Exhibit
99.2









Copernic
Inc.
 Management’s
Discussion
 and
Analysis
 of
Financial Condition
 and
Results of Operations
 
 at
December 31, 2008
 (expressed in U.S.
dollars)
  
  MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 The
following discussion and analysis of the consolidated financial condition and
results of operations of Copernic Inc. for the three years ended December 31,
2008, 2007 and 2006 should be read in conjunction with its consolidated
financial statements and the related notes.  All statements in the
following discussion, which are not reports of historical information or
descriptions of current accounting policy, are forward-looking
statements.  Please consider our forward-looking statements in light
of the risks referred to in this Management’s Discussion and Analysis of
Financial Condition and Results of Operations cautionary note.  The
Company’s consolidated financial statements are reported in US dollars and have
been prepared in accordance with generally accepted accounting principles as
applied in Canada (“Canadian GAAP”).  As a registrant with the
Securities and Exchange Commission in the United States, the Company is required
to reconcile its financial results for significant measurement differences
between Canadian GAAP and generally accepted accounting principles as applied in
the United States (“U.S. GAAP”) as they specifically relate to the Company as
described in note 27 to its consolidated financial statements. This Management’s
Discussion and Analysis of Financial Condition and Results of Operations is
dated March 27, 2009.
 
 Business
overview
  Copernic
Inc. is a leading provider of award winning search technology for both the web
and desktop space delivered through its online properties, including
www.mamma.com and www.copernic.com.
   Through
its award winning Copernic Desktop Search® software search engine product, the
Company develops cutting edge search solutions bringing the power of a
sophisticated, yet easy-to-use search engine to the user’s PC. It allows for
instant searching of files, calendar, emails, and email attachments stored
anywhere on a PC hard drive. The desktop search application won the CNET
Editors’ Choice Award, as well as the PC World World Class award in 2005.
 In 2007, PC Pro, the UK’s most respected IT magazine for professionals,
and Micro Hebdo, one of France’s most read IT magazines, each selected Copernic
Desktop Search® 2.0 software search engine as the top desktop search tool. At
the CTIA Wireless 2008® Copernic’s Desktop Search won first prize for innovation
in the enterprise solutions category.  Also in 2008, Copernic Desktop
Search® 3.0 received the prestigious “Gizmo’s Top Pick” award in the “Best Free
Desktop Search Utility” category at Gizmo’s popular Best-ever Freeware
site.
   In Q3
2008, the Company launched version 3.0 of its business-oriented desktop search
product. The upgraded Copernic Desktop Search (“CDS”) Corporate Edition further
increases its competitive edge by adding Intranet integration features and
expanding its MS Outlook® search capabilities. CDS Professional Edition also
specifically targets knowledge workers with features such as the indexing of
Microsoft Outlook’s calendar, tasks and notes. Some advanced search functions
are now exclusive to the Professional and Corporate products: network drive
indexing, “as you type” display of results, and saving of queries for frequently
used searches. CDS Home Edition offers a unique competitive advantage with the
new “One Search” feature which simultaneous searches the desktop and the
Internet. Although the Home Edition is free to consumers, it does provide for
contextual advertised sponsored banner ads based on search queries.
   Through
its well established media placement channels, Copernic Inc. provides both
online advertising as well as pure content to its partnerships worldwide.
Copernic’s search division handles over 1 billion search requests per month and
has media placement partnerships established not only in North America, but in
Europe and elsewhere.  The revenue models of the Company are based
on:
   Pay-Per-Click
search listing placement – advertisers bid or pay a fixed price for position on
search listing advertisements on www.mamma.com and within the Copernic Media
SolutionsTM Publisher Network.
   Graphic
Ad Units – priced on a CPM (Cost-Per-Thousand) basis and are distributed through
the Copernic Media SolutionsTM Publisher Network.
   Copernic
Media SolutionsTM Publisher Network has over 98 active publishers (combined
search and graphic ad publishers).
   Copernic
Agent® and Copernic Desktop Search® users generate Web searches and clicks from
pay-per-click advertising listings.
   Copernic
Desktop Search® licensing to ISPs, portals, enterprise search providers and
e-commerce sites generates license, maintenance and customization
revenues.
   Copernic
Agent® Personal Pro, Copernic Summarizer® and Copernic Tracker® software are
sold from our e-commerce store.
  
 
 
 Search
and graphic advertising
 
 Approximately
80% of our revenues come from our search based businesses which
are:  search property Mamma.com, “The Mother of All Search Engines®”
and its search publisher network of approximately 98 partners representing 68%
of these revenues and Copernic Agent® and Copernic Desktop Search® for 12% of
these revenues respectively.  The revenue model in this sector is
simply a pay-per-click fee that is charged to the advertiser when a user clicks
on a sponsored link. The business model consists of advertisers buying keywords.
When these keywords are searched by a user, the advertiser’s Web site will be
listed in a premium position in the search results, identified as a sponsored
result. The Company aggregates advertisers from other search-based businesses
and from its own direct sales efforts (through direct sales and automated
online marketing initiatives). Advertising revenues generated through third
party search properties have associated payout costs; these payout costs
represent a percentage of the revenues generated from the distribution of search
advertisements onto third party search property.  Higher margins are
obtained through our own properties as there are no payout costs associated with
these revenues.
 
 2
  The other
revenue model is CPM based (cost per one thousand impressions published).
The business model is based on advertisers buying impressions for ad campaigns
(these are creative based campaigns: different size banners, pop-ups, rich media
advertising) and targeting them through our network of publishers. Campaigns can
be targeted in several ways: geo-targeting (by region), or by site category
(e.g.: travel, entertainment, finance).
 
 Software
licensing
 
 Approximately
14% of our revenues came from software licensing. The business model is based on
selling licenses of Copernic Desktop Search® to ISPs, portals, enterprises,
international distributors and resellers as well as Copernic Agent®
Personal/Pro, Copernic Summarizer® and Copernic Tracker® through our e-commerce
store.
 
 Customized
development and maintenance support
 
 Approximately
6% of our revenues were the result of customized development and maintenance
support.  The business model is based on billing our technical team
for software customization and maintenance support.
 
 Recent
events
 
 Write-down
of intangible assets and goodwill
 
 In Q4
2008, the Company concluded that its software unit was still facing delays in
execution and changes of market conditions of its commercial deployment
solutions.  Based on the Company’s assessment of the fair value of its
assets related to the software unit, the Company concluded that these assets had
suffered a loss in value and the fair values of intangible assets and goodwill
were less than their carrying value.  Therefore, write-downs of
$140,000 for trade names, $192,000 for technology and goodwill of $3,995,000
were recorded in 2008.
 
 Normal
course issuer bid
 
 On
November 11, 2008 the Company announced a normal course issuer bid under which
it may purchase up to a maximum of 700,000 of its common shares, representing
approximately 5% of the issued and outstanding common shares of the Company as
of the date hereof.  Purchases under the normal course issuer bid may
take place over a twelve month period commencing on the 17th day of November, 2008 and
ending on the 16th day of
November, 2009.  The Company reserves the right to discontinue its
normal course issuer bid at any time.
 
 Cost
reduction plan
 
 In Q4
2008, the Company continued to execute its cost reduction plan announced at the
end of Q1 2008.  Total costs in 2008 excluding write-downs,
termination costs and restructuring costs were at $6,678,774 compared to
$10,318,889 in 2007.
 
 In
addition, the Company has decided to close its Montreal office in Q1 2009 and
concentrate all its activity in Quebec City.
 
 The total
cost of the restructuring which includes termination costs, head hunters’ fees,
lease termination costs and moving expenses is estimated at approximately
$150,000. In 2008, the Company has recorded $101,012 of restructuring
costs.
 
 Resignation
and departure of officers
 
 Eric
Bouchard, Vice President Marketing and Officer of the Company, for personal
reasons, did not renew his employment contract which expired on December 31,
2008, with the Company. In relation with this departure, 51,999 stock options
were cancelled, resulting in a reversal of employee stock-based compensation
expense of $40,878 that was recorded in Q4 2008.
 
 The
Company accepted the resignation of Mr. Daniel Bertrand, Executive Vice
President and Chief Financial Officer, effective September 8, 2008. Furthermore
Ms. Claire Castonguay, the Company’s Controller for the past three years was
appointed Vice President, Finance and Controller while Mr. Ferland, President
and CEO assumed the additional responsibilities of Chief Financial Officer on an
interim basis. In relation with this resignation, the Company recorded and paid
termination costs of $149,420 in Q3 2008. Furthermore, 121,791 non
vested  stock options held by Mr. Bertrand were cancelled, resulting
in a reversal of employee stock-based compensation expense of $104,741 that was
recorded in Q3 2008. In Q4 2008, an additional 52,709 vested stock options held
by Mr. Bertrand were cancelled.
  3
 
 On
February 11, 2008, the Company announced the departure of Patrick Hopf,
Executive Vice President of Business Development.  117,134 options
held by Mr. Hopf were cancelled, resulting in a reversal of employee stock-based
compensation expense of $48,542 which was recorded in Q1 2008.
 
 On
February 8, 2008, the Company announced that its President and Chief Executive
Officer, Martin Bouchard, tendered his resignation, effective March 3, 2008,
citing personal reasons. 155,000 options held by Mr. Bouchard were cancelled,
resulting in a reversal of employee stock-based compensation expense of $49,320
which was recorded in Q1 2008.  Mr. Marc Ferland, a director of the
Company, was appointed President and CEO commencing on March 3,
2008.
 
 Notice
from NASDAQ
  On June
16, 2008 a notice from NASDAQ Listing Qualifications was received by the
Company.  The notice stated that for the last 30 consecutive business days,
the bid price of the Company’s common stock had closed below the minimum $1.00
per share requirement for continued inclusion under Marketplace Rule 4310(c)(4)
(the “Rule”).  Therefore, in accordance with Marketplace Rule
4310(c)(8)(D), the Company will be provided 180 calendar days, or until December
15, 2008 to regain compliance.  If, at anytime before December 15, 2008,
the bid price of the Company’s common stock closes at $1.00 per share or more
for a minimum of 10 consecutive business days, NASDAQ Staff will provide written
notification that it complies with the Rule. If compliance with this Rule cannot
be demonstrated by December 15, 2008, NASDAQ Staff will determine whether the
Company meets The NASDAQ Capital Market initial listing criteria as set forth in
Marketplace Rule 4310(c), except for the bid price requirement.  If it
meets the initial listing criteria, NASDAQ Staff will notify the Company that it
has been granted an additional 180 calendar day compliance period. If the
Company is not eligible for an additional compliance period, NASDAQ Staff will
provide written notification that the Company’s securities will be
delisted.  At that time, the Company may appeal NASDAQ Staff’s
determination to delist its securities to a Listing Qualifications Panel (the
“Panel”). These circumstances may adversely impact trading in our Common Shares
and may also adversely affect our ability to access capital.
  On
October 22, 2008, the Company received a NASDAQ Notice, indicating that the
Company has received an extension to comply with the minimum bid price
requirement for continued listing.
 
 The
notice stated: “Given these extraordinary market conditions, NASDAQ has
determined to suspend enforcement of the bid price and market value of publicly
held shares requirements through Friday, January 16, 2009. In that regard, on
October 16, 2008, NASDAQ filed an immediately effective rule change with the
Securities and Exchange Commission to implement the suspension. As a result, all
companies presently in a bid price or market value of publicly held shares
compliance period will remain at that same stage of the process and will not be
subject to being delisted for these concerns. These rules will be reinstated on
Monday, January 19, 2009 and the first relevant trade date will be Tuesday,
January 20, 2009.
 
 Since
your company had 59 calendar days remaining in its compliance period as of
October 16th, it will, upon reinstatement of the rules, still have this number
of days, or until March 19, 2009, to regain compliance. The company can regain
compliance, either during the suspension or during the compliance period
resuming after the suspension, by achieving a $1 closing bid price for a minimum
of 10 consecutive trading days”.
 
 On
December 19, 2008, NASDAQ issued an issuer alert #2008-005A stating “Given the
continued extraordinary market conditions, NASDAQ is extending the suspension of
the bid price and market value of publicly held shares requirements. Enforcement
of these rules is scheduled to resume on Monday, April 20, 2009. Any company in
the compliance process for a bid price or market value of publicly held shares
concern will continue to be “frozen” at the same stage of the process until the
end of the suspension. However, a company could be delisted for other reasons
during the suspension. NASDAQ staff will contact each company affected by this
extension and notify those that regain compliance with these requirements during
the suspension. NASDAQ will continue to monitor closely these circumstances.”
The Company had 59 calendar days remaining in its compliance period, therefore,
with the new extension, it has until June 18, 2009 to effect
compliance.
 
