Effective April 17, 2008, we
appointed Janet Scardino as a director of the Company. Ms. Scardino is currently
President, Commercial for the 19 Entertainment Group. Prior to this, she was
President and Chief Marketing Officer of The Knot, Inc., a NASDAQ listed
company. She was the Executive Vice President of Reuters Group PLC from March
2005 through August 2007 and the Executive Vice President and Managing Director
of the Media division of Reuters from January 2006 through August 2007. Ms.
Scardino also served as Executive Vice President and Global Head of Marketing of
Reuters Media from March 2005 through January 2006. Between February 2003 and
March 2005, Ms. Scardino was a digital media entrepreneur. From March 2001 to
February 2003, Ms. Scardino was Senior Vice President, International Marketing
for the America Online division of AOL Time Warner Inc. Between 1998 and 2001
Ms. Scardino was Managing Director for the Disney Channel Italy, a wholly owned
subsidiary of The Walt Disney Company. Prior to that, Ms. Scardino served in
various positions for MTV Networks from 1987 to 1997, most recently as Vice
President, International Marketing for MTV: Music Television. Ms. Scardino
received a B.S. in Communications from Emerson College in 1981. Ms. Scardino is
a member of our Governance and Compensation Committees.

Private placement of preferred shares

On May 13, 2008, we closed a
private placement with PEAK6 Capital Management LLC (PEAK6), pursuant to a
stock purchase agreement we entered into on April 30, 2008. In this equity
financing, we agreed to issue 3,000 shares of Series A convertible preferred
stock at a price of $1,000 per share for gross proceeds of $3,000,000. Holders
of preferred shares are entitled to receive dividends when, as, and if declared
by the Company at a rate of 7%. Each preferred share is convertible to 2,200
common shares of the Company. The preferred shares are non-voting until
conversion, are convertible 180 days after issuance, and automatically convert
into common shares at the end of twenty four months from date of issuance at a
price of $0.4545 per common share. We may redeem the preferred shares at any
time after 90 days by paying 110% of their value. Separate from the stock
purchase agreement, we also entered into an agreement whereby we provide market
data, research and news to PEAK6's new online options information portal, The
Options News Network.

Change of name

Effective July 10, 2008, we
changed our name from Stockgroup Information Systems Inc. to Stockhouse Inc.

27

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Launch of Stockstream
MobileTM

On October 8, 2008, we launched
Stockstream MobileTM and Stockstream Mobile Pro. These products
provide the individual investor and professional trader with streaming real-time
market data and news covering 40 global exchanges and all financial instruments
from Reuters. These products can be white-labeled for client loyalty products or
resale through channel partners. The new media of the future, mobile devices are
poised to transform how both the professional and retail market access financial
information. Our global wireless market data solution addresses the growing
demand for wireless access to financial information and analytics using
state-of-the-art mobile technology. Our products are available as full-featured
applications for BlackBerry smart phones, which are designed to stream real-time
financial information to individual investors and professional traders.

Cost restructuring program

In October 2008, owing to market
conditions, we undertook a cost restructuring program, reducing our staff by 19
members, or 27%, including three senior executive roles. The total associated
liability was $76,000, of which we paid $61,000 at December 31, 2008. We paid
the remaining liability of $15,000 by January 31, 2009. No leases for facilities
or equipment were modified or terminated.

Debenture Financing

In November 2008, we entered into
debenture purchase agreements with six subscribers pursuant to which we issued
to the subscribers a total of $550,000 (C$672,000) of secured unregistered 18%
debentures which mature on November 14, 2009 (the debentures). These
debentures are described further below under the heading Future Liquidity
Requirements.

Changes in Executive Management Team

In January 2008 we appointed Dana
Stetson to be our Vice President of Licensing and Subscription Sales On August
29, 2008, Mr.Stetson, left the Companys employ. Our licensing and subscription
products are converging with advertising supported models. Theresa McVean, Vice
President of Advertising Sales was promoted to Vice President of Sales and now
leads both the subscription and advertising sales operations.

We appointed Karl Buhr to be our
Chief Operating Officer in January 2008. As part of the cost cutting strategy
and cost restructuring program announced October 1, 2008, his employment
agreement was terminated and he ceased to be the Companys Chief Operating
Officer or perform any other executive officer functions. Mr. Buhr waived notice
period, severance and his 750,000 outstanding options as of October 31, 2008.
Mr. Buhr signed a new employment agreement in the capacity of Advisor and will
work for us for a minimum of four days per month until October 31, 2009. Mr.
Buhr was granted 200,000 stock options and will be paid $4,000 (C$5,000) per
month. He will also be paid a one-time bonus of up to $8,000 (C$10,000) if
certain conditions are met.

Effective February 1, 2008, we
entered into an employment agreement with Audrey Brownmiller, formerly a
Director of Operations for the Company, to serve as the Companys Vice President
of Operations. Ms. Brownmiller is to receive an annual base salary of $103,000
(C$125,000), subject to normal salary increases, and is entitled to an annual
$17,000 (C$20,000) maximum incentive compensation bonus. For the Companys
termination of Ms. Brownmillers employment with the Company without cause, the
Employment Standards Act of British Columbia would govern.

As part of the cost restructuring program undertaken in the
fourth quarter of 2008, our Publisher and Executive Editor, Darin Diehl, and our
Vice President of Marketing, Bruce Nunn left the Company.

28

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On January 5, 2009 we appointed Joseph Lee to be our Chief
Financial Officer, following the resignation of Susan Lovell from that office.
Mr. Lee is to receive and annual base salary of $116,000 (C$140,000) subject to
normal salary increases, and is entitled up to an annual $21,000 (C$25,000)
incentive compensation bonus. In addition, Mr Lee was granted 400,000 options
which vest over three years or sooner if certain conditions are met. For the
Companys termination of Mr. Lees employment with the Company without cause,
the Company would pay a minimum of 2 month severance. Ms. Lovell remains in our
employ in the capacity of Senior Financial Advisor.

Results of Operations

The following table shows each
line item on our consolidated statements of operations as a percentage of total
revenues (rounded to the nearest percentage):

Year ended December 31,2008
    
    
    2007REVENUESLicensing and subscriptions
    
    78 %
    
    
    72 %Advertising services
    
    22 %
    
    
    28 %TOTAL REVENUES
    
    100 %
    
    
    100 %OPERATING COSTS AND EXPENSES(1)Cost of revenues (exclusive of
      amortization)
    
    44 %
    
    
    42 %Sales and marketing
    
    37 %
    
    
    34 %Research and development
    
    12 %
    
    
    14 %General and administrative
    
    54 %
    
    
    43 %Amortization of intangible assets
    
    3 %
    
    
    4 %Impairment of goodwill
    
    1 %
    
    
    0 %Impairment of intangible assets
    
    8 %
    
    
    0 %TOTAL OPERATING EXPENSES
    
    159 %
    
    
    137 %Loss from operations
    
    59 %
    
    
    7 %Interest and other expense (income), net
    
    4 %
    
    
    1 %Loss before income taxes
    
    55 %
    
    
    36 %Provision for income taxes
    
    0 %
    
    
    0 %Net loss and comprehensive loss
    
    55 %
    
    
    36 %


|(1) | Total operating costs and expenses for the year ended
      December 31, 2008 includes stock-based compensation of $177,000 or 2% of
      total revenues. We recorded $216,000 of stock-based compensation for the
      year ended December 31, 2007, or 2% of total revenues for 2007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The results of operations for the
year ended December 31, 2008 are not necessarily indicative of the results that
may be expected in future operating periods especially considering the current
volatile economic and financial market conditions. During the year ended
December 31, 2008, for reasons outlined below, revenues have decreased quarter
over quarter with licensing and subscriptions revenues declining overall by 9%,
although primarily as the result of declining revenue in our legacy pager
business and advertising sales revenues declining overall by 35%.

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Revenues

|                            |   | Year ended December 31, |  |  |        |  |  |        |  
|--------------------------- | - | ----------------------- |  |  | ------ |  |  | ------ | -
|                            |   |                         |  |  |        |  |  | Change |  
|(In thousands of dollars)   |   | 2008                    |  |  | 2007   |  |  | $      |  
|REVENUES                    |   |                         |  |  |        |  |  |        |  
|Licensing and subscriptions | $ | 9,210                   |  |  | 10,170 |  |  | (960   | )
|Advertising services        |   | 2,600                   |  |  | 3,978  |  |  | (1,378 | )
|TOTAL REVENUES              | $ | 11,810                  |  |  | 14,148 |  |  | (2,338 | )

The majority of our revenues are
derived from customers located in North America. On February 1, 2007, as a
result of our acquisition of the Mobile Finance Division (MFD) of
TeleCommunication Systems, Inc. we commenced business operations in the United
Kingdom, Spain and Benelux and our European revenues approximated 18% of total
revenues for 2008. Advertising services were not impacted by our acquisition of
MFD and Semotus, as advertising revenue has historically been derived from our
stockhouse.com website.

Licensing and Subscriptions

Licensing and subscriptions
revenues decreased by 9% to $9.2 million for the year ended December 31,
2008.

During the years ended December
31, 2008 and 2007, respectively, there were no revenues from individual
customers greater than 10% of total revenues.

The decrease in revenues recorded
during the year ended December 31, 2008 was mainly attributable to a 39% decline
in our pager subscription services compared to the prior year period. Our pager
subscription services continue to represent a diminishing revenue stream as
customers change to other types of wireless devices, due partially to upgrading
technology and due partially to the discontinuation of pager networks in the US.
Sales to our institutional customers increased by 2% and revenues associated
with the Semotus assets decreased by 25% for the year ended December 31, 2008,
compared to the prior year. Sales to our MFD Marketstream and Stockstream mobile
customers increased by 17% in the year ended December 31, 2008 compared to the
comparable prior year.

Advertising Services

Advertising services revenues
include advertising on our Stockhouse websites and related properties. The
Stockhouse brand name and the functionality of the Stockhouse website; including
our Stockhouse Blogs, provide us with access to the investment community. The
Stockhouse website allows us to provide a range of advertising services for our
clients where they gain exposure to an affluent group of consumers. While we
believe that the market for online advertising in general will continue to grow
and that there will be greater demand among companies for advertising targeted
to the investment community, the current economic conditions and decline in the
stock market have caused some customers to delay or cancel purchases of
advertising services. As a result of the deterioration in general economic
conditions in 2008, and more significantly, the decline in the stock markets,
our advertising sales to small publicly traded companies has been significantly
negatively impacted. Although the Company is actively replacing this advertising
with advertising from national agencies, the increase in national accounts has
not compensated for the decreases in public company sales. The Company expects
public company advertising to continue to be negatively impacted while the
current stock market conditions persist.

Advertising services revenues
decreased by 35% to $2.6 million for the year ended December 31, 2008 from $4.0
million for the year ended December 31, 2007. During the first quarter of 2008
we

30

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maintained the beta version of Stockhouse.com as a separate
site. The maintenance of an additional site and the closing of the older version
of Stockhouse.com contributed to difficulties in inventory management,
advertising delivery and advertising sales. This transition and the loss of
advertising sales personnel in the first quarter of 2008 contributed to
decreased revenues starting at the end of the first quarter of 2008. These
factors, as well as the decline in the stock market and the general economy
during the third and fourth quarters of 2008, contributed to lower revenue
levels compared to the prior year. During the year ended December 31, 2008, we
hired a new VP of Advertising Sales and installed Doubleclick DART for
Publishers for advertising delivery to increase our ability to attract national
advertisers and advertising agencies.

Operating Costs and Expenses

|                                             |   | Year ended December 31, |  |   |        |  |   |        |  
|-------------------------------------------- | - | ----------------------- |  | - | ------ |  | - | ------ | -
|                                             |   |                         |  |   |        |  |   | Change |  
|(In thousands of dollars)                    |   | 2008                    |  |   | 2007   |  |   | $      |  
|OPERATING COSTS AND EXPENSES                 |   |                         |  |   |        |  |   |        |  
|Cost of revenues (exclusive of amortization) | $ | 5,236                   |  | $ | 5,986  |  | $ | (750   | )
|Sales and marketing                          |   | 4,403                   |  |   | 4,869  |  |   | (466   | )
|Research and development                     |   | 1,434                   |  |   | 1,925  |  |   | (491   | )
|General and administrative                   |   | 6,372                   |  |   | 6,100  |  |   | 233    |  
|Amortization of intangible assets            |   | 389                     |  |   | 505    |  |   | (116   | )
|Impairment of goodwill                       |   | 99                      |  |   | -      |  |   | 99     |  
|Impairment of intangible assets              |   | 889                     |  |   | -      |  |   | 889    |  
|TOTAL OPERATING EXPENSES                     | $ | 18,822                  |  | $ | 19,385 |  | $ | (602   | )

Total operating costs and
expenses decreased by 3% for the year ended December 31, 2008 as compared to the
year ended December 31, 2007.

Operating costs excluding
Amortization of intangible assets and Impairment of Goodwill and Intangible
assets decreased by $1.5 million, from $18.9 million in the year ended December
31, 2007 to $17.4 million in the year ended December 31, 2008. The majority of
the absolute dollar decreases for the year ended December 31, 2008 are
attributable to reductions in Cost of Revenues. Sales and marketing and research
and development costs also reduced, offset by a small increase in general and
administrative expenses.

Commencing in June 2008, we
undertook several cost cutting measures in order to reduce operating costs and
expenses. As part of these measures in Q3 and Q4, we terminated 32 of our
employees or 38%, including three members of our management team. We saw the
impact of these costs cutting measures in the fourth quarter and first quarter
of 2009.

Cost of revenues

Our cost of revenues includes
costs associated with bandwidth, data feeds and exchange fees, and other direct
product costs. Total cost of revenues decreased by $0.8 million or 13% to $5.2
million for the year ended December 31, 2008 from $6.0 million for the year
ended December 31, 2007.

Our bandwidth and data feed costs
are generally correlated with our Stockhouse website and the number of customers
to which we license our platform. We are subject to exchange fees, including
user fees, which are subject to change. Our costs may increase without a
proportionate increase in revenues until we can complete new agreements with our
customers to recover these costs. During the first quarter of 2008 we changed
our major advertising server which resulted in certain duplicate costs during
that period. However, we also continued to manage our relationships with our
providers and eliminated duplicate services associated with bringing the legacy
MFD customers to one data center. The transition

31

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to our primary data feed provider in 2007 resulted in increased
costs that did not recur in 2008. Despite the fact that our pager revenue stream
continues to decrease, certain fixed airtime costs continue to apply. We
anticipate that these costs will decrease with decreased activity and ultimately
will be eliminated when pagers hit threshold minimum revenue levels and are
discontinued. We continue to rationalize our data supplier base, renegotiating
contracts and eliminating unprofitable suppliers.

Sales and Marketing

Sales and marketing expenses
decreased by $0.5 million or 10% to $4.4 million for the year ended December 31,
2008 from $4.9 million for the year ended December 31, 2007.

During the year ended December
31, 2008, we continued to experience changes in our sales force, continued to
invest in our team who provides editorial content, and invested in marketing the
Stockhouse brand and the www.Stockhouse.com website. These investments resulted
in additional costs during the first and second quarters of 2008 which were
offset by reduced commissions and the cost cutting measures implemented
beginning in June 2008. This resulted in the decrease in sales and marketing
costs for the year to pre-MFD acquisition levels.

The majority of the decrease in
sales and marketing expenses in the year ended December 31, 2008 resulted from
decreased sales personnel, commissions, travel and marketing costs. Sales and
marketing costs as a percentage of revenues year ended December 31, 2008
increased from the prior comparative period as a result of decreased revenue;
however, have reduced in absolute terms, which reflects the impact of the cost
savings.

Research and development

Research and development expenses
decreased by 26% to $1.4 million for the year ended December 31, 2008 from $1.9
million for the year ended December 31, 2007.

The April 2008 release of the
Stockhouse website necessitated the addition of 12 employees in February 2007,
for which the associated salary costs continued to the end of March 2008. With
the project being completed, costs declined during the remainder of the year
compared to the year ended December 31, 2007. Our core research and development
team continues to work on the development of our existing and future products
and also on internal use software solutions to support our business. Our
research and development team completed our new global mobile platform in the
fourth quarter of 2008.

General and Administrative

General and administrative
expenses increased by $0.3 million or 4% to $6.4 million for the year ended
December 31, 2008 from $6.1 million for the year ended December 31, 2007. These
expenses increased as a percentage of total revenues for the year ended December
31, 2008 compared to 2007, as result an absolute increase in expenditure and the
decline in revenues earned during the year ended December 31, 2008.

During year ended December 31,
2008, salaries and related staff costs accounted for $3.3 million or 51% of all
general and administrative expenditure. This amount was almost $0.1 million
lower than the amount incurred for the year ended December 31, 2007. Consulting
costs increased by $0.1 million to $0.2 million for the year ended December 31,
2008, resulting from the Companys efforts to complete the integration processes
related to the acquisition of the Mobile Finance division of TCS and Semotus, as
well as the Companys decision to transfer the UK accounting function to
Vancouver and the implementation of a new accounting system. Accounting and
audit fees increased to $0.6 million for the year ended December 31, 2008 from
$0.3 million for the year ended December 31, 2007, primarily as a result of
additional costs incurred to complete our 2007 audit, which was complicated by
the acquisitions

32

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of the Mobile Finance division of TCS and the acquisition of
Semotus, as well as an unusually high turnover of accounting personnel. Bad
debts expense for the year ended December 31, 2008, amounted to $0.5 million, an
increase of $0.1 million over the expense for the year ended December 31,
2007.

The above increases in
expenditures were offset by decreases in depreciation expense for the year ended
December 31, 2008 over the previous year , of $0.1 million to $0.3 million.

Small increases in expenditures
on financing, legal and office expenses during the year ended December 31, 2008
over the previous year were offset by reductions in expenditure for insurance
and computer expenses

Stock option expense and foreign
exchange gains for the year ended December 31, 2008 were $0.1 million and $0.2
million, respectively, both unchanged from the year ended December 31, 2007.

