---

SECURITIES AND EXCHANGE COMMISSION Washington, DC
20549



|FORM 20-F
|---------

|[    ] |  | REGISTRATION STATEMENT PURSUANT TO
      SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF
      1934
|------ |  | ----------------------------------------------------------------------------------------------------------
|OR     |  |                                                                                                           

|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THEFISCAL YEAR ENDED DECEMBER 31, 2005
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|   

|OR                                                           |  |                                                                                                     
|------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------
|                                                            
|[    ]                                                       |  | TRANSITION REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
|                                                            
|0-17164                                                     
|(Commission file number)                                    
|                                                            
|MAMMA.COM INC.                                              
|(Exact name of registrant as
      specified in its charter)
|                                                            
|(FORMERLY INTASYS CORPORATION)                              
|                                                            
|PROVINCE OF ONTARIO (CANADA)                                
|(Jurisdiction of incorporation or
      organization)       
|                                                            
|388 St.
      Jacques Street West, 9th Floor                
|Montreal,
      Quebec                                      
|Canada, H2Y 1S1                                             
|(Address of principal executive
      offices)              

Securities registered or to be registered pursuant to
      Section 12(b) of the Act.
NoneSecurities registered or to be registered pursuant to
      Section 12(g) of the Act.
Common Shares, no par value(Title of Class)Securities for which there is a reporting obligation
      pursuant to Section 15(d) of the Act.

---

None

Indicate
the number of outstanding shares of each of the issuers classes of capital or
Common Shares, as of March 15, 2006:



|14,340,864 Common Shares
|------------------------

Indicate
by a check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

Yes
    
    X
    
    No


Indicate
by check mark which financial statement item the registrant has elected to
follow.

Item
      17
    
    X
    
    Item
      18


Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.

|NOT
      APPLICABLE.
|---------------------

# EXPLANATORYNOTES

On January
6, 2004, the Company changed its name from Intasys Corporation to Mamma.com Inc.
At the same time, its subsidiary changed its name from Mamma.com Inc. to
Mamma.com Enterprises Inc. Therefore, in order to avoid any confusion in this
document, the Company will use the name Mamma.com Inc. in reference to the
parent company and Mamma.com Enterprises Inc. for its subsidiary. On May 31,
2004, the wholly owned subsidiary, Mamma.com Enterprises Inc. was wound up into
the Company.

In this
Annual Report on Form 20-F, unless otherwise indicated or the context otherwise
requires, all monetary amounts are expressed in United States
dollars.

On July 11,
2001, Mamma.com Inc. (Mamma or the Company) filed articles of amendment
consolidating its issued and outstanding Common Shares on the basis of one (1)
post-consolidation common share for every ten (10) pre-consolidation Common
Shares. In this Annual Report on Form 20-F, unless otherwise indicated or the
context otherwise requires, all references to the Companys Common Shares,
including those relating to prices of the Companys Common Shares, have been
adjusted to reflect this consolidation.

---

SPECIALNOTE ONFORWARD-LOOKINGSTATEMENTS

INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 20-F 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 THAT OUR STOCK MAY NOT SATISFY OUR REQUIREMENTS FOR CONTINUED LISTING ON THE NASDAQ SMALLCAP MARKET INCLUDING WHETHER THE
MINIMUM BID PRICE FOR THE STOCK FALLS BELOW $1; AND THE ADVERSE RESOLUTION OF LITIGATION. DEVELOPMENTS IN THE SEC INQUIRY, PURPORTED CLASS ACTION LITIGATION OR RELATED EVENTS COULD HAVE A NEGATIVE IMPACT ON THE COMPANY, INCREASE COMPANY EXPENSES
OR CAUSE EVENTS OR RESULTS TO DIFFER FROM CURRENT EXPECTATIONS. 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 WEBSITE AT
WWW.MAMMAINC.COM. ALL INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 20-F 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-PERIODCOMPARISONS

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,
ECONOMIC RECESSIONS AND RECOVERIES. HISTORICAL OPERATING RESULTS ARE NOT
INDICATIVE OF FUTURE RESULTS AND PERFORMANCE.

PART
I

|ITEM 1.              |  | IDENTITY OF DIRECTORS, SENIOR
MANAGEMENT AND ADVISERS
|-------------------- |  | -----------------------------------------------------
|Not Applicable       |  |                                                      
|                     |  |                                                      
|ITEM
      2.        |  | OFFER
      STATISTICS AND EXPECTED TIMETABLE        
|Not
      Applicable |  |                                                      
|                     |  |                                                      
|ITEM
      3.        |  | KEY
      INFORMATION                                

SELECTED FINANCIAL DATA

The
following consolidated statements of operations data for the years ended
December 31, 2005, 2004 and 2003, and consolidated balance sheets data as at
December 31, 2005 and 2004 is derived from the audited consolidated financial
statements included in item 17, all other financial information below is
unaudited and derived from sources not included in item 17.

---

|CANADIAN GAAP                     |  |             |  |            
|--------------------------------- |  | ----------- |  | -----------
|YEAR ENDED DECEMBER 31st          |  |             |  |            
|                                 
|                                 
|                                 
|Consolidated Statements
      of  |  |             |  |            
|Operations Data                   |  |             |  |            
|                                  |  |             |  |            
|Revenue                           |  |             |  | 9,464,560  
|Earnings (loss) from continuing   |  |             |  |            
|operations                        |  |             |  | (3,342,983)
|Results of
      discontinued     |  |             |  |            
|operations                        |  |             |  | (2,315,335)
|Net earnings (loss) for the year  |  | (5,658,318) |  | 1,104,407  
|Basic and diluted earnings (loss) |  |             |  |            
|per share
      from continuing   |  |             |  |            
|operations                        |  |             |  |            
|Basic and diluted earnings (loss) |  |             |  |            
|per share
      from discontinued |  |             |  |            
|operations                        |  |             |  |            
|Basic and diluted net earnings    |  |             |  |            
|(loss) per
      share            |  |             |  |            
|Weighted
      average number of  |  |             |  |            
|shares 
      basic              |  |             |  | 12,168,117 
|                                 
|Weighted
      average number of  |  |             |  |            
|shares 
      diluted            |  |             |  | 12,168,117 
|                                 
|                                 

|Consolidated
      Balance       |  |              |  |              |  |              |  |              |  |             
|-------------------------------- |  | ------------ |  | ------------ |  | ------------ |  | ------------ |  | ------------
|Sheets Data                      |  | 2005         |  | 2004         |  | 2003         |  | 2002         |  | 2001        
|                                 |  | $            |  | $            |  | $            |  | $            |  | $           
|Total assets                     |  | 38,327,198   |  | 35,166,098   |  | 11,736,414   |  | 9,971,214    |  | 7,139,984   
|Total
      liabilities          |  | 5,810,217    |  | 3,130,526    |  | 3,716,276    |  | 3,270,019    |  | 2,704,141   
|Net
      Assets                 |  | 32,516,981   |  | 32,035,572   |  | 8,020,138    |  | 6,701,195    |  | 4,435,843   
|Working
      capital            |  | 8,944,985    |  | 27,528,003   |  | 4,351,746    |  | 3,357,422    |  | 2,202,718   
|Capital stock                    |  | 95,298,234   |  | 90,496,088   |  | 70,522,179   |  | 69,873,994   |  | 68,077,781  
|Additional paid-in               |  |              |  |              |  |              |  |              |  |             
|capital                          |  | 5,985,077    |  | 5,255,249    |  | 1,166,814    |  | 750,111      |  | 339,550     
|Deferred stock-basedcompensation |  | (735,175)    |  | (1,333,443)  |  | (262,806)    |  | (10,667)     |  | (418,727)   
|Cumulative
      translation     |  |              |  |              |  |              |  |              |  |             
|adjustment                       |  | 370,369      |  | 360,884      |  | 441,564      |  | (275,693)    |  | (243,205)   
|Accumulated deficit              |  | (68,401,524) |  | (62,743,206) |  | (63,847,613) |  | (63,636,550) |  | (63,319,556)
|Shareholders
      equity       |  | 32,516,981   |  | 32,035,572   |  | 8,020,138    |  | 6,701,195    |  | 4,435,843   
|                                
|Other                            |  |              |  |              |  |              |  |              |  |             
|Cash
      Dividends             |  | None         |  | None         |  | None         |  | None         |  | None        

---

| | U.S.
GAAPYEAR ENDED DECEMBER 31st
| | ---------------------------------

|                                       
|---------------------------------------
|                                       
|                                       
|Consolidated Statements
      of       
|Operations Data                        
|Revenue                                
|Earnings
      (loss) from continuing  
|operations                             
|Results of
      discontinued          
|operations                             
|Net earnings
      (loss) for the year 
|Basic and
      diluted earnings (loss)
|per share
      from continuing        
|operations                             
|Basic and
      diluted earnings (loss)
|per share
      from discontinued      
|operations                             
|Basic and
      diluted net earnings   
|(loss) per
      share                 
|Weighted
      average number of       
|shares 
      basic                   
|Weighted
      average number of       
|shares 
      diluted                 
|                                       
|Consolidated Balance
      Sheets      
|Data                                   
|Total
      assets                     
|Total
      liabilities                
|Net
      assets                       
|Working
      capital                  
|Capital
      stock                    
|Additional
      paid-in capital       
|Deferred
      stock-based             
|compensation                           
|Accumulated
      other                
|comprehensive
      gain (loss)        
|Accumulated
      deficit              
|Shareholders
      equity             
|                                       
|Other                                  
|Cash
      dividends                   

---

|CAPITALIZATION AND
  INDEBTEDNESS
|---------------------------------

The
following tables set forth the consolidated cash and consolidated capitalization
of the Company as at December 31, 2005 prepared in accordance with Canadian GAAP
and United States GAAP, respectively.