 As at
December 31, 2008, the Company’s closing stock price was at $0.13.
 
 Granting,
exercising and cancellation of stock options
 
 On April
2, 2008, the Company granted 100,000 stock options to an officer, at an exercise
price of $1.00 expiring in five years.
 
 On June
17, 2008, the Company granted 125,000 stock options to directors and a new
officer, at an exercise price of $0.62 expiring in five years.
 4
 On
November 11, 2008, the Company granted 125,000 stock options to two officers and
employees at an exercise price of $0.22 expiring in five years.
 
 As at
December 31, 2008, 785,819 stock options were forfeited.
 
 Critical
Accounting Policies and Estimates
 
 The
Company prepares its consolidated financial statements in accordance with
accounting principles generally accepted in Canada. In doing so, management has
to make estimates and assumptions that affect reported amounts of assets,
liabilities, revenues and expenses, as well as related disclosure of contingent
assets and liabilities.  In many cases, management reasonably has used
different accounting policies and estimates.  In some cases, changes
in the accounting estimates are reasonably likely to occur from period to
period.  Accordingly, actual results could differ materially from our
estimates. To the extent that there are material differences between these
estimates and actual results, our financial condition or results of operations
will be affected.  Management bases its estimates on past experience
and other assumptions that it believes are reasonable under the circumstances,
and it evaluates these estimates on an ongoing basis. Management refers to
accounting estimates of this type as critical accounting policies and estimates,
which are discussed further below. Management has reviewed its critical
accounting policies and estimates with its Board of Directors.
 
 Use of
estimates
 
 Significant
estimates in these financial statements include the allowance for doubtful
accounts, recovery of future income taxes, goodwill and annual goodwill
impairment test, useful lives and impairment of long-lived assets, stock-based
compensation costs and determination of the fair value of the intangible assets
on acquisitions.  Each of these critical accounting policies is
described in more detail below.
 
 Allowance
for doubtful accounts
 
 Judgments
are made in the ability to collect outstanding receivables and provide
allowances for the portion of receivables when collection becomes doubtful.
Provisions are made based upon a specific review of all significant outstanding
invoices.  The allowance provided for doubtful accounts does not
reflect the future ability to collect outstanding receivables, additional
provisions for doubtful accounts may be needed and our future results of
operations could be adversely impacted.
 
 For this
item, actual results could differ from those estimates.
 
 Recovery
of future income taxes
 
 Significant
judgment is used in determining our consolidated recovery of future income
taxes. Uncertainties may arise with respect to the tax treatment of certain
transactions. Although it is believed that estimates are reasonable, there is no
certainty that the final tax outcome of these matters will not be different than
that which is reflected in our financial statements. Such differences could have
a material effect on our future income taxes in the period in which such
determination is made.
 
 For this
item, actual results could differ from those estimates.
 
 Goodwill
and annual goodwill impairment test
 
 Goodwill
is evaluated for impairment annually on December 31st of each year or when events
or changed circumstances indicate impairment may have occurred.  In
connection with the goodwill impairment test, if the carrying value of the
Company’s reporting unit to which goodwill relates exceeds its estimated fair
value, the goodwill related to that reporting unit is tested for
impairment.  We have determined that in our case, the reporting units
is the operating segment or a business one level below that operating segment if
discrete financial information is prepared and regularly reviewed by management
at that level. If the carrying value of such goodwill is determined to be in
excess of its fair value, an impairment loss is recognized in the amount of the
excess of the carrying value over the fair value. Management’s determination of
the fair value of each reporting unit incorporates multiple inputs including
discounted cash flow calculations, peer company price to earnings multiples, the
level of the Company’s share price and assumptions that market participants
would make in valuing the reporting unit. Other assumptions include levels of
economic capital, future business growth, earnings projections and weighted
average cost of capital used for purpose of discounting. Decreases in the amount
of economic capital allocated to a reporting unit, decreases in business growth,
decreases in earnings projections and increases  in the weighted
average cost of capital will all cause the reporting unit’s fair value to
decrease. The Company completed its annual goodwill assessment for the
individual units as of December 31, 2008. Future adverse changes in these
factors could result in losses or inability to recover the carrying value of the
goodwill, thereby possibly requiring an impairment charge in the
future.
  For this
item, actual results could differ from those estimates.
 5
 Useful
lives and impairment of long-lived assets
 
 The
Company assesses the carrying value of its long-lived assets which include
property and equipment and intangible assets, for future recoverability when
events or changed circumstances indicate that the carrying value may not be
recoverable. Useful lives of long-lived assets are regularly reviewed for their
appropriateness. An impairment loss is recognized if the carrying value of a
long-lived asset exceeds the sum of its estimated undiscounted future cash flows
expected from its use.  The amount of impairment loss, if any, is
determined as the excess of the carrying value of the assets over their fair
value.  Management assesses long-lived assets for impairment using
estimates including discount rate, future growth rates, general economic,
industry conditions and competition.  Future adverse changes in these
factors could result in losses or inability to recover the carrying value of the
long-lived assets, thereby possibly requiring an impairment charge in the
future.
 
 For this
item, actual results could differ from those estimates.
 
 Stock-based
compensation costs
 
 In
determining the fair value of stock options and warrants issued to employees and
service providers, using the Black-Scholes option pricing model, the Company
must make estimates of the forfeiture rate, the period in which the holders of
the options and warrants will exercise the options and warrants and the
volatility of the Company’s stock over that same period. Different estimates
would result in different amounts of compensation being recorded in the
financial statements.
 
 Revenue
recognition
  Search
advertising, graphic advertising, software licensing, customized development and
maintenance support revenues are recognized when services are rendered, provided
there is persuasive evidence of an arrangement, the fee is fixed or
determinable, collection is considered probable, and fees are not subject to
forfeiture, refund or other concessions.
 
 With
respect to search advertising and graphic advertising revenues, insertion orders
or signed contracts are generally used as evidence of an arrangement. Revenues
are recognized in accordance with EIC-123, Reporting Revenue Gross as a
Principal Versus Net as an Agent.
 
 Software
licensing agreements are recognized upon delivery of software if persuasive
evidence of an arrangement exists, collection is probable, the fee is fixed or
determinable and vendor-specific evidence of an arrangement exists to allocate
the total fee to the different elements of an arrangement. Vendor-specific
objective evidence is typically based on the price charged when an element is
sold separately, or, in the case of an element not yet sold separately, the
price established by management, if it is probable that the price, once
established, will not change before market introduction.
 
 Revenues
from maintenance support for licenses previously sold and implemented are
recognized ratably over the term of the contract.
 
 Revenues
from customized development, not considered as part of the implementation of
software licenses, are recognized as the services are provided.
 
 Amounts
received in advance of the delivery of products or performance of services are
classified as deferred revenue.
 
 Estimates
of collection likelihood are based on a number of factors, including past
transaction history with the customer and the credit-worthiness of the customer.
If it is determined that collection of a fee is not probable, management defers
the fee and recognizes revenues at the time collection becomes probable, which
is generally upon receipt of cash.
 
 Recent
accounting changes
 
 a)  For
changes affecting 2007
 
 Initial
application of primary source of GAAP
 
 On
January 1, 2007, in accordance with the applicable transitional provisions, the
Company applied the recommendations of new Section 1506, “Accounting Changes”,
of the CICA’s Handbook.  This new section, effective for the years
beginning on or after January 1, 2007, prescribes the criteria for changing
accounting policies, together with the accounting treatment and disclosure of
changes in accounting policies, changes in accounting estimates and corrections
of errors.  Furthermore, the new standard requires the communication
of the new primary sources of GAAP that are issued but not yet effective or not
yet adopted by the Company.  The new standard had a negligible effect
on the Company’s financial statements.
 6
 Effective
in January 2007, the Company adopted three new accounting standards issued by
the CICA: Section 1530, Comprehensive Income; Section 3855, Financial
Instruments – Recognition and Measurement; and Section 3865, Hedges. These new
accounting standards establish standards for recognizing and measuring financial
instruments, namely financial assets, financial liabilities and derivatives.
Certain changes in the value of these financial instruments are presented under
Comprehensive Income in the Consolidated Statements of Shareholders’ Equity. The
application of these new standards had a negligible effect on the Company’s
financial statements and financial position.
 
 Accounting
policy choice for transaction costs (“EIC-166”)
 
 Issued in
June 2007, EIC-166 addresses whether the entity must make one accounting policy
choice that applies to all financial assets and financial liabilities classified
other than held for trading. This Abstract mentions that the same accounting
policy choice should be made for all similar financial instruments classified as
other than held for trading but that a different accounting policy choice might
be made for financial instruments that are not similar. This accounting
treatment should be applied retrospectively to transaction costs accounted for
in accordance with Section 3855 in financial statements issued for interim and
annual periods ending on or after September 30, 2007.  The adoption of
this Abstract had no impact on the Company’s financial statements.
 
 Convertible
and other debt instruments with embedded derivatives (“EIC-164”)
 
 EIC-164
addresses the situation where a company issues a debt instrument that is
convertible at any time at the holder’s option into a fixed number of common
shares. Upon conversion, the issuer is either required or has the option to
satisfy all or part of the obligation in cash. The instrument may also permit
the issuer to redeem the instrument prior to maturity, and/or permit the holder
to force the issuer to redeem the instrument prior to maturity. This Abstract
provides guidance on various issues related to such debt
instruments.
 
 The
accounting treatment in this Abstract should be applied retrospectively to
financial instruments accounted for in accordance with Section 3855 in financial
statements issued for interim and annual periods ending on or after June 30,
2007. The adoption of this Abstract had no impact on the financial
statements.
 
 Accounting
by an investor upon a loss of significant influence (“EIC-165”)
 
 Issued in
April 2007, EIC-165 addresses the situation of how an investor that loses
significant influence in an investee should account for the amount the investor
has in its accumulated other comprehensive income (OCI) for its proportionate
share of the investee’s equity adjustment for OCI.  The amount
recorded by the investor in accumulated OCI for the investor’s proportionate
share of an investee’s equity adjustments for OCI should be deducted from or
added to the carrying value of the investment at the time significant influence
is lost. To the extent that the adjustment results in a carrying value of the
investment that is less than zero, an investor should reduce the carrying value
of the investment to zero and record the remaining balance in net
income.
 
 The
accounting treatment in this Abstract should be applied retrospectively, with
restatement of prior periods, to all financial statements for interim and annual
reporting periods ending June 30, 2007.  The adoption of this Abstract
had no impact on the Company’s financial statements.
 
 b)  For
changes affecting 2008
 
 CICA
Section 1535 - Capital Disclosures
 
 In
December 2006, the CICA issued Handbook Section 1535 – Capital
Disclosures.  The new accounting standard requires disclosure of
information about an entity’s objectives, policies, and processes for managing
capital, as well as quantitative data about capital and whether the entity has
complied with any capital requirements.  This Handbook Section is
effective for interim and annual periods beginning on or after October 1,
2007.  The Company has adopted this new Section in its first
quarter.
 
 CICA
Section 3862 – Financial Instruments – Disclosures
 CICA
Section 3863 – Financial Instruments – Presentation
 
 In
December 2006, the CICA issued Handbook Section 3862 and 3863 that provide
additional guidance regarding disclosure of the risks associated with both
recognized and unrecognized financial instruments and how those risks are
managed.  These Handbook Sections are also effective for interim and
annual periods beginning on or after October 1, 2007. The Company has adopted
these new Sections in its first quarter.
 