Amortization of intangible assets

Amortization of intangible assets
was $0.4 million for the year ended December 31, 2008 and $0.5 million for the
year ended December 31, 2007. Amortization is charged on definite-lived
intangible assets, including intellectual property and customer relationships
related to our MFD purchase and Semotus asset acquisition. Amortization expense
decreased in the year ended December 31, 2008 as the result of the impairment
charge recorded at June 30, 2008, which reduced the carrying value of these
assets amortized in the remainder of 2008.

Impairment of goodwill and acquired intangible
assets

We test the carrying amount of
identifiable intangible assets and goodwill annually as of December 31, or
whenever events or circumstances indicate that impairment may have occurred. Due
to the combination of the continued decline in revenues from the acquired MFD
business, and the departure of certain key MFD European employees, management
concluded that there were sufficient indicators of impairment to test the
carrying value of intangible assets and goodwill as at June 30, 2008. In
addition, as revenues continued to decline from the acquired Semotus products,
management concluded that there were sufficient indicators of impairment to test
the carrying value of those acquired intangible assets as at June 30, 2008,
September 30, 2008, and December 31, 2008.

Impairment testing for goodwill
is performed in accordance with FAS No. 142, Goodwill and Other Intangible
Assets (FAS 142). FAS 142, requires the Company to complete a two-step
process that begins with an estimation of the fair value of the reporting unit.
The first step of the impairment test, used to identify potential impairment,
compares the fair value of a reporting unit with its carrying amount, including
goodwill. If the carrying amount of the reporting unit exceeds its fair value,
the second step of the impairment test is performed to measure the amount of the
impairment loss, if any. The impairment test indicated that the implied fair
value of the Companys goodwill was not in excess of its carrying value at June
30, 2008, and as a result we recorded an impairment loss to write-off the
goodwill balance of $0.1 million as a non-cash charge to operating expenses.

We evaluate long-lived tangible
assets and definite-lived intangible assets for potential impairments in
accordance with FAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (FAS 144). Under FAS 144, an impairment loss is
recognized only if the carrying amount of a definite-lived intangible asset is
not recoverable and exceeds its fair value. Recoverability of these assets is
determined based upon the expected undiscounted future net cash flows from the
operations to which the assets relate, utilizing managements best estimates,
appropriate assumptions and projections at the time. When analyzing intellectual
property for impairment we use a relief from royalty method which calculates the
cost savings associated with owning rather than licensing the intellectual
property, applying an assumed royalty rate within our discounted cash flow
calculation. If the carrying value is determined

33

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not to be recoverable from future operating cash flows, the
asset is deemed impaired and an impairment loss is recognized to the extent the
carrying value exceeds the estimated fair market value of the asset.

As a result of these evaluations,
we recorded impairment losses totaling $0.9 million during the year ended
December 31, 2008 to reduce the carrying value of the definite-lived intangible
assets to their estimated fair market values. The estimated fair values of the
MFD intangible assets were $0.2 million for intellectual property and $nil for
customer relationships. The Semotus intangible assets were estimated to have no
fair value at December 31, 2008.

Interest and other income (expense)

Year ended December 31,Change
    
    
    Change(In thousands of dollars)
    
    2008
    
    
    2007
    
    
    $
    
    
    %Interest income
    $
    36
    
    $
    180
    
    
    (114
    )
    
    (63%
    )Interest expense
    
    (31
    )
    
    (83
    )
    
    37
    
    
    (45%
    )Other income (net)
    
    456
    
    
    10
    
    
    469
    
    
    4,690%$
    461
    
    $
    107
    
    
    392
    
    
    366%


We earn interest income on our
cash and cash equivalents, which are held in major banks in either interest
bearing accounts or term deposits. Interest expense represents interest charged
on capital lease obligations which have decreased from the prior year, and
interest charged on the debentures. Other income in the year ended December 31,
2008, represents $0.3 million resulting from the favorable settlement of the
Hollinger litigation and proceeds of $0.1 million received on the sale of our
50% ownership interest in Stockscores Analytics Corp. (Stockscores) in July
2008 to the other shareholder. Stockscores had limited activity and no material
impact on the Company. Also included in Other income is the $44,000 gain on the
write off of the remaining payable relating to the acquisition of the Semotus
assets.

Liquidity and Capital Resources

Cash and cash equivalents totaled
$0.8 million at December 31, 2008 - a decrease of $2.1 million from December 31,
2007. We also held restricted cash of $0.1 million at December 31, 2008.

(In thousands of dollars)
    
    Year ended December 31,2008
    
    
    2007Cash used in operating activities
    $
    (5,302
    )
    $
    (2,435
    )Cash used in investing activities
    
    (298
    )
    
    (910
    )Cash provided by financing activities
    
    3,507
    
    
    4,153Net (decrease)
      increase in cash and cash equivalents
    $
    (2,093
    )
    $
    808


Operating Activities.During the year ended
December 31, 2008 we used more cash than we generated from operations. Our total
revenues have decreased compared to prior year periods and receivables
collections have continued to be slow, due to general economic conditions and a
turnover of personnel. We also paid down our accounts payable balances related
to certain key suppliers which resulted in an additional use of cash.

Investing Activities. Cash used in the year ended
December 31, 2008 represents cash used for additions to property and equipment
of $0.2 million, purchase price payments to Semotus of $0.05 million, and
restricted cash of $0.1 million. These uses were offset by proceeds received on
the sale of our shares in Stockscores of $0.1 million. For the year ended
December 31, 2007, we used $0.3 million to purchase property and equipment, and
$0.6 million for acquisition costs related to our acquisition of MFD and the
Semotus assets.

34

---

Financing Activities.Net cash provided by financing activities was $3.5 million for the year
ended December 31, 2008.

On May 13, 2008, we closed a
private placement with PEAK6 Capital Management LLC (PEAK6), pursuant to a
stock purchase agreement we entered into on April 30, 2008. In this equity
financing, we agreed to issue 3,000 shares of Series A convertible preferred
stock at a price of $1,000 per share for gross proceeds of $3 million. Holders
of preferred shares are entitled to receive dividends when, as, and if declared
by the Company at a rate of 7%. Each preferred share is convertible to 2,200
common shares of the Company. The preferred shares are non-voting until
conversion, are convertible 180 days after issuance, and automatically convert
into common shares at the end of twenty four months from date of issuance at a
price of $0.4545 per common share. We may redeem the preferred shares at any
time after 90 days by paying 110% of their value. Separate from the stock
purchase agreement, we also entered into an agreement whereby we provide market
data, research and news to PEAK6's new online options information portal, The
Options News Network. In May 2007, we completed a private financing and issued
on a bought deal basis 3,333,334 common shares at C$1.50 ($1.36) per share for
total gross proceeds of C$5.0 million ($4.5 million).

In November 2008, we entered into
debenture purchase agreements with six subscribers pursuant to which we issued
to the subscribers a total of $545,000 (C$672,000) of secured unregistered 18%
debentures which mature on November 14, 2009 (the debentures). Of this amount,
$450,000 is denominated in Canadian dollars and $163,000 (C$200,000) was
subscribed for by our Chief Executive Officer. Interest accrues on the
debentures at a rate of 18% per annum, calculated monthly, and is payable at the
end of each of the 4th calendar day of January, April, July and
October. Subscribers may choose to receive all accrued interest on the maturity
date in lieu of the quarterly payments of interest. Our obligations under these
debentures are secured by the assets of our wholly-owned subsidiary Stockgroup
Media Inc., pursuant to a general security agreement. We may redeem all or any
portion of the debentures and any accrued interest thereon, at any time from
April 30, 2009 until maturity.

In addition, we received cash on
the exercise of stock options of $0.2 million (2007 - $0.2 million). These
inflows were partially offset by repayment of capital lease obligations of $0.2
million (2007 - $0.2 million).

Future Liquidity Requirements

Changes in the demand for our
products and services will continue to impact our operating cash flow. At
December 31, 2008, the Company held cash and cash equivalents of $728,000 and
had a net working capital deficit of $1,830,000. Net working capital is defined
as current assets minus current liabilities excluding current deferred revenues.
These conditions raise doubt about the Companys ability to continue as a going
concern.

General economic conditions deteriorated during 2008 and the
Companys revenue, operating results and cash flows were significantly impacted
by the economic slowdown. The duration and depth of this economic slowdown in
markets in which the Company operates will continue to impact the Companys
future advertising and subscription revenue. Management acted to reduce the
Companys operating costs in the second, third, and fourth quarters of 2008,
which included downsizing the number of staff and executives, renegotiating
contracts with significant vendors to reduce costs, and closing unprofitable
locations in Europe. Management believes that as a result of these cost
reductions the Company has sufficient resources for the next twelve months to
meet its obligations as they fall due in the ordinary course of business

The Company will also finance any
further cash requirements, if necessary, through further debt or equity
financings. There is no assurance, however, that additional can be obtained, or
if obtained, on

35

---

terms that are acceptable to management. The accompanying
consolidated financial statements do not include any adjustments to reflect the
possible future effects on recoverability and classification of assets or
liabilities should the Company not be able to continue as a going concern.

Contractual Obligations

The following table summarizes our cash contractual obligations
at December 31, 2008.

(In thousands of dollars)
    
    
    
    
    Payments Due by PeriodWithin 1
    
    
    2  3
    
    
    4  5Total
    
    
    Year
    
    
    Years
    
    
    YearsOperating leases
    $
    2,138
    
    $
    485
    
    $
    956
    
    $
    697Capital leases
    
    104
    
    
    100
    
    
    4
    
    
    -Data provider commitment
    
    411
    
    
    372
    
    
    39
    
    
    -Total contractual
      cash obligations
    $
    2,653
    
    $
    957
    
    $
    999
    
    $
    697


In June 2008, on the expiry of an
existing lease, we secured new leased space in Toronto with a lease term to
October 2013. During the year ended December 31, 2008, we entered into three new
leases for servers and computer equipment. During the year ended December 31,
2008 a contract with a major data vendor expired. There has been no interruption
of data supply from this vendor, and as of the date of this report we are in
negotiations to conclude a new contract. During September 2008, we negotiated a
reduction in costs related to the hosting and connectivity agreement for the
back-up hosting site from $13,000 per month to approximately $10,000 per
month.

Off-Balance Sheet Arrangements

We did not have any off-balance
sheet arrangements as of December 31, 2008 or December 31, 2007 as that term is
defined in Item 303(a) (4) of Regulation S-K.

Critical Accounting Policies

Our audited consolidated
financial statements and notes thereto included in our 2008 Annual Report on
Form 10-K are prepared in accordance with U.S. GAAP. These accounting principles
require us to make certain estimates, judgments and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses. These estimates,
judgments and assumptions are based upon information available to us at the time
that they are made. To the extent there are material differences between these
estimates, judgments or assumptions and actual results, our consolidated
financial statements will be affected. We believe the following critical
accounting policies reflect our most significant estimates, judgments and
assumptions used in the preparation of our consolidated financial statements.

- Revenue Recognition
- Allowance for Doubtful Accounts
- Contingencies and Litigation
- Cost of Revenue accruals
- Stock-based Compensation
- Business Combinations
- Foreign Currency
- Accounting for Income Taxes
- Goodwill and other intangible assets
- Impairment of goodwill and other intangible assets

36

---

There have been no significant
changes in our critical accounting policies during the year ended December 31,
2008 compared to those previously disclosed in Item 6. Managements
Discussion and Analysis or Plan of Operationincluded in our Annual Report
on Form 10-KSB for the year ended December 31, 2007 except for the adoption of
the policy on Fair Value Measurements and the policy on

Fair Value Option for Financial Assets and Financial
Liabilities as described in Note 2 Significant Accounting Policies of the
Notes to the Consolidated Financial Statements included elsewhere in this Form
10-K.

Recently issued accounting pronouncements

In December 2007, the FASB issued
FAS No. 141 (revised 2007), Business Combinations(FAS 141(R))
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. FAS 141(R) also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business combination.
FAS 141(R) is effective for fiscal years beginning after December 15, 2008.

In March 2008, the FASB issued
FAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities, (FAS 161) which is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entitys financial position, financial performance, and cash flows. FAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008 and is applicable to the Company beginning in
the first quarter of 2009. We are currently evaluating the impact of FAS 161 on
our consolidated financial statements.

In May 2008, the FASB issued FAS
No. 162 The Hierarchy of Generally Accepted Accounting Principles(FAS
162). FAS 162 identifies the sources of accounting principles and the framework
for selecting the principles to be used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with
generally accepted accounting principles in the United States. FAS 162 is
effective November 16, 2008.

|ITEM 7A | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK
|------- | ----------------------------------------------------------------

Not applicable.

37

---

|ITEM 8 | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA
|------ | -------------------------------------------------

|Report
      of Independent Registered Chartered Accountants                                                            | 39
|----------------------------------------------------------------------------------------------------------------------- | --
|Consolidated
      Balance Sheets as of December 31, 2008 and 2007                                                      | 40
|Consolidated
      Statements of Operations for the Years Ended December 31, 2008 and 2007                              | 41
|Consolidated
      Statements of Shareholders (Deficiency) Equity for the Years Ended
      December 31, 2008 and 2007 | 42
|Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2008 and 2007                              | 43
|Notes
      to the Consolidated Financial Statements                                                                    | 44

38

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REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To the Board of Directors and Shareholders of Stockhouse
Inc.

We have audited the accompanying consolidated balance sheets of
Stockhouse Inc. and subsidiaries (the "Company") as of December 31, 2008 and
2007, and the related consolidated statements of operations, shareholders'
(deficiency) equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the Company at
December 31, 2008 and 2007, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

As discussed in Note 1 to the consolidated financial
statements, the Company adopted Interpretation No. 48, Accounting for
Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109,
effective January 1, 2007.

The accompanying consolidated financial statements for the year
ended December 31, 2008 have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company's recurring losses from operations and net shareholders deficiency
raise substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Deloitte & Touche LLPIndependent Registered
Chartered Accountants Vancouver, Canada March 31, 2009

39

---

|Stockhouse Inc.                                                               
|------------------------------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)                                
|                                                                              
|CONSOLIDATED BALANCE SHEETS                                                   
|                                                                              
|(Expressed in thousands of U.S. Dollars, except number of
      common shares)
|                                                                              
|Continuing operations (note 1)                                                

|                                                              |   | As at December 31, |  
|------------------------------------------------------------- | - | ------------------ | -
|                                                              |   | 2008               |  
|ASSETS                                                        |   |                    |  
|Current Assets:                                               |   |                    |  
|Cash and cash
      equivalents (note 1)                      | $ | 728                |  
|Restricted cash (note 10)                                     |   | 131                |  
|Accounts receivable
      (net of allowance of $347 and $456) |   | 1,327              |  
|Prepaid expenses and other current
      assets               |   | 253                |  
|TOTAL CURRENT ASSETS                                          |   | 2,439              |  
|Property and equipment, net (note 5)                          |   | 555                |  
|Goodwill (note 3)                                             |   | -                  |  
|Intangible assets, net (notes 3 and 4)                        |   | 208                |  
|TOTAL ASSETS                                                  | $ | 3,202              |  
|                                                              |   |                    |  
|LIABILITIES AND SHAREHOLDERS EQUITY                          |   |                    |  
|Current Liabilities:                                          |   |                    |  
|Accounts payable (note
      5)                               | $ | 1,561              |  
|Accrued liabilities (notes 4 and 5)                           |   | 2,085              |  
|Deferred revenues                                             |   | 711                |  
|Debentures (note 6)                                           |   | 545                |  
|Capital lease
      obligations                               |   | 78                 |  
|TOTAL CURRENT LIABILITIES                                     |   | 4,980              |  
|Long-term capital lease obligations                           |   | 4                  |  
|Long term payable (note 4)                                    |   | -                  |  
|Long-term deferred revenues                                   |   | 103                |  
|TOTAL LIABILITIES                                             |   | 5,087              |  
|                                                              |   |                    |  
|SHAREHOLDERS (DEFICIENCY) EQUITY                             |   |                    |  
|                                                              |   |                    |  
|Preferred stock                                               |   |                    |  
|Series A convertible, $1,000 per share                        |   |                    |  
|authorized 5,000,000 shares                                   |   |                    |  
|issued and outstanding 3,000 shares                           |   | 2,969              |  
|Common stock, no par value:                                   |   |                    |  
|authorized 75,000,000
      shares                            |   |                    |  
|issued and outstanding 41,295,922 and
      40,916,921 shares |   | 18,910             |  
|Additional paid-in capital                                    |   | 3,820              |  
|Accumulated deficit                                           |   | (27,584            | )
|TOTAL SHAREHOLDERS (DEFICIENCY) EQUITY                       |   | (1,885             | )
|TOTAL LIABILITIES AND SHAREHOLDERS                           |   |                    |  
|(DEFICIENCY) EQUITY                                           | $ | 3,202              |  

Commitments and contingencies (note 10) Guarantees (note
11)

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

40

---

|Stockhouse Inc.                                                      
|---------------------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)                       
|                                                                     
|CONSOLIDATED STATEMENTS OF OPERATIONS                                
|                                                                     
|(Expressed in thousands of U.S. Dollars, except per share
      data)

|                                                                   |   | For the years ended December 31, |  
|------------------------------------------------------------------ | - | -------------------------------- | -
|                                                                   |   | 2008                             |  
|REVENUES                                                           |   |                                  |  
|Licensing and subscriptions                                        | $ | 9,210                            |  
|Advertising services                                               |   | 2,600                            |  
|TOTAL REVENUES                                                     |   | 11,810                           |  
|OPERATING COSTS AND EXPENSES                                       |   |                                  |  
|Cost of revenues (exclusive of
      amortization)                 |   | 5,236                            |  
|Sales and marketing                                                |   | 4,403                            |  
|Research and development                                           |   | 1,434                            |  
|General and
      administrative                                   |   | 6,372                            |  
|Amortization of intangible assets
      (notes 3 and 4)            |   | 389                              |  
|Impairment of goodwill
      (notes 3 and 4)                       |   | 99                               |  
|Impairment of intangible assets (notes
      3 and 4)              |   | 889                              |  
|TOTAL OPERATING EXPENSES                                           |   | 18,822                           |  
|                                                                   |   |                                  |  
|Loss from operations                                               |   | (7,012                           | )
|Interest and other expense (income), net (notes 4,10 and
      14) |   | (461                             | )
|Loss before income taxes                                           |   | (6,551                           | )
|(Recovery of) provision for income taxes (note 8)                  |   | (5                               | )
|Net loss and comprehensive loss                                    | $ | (6,546                           | )
|                                                                   |   |                                  |  
|Net loss per common share:                                         |   |                                  |  
|Basic and diluted                                                  | $ | (0.16                            | )
|                                                                   |   |                                  |  
|Common shares used in computing basic and diluted net loss         |   |                                  |  
|per share (thousands)                                              |   | 41,301                           |  