|(Prepared in accordance
      with Canadian GAAP) |  | As at December
      31,2005$
|------------------------------------------------- |  | -----------------------------
|Cash and cash
      equivalents                   |  | 4,501,201                    
|Temporary
      investments                       |  | 4,013,312                    
|Indebtness                                        |  |                              
|current liabilities                               |  | 3,138,181                    
|Future income taxes                               |  | 2,672,036                    
|Shareholders
      Equity                        |  |                              
|Capital stock                                     |  | 95,298,234                   
|Additional paid-in
      capital                  |  | 5,985,077                    
|Deferred stock-based
      compensation           |  | (735,175)                    
|Cumulative translation
      adjustment           |  | 370,369                      
|Accumulated
      deficit                         |  | (68,401,524)                 
|Total shareholders
      equity                  |  | 32,516,981                   
|Total
      capitalization                        |  | 38,327,198                   
|                                                 
|                                                 
|(Prepared in accordance
      with US GAAP)       |  | As at December
      31,2005$
|Cash and cash
      equivalents                   |  | 4,501,201                    
|Temporary
      investments                       |  | 4,013,312                    
|Indebtness                                        |  |                              
|current liabilities                               |  | 3,138,181                    
|Future income taxes                               |  | 2,672,036                    
|Shareholders
      Equity                        |  |                              
|Capital stock                                     |  | 112,067,804                  
|Additional paid-in
      capital                  |  | 7,022,767                    
|Deferred stock-based
      compensation           |  | (735,175)                    
|Cumulative translation
      adjustment           |  | 370,369                      
|Accumulated
      deficit                         |  | (86,208,784)                 
|Total shareholders
      equity                  |  | 32,516,981                   
|Total
      capitalization                        |  | 38,327,198                   
|                                                 
|Reasons for the Offer and Use of
      Proceeds   |  |                              
|                                                 
|Not
      Applicable.                             |  |                              

---

|RISK FACTORS
|------------

You should
consider carefully the following risk factors inherent in and affecting the
Companys business, as well as all other information set forth in this Annual
Report on Form 20-F and in the reports and other information that the Company
files or furnishes with the SEC and/or OSC.

Our
future growth significantly depends to a high degree on our ability to integrate
our recent acquisition of Copernic, and any failure or delays in that
integration would adversely affect our business and results of
operations.

On December
22, 2005,we completed
our acquisition of Copernic which should be accretive to earnings in 2006 and
should position the Company as a leader in search technologies and applications
and as a multi-channel on-line marketing services provider. We have high
expectations for the Copernic Desktop Search® (CDS) award-winning product. This
world-class software has already seen a healthy adoption rate in blue chip
customer agreements and we expect that other major portals will also want to
adopt CDS in order to protect against user attrition and generate more cost per
click revenues from their search partners. Any failure or delay in successfully
integrating Copernic into the Companys operations could adversely affect our
business and results of operations.

Our
revenues depend to a high degree on our relationship with two customers, the
loss of which would adversely affect our business and results of
operations.

For the year
ended December 31, 2005, approximately 14% and 11% respectively of our revenues
were derived from agreements with our two largest customers. Revenues from these
customers represented 2% and 11% of our revenues in 2004 and 0% and 8% of our
revenues in 2003. Although we monitor our accounts receivable for credit risk
deterioration and these customers have been paying their payables to Mamma.com
in accordance with the terms of their agreements with the Company, there can be
no assurance that they will continue to do so or that they will continue to do
so at the volume of business they have done historically. Our loss of these
customers 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
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.

8

---

- 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.

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.

We are
the subject of an SEC investigation which may depress the market price for our
Common Shares, reduce the liquidity of the Common Shares trading market and
negatively affect our results of operations.

We are the
subject of an SEC investigation. The scope, focus and subject matter of the SEC
investigation may change from time to time. Adverse developments in connection
with the investigation or our internal fact finding could have a negative impact
on our Company and on how it is perceived by investors and potential investors
and negatively impact our results of operations. In addition, the management
effort and attention required to respond to the investigation and any such
developments could have a negative impact on our business operations. An adverse
determination by the SEC in its investigation could result in negative
consequences for the Company, including initiation of enforcement proceedings,
fines, penalties and possibly other sanctions that could harm the Companys
business, reduce the market value of its Common Shares and negatively affect its
results of operations.

Expenses
relating to the SEC investigation could negatively affect our results of
operations.

While we are not
able to estimate, at this time, the amount of the additional expenses that we
will incur in future connection with the investigation, we expect that it could
negatively affect our results of operations.

9

---

Adverse
results in purported securities class action lawsuit could result in significant
damages and adversely affect the Companys financial condition and results of
operation.

On February
22, 2005, the first of several purported securities class action lawsuits was
filed in the United States District Court, Southern District of New York against
the Company, and certain of the Companys current officers and directors. The
plaintiffs allege, among other things, violations of the Securities Exchange Act
of 1934 for purportedly failing to disclose and misrepresenting certain
allegedly material facts relative to the market for and trading in the Companys
stock, and seek unspecified damages. The purported class actions appear to be
based on unsubstantiated rumours, purported statements from unidentified
individuals and newspaper reports. All of these law suits have been consolidated
and the lead plaintiff has filed an amended complaint in the case. On March 28,
2006, the court in the consolidated case denied a motion the Company filed for
dismissal of the consolidated complaint. The Company denies the allegations
against it, believes that the purported claims are without merit, and intends to
continue to defend itself vigorously. Nevertheless, a finding of liability of the
Company in any of these class action lawsuits could result in significant
damages and materially adversely affect the Companys financial condition and
results of operations.

We rely
on our co-branded web site partners for a significant portion of our net
revenues, and otherwise benefit from our association with them. The loss of
these co-branded 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 co-branded partner
web sites. We expect the percentage of our net revenues generated from this
network to increase in the future. We consider this network to be critical in
the future growth of our net 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 co-branded web site
partners decide to use a competitors or their own web search or advertising
services, our net revenues would decline.

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.

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

10

---

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 2005 and we anticipate downward pressure on our operating margin in the future.

Our revenues declined in 2005 due to increased demand for better converting traffic on loss of several of our Ad network sales staff who formed a competing business.  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. We also expect that our operating
margin may decline as a result of increases in the proportion of our revenues generated from our co-branded partner web sites. The margin on revenues we generate from our co-branded 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 co-branded partner web sites could decrease in the future if our co-branded 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 co-branded web
site partners. Our operating results would also suffer if our innovations were not responsive to the needs of our users, advertisers and co-branded 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

11

---

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 brand, 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 brand may become increasingly difficult and expensive. Maintaining and enhancing our brand will depend largely on our ability to continue to provide high quality products and services, which we may not do
successfully.

New technologies could block our ads, which would harm our business.

Technologies may be 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 the reduction of spending by or loss of advertisers could seriously harm our business.

We generated all of our revenues in 2005 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. 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. Mamma 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. We therefore, from time to time cease sending advertisements to what we qualify a low quality publishers. This can reduce our revenues in the short term in order to create adverstiser retention in the long
term.

Our operating results may be subject to fluctuations.

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.

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 has announced plans to develop a new web search technology

12

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that may make web search a more integrated part of the Windows operating system. We expect that Microsoft will increasingly use its financial and engineering resources to compete with us. Yahoo
has become an increasingly significant competitor, having acquired Overture Services, which offers Internet advertising solutions that compete with our advertising programs.

Microsoft, Yahoo, Google and Ask.com have more employees and cash resources than we do. These companies also have longer operating histories 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 traffic could negatively affect
our net revenues.

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. During the twelve-month period ended December 31, 2005, the closing per share price of our Common Shares has
varied from $2.12 to $6.28. During that same period, the daily trading volume of our Common Shares has varied between 22,500 and 12,871,300 with an average daily trading of 325,730 Common Shares. Future market conditions may adversely affect
the market price and trading volume of our Common Shares. Furthermore, should the market price of our Common Shares drop below the $1.00 per share minimum bid price requirement, our Common Shares risk being delisted from the NASDAQ SmallCap
Market®, which would have an adverse effect on our business and liquidity of our Common Shares. Brokerage firms may not provide a market for low-priced stock, may not recommend low-priced stock to their clients and may charge a greater
percentage commission on low-priced stock than that which they would charge on a transaction of a similar dollar amount but fewer shares. These circumstances may adversely impact trading in our Common Shares and may also adversely affect our ability
to access capital.

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,

13

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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.

With respect
to any intellectual property rights claim, we may have to 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. (recently 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.

Historical net results include net losses for the years ended
December 31, 1999 to December 31, 2003 and for the year ended December 31, 2005.
Working capital may be inadequate.

Prior to
December 31, 2004 and for the year ended December 31, 2005, we have reported net
losses and net losses per share during these years. We have been financing
operations mainly from funds obtained in several private placements, and from
exercised warrants and options. Management considers that cash and cash
equivalents as at December 31, 2005 will be sufficient to meet normal operating
requirements throughout 2006. 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

14

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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 $16.3M as at December 31, 2005, may be written-down in the future
which could adversely effect 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,
plant 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 amounts to
approximately $9.2M as at December 31, 2005, may be written-down in the
future.

Investment in LTRIM may be written-down in the
future.

We have an
investment in LTRIM. LTRIM is a corporation which has started its
commercialization phase and there is no assurance that it will become profitable
in the future or that we will be able to recover the cost of this investment.
Consequently, our investment in LTRIM, which has been written-down in the past
to $720,000, may be written-down again in the future.

Reduced
Internet use may adversely affect our results.