 EIC-169,
Determining Whether a Contract is Routinely Denominated in a Single
Currency
 
 Issued
January 8, 2008, EIC-169 provides guidance on how to define or apply the term
“routinely denominated in commercial transactions around the world” as discussed
in Section 3855 when assessing contracts for embedded foreign currency
derivatives.  It also determines the factors that can be used to
determine whether a contract for the purchase or sale of a non-financial item
such as a commodity is routinely denominated in a particular currency in
commercial transactions around the world.  The accounting treatment of
this Abstract should be applied retrospectively to embedded foreign currency
derivatives in host contracts that are not financial instruments accounted for
in accordance with Section 3855 in financial statements issued for interim and
annual periods ending on or after March 15, 2008. The adoption of this Abstract
did not have any impact on the Company’s financial statements.
 7
 c)  Future
accounting changes
 
 Goodwill
and Intangible Assets - Section 3064
 
 In
January 2008, the CICA issued Section 3064, Goodwill and Intangible Assets,
which replaces Section 3062, Goodwill and Other Intangible Assets.  The
objectives of Section 3064 are to reinforce the principle-based approach to the
recognition of assets only in accordance with the definition of an asset and the
criteria for asset recognition; and clarify the application of the concept of
matching revenues and expenses such that the current practice of recognizing
asset items that do not meet the definition and recognition criteria is
eliminated.  This standard also provides guidance for the recognition
of internally developed intangible assets (including research and development
activities), ensuring consistent treatment of all intangible assets, whether
separately acquired or internally developed.  This Section applies to
interim and annual periods beginning on or after October 1, 2008, with early
adoption encouraged.  The adoption of this new standard will not have
any impact on the Company’s financial statements.
 
 Transition
to International Financial Reporting Standards (“IFRS”)
 
 In
February 2008, the Canadian Accounting Standards Board confirmed that publicly
accountable enterprises will be required to transition from Canadian GAAP to
IFRS for interim and annual financial reporting purposes for fiscal years
beginning on or after January 1, 2011 with comparative information. In May 2008,
the Canadian Securities Administrators issued Staff Notice 52-320, which
provides guidance on the disclosure of changes expected in accounting policies
related to the change over IFRS. In accordance with the notice, the Company is
required to provide an update of the Company’s IFRS conversion plan in each
financial reporting period prior to conversion on January 1, 2011.
 
 The
Company started working on the conversion plan in Q4 2008 with the help of an
external advisor. The project consists of three phases to be completed in order
to change over to IFRS: the diagnostic, development and
implementation.
 
 The first
phase includes the identification of significant differences between existing
Canadian GAAP and IFRS that are relevant to the Company and a review of the
alternatives available upon adoption.  In Q4 2008, the Company
performed a diagnostic review and established that the most significant
differences for the Company between Canadian GAAP and IFRS relate to revenue
recognition, property and equipment, leases, provisions, reporting currency,
presentation and additional disclosure requirements under IFRS. Additional
differences might be identified in the future as changes to IFRS standards are
released.
 
 The
second phase includes identification, evaluation and selection of accounting
policies necessary for the Company to change over to IFRS as well as potential
first-time adoption exemptions. During this phase, the Company will assess the
impact of the transition on the data system and internal control over financial
reporting,  the further training required for the financial team and
the impact on business activities such as foreign currency, capital
requirements, banking agreements or compensation arrangements. The Company began
this phase in Q1 2009.
 
 The
implementation phase will integrate all the solutions into the Company’s
financial system and processes that are necessary for the Company to convert to
IFRS.
 
 Results
of Operations
 
 Revenues
 
 2008
as compared to 2007
 
 Revenues
for 2008 were $7,011,631 compared to $8,116,408 in 2007, a decrease of
14%.
 
 In 2008
search and graphic advertising revenues decreased by $1,748,326 or 24% to
$5,606,383 from $7,354,709 last year. The variance is explained by a decrease in
search advertising revenues due to a change in client mix and reduced
traffic.  In 2008, the revenues decrease was offset by the reversal of
old prepayments totalling $80,000.
  Software
licensing went from $415,263 in 2007 to $951,022 in 2008, an increase of
$535,759. The increase is explained by the sales of a new product “CDS Corporate
Edition” in 2008. Also, the launch of the new CDS Pro version in late Q3 2008
started having an impact on  Q4 2008 results.
 
 In 2008,
customized development and maintenance support amounted to $454,226 compared to
$346,436 in 2007 an increase of $107,790. The
difference is explained by the maintenance fees included in the sales
of  “CDS Corporate Edition” launched in 2008.
  8
  2007
as compared to 2006
 
 In 2007,
the Company generated revenues of $8,116,408 compared to $9,596,402 for the
previous year, a decrease of 15%.
 
 Search
and graphic advertising revenues totalled $7,354,709 in 2007 compared to
$8,024,972 for the same period in 2006, a decrease of $670,263 or 8%. The
decrease is due to the decline in pop-up campaigns and a decrease in demand for
all other graphic ad units.
 
 Software
licensing stood at $415,263 in 2007 compared to $957,488 in 2006, a decrease of
$542,225 or 57%.  The decrease is explained by the sale of one major
CDS license in 2006 compared to two smaller CDS licenses in 2007.
 
 Customized
development and maintenance support revenues generated $346,436 in 2007 compared
to $613,942 for the same period the previous year, a decrease of $267,506 or
44%. The decrease is explained by maintenance support contracts that were not
renewed in 2007.
 
 Expenses
 
 Cost
of revenues
 
 Cost of
revenues is comprised of partners’ payouts and bandwidth costs to deliver our
services.
 
 2008
as compared to 2007
 
 For the
fiscal year ended December 31, 2008, cost of revenues represented $2,530,908 or
45% of search and graphic advertising revenues, compared to $2,636,410 or 36% of
search and graphic revenues for the same period last year, due to the loss of a
high margin account in 2007.
 
 In 2008,
search and graphic payouts totalled $2,169,916 compared to $2,262,356 for the
same period last year and represented respectively 39% and 31% over search and
graphic revenues. The increase in percentage in 2008 is explained by higher
payouts to retain partners which deliver better quality traffic.
 
 The
bandwidth costs were $360,992 for the twelve-month period ended December 31,
2008, compared to $374,054 for the same period in 2007.
 
 2007
as compared to 2006
 
 In 2007,
cost of revenues represented $2,636,410 or 36% over search and graphic
advertising revenues, compared to $2,704,101 or 34% over search and graphic
advertising revenues for the same period in 2006.
 
 Search
and graphic payouts totalled $2,262,356 in 2007 compared to $2,309,435 for the
same period in 2006 and represented respectively 31% and 29% over search
revenues.  The increase in percentage in 2007 is explained by
gradually increasing payouts to partners which deliver better quality
traffic.
 
 In 2007,
bandwidth costs decreased by $20,612 or 5% to $374,054 from $394,666 in
2006.
 
 Marketing,
sales and services
 
 Marketing,
sales and services consist primarily of salaries, commissions and related
personnel expenses for our sales force, advertising and promotional expenses, as
well as the provision for doubtful accounts.
 
 2008
as compared to 2007
 
 For the
year ended December 31, 2008, marketing, sales and services expenses stood at
$938,611 from $1,897,822 in 2007, a decrease of $959,211 or 51%. The variance
for the year is explained by the decrease in salaries and related employment
costs of $540,000, decrease in stock options compensation of $206,000 in
relation with the termination of employees and employee departures, decrease in
training and recruiting costs and purchase of algorithmic contents of
respectively $121,000 and $77,000.
  2007
as compared to 2006
 
 For the
fiscal year ended December 31, 2007, marketing, sales and services increased by
$47,646 or 3% from $1,850,176 in 2006 to $1,897,822. The variance for the
twelve-month period reflected an increase in salaries due to reorganization of
the department, professional services due to new sales consultants for CDS and
stock-based compensation of respectively $127,000, $93,000 and $67,000. The
increases were offset by a decrease in purchase of algorithmic contents and
publicity and promotion of respectively $137,000 and $117,000 due to reduced
revenue.
  9
  General
and administration
 
 General
and administrative expenses include salaries, stock-based compensation and
associated costs of employment of executive management and finance personnel.
These costs also include facility charges, investor relations, as well as legal,
tax and accounting, consulting and professional service fees associated with
operating our business and corporate compliance requirements.
 
 2008
as compared to 2007
 
 In 2008,
general and administrative expenses amounted to $2,907,964 compared to
$4,691,572 in 2007, a decrease of $1,783,608. Salaries and stock-based
compensation expenses decreased by respectively $338,000 and $428,000. In 2008,
salaries included termination costs of $149,000 related to the resignation of
the former CFO offset by a decrease in salaries of $53,000 due to employee
departures. In 2007, salaries included termination costs of $434,000 related to
the departure of the former President and CEO. The decrease in stock-based
compensation expenses is mainly explained by the reversal of expenses in 2008 of
$154,000 due to the departure of two officers compared to an additional expense
of $261,000 in 2007 related to the departure of the former CEO. In 2008,
professional fees decreased by $650,000 explained mainly by the reduction of
legal fees,  the investor relation expenses decreased by $147,000 due
to decrease expenses related to the annual reporting and the insurance expenses
decreased by $142,000 due to lower premium for D&O insurance.
 
 2007
as compared to 2006
 
 For the
year ended December 31, 2007, general and administrative expenses increased by
$695,245 to $4,691,572 from $3,996,327 in 2006. The increase is mainly explained
by the termination costs of approximately $695,000, which included a non-cash
item for accelerated vesting options of $253,236, related to the departure of
the former President and CEO of the Company in January 2007.
 
 Product
development and technical support
 
 Product
development and technical support costs include the salaries and associated
costs of employment of our team’s software developers and maintenance of our
metasearch engine and other IT systems. These charges also include the costs of
technical support and license maintenance. Research and development (R&D)
tax credits are also recorded against product development and technical support
expenses.
 
 2008
as compared to 2007
 
 In 2008,
product development and technical support expenses amounted to $1,938,724
compared to $2,416,410 last year, a decrease of $477,686 and mainly explained by
a decrease in salaries and related employment costs of $313,000, lower stock-
based compensation expenses of $63,000 and lower technical fees of
$60,000.
 
 2007
as compared to 2006
 
 For the
fiscal year ended December 31, 2007, product development and technical support
decreased to $2,416,410 from $2,538,867 in 2006, representing a decrease of
$122,457. The decrease is explained by a reduction in salaries due to a
reorganization of our R&D team.
 
 Amortization
of property and equipment
 
 2008
as compared to 2007
 
 In 2008,
amortization of property and equipment stood at $211,056 compared to $302,509 in
2007 explained by the decrease of the asset’s net book value at the beginning of
2008.
 
 2007
as compared to 2006
 
 Amortization
of property and equipment totalled $302,509 for the year ended December 31,
2007, compared to $178,192 in 2006. The increase is explained by acquisitions of
equipment during the year of approximately $150,000 and the change in the
amortization rates, from 30% in 2006 to 50% in 2007 and from 20% to 33% for
computer equipment and for furniture respectively.
  10
 Amortization
of intangible assets
 
 2008
as compared to 2007
 
 Amortization
of intangible assets stood at $1,019,159 in 2008 compared to $1,991,286 in 2007.
The decrease is explained by the write-downs of intangible assets of $1,985,470
recorded in Q4 2007.
 
 2007
as compared to 2006
 
 For the
fiscal year ended December 31, 2007, amortization of intangible assets decreased
to $1,991,286 from $2,067,009 in 2006. The decrease is explained by the
write-down of intangible assets recorded in Q3 2006 of $413,238.
 
 Write-downs
and settlement costs
 
 2008
as compared to 2007
 
 For the
twelve-month period ended December 31, 2008, write-down and settlement costs
totalled $4,432,264 compared to $10,146,311 in 2007.
 
 The
variance is mainly explained by the write-downs of goodwill and intangible
assets related to the acquisition of Copernic Technologies Inc. of $4,327,000 in
2008 compared to $9,200,000 in 2007.  Also, in 2007 the Company
recorded a write-down of goodwill of $846,310 in relation to the acquisition of
FocusIN.
 
 In 2008,
faced with improved competitive offerings the underlying core technology in
Copernic desktop search needed to be significantly enhanced and therefore, the
Company concluded, based on the assessment of the fair value of the Company’s
assets related to the software unit that the assets had suffered a loss in value
and the fair values of goodwill and intangible assets were less than the
carrying value for these assets.
 
 2007
as compared to 2006
 
 In 2007,
write-downs and settlement costs amounted to $10,146,311 compared to $1,683,238
for the same period last year.
 
 In Q4
2007, the Company recorded write-downs of goodwill and intangible assets related
to Copernic Technologies Inc.’s acquisition of respectively $7,214,531 and
$1,985,470. The Company’s software unit was facing delays in execution and
changes of market conditions of its commercial deployment
solutions.  Based on the assessment of the fair value of the Company’s
assets related to the software unit, the Company concluded that these assets had
suffered a loss in value and the fair values of goodwill and intangible assets
were significantly less than the carrying value for these assets.
 