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

41

---

|Stockhouse Inc.                                                  
|-----------------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)                   
|                                                                 
|CONSOLIDATED STATEMENT OF SHAREHOLDERS (DEFICIENCY)
      EQUITY
|(Expressed in thousands)                                         

|                          |           |  |           |  |        |   |        |   |            |   |             |   | Total         |  
|------------------------- | --------- |  | --------- |  | ------ | - | ------ | - | ---------- | - | ----------- | - | ------------- | -
|                          | Preferred |  |           |  | Common |   |        |   | Additional |   |             |   | Shareholders |  
|                          | shares    |  | Preferred |  | stock  |   | Common |   | paid-in    |   | Accumulated |   | (Deficiency)  |  
|                          | No. of    |  | shares    |  | No. of |   | stock  |   | capital    |   | deficit     |   | Equity        |  
|                          | shares    |  | $         |  | shares |   | $      |   | $          |   | $           |   | $             |  
|Balance at                |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|December 31, 2006         | -         |  | -         |  | 35,350 |   | 13,793 |   | 3,394      |   | (15,904     | ) | 1,283         |  
|Issuance of common        |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|shares pursuant to        |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|exercise of employee      |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|stock options             | -         |  | -         |  | 734    |   | 236    |   | (54        | ) | -           |   | 182           |  
|Private placement         |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|transaction  common      |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|shares and warrants       | -         |  | -         |  | 3,333  |   | 4,033  |   | 96         |   | -           |   | 4,129         |  
|Issuance of common        |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|shares pursuant to        |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|business acquisition      | -         |  | -         |  | 1,500  |   | 840    |   | -          |   | -           |   | 840           |  
|Stock-based compensation  | -         |  | -         |  | -      |   | -      |   | 216        |   | -           |   | 216           |  
|Net loss and              |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|comprehensive loss        | -         |  | -         |  | -      |   | -      |   | -          |   | (5,134      | ) | (5,134        | )
|Balance at                |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|December 31, 2007         | -         |  | -         |  | 40,917 |   | 18,902 |   | 3,652      |   | (21,038     | ) | 1,516         |  
|Issuance of series A      |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|convertible preferred     |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|shares                    | 3         |  | 2,969     |  | -      |   | -      |   | -          |   | -           |   | 2,969         |  
|Issuance of common stock  |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|pursuant to exercise of   |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|employee stock options    | -         |  | -         |  | 779    |   | 176    |   | (9         | ) | -           |   | 167           |  
|Shares returned to settle |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|acquisition liabilities   |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|(note 3)                  | -         |  | -         |  | (400   | ) | (168   | ) | -          |   | -           |   | (168          | )
|Stock-based compensation  | -         |  | -         |  | -      |   |        |   | 177        |   | -           |   | 177           |  
|Net loss and              |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|comprehensive loss        | -         |  | -         |  | -      |   | -      |   | -          |   | (6,546      | ) | (6,546        | )
|Balance at                |           |  |           |  |        |   |        |   |            |   |             |   |               |  
|December 31, 2008         | 3         |  | 2,969     |  | 41,296 |   | 18,910 |   | 3,820      |   | (27,584     | ) | (1,885        | )

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

42

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|Stockhouse Inc.                               
|----------------------------------------------
|(formerly Stockgroup Information Systems Inc.)
|                                              
|CONSOLIDATED STATEMENTS OF CASH FLOWS         
|(Expressed in thousands of U.S. Dollars)      

|                                                                      |   | For the years ended December 31, |  
|--------------------------------------------------------------------- | - | -------------------------------- | -
|                                                                      |   | 2008                             |  
|Operating activities:                                                 |   |                                  |  
|Net loss                                                              | $ | (6,546                           | )
|Adjustments to reconcile net loss to net
      cash used in           |   |                                  |  
|operating activities:                                                 |   |                                  |  
|Amortization of property and
      equipment                          |   | 340                              |  
|Amortization of intangible assets                                     |   | 389                              |  
|Impairment of goodwill                                                |   | 99                               |  
|Impairment of intangible
      assets                                 |   | 889                              |  
|Stock-based compensation                                              |   | 177                              |  
|Gain on
      write off of account payable (note 4)                   |   | (44                              | )
|Gain on
      sale of shares in Stockscores (note 14)                 |   | (75                              | )
|Changes in non-cash working capital (note 9)                          |   | (531                             | )
|CASH USED IN OPERATING ACTIVITIES                                     |   | (5,302                           | )
|                                                                      |   |                                  |  
|Investing activities:                                                 |   |                                  |  
|Purchases of property and equipment                                   |   | (192                             | )
|Proceeds on sale of
      shares in Stockscores (note 14)             |   | 75                               |  
|Acquisition of Mobile Finance Division
      (note 3)                 |   | -                                |  
|Acquisition of Semotus assets
      (note 4)                          |   | (50                              | )
|Restricted cash (note 10)                                             |   | (131                             | )
|CASH USED IN INVESTING ACTIVITIES                                     |   | (298                             | )
|                                                                      |   |                                  |  
|Financing activities:                                                 |   |                                  |  
|Proceeds on exercise of stock options                                 |   | 167                              |  
|Proceeds on issuance of
      preferred shares, net of costs (note 7) |   | 2,969                            |  
|Proceeds on debentures, net of costs (note 6)                         |   | 545                              |  
|Proceeds on private
      placements, net of costs (note 7)           |   | -                                |  
|Repayment of capital lease obligations                                |   | (174                             | )
|CASH PROVIDED BY FINANCING ACTIVITIES                                 |   | 3,507                            |  
|                                                                      |   |                                  |  
|Net (decrease) increase in cash and cash
      equivalents            |   | (2,093                           | )
|Cash and cash equivalents, beginning of the year                      |   | 2,821                            |  
|Cash and cash equivalents, end of the year                            | $ | 728                              |  

Supplemental Cash Flow Information (note 9)

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

43

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          
|                                                           

1.Basis of Presentation and Continuing Operations

Stockhouse Inc. (the Company or
Stockhouse) is a financial media company that provides various financial
Internet solutions, tools, content and services to financial institutions, media
publishers, public companies, and advertisers. The Company also helps the retail
investor create and manage their personal wealth by delivering a consolidated
source of financial data streams, news, portfolio management, analysis tools and
a forum for capturing user-generated content. The Company also operates its
StockHouse.com and StockHouse.ca websites, where it provides its advertising
services.

The Company was incorporated
under the laws of Colorado on December 6, 1994.

Effective July 10, 2008, the
Company changed its name from Stockgroup Information Systems Inc. to Stockhouse
Inc. (Stockhouse or the Company). As a result, effective July 21, 2008,
Stockhouse traded on the Over-the-Counter Bulletin Board quotation service
operated by the Nasdaq Stock Market, Inc. under its new trading symbol STKH.OB
(previously since March 17, 1999 under the symbol SWEB) and on the TSX Venture
Exchange under its new trading symbol SHC.V (previously since December 17,
2002 under the symbol SWB).

Basis of Presentation

These consolidated financial
statements have been prepared in accordance with United States (U.S.)
generally accepted accounting principles (GAAP). The accompanying financial
statements include the accounts of the Company and its subsidiaries. All
intercompany accounts and transactions have been eliminated. All information is
stated in U.S. dollars unless otherwise indicated.

The accompanying consolidated
financial statements have been prepared assuming that the Company will continue
as a going concern which contemplates the realization of assets and discharge of
liabilities in the normal course of operations for the foreseeable future. The
Company has incurred significant recurring operating losses over the past two
years, and has not generated positive cash flow from operations since the first
quarter of 2007. For year ended December 31, 2008 the Company had a net loss of
$6,546,000. At December 31, 2008, the Company held cash and cash equivalents of
$728,000 and had a net working capital deficit of $1,830,000. Net working
capital is defined as current assets minus current liabilities excluding current
deferred revenues. At March 30, 2009, the Company held cash and cash equivalents
of $489,018. These conditions raise doubt about the Companys ability to
continue as a going concern.

The Company has been able, thus
far, to finance the losses, as well as the growth of the business through a
series of equity and debt private placements. As further described in Note 7 to
these consolidated financial statements, in May 2008, the Company closed a
private placement of 3,000 shares of Series A convertible preferred stock at a
price of $1,000 per share for net proceeds of $2,969,000. As further described
in Note 6 to these consolidated financial statement, in November 2008, the
Company entered into debenture purchase agreements with multiple subscribers
under which the Company issued to the subscribers a total of $550,000
(C$672,000) of secured unregistered 18% debentures.

44

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

General economic conditions
deteriorated during 2008 and the Companys revenue, operating results and cash
flows were significantly impacted by the economic slowdown. The duration and
depth of this economic slowdown in markets in which the Company operates will
continue to impact the Companys future advertising and subscription revenue.
Management acted to reduce the Companys operating costs in the second, third,
and fourth quarters of 2008, which included downsizing the number of staff and
executives, renegotiating contracts with significant vendors to reduce costs,
and closing unprofitable locations in Europe. Management believes that as a
result of these cost reductions, the Company has sufficient resources for the
next twelve months to meet its obligations as they fall due in the ordinary
course of business.

The Company will also finance any
further cash requirements, if necessary, through further debt or equity
financings. There is no assurance however, that additional financing can be
obtained, or if obtained, on terms that are acceptable to management. The
accompanying consolidated financial statements do not include any adjustments to
reflect the possible future effects on recoverability and classification of
assets or liabilities should the Company not be able to continue as a going
concern.

2.Summary of Significant Accounting Policies

*Use of estimates*

The preparation of financial
statements in conformity with U.S. GAAP requires the Company to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Estimates are used for, but are not limited to, revenue
recognition, accrued liabilities, contingencies and litigation, allowances for
doubtful accounts, stock-based compensation and income and other taxes. Actual
results could differ from those estimates.

*Foreign Currency*

The reporting and functional
currency of the Company and its subsidiaries is the U.S. dollar. Foreign
currency monetary assets and liabilities are translated into U.S. dollars at the
exchange rate prevailing at the balance sheet date; non monetary assets
denominated in foreign currencies are translated using the rate of exchange at
the transaction date; and foreign exchange gains and losses are included in the
determination of earnings.

*Revenue Recognition*

The Company generates its
revenues from two primary sources: Licensing and Financial Subscription Services
and Advertising Services. The Company records its revenues in accordance with
the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No.
104, Revenue Recognition (SAB 104) and the Financial Accounting
Standards Board (FASB) Emerging Issues Task Force (EITF) Issue No. 00-21,
Revenue Arrangements with Multiple Deliverables. In all cases, revenue
is recognized only when the price is fixed or determinable, persuasive evidence
of an arrangement exists, the service is performed, and collectability of the
resulting receivable is reasonably assured.

Licensing and Subscription
services consist of managing, licensing, and delivering financial market
information. Examples of financial market information are real time stock
quotes, stock charts, public

45

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

company profiles, investment information and technical stock
analysis. Under these revenue contracts, the Company normally charges customers
for set up fees, periodic maintenance fees, and the contractual monthly
licensing fees for ongoing use of financial tools and content. These revenues
are recognized ratably over the contract term, which is typically 24 months,
beginning when the product is activated. Revenue from activation fees is
recognized ratably over the determinable portion of the customer contract.

All Licensing and Subscription
services are delivered via the Internet from the Companys Web servers to the
clients websites on a continuous real time basis. Revenue begins to be earned
on the day the data feed is activated and begins to deliver content to the
client site. Revenue is earned on a fixed monthly fee, with some clients paying
a page-view overage fee over a certain number of page-views. The page-view
overages, if any, are billed to the client and recorded on a monthly basis as
they occur and usually represent a small portion of the overall monthly fee from
each customer. Usage usually refers to website page views and real-time
quotes.

Advertising Services consist of
advertising on the Companys investment-orientated websites; the Companys
client direct advertising solutions portfolio, and e-mail services, Internet
advertising services are sold either individually or bundled together into
comprehensive programs.

A portion of advertising revenues
on the Companys investment-oriented websites consists of continuous or rotating
advertisements on various specialized web pages hosted by StockHouse.com,
StockHouse.ca, SmallCapCenter.com and InvestorMarketPlace.com. Delivery of these
profiles is based either on a certain number of days the advertising appears on
the web pages or a certain quantity of impressions, profile views or
click-throughs, depending on the agreement. An impression is a single instance
of an Internet user viewing the page that contains the clients name and/or
logo. A profile view is a single instance of an Internet user clicking on the
clients profile link. A click-through is a single instance of an Internet user
clicking on the clients profile and being redirected to the clients website.
Revenue is recognized on such advertising programs based on delivery, and
delivery organized and measured to equal the agreed monthly fee in each month
the customer is profiled on the web pages.

E-mail services are mailings to a
targeted list of e-mail addresses, with delivery consisting solely of
transmitting the mailing to the e-mail targets. Each transmittal is called a
flight. E-mail services may be bought on a per-flight basis, for which revenue
is recorded when the flight occurs, or on a fixed-fee monthly basis in which the
client receives access to a fixed number of flights per month. The Company
records the revenue on the fixed fee monthly e-mail services on a pro-rata basis
over the term of the agreement.

Internet advertising on the
Companys websites is delivered, and revenue is earned, on a page-view basis, as
this term is defined above. Advertising insertion orders are obtained from
customers and advertisements are delivered in a set rotation on the Companys
StockHouse websites. At the end of certain specified period, usually monthly,
the customer is given a page-view delivery report and billed according to the
number of page-views delivered.

Subscriptions to StockStream and
MarketStream and its real-time streaming data information are sold online via
our websites. Subscriptions are one month in duration and auto-renew unless
cancelled by the subscriber. Revenue from subscriber services is recognized in
the period earned.

46

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Deferred revenues represent
amounts for which the Company has received deposits which are to be applied to
the end of the contract. The earnings process has not yet been completed for
those payments. Deferred revenues primarily related to our license agreements,
which are amortized ratably over the period of the contract and certain internet
services for which the Company holds deposits.

*Cost of Revenues*

Cost of revenues is recorded if
the cost relates directly to the services the Company sells or to its
revenue-generating websites, namely StockHouse.com, StockHouse.ca,
SmallCapCenter.com, and InvestorMarketPlace.com. Cost of revenues consist of
subscription fees for access to data feeds of financial and business databases,
as well as internet bandwidth costs, and direct advertising purchases. Data
feeds are a key component of many of the Companys licensing and subscription
services, as well as a key input into its revenue-generating websites. Bandwidth
is consumed by the Companys revenue-generating websites, by its licensing and
subscription services, and by its e-mail mailing services. Direct advertising
purchases relate to Internet advertising purchases for the purpose of promoting
a client or clients feature on one of the Companys websites.

*Fair value of Financial
Instruments*

The Companys financial
instruments consist of cash and cash equivalents, restricted cash, accounts
receivable, accounts payable, accrued liabilities, and capital lease
obligations. Unless otherwise stated the fair value of the financial instruments
approximates their carrying value.

*Cash and Cash Equivalents*

Cash and cash equivalents, which
consist of cash and short-term deposits with original maturities of ninety days
or less, are recorded at fair value. The Company places its cash and cash
equivalents with high quality financial institutions. Cash equivalents at
December 31, 2008 and 2007, respectively, were US denominated term deposits of
$nil and $1,465,000.

*Accounts Receivable*

Accounts receivable are stated
net of allowance for doubtful accounts of $347,000 at December 31, 2008 and
$456,000 at December 31, 2007. The Company makes judgments as to its ability to
collect outstanding receivables and provides allowances for a portion of
accounts receivable when collection becomes doubtful. Provisions are generally
made for all accounts over 90 days, with certain exceptions based on the nature
of the customer or where special arrangements are agreed to with the customer.
In some cases an allowance is made before 90 days if the Company has a
reasonable belief that the collection of the account is doubtful. Invoices which
are over 120 days are generally sent to collections.

*Property and
Equipment*

Property and equipment are
carried at cost less accumulated amortization. Office equipment, computer
software and equipment are amortized using the straight-line method over the
assets estimated useful lives which range from 1 to 5 years. Capital leases of
computer hardware are amortized over the term of the lease on a straight-line
basis. Leasehold improvements are amortized over the shorter of the asset life
or the remaining lease term on a straight-line basis.

47

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

*Leases*

Leases are classified as either
capital or operating leases. Leases which transfer substantially all the
benefits and risks of ownership of the property to the Company are accounted for
as capital leases. Capital lease obligations reflect the present value of future
minimum lease payments, discounted at the appropriate interest rate. All other
leases are accounted for as operating leases and rental payments are expensed as
incurred.

*Software development
costs*

The Company applies FAS No. 86,
Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed (FAS 86) to software developed internally, acquired in
business acquisitions or purchased. FAS 86 requires companies to capitalize
eligible software development costs upon achievement of technological
feasibility, subject to net realizable value considerations. Research and
development costs prior to technological feasibility are expensed as incurred.
Because the period between achievement of technological feasibility and the
general release of the Companys products have been a relatively short duration,
costs qualifying for capitalization were insignificant during 2008 and 2007.
There were no capitalized software development costs at December 31, 2008 and
2007.

*Goodwill and Intangible
assets*

In accordance with FAS No. 142,
Goodwill and Other Intangible Assets, goodwill and intangible assets
that have indefinite useful lives are no longer amortized to expense. Goodwill
is required to be tested for impairment on an annual basis, or more frequently
if certain indicators arise, using the guidance specifically provided.
Furthermore, Statement No. 142 requires purchased intangible assets other than
goodwill to be amortized over their useful lives unless these lives are
determined to be indefinite.

Management reviews goodwill and
other intangible assets at least annually, and on an interim basis when
conditions require, evaluates events or changes in circumstances that may
indicate impairment in the carrying amount of such assets. An impairment loss is
recognized in the statement of operations in the period that the related asset
is deemed to be impaired. Other intangible assets, which include intellectual
property and customer relationships, with definite lives are amortized to
expense on a straight-line basis over their respective estimated useful lives
averaging approximately three years.