Our business
is based on Internet driven products and services including direct on-line
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
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, 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 now 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;

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- 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 that the
measures in place are adequate to prevent security breaches.

If we
fail to detect click fraud, we could lose the confidence of our advertisers,
thereby causing our business to suffer.

We are
exposed to the risk of fraudulent clicks on our ads from a variety of potential
sources. We have regularly refunded revenues that our advertisers have paid to
us that were later attributed to click fraud, and we expect to do so in the
future. 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. If we are unable to stop
this fraudulent activity, these refunds may increase. If we find new evidence of
past fraudulent clicks we may issue refunds retroactively of amounts previously
paid to our network of advertisers. This would negatively affect our
profitability, and these types of fraudulent activities could hurt our brand. 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. This
could lead the advertisers to become dissatisfied with our advertising programs,
which could lead to a loss of advertisers and revenues and potentially
litigation.

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. For example, because our web search technology ranks a
web pages relevance based in part on the importance of the web sites that link
to it, people have attempted to link a group of web sites together to manipulate
web search 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 index spamming are unsuccessful, our reputation
for

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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, 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.

Websites 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 websites to provide users with a more customized experience. Cookie information is passed to the website through an Internet
users browser software. We currently use cookies to track an Internet users movement through the advertisers website 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

17

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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
behavioral 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 laws and regulations
relating to Internet unsolicited advertisements, privacy, pricing, taxation and content.  The enactment of any additional laws or regulations in Canada or the United States, or any state or province of either of them 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.  We believe our employee relations are good. 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.

Possible future exercise of warrants and options could dilute existing and future shareholders.

As at December 31, 2005, we had 646,392 warrants and 661,083 stock options outstanding. As at December 31, 2005, the exercise prices of some of our outstanding options, but none of our
outstanding warrants, issued are lower than the market price of our Common Shares. While the market value of the Common Shares is above the respective exercise prices of some options and all the warrants, their exercise could result in the issuance
of up to an additional 1,307,475 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

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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 the 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.

We have never paid dividends on any class of our shares. Our management anticipates that any earnings generated from our operations will be used to finance our working capital and potential
market expansion opportunities and that for the foreseeable future cash dividends will not be paid to holders of the Common Shares.

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.

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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.  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.

To the extent our net revenues are paid in foreign currencies, and currency exchange rates become unfavourable, we may lose some of the economic value of the net revenues in U.S. dollar
terms.

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. If the currency exchange rates were to change unfavourably, the value of net receivables we receive in foreign currencies and later convert to U.S. dollars after the
unfavourable change would be diminished.  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.

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.

ITEM 4.   INFORMATION ON THE COMPANY

|GENERAL INFORMATION
|-------------------

The Company was incorporated on July
5, 1985, pursuant to the Business Corporations Act(Ontario), promulgated under
the laws of the Province of Ontario, Canada. The Companys principal executive
officers are located at 388 St. Jacques Street West, 8th Floor, Montreal,
Quebec, Canada H2Y 1S1.

The Company maintains its registered office c/o Goodmans LLP, 250 Yonge Street, Suite 2400, Toronto, Ontario, Canada M5B 2M6.

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|RECENT FINANCINGS
|-----------------

On June 30,
2004, the Company sold under a securities purchase agreement an aggregate of
1,515,980 common shares and 606,392 warrants to certain accredited investors for
an aggregate price of $16,599,981. Net proceeds from the offering amounted to
$15,541,162, net of issue cost of $1,058,819, $996,000 of which was paid to
Merriman Curhan Ford & Co. (MCF). For this specific transaction, MCF
waived their entitlement to a warrant component of the financing completion fee.
Each warrant entitles the accredited investors to purchase one additional common
share at an exercise price equal to $15.82 per share. The warrants will be
exercisable beginning six months after the closing date, and will have a term of
five years from the closing date.

On December
12, 2002, the Company entered into subscription agreements to sell 1,893,939
Units, for a purchase price of $1.32 per Unit or total proceeds of $2.5 million.
Each Unit consisted of one share of Common Shares plus one nontransferable A
Warrant that entitled the holder to purchase one additional Common Share at a
price of $1.40 on or before November 30, 2004. Only in the event and upon the
exercise of each respective A Warrant, the holder thereof was entitled to be
issued one B Warrant that would entitle such holder to purchase one additional
Common Share at a price of $1.50 on or before November 30, 2006. A placement fee
of 142,045 Units was paid to a placement agent for arranging this financing and
the A and B warrants attached were exercised in September 2004 and November 2004
respectively. A sum of $5,904,354 accrued to the treasury of the Company and a
further 4,071,968 common shares of the Company were issued.

|RECENT AGREEMENTSMerriman Curhan Ford &
      Co.
|-------------------------------------------------

On March 16,
2004, the Company retained Merriman Curhan Ford & Co. (MCF) as a financial
advisor and as an investment banking advisor. The Company then signed two
separate agreements. In consideration for financial services, the Company had
committed to pay MCF a monthly fee of $5,000 for a minimum obligation of $30,000
and 10,000 warrants per month with a minimum issuance of 60,000 warrants, each
warrant gives the rights to purchase one common share of the Company. Warrants
are issuable at an exercise price equal to the average closing bid for the last
five trading days at the end of the month of issue, for the duration of the
agreement upon the same terms and conditions. The warrants have a life of five
years from the issuance date. For the investment banking services, the Company
had committed to pay a cash financing completion fee equal to 6% of the total
amount of capital received by the Company from the sale of its equity securities
and warrants to purchase common shares of the Company in an amount equal to 6%
of the number of common shares purchased by investors in capital raising
transactions. The warrants are immediately exercisable at the higher of the
price per share at which the investor can acquire common shares or the closing
price of the Companys common shares at the date of the capital raising
transaction. For mergers and acquisitions, the Company had committed to pay a
success fee upon closing equal to the sum of 4% of up to $10,000,000 transaction
value, 3% of $10,000,000 to $15,000,000 transaction value and 2% of greater than
$15,000,000 transaction value, provided that MCF either introduces and/or
performs specific services for the transaction. The minimum success fee for a
transaction is $200,000. For a sale transaction, the Company had committed to
pay a success fee with the same parameters of an acquisition except for the
minimum fee which is $500,000.

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For the
period ended December 31, 2004, 40,000 warrants were issued to MCF at an average
price of $12.31, the fair value of which was $260,301 estimated as of grant date
using the Black-Sholes pricing model, and charged to expense with a
corresponding credit to additional paid-in capital. The following weighted
average assumptions were used:

Expected option
      life
    
    3.5 yearsVolatility
    
    86%Risk-free interest
      rate
    
    3.99%Dividend
      yield
    
    nil


On July 16,
2004, the agreement for financial services, dated March 16, 2004 was
amended. The
Company committed to pay MCF a monthly fee of $5,000 for eight months from July
16, 2004. The agreement for investment banking services was amended on July 16,
2004, on September 8, 2004 and subsequently on October 12, 2005. The Company
then is committed to pay a success fee upon closing equal to the sum of 3% of up
to $20,000,000 transaction value, 1.5% of the excess of $20,000,000. If an
acquisition transaction is less than 50% interest in the Company or the Target,
a fee shall be payable in cash for 7% of the transaction value. If transaction
is not consummated and the Company is entitled to receive break-up fee and other
form of compensation, the Company then will pay to MCF 30% of Companys entire
entitlement. In the event that the Board deems it necessary or appropriate for a
fairness opinion to be rendered in connection with an acquisition transaction,
MCF will receive a Fairness Opinion Fee of $200,000 for rendering its opinion,
payable upon delivery of the Fairness Opinion and will be credited against the
M&A Completion Fee due to MCF.

At the
completion of Copernic acquisition, total fees paid to MCF was $618,468
including the fairness opinion fee of $200,000.

|Maxim Group, LLC
|----------------

On January
29, 2003, the Company retained Maxim Group LLC (Maxim), on a non-exclusive
basis, as its investment banker, strategic advisor and financial advisor. In
consideration for these services, the Company paid a retainer of $25,000 for the
first month and a monthly fee of $5,000 for the duration of the agreement. Upon
execution of the agreement, the Company issued a warrant to purchase 25,000 of
the Companys Common Shares at an exercise price of $2.15 expiring on June 30,
2006. Under the agreement, on a monthly basis, commencing 30 days after
execution of the agreement, the Company was obligated to issue additional
warrants, each to purchase 8,000 Common Shares, at an exercise price equal to
the market price, for the duration of the agreement upon the same terms and
conditions. For any Transaction completed by the Company with Maxim Group LLC,
the Company agreed to pay a success fee upon closing equal to the sum of 2 1⁄2% of
the aggregate transaction value, provided that Maxim either introduced and/or
performed specific services for the Transaction. The minimum success fee for any
transaction was $200,000. On May 5, 2003, an amendment was made to the agreement
to increase the success fee for a specific Transaction from 21⁄2% to
31⁄2%.

The term of
this agreement was indefinite. However, the Company or Maxim could terminate it
upon 30 days written notice. If such a notice was sent by the Company, the
monetary consideration was payable by the Company for the ensuing five months;
however, the warrant consideration would cease after the 30 days written notice.
If Maxim sent such a notice, both the

22

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monetary and
warrant consideration will cease immediately. The preceding statements
notwithstanding, the agreement could also be terminated upon 30 days written
notice by either party any time after the 6thmonth anniversary of the agreement. On October
30, 2003 the Company advised Maxim of termination of this agreement effective
November 30, 2003. In 2003, the Company granted a total of 105,000 warrants at
an average price of $2.50 to Maxim Group LLC for financial advisory
fees.

Maxim Group
was paid a $200,000 success fee related to the acquisition of Digital Arrow in
June 2004.