 In Q4
2007, the Company reported decreased revenues due to industry pressures on
advertising rates, slow down in sponsored clicks and a general decrease for all
graphic ads.  Based on the Company assessment of the fair value of its
assets related to search / media unit, the Company concluded that the goodwill
had suffered a loss in value and the fair value of the related goodwill was
significantly less then its carrying value.  Therefore, a write-down
of goodwill of $846,310 for search / media unit was recorded in 2007 to bring it
to nil.
 
 Also in
Q4 2007, based on its assessment of the fair value of the Company’s investment
in LTRIM, the Company concluded that its investment had suffered a loss in value
other than a temporary decline due to LTRIM’s significant corporate
restructuring and therefore recorded a write-down of $150,000 to bring it to
nil.
 
 These
expenses were offset by the reversal of $50,000 of class action settlement
costs.
 
 In 2006,
the Company recorded class action settlement and closure costs of $700,000,
write-downs of property and equipment and intangible assets related to graphic
advertising for a total of $413,238 and a write-down of LTRIM’s investment of
$570,000.
 
 Restructuring
charges
 
 2008
as compared to 2007
 
 In order
to reduce its costs, the Company has decided to close its Montreal office in Q1
2009 and concentrate all its activity in Quebec City.
    11
  Interest
and other income
 
 2008
as compared to 2007
 
 Interest
income and other income decreased to $162,880 in 2008 from $401,183 in 2007. The
decrease reflected lower liquidities and lower interest rates in
2008.
 
 2007
as compared to 2006
 
 Interest
and other income stood at $401,183 in 2007 compared to $415,950 in
2006.
 
 Loss
(gain) on foreign exchange
 
 Gain on
foreign exchange totalled $24,440 for the year ended December 31, 2008 compared
to a loss of $115,071 in 2007 and $82,203 in 2006.
 
 The gain
in foreign exchange is mainly due to the depreciation of the Canadian dollar in
2008.
 
 Recovery
of income taxes
 
 For the
fiscal year 2008, the recovery for current and future income taxes amounted to
$390,043 compared to $1,248,974 in 2007 and $729,053 in 2006.
 
 In 2008,
the recovery of income taxes is explained by current income taxes paid of $522
and the reversal of $390,565 of future income taxes due to current amortization
and write-downs of Copernic Technologies Inc.’s intangible assets.
 
 In 2007,
the recovery of income taxes is explained by current income tax paid of $1,479
and the reversal of $1,250,453 of future income tax liability due to the current
amortization and write-downs of Copernic Technologies Inc.’s intangible
assets.
 
 In 2006,
the recovery of future income taxes is explained by a recovery of previous
year’s income tax for $4,876 and the reversal of $724,177 of future income tax
liability related to the amortization of Copernic Technologies Inc.’s intangible
assets.
 
 Loss
from continuing operations and loss per share from continuing
operations
 
 The
Company reported a loss from continuing operations of $6,490,704 ($0.44 per
share) in 2008, compared to a loss of $14,430,826   ($0.99 per
share) in 2007 and a loss of $4,358,708 ($0.31 per share) in 2006.
 
 Results
of discontinued operations and loss per share from discontinued
operations
 
 Results
from discontinued operations for Digital Arrow are nil in 2008 and 2007 compared
to contribution to earnings of $89,328 ($0.01 per share) in 2006.
 
 In 2006,
the contribution of Digital Arrow was due to a reversal of a reserve for salary
expenses after a settlement with two former employees and a reversal of the
provision for remaining restructuring costs.
 
 Loss
for the year
 
 The loss
for the year totalled $6,490,704 ($0.44 per share) in 2008 compared to a loss of
$14,430,826 ($0.99 per share) in 2007 and a loss of $4,269,380 ($0.30 per share)
in 2006. For 2008, 2007 and 2006, there is no difference between net loss under
US GAAP as compared to Canadian GAAP.
 
 Liquidity
and capital resources
 
 As at
December 31, 2008, the Company had liquidities of $5,072,932 which were composed
of $2,067,705 in cash and cash equivalents and $3,005,227 in temporary
investments compared to $6,872,412 in 2007 which consisted of $2,099,560 in cash
and cash equivalents, restricted cash of $807,468 and $3,965,384 in temporary
investments. For the year ended December 31, 2008, working capital was
$5,051,474 compared to $6,413,044 for the previous year.
 12
 Operating
activities
 
 In 2008,
the cash used for operating activities of $1,720,571 is explained by the loss
from continuing operations net of non-cash items of $1,281,463 and net change in
non-cash working capital items of $439,108.
 
 In 2007,
the cash used for operating activities of $1,527,890 is mainly due to the loss
from continuing operations net of non-cash items of $2,518,048 offset by net
change in non-cash working capital items of $990,158. The cash used for
discontinued operations in 2007 totalled $6,253.
 
 In 2006,
the cash used is explained by the loss from continuing operations net of
non-cash items of $1,343,253 offset by net change in non-cash working capital
items of $515,619. The cash used for discontinued operations in 2006 stood at
$83,948.
 
 Investing
activities
 
 In 2008,
investing activities provided cash of $939,224 explained by the decrease of
temporary investments of $960,157 offset by the purchases of property and
equipment and intangible assets of $20,933.
 
 In 2007,
investing activities provided cash of $1,408,367 mainly explained by the
decrease of temporary investments of $1,626,458 offset by the purchases of
property and equipment and intangible assets of $218,091.
 
 In 2006,
investing activities used cash of $1,326,652 mainly explained by the purchase of
temporary investments of $1,578,530 offset by a reimbursement related to
Copernic Technologies Inc.’s business acquisition of $379,382 and purchases of
intangible assets and property and equipment of $127,504.
 
 Financing
activities
 
 In 2008,
financing activities used cash of $57,976 for the repayment of obligations under
capital leases.
 
 In 2007,
financing activities provided cash totalling $676,258 from issuance of capital
stock upon exercise of options offset by repayment of obligations under capital
leases of $23,071.
 
 In
2006, no cash was provided by, nor used in the financing activities of the
Company.
 
 Liquidity
and capital resources
 
 The
Company considers that its liquidities will be sufficient to meet normal
operating requirements until the end of 2009. It has no plans for a significant
capital expenditures program nor does it view its Notice of Intention to
purchase up to 700,000 common shares as material in the light of its current
cash position. Furthermore, the company intends to fund its growth through
internal cash generation and has no plans to enter into debt or equity financing
at this time. In the long term, the Company may take advantage of favourable
market conditions to gain additional liquidity to fund growth, which could
include additional equity offerings or debt financing.
 
 Concentration
of credit risk with customers
 
 As at
December 31, 2008, four customers represented 52% of our accounts receivable
compared to 54% from four customers for the previous year resulting in a
significant concentration of credit risk. Management monitors the evolution of
these customers closely in order to rapidly identify any potential problems.
These customers, which represented more than 10% of the Company’s net accounts
receivable, have paid accounts receivable as per their commercial agreements.
The Company also monitors the other accounts receivable and there is no
indication of credit risk deterioration. Nevertheless we cannot assure that we
can retain the business of these customers or that their business will not
decline generally in the future.
 Segmented
information
 
 Management
follows and measures its operations using two separate segments:
 ·
              Search
      / Media
 o
              This
      segment includes the metasearch and vertical search engines such
      as:
 §
              Mamma.com –The Mother
      of all Search Engines is a search site on the Web that simultaneously
      searches a variety of engines, directories, and deep content
      sites.
 §
              Mamma Videos –Find,
      explore, and view broadband videos from a wide range of topics including
      TV shows, movies, music, and news from providers across the
      Web.
   13
  §
              Mamma Jobs –Provides job seekers
      free instant access in one single search for job boards, newspapers and
      associations.
 o
              This
      segment also includes our media network consisting of active publishers in
      the combined search and graphic ad categories which provides online
      marketing solutions such as:
 §
              Pay-per-click advertising –Advertisers bid or pay a fixed price for position on search listing
      advertisements on our own properties as well as within our Publisher
      Network.
 §
              Graphic ad
      network –Allows
      advertisers to pay a CPM price for graphic ads to be distributed though
      our Publisher Network.
 §
              XML search feeds –Our
      property provides third party’s content, whether commercial or
      non-commercial search result
listings.
 ·
              Software
 o
              This
      segment includes various sophisticated technology such
  as:
 §
              Copernic
      Desktop Search® –Software that allows to find
      files and e-mails with the power of a search engine right on a
      desktop.  With the Company’s new mobile plug-in, PC files can be
      accessed by mobile devices.  There are three product types
      available:
 ·
              Copernic
      Desktop Search® Home Edition: for personal use with basic features and is
      now ad supported.
 ·
              Copernic
      Desktop Search® Pro Edition for SMEs with features such as the indexing of
      Microsoft Outlook’s calendar, tasks and
notes.
 ·
              Copernic
      Desktop Search® Corporate Edition: enterprise-oriented desktop search
      solution that is secure, scalable and easy to deploy and provides searches
      on Intranets.
 §
              Copernic Agent® –An
      Internet search and tracking tool
software.
 §
              Copernic
      Tracker® – A
      software that keeps users up to date with what is new on the
      Web.
 §
              Copernic
      Summarizer® – Creates concise document
      summaries of any file or Web page to save users time spent reading,
      without missing any important
  information.
 o
              This
      segment also includes software customization and
    maintenance.
 
 Search
/ Media Segment
 
 Revenues
for the twelve-month period ended December 31, 2008 totalled $5,606,383 compared
to $7,354,709 for the same period in 2007.
 
 Segmented
operating income before unallocated expenses was $1,807,513 in 2008 compared to
$1,592,554 for the same period in 2007.  The variance was mainly due
to decrease in search revenues of $1,748,000 offset by reduced expenses in
marketing, sales, services and product development and technical support of
respectively $585,000 and $423,000 due to rationalization of these segments.
Also, in 2008, write-downs and settlement costs were reduced by
$796,000.
 
 Software
Segment
 
 In 2008,
revenues totalled $1,405,248 compared to $761,669 for the same period in
2007.
 
 Segmented
operating loss before unallocated expenses was $5,866,604 in 2008 compared to
$12,766,894 for the same period in 2007.  The variance was mostly due
to increased revenues of $644,000 and a decrease of $4,818,000 in write-downs.
Also, amortization of intangible assets decreased by $961,000 in 2008 explained
by the write-down recorded in Q4 2007.
 
 Q4
2008 Results
 
 Revenues
 
 Revenues
for the three-month period ended December 31, 2008 (“Q4”) totalled $1,909,648
compared to $1,654,352 for the same period in 2007, an increase of $255,296 or
15%. The increase is mainly explained by software licensing.
 
 Search
and graphic advertising revenues went from $1,446,167 in Q4 2007 to $1,435,148
in Q4 2008, a decrease of $11,019. In Q4 2008, the revenues decrease was offset
partially by the reversal of old prepayments of $80,000.
 
 Software
licensing stood at $325,025 in Q4 2008 compared to $85,751 in Q4 2007, an
increase of $239,274. The increase is mainly due to the launch of new products
“CDS Corporate Edition” and “CDS Pro”.
 
 Customized
development and maintenance support revenues generated $149,475 in Q4 2008
compared to $122,434 for the same period last year, an increase of
$22,041.
 14
 Expenses
 
 Cost
of revenues
 
 In Q4
2008, cost of revenues represented $601,519 or 42% over search and graphic
advertising revenues, compared to $543,763 or 38% over search and graphic
advertising revenues for the same period in 2007.
 
 In Q4
2008, search and graphic advertising payouts totalled $552,605 compared to
$433,514 for the same period last year, representing 39% and 30% of search and
graphic revenues respectively.  In 2007, payouts were reduced by the
reversal of old inactive payables of $79,342. Excluding the adjustment, the
percentage of payouts over revenue would have been 35%. In 2008, the percentage
of payouts was increased to retain partners with good quality
traffic.
 
 The
bandwidth costs were $48,914 in Q4 2008 compared to $110,249 for the same period
in 2007.  In Q4 2007, two new data centers were opened in Canada and
were run in parallel with the ones located in the US. The data centers located
in the US were shut down in Q2 2008.
 
 Marketing,
sales and services
 
 In Q4
2008, marketing, sales and services expenses decreased to $160,802 from $480,531
in Q4 2007, a decrease of $319,729. The variance is mainly explained by the
decrease in salaries and fringe benefits and stock-based compensation of
respectively $173,000 and $47,000, a decrease in purchase of algorithmic
contents and professional services by respectively $25,000 and $21,000. Other
expenses also decreased by $54,000 in Q4 2008.
 