Impairment testing for goodwill
is performed in accordance with FAS No. 142, Goodwill and Other Intangible
Assets (FAS 142). FAS 142, requires the Company to complete a two-step
process that begins with an estimation of the fair value of the reporting unit.
The first step of the impairment test, used to identify potential impairment,
compares the fair value of a reporting unit with its carrying amount, including
goodwill. If the carrying amount of the reporting unit exceeds its fair value,
the second step of the impairment test is performed to measure the amount of the
impairment loss, if any.

The Company evaluates long-lived tangible assets and
definite-lived intangible assets for potential impairments in accordance with
FAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (FAS 144). Under FAS 144, an impairment loss is recognized only if
the carrying amount of a definite-lived intangible asset is not recoverable and
exceeds its fair value. Recoverability of these assets is determined based upon
the expected undiscounted future net cash flows from the operations to which

48

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

the assets relate, utilizing managements best estimates,
appropriate assumptions and projections at the time. When analyzing intellectual
property for impairment the Company uses a relief from royalty method which
calculates the cost savings associated with owning rather than licensing the
intellectual property, applying an assumed royalty rate within the Companys
discounted cash flow calculation. If the carrying value is determined not to be
recoverable from future operating cash flows, the asset is deemed impaired and
an impairment loss is recognized to the extent the carrying value exceeds the
estimated fair market value of the asset.

*Income Taxes*

The Company accounts for its
income taxes in accordance with FAS No. 109, Accounting for Income
Taxes (FAS 109) and related interpretations. This Interpretation requires
that the impact of a tax position be recognized if it is more likely than not of
being sustained in an audit, based on the technical merits of the position. Even
though the Company is in a consolidated loss position, determining the provision
for income tax expense, income tax liabilities, and deferred tax assets and
liabilities involves judgment. In addition, tax interpretations, regulations and
legislations are continually changing. Tax exposures can involve complex issues
and may require an extended period to resolve.

The Company records a valuation
allowance to reduce its deferred tax assets to the amount of future tax benefit
that is more likely than not to be realized. The Company believes its tax
positions comply with current applicable tax law and that the Company has
adequately provided for known tax contingencies.

In June 2006, the Financial
Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN
48). The Interpretation clarifies the accounting and disclosure for uncertainty
in tax positions, as defined. The Company adopted the provisions of FIN 48 on
January 1, 2007. The Company did not have any material uncertain tax positions
upon adoption. As a result, there were no adjustments to the opening balance of
accumulated deficit. The Company believes that its income tax filing positions
and deductions will be sustained on audit and does not anticipate any
adjustments that will result in a material adverse effect on the Companys
financial condition, results of operations, or cash flow. Therefore, at December
31, 2008 and 2007, the Company had no material unrecognized tax benefits.

The Companys policy is to
recognize interest and penalties accrued on any unrecognized tax benefits as a
component of income tax expense. For the years ended December 31, 2008 and 2007,
the Company has not recorded or realized any material interest or penalties with
respect to income taxes.

49

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

The Company is subject to federal
and state taxation in the United States as well as other foreign jurisdictions.
The Companys major tax jurisdictions, as defined, are reflected below. As at
December 31, 2008, income tax returns, whether filed or not, pertaining to
taxation years that remain open to examination by major jurisdictions are as
follows:

United States
    2005 – 2008Canada
    2004 – 2008United Kingdom
    2007 – 2008Spain
    2004 – 2008Netherlands
    2003 – 2008


The Company does not anticipate
any material change in the total amount of unrecognized tax benefits to occur
within the next twelve months.

*Net Loss per Share*

In accordance with FAS No. 128,
Earnings per Share, basic net income (loss) per share is computed based
on the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per share is computed using the weighted average
number of common shares and dilutive equivalent common shares outstanding during
the using the treasury stock method. In a year of income, dilutive equivalent
common shares consist of stock options and warrants where the calculated market
price is in excess of the exercise price of these stock awards In a loss year,
basic and fully diluted net income (loss) per share is equal.

*Contingencies and
Litigation*

The Company evaluates contingent
liabilities including threatened or pending litigation in accordance with FAS
No. 5 Accounting for Contingencies. The Company assesses the likelihood
of an adverse outcome or judgment to a potential claim or legal proceeding, as
well as potential ranges of probable losses, when the outcome of the claims or
proceedings are probable and reasonably estimable. A determination of the amount
of accrued liabilities required, if any, for these contingencies is made after
analysis of each matter. Because of uncertainties related to these matters, the
Company bases its estimates on the information available at the time. As
additional information becomes available, the Company reassesses the potential
liability and may revise its estimates. Any revision to these estimates could
have a material impact on the Companys results of operations and financial
position.

*Accounting for Stock-based Compensation*

On January 1, 2006, the Company adopted the provisions of FAS
No. 123R Share-Based Payment (FAS 123R) which requires recognition of
stock-based compensation expense for all share-based payments based on fair
value. On transition, the Company elected to use the modifiedprospective
approach method. Stock-based compensation expense for all awards granted after
January 1, 2006 is based on the grant-date fair values estimated in accordance
with the provisions of FAS 123R. The Company recognizes these compensation
costs, net of an estimated forfeiture rate, on a pro rata basis over the
requisite service period of each vesting tranche of each award. The Company
considers voluntary termination behavior as well as trends of actual option
forfeitures when estimating the forfeiture rate.

50

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Changes in accounting policies

Fair value measurements

In September 2006, the FASB
issued FAS No. 157 Fair Value Measurements, (FAS 157) which defines
fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. This statement does not require any
new fair value measurements but provides guidance in determining fair value
measurements under other accounting pronouncements that require or permit fair
value measurements. FAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. In February 2008, the FASB issued FASB Staff Positions FAS No.
157-1 and FAS No. 157-2 which exclude FAS No. 13 Accounting for Leases
from the scope of FAS 157 and defers the effective date of FAS 157 to fiscal
years beginning after November 15, 2008 for nonfinancial assets and nonfinancial
liabilities, except for items that are recognized or disclosed at fair value in
an entitys financial statements on a recurring basis. The adoption of FAS 157
on January 1, 2008 did not impact the Companys consolidated financial
statements. In October 2008, the FASB issued FASB Staff Position No. 157-3 (FSP
157-3). FSP 157-3 clarifies the application of FAS 157 in a market that is not
active. The Company has considered the guidance provided by FSP 157-3 in its
determination of estimated fair values as of December 31, 2008, and assessed
there was no impact. (note 12  Fair value of financial instruments)

Fair Value Option for Financial Assets and Financial
Liabilities

In February 2007, the FASB issued
FAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities  Including an amendment of FASB Statement No. 115, (FAS 159)
which permits entities to choose to measure at fair value, at specified election
dates, many financial instruments and certain other items that are not currently
required to be measured at fair value. This statement is expected to expand the
use of fair value measurement. The objective of FAS 159 is to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. A business entity
is required to report unrealized gains and losses on items for which the fair
value option has been elected in earnings at each subsequent reporting date. The
statement does not affect any existing accounting literature that requires
certain assets and liabilities to be carried at fair value. FAS 159 is effective
for financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. The Company adopted the
provisions of FAS 159 commencing January 1, 2008 and currently the Company has
not elected to report any additional assets or liabilities at fair value that
were not already being reported at fair value. The adoption of FAS 159 did not
impact the Companys consolidated financial statements.

In May 2008, the FASB issued FAS
No. 162 The Hierarchy of Generally Accepted Accounting Principles(FAS
162). FAS 162 identifies the sources of accounting principles and the framework
for selecting the principles to be used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with
generally accepted accounting principles in the United States. FAS 162 is
effective November 16, 2008.

51

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Recent accounting pronouncements

In December 2007, the FASB issued
FAS No. 141 (revised 2007), Business Combinations(FAS 141(R))
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. FAS 141(R) also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business combination.
FAS 141(R) is effective for fiscal years beginning after December 15, 2008.

In March 2008, the FASB issued FAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities, (FAS 161) which is
intended to improve financial reporting about derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entitys financial position, financial
performance, and cash flows. FAS 161 is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008
and is applicable to the Company beginning in the first quarter of 2009. The
Company is currently evaluating the impact of FAS 161 on its consolidated
financial statements.

3. Business Acquisition

On January 25, 2007 the Company
announced that it had entered into a formal Purchase Agreement with
TeleCommunication Systems, Inc. (TCS) pursuant to which the Company agreed to
issue to TCS 1,500,000 common shares in the capital of the Company and to assume
certain TCS liabilities in exchange for certain assets of TCS that made up its
Mobile Finance Division (MFD). The transaction closed on January 31, 2007. The
acquisition of MFD was accounted for as a purchase of a business, with the
Company being identified as the acquirer and MFD as the acquiree. These
consolidated financial statements include 100% of the operating results of MFD
from February 1, 2007.

52

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

The allocation of the purchase price at January 31, 2007 is as
follows (in thousands of Dollars):

Purchase Price:1,500,000 common shares of Stockhouse
    $
    840Acquisition costs
    
    348$
    1,188Net Assets Acquired:Accounts receivable
    $
    1,230Prepaid and other current assets
    
    448Property and equipment
    
    146Other assets
    
    157Intellectual property
    
    870Customer relationships
    
    790Goodwill
    
    99Accounts payable
    
    (476
    )Accrued liabilities
    
    (1,269
    )Customer deposits
    
    (291
    )Deferred revenues
    
    (516
    )$
    1,188


An independent valuation of the
significant assets acquired supported managements allocation of the purchase
consideration.

The fair value of the 1,500,000
common shares issued was determined based on the Companys common share price of
$0.56 per share, representing the average closing price of the Companys shares
for the two days before, the day of, and the two days after the date of
announcement of the acquisition. The purchase price may be increased by up to
$500,000, payable in cash, if certain performance requirements are achieved.

The Company tests the carrying
amount of identifiable intangible assets and goodwill annually as of December
31, or whenever events or circumstances indicate that impairment may have
occurred. Due to the combination of the continued decline in revenues from the
acquired MFD business, and the departure of certain key MFD European employees,
management concluded that there were sufficient indicators of impairment to test
the carrying value of intangible assets and goodwill as at June 30, 2008,
September 30, 2008 and December 31, 2008. The impairment test indicated that the
implied fair value of the Companys goodwill was not in excess of its carrying
value at June 30, 2008, and as a result the Company recorded an impairment loss
to write-off the goodwill balance of $99,000 as a non-cash charge to operating
expenses. As a result of the evaluation at June 30, 2008, the Company recorded
an impairment loss totaling $524,000 to reduce the carrying value of the MFD
definite-lived intangible assets to their estimated fair market values of
$347,000 for intellectual property and $106,000 for customer relationships. An
impairment test was also completed at September 30, 2008, and management
concluded that no further impairment existed at that date. As a result of the
evaluation conducted at December 31, 2008, the Company recorded a further
impairment loss totaling $154,000 to reduce the carrying value of the MFD
definite-lived intangible assets to their estimated fair market values of
$208,000 for intellectual property and $Nil for customer relationships.

53

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

The following table presents details of the acquired MFD
intangible assets:

Estimated Useful Life
    
    
    As at December 31,(In thousands of
      Dollars)
    
    (in years)
    
    
    2008
    
    
    2007Intellectual property
    
    4
    
    $
    208
    
    $
    671Customer
      relationships
    
    2 -
      4
    
    
    -
    
    
    547$
    208
    
    $
    1,218


The estimated future amortization expense of the MFD intangible
assets is as follows:

(In thousands of
      Dollars)2009
    $
    1002010
    
    1002011
    
    8Total
    $
    208


For 2008 and 2007, amortization of MFD intangible assets was
$332,000 and $442,000 respectively.

Indemnity

Under the terms of the Purchase
Agreement with TCS the Company was indemnified for certain undisclosed
liabilities of MFD as at the date of the transaction. On June 13, 2008, TCS and
the Company agreed to settlement terms under the Purchase Agreement that in
compensation for these previously indemnified liabilities, TCS would return
400,000 of the 1,500,000 Stockhouse common shares issued as part of the purchase
consideration. These 400,000 shares were valued at the date of the settlement at
$0.42 per share. The total value of the shares of $168,000 is considered full
payment for initially undisclosed liabilities of $148,000 plus costs of $20,000
associated with additional professional fees incurred to determine the
undisclosed liabilities as at the date of acquisition. The settlement agreement
also provided for an extension of the indemnity period for certain claims of
undisclosed liability for two years from June 13, 2008.

54

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

*Pro forma Information
(Unaudited)*

The following interim condensed
pro forma consolidated financial summary is presented as if the acquisition of
MFD was completed as of January 1, 2007. The pro forma combined results have
been prepared for informational purposes only and do not purport to be
indicative of the results which would have actually been attained had the
business combination been consummated on the date indicated or of the results
which may be expected to occur in the future.

Year Ended(In thousands of Dollars, except per share data)
    
    December 31,2007REVENUESLicensing and subscriptions
    $
    10,870Advertising services
    
    3,978$
    14,848Total Operating Expenses net of Other
      Income (Expense)
    
    19,828Net loss and comprehensive loss
    $
    (4,980
    )Net loss per common share: Basic and
      diluted
    $
    (0.13
    )Common shares used in computing basic and
      diluted net loss per share(in thousands)
    
    39,431


**4. Asset Acquisition**

On May 8, 2007 the Company
entered into an Asset Purchase Agreement with Semotus Solutions Inc. (Semotus)
pursuant to which the Company agreed to acquire certain intangible assets
related to Semotus Mobile Finance business for total cash consideration of up
to $350,000 payable as: (a) $150,000 cash payable at the Closing Date; and (b)
30% of monthly gross revenues earned from customer contracts purchased from
Semotus until the remaining $200,000 of the purchase price is fully paid or
within two years whichever occurs first. Should monthly gross revenues fall
below $15,000 per month the purchase price will be deemed to be paid in
full.

This acquisition closed on May 8,
2007 and was accounted for as an asset purchase transaction for a total cost of
$375,000 including $25,000 for acquisition costs. The purchase consideration was
allocated, based on managements best estimates, to the identifiable intangible
assets acquired in the amounts of $140,000 for intellectual property and
$235,000 for customer relationships.

As revenues continued to decline
from the acquired Semotus products, management concluded that there were
sufficient indicators of impairment to test the carrying value of acquired
intangible assets as at June 30, September 30, and December 31, 2008. As a
result of this evaluation, the Company recorded an impairment loss totaling
$212,000 at June 30, 2008 to reduce the carrying value of the Semotus
definite-lived intangible assets to their estimated fair market value. The
estimated fair market value of intellectual property was assessed at $53,000.
Customer relationships were determined to have no

55

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

estimated fair market value. An impairment test was also
completed at September 30, 2008, and management concluded that no further
impairment existed at that date

The following table presents details of the acquired Semotus
identifiable intangible assets:

Estimated Useful Life
    
    
    As at December 31,(In thousands of
      Dollars)
    
    (in years)
    
    
    2008
    
    
    2007Intellectual property
    
    4
    
    $
    -
    
    $
    116Customer
      relationships
    
    4
    
    
    -
    
    
    196$
    -
    
    $
    312


For 2008 and 2007, amortization
of Semotus intangible assets was $57,000 and $63,000, respectively.

At December 31, 2007, of the
$137,000 balance expected to be payable $96,000 was recorded in accounts payable
and $41,000 was recorded as a long-term payable.

During the year ended December
31, 2008, purchase consideration of $50,000 related to monthly gross revenues
was paid to the vendor under the terms of the Asset Purchase Agreement (2007
$63,000). In the fourth quarter of 2008, gross revenues attributable to the
acquired customer contracts fell below $15,000 per month for three consecutive
months and accordingly, the Company has deemed the Semotus purchase price paid
in full. The Company derecognized the remaining $88,000 amount payable due to
the Semotus vendor, reduced the remaining  $44,000 carrying value of the intangible assets
to zero, and recorded a gain of $44,000 in other income.

56

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

**5. Balance Sheet
Components**

As at December 31,(In thousands of Dollars)
    
    2008
    
    
    2007Property and equipmentComputer equipment
    $
    1,783
    
    $
    1,580Computer equipment
      under capital lease
    
    412
    
    
    530Computer software
    
    168
    
    
    115Office furniture and
      equipment
    
    107
    
    
    94Leasehold improvements
    
    151
    
    
    110Total cost
    
    2,621
    
    
    2,429Less: accumulated
      amortization
    
    (2,066
    )
    
    (1,726
    )Property and equipment
    $
    555
    
    $
    703Accounts payableTrade accounts payable
    $
    1,413
    
    $
    1,517Current portion of
      amount due to assetacquisition vendor (note 4)
    
    -
    
    
    95Sales taxes payable
    
    142
    
    
    206Total Accounts
      payable
    $
    1,561
    
    $
    1,818Accrued liabilitiesAccrued liabilities
    $
    779
    
    $
    1,178Accrued data costs
    
    1,108
    
    
    1,372Customer deposits
    
    198
    
    
    274Total Accrued
      liabilities
    $
    2,085
    
    $
    2,824


In 2008, amortization expense
related to property and equipment totalled $340,000 including $144,000
amortization for capital assets under lease. In 2007, amortization expense was
$446,000, including $167,000 of amortization for capital assets under lease.

Substantially all of the
Companys property and equipment is located in located in Canada.

**6. Debenture
financing**

In November 2008, the Company
entered into debenture purchase agreements with six subscribers pursuant to
which the Company issued to the subscribers a total of $550,000 (C$672,000) of
secured unregistered 18% debentures which mature on November 14, 2009 (the
debentures). Of this amount, $450,000 is denominated in Canadian dollars and
$163,000 (C$200,000) was subscribed for by the Companys Chief Executive
Officer. Interest accrues on the debentures at a rate of 18% per annum,
calculated monthly, and is payable at the end of each of the 4th
calendar day of January, April, July and October. Subscribers may choose to
receive all accrued interest on the maturity date in lieu of the quarterly
payments of interest. The obligations of the Company under these debentures are
secured by the assets of the Companys wholly-owned subsidiary Stockgroup Media
Inc., pursuant to a general

57

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

security agreement. The Company may redeem all or any portion
of the debentures and any accrued interest thereon, at any time from April 30,
2009 until maturity.