As at March
30, 2005, Maxim Group, LLC had exercised all its warrants.

ACQUISITIONS, DIVESTITURES AND DISCONTINUED OPERATIONS

Acquisition of Copernic Technologies Inc.

On December
22, 2005, the Company acquired 100% of the issued and outstanding securities of
Copernic including an amount to cover Copernics outstanding stock appreciation
right obligations.

Copernic
develops cutting-edge search and information management solutions that enable
home and business PC users to maximize their information assets and become more
efficient and proactive in their daily activities. Copernic is dedicated to
providing its customers with cost-effective Web and desktop search technology
that enables better decision-making and increased productivity.

The
consideration for the acquisition, including costs directly related to the
acquisition, consisted of $15,851,922 in cash including $3,297,007 paid to
settle Copernics stock appreciation right and severance obligations net of cash
acquired. The Company also issued 2,380,000 common shares as part of the
consideration paid. The fair value of the Company shares issued to owners of
Copernic has been determined to be $2.958 per share. This value has been
determined using the average closing price of the Companys common stock for two
days before and after August 17, 2005, the date the significant terms and
conditions of the transaction were agreed to and publicly announced.

This
acquisition has been accounted for using the purchase method and the results of
operations have been included in the statement of operations from the date of
acquisition. The purchase price allocation was finalized upon receipt of a
valuation report.

Discontinued Digital Arrow LLC and High Performance Broadcasting
Inc. (Digital Arrow) Operations

In September
2005, following the poor performance of Digital Arrow located in Florida,
management decided to discontinue its subsidiarys operations. The Company has
therefore not renewed the lease in Florida and recorded closing
costs.

Consequently, the results of the operations of Digital Arrow were
recorded as discontinued operations and the results of the Company for the years
ended December 31, 2005 and 2004 were reclassified to account for the closure of
the subsidiarys operations. The Company had acquired Digital Arrow on June 10,
2004, a privately held marketing company that was engaged in the distribution of
on-line, opt-in e-mail marketing solutions via the Internet. In that
acquisition, the

23

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wholly owned
subsidiary, Mamma.com USA, Inc., entered into a Securities Purchase Agreement
with Digital Arrow and their equity holders, pursuant to which Mamma.com USA,
Inc. acquired all equity interests in Digital Arrow. The consideration for the
acquisition, including costs directly related to the acquisition, consisted of
$1,264,210 in cash, net of cash acquired, and 90,000 of the Companys common
shares. The fair value of the Company shares issued to owners of Digital Arrow
has been determined to be $8.23 per share. This value has been determined using
the average closing price of the Companys common stock for five days before and
five days after March 3, 2004, the date the significant terms and conditions of
the transaction were agreed to and publicly announced. The operations of the
business have been included in these financial statements since June 1, 2004.

This
acquisition has been accounted for using the purchase method. The fair value of
the net assets acquired was $1,535,744 and goodwill of $556,196, for a total
purchase price of $2,091,940. From this purchase price, $740,782 was paid by
issuance of the Companys common shares, $86,948 was cash acquired at the
transaction for a cash paid net of cash acquired of $1,264,210.

Divestiture of Intasys Billing Technologies
Subsidiaries(IBT)

On September
9, 2003, the Company announced that it had received and accepted, subject to
completion of due diligence, an offer for the sale of its wireless billing
subsidiary, IBT. The results of operations and cash flows for IBT have been
reported separately as discontinued operations in the consolidated statements of
operations and cash flows, and the remaining assets and liabilities of IBT have
been segregated on the consolidated balance sheets. Comparative figures for the
year ended December 31, 2004 and 2003 have been reclassified in order to comply
with this presentation.

On February
12, 2004, the Company concluded the sale of IBTs assets which include
contracts, customer lists, intellectual property, fixed assets and tangible and
intangible assets relating to the business.

The proceeds
of disposal was $1,699,185 with a gain on disposal of $1,588,923 which has been
included in the Results of discontinued operations line in the consolidated
statements of operations. The Company was entitled to additional consideration
of up to a maximum of $250,000 should certain events occur or conditions be met.
As of December 31, 2004, an amount of $100,000 of such contingent consideration
had been earned by the Company and recorded in results of discontinued
operations. The Company recorded, for 2004, net costs for an amount of $544,927
which represented the net of revenue of $621,296 and expenses of $1,166,223
including closing costs. An amount of $148,000 has been kept in escrow and has
been released in 2005.

IBT
developed, marketed, sold, installed and maintained billing and customer care
and mediation software for customers operating in the telecommunications
industry. Customers include cellular operators (analog, digital, GSM) and fixed
line operators. Typical customers purchase network capacity from network
operators for resale. IBT focused on achieving growth by penetrating projected
wireless subscriber growth in emerging markets, particularly the rapidly
developing small network operator market in Asia-Pacific.

INCUBATOR ACTIVITIES

Prior to
February 2001, when the Company announced a moratorium on new incubator
activities, the Company had engaged in incubator management services and held
investments in companies

24

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in the
analog circuit, new media and telecommunications sectors. These companies
included LTRIM Technologies Inc., (LTRIM), interWAVE communications
International, Ltd.Tri-Link Technologies Inc., TEC Technology Evaluation.com
Corporation, uPath.com Inc. and ESP Media Inc. The Company has written down
completely or disposed of its interest in all of these companies except for
LTRIM.

LTRIM is
engaged in the design and development of high-performance analog integrated
circuit products. LTRIMs proprietary core technology consists of a laser-based
fine-tuning system designed to set the electrical characteristics of
high-performance analog integrated circuits by precisely adjusting the
resistance of silicon-embedded resistive elements that are fabricated through
standard semiconductor manufacturing processes. It is expected that this
technology will have advantages over conventional circuit fine-tuning
techniques, in terms of manufacturing cost, integration, and time-to-market,
when applied to the production of high-performance analog semiconductor
products.

On May 4,
2000, the Company initiated a series of transactions pursuant to which it
subscribed to a CA$850,000 secured debenture convertible into 12.75% of the
equity of LTRIM. On February 23, 2001, the Company started acquiring preferred
shares by step purchase and by May 2001, a total of 207,323 preferred shares
were subscribed to and entirely paid. These shares were subsequently split 10
for 1, resulting in 2,073,230 shares.

On December
13, 2002, LTRIM closed the first round of an intended two-round financing
transaction with new investors. As part of the transaction, the Company
converted all preference shares and the secured debenture into 4,891,686 Class A
Common Shares. Accrued interest on the debenture in the amount of CA$137,014
(US$80,038) was converted into 359,281 Class A preference shares. On February
11, 2004, LTRIM closed the second round of financing.

In 2004,
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 and therefore recorded a write-down of $365,286.

As at
December 31, 2005 and 2004, the investment in LTRIM was at $720,000 for
approximately 8% of LTRIM.

|BUSINESS OVERVIEW
|-----------------

Mamma.com
Inc. is a provider of search technology for both the Web and desktop space,
delivered through its properties, www.mamma.com and www.copernic.com,
respectively. The Company, through its Mamma Media Solutions brand, is also a
provider of online marketing solutions to advertisers, providing keyword and
graphic ad placement on its publisher network.

Mamma.com
The Mother of All Search Engines® is a metasearch engine for the Internet; it
makes it easier and faster for people to find information by gathering results
from the Internet.

Through its
Copernic Desktop Search product, Copernic Technologies Inc. (Copernic)
develops cutting edge search solutions bringing the power of a sophisticated,
yet easy-to-use search engine right to the users PC. It allows for instant
searching of files, emails, and email attachments stored anywhere on a PC hard
drive.

25

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The Company
provides several types of revenues: Search advertising, Graphic advertising and
other which includes license, development and support revenues from customers
mainly located in the United States, Canada and Europe. The Company also holds
investments in companies which develop and market analog integrated circuit
products, and in the new media and telecommunication sectors through LTRIM
Technologies Inc.(LTRIM), and TECE, Inc.

|Copernics Role in our
  Strategy
|---------------------------------

The
acquisition of Copernic fits well within our strategy. We believe it will
increase our top line revenues and create more critical mass as we distribute
the costs of running a public company.

We believe
Copernic presents us with three principal synergies. By acquiring Copernic we:

|1. | Enter into the highly sought after desktop search marketplace
      through the Copernic Desktop Search (CDS) product, an industry award
      winning product.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Add to our existing search
      distribution network through the Copernic Agent user base.                                                                    
|  
|3. | Expand our total reach for
      advertisers and allow cross-marketing in both our Search and Ad
      networks.                                               
|  

Copernic
will increase our product offering with the addition of its CDS (Copernic
Desktop Search) software. We already operate our own search web site
(www.mamma.com ), as well as our own PPC (Pay-per-click) application and have
developed a significant search distribution partner network. With the CDS
application, we should be able to be present in more areas sought after by
potential customers such as advertisers, owners of other search properties and
owners of large portals. The large portal owners are potential prospects for the
CDS offering as they want to retain their own user base and the CDS product
allows them to do this. We believe the business model for CDS would allow us to
conclude significant contracts with a license component and also a revenue share
component, which provides a recurring revenue stream opportunity.

We believe
the CDS revenue stream has the potential to enhance our overall margins because
historically the CDS business has provided higher margins than we have
experienced. If obtained, we believe such higher margins could result from our
recapture of the development costs in the initial license contracts utilizing
the CDS product.

With
Copernics clients we will have an expanded client base including blue chip
customers that should facilitate new market penetration. We also expect to be
able to develop the CDS business throughout the North American, European and the
Asian marketplaces.

We believe
the addition of the Copernic Agent user base fits well into our existing search
distribution partners network. Having better control of advertisers placement,
we expect to be able to optimize to a greater extent on pay-per-click revenues
within this service segment.