 General
and administration
 
 General
and administrative expenses in Q4 2008 totalled $525,309 as compared to
$1,020,709 for the same period last year, a decrease of $495,400 or 49%. The
variance is explained by a decrease in professional fees of $258,000 a decrease
in salaries, stock-based compensation, investor relation and other expenses of
respectively $79,000, $60,000, $34,000 and $64,000.
 
 Product
development and technical support
 
 Product
development and technical support expenses amounted to $332,145 in Q4 2008,
compared to $651,830 for the same period last year, a decrease of $319,685 or
49%. The decrease is explained by the decrease in salaries and other employment
costs of $220,000 and a decrease in stock-based compensation of $75,000 due
lower headcount.
 
 Amortization
of property and equipment
 
 Amortization
of property and equipment totalled $55,353 in Q4 2008, compared to $119,220 for
the same period last year. The decrease is explained by lower net book value at
the beginning of the year.
 
 Amortization
of intangible assets
 
 Amortization
of intangible assets decreased to $254,746 in Q4 2008, compared to $511,384 for
the same period last year.  The decrease is explained by the
write-downs of intangible assets at the end of Q4 2007.
 
 Write-downs,
settlement and other costs
 
 In Q4
2008, write-downs and settlement costs amounted to $ 4,410,733 compared to
$10,146,311 in Q4 2007.
 
 The
variance is mainly explained by the write-downs of goodwill and intangible
assets related to the acquisition of Copernic Technologies Inc. of $4,327,000 in
2008 compared to $9,200,000.  Also, in 2007 the Company recorded a
write-down of goodwill of $846,310 in relation to the acquisition of
FocusIN.
 
 In 2008,
still facing delays in execution and changes of market conditions of its
commercial deployment solutions, the Company concluded, based on the assessment
of the fair value of the Company’s assets related to the software unit that the
assets had suffered a loss in value and the fair values of goodwill and
intangible assets were less than the carrying value for these
assets.
 15
 Restructuring
charges
 
 In Q4
2008, $69,621 was recorded as restructuring charges in relation with the
Company’s decision to close its Montreal office in Q1 2009.
 
 Interest
and other income
 
 Interest
income and other income decreased to $40,762 in Q4 2008 from $74,078 in Q4 2007.
The decrease is explained by lower liquidities during Q4 2008 compared to the
same period last year.
 
 Loss
(gain) on foreign exchange
 
 Gain on
foreign exchange totalled $18,218 for Q4 2008, compared to a loss of $41,164 for
the same period last year mainly due to the depreciation of the Canadian dollar
in Q4 2008.
 
 Income
taxes
 
 The
recovery of future income taxes relates to the amortization of intangible assets
which does not have the same asset base for accounting and tax
purposes.  Recovery of future income taxes totalled $181,163 in Q4
2008, compared to $796,401 for the same period last year.  In 2007,
the recovery for income taxes included a more significant reversal of future
income taxes liability in relation with the write-downs of intangible assets in
Q4 2007 compared to Q4 2008.
 
 Loss
and loss per share
 
 Loss for
the three-month period ended December 31, 2008, totalled $4,260,437 ($0.29 per
share), compared to a loss of $10,990,081 ($0.75) per share for the same period
last year.
 
 Off-balance
sheet arrangements
 
 As at
December 31, 2008 and 2007, the Company has no off-balance sheet
arrangements.
 
 Contractual
obligations, contingent liabilities and commitments
 
 The
following table summarizes our contractual obligations as at December 31, 2008,
and the effect such obligations are expected to have on our liquidity and cash
flows in future periods:
 
 Operating
      leasesYears:
              $2009
              
              249,0002010
              
              46,0002011
              
              27,0002012
              
              18,0002013
              
              -
 
 The
Company maintains director and officer insurance, which may cover certain
liabilities arising from its obligation to indemnify its directors, and officers
and former directors, officers and employees of acquired companies, in certain
circumstances. It is not possible to determine the maximum potential amount
under these indemnification agreements due to the limited history of prior
indemnification claims and the unique facts and circumstances involved in each
particular agreement. Such indemnification agreements may not be subject to
maximum loss clauses. Historically, the Company has not incurred material costs
as a result of obligations under these agreements and it has not accrued any
liabilities related to such indemnification obligations in its financial
statements.
 
 As at
December 31, 2008, the Company has change of control agreements with certain
executive officers and a few employees.  If there is a change of
control of the Company and their employments are not required, the Company will
have to pay lump sums up to a maximum of $614,181 for these specific
people.
  16
 Subsequent
Events
 
 On
January 28, 2009, the Board of Director’s unanimously approved an adjustment to
Mr. David Goldman’s consultancy agreement, to which David Goldman concurred,
that the change of control clause is amended to an entitlement to the lesser
of  $300,000 or 3% of the transaction triggering a change of control.
The Board further specified that the resulting payment would be made in the same
currency as the transaction itself. The previous agreement stipulated that in
the case of change of control, David Goldman was entitled to receive a lump sum
payment equal to the greater of the past 24 months consulting payments or CDN
$300,000.
 
 On
February 2, 2009, the Company sold 5,200,000 shares of TECE Inc. for CDN
$208,000.  The Company’s investment in TECE Inc. was completely
written off in 2001.
 
 On
February 3, 2009, a lawsuit was filed against the Company by one former officer.
The plaintiff alleges an unlawful dismissal by the Company and seeks damages
amounting to CDN $256,775. The Company denies the allegations against it,
believes that the claim is without merit, and intends to defend
itself.
 
 On March
4, 2009 the Company announced that Claire Castonguay, Vice President, Finance
and Controller will terminate her employment with the Company at the end of the
quarter consistent with the closure of the Montreal office at that time.
Jean-Rock Fournier, Vice President Finance since the beginning of the quarter
and also located in Quebec City will assume the duties of Chief Financial
Officer, effective March 31st. Mr. Fournier is
a  Chartered Accountant since 2000, practiced public accounting with
KPMG, and has been Vice President Finance with Axion Technologies and PGI, both
companies in the Information Technology sector.
 
 Risks
and uncertainties
 
 Copernic
Inc.’s Management considers that these following factors, among others, should
be considered in evaluating its future results of operations.
 
 Our
revenues depend to some degree on our relationship with one customer, the loss
of which would adversely affect our business and results of
operations.
 
 For the
year ended December 31, 2008, approximately 13% of our revenues were derived
from an agreement with our largest customer. Revenues from this customer
represented 14% of our revenues in2007 and11% of our revenues in
2006. Although we monitor our accounts receivable for credit risk deterioration
and this customer has been paying its payables to Copernic Inc. in accordance
with the terms of its agreement with the Company, there can be no assurance that
it will continue to do so or that it will continue to do so at the volume of
business it has done historically. Our loss of this customer’s business would
adversely affect our business and results of operations.
 
 Our
operating results may fluctuate, which makes our results difficult to predict
and could cause our results to fall short of expectations.
 
 Our
operating results may fluctuate as a result of a number of factors, many of
which are outside of our control. For these reasons, comparing our operating
results on a period-to-period basis may not be meaningful, and you should not
rely on our past results as an indication of our future performance. Our
operating results may fluctuate as a result of many factors related to our
business, including the competitive conditions in the industry, loss of
significant customers, delays in the development of new services and usage of
the Internet, as described in more detail below, and general factors such as
size and timing of orders and general economic conditions.  Our
quarterly and annual expenses as a percentage of our revenues may be
significantly different from our historical or projected rates. Our operating
results in future quarters may fall below expectations. Any of these events
could cause our stock price to fall. Each of the risk factors listed in this
“Risk Factors” section, and the following factors, may affect our operating
results:
 
 ·
              Our
      ability to continue to attract users to our Web
  sites.
 ·
              Our
      ability to monetize (or generate revenue from) traffic on our Web sites
      and our network of advertisers’ Web
sites.
 ·
              Our
      ability to attract advertisers.
 ·
              The
      amount and timing of operating costs and capital expenditures related to
      the maintenance and expansion of our businesses, operations and
      infrastructure.
 ·
              Our
      focus on long term goals over short term
  results.
 ·
              The
      results of any investments in risky
projects.
 ·
              Payments
      that may be made in connection with the resolution of litigation
      matters.
 ·
              General
      economic conditions and those economic conditions specific to the Internet
      and Internet advertising.
 ·
              Our
      ability to keep our Web sites operational at a reasonable cost and without
      service interruptions.
 ·
              Geopolitical
      events such as war, threat of war or terrorist
  actions.
 ·
              Our
      ability to generate CDS revenues through licensing and revenue
      share.
 
 Because
our business is changing and evolving, our historical operating results may not
be useful to you in predicting our future operating results. In addition,
advertising spending has historically been cyclical in nature, reflecting
overall economic conditions as well as budgeting and buying patterns. Also, user
traffic tends to be seasonal.
 17
 We
rely on our Web site partners for a significant portion of our net revenues, and
otherwise benefit from our association with them. The loss of these Web site
partners could prevent us from receiving the benefits we receive from our
association with them, which could adversely affect our business.
 
 We
provide advertising, Web search and other services to members of our partner Web
sites. We consider this network to be critical in the future growth of our
revenues. However, some of the participants in this network may compete with us
in one or more areas. Therefore, they may decide in the future to terminate
their agreements with us. If our Web site partners decide to use a competitor’s
or their own Web search or advertising services, our revenues would
decline.
 
 We face significant competition from Microsoft,
Yahoo, Google and Ask.com.
 
 We face
formidable competition in every aspect of our business, and particularly from
other companies that seek to connect people with information on the Web and
provide them with relevant advertising. Currently, we consider our primary
competitors to be Microsoft, Yahoo, Google and Ask.com. Microsoft, Yahoo, Google and Ask.com have a variety of Internet
products, services and content that directly compete with our products,
services, content and advertising solutions.We expect that Microsoft will increasingly use its financial and
engineering resources to compete with us.
 
 Microsoft,
Yahoo, Google and Ask.com have more employees and cash resources than we do.
These companies also have longer histories operating search engines and more
established relationships with customers. They can use their experience and
resources against us in a variety of competitive ways, including by making
acquisitions, investing more aggressively in research and development and
competing more aggressively for advertisers and Web sites. Microsoft and Yahoo
also may have a greater ability to attract and retain users than we do because
they operate Internet portals with a broad range of products and services. If
Microsoft, Yahoo, Google or Ask.com are successful in providing similar or
better Web search results compared to ours or leverage their platforms to make
their Web search services easier to access than ours, we could experience a
significant decline in user traffic. Any such decline in user traffic could
negatively affect our net revenues.
 
 We
face competition from other Internet companies, including Web search providers,
Internet advertising companies and destination Web sites that may also bundle
their services with Internet access.
 
 In
addition to Microsoft, Yahoo, Google and Ask.com, we face competition from other
Web search providers, including companies that are not yet known to us. We
compete with Internet advertising companies, particularly in the areas of
pay-for-performance and keyword-targeted Internet advertising. Also, we may
compete with companies that sell products and services online because these
companies, like us, are trying to attract users to their Web sites to search for
information about products and services.  Barriers to entry in our
business are generally low and products, once developed, can be distributed
quickly and to a wide range of customers at a reasonably low cost.
 
 We also
compete with destination Web sites that seek to increase their search-related
traffic. These destination Web sites may include those operated by Internet
access providers, such as cable and DSL service providers. Because our users
need to access our services through Internet access providers, they have direct
relationships with these providers. If an access provider or a computer or
computing device manufacturer offers online services that compete with ours, the
user may find it more convenient to use the services of the access provider or
manufacturer. In addition, the access provider or manufacturer may make it hard
to access our services by not listing them in the access provider’s or
manufacturer’s own menu of offerings. Also, because the access provider gathers
information from the user in connection with the establishment of a billing
relationship, the access provider may be more effective than we are in tailoring
services and advertisements to the specific tastes of the user.
 
 There has
been a trend toward industry consolidation among our competitors, and so smaller
competitors today may become larger competitors in the future. If our
competitors are more successful than we are at generating traffic and
advertising, our revenues may decline.
 
 We
face competition from traditional media companies, and we may not be included in
the advertising budgets of large advertisers, which could harm our operating
results.
 