**7. Shareholders
Equity**

Preferred Shares

On May 13, 2008, the Company
closed a private placement according to the terms of a stock purchase agreement
entered on April 30, 2008 with PEAK6 Capital Management LLC (PEAK6). Under the
terms of the agreement the Company issued 3,000 shares of Series A convertible
preferred stock at a price of $1,000 per share to PEAK6 for net proceeds to the
Company of $2,969,000. Issue costs of $31,000 were allocated to preferred
shares. In the event of any liquidation, dissolution or winding up of the
affairs of the Company, the preferred shareholders are entitled to be paid first
out of the assets of the Company up to $1,000 per share, subject to certain
adjustments. Holders of preferred shares are entitled to receive dividends when,
as, and if declared by the Company at a rate of 7%. Each preferred share is
convertible to 2,200 common shares of the Company. The preferred shares are
non-voting until conversion, are convertible 180 days after issuance, and
automatically convert into common shares at the end of twenty four months from
date of issuance at a price of $0.4545 per common share. The Company may redeem
the preferred shares at any time after 90 days by paying 110% of their
value.

Common Stock

On May 15, 2007, the Company
completed a private financing led by Jennings Capital Inc. and including Cormark
Securities Inc. (the Underwriters), and issued, on a bought deal basis,
3,333,334 common shares at C$1.50 ($1.36) per share for total gross proceeds of
C$5,000,000 ($4,534,000). The Company paid underwriter fees of 6% of the gross
proceeds of the financing and issued 200,000 warrants to the agents equal to 6%
of the common shares issued in the financing. The warrants expired unexercised
in 2008. These warrants were assigned a value of $105,000 based on a
Black-Scholes valuation model leaving gross proceeds of $4,428,000 attributable
to the common shares. The following assumptions were used in the Black-Scholes
model:

Expected life (in years)
    1 yearRisk-free interest rate
    4%Expected volatility
    97%Fair value per warrant
    $0.58


Share issue costs of $395,000 and
$9,000 were allocated to common shares and to warrants, respectively.

Warrants

The Company issued warrants in
prior periods pursuant to equity financing and private placement transactions.
All warrants expired unexercised in 2008.

58

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Stock Based Compensation Plans

The Company grants stock options
pursuant to shareholder approved stock option plans. On June 4, 2007, the
shareholders of the Company approved the 2007 Stock Option Plan that authorized
the issuance of a maximum of 3,300,000 shares of the Companys common stock
granted to directors, officers, employees, consultants or advisors of the
Company. The Companys 1999, 2000, 2001, 2002, 2003 and 2007 Stock Option Plans
(collectively the Plans) authorize a total of 8,520,600 common shares for
issuance. The Plans entitle employees, non-employee directors, and consultants
to purchase common shares of the Company on the exercise of stock options.
Options immediately become exercisable once vested. Any options that do not vest
as the result of a grantee leaving the Company are forfeited and the common
shares underlying them are returned to the reserve if they were granted under
the 2003 or 2007 Stock Option Plans.

The Company generally grants
stock options for a fixed number of shares to employees with an exercise price
equal to at least the fair market value of the underlying common shares on the
date of grant. The standard vesting schedule used for stock option grants to
most employees is a two year vesting calendar, with equal vesting occurring at
the end of each quarterly period. Stock option grants to management generally
follow a four year vesting calendar, with vesting occurring at the end of each
quarterly period. All stock options are denominated in U.S. dollars and expire
either five or six years after the date of grant.

The following table provides
information on the Companys outstanding options and options available for grant
at December 31, 2008, and activity since December 31, 2006:

|                                   |                 |   |            |   | Options Outstanding |  |          | 
|---------------------------------- | --------------- | - | ---------- | - | ------------------- |  | -------- | 
|                                   |                 |   |            |   |                     |  |          | 
|                                   |                 |   |            |   |                     |  | Weighted | 
|                                   | Number of       |   |            |   |                     |  | Average  | 
|                                   | Options         |   |            |   |                     |  | Exercise | 
|                                   | Available       |   | Number of  |   | Price Per Share     |  | Price    | 
|                                   | For
      Grant |   | Options    |   | $                   |  | $        | 
|Balance at December 31, 2006       | 391,325         |   | 3,884,250  |   | $0.12 - $0.59       |  | $0.29    | 
|Additional options authorized      | 3,300,000       |   |            |   |                     |  |          | 
|Options granted                    | (1,107,000      | ) | 1,107,000  |   | $0.41 - $1.25       |  | $0.85    | 
|Options exercised                  | -               |   | (732,175   | ) | $0.12 - $0.43       |  | $0.23    | 
|Options expired and forfeited      | 347,450         |   | (397,450   | ) | $0.31 - $1.08       |  | $0.57    | 
|Balance at
      December 31, 2007 | 2,931,775       |   | 3,861,625  |   | $0.12 -
      $1.25 |  | $0.64    | 
|Options granted                    | (2,808,000      | ) | 2,808,000  |   | $0.08  $0.59       |  | $0.31    | 
|Options exercised                  | -               |   | (779,000   | ) | $0.17 - $0.42       |  | $0.22    | 
|Options forfeited                  | 2,139,000       |   | (2,155,000 | ) | $0.15 - $1.25       |  | $0.52    | 
|Available and outstanding at       |                 |   |            |   |                     |  |          | 
|December 31, 2008                  | 2,262,775       |   | 3,735,625  |   | $0.08 - $0.59       |  | $0.33    | 
|                                   |                 |   |            |   |                     |  |          | 
|Vested and exercisable at          |                 |   |            |   |                     |  |          | 
|December 31, 2008                  |                 |   | 1,692,625  |   |                     |  | $0.39    | 

59

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

The Company ceased granting of
stock options under its 1999, 2000, 2001 and 2002 Stock Option Plans in December
2002. Stock options outstanding to purchase common shares under these plans
continue to be exercisable as vested until exercised or forfeited, and if
forfeited, they are no longer available for future grants.

In 2008, 779,000 options were
exercised for proceeds of $167,000. Subsequent to December 31, 2008, an
additional 836,000 options have been granted under the 2007 Option Plan at an
average exercise price of $0.08.

The aggregate intrinsic value is
equal to the difference between the quoted closing market price of the Companys
common shares at December 31, 2008 and the exercise price of the underlying
awards, where the stock options are in-the-money. At December 31, 2008, there
were no in-the-money options outstanding and no in-the-money options vested and
exercisable.

The following table summarizes
the Companys unvested equity award activity for the year ended December 31,
2008:

|                              |  |                  |   |   | Weighted-Average | 
|----------------------------- |  | ---------------- | - | - | ---------------- | 
|                              |  |                  |   |   | Grant Date Fair  | 
|Unvested Shares               |  | Number of Awards |   |   | Value  $        | 
|Unvested at December 31, 2007 |  | 1,098,906        |   | $ | 0.50             | 
|Granted                       |  | 2,808,000        |   | $ | 0.23             | 
|Vested                        |  | 275,094          |   | $ | 0.24             | 
|Forfeited                     |  | (2,139,000       | ) | $ | 0.36             | 
|Unvested at December 31, 2008 |  | 2,043,000        |   | $ | 0.21             | 

As of December 31, 2008, total
unrecognized compensation expense related to unvested awards granted under the
Plans was $183,000, which is expected to be recognized over a weighted-average
period of 3.04 years. Forfeiture rates used to determine unrecognized
compensation expense were based on forfeiture rates experienced for the year
ended December 31, 2007.

Stock-Based Compensation Expense

|(In thousands of Dollars)              |   | For the years ended December 31, | 
|-------------------------------------- | - | -------------------------------- | 
|                                       |   | 2008                             | 
|Sales and marketing                    | $ | 11                               | 
|Research and development               |   | 4                                | 
|General and administrative             |   | 162                              | 
|Total stock-based compensation expense | $ | 177                              | 

60

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Valuation Assumptions Used in Fair-Value Based Calculation
Method

The fair-value of the Companys
stock-based awards was estimated using the Black-Scholes option-pricing model
using the following weighted average assumptions:

|                            |   | For the years ended | 
|--------------------------- | - | ------------------- | 
|                            |   | December 31,        | 
|                            |   | 2008                | 
|Expected life (in years)    |   | 5 years             | 
|Risk-free interest rate     |   | 3%                  | 
|Expected volatility         |   | 111%                | 
|Dividend yield              |   | 0%                  | 
|Fair value per stock option | $ | 0.21                | 

The expected life of employee
stock options is based on the average expected life of all outstanding stock
options taking into consideration past employee exercise behavior. The exercise
price of the stock option is equal to the market value of the Companys common
stock on the grant date. The Company uses the zero coupon interest yield rate
comparable to the expected life of the option. Expected volatility is based on
historical computations of the Companys volatility. The estimated fair value of
the stock-based awards is amortized over the vesting period of the underlying
awards, on a graduated basis.

The Black-Scholes option pricing
valuation model was developed for use in estimating the fair value of traded
options that have no vesting restrictions, are fully transferable and do not
have employment or trading restrictions. Employee stock options have
characteristics significantly different from those of traded options.

**8. Income Taxes**

The Company is subject to United
States federal and state income taxes at an approximate rate of 41% (2007 
approximate rate of 42%). The reconciliation of the provision for income taxes
at the United States federal statutory rate compared to the Companys income tax
expense as reported is as follows:

For the Years EndedDecember 31,(In thousands of
        Dollars)
      
      2008
      
      
      2007Tax recovery at U.S. statutory rates
      $
      (2,716
      )
      $
      (2,167
      )Lower statutory rates on the losses of foreign subsidiaries
      
      542
      
      
      366Change in statutory tax rates in the USA
        and Canada
      
      (47
      )
      
      173Change in and adjustment to valuation allowance
      
      1,971
      
      
      1,249Non-deductible expenses
      
      250
      
      
      379Other
      
      (5
      )
      
      4(Recovery of) provision for income taxes
      $
      (5
      )
      $
      4


61

---

|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Deferred income taxes reflect the
net tax effects of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income
tax purposes. The Company has recognized a valuation allowance for the deferred
tax assets for which it is not more likely than not that realization will occur.
Significant components of the Companys deferred tax assets are as follows:

As at December 31,(In thousands of
        Dollars)
      
      2008
      
      
      2007Net operating loss carry forwards
      $
      7,242
      
      $
      6,759Net capital loss carry forwards
      
      84
      
      
      87Property and equipment
      
      647
      
      
      743Deferred revenue
      
      155
      
      
      317Financing fees
      
      101
      
      
      137Other
      
      188
      
      
      46Total deferred tax assets
      
      8,417
      
      
      8,089Less: valuation
        allowance
      
      (8,417
      )
      
      (8,089
      )Net deferred tax assets
      $
      -
      
      $
      -


The Company has net capital
losses of $323,000 available to offset future taxable capital gains in Canada.
At December 31, 2008, the Company had operating losses available to be carried
forward in several tax jurisdictions that will expire as follows:

United(In thousands of
      Dollars)
    
    USA
    
    
    Canada
    
    
    Kingdom
    
    
    Netherlands
    
    
    Spain
    
    
    Total2011
    $
    -
    
    $
    -
    
    $
    -
    
    $
    368
    
    $
    -
    
    $
    3682012
    
    -
    
    
    -
    
    
    -
    
    
    43
    
    
    -
    
    
    432013
    
    -
    
    
    -
    
    
    -
    
    
    110
    
    
    -
    
    
    1102014
    
    -
    
    
    -
    
    
    -
    
    
    6
    
    
    -
    
    
    62015
    
    -
    
    
    -
    
    
    -
    
    
    177
    
    
    -
    
    
    1772016
    
    -
    
    
    -
    
    
    -
    
    
    170
    
    
    -
    
    
    1702017
    
    -
    
    
    -
    
    
    -
    
    
    426
    
    
    -
    
    
    4262022
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    158
    
    
    1582023
    
    517
    
    
    -
    
    
    -
    
    
    -
    
    
    31
    
    
    5482024
    
    161
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    1612025
    
    267
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    2672026
    
    273
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    2732027
    
    394
    
    
    2,798
    
    
    -
    
    
    -
    
    
    -
    
    
    3,1922028
    
    800
    
    
    2,279
    
    
    -
    
    
    -
    
    
    -
    
    
    3,079Indefinite
    
    -
    
    
    -
    
    
    17,410
    
    
    -
    
    
    -
    
    
    17,410Total
    $
    2,412
    
    $
    5,077
    
    $
    17,410
    
    $
    1,300
    
    $
    189
    
    $
    26,388


62

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

**9. Supplemental Cash Flow
Information**

During the years end December 31, 2008 and 2007, the Company
had the following changes in non-cash working capital accounts:

|                                 |   | For the years ended December 31, |  
|-------------------------------- | - | -------------------------------- | -
|(In thousands of Dollars)        |   | 2008                             |  
|Accounts receivable              | $ | 579                              |  
|Prepaid and other current assets |   | 499                              |  
|Accounts payable                 |   | (160                             | )
|Accrued liabilities              |   | (907                             | )
|Deferred revenues                |   | (542                             | )
|                                 | $ | (531                             | )

|                                                                    |   | For the years ended December 31, | 
|------------------------------------------------------------------- | - | -------------------------------- | 
|(In thousands of Dollars)                                           |   | 2008                             | 
|Cash                                                                | $ | 728                              | 
|Cash equivalents                                                    | $ | -                                | 
|Interest paid                                                       | $ | 17                               | 
|Taxes paid                                                          | $ | -                                | 
|                                                                    |   |                                  | 
|*Non-cash investing and financing activities*                       |   |                                  | 
|Assets acquired through capital lease transactions                  | $ | 63                               | 
|Value of warrants issued in connection with
      private placement | $ | -                                | 
|Value of shares issued for acquisition of Mobile Finance            |   |                                  | 
|Division                                                            | $ | -                                | 
|Value of shares returned to settle Mobile Finance Division          |   |                                  | 
|acquisition liabilities                                             | $ | 168                              | 

**10. Commitments and
Contingencies**

|Commitments                              |   |       |  |   |                        |  |   |             |  |   |             | 
|---------------------------------------- | - | ----- |  | - | ---------------------- |  | - | ----------- |  | - | ----------- | 
|(In thousands of dollars)                |   |       |  |   | Payments Due by Period |  |   |             | 
|                                         |   |       |  |   | Within 1               |  |   |             |  |   |             | 
|                                         |   | Total |  |   | Year                   |  |   | 2  3 Years |  |   | 4  5 Years | 
|Operating leases                         | $ | 2,138 |  | $ | 485                    |  | $ | 956         |  | $ | 697         | 
|Capital leases                           |   | 104   |  |   | 100                    |  |   | 4           |  |   | -           | 
|Data provider commitment                 |   | 411   |  |   | 372                    |  |   | 39          |  |   | -           | 
|Total contractual
      cash obligations | $ | 2,653 |  | $ | 957                    |  | $ | 999         |  | $ | 697         | 

The Company leases its facilities
under operating leases that expire at various times to March 2014. Total rent
expense was $608,000 in 2008 and $621,000 in 2007. In June 2008, on the expiry
of an existing lease the Company secured larger premises in Toronto with a lease
term to October 2013. The Company leases certain computer equipment, mainly
servers, under capital leases. Of the total amount of capital lease payments
above, approximately $1,000 relates to interest payments due in future years.
Interest expense related to capital lease obligations was $3,000 for 2008 and
$20,000 for 2007.

63

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

Contingencies

The Company was the plaintiff in
a lawsuit filed in Ontario Superior Court of Justice against Hollinger Inc. and
Hollinger Canadian Publishing Holdings Co in which the Company sought to recover
approximately $457,000 from the defendant. The defendant was a vendor to the
Company and the amount sought by the Company consisted of unused advertising
credits which were prepaid by the Company in 1999. The case was resolved by a
negotiated settlement during the first quarter of 2008 and the defendant paid
$340,000 to the Company in full settlement, which is included in other
income.

The Company was the defendant in
a lawsuit filed in the Supreme Court of British Columbia by the plaintiff, Tanis
Churchill. The Plaintiff, a former employee of the Company, sought damages,
interest and costs in the order of approximately $218,000 for alleged wrongful
dismissal from her employment with the Company. The matter was heard by the
Supreme Court of British Columbia and on May 8, 2008, the Supreme Court found in
favor of the plaintiff and awarded damages in the amount of $9,000(C$11,000).
The Court awarded costs to the Company.

The Company is the plaintiff in a
lawsuit filed in the Commercial & Equity Division of the County Court of
Victoria in Melbourne, Australia against The Eight Black Partnership Pty and
Simon Chen, in which the Company seeks to recover approximately $435,000 from
the defendant. The defendant was a reseller of the Companys Marketstream
service in Australia and the amount sought by the Company consists of unpaid
Marketstream subscription fees from July 2006 to May 2007, plus interest. The
case is currently pending final resolution and there is uncertainty as to what
value, if any, will be derived from the lawsuit. No provision has been made for
recovery of these credits in the financial statements in any period.

During 2008, an employee of the
Company made an application to the District Court of Amsterdam, the Netherlands
requesting the Court to order the Company to restore his access to Company
systems and continue paying his salary. He further requested that the Court
order the temporary restriction of funds then held in the Companys Dutch
subsidiarys bank accounts until the terms of his employment could be
determined. The Court granted this application and ordered the transfer of
€89,110 ($131,000) from the operating bank accounts to a restricted account.
This amount is classified as restricted cash on the consolidated balance sheet
at December 31, 2008. Subsequent to December 31, 2008 the matter was resolved by
negotiation, and the restriction on the Companys funds lifted by the Court.

In addition to the above, the
Company is involved in various other legal matters which arise from time-to-time
in the ordinary course of the Companys business, none of which is believed to
be material to its results of operations, liquidity or financial condition at
this time. Unless otherwise noted, the Company cannot reasonably estimate at
this time whether a monetary settlement will be reached or predict the ultimate
resolution of these legal matters.

64

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

**11. Accounting for and
Disclosure of Guarantees**

From time-to-time, the Company
enters into certain types of contracts that require it contingently to indemnify
parties against third party claims. These contracts primarily relate to: (i)
service level agreements with clients, under which the Company may be required
to indemnify clients for liabilities related to data transmission and
dissemination; and (ii) certain agreements with the Companys officers,
directors and employees and third parties, under which the Company may be
required to indemnify such persons for liabilities arising out of their duties
to the Company.