The addition
of Copernics millions of users to our search network will generate more
revenues, will give us the opportunity to optimize revenues and add to our
ability to develop cross marketing opportunities for our advertisers. Through
Copernics new technologies, these advertisers could reach users with targeted
advertising either on our Search or Ad Network.

Also,
Copernics market-leading product development experience and its highly skilled
R&D team should allow us to add technologies to our existing products,
making them more attractive to our users and enhancing our ability to
compete.

26

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|PRINCIPAL MARKETS
|-----------------

Although we
operate in the global on-line market, and now engage in the development and sale
of information management and search solution products, the majority of our
users and customers are concentrated in the U.S., Europe and Canada. Our total
revenues in 2005 can be divided into several categories: search advertising,
graphic advertising and other which include license, development and support
revenues. The following table gives a breakdown of the total revenues by
category for the last five financial years. The operations of Copernic have been
included since December 23, 2005.

|YEAR |  | SEARCH      |  | GRAPHIC     |  |       
|---- |  | ----------- |  | ----------- |  | ------
|     |  | ADVERTISING |  | ADVERTISING |  | OTHER 
|     |  |             |  |             |  |       
|     |  | US$         |  | US$         |  | US$   
|     |  |             |  |             |  |       
|2005 |  | 4,935,617   |  | 4,456,399   |  | 72,544
|     |  |             |  |             |  |       
|2004 |  | 9,659,024   |  | 4,965,198   |  | 12,096
|     |  |             |  |             |  |       
|2003 |  | 5,787,980   |  | 3,150,883   |  | -     
|     |  |             |  |             |  |       
|2002 |  | 2,733,953   |  | 1,488,399   |  | -     
|     |  |             |  |             |  |       
|2001 |  | 2,870,878   |  | 1,324,464   |  | -     
|     |  |             |  |             |  |       

|SEASONALITY
|-----------

The Company
is subject to seasonal fluctuations affecting its operations and results.
Historically, the first and third quarters have shown significant decreases in
operating revenues, which the Company believes are respectively attributable to
decreased advertising and Internet use during the post-Christmas lull and the
Summer holiday season.

Copernics
pay per click revenues from their agent user base has the same seasonality as
Mammas pay per click search revenues. The CDS revenue base is from licensing
and revenue share. We expect that the license revenue would be evenly
distributed throughout the year and the revenue share portion would again be
under the same seasonality as Mammas search revenues.

MARKETING CHANNELS AND SALES METHODS

The Company
maintains its own sales and marketing staff and has its own experienced direct
sales force to address the new and evolving requirements of its target markets.
Although the Company itself does not expend significant resources on public
relations, Mamma markets itself through public relations campaigns, on-line
advertising, press releases, internally sponsored events and trade
shows.

Mamma
solicits graphic revenues by telephone or e-mail directly to the end client,
through advertising agencies or network distribution business associates who
mainly specialize in the online advertising market. Search listings are
solicited either directly or through on-line marketing campaigns from the end
client or through specialized search engines.

Copernic
solicits through public relations campaigns, on-line advertising, press
releases, industry and analyst reviews. Copernic has a sales force that actively
prospects potential clients for its CDS technology which consists mainly of
internet service providers, portals and content web sites.

27

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DEPENDENCE ON INTELLECTUAL PROPERTY AND OTHER MATTERS MATERIAL TO
PROFITABILITY

We rely upon
a combination of trade secret, copyright, trademark, patent 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. 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.

|GOVERNMENT
REGULATION
|---------------------

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, 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.

|COMPETITION
|-----------

The Company
primarily competes in the area of on-line advertising and marketing. The market
for these services are in a constant state of flux and competition is intense.

Mamma faces
intense competition and the Company expects competition will continue to
intensify. Mammas market is subject to rapid changes in technology and
marketing strategies and is significantly affected by new product introductions
and other market activities of its existing and potential competitors. The
Company believes the principal competitive factors in this market are name
recognition, product performance and functionality, ease of use, size of the
Web

28

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index, user
traffic, the speed with which search results return and the relevance of
results, pricing and quality of customer support. Many of Mammas current and
potential competitors, including Google, Ask Jeeves, Miva, Looksmart, Findwhat,
Microsoft, Yahoo!, Value Click, FastClick, Burst Media, Tribal Fusion, X1 and
Exalead have significant operating histories, larger customer bases, greater
brand name recognition, greater access to proprietary content and significantly
greater financial, marketing and other resources which give them a competitive
advantage.

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.

|ORGANIZATIONAL
STRUCTURE
|------------------------

On May 31,
2004, the wholly owned subsidiary, Mamma.com Enterprises Inc. was wound up into
the Company.The transaction has allowed the Company to
use carry forward tax losses. As at March, 2006 the Company had these
wholly-owned operating subsidiaries: Operating subsidiary Copernic Technologies,
Inc. a corporation incorporated under the laws of Canada and Non-operating
subsidiaries Mamma.com USA, Inc. who owned Digital Arrow, which discontinued
operations in September 2005, Intasys Billing Technologies (Asia-Pacific) Pty
Ltd, Intasys Billing Technologies (Canada) Inc., Intasys Billing Technologies
Limited and Intasys Online Limited which are dormant corporations, that the
Company will eventually disolve.

The Company
leases three office locations. They are in Quebec City, Canada with 13,000
square feet, Montreal, Canada with 7,000 square feet, and Toronto, Canada with
150 square feet.

ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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 Mamma.com Inc. (formerly Intasys Corporation) for the
three years ended December 31, 2005, 2004 and 2003 should be read in conjunction
with its consolidated financial statements and the related notes included with
this form 20-F. All statements in the following

29

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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 the 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 26 to its consolidated financial
statements. This Managements Discussion and Analysis of Financial Condition and
Results of Operations is dated March 15, 2006.

|BUSINESS OVERVIEW
|-----------------

Mamma.com
Inc. is a provider of search technology for both the Web and desktop space,
delivered through its properties, www.mamma.com and www.copernic.com,
respectively. The Company, through its Mamma Media Solutions brand, is also a
provider of online marketing solutions to advertisers, providing keyword and
graphic ad placement on its publisher network.

Mamma.com
The Mother of All Search Engines® is a metasearch engine for the Internet; it
makes it easier and faster for people to find information by gathering results
from the Internet.

Through its
Copernic Desktop Search product, Copernic Technologies Inc. (Copernic)
develops cutting edge search solutions bringing the power of a sophisticated,
yet easy-to-use search engine right to the users PC. It allows for instant
searching of files, emails, and email attachments stored anywhere on a PC hard
drive.

The Company
provides several types of revenues: Search advertising, Graphic advertising and
other which includes license, development and support revenues from customers
mainly located in the United States, Canada and Europe. The Company also holds
investments in companies which develop and market analog integrated circuit
products, and in the new media and telecommunication sectors through LTRIM
Technologies Inc.(LTRIM), Tri-Link Technologies Inc. and
TECE, Inc.

The
      revenue model of the Company is 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 Mamma Media Solutions Publisher Network.

Graphic Ad
Units  priced on a CPM (Cost-Per-Click) basis and are distributed through the
Mamma Media Solutions Publisher Network.

Mamma Media
Solutions Publisher Network has over 990 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.

30

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Copernic
Desktop Search licensing to ISPs, portals and e-commerce site generates license,
maintenance and customization revenues.

Copernic
Agent Personal / Pro, Copernic Summarizer and Copernic Tracker software are sold
from our e-commerce store.

|Search
      advertising
|------------------------

Approximately 52% of Mamma.com Inc.s revenues come from our search
base business. 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 and is 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 on-line marketing
initiatives). The Company then distributes these search advertisements onto its
search publisher network which consists of its own search property (Mamma.com
The Mother of All Search Engines) and third party search properties.
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 property
because less or no payout costs are associated.

|Graphic advertising
|-------------------

Approximately 47% of our revenues come from our Ad Network
business. The 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, towers,
pop-ups, rich media advertising) and can target them through our network of
publishers. These campaigns can be targeted in several ways: geo-targeting (by
region), by site category (ex: travel, entertainment, finance, etc.) and site
specific. The publisher network consists of about 850 active small to medium
sized web sites that subscribe to our service (through an online or direct
representation contract) and give us access to their advertising inventory on
their property. Mamma.com Inc. recruits publishers through a direct sales force
and through on-line initiatives. Publishers receive payouts for campaigns
published on their websites; these payouts represent a percentage of the
revenues generated from these campaigns.

|Other
|-----

Approximately 1% of our revenues came from license, development and
support services.

Trends of
the industry have been released in recent publications such as:

|1. | More than 83% of marketing executives plan to increase their
      investment in the Web this year (Source: WebTrends Inc. February 28,
      2006)                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Online advertising revenues to increase 27.4% in 2006
      (Source: Merill Lynch, February 2006)                                                                                                                                            
|  
|3. | Online ad spending will reach $18.9 billion in 2010, double
      2004s expenditure. Specifically, display ads will increase by seven
      percent in five years to 7.2 billion by 2010, (Source: Jupiter Research
      February 26, 2006)
|  

31

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|4. | Paid Search is expected to generate more than 14 billion
      globally in 2006 - Safa Rashtchy from Piper Jaffrey (Source: ClickZ News
      January 4, 2006)                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. | US
      Online Advertising Revenues projected increase from 2005 to 2006 is 33%
      and from 2006 to 2007 is 26% (Source: JMP Securities LLC, IAB, and McCann
      Erickson, December 2005)
|  

|RECENT EVENTSBusiness
  acquisition
|-----------------------------------

On December
22, 2005, the Company acquired 100% of the issued and outstanding securities of
Copernic including an amount to cover Copernics outstanding stock appreciation
right obligations.