 In
addition to Internet companies, we face competition from companies that offer
traditional media advertising opportunities. Most large advertisers have set
advertising budgets, a very small portion of which is allocated to Internet
advertising. We expect that large advertisers will continue to focus most of
their advertising efforts on traditional media. If we fail to convince these
companies to spend a portion of their advertising budgets with us, or if our
existing advertisers reduce the amount they spend on our programs, our operating
results would be harmed.
 
 Our
revenues declined in 2008 and we are experiencing downward pressure on our
operating margin, which we expect will intensify in the future.
 18
 We
believe our operating margin may decline as a result of increasing competition
and increased expenditures for all aspects of our business as a percentage of
our revenues, including product development and sales and marketing expenses.
Also, our operating margin has declined as a result of increases in the
proportion of our revenues generated from our partner Web sites. The margin on
revenues we generate from our partner Web sites is generally significantly less
than the margin on revenues we generate from advertising on our Web sites.
Additionally, the margin we earn on revenues generated from our partner Web
sites could decrease in the future if our partners require a greater portion of
the advertising fees.
 
 If
we do not continue to innovate and provide products and services that are useful
to users, we may not remain competitive, and our revenues and operating results
could suffer.
 
 Our
success depends on providing products and services that people use for a high
quality Internet experience. Our competitors are constantly developing
innovations in Web search, online advertising and providing information to
people. As a result, we must continue to invest significant resources in
research and development in order to enhance our Web search technology and our
existing products and services and introduce new high-quality products and
services that people will use. If we are unable to predict user preferences or
industry changes, or if we are unable to modify our products and services on a
timely basis, we may lose users, advertisers and Web site partners. Our
operating results would also suffer if our innovations were not responsive to
the needs of our users, advertisers and Web site partners are not appropriately
timed with market opportunity, effectively brought to market or well received in
the market place.  As search technology continues to develop, our
competitors may be able to offer search results that are, or that are perceived
to be, substantially similar or better than those generated by our search
services. This may force us to compete on bases in addition to quality of search
results and to expend significant resources in order to remain
competitive.
 
 Our
business depends on a strong brand, and if we are not able to maintain and
enhance our brands, our ability to expand our base of users and advertisers will
be impaired and our business and operating results will be harmed.
 
 We
believe that the brand identity that we have developed has significantly
contributed to the success of our business. We also believe that maintaining and
enhancing the Company’s brands is critical to expanding our base of users and
advertisers. Maintaining and enhancing our brands may require us to make
substantial investments and these investments may not be successful. If we fail
to promote and maintain the Mamma® and Copernic® brands, or if we incur
excessive expenses in this effort, our business, operating results and financial
condition will be materially and adversely affected. We anticipate that, as our
market becomes increasingly competitive, maintaining and enhancing our brands
may become increasingly difficult and expensive. Maintaining and enhancing our
brands will depend largely on our ability to continue to provide high quality
products and services, which we may not do successfully.
 
 We
generated a significant portion of our revenues in 2008 from our advertisers. Our advertisers can generally terminate
their contracts with us at any time. Advertisers will not continue to do
business with us if their investment in advertising with us does not generate
sales leads, and ultimately customers, or if we do not deliver their
advertisements in an appropriate and effective manner.
 
 New
technologies could block our ads, which would harm our business.
 
 Technologies
are being developed that can block the display of our ads. Most of our revenues
are derived from fees paid to us by advertisers in connection with the display
of ads on Web pages. As a result, ad-blocking technology could, in the future,
adversely affect our operating results.
 
 We
generate all of our revenue from advertising and software licensing, and the
reduction of spending by or loss of customers could seriously harm our
business.
 
 If we are
unable to remain competitive and provide value to our advertisers, they may stop
placing ads with us, which could negatively affect our net revenues and
business. Copernic has on-going efforts to maintain a high quality network of
publishers in order to offer advertisers high quality users that will provide
for a satisfactory ROI. Therefore, from time to time we cease sending
advertisements to what we determine are low quality publishers. This can reduce
our revenues in the short term in order to create advertiser retention in the
long term.
 
 We make investments in new products and services that may not be
profitable.
 
 We have made and will continue to make investments in research,
development and marketing for new products, services and
technologies.  Our success in this area depends on many factors
including our innovativeness, development support, marketing and
distribution.  We may not achieve significant revenue from a new
product for a number of years, if at all.  For the years 2007 and
2008, we did not generate significant revenues from licensingCopernic® software and we cannot assure you that we will generate
significant revenue from the licensing of Copernic® software going forward. In
addition, ourcompetitors are constantly improving their
competing software, and if we fail to innovate and remain competitive our
revenues from software licensing will decline.
  19
  Volatility
of stock price and trading volume could adversely affect the market price and
liquidity of the market for our Common Shares.
 
 Our
Common Shares are subject to significant price and volume fluctuations, some of
which result from various factors including (a) changes in our business,
operations, and future prospects, (b) general market and economic conditions,
and (c) other factors affecting the perceived value of our Common Shares.
Significant price and volume fluctuations have particularly impacted the market
prices of equity securities of many technology companies including without
limitation those providing communications software or Internet-related products
and services. Some of these fluctuations appear to be unrelated or
disproportionate to the operating performance of such companies. The market
price and trading volume of our Common Shares have been, and may likely continue
to be, volatile, experiencing wide fluctuations. In addition, the stock market
in general, and market prices for Internet-related companies in particular, have
experienced volatility that often has been unrelated to the operating
performance of such companies.  These broad market and industry
fluctuations have adversely affected the price of our stock, regardless of our
operating performance.
  On June
16, 2008 a notice from NASDAQ Listing Qualifications was received by the
Company.  The notice stated that for the last 30 consecutive business days,
the bid price of the Company’s common stock had closed below the minimum $1.00
per share requirement for continued inclusion under Marketplace Rule 4310(c)(4)
(the “Rule”).  Therefore, in accordance with Marketplace Rule
4310(c)(8)(D), the Company will be provided 180 calendar days, or until December
15, 2008 to regain compliance.  If, at anytime before December 15, 2008,
the bid price of the Company’s common stock closes at $1.00 per share or more
for a minimum of 10 consecutive business days, NASDAQ Staff will provide written
notification that it complies with the Rule. If compliance with this Rule cannot
be demonstrated by December 15, 2008, NASDAQ Staff will determine whether the
Company meets The NASDAQ Capital Market initial listing criteria as set forth in
Marketplace Rule 4310(c), except for the bid price requirement.  If it
meets the initial listing criteria, NASDAQ Staff will notify the Company that it
has been granted an additional 180 calendar day compliance period. If the
Company is not eligible for an additional compliance period, NASDAQ Staff will
provide written notification that the Company’s securities will be
delisted.  At that time, the Company may appeal NASDAQ Staff’s
determination to delist its securities to a Listing Qualifications Panel (the
“Panel”). These circumstances may adversely impact trading in our Common Shares
and may also adversely affect our ability to access capital.
  On
October 22, 2008, the Company received a NASDAQ Notice, indicating that the
Company has received an extension to comply with the minimum bid price
requirement for continued listing.
 
 The
notice stated: “Given these extraordinary market conditions, NASDAQ has
determined to suspend enforcement of the bid price and market value of publicly
held shares requirements through Friday, January 16, 2009. In that regard, on
October 16, 2008, NASDAQ filed an immediately effective rule change with the
Securities and Exchange Commission to implement the suspension. As a result, all
companies presently in a bid price or market value of publicly held shares
compliance period will remain at that same stage of the process and will not be
subject to being delisted for these concerns. These rules will be reinstated on
Monday, January 19, 2009 and the first relevant trade date will be Tuesday,
January 20, 2009.
 
 Since
your company had 59 calendar days remaining in its compliance period as of
October 16th, it will, upon reinstatement of the rules, still have this number
of days, or until March 19, 2009, to regain compliance. The company can regain
compliance, either during the suspension or during the compliance period
resuming after the suspension, by achieving a $1 closing bid price for a minimum
of 10 consecutive trading days”.
 
 On
December 19, 2008, NASDAQ issued an issuer alert #2008-005A stating “Given the
continued extraordinary market conditions, NASDAQ is extending the suspension of
the bid price and market value of publicly held shares requirements. Enforcement
of these rules is scheduled to resume on Monday, April 20, 2009. Any company in
the compliance process for a bid price or market value of publicly held shares
concern will continue to be “frozen” at the same stage of the process until the
end of the suspension. However, a company could be delisted for other reasons
during the suspension. NASDAQ staff will contact each company affected by this
extension and notify those that regain compliance with these requirements during
the suspension. NASDAQ will continue to monitor closely these circumstances.”
The Company had 59 calendar days remaining in its compliance period, therefore,
with the new extension, it has until June 18, 2009 to effect
compliance.
 
 As at
December 31, 2008, the Company’s closing stock price was at $0.13.
 
 Infringement
and liability claims could damage our business.
 
 Companies
in the Internet, technology and media industries own large numbers of patents,
copyrights, trademarks and trade secrets and frequently enter into litigation
based on allegations of infringement or other violations of intellectual
property rights. As we face increasing competition and become increasingly high
profile, the possibility of intellectual property rights claims against us
grows. Our technologies may not be able to withstand any third-party claims or
rights against their use. Any intellectual property claims, with or without
merit, could be time-consuming, expensive to litigate or settle and could divert
resources and attention. In addition, many of our agreements with our
advertisers require us to indemnify certain third-party intellectual property
infringement claims, which would increase our costs as a result of defending
such claims and may require that we pay damages if there were an adverse ruling
in any such claims. An adverse determination also could prevent us from offering
our services to others and may require that we procure substitute services for
these members.
 20
 With
respect to any intellectual property rights claim, to resolve
these claims, we may enter into royalty and licensing agreements on less
favorable terms, pay damages or stop using technology or content found to be in
violation of a third party’s rights. We may have to seek a license for the
technology or content, which may not be available on reasonable terms and may
significantly increase our operating expenses. The technology or content also
may not be available for license to us at all. As a result, we may also be
required to develop alternative non-infringing technology, which could require
significant effort and expense, or stop using the content. If we cannot license
or develop technology or content for the infringing aspects of our business, we
may be forced to limit our product and service offerings and may be unable to
compete effectively. Any of these results could harm our brand and operating
results.
 
 In
addition, we may be liable to third-parties for content in the advertising we
deliver if the artwork, text or other content involved violates copyright,
trademark, or other intellectual property rights of third-parties or if the
content is defamatory. Any claims or counterclaims could be time-consuming,
could result in costly litigation and could divert management’s
attention.
 
 Additionally,
we may be subject to legal actions alleging patent infringement, unfair
competition or similar claims. Others may apply for or be awarded patents or
have other intellectual property rights covering aspects of our technology or
business. For example, we understand that Overture Services, Inc. (acquired by
Yahoo) purports to be the owner of U.S. Patent No. 6,269,361, which was issued
on July 31, 2001 and is entitled “System and method for influencing a position
on a search result list generated by a computer network search engine.” Overture
has aggressively pursued its alleged patent rights by filing lawsuits against
other pay-per-click search engine companies such as MIVA (formerly known as
FindWhat.com) and Google. MIVA and Google have asserted counter-claims against
Overture including, but not limited to, invalidity, unenforceability and
non-infringement.  While it is our understanding that the lawsuits
against MIVA and Google have been settled, there is no guarantee Overture (owned
by Ask.com) will not pursue its alleged patent rights against other companies.
In addition, X1 has won a patent to provide search results as you type a
function utilised by other companies including Copernic Inc.
 
 An
inability to protect our intellectual property rights could damage our business.
 
 We rely
upon a combination of trade secret, copyright, trademark, patents and other laws
to protect our intellectual property assets. We have entered into
confidentiality agreements with our management and key employees with respect to
such assets and limit access to, and distribution of, these and other
proprietary information. However, the steps we take to protect our intellectual
property assets may not be adequate to deter or prevent misappropriation. We may
be unable to detect unauthorized uses of and take appropriate steps to enforce
and protect our intellectual property rights.Additionally, the absence of harmonized patent laws
between the United States and Canada makes it more difficult to ensure
consistent respect for patent rights.  Although senior management
believes that our services and products do not infringe on the intellectual
property rights of others, we nevertheless are subject to the risk that such a
claim may be asserted in the future. Any such claims could damage our
business.
 
 Historical
net results include net losses for the years ended December 31, 1999 to December
31, 2003 and for the years ended December 31, 2005 to December 31, 2008. Working
capital may be inadequate.
 