The Company regularly enters into
service level agreements with clients, under which the Company guarantees
consistent streaming of data within certain pre-defined tolerances. The terms of
these obligations vary and generally are not limited in amount, so it is not
possible to express the amount at risk in dollars. Historically, the Company has
not been obligated to make significant payments on account of these obligations,
and accordingly, no liabilities were recorded for these obligations of this
nature on its balance sheets as of December 31, 2007 and December 31, 2006. The
Company carries coverage under certain insurance policies to protect itself in
the case of an unexpected liability; however, this coverage may not be
sufficient.

**12. Fair Value of
Financial Instruments**

The Company adopted SFAS 157 on
January 1, 2008. SFAS 157 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (an exit price). The
standard outlines a valuation framework and creates a fair value hierarchy in
order to increase the consistency and comparability of fair value measurements
and the related disclosures. Under GAAP, certain assets and liabilities must be
measured at fair value, and SFAS 157 details the disclosures that are required
for items measured at fair value.

The Company has various financial
instruments that must be measured under the new fair value standard including:
cash and cash equivalents, restricted cash, and debentures. The Company
currently does not have non-financial assets or non-financial liabilities that
are required to be measured at fair value on a recurring basis, with the
exception of intangible assets. The Companys financial assets and liabilities
are measured using inputs from the three levels of the fair value hierarchy. The
three levels are as follows:

Level 1 - Inputs are unadjusted quoted
prices in active markets for identical assets or liabilities that the Company
has the ability to access at the measurement date. The fair value of the
Companys cash equivalents and restricted cash based on quoted prices and
therefore classified as Level 1.

Level 2 - Inputs include quoted prices
for similar assets and liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the asset or liability
(e.g., interest rates, yield curves, etc.), and inputs that are derived
principally from or corroborated by observable market data by correlation or
other means (market corroborated inputs).

Level 3 - Unobservable inputs that
reflect our assumptions about the assumptions that market participants would use
in pricing the asset or liability.

65

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

The following table provides a summary of the fair values of
assets and liabilities under SFAS 157:

Fair Value Measurements at December31, 2008CarryingValueDecember 31,2008
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets:Cash and cash equivalents
    $
    728
    
    $
    728
    
    $
    -
    
    $
    -Restricted cash
    
    131
    
    
    131
    
    
    -
    
    
    -Total
    $
    859
    
    $
    859
    
    $
    -
    
    $
    -Liabilities:Debentures
    $
    545
    
    $
    -
    
    $
    -
    
    $
    545


As the debentures were issued late in 2008, the Company believes
that the market rate of interest as at December 31, 2008 was not materially
different to the rate of interest at which the debentures were issued.
Accordingly, the Company believes that the fair value of the debentures
approximated their carrying value at December 31, 2008

66

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|Stockhouse Inc.                                            
|-----------------------------------------------------------
|(formerly Stockgroup Information Systems Inc.)             
|                                                           
|Notes to the consolidated annual financial
      statements
|December 31, 2008                                          

**13. Segmented
Information**

The Company operates in one
reportable segment. The Company defines a reportable operating segment as a
component of the Company for which separate financial information is available
and which is evaluated regularly by the Chief Executive Officer in deciding how
to allocate resources and in assessing performance.

The following information is
presented by the customers geographic area:

(in thousands of Dollars)North
    
    
    United2008
    
    America
    
    
    Kingdom
    
    
    Other
    
    
    TotalREVENUESLicensing and subscription
    $
    7,061
    
    $
    1,136
    
    $
    1,013
    
    $
    9,210Advertising services
    
    2,600
    
    
    -
    
    
    -
    
    
    2,600TOTAL REVENUES
    $
    9,661
    
    $
    1,136
    
    $
    1,013
    
    $
    11,810


North
    
    
    United2007
    
    America
    
    
    Kingdom
    
    
    Other
    
    
    TotalREVENUESLicensing and subscription
    $
    7,206
    
    $
    1,572
    
    $
    1,392
    
    $
    10,170Advertising services
    
    3,978
    
    
    -
    
    
    -
    
    
    3,978TOTAL REVENUES
    $
    11,184
    
    $
    1,572
    
    $
    1,392
    
    $
    14,148


As of December 31, 2008 and 2007,
one customer accounted for 10% of outstanding trade receivables. During 2008 and
2007, the Company had no customers whose revenue represented greater than 10% of
total revenues.

**14. Related Party
Transactions**

In the third quarter of 2007, the
Company entered into a one year agreement with a third party. Under the
agreement the Company provides the implementation set up fee and Intraday
Indices at no charge, with the remaining portions of the agreement billed at
market price. In exchange for the no charge services, the third party agreed to
set up a link on the third partys website indicating Markets provided by
StockHouse.com. These services were valued at the market rate for the set up
fee provided. In the third quarter of 2008 the contract was renewed for a
further one year term. A member of the third partys senior managements team is
a director of the Company.

The Canadian subsidiary of
Stockhouse owned 50% of Stockscores Analytics Corp. (Stockscores), a British
Columbia corporation with limited activity and no material impact on the
Company. During 2008, the Company disposed of its 50% share in Stockscores to
the other shareholder for $75,000 which is recorded as Other Income for the year
ended December 31, 2008.

67

---

|ITEM 9 | CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------ | ------------------------------------------------------------------------------------------

None

|ITEM 9A(T) | CONTROLS AND PROCEDURES
|---------- | -----------------------

Certifications of the Chief
Executive Officer and the Chief Financial Officer are included as exhibits to
this Annual Report. On January 2, 2009 our former Chief Financial officer
resigned and Mr. Joseph Lee was appointed as our Chief Financial Officer,
effective January 5, 2009. This section of the Annual Report contains the
information concerning the controls evaluation referred to in Rule 13a-14(a).
Certifications and this information should be read in conjunction with the Rule
13a-14(a) Certifications for a more complete understanding of the topics
presented

Controls and Procedures

Disclosure controls and
procedures are controls and other procedures that are designed to ensure that
information required to be disclosed in our reports filed or furnished under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commissions rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports is accumulated and communicated to management, including our Chief
Executive Officer as appropriate, to allow timely decisions regarding required
disclosure.

As required by Rule 13a-15 under
the Exchange Act, as of the end of the period covered by this report, being
December 31, 2008, we have carried out an evaluation of the effectiveness of the
design and operation of our Company's disclosure controls and procedures. This
evaluation was carried out under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded, as discussed below, that a material weakness
existed in our internal control over financial reporting as of December 31,
2008, and as a result our disclosure controls and procedures were not
effective.

Managements Report on Internal Control over Financial
Reporting

Management is responsible for
establishing and maintaining adequate internal control over our financial
reporting. In order to evaluate the effectiveness of internal control over
financial reporting, as required by Section 404 of the Sarbanes-Oxley Act,
management has conducted an assessment, including testing, using the criteria in
Internal Control  Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Our system of internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements.

Based on our evaluation under the
framework in Internal Control-Integrated Framework, our Chief Executive Officer
and Chief Financial Officer concluded that our internal control over financial
reporting was not effective as of December 31, 2008. A material weakness
(described in the following paragraph) existed in our internal control over
financial reporting, and therefore our internal control over financial reporting
was not operating effectively as of such date, for the reasons discussed below.

68

---

As a result of finalizing the
Companys annual consolidated financial statements, management has identified
several significant deficiencies in the effectiveness of internal control over
financial reporting in its financial close and reporting processes, including
accounting for foreign exchange. Management believes that, when considered in
the aggregate, these significant deficiencies constitute a material weakness. A
material weakness as defined in Rule 1-02 of Regulation S-X and adopted by PCAOB
Auditing Standard 5 is a deficiency, or combination of deficiencies, in internal
control over financial reporting such that there is a reasonable possibility
that material misstatement of the Companys annual or interim financial
statements will not be prevented or detected on a timely basis. Management
attributes this material weakness to legacy systems, and a lack of appropriately
skilled personnel resources.

Management is taking steps to
enhance and improve its internal controls by implementing additional levels of
supervisory review. Although the Company has implemented additional levels of
supervisory review, there can be no assurance that these measures can
definitively prevent errors from occurring in the future.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Inherent Limitations of Internal Controls

Our internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those
policies and procedures that:

- pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transactions and dispositions of our assets;
- provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that our receipts and expenditures are
  being made only in accordance with authorizations of our management and
  directors; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use, or disposition of our assets that could have a
  material effect on the financial statements.

Management does not expect that
our internal controls will prevent or detect all errors and all fraud. A control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of internal controls can provide absolute assurance that all control
issues and instances of fraud, if any, have been detected. Also, any evaluation
of the effectiveness of controls in future periods are subject to the risk that
those internal controls may become inadequate because of changes in business
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

69

---

Changes in internal control over financial
reporting.

Except as discussed in the preceding paragraphs, there were no
changes in the Companys internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934,
as amended) during the year ended December 31, 2008 that has materially
affected, or are reasonably likely to materially affect, the Companys internal
control over financial reporting.

|ITEM 9B | OTHER INFORMATION
|------- | -----------------

None

70

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PART III

|ITEM 10 | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
      GOVERNANCE
|------- | ------------------------------------------------------------

The following are our directors
and executive officers and certain biographical information about them as of
December 31, 2008:

|Name                  | Age | Principal Occupation and Business
      Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------- | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Marcus New            | 38  | Founder, President and CEO. Mr. New founded
      Stockhouse in May 1995 and continues to provide the corporate vision and
      direction for the Company. A finalist as Entrepreneur of the Year by Ernst
      & Young Pacific Region in 2005. Mr. New is a recognized leader and
      sought-after speaker in the industry. Prior to founding Stockhouse, Mr.
      New served as VP of Investor Relations for AmCan Public Relations Group
      Inc., a company specializing in investor campaigns for public companies.
      Mr. New received a Bachelor of Arts degree with a Business major from
      Trinity Western University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|David Caddey          | 59  | Retired President of the Space Missions Unit of MDA
      Corporation, responsible for $300 million in revenues and
      approximately 900 employees. Mr. Caddey has extensive experience in all
      facets of business management including mergers and acquisitions, business
      development, program management and engineering. Mr. Caddey has severed on
      numerous Boards of profit and not-for-profit organizations including as
      past Chair and now as a Director of the Aerospace Industries Association
      of Canada. Mr. Caddey joined our Board of Directors in June 1999, and in
      addition to being the Chair of the Companys Board of Directors he is also
      a member of our Audit Committee and Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Louis (Lee) deBoer II | 56  | Former Chairman, Life Balance Media LLC; Managing
      Partner, Propeller Partners LLC. Mr. deBoer has over 20 years
      experience in the strategic development of national media programming,
      advertising sales and content development. Mr. deBoer spent 17 years at
      HBO culminating in the positions of Executive Vice President of HBO Inc.
      and President of its International division. Mr. deBoer joined our Board
      of Directors in October 1999, and he is also a member of our Compensation
      Committee and Nominating and Corporate Governance Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Patrick Spain         | 56  | Chairman & CEO of Newser LLC.Newser, headquartered in Chicago and New York with a web site located at www.newser.com, is an online news aggregator that uses a combination of technology and editorial expertise to bring the most informative and entertaining news from across the Web to its readers in a highly visual, short-form interface.  Newser was spun off from Highbeam Research, Inc of which Spain was the founder and CEO until it was sold to the Gale unit of Cengage Learning in December 2008. HighBeam operates two online research and reference services for individuals.  He is also the co-founder and former Chairman and CEO of Hoover's, Inc. a leading online provider of company information headquartered in Austin, Texas. Hoover's was bought by Dun & Bradstreet in March 2003.  Prior to Hoover’s, Mr. Spain worked in the telecommunications, real estate and consulting industries.  Mr. Spain holds a Bachelor of Arts from the University of Chicago in Ancient History and a Juris Doctorate from Boston University.  Mr. Spain joined our Board of Directors in August 2004, and he is a member of our Compensation Committee and Chair of our Nominating and Corporate Governance Committee.

71

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|Name              | Age | Principal Occupation and Business
      Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Stephen Zacharias | 59  | Founder and managing director of Transact Capital
      Partners LLC, a Richmond Virginia based financial advisory firm
      specializing in business sales, acquisitions and other strategic
      consulting for privately-held companies. Mr. Zacharias has over 30 years
      of financial related experience, including numerous acquisition and
      divestiture transactions, debt financings and capital reorganizations.
      Before founding Transact, he served as corporate treasurer for Media
      General Inc (NYSE: MEG), a Fortune 1000 TV and newspaper media company,
      and as a board director and audit committee chairman for Hoovers Inc., an
      online business information company acquired by Dun & Bradstreet. Mr.
      Zacharias is also on the board of directors of creditcards.com. Mr.
      Zacharias joined our Board of Directors in July 2006, and he is the Chair
      of our Audit Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Thomas Baker      | 54  | Consultant. Mr. Baker has more than 25 years of
      experience in print and online media. He was the founder and general
      manager of The Wall Street Journal Online (wsj.com), a publication
      of Dow Jones & Company, where he led the start-up effort and grew the
      Online Journalinto a $60 million business unit and the largest
      paid news and information site on the web. He oversaw The Wall Street
      Journals national radio news network and Dow Jones news syndication
      and licensing business. Mr. Baker has consulted for leading publishers and
      media companies. He holds a degree from Princeton University and an MBA
      from Columbia Business School. Mr. Baker joined our Board of Directors in
      July 2006, and he is a member of our Compensation Committee and Audit
      Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Janet Scardino    | 48  | President Commercial for the 19 Entertainment Group.Ms. Scardino has more than 20 years experience as a Senior marketing
      executive of global media organizations. Ms. Scardino was formerly
      President and Chief Marketing Officer of The Knot, Inc., a NASDAQ listed
      company. She was the Executive Vice President of Reuters Group PLC from
      March 2005 through August 2007 and the Executive Vice President and
      Managing Director of the Media division of Reuters from January 2006
      through August 2007. Ms. Scardino also served as Executive Vice President
      and Global Head of Marketing of Reuters Media from March 2005 through
      January 2006. Between February 2003 and March 2005, Ms. Scardino was a
      digital media entrepreneur. From March 2001 to February 2003, Ms. Scardino
      was Senior Vice President, International Marketing for the America Online
      division of AOL Time Warner Inc. Between 1998 and 2001 Ms. Scardino was
      Managing Director for the Disney Channel Italy, a wholly owned subsidiary
      of The Walt Disney Company. Prior to that, Ms. Scardino served in various
      positions for MTV Networks from 1987 to 1997, most recently as Vice
      President, International Marketing for MTV: Music Television. Ms. Scardino
      holds a B.S. in Communications from Emerson College.

72

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|Name               | Age | Principal Occupation and Business
      Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------ | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                   |     | Executive Officers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Joseph Lee         | 47  | Chief Financial OfficerPrior to joining
      Stockhouse, Mr. Lee was Chief Financial Officer at Digital Payment
      Systems, a company that assembles high tech parking meters and specializes
      in developing and selecting recurring revenue services including real time
      credit card processing and reporting. Prior to joining Digital Payment
      Technologies, Mr. Lee was the Chief Financial Officer of Coastal Contacts
      (TSX: COA) where he was instrumental in the public listing of the company
      and raising more than $20 million dollars.
|                   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Audrey Brownmiller | 50  | Vice President, Operations, Ms. Brownmiller leads
      Stockhouses IT, software production and client services efforts. She
      joined the company in 2007 from Chancery Software (acquired by Pearson
      School Systems), where she was Director of Project Management, ultimately
      leading deployment of information system programs to 160 Canadian DOD
      schools in North America, the UK and Germany.                                                                                                                                                      

Each director who is elected will
serve until the earlier of our next annual meeting, the date his or her
successor has been elected and qualified, or the date of the director's death,
resignation or removal. All terms of office on our Board of Directors will
expire at the close of our 2008Annual Shareholders meeting.

During 2008 the following
executive officers resigned their offices, but remain in the Companys employ,
with certain information about them as follows:

|Name         | Age | Principal Occupation and Business
      Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------ | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Karl Buhr    | 47  | Chief Operating Officer. Mr. Buhr is a digital
      content veteran, who came to Stockhouse in January 2008 to lead the
      execution of the companys product and market vision. Prior to joining
      Stockhouse he was COO of Telemedia Development, a California mobile
      entertainment content provider, acquired in 2007 by Conectium Ltd. Mr Buhr
      resigned as Chief Operating Officer on October 31, 2008, but remains
      employed by the Company in an advisory capacity                                
|             |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Susan Lovell | 40  | Chief Financial Officer. Until her resignation as
      Chief Financial Officer in January 2009 Ms. Lovell provided
      direction on financial strategy for Stockhouse. She was recruited
      in April 2006. Formerly with Crystal Decisions, Ms. Lovell was also
      the Controller of GaleForce Solutions and was responsible for
      developing and leading the information systems audit practice for
      Ernst & Young in Vancouver. Ms. Lovell remains in the Companys
      employ as Senior Financial Advisor.

Indemnification of Directors and Officers

Our by-laws provide for the
indemnification of our, directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. We will also bear the
expenses of such litigation for any of its directors, officers, employees, or
agents, upon such persons promise to repay us if it is ultimately determined
that any such person should have not been entitled to indemnification. This
indemnification policy could result in substantial expenditures by us, which we
may be unable to recover.

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Code of Ethics

We have adopted a code of ethics
that applies to each of our Chief Executive Officer, Chief Financial Officer and
other Senior Officers of our Company. The text of our Code of Ethics may be
viewed on our website at www.stockgroup.com
under Investors/Corporate Governance. . If we make any amendments to our Code of
Ethics other than technical, administrative, or other non-substantive
amendments, or grant any waivers, including implicit waivers, from a provision
of our Code of Ethics to our chief executive officer, chief financial officer,
or certain other finance executives, we will disclose the nature of the
amendment or waiver, its effective date and to whom it applies in a Current
Report on Form 8-K filed with the SEC.

Committees

Audit Committee.Our Audit Committee currently consists of David Caddey, Thomas Baker and
Stephen Zacharias. The Audit Committee is governed by a written charter, which
can be viewed at www.stockgroup.com under
Investors/Corporate Governance. Each of the members of our Audit Committee is
independent, as that term is defined by Rule 4200 (a)(15) of the Marketplace
Rules of NASDAQ and Canadian National Instrument 52-110 (the Applicable Rules).
Mr. Zacharias is our audit committee financial expert as defined by the rules
of the SEC.