Copernic
develops cutting-edge search and information management solutions that enable
home and business PC users to maximize the use of their information assets and
become more efficient and proactive in their daily activities. Copernic is
dedicated to providing its customers with cost-effective web and desktop search
technology that enables better decision-making and increased
productivity.

The
consideration for the acquisition, including costs directly related to the
acquisition, consisted of $15,851,922 in cash including $3,297,007 paid to
settle Copernics stock appreciation right and severance obligations net of cash
acquired. The Company also issued 2,380,000 common shares as part of the
consideration paid. The fair value of the Company shares issued to owners of
Copernic has been determined to be $2.958 per share. This value has been
determined using the average closing price of the Companys common stock for two
days before and after August 17, 2005, the date the significant terms and
conditions of the transaction were agreed to and publicly announced. The
operations of Copernic have been included in these financial statements since
December 23, 2005.

|Discontinued operation
|----------------------

In September
2005, following the poor performance of Digital Arrow LLC and High Performance
Broadcasting, Inc. (Digital Arrow) located in Florida, management decided to
discontinue its subsidiarys operations. The Company had therefore not renewed
the lease in Florida and recorded closing costs.

Consequently, the results of the operations of Digital Arrow were
recorded as discontinued operations and the results of the Company for the years
ended December 31, 2005 and 2004 were reclassified to account for the closure of
the subsidiarys operations. The Company had acquired Digital Arrow on June 10,
2004.

32

---

|Granting and cancellation of stock
  options
|--------------------------------------------

On November
8, 2005, the Company granted to Officers and Members of the Board 430,000 stock
options at an exercise price of $2.28 expiring in five years.

On February
16, 2005, 94,996 options at an exercise price of $6.28 expiring in five years
were granted to the Companys officers and employees.

On February
2, 2005, the Officers and Members of the Board of Directors of Mamma.com to whom
295,000 stock options had been granted on November 2, 2004, waived and renounced
any and all rights that each had or may have had on the options. Consequently,
the options were cancelled as of that date. The stock-based compensation costs
recorded as of December 31, 2004 pertaining to these options were reversed in
the first quarter of 2005.

|Purported Securities Class Action
  Lawsuit
|-------------------------------------------

On February
22, 2005, the first of several purported securities class action lawsuits was
filed in the United States District Court, Southern District of New York against
the Company, and certain of the Companys current officers and directors. The
plaintiffs allege, among other things, violations of the Securities Exchange Act
of 1934 for purportedly failing to disclose and misrepresenting certain
allegedly material facts relative to the market for and trading in the Companys
stock, and seek unspecified damages. The purported class actions appear to be
based on unsubstantiated rumours and newspaper reports. All of these lawsuits
have been consolidated.

We have
director and officer liability insurance that, subject to paying a retention of
$250,000, we expect will cover most costs of defending the purported securities
class action. The insurer of the coverage has paid most of the fees and expenses
to date, except an amount of approximately $26,000 which has not been paid; the
insurer is asserting that some fees and expenses of the class action defense
counsel were outside the scope of coverage. We do not believe the insurer will
successfully maintain this position with respect to this minimal unpaid amount
of fees and expenses.

On March 28,
2006, the court in the consolidated case denied a motion the Company filed for
dismissal of the consolidated complaint. The Company denies the allegations
against it, believes that the purported claims are without merit, and intends to
continue defend itself vigorously.

|Special Investigation of Independent
    Committee
|--------------------------------------------------

Following
press reports in January 2005 and in response to recommendations made by the
Companys former independent auditor, the Companys Board of Directors initiated
an investigation under the supervision of a Special Independent Committee
consisting of independent directors of the Audit Committee with independent
legal counsel to investigate the allegations in the press reports. Those press
reports claimed that Irving Kott and persons acting jointly or in concert with
him may have had a controlling influence on the Company in the past as a result
of undisclosed shareholdings. The Special Committee and its independent counsel
have reviewed the relevant information available at the time of the
investigation relating to the period from January 1, 1999 to December 31, 2004.
While the Special Committee did note some evidence of contacts with and
involvement by Mr. Kott and persons with whom he may have had an association,
based on its review, the Special Committee has not found evidence establishing
that Mr. Kott had a controlling influence on the Company during such
period.

33

---

|Normal
      Course Issuer Bid
|------------------------------

On September
7, 2004, the Company filed a notice of intention with the Ontario Securities
Commission to make a normal course issuer bid, to repurchase up to a maximum of
600,000 common shares, representing less than 5% of the issued and outstanding
common shares of the Company. According to the Notice, the normal course issuer
bid was scheduled to take place over a twelve-month period ending on the 7th day
of September 2005. At the expiration period, the Company did not file a new
notice.

During the
year ended December 31, 2005, the Company redeemed 304,665 of its common shares
at a weighted average price of $3.46, for a total amount of $1,053,155. The
$1,195,147 excess of stated capital value over the redemption amount has been
credited to additional paid-in capital.

|Informal SEC Inquiry to Formal
  Investigation
|----------------------------------------------

On March 18,
2004, the United States Securities and Exchange Commission (SEC) notified the
Company that the SEC had begun an informal inquiry relating to trading activity
in the Companys securities. During March of 2004, trading in the Companys
common stock had been intense and the market price of the common stock had risen
sharply.

The SEC has
since issued a formal order of investigation in this matter. As a part of its
investigation, the Company believes the SEC may consider matters related to
trading in the Companys securities and whether an individual and persons acting
jointly or in concert with him may have had a significant influence on the
Company in the past as a result of undisclosed shareholdings. (See
Special
Investigation of Independent Committee above.) The Company also believes that the
Commissions staff may consider matters relating to the Companys financial
reporting and internal controls. The scope, focus and subject matter of the SEC
investigation may change from time to time and the Company may be unaware of
matters under consideration by the SEC. The Company intends to continue
cooperating with the SEC in its investigation.



|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.

34

---



|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, valuation of investments, determination of the fair value of
the intangible assets on recent acquisitions, determination of the fair value of
the warrants issued on the private placement and the resulting impact on the
allocation of the proceeds between the shares and warrants. Each of these
critical accounting policies is described in more detail below.



|Allowance for doubtful
accounts
|-------------------------------

We make
judgments as to our 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.

We also
record a provision for revenue adjustments in the same period as the related
revenues are recorded. These estimates are based on historical analysis of
credit memo data and other factors. If the historical data we use to calculate
these estimates does not properly reflect future uncollectible revenues, then a
change in the allowances would be made in the period in which such a
determination is made and revenues in that period could be impacted.

For this
item, actual results could differ from those estimates.



|Recovery of future income
taxes
|-------------------------------

We use
significant judgment in determining our consolidated recovery of future income
taxes. Uncertainties may arise with respect to the tax treatment of certain
transactions. Although we believe our estimates are reasonable, we cannot be
certain 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, 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. 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 assesses goodwill for impairment using 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, thereby possibly requiring an impairment charge
in the future.

35

---

For this
item, actual results could differ from those estimates.



|Useful
      lives and impairment of long-lived
assets
|------------------------------------------------------

The Company
assesses the carrying value of its long-lived assets which include property,
plant 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 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.



|Valuation of
investments
|------------------------

The Company
holds interests in various companies. Management records an investment
impairment charge when it believes an investment has experienced a decline in
value that is judged to be other than temporary. Management monitors its
investments for impairment by considering current factors including economic
environment, market conditions and operational performance and other specific
factors relating to the business underlying the investment, and records
reductions in carrying values when necessary. The fair value for privately held
securities is estimated using the best available information as of the valuation
date, including the quoted market prices of comparable public companies, recent
financing rounds of the investee and other investee specific information.

For this
item, actual results could differ from those estimates.

Determination of the fair value of the intangible assets on
Copernic acquisition

The
acquisition of Copernic made on December 22, 2005 resulted in the recognition of
intangible assets totalling $7,900,000 and goodwill of $15,408,721. The
determination of the fair value of the acquired intangible assets and goodwill
requires management to estimate the discount rate to be used in the
calculations, the amounts and timing of estimated future net cash flows, royalty
rate, tax rate, weighted average cost of capital, residual growth rate, general
economic and industry conditions. If different estimates had been used, the
purchase price allocation might have been materially different and could cause
the amortization expense for the current and future years to be significantly
different.

36

---

Determination of the fair value of the warrants issued on the
private placement and the resulting impact on the allocation of the proceeds
between the shares and warrants

The amounts
allocated to the shares and warrants totalled $13,158,329 and $3,441,652,
respectively, for the private placement closed as at June 30, 2004. These
amounts have been allocated based upon the relative fair values of the shares
and warrants at the date they were issued. The estimated fair value of the
warrants has been determined using the Black-Scholes pricing model using
Managements best estimates of the volatility and the expected life of the
warrants.



|REVENUE
RECOGNITION
|-------------------

Search
advertising, graphic advertising, sales of software and 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.

Support
revenue is recognized on a straight-line basis over the term of the
agreements.