 For the
years ended December 31, 1999 through the year ended December 31, 2003 and for
the years ended December 31, 2005 toDecember 31,2008,we have reported
net losses and net losses per share. We have been financing operations mainly
from funds obtained in several private placements, and from exercised warrants
and options. Management considers that liquidities as at December 31,2008will be sufficient to meet normal
operating requirements throughout2009.In the long term, we may require additional liquidity to fund
growth, which could include additional equity offerings or debt finance. No
assurance can be given that we will be successful in getting required financing
in the future.
 
 Goodwill
may be written-down in the future.
 
 Goodwill
is evaluated for impairment annually, or when events or changed circumstances
indicate impairment may have occurred. Management monitors goodwill for
impairment by considering estimates including discount rate, future growth
rates, amounts and timing of estimated future cash flows, general economic,
industry conditions and competition. Future adverse changes in these factors
could result in losses or inability to recover the carrying value of the
goodwill. Consequently, our goodwill, which amounts to approximately $3.0M as at
December 31, 2008, may be written-down in the future which could adversely
affect our financial position.
 
 Long-lived
assets may be written-down in the future.
 
 The
Company assesses the carrying value of its long-lived assets, which include
property and equipment and intangible assets, for future recoverability when
events or changed circumstances indicate that the carrying value may not be
recoverable. Management monitors long-lived assets for impairment by considering
estimates including discount rate, future growth rates, general economic,
industry conditions and competition. Future adverse changes in these factors
could result in losses or inability to recover the carrying value of the
long-lived assets. Consequently, our long-lived assets, which amount to
approximately $1.2M as at December 31, 2008, may be written-down in the
future.
 21
 Reduced
Internet use may adversely affect our results.
 
 Our
business is based on Internet driven products and services including direct
online Internet marketing. The emerging nature of the commercial uses of the
Internet makes predictions concerning a significant portion of our future
revenues difficult. As the industry is subject to rapid changes, we believe that
period-to-period comparisons of its results of operations will not necessarily
be meaningful and should not be relied upon as indicative of our future
performance. It is also possible that in some fiscal quarters, our operating
results will be below the expectations of securities analysts and investors. In
such circumstances, the price of our Common Shares may decline. The success of a
significant portion of our operations depends greatly on increased use of the
Internet by businesses and individuals as well as increased use of the Internet
for sales, advertising and marketing. It is not clear how effective Internet
related advertising is or will be, or how successful Internet-based sales will
be. Our results will suffer if commercial use of the Internet, including the
areas of sales, advertising and marketing, fails to grow in the
future.
 
 Our business depends on the continued growth and maintenance of
the Internet infrastructure.
 
 The
success and availability of our Internet based products and services depend on
the continued growth, maintenance and use of the Internet.  Spam,
viruses, worms, spyware, denial of service attacks, phishing and other acts of
malice may affect not only the Internet’s speed and reliability but also its
desirability for use by customers.  If the Internet is unable to meet
these threats placed upon it, our business, advertiser relationships, and
revenues could be adversely affected.
 
 Our
long-term success may be materially adversely affected if the market for
e-commerce does not grow or grows slower than expected.
 
 Because
many of our customers’ advertisements encourage online purchasing and/or
Internet use, our long-term success may depend in part on the growth and market
acceptance of e-commerce. Our business will be adversely affected if the market
for e-commerce does not continue to grow or grows slower than expected. A number
of factors outside of our control could hinder the future growth of
 e-commerce,
including the following:
 
 ·
              the
      network infrastructure necessary for substantial growth in Internet usage
      may not develop adequately or our performance and reliability may
      decline;
 ·
              insufficient
      availability of telecommunication services or changes in telecommunication
      services could result in inconsistent quality of service or slower
      response times on the Internet;
 ·
              negative
      publicity and consumer concern surrounding the security of e-commerce
      could impede our growth; and
 ·
              financial
      instability of e-commerce
customers.
 
 Security
breaches and privacy concerns may negatively impact our business.
 
 Consumer
concerns about the security of transmissions of confidential information over
public telecommunications facilities is a significant barrier to increased
electronic commerce and communications on the Internet that are necessary for
growth of the Company’s business. Many factors may cause compromises or breaches
of the security systems we use or other Internet sites use to protect
proprietary information, including advances in computer and software
functionality or new discoveries in the fields of cryptography and processor
design. A compromise of security on the Internet would have a negative effect on
the use of the Internet for commerce and communications and negatively impact
our business. Security breaches of their activities or the activities of their
customers and sponsors involving the storage and transmission of proprietary
information, such as credit card numbers, may expose our operating business to a
risk of loss or litigation and possible liability. We cannot assure you that the
measures in place are adequate to prevent security breaches.
 
 If
we fail to detect click fraud or other malicious applications or activity of
others, we could lose the confidence of our advertisers as well as face
potential litigation, government regulation or legislation, thereby causing our
business to suffer.
 
 We are
exposed to the risk of fraudulent clicks on our ads and other
clicks that advertisers may perceive as undesirable. Click fraud occurs when a
person clicks on an ad displayed on a Web site for a reason other than to view
the underlying content. These types of fraudulent activities could hurt our
brands. If fraudulent clicks are not detected, the affected advertisers may
experience a reduced return on their investment in our advertising programs
because the fraudulent clicks will not lead to potential revenue for the
advertisers.Advertiser dissatisfaction with
click fraud and other traffic quality related claims has lead to litigation and
possible governmental regulation of advertising. Any increase in costs due to
any such litigation, government regulation, or refund could negatively impact
our profitability.
 22
 Index
spammers could harm the integrity of our Web search results, which could damage
our reputation and cause our users to be dissatisfied with our products and
services.
 
 There is
an ongoing and increasing effort by “index spammers” to develop ways to
manipulate our Web search results. Although they cannot manipulate our results
directly, “index spammers” can manipulate our suppliers, which can result in our
search engine pages producing poor results. We take this problem very seriously
because providing relevant information to users is critical to our success. If
our efforts to combat these and other types of manipulation are unsuccessful,
our reputation for delivering relevant information could be diminished. This
could result in a decline in user traffic, which would damage our
business.
  Our
business is subject to a variety of U.S. and foreign laws that could subject us
to claims or other remedies based on the nature and content of the information
searched or displayed by our products and services, and could limit our ability
to provide information regarding regulated industries and products.
 
 The laws
relating to the liability of providers of online services for activities of
their users are currently unsettled both within the U.S. and abroad. Claims have
been threatened and filed under both U.S. and foreign law for defamation, libel,
invasion of privacy and other data protection claims, tort, unlawful activity,
copyright or trademark infringement, or other theories based on the nature and
content of the materials searched and the ads posted or the content generated by
our users. Increased attention focused on these issues and legislative proposals
could harm our reputation or otherwise affect the growth of our
business.
 
 The
application to us of existing laws regulating or requiring licenses for certain
businesses of our advertisers, including, for example, distribution of
pharmaceuticals, adult content, financial services, alcohol or firearms and
online gambling, can be unclear. Existing or new legislation could expose us to
substantial liability, restrict our ability to deliver services to our users,
limit our ability to grow and cause us to incur significant expenses in order to
comply with such laws and regulations.
 
 Several
other federal laws could have an impact on our business. Compliance with these
laws and regulations is complex and may impose significant additional costs on
us. For example, the Digital Millennium Copyright Act has provisions that limit,
but do not eliminate, our liability for listing or linking to third-party Web
sites that include materials that infringe copyrights or other rights, so long
as we comply with the statutory requirements of this act. The Children’s Online
Protection Act and the Children’s Online Privacy Protection Act restrict the
distribution of materials considered harmful to children and impose additional
restrictions on the ability of online services to collect information from
minors. In addition, the Protection of Children from Sexual Predators Act of
1998 requires online service providers to report evidence of violations of
federal child pornography laws under certain circumstances. Any failure on our
part to comply with these regulations may subject us to additional
liabilities.
 
 If
the technology that we currently use to target the delivery of online
advertisements and to prevent fraud on our networks is restricted or becomes
subject to regulation, our expenses could increase and we could lose customers
or advertising inventory.
 
 Web sites
typically place small files of non-personalized (or “anonymous”) information,
commonly known as cookies, on an Internet user’s hard drive, generally without
the user’s knowledge or consent. Cookies generally collect information about
users on a non-personalized basis to enable Web sites to provide users with a
more customized experience. Cookie information is passed to the Web site through
an Internet user’s browser software. We currently use cookies to track an
Internet user’s movement through the advertiser’s Web site and to monitor and
prevent potentially fraudulent activity on our network. Most currently available
Internet browsers allow Internet users to modify their browser settings to
prevent cookies from being stored on their hard drive, and some users currently
do so. Internet users can also delete cookies from their hard drives at any
time. Some Internet commentators and privacy advocates have suggested limiting
or eliminating the use of cookies, and legislation (including, but not limited
to, Spyware legislation such as U.S. House of Representatives Bill HR 29 the
“Spy Act”) has been introduced in some jurisdictions to regulate the use of
cookie technology. The effectiveness of our technology could be limited by any
reduction or limitation in the use of cookies. If the use or effectiveness of
cookies were limited, we would have to switch to other technologies to gather
demographic and behavioural information. While such technologies currently
exist, they are substantially less effective than cookies. We would also have to
develop or acquire other technology to prevent fraud. Replacement of cookies
could require significant reengineering time and resources, might not be
completed in time to avoid losing customers or advertising inventory, and might
not be commercially feasible. Our use of cookie technology or any other
technologies designed to collect Internet usage information may subject us to
litigation or investigations in the future. Any litigation or government action
against us could be costly and time-consuming, could require us to change our
business practices and could divert management’s attention.
 
 Increased
regulation of the Internet may adversely affect our business.
 
 If the
Internet becomes more strongly regulated, a significant portion of our operating
business may be adversely affected. For example, there is increased pressure to
adopt and where adopted, strengthen laws and regulations relating to Internet
unsolicited advertisements, privacy, pricing, taxation and content. The
enactment of any additional laws or regulations in Canada, Europe, Asia or the
United States, or any state or province of the United States or Canada may
impede the growth of the Internet and our Internet-related business, and could
place additional financial burdens on us and our Internet-related
business.
 
 Changes
in key personnel, labour availability and employee relations could disrupt our
business.
 
 Our
success is dependent upon the experience and abilities of our senior management
and our ability to attract, train, retain and motivate other high-quality
personnel, in particular for our technical and sales teams. There is significant
competition in our industries for qualified personnel. Labour market conditions
generally and additional companies entering industries which require similar
labour pools could significantly affect the availability and cost of qualified
personnel required to meet our business objectives and plans. There can be no
assurance that we will be able to retain our existing personnel or that we will
be able to recruit new personnel to support our business objectives and plans.
Currently, none of our employees are unionized. There can be no assurance,
however, that a collective bargaining unit will not be organized and certified
in the future. If certified in the future, a work stoppage by a collective
bargaining unit could be disruptive and have a material adverse effect on us
until normal operations resume.
 23
 Possible
future exercise of warrants and options could dilute existing and future
shareholders.
 
 As at
March 25, 2009, we had 646,392 warrants at a weighted average exercise price of
$15.60 expiring from April to July 2009 and 693,993 stock options at a weighted
average exercise price of $1.54 outstanding. As at March 25, 2009, the exercise
prices of all outstanding warrants and options, were higher than the market
price of our Common Shares. When the market value of the Common Shares is above
the respective exercise prices of all options and warrants, their exercise could
result in the issuance of up to an additional 1,320,385 Common Shares. To the
extent such shares are issued, the percentage of our Common Shares held by our
existing stockholders will be reduced. Under certain circumstances the
conversion or exercise of any or all of the warrants or stock options might
result in dilution of the net tangible book value of the shares held by existing
Company stockholders. For the life of the warrants and stock options, the
holders are given, at prices that may be less than fair market value, the
opportunity to profit from a rise in the market price of the shares of Common
Shares, if any. The holders of the warrants and stock options may be expected to
exercise them at a time when the Company may be able to obtain needed capital on
more favourable terms. In addition, we reserve the right to issue additional
shares of Common Shares or securities convertible into or exercisable for shares
of Common Shares, at prices, or subject to conversion and exercise terms,
resulting in reduction of the percentage of outstanding Common Shares held by
existing stockholders and, under certain circumstances, a reduction in the net
tangible book value of existing stockholders’ Common Shares.
 