Compensation Committee.Our Compensation Committee currently consists of Lee deBoer, David
Caddey, Patrick Spain and Thomas Baker.

Nominating and Corporate
Governance Committee.Our Nominating and Corporate Governance Committee
currently consists of Patrick Spain, David Caddey, Lee deBoer and Janet
Scardino, and is governed by a written charter which can be viewed at www.stockgroup.com under Investors/Corporate
Governance. The Committee was formed in 2004. During 2008, the nominating
committee did not receive a recommended nominee for director from a security
holder that beneficially owned more than 5% of our common share under rule
(407)(c)(ix) of Regulation S-B.

Procedure for Submitting Shareholder
Proposals

We encourage shareholders to
submit proposals, questions or concerns to us by writing to Mr. Patrick Spain,
the Chairman of our Corporate Governance Committee or any member of our Board of
Directors. All written communications with Board members are treated as
confidential. Instructions and contact information for Mr. Spain and the Board
of Directors can be found by visiting our website at www.stockgroup.com under Investors/Corporate
Governance. Once a proposal, question or concern is received by Mr. Spain or a
Board member, the communication is reviewed and addressed accordingly.

The Board of Directors
established a Corporate Governance Committee to monitor our practice against
generally accepted governance guidelines, and to determine which guidelines are
both practical and beneficial for us. The Corporate Governance Committee has
reviewed our own corporate governance practices, with input and guidance from
the Board of Directors.

Procedure for Submitting Shareholder Proposals Related to
Nominee as Director

See Procedures for Submitting
Shareholder Proposals above.

74

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Director compensation

Commencing for the compensation
year beginning June 1, 2007, each director receives an annual fee of $15,000
related to service on the Board of Directors, with an additional $3,000 per
annum paid to members of our Audit Committee, and an additional $2,000 per annum
paid to directors who serve as chairs of committees. Each director is eligible
to receive up to 25,000 stock options to acquire shares of common stock, with
the exercise price being equal to the market price of our common stock on the
date of grant. Directors who are re-elected and continue to serve for more than
one year may receive up to an additional 25,000 stock options after each annual
general meeting in compensation for future service.

Employment Contracts, Termination of Employment and
Change-in-Control Arrangements

Employment Agreements

We have an employment agreement
with our CEO, Marcus New, which became effective on February 9, 2004. Under the
Agreement, for 2007, Mr. New received an annual base salary of $198,000
(C$240,000). He is entitled to a minimum 5% annual compensation increase. All
increases are approved by our Compensation Committee. In addition, he receives
an incentive compensation bonus based on achieving certain goals in the calendar
year. For 2007, Mr New received a bonus of $98,000 (C$119,000). In 2008 Mr. New
received no bonus. Mr. New will be entitled to 12 months of severance which will
include pay in lieu of notice plus an additional one month severance for each
year of employment up to a maximum of 24 months, should we elect to terminate
his employment without cause. The employment agreement contains a
confidentiality clause and a 24-month non-competition clause. There is no
specified termination date in the Agreement.

We have an employment agreement
with our Chief Financial Officer, Joseph Lee. In 2009, his annual base salary
will be $116,000 (C$140,000). He will also be eligible to receive a bonus of
$21,000 (C$25,000) in 2009, based on the achievement of both Company and
departmental goals, of which $12,500 is guaranteed. Mr Lees annual salary is
subject to normal salary increases. On date of his employment, January 5, 2009,
he received 400,000 stock options for the Companys common shares at an exercise
price of $0.08 per share, which will vest over 3 years, with 34% vesting at the
end of the first year and 33% vesting at the ends of the second and third years.
In the event that more than 50% of the common shares of the Company are sold to
a single buyer within six months of the commencement of his employment, 25% of
his options will vest immediately. In the event that more than 50% of the common
shares are sold to a single buyer after six months from the commencement of his
employment, 100% of his options will vest immediately. If Mr Lees employment is
with the Company is terminated by the Company without Cause, he will be entitled
to one months salary per year of service up to a maximum of six months salary
after six years service. However, between July 1, 2009 and January 1, 2011, he
will be entitled to a severance payment equal to two months salary. In the
event that more than 50% of the common shares are sold to a single buyer within
six months of his start date, and he is terminated without Cause, severance will
be equal to four months salary.

Effective February 1, 2008, we
have an employment agreement with Audrey Brownmiller, formerly a Director of
Operations for the Company, to serve as the Companys Vice President of
Operations. Ms. Brownmiller is to receive an annual base salary of $103,000
(C$125,000) subject to normal salary increases, and is entitled to an annual
$17,000 (C$20,000) incentive compensation bonus. On January 15, 2008, Ms.
Brownmillers original grant of stock options for 75,000 common shares of
Company stock (with 6.25% of the original number of options vesting on the third
month anniversary of her start date and an additional 6.25% vesting on each
three-month anniversary thereafter until all the options are vested) were
increased by stock options for an additional 60,000 common shares of Company
stock, with one third of these additional options vesting at the end of each
year for three years on the anniversary of the

75

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grant date. For the Companys termination of Ms. Brownmillers
employment with the Company without cause, the Employment Standards Act of
British Columbia would govern.

Change of employment, resignation or termination of
executive officers during 2008

Until his employment with the
Company ended effective February 15, 2008, we had an employment agreement,
beginning on July 16, 2008, with our Vice President of Monetization, Joe
McWilliams, who was to receive an annual base salary of $170,000 subject to
normal salary increases, and was entitled to receive variable pay of 60% of his
annual salary. On October 16, 2007, he was granted stock options for 135,000 of
the Companys common shares, vesting at one third per year over a three year
period on the anniversary of the grant date. These options expired when Mr.
McWilliams employment with the Company ended effective February 15, 2008.

Until his employment with the
Company ended effective October 23, 2008, we had an employment agreement with
our Vice President of Marketing, Bruce Nunn. In 2007, his annual base salary was
$93,000 (C$113,000). Per his employment agreement, Mr. Nunns annual base salary
was subject to normal salary increases. In 2007, Mr. Nunns annual maximum
incentive compensation bonus was $37,000 (C$45,000) based on the achievement of
both Company and departmental goals. On his date of employment, September 7,
2005, he received 75,000 stock options at an exercise price of $0.315 per share,
which will vest over a two year period at 12.5% per quarter in arrears (with
immediate vesting in the event of a change in control). Additional stock options
for (i) 50,000 of Company common shares were also issued to Mr. Nunn on August
20, 2007, vesting over 4 years at 6.25% per quarter beginning three months after
grant date, and (ii) 10,000 of Company common shares were also issued to Mr.
Nunn on September 7, 2007, vesting at one third per year over a three year
period on the anniversary of his grant date (with immediate vesting in the event
of a change in control).

We had an employment agreement
with Susan Lovell, to serve as our Chief Financial Officer, in 2007; her annual
base salary was adjusted to C$138,000, from her annual base salary in 2006 of
$99,000 (C$120,000). In 2007, she also received a one time bonus of $8,000
(C$10,000). Per her employment agreement, Ms. Lovells annual salary was subject
to normal salary increases, and she was entitled to a $21,000 (C$25,000) annual
maximum incentive compensation bonus, based on the achievement of both Company
and departmental goals. On her date of employment, April 3, 2006, she received
150,000 stock options for the Companys common shares at an exercise price of
$0.34 per share, which will vest over 4 years at 6.25% per quarter in arrears
(with immediate vesting in the event of a change in control). Stock options for
50,000 of Company common shares were also issued to Ms. Lovell on May 17, 2007,
vesting over 4 years at 6.25% per quarter beginning three months after grant
date. Ms. Lovell would have been entitled to one month of severance, which would
have included pay in lieu of notice, for each year of employment up to a maximum
of four months, had the Company elected to terminate her employment without
cause after 395 days. Ms. Lovell resigned as Chief Financial Officer on January
2, 2009, but remains in our employ the capacity of Senior Financial Advisor.

Effective January 7, 2008, we had
an employment agreement with Karl Buhr to serve as the Companys Chief Operating
Officer. Mr. Buhr was to receive an annual base salary of $157,000 (C$190,000),
subject to normal salary increases. In addition, he was entitled to an annual
$58,000 (C$70,000) maximum incentive compensation bonus. On January 7, 2008, Mr.
Buhr was granted 500,000 time based stock options for the Companys common
shares, with one third vesting at the end of each full year for three years on
the anniversary of the grant date. An additional 250,000 performance based stock
options for the Companys common shares could have been granted to Mr. Buhr,
based upon Mr. Buhrs and the Companys attainment of mutually acceptable longer
term performance goals. Mr. Buhr was entitled to 6 months of salary and the
prorated portion of bonuses earned, which would have included pay in lieu of
notice, if we elected to terminate his employment without cause. On October 31,
2008, Mr Buhr resigned as Chief Operating Officer. His employment agreement was
terminated and he

76

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ceased to be our Chief Operating Officer or perform any other
executive officer functions. Mr. Buhr waived notice period, severance and his
750,000 outstanding options as of October 31, 2008. Mr. Buhr signed a new
employment agreement in the capacity of Advisor and will work for us for a
minimum of four days per month until October 31, 2009. Mr. Buhr was granted
200,000 stock options and will be paid $4,000 (C$5,000) per month. He will also
be paid a one-time bonus of up to $8,000 (C$10,000) if certain conditions are
met.

Effective January 8, 2008, we had
an employment agreement with Dana Stetson to serve as the Companys Vice
President of Licensing and Subscription Sales. Mr. Stetson was to receive an
annual base salary of $160,000 subject to normal salary increases, and was
entitled to receive variable pay of up to 50% of his annual salary. On April 8,
2008, Mr. Stetson was granted stock options for 135,000 of the Companys common
shares, vesting at one third per year over a three year period on the
anniversary of the grant date. These options expired when Mr. Stetsons
employment with the Company ended effective August 29, 2008.

The foregoing summary of the
employment agreements of our executive officers is qualified by reference to the
complete copies of each of the employment agreements filed as exhibits to this
Annual Report or as an exhibit to our periodic reports which are on file with
the SEC and available at the SEC website at www.sec.gov., as further described
on the list of exhibits in Item 15. Exhibits, below.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act
requires our executive officers, directors and persons who own more than 10% of
our registered common stock to file reports of ownership and changes in
ownership with the SEC. Such executive officers, directors and persons who own
more than 10% of our stock are also required by SEC rules to furnish us with
copies of all forms that they file pursuant to Section 16(a) of the Exchange
Act.

Based solely on our review of
copies of Forms 3 and 4 and amendments thereto furnished to us pursuant to Rule
16a-3 and Forms 5 and amendments thereto furnished to us with respect to 2008,
and any written representations referred to in Item 405(b)(1) of Regulation S-B
of the Securities Act stating that no Forms 5 were required, we believe that,
during 2008, all Section 16(a) filing requirements applicable to our officers,
directors and more than 10% shareholders, were compiled with except for the late
filings disclosed in the table below.

Number oftransactions thatNumber of late
    were not reportedName
    Relationship
    reports
    on a timely basisKarl Buhr
    Officer
    1
    1Louis deBoer
    Director
    1
    1


Corrective filings were made for
these incidences of non-compliance.

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|ITEM 11 | EXECUTIVE COMPENSATION
|------- | ----------------------

Summary Compensation
Table.The following table provides certain information
concerning the compensation awarded to earned by or paid to (i) our Principal
Executive Officer (PEO); (ii) our Principal Financial Officer (PFO); and
(iii) our three most highly compensated executive officers other than our PEO
and PFO who were serving as executive officers at the end of the last completed
fiscal year and whose total compensation exceeded $100,000 (herein referred to
as named executive officers) for the fiscal years ended December 31, 2008 and
2007.

Namei
    Year
    Salary ($)
    Bonus ($)
    Option Grants ($)ii
    All Other Compensation ($)
    Total ($)Marcus NewiiiChief Executive
      Officer
    2008
    228,256
    -
    -
    25,904
    254,1602007
    224,372
    110,360
    -
    25,928
    360,660Joseph LeeivChief Financial
      Officer
    2008
    -
    -
    -
    -
    -2007
    -
    -
    -
    -
    -Audrey Brownmiller Vice President,
      Operations
    2008
    125,810
    11,826
    40,240
    -
    177,8762007
    67,416
    -
    83,910
    -
    151,326Theresa McVean Vice President, Sales
    2008
    77,762
    7,096
    34,155
    -
    119,0132007
    -
    -
    -
    -
    -Dale Prosser Director, Human Resources
    2008
    80,974
    5,000
    32,775
    -
    118,7492007
    -
    -
    -
    -
    -Susan Lovellvformerly Chief
      Financial Officer
    2008
    18,663
    -
    -
    91
    18,7542007
    124,985
    9,300
    37,900
    2,149
    174,334Karl Buhrviformerly Chief
      Operating Officer
    2008
    157,276
    -
    13,800
    1,321
    172,3972007
    -
    -
    -
    -
    -Dana Stetsonviiformerly Vice
      President, Sales
    2008
    103,692
    20,000
    37,125
    -
    160,8172007
    -
    -
    -
    -
    -Bruce Nunnviiiformerly Vice
      President, Marketing
    2008
    93,816
    20,172
    -
    1,731
    115,7192007
    105,090
    -
    37,900
    2,149
    145,139Joe McWilliamsixformerly Vice
      President, Advertising Sales
    2008
    27,246
    -
    -
    -
    27,2462007
    73,994
    10,577
    91,530
    -
    176,101Michael Donnellyxformerly Vice
      President, Sales
    2008
    -
    -
    -
    -
    -2007
    104,256
    43,952
    -
    -
    148,208


|___________________________________
|-----------------------------------
|i                                  
|ii                                 

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|____________________________
|----------------------------
|iii                         
|iv                          
|v                           
|vi                          
|vii                         
|viii                        
|ix                          
|x                           

79

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Outstanding Equity Awards at Fiscal Year-End

Number of Securities
      UnderlyingUnexercised OptionsOptionExercise
    
    
    OptionPrice
    
    
    ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    DateMarcus New
    
    652,500
    
    
    -
    
    $
    0.270
    
    
    09-Feb-2009Susan Lovell i
    
    103,125
    
    
    46,875
    
    $
    0.340
    
    
    3-Apr-201118,750
    
    
    31,250
    
    $
    1.115
    
    
    17-May-2012Audrey Brownmiller ii
    
    28,125
    
    
    46,875
    
    
    1.115
    
    
    17-May-20120
    
    
    60,000
    
    
    0.550
    
    
    9-Jan-20130
    
    
    200,000
    
    
    0.080
    
    
    1-Dec-2013


| | i  | Options expiring April 3, 2011 and May 17, 2012 vest over
      4 years at the rate of 6.25% per quarter in arrears, beginning three
      months after the grant date.                                                                                                                                                                                                                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii | Options expiring May 17, 2012 vest over 4 years at the
      rate of 6.25% per quarter in arrears, beginning three months after the
      grant date. Options expiring January 9 2013 vest over 3 years at the rate
      of 34% on the first anniversary of the grant and 33% on the second and
      third anniversaries of the grant. Options expiring 9-December 2013 vest
      over 2 years at the rate of 25% per 6 months in
arrears

Introduction

The Compensation Committee is
responsible for reviewing and approving the annual compensation of our executive
officers, of whom we presently have three. The Nominations and Corporate
Governance Committee is responsible for reviewing and approving the compensation
of our non-employee directors.

The Compensation Committee of the
Board of Directors is composed solely of directors who are independent under the
revised listing standards of The NASDAQ Stock Market, Inc. The Board of
Directors has delegated to the Compensation Committee the responsibility to
review and approve our compensation and benefits plans, programs and policies,
including the compensation of the chief executive officer and our other
executive officers. The Compensation Committee administers all of our executive
compensation programs, incentive compensation plans and equity-based plans and
provides oversight for all of our other compensation and benefit programs.

Objectives of Compensation Program

The Compensation Committee
intends to govern and administer compensation plans to support the achievement
of our long-term strategic objectives, to enhance stockholder value, to attract,
motivate and retain highly qualified employees by paying them competitively and
rewarding them for their own and our success.

We have no retirement plans or
deferred compensation programs in effect for our non-employee directors and our
executive officers. Compensation is generally paid as earned. We do not have an
exact formula for allocating between cash and non-cash compensation, which has
been in the form of stock options. We do not have a Non-Equity Incentive Plan,
as that term is used in SFAS No. 123R, Share-Based Payment.

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What Our Compensation Program is Designed to
Reward

The key components of the
compensation program for our executive officers are base salary and bonus, and
long-term incentives in the form of stock options. These components are
administered with the goal of providing total compensation that is competitive
in the marketplace, recognizes meaningful differences in individual performance
and offers the opportunity to earn superior rewards when merited by individual
and corporate performance.

Stock price performance has not
been a factor in determining annual compensation insofar as the price of our
common stock is subject to a number of factors outside of our control. We have
endeavored through the grants of stock options to the executive officers to
incentivize individual and team performance, providing a meaningful stake in us
and linking them to a stake in our overall success.

Elements of Companys Compensation Plan and How Each
Element Relates to Objectives

There are three primary elements
in the compensation package of our executive officers: base salary, bonus and
long-term incentives. Compensation payable in the event of an executives
termination from the Company is a secondary, material element in the
package.

Base SalariesBase salaries for our executive
officers are designed to provide a base pay opportunity that is appropriately
competitive within the marketplace. As an officer's level of responsibility
increases, a greater proportion of his or her total compensation will be
dependent upon our financial performance and stock price appreciation rather
than base salary. Adjustments to each individuals base salary are made in
connection with annual performance reviews in addition to the assessment of
market competitiveness.

BonusAt the outset of a fiscal year, the
Compensation Committee establishes a bonus program for executive officers and
other managers and key employees eligible to participate in the program. The
program is based on a financial plan for the fiscal year and other business
factors. The amount of bonus, if any, hinges on corporate performance and
financial condition and on the performance of the participant in the program. A
program will typically allow some partial or discretionary awards based on an
evaluation of the relevant factors. Provision for bonus expense is typically
made over the course of a fiscal year. The provision becomes fixed, based on the
final review of the Committee, which is usually made after the financial results
of the fiscal year have been reviewed by our independent accountants. For 2008,
there were three factors of generally equal weight: Company revenues, Company
EBITDA and a discretionary component.