Estimates of
collection likelihood is 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 CHANGESa) For changes
      affecting 2003
|------------------------------------------------------------

Stock-based compensation and other stock-based
payments

During the
fourth quarter of 2003, the Company adopted, retroactive to January 1, 2003, the
fair value method of accounting for stock options granted to employees. Under
this method, the fair value of options granted to employees is charged to
expense over the future vesting period. In accordance with the transitional
provisions of the Canadian Institute of Chartered Accountants (CICA) Handbook
Section 3870, Stock-Based Compensation and Other Stock-Based Payments, the
Company has elected to apply this new method prospectively to options granted to
employees on or after January 1, 2003. Consequently, prior period financial
statements have not been restated; however, the Company continues to provide pro
forma disclosures as if the fair value method of accounting had been applied
retroactively.



|Impairment of long-lived
  assets
|---------------------------------

CICA
Handbook section 3063, Impairment of Long-Lived Assets, provides guidance on
the recognition, measurement and disclosure of the impairment of long-lived
assets. It replaces the write-down provisions in Section 3061, Property, Plant
and Equipment. The provisions of the Section require an impairment loss for a
long-lived asset to be held and used to be recognized when its carrying amount
exceeds the sum of the undiscounted cash flows expected from its use and
eventual disposition. The impairment loss is measured as the amount by which its
carrying

37

---

amount
exceeds its fair value. The adoption of this section did not have a significant
impact on the financial statements.

Disposal
of long-lived assets and discontinued operations

CICA
Handbook section 3475, Disposal of Long-Lived Assets and Discontinued
Operations, provides guidance on recognizing, measuring, presenting and
disclosing long-lived assets to be disposed of and replaces the disposal
provisions in Section 3475, Discontinued Operations and Section 3061,
Property, Plant and Equipment. The Section provides criteria for classifying
assets as held for sale to be measured at the lower of carrying value and fair
value less costs to sell, provides criteria for classifying a disposal as a
discontinued operation and specifies presentation and disclosure for
discontinued operations and other disposals of long-lived assets. The adoption
of this section did not have a significant impact on the financial
statements.



|b) For
      changes affecting 2004Asset retirement
      obligations
|---------------------------------------------------------------------

CICA
Handbook section 3110, Asset Retirement Obligations, focuses on the
recognition and measurement of liabilities for obligations associated with the
retirement of property, plant and equipment when those obligations result from
the acquisition, construction, development or normal operation of the assets.
The adoption of this section did not have a significant impact on the financial
statements.

c) For
changes affecting 2005 and future years



|Consolidation of variable interest
  entities
|---------------------------------------------

CICA
Accounting Guideline 15, Consolidation of Variable Interest Entities, provides
clarification on the consolidation of those entities defined as variable
interest entities, when equity investors are not considered to have a
controlling financial interest or they have not invested enough equity to allow
the entity to finance its activities without additional subordinated financial
support from other parties. Variable interest entities are commonly referred to
as special purpose entities. The guideline comes into effect for interim periods
beginning on or after November 1, 2004. The adoption of this section did not
have a significant impact on the financial statements.



|Financial instruments
|---------------------

On April 1,
2005, the CICA issued three new Handbook sections: Section 1530, Comprehensive
Income, Section 3855, Financial Instruments  Recognition and Measurement,
and Section 3865, Hedges. These new sections apply to fiscal years beginning
on or after October 1, 2006 with earlier adoption permitted as of the beginning
of a fiscal year ending on or after December 31, 2004.

Section
3855, Financial Instruments  Recognition and Measurement, requires all
financial instruments to be classified as either Held to Maturity, Loans and
Receivables, Held for Trading, or Available for Sale. The Held to Maturity
classification is restricted to fixed maturity instruments that the Company
intends and is able to hold to maturity. Loans and Receivables and Held to
Maturity investments are accounted for at amortized cost. Securities that are
acquired for selling in the near term are classified as Held for Trading are
accounted for at fair value with

38

---

realized and
unrealized gains and losses reported in net income. The remaining financial
instruments are classified as Available for Sale and are measured at fair value
with unrealized gains and losses, not affecting income, but reported in a new
category in Shareholders equity called Other Comprehensive Income.

Section
3865, Hedges, which replaces Accounting Guideline 13, Hedging Relationships,
requires that all derivatives, including hedges, be measured at fair value.
Changes in the fair value of a derivative which hedges the Companys exposure
that the fair value of an asset or liability will change due to a particular
risk are recognized in net income together with those of the respective
offsetting hedged item. However, changes in the fair value of a derivative which
hedges the Companys exposure to changing cash flows are accumulated in Other
Comprehensive Income until the transaction being hedged affects net income.

Section
1530, Other Comprehensive Income, a new category in the Shareholders equity
section, includes in addition to the items mentioned above, unrealized foreign
currency translation gains and losses, net of hedging activities.

The Company
will adopt these recommendations for its fiscal year 2007.



|RESULTS OF
OPERATIONS
|---------------------



|Revenues
|--------



|2005
      as compared to 2004
|------------------------------

Revenues for
the year 2005 were $9,464,560, a decrease of 35% from revenues $14,636,318 for
the year 2004.

Search
advertising revenues decreased by 49% from $9,659,024 in 2004 to $4,935,617.
This decrease was mainly explained by a significant reduction in business with a
major customer, which impacted our search revenues unfavourably by more than
$3.8 million and to industry pressure to deliver better conversion rates and to
improve traffic quality by cutting non-converting clicks.

Graphic
advertising revenues decreased by 10% from $4,965,198 to $4,456,399 due to the
loss of a significant number of sales people from our Ad Network team during the
last quarter of 2005.



|2004
      as compared to 2003
|------------------------------

During the
financial year ended December 31, 2004, the Company generated revenues of
$14,636,318, an increase of 64% from revenues of $8,938,863 during the previous
year.

Search
revenues were favourably affected by the Companys positioning strategy and the
industrys strong growth represented the most of our growth in 2004.

Graphic
advertising revenues, increased to $4,965,198, a 58% growth as compared to
$3,150,883 in 2003. The growth is primarily due to an increase in unit pricing,
a better product mix and an increase in the number of significant
clients.

39

---



|ExpensesCost of
  revenues
|--------------------------

Cost of
revenues represent partners payouts and bandwidth costs to deliver our
services. For the year ended December 31, 2005, theses costs represented
$4,204,030 or 44% over revenue compared to $6,539,213 or 45% over revenue in
2004 and $3,991,265 or 45% over revenue in 2003.

In 2005, the
payouts stand at $3,924,065 or 41% over revenues compared to $6,324,612 or 43%
in 2004 and $3,685,314 or 41% over revenue in 2003. In 2005, the decrease of
costs as a percentage of revenues was mainly due to a higher proportion of
revenues generated from our metasearch engine for which no payouts are incurred.
The increase of 2% of partner payouts from 2003 to 2004 reflected the
competitive landscape for which business partners require higher payouts in
order to maintain their relationship by providing user traffic or content on the
Companys online media properties.

The
bandwidth costs represented $279,965, or 3% over revenues compared to $214,601,
or 3% in 2004 and $305,951 or 3% in 2003. The variance as a percentage of
revenues in 2005 is explained by an increase in the bandwidth used for our
metasearch engine and delivery of our services. The decrease of 2% from 2003 to
2004 is mainly due to the volume discount renegotiation of ISP fees following
the integration of our search and graphic ad services.



|Marketing, sales and
services
|-----------------------------

Marketing,
sales and services consist primarily of salaries, commissions and related
personnel expenses of our sales force, advertising and promotional expenses as
well as the provision for doubtful account.

For the year
ended December 31, 2005, marketing, sales and services expenses stood at
$2,023,925, whereas for 2004 and 2003, these expenses stood at $2,188,488 and
$1,600,643 respectively. The decrease of $164,563 in 2005 is mainly explained by
a decrease in salaries due to the loss of several sales employees and a network
manager and a decrease in marketing campaign costs.

The increase
of $587,845 in 2004 as compared to 2003 was primarily related to higher sales
commission due to the growth of revenues, an increase in on-line marketing
campaigns focused on attracting traffic to our metasearch engine, as well as an
increase in the charges paid for algorithmic content from other search engines;
a direct impact of the increased traffic to the Mamma.com metasearch
engine.



|General and
administrative
|--------------------------

General and
administrative expenses include the salaries and associated costs of employment
of executive management and finance personnel, including stock-based
compensation. 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.

General and
administrative expenses increased to $5,692,092 as compared to $3,567,247 in the
previous year and $2,255,099 in 2003.

40

---

In 2005, the
increase of $2,124,845 is explained by the following items: increase of
$1,914,000 in professional fees in relation to the securities class action
lawsuits and SEC investigation, increase of $481,000 in directors and officers
insurance, $119,000 for investor relations and public reporting and $118,000 in
salaries due to higher headcount offset by $284,000 of non-cash expenses related
to issued warrant to investment banker recorded in Q2 2004, a reduction $236,000
of stock-based compensation expense due primarily the reversal of expense for
the cancelled stock option granted in 2004 and a reduction of $106,000 of
professional fees.

In 2004, the
increase of $1,312,148, as compared to 2003 is mainly due to the following
items: professional fees of approximately $410,000 incurred for the SEC inquiry;
$260,000 of non-cash expense related to issued warrants to the investment
banker, an increase of approximately $245,000 in stock-based compensation costs
mainly due to the issuance of new options; an increase in salaries and benefits
of approximately $132,000 which mainly reflects the normal raise in salaries,
increased incentive compensation since the Company attained required performance
and new headcount in order to meet SOX 404 requirements; an increase of
approximately $100,000 in the compensation for the board members, mainly due to
the costs of fringe benefits on stock options exercised in 2004 and additional
consulting fees paid to our Executive Chairman; an increase in annual audit fees
and review of quarterly financial statements of approximately $210,000 offset by
a decline in legal fees of $119,000 following the conclusion of two legal claims
against the Company in 2002.



|Product development and technical
  support
|-------------------------------------------

Product
development and technical support costs include the salaries and associated
costs of employment of our team 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 and future
benefit of non-refundable tax credits are also recorded against product
development and technical support expenses.

Product
development and technical support expenses totalled $1,286,345 in 2005, as
compared to $891,541 in the previous year and $599,383 in 2003.