 Strategic
acquisitions and market expansion present special risks.
 
 A future
decision to expand our business through acquisitions of other businesses and
technologies presents special risks. Acquisitions entail a number of particular
problems, including (i) difficulty integrating acquired technologies,
operations, and personnel with the existing businesses, (ii) diversion of
management’s attention in connection with both negotiating the acquisitions and
integrating the assets as well as the strain on managerial and operational
resources as management tries to oversee larger operations, (iii) exposure to
unforeseen liabilities relating to acquired assets, and (iv) potential issuance
of debt instruments or securities in connection with an acquisition possessing
rights that are superior to the rights of holders of our currently outstanding
securities, any one of which would reduce the benefits expected from such
acquisition and/or might negatively affect our results of operations. We may not
be able to successfully address these problems. We also face competition
from other acquirers, which may prevent us from realizing certain desirable
strategic opportunities.
 
 We
do not plan to pay dividends on the Common Shares.
 
 The
Company has never declared or paid dividends on its shares of Common Shares. The
Company currently intends to retain any earnings to support its working capital
requirements and growth strategy and does not anticipate paying dividends in the
foreseeable future. Payment of future dividends, if any, will be at the
discretion of the Company’s Board of Directors after taking into account various
factors, including the Company’s financial condition, operating results, current
and anticipated cash needs and plans for expansion.
 
 Rapidly
evolving marketplace and competition may adversely impact our
business.
 
 The
markets for our products and services are characterized by (i) rapidly changing
technology, (ii) evolving industry standards, (iii) frequent new product and
service introductions, (iv) shifting distribution channels, and (v) changing
customer demands. The success of the Company will depend on its ability to adapt
to its rapidly evolving marketplaces. There can be no assurance that the
introduction of new products and services by others will not render our products
and services less competitive or obsolete. We expect to continue spending funds
in an effort to enhance already technologically complex products and services
and develop or acquire new products and services. Failure to develop and
introduce new or enhanced products and services on a timely basis might have an
adverse impact on our results of operations, financial condition and cash flows.
Unexpected costs and delays are often associated with the process of designing,
developing and marketing enhanced versions of existing products and services and
new products and services. The market for our products and services is highly
competitive, particularly the market for Internet products and services which
lacks significant barriers to entry, enabling new businesses to enter this
market relatively easily. Competition in our markets may intensify in the
future. Numerous well-established companies and smaller entrepreneurial
companies are focusing significant resources on developing and marketing
products and services that will compete with the Company’s products and
services. Many of our current and potential competitors have greater financial,
technical, operational and marketing resources. We may not be able to compete
successfully against these competitors. Competitive pressures may also force
prices for products and services down and such price reductions may reduce our
revenues.
 
 To
the extent that some of our revenues and expenses are paid in foreign
currencies, and currency exchange rates become unfavourable, we may lose some of
the economic value in U.S. dollar terms.
 24
 Although
we currently transact a majority of our business in U.S. dollars, as we expand
our operations, more of our customers may pay us in foreign currencies.
Conducting business in currencies other than U.S. dollars subjects us to
fluctuations in currency exchange rates. This could have a negative impact on
our reported operating results. We do not currently engage in hedging
strategies, such as forward contracts, options and foreign exchange swaps
related to transaction exposures to mitigate this risk. If we determine to
initiate such hedging activities in the future, there is no assurance these
activities will effectively mitigate or eliminate our exposure to foreign
exchange fluctuations. Additionally, such hedging programs would expose us to
risks that could adversely affect our operating results, because we have limited
experience in implementing or operating hedging programs. Hedging programs are
inherently risky and we could lose money as a result of poor
trades.  In 2008, revenues were decreased by approximately $101,000
and total expenses were increased by $50,000 resulting in a net loss $151,000
due to the fluctuation of foreign currencies.
 
 Higher
inflation could adversely affect our results of operations and financial
condition.
 
 We do not
believe that the relatively moderate rates of inflation experienced in the
United States and Canada in recent years have had a significant effect on our
revenues or profitability. Although higher rates of inflation have been
experienced in a number of foreign countries in which we might transact
business, we do not believe that such rates have had a material effect on our
results of operations, financial condition and cash flows. Nevertheless, in the
future, high inflation could have a material, adverse effect on the Company’s
results of operations, financial condition and cash flows.
 
 Our future growth significantly
depends to a high degree on our ability to successfully commercialize the
Copernic Desktop Search®product, and any failure or delays
in that commercialization would adversely affect our business and results of
operations.
 
 On
December 22, 2005, we completed our acquisition of Copernic, which we believe
positioned the Company as a leader in search technologies and applications and
as a multi-channel online marketing services provider.  Although we have high expectations for the Copernic Desktop
Search® (CDS) award-winning product, to date our program
to commercialize that product through licensing to large ISP’s and Internet
Portals has not generated significant revenue and we cannot guarantee we will
obtain such significant licensing revenue in the future. However in 2008, we
have generated subscription sales of $636,893 through new products and sales
channel expansion which appears to have reversed the previous
trend.
 
 Controls
and Procedures
 
 Disclosure
on Controls and Procedures
 
 We are
responsible for establishing and maintaining a system of disclosure controls and
procedures, as defined in Rule 13a-15 (e) under the Securities Exchange Act of
1934, (the “Exchange Act”) designed to ensure that information we are required
to disclose in the reports that we file or submit 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 by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer’s management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
 
 We
carried out an evaluation, under the supervision of and with the participation
of our management, including our Chief Executive Officer and Vice President
Finance, as to the effectiveness of our disclosure controls and procedures as of
December 31, 2008.
 
 Based
upon that evaluation, our Chief Executive Officer and Vice President Finance
concluded that our disclosure controls and procedures were effective as of
December 31, 2008.
 
 Management’s
Report on Internal Control over Financial Reporting
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) of the Exchange Act as a process 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 and includes those policies and
procedures that (1) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company’s assets that could have a
material effect on the financial statements.
 25
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect all misstatements. Projections of any assessment of
effectiveness to future periods are subject to the risks that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.  Our
management evaluated the effectiveness of our internal control over financial
reporting as of December 31, 2008. In making this evaluation, management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in “Internal Control — Integrated
Framework.”
 
 Based on
our evaluation under the framework in Internal Control-Integrated Framework,
management concluded that our internal control over financial reporting was
effective as of December 31, 2008.
 
 It should
be noted that while management believes that current disclosure and internal
controls and procedures provide a reasonable level of assurance, it cannot be
expected that existing disclosure controls and procedures or internal financial
controls will prevent all human error and circumvention or overriding of the
controls and procedures.  A control system, no matter how well
conceived or operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met.
 
 Capital
Stock Information
 
 The
following table discloses the Company’s outstanding share data:
 
 Number
      of issued and
                outstanding
      common
                shares
      as at March 25,
                2009
              Book
      value as at
                December
      31, 2008
                under
      Canadian
                GAAP
              Book
      value as at
                December
      31, 2008
                under
      US GAAP14,637,531
              $96,556,485
              $113,326,055
  As at
March 25, 2009, the Company also had 646,392 warrants and 693,993 stock options
outstanding.
  26
 
  Forward-Looking
Statements
  Information
contained in this Management’s Discussion and Analysis of Financial Condition
and Results of Operations includes forward-looking statements, which can be
identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “desires,” “will,” “should,” “projects,” “estimates,”
“contemplates,” “anticipates,” “intends,” or any negative such as “does not
believe” or other variations thereof or comparable terminology.  No
assurance can be given that potential future results or circumstances described
in the forward-looking statements will be achieved or occur.  Such
information may also include cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties that could cause actual results to vary materially from the
projections and other expectations described in such forward-looking
statements.  Prospective investors, customers, vendors and all other
persons are cautioned that forward-looking statements are not assurances,
forecasts or guarantees of future performance due to related risks and
uncertainties, and that actual results may differ materially from those
projected. Factors which could cause results or events to differ from current
expectations include, among other things:  the severity and duration
of the adjustments in our business segments; the effectiveness of our
restructuring activities, including the validity of the assumptions underlying
our restructuring efforts; fluctuations in operating results; the impact of
general economic, industry and market conditions; the ability to recruit and
retain qualified employees; fluctuations in cash flow; increased levels of
outstanding debt; expectations regarding market demand for particular products
and services and the dependence on new product/service development; the ability
to make acquisitions and/or integrate the operations and technologies of
acquired businesses in an effective manner; the impact of rapid technological
and market change; the impact of price and product competition; the
uncertainties in the market for Internet-based products and services; stock
market volatility; the trading volume of our stock; the possibility of delisting
our stock since the Company may not satisfy the requirements for continued
listing on the NASDAQ Capital Market including whether the minimum bid price for
the stock falls below $1; and the adverse resolution of
litigation.  For additional information with respect to these and
certain other factors that may affect actual results, see the reports and other
information filed or furnished by the Company with the United States Securities
and Exchange Commission (“SEC”) and/or the Ontario Securities Commission (“OSC”)
respectively accessible on the Internet at www.sec.gov and www.sedar.com, or the
Company’s Web site at www.copernic-inc.com.  All
information contained in these audited financial statements and Management’s
Discussion and Analysis of Financial Condition and Results of Operations is
qualified in its entirety by the foregoing and reference to the other
information the Company files with the OSC and SEC. Unless otherwise required by
applicable securities laws, the Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
 
 Period-to-Period
Comparisons
 
 A variety
of factors may cause period-to-period fluctuations in the Company’s operating
results, including business acquisitions, revenues and expenses related to the
introduction of new products and services or new versions of existing products,
new or stronger competitors in the marketplace as well as currency fluctuations.
Historical operating results are not indicative of future results and
performance.
 27
  Selected
Annual Information
 
 (in
thousand of US dollars, except per share data and in accordance with generally
accepted accounting principles in Canada)
 
 For
      the years ended December 31,
              
              2008
                $
              
              
              
              2007
                $
              
              
              
              2006
                $
              
              
              
              2005
                $
              
              
              
              2004
                $Revenues
              
              7,012
              
              
              
              8,116
              
              
              
              9,596
              
              
              
              9,444
              
              
              
              14,636Earnings
      (loss) from continuing operations
              
              (6,491
              )
              
              
              (14,431
              )
              
              
              (4,358
              )
              
              
              (3,343
              )
              
              
              371Results
      of discontinued operations, net of income taxes
              
              -
              
              
              
              -
              
              
              
              89
              
              
              
              (2,315
              )
              
              
              734Earnings
      (loss) for the year
              
              (6,491
              )
              
              
              (14,431
              )
              
              
              (4,269
              )
              
              
              (5,658
              )
              
              
              1,104Earnings
      (loss) per share from continuing operationsBasic
      and diluted
              
              (0.44
              )
              
              
              (0.99
              )
              
              
              (0.31
              )
              
              
              (0.27
              )
              
              
              0.03Net
      earnings (loss) per shareBasic
      and diluted
              
              (0.44
              )
              
              
              (0.99
              )
              
              
              (0.30
              )
              
              
              (0.46
              )
              
              
              0.10Total
      assets
              
              10,782
              
              
              
              18,358
              
              
              
              33,339
              
              
              
              38,327
              
              
              
              35,166
 
 
 Quarterly
Financial Highlights
 
 (in
thousand of US dollars, except per share data and in accordance with generally
accepted accounting principles in Canada)
 (unaudited)
 
 2008
              
              
              2007Q4
                $
              
              
              
              Q3
                $
              
              
              
              Q2
                $
              
              
              
              Q1
                $
              
              
              
              Q4
                $
              
              
              
              Q3
                $
              
              
              
              Q2
                $
              
              
              
              Q1
                $Revenues
              
              1,910
              
              
              
              1,672
              
              
              
              1,721
              
              
              
              1,709
              
              
              
              1,654
              
              
              
              1,867
              
              
              
              1,953
              
              
              
              2,642Loss
      for the period
              
              (4,261
              )
              
              
              (622
              )
              
              
              (522
              )
              
              
              (1,086
              )
              
              
              (10,990
              )
              
              
              (975
              )
              
              
              (1,085
              )
              
              
              (1,381
              )Loss
      per share basic and diluted
              
              (0.29
              )
              
              
              (0.04
              )
              
              
              (0.04
              )
              
              
              (0.07
              )
              
              
              (0.75
              )
              
              
              (0.07
              )
              
              
              (0.07
              )
              
              
              (0.10
              )
 
 28