Long-Term Incentives Grants of stock options
under our stock option plans are designed to provide executive officers and
other managers and key employees with an opportunity to share, along with
stockholders, in our long-term performance. Stock option grants are generally
made annually to all executive officers, with additional grants being made
following a significant change in job responsibility, scope or title or a
significant achievement. The size of the option grant to each executive officer
is set by the Compensation Committee at a level that is intended to create a
meaningful opportunity for stock ownership based upon the individual's current
position with us, the individual's personal performance in recent periods and
his or her potential for future responsibility and promotion over the option
term. The Compensation Committee also takes into account the number of unvested
options held by the executive officer in order to maintain an appropriate level
of equity incentive for that individual. The relevant weight given to each of
these factors varies from individual to individual.

Prior to 2007, stock options granted under the various stock
option plans generally had a four-year vesting schedule depending upon the size
of the grant, and generally were set to expire five years from the date of
grant. In 2007, the Committee determined that such grants would be for ten years
and vest over five years. The exercise price of options granted under the stock
option plans is at no less than 100% of the fair

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market value of the underlying stock on the date of grant. The
number of stock options granted to each executive officer is determined by the
Compensation Committee based upon several factors, including the executive
officers salary grade, performance and the estimated value of the stock at the
time of grant, but the Compensation Committee has the flexibility to make
adjustments to those factors at its discretion. The options granted to
executives as a rule have provisions by which vesting and exercisability are
accelerated in the event of a change of control or a termination of employment
initiated by the Company other than for cause.

Compensation on Termination of Employment or Change of
Control

We have employment agreements
with Messrs. New, Lee and Ms. Brownmiller. These agreements provide for
severance upon termination of employment, whether in context of a change of
control or not. These arrangements are more fully described above in ITEM 10-
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

How Amounts Were Selected for Each Element of an
Executives Compensation

Each executives current and prior compensation is considered
in setting future compensation. In addition, we review from time to time the
compensation practices of other companies, particularly peer companies. To some
extent, our compensation plan is based on the market and the companies we
compete against for executives. Base salary and the long-term incentives are not
set with reference to a formula.

An executives target bonus amount is set by an executives
employment agreement, which was negotiated at arms length. A target bonus, or
portion thereof, is earned, based on fulfillment of conditions, which are set by
the Committee at the outset of a fiscal year.

Accounting and Tax Considerations

On January 1, 2006, we adopted
SFAS No. 123R. Under this accounting standard, we are required to value stock
options granted, and restricted stock awarded, in 2006 and beyond under the fair
value method and expense those amounts in the income statement over the vesting
period of the stock option or restricted stock. We were also required to value
unvested stock options granted prior to our adoption of SFAS 123R under the fair
value method and amortize such expense in the income statement over the stock
options remaining vesting period. A material portion of such amortizing expense
relates to option grants made to our executive officers, and future option
grants and stock awards made in 2006 and beyond to our executive officers will
also have a material impact on such expense.

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Compensation of Directors

The following table shows the
amount of compensation earned by our independent directors in 2008. We
compensate our independent directors with directors fees and stock options.
Option Awards represent the fair value of option awards granted in 2008 as
determined as described in PART III - Item 15. Financial Statements, Note
7.

|                  |   | Fees Earned or |  |   | Option |  |   | All Other    |  |   |         | 
|----------------- | - | -------------- |  | - | ------ |  | - | ------------ |  | - | ------- | 
|                  |   | Paid in Cash   |  |   | Awards |  |   | Compensation |  |   | Total   | 
|Names             |   | ($)            |  |   | ($)    |  |   | ($)          |  |   | ($)     | 
|David Caddey      | $ | 20,000         |  | $ | 7,025  |  | $ | -            |  | $ | 27,025  | 
|Louis deBoer II   |   | 17,000         |  |   | 7,025  |  |   | -            |  |   | 24,025  | 
|Patrick Spain     |   | 17,000         |  |   | 7,025  |  |   | -            |  |   | 24,025  | 
|Stephen Zacharias |   | 20,000         |  |   | 7,025  |  |   | -            |  |   | 27,025  | 
|Thomas Baker      |   | 18,000         |  |   | 7,025  |  |   | -            |  |   | 25,025  | 
|Janet Scardino    |   | 10,394         |  |   | 26,825 |  |   | -            |  |   | 37,219  | 
|                  | $ | 102,394        |  | $ | 61,950 |  | $ | -            |  | $ | 164,344 | 

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|ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
      AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|------- | ----------------------------------------------------------------------------------------------------

The following table reflects, as of March 21, 2009, the
beneficial common stock ownership of: (a) each of our directors, (b) each
executive officer, (c) each person known by us to be a beneficial holder of five
percent (5%) or more of our common stock, and (d) all of our executive officers
and directors as a group:

Beneficial ownership is determined in accordance with the rules
of the SEC. Shares of common stock subject to options currently exercisable or
exercisable within 60 days of March 30, 2009, are deemed outstanding for
computing the percentage ownership of the stockholder holding the options or
warrants, but are not deemed outstanding for computing the percentage ownership
of any other stockholder. Unless otherwise indicated in the footnotes to this
table, we believe stockholders named in the table have sole voting and sole
investment power with respect to the shares set forth opposite such
stockholder's name. Unless otherwise indicated, the officers, directors and
stockholders can be reached at our principal offices. Percentage of ownership is
based on 41,295,922 shares of common stock outstanding as of March 21, 2009.

Amount
      and nature of
    
    
    Percent
      ofName and address
      of beneficial owner
    
    beneficial ownershipi
    
    
    classPreferred sharesPEAK 6 LLC
    
    3,000
    
    
    100%Common sharesOppenheimer
    
    3,000,000
    
    
    7.3%Hulsizer Matthew
    
    4,500,000
    
    
    10.9%Just Jennifer
    
    4,500,000
    
    
    10.9%Peak6 LLC
    
    4,000,000
    
    
    9.7%Lee de Boer
    
    257,550
    
    
    *David Caddey
    
    425,417
    
    
    1.0%Patrick Spain
    
    345,250
    
    
    0.8%Stephen Zacharias
    
    455,175
    
    
    1.1%Janet Scardino
    
    25,000
    
    
    *Thomas Baker
    
    122,708
    
    
    *Marcus New
    
    6,220,477ii
    
    
    14.8%Audrey Brownmiller
    
    155,312
    
    
    *Directors and officers as a group (8 persons)
    
    8,006,889
    
    
    19.1%


* Less than 1%

|__________________________
|--------------------------
|i                         
|ii                        

84

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|ITEM 13 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
      AND DIRECTOR INDEPENDENCE
|------- | -------------------------------------------------------------------------------

Transactions with related parties

During 2007, we entered into a one year agreement with a third
party. Under the agreement we provided the implementation set up and Intraday
Indices data at no charge, with the remaining portions of the agreement billed
at market price. In exchange for the no charge services, the third party agreed
to set up a link on the third partys website indicating Markets provided by
Stockhouse.com. These services were valued at the market rate for the set up
provided. At the termination of the initial period of the contract in 2008 the
agreement was renewed for another year. One of our directors is a member of the
third partys management team.

Our Canadian subsidiary owned 50% of Stockscores Analytics
Corp. (Stockscores), a British Columbia corporation with limited activity and
no material impact on the Company. During 2008, we disposed of our 50% share in
Stockscores to the other shareholder for $75,000.

Director independence

For the purpose of preparing the disclosures in this Annual
Report on Form 10-K regarding director independence, we have used the definition
of independent director set forth in Rule 4200 (a)(15) of the Marketplace
Rules of NASDAQ and Canadian National Instrument 52-110 (the "Applicable Rules"),
which defines an independent director generally as a person other than an
executive officer or employee of the Company or any other individual having a
relationship which, in the opinion of the Companys board of directors, would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. Consistent with these standards, we believe that
all of our directors with the exception of Mr. New meet the director
independence requirements of the Applicable Rules.

|ITEM 14 | PRINCIPAL ACCOUNTING FEES AND SERVICES
|------- | --------------------------------------

Services performed by our principal accountant during 2008
consisted of the examination of our financial statements, services related to
filings with the SEC and the TSX Venture Exchange, domestic and foreign tax
filings and certain consulting services.

The following table sets out the fees charged by our principal
accountant in 2008 and 2007, respectively:

Year Ended December 31,2008
    
    
    2007Audit fees
    $
    378,000
    
    $
    204,000Audit related fees
    
    -
    
    
    9,000Tax fees
    
    63,000
    
    
    75,000All other fees
    
    3,000
    
    
    2,000$
    444,000
    
    $
    290,000


85

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Pre-approval Policies and Procedures

In accordance with our Audit Committee Charter, our Audit
Committee is required to review and approve in advance all audit, audit-related,
tax, and other services performed by the principal accountant. Unless the
specific service has been previously pre-approved with respect to that year, the
Audit Committee must approve the permitted service before the principal
accountant is engaged to perform it. The Audit Committee has delegated to the
Chair of the Audit Committee authority to approve permitted services provided
that the Chair reports any decisions to the Committee at its next scheduled
meeting. For 2008, the Audit Committee pre-approved 100% of the fees
incurred.

The Audit Committee has considered the nature and amount of the
fees billed by our principal accountant, and believes that the provision of the
services for non-audit services is compatible with maintaining our principal
accountants independence under U.S. Regulations.

86

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PART IV

|Item 15 | EXHIBITS AND FINANCIAL STATEMENT
      SCHEDULES
|------- | ------------------------------------------------

The following consolidated financial statements of Stockhouse
Inc. and subsidiaries are filed as part of this Form 10-K:

Statements

Report of Independent Registered Chartered
      AccountantsConsolidated Balance SheetsDecember 31, 2008 and 2007Consolidated Statements of OperationsYears
      ended December 31, 2008 and 2007Consolidated Statements of Stockholders' (Deficiency)
      Equity and Comprehensive LossYearsended December 31, 2008 and 2007Consolidated Statements of Cash FlowsYears ended December
      31, 2008 and 2007Notes to Consolidated Financial Statements


All schedules are omitted because they are not applicable or
the required information is shown in the Financial Statements or notes
thereto.

EXHIBITS

|                                                                                                                                                                                                                                                                                                              | Exhibit |         | Filing    | Filed with
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ------- | --------- | ----------
|Description                                                                                                                                                                                                                                                                                                   | number  | Form    | Date      | this 10-K 
|Articles of Incorporation and
      Bylaws                                                                                                                                                                                                                                                                    |         |         |           |           
|Articles of Incorporation & Bylaws                                                                                                                                                                                                                                                                            | 3.1     | 10SB12G | 1/29/1998 |           
|Articles of Amendment dated July 10, 2008                                                                                                                                                                                                                                                                     | 3.2     | 8-K     | 7/24/2008 |           
|Articles of Amendment dated September 30, 2001                                                                                                                                                                                                                                                                | 3.3     | 8-K     | 9/30/2001 |           
|                                                                                                                                                                                                                                                                                                              |         |         |           |           
|Instruments defining the rights of security
      holders                                                                                                                                                                                                                                                     |         |         |           |           
|Certificate of Designation for Series A
      Convertible Preferred Stock                                                                                                                                                                                                                                     | 4.1     | 10-Q    | 5/14/2008 |           
|                                                                                                                                                                                                                                                                                                              |         |         |           |           
|                                                                                                                                                                                                                                                                                                              |         |         |           |           
|                                                                                                                                                                                                                                                                                                              |         |         |           |           
|Material Contractsfinancing
      agreements                                                                                                                                                                                                                                                                 |         |         |           |           
|Private Placement Subscription Agreement dated September
      26, 2006 between the Company and various directors and senior management                                                                                                                                                                       | 10.1    | 8-K     | 9/28/2006 |           
|Purchase Agreement between Stockgroup
      Information Systems Inc., Stockgroup Systems Ltd., Stockgroup Media, Inc.,
      TeleCommunication Systems, Inc., and TeleCommunication Systems (Holdings)
      Limited                                                                                          | 10.2    | 8-K     | 2/16/2007 |           
|Audited Combined Financial Statements of Mobile Finance
      Division (A division of TeleCommunication Systems, Inc.) (MFD) for the
      years ended December 31, 2005 and 2006 and Unaudited Pro forma Consolidated Financial Statements of Stockgroup Information Systems as of
      December 31, 2006 | 10.3    | 8-K/A   | 4/16/2007 |           
|Form of Private Placement Subscription
      Agreement dated May 15, 2007                                                                                                                                                                                                                                     | 10.4    | 8-K     | 5/21/2007 |           
|Form of Registration Rights Agreement dated May 15, 2007                                                                                                                                                                                                                                                      | 10.5    | 8-K     | 5/21/2007 |           
|Asset Purchase Agreement dated May 8, 2007
      between the Company and Semotus Solutions Inc.                                                                                                                                                                                                               | 10.6    | 8-K     | 5/10/2007 |           
|Amended Purchase Agreement dated January 24, 2007 between
      the Company and TeleCommunication Systems, Inc.                                                                                                                                                                                               | 10.7    | 8-K     | 2/20/2007 |           

87

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|Purchase Agreement dated January 24, 2007
      between the Company and TeleCommunication Systems, Inc.                                                                                              | 10.8  | 8-K    | 2/20/2007  |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------ | ---------- | -
|Series A Convertible Preferred Stock Purchase Agreement
      dated April 30, 2008                                                                                                                   | 10.9  | 8-K    | 5/7/2008   |  
|Form of Secured Debenture Agreement dated
      November 14, 2008  Canadian Version                                                                                                                 | 10.10 | 10-Q   | 11/17/2008 |  
|Form of Secured Debenture Agreement dated November 14,
      2008 US Version                                                                                                                        | 10.11 | 10-Q   | 11/17/2008 |  
|Debenture Purchase Agreement                                                                                                                                                                         | 10.12 | 10-Q   | 11/17/2008 |  
|General Security Agreement                                                                                                                                                                           | 10.13 | 10-Q   | 11/17/2008 |  
|Lease agreement dated September 19, 2006
      between the Company and Pacific Centre Leaseholds Limited                                                                                             | 10.14 |        | 3/31/2009  | X
|Lease agreement dated May 8, 2008 between the Company and
      University Equities Inc                                                                                                              | 10.15 |        | 3/31/2009  | X
|Material Contractsmanagement
      contracts and compensatory plans                                                                                                                                 |       |        |            |  
|Stockgroup Information Systems Inc. 2003 Stock Option Plan
       Amended                                                                                                                           | 10.16 | S-8    | 5/19/2006  |  
|Stockgroup Information Systems Inc. Amended
      and Restated Stock Option Plan  2007                                                                                                              | 10.17 | 10-Q   | 8/13/2008  |  
|Employment Agreement dated February 9, 2004between the
      Company and Marcus New                                                                                                                  | 10.18 | 10-KSB | 03/11/2004 |  
|Employment Agreement dated December 28,
      2007 between the Company and Karl Buhr                                                                                                                 | 10.19 | 8-K    | 2/21/2008  |  
|Employment Agreement dated February 20, 2008 between the
      Company and Audrey Brownmiller                                                                                                        | 10.20 | 8-K    | 2/21/2008  |  
|Amended employment agreement dated October
      31, 2008 between the Company and Karl Buhr                                                                                                          | 10.21 |        |            | X
|Employment Agreement dated December 8, 2008 between the
      Company and Joseph Lee                                                                                                                 | 10.22 | 8-K    | 1/8/2009   |  
|                                                                                                                                                                                                     |       |        |            |  
|Additional Exhibits                                                                                                                                                                                  |       |        |            |  
|List of subsidiaries of the Company                                                                                                                                                                  |       | 21.1   |            | X
|Consent of Independent Registered Chartered Accountants                                                                                                                                              |       | 23.1   |            |  
|Certification of Chief Executive Officer
      pursuant to Rule 13a-14(a) of the Exchange Act                                                                                                        |       | 31.1   |            | X
|Certification of Chief Financial Officer pursuant to Rule
      13a-14(a) of the Exchange Act.                                                                                                       |       | 31.2   |            | X
|Certification of Chief Executive Officer
      furnished pursuant to Rule13a-14(b) of the Exchange Act and Section 1350
      of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).  |       | 32.1   |            | X
|Certification of Chief Financial Officer furnished pursuant
      to Rule 13a-14(b) of the Exchange Act and Section 1350 of Chapter 63 of
      Title 18 of the United States Code (18 U.S.C. 1350). |       | 32.2   |            | X

88

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

STOCKHOUSE INC.

|By: /s/ Marcus New                    | 
|------------------------------------- | 
|Marcus A. New                         | 
|President and Chief Executive Officer | 

Date: March 31, 2009

Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.

|Signature                  |  | Capacity in Which Signed                        |  |  | Date           | 
|-------------------------- |  | ----------------------------------------------- |  |  | -------------- | 
|/s/ David Caddey           |  | Chairman of the Board of Directors              |  |  | March 31, 2009 | 
|David Caddey               |  |                                                 |  |  |                | 
|                           |  | President, Chief Executive Officer and Director |  |  |                | 
|/s/ Marcus New             |  | (Principal Executive Officer)                   |  |  | March 31, 2009 | 
|Marcus New                 |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|                           |  | Chief Financial Officer                         |  |  |                | 
|/s/ Joseph Lee             |  | (Principal Financial and Accounting Officer)    |  |  | March 31, 2009 | 
|Joseph Lee                 |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|/s/ Thomas Baker           |  | Director                                        |  |  | March 31, 2009 | 
|Thomas Baker               |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|/s/ Patrick Spain          |  | Director                                        |  |  | March 31, 2009 | 
|Patrick Spain              |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|/s/ Louis deBoer           |  | Director                                        |  |  | March 31, 2009 | 
|Louis deBoer III           |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|/s/ Janet Scardino         |  | Director                                        |  |  | March 31, 2009 | 
|Janet Scardino             |  |                                                 |  |  |                | 
|                           |  |                                                 |  |  |                | 
|/s/ Stephen
      Zacarias |  | Director                                        |  |  | March 31, 2009 | 
|Stephen Zacarias           |  |                                                 |  |  |                | 

89

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