The increase
of $394,804 is mainly explained by an increase of approximately $351,000 in
salaries and related employment costs due to an increase in headcount;
stock-based compensation costs following the grant of employee stock options in
the first quarter of 2005 and a retention bonus.

The increase
of $292,158 in 2004 as compared to 2003 primarily includes additional salary and
benefits from the growth in headcount, increased benefits due to the exercise of
stock options and consulting fees incurred to enhance our metasearch engine. For
the year ended December 31, 2005, the Company recorded R&D tax credits and
future benefit of non-refundable tax credits of $21,601 as compared to $86,521
and $128,157 in 2004 and 2003, respectively.



|Amortization of property, plant and
    equipment
|-------------------------------------------------

Amortization
of property, plant and equipment stands at $106,788 for the year ended December
31, 2005 compared to $133,123 in 2004 and $140,090 in 2003. The slight decrease
in 2004 reflects the normal decrease of the assets net book value. Acquisition
of property, plant and

41

---

equipment,
excluding those acquired through business acquisitions, total $85,687 in 2005,
$70,284 in 2004 and $47,432 in 2003.

Amortization of intangible assets

Amortization
of intangible assets increased to $242,031 in 2005 compared with $191,218 in
2004 and $178,509 in 2003. The increase of $50,813 in 2005 relates to the
acquisition of the intangible assets of Copernic acquired on December 22, 2005.
The intangible assets totalled $8,601,848 and they are being amortized on a
straight-line basis over a period of 3 to 10 years.



|Interest and other
income
|-------------------------

Interest and
other income stand at $768,738 in 2005 compared to $233,506 in 2004 and $15,869
in 2003. The increase in 2005 compared to 2004, reflected the interest earned on
cash and cash equivalents and temporary investments on a full year in 2005
compared to half a year in 2004 due to significant amounts of cash and cash
equivalents following the private placement close on June 2004.

The increase
from 2003 to 2004 reflects the interest earned on cash and cash equivalents
following the issuance of capital stock. On June 30, 2004, the Company realized
a private placement where the net proceeds totalled $15,541,162. The remaining
issuance of capital stock relates to the exercise of employee stock options and
warrants.



|Loss
      on foreign exchange
|------------------------------

Loss on
foreign exchange totalled at $47,080 for the year ended December 31, 2005
compared to $68,275 in 2004 and $210,888 in 2003. The improvement in 2004 as
compared to 2003 mainly reflected the change in functional currency, from the
Canadian dollar to the U.S. dollar, for the Companys wholly owned subsidiary,
Mamma.com Enterprises Inc.



|Write-down of
investment
|------------------------

In 2004,
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 and therefore recorded a write-down of $365,286.



|Income
      taxes (recovery)
|-----------------------------

The recovery
for current and future income taxes is $26,010 in 2005 as compared to a
provision of income taxes of $554,680 in 2004 and a recovery of income taxes of
$77,636 in 2003.

In 2005, the
recovery of income taxes is explained by the reassessment of previous years
income tax returns for $12,046 and the reversal of future income taxes related
to the acquisition of Copernics intangible assets of $13,964.

In 2004, the
provision for income taxes is due to the utilization of non-capital losses for
which future income taxes have been previously recorded.

In 2003, the
media solutions segment which represented a separate legal entity (Mamma.com
Enterprises Inc.) recorded a net future recovery of income taxes of $77,636
which included a

42

---

standard tax
provision on earnings of $460,456 (representing earnings for 2003 of $1,466,909
at a current taxable rate of 31.4%) and a tax recovery of $538,092 which
represented the total outstanding amount of prior year losses that the media
solutions segment expects to use in the future. In 2003, after two consecutive
years of profitability for the segment and profitability expectations forecasted
for 2004, management determined that it was more likely than not that the future
tax assets would be realized.



|Results of discontinued
  operations
|------------------------------------

In September
2005, following the poor performance of Digital Arrow located in Florida,
management decided to discontinue its subsidiarys operations. The Company has
therefore not renewed the lease in Florida and recorded closing
costs.

Consequently, the results of the operations of Digital Arrow were
recorded as discontinued operations and the results of the Company for the years
ended December 31, 2005 and 2004 were reclassified to account for the closure of
the subsidiarys operations. The Company had acquired Digital Arrow on June 10,
2004.

In 2005, the
loss of discontinued operations amounting to $2,315,335 included a write-down of
$1,625,898 for property, plant and equipment, intangible assets and goodwill.

In 2004, the
results of discontinued operations totalling $733,654 include a gain on disposal
of the assets of IBT of $1,588,923, net cost for an amount of $544,927 of IBT
and net loss of Digital Arrow of $310,342. In 2003, IBT recorded a loss before
income taxes of $32,220 and a tax provision of $267,833 to reflect a likely
reassessment of R&D deductions claimed by the UK operation in prior
years.



|Earnings (loss) for the
year
|----------------------------

In
accordance with Canadian GAAP, loss from continuing operations total $3,342,983
($0.27 per share) in 2005, compared to earnings of $370,753 ($0.03 per share) in
2004 and $88,990 ($0.01 per share) in 2003. For 2005, 2004 and 2003, there is no
difference between net earnings (loss) under US GAAP as compared to Canadian
GAAP.



|Liquidity and capital
resources
|-------------------------------

As at
December 31, 2005, the Company had liquidities of $8,514,513 which were composed
of $4,501,201 in cash and cash equivalents and $4,013,312 in temporary
investments compared to $27,631,244 in 2004 which consisted mainly of cash and
cash equivalents of $20,609,089, $148,000 of restricted cash and $6,874,155 of
temporary investments. For the year ended December 31, 2005, working capital was
$8,944,985 compared to $27,528,003 for the previous year.

Operating
activities used cash of $2,081,470 in 2005 compared to generating cash of
$1,006,093 in 2004 and use of cash of $61,957 in 2003. In 2005, the cash used is
mainly due to the loss from continuing operations of $3,342,983 offset by the
net change in non-cash working capital of $1,420,013 mainly due to a decrease in
accounts receivable of $1,266,077 and an increase in accounts payable of
$277,841. The cash used from discontinued operation amounted to $630,288 in
2005.

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In 2004,
adjustments for non-cash items such as future income taxes of $400,855,
amortization of intangible assets and amortization of property, plant and
equipment of $191,218 and $133,123 respectively, write-down of investment of
$365,286, stock-based compensation costs of $281,367 and financial fees paid by
issuance of capital stock and warrants of $260,301 mainly explain the positive
cash flows. The net change in non-cash working capital items partially offset
the above-mentioned items mainly due to an increase in our accounts receivable,
a direct result of the growth of our sales. However, discontinued operations
partially offset positive cash flows from continuing operations by $790,370. The
cash used for operating activities from discontinued operations is primarily
related to the net change in non-cash working capital items mainly due to a
decrease in accounts payable and accrued liabilities and income taxes
payable.

In 2003,
operating activities used cash of $61,957 mainly due to the fact that the
accounts receivable increased by $1,033,078 during the year pursuant to
increased revenues offset by cash flow from operating activities of discontinued
operations of $479,852.

In 2005,
investing activities used cash of $13,131,709 of which $15,851,922 was used for
the acquisition of Copernic, $140,630 used for purchases of property, plant,
equipment and intangibles assets and the decrease in temporary investments
provided cash of $2,860,843. The use of cash in 2004 of $6,495,722 mainly
reflected the net increase in short-term investments of $6,850,979 composed of
commercial paper with maturity dates in excess of 90 days, purchases of
property, plant, equipment and intangibles assets of $79,718 and cash provided
from discontinued operations of $434,975 reflected the cash consideration for
the sale of the assets of IBT of $1,699,185 partially compensated by the
acquisition of Digital Arrow for a cash consideration of $1,264,210. In 2003,
investing activities used cash of $95,167.

In 2005,
financing activities used cash of $1,046,731 mainly explained by the redemption
of common shares of the Company. In 2004 and 2003, financing activities
generated $21,701,442 and $585,598 respectively due to issuance of common shares
and warrants through a private placement and exercised options.

The Company
considers that cash and cash equivalents will be sufficient to meet normal
operating requirements until the end of 2006. In the long term, the Company may
require additional liquidity to fund growth, which could include additional
equity offerings or debt financing.



|Concentration of credit risk with
  customers
|---------------------------------------------

As at
December 31, 2005, two customers represented 39% of our accounts receivable
compared to 30% 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 have paid receivables 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.



|Q4
      2005 RESULTS
|---------------------



|Revenues
|--------

Revenues for
Q4 2005 totalled $1,659,017, compared to $3,416,315 for the same period in 2004.
The decrease of $1,757,298 or 51% was explained by a reduction in search
advertising revenues

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by $974,301
due to industry pressure to deliver better conversion rates and to improve
traffic quality by cutting non-converting clicks and a reduction in graphic
advertising revenue by $853,906 due to the loss of a significant number of sales
people during the last quarter of the year. Other revenues increased by $70,909
mainly due to Copernics activity from the date of acquisition.



|Expenses
      Cost of
      revenues
|-------------------------------------

For Q4 2005,
cost of revenues represented $739,276, or 45% over revenues compared to
$1,404,294 or 41% in Q4 2004. The increase as a percentage of revenues is mainly
explained by an increase in graphic payout costs due to competitive landscape;
graphic partners require higher payouts in order to maintain their relationship
with the Company.



|Marketing, sales and
services
|-----------------------------

For Q4 2005,
marketing, sales and services expenses decreased to $321,541 compared to
$679,964 for the same period in 2004, representing a decrease of $358,423. The
variance reflected a decrease of approximately $149,000 in salaries and related
employment costs explained by a lower number of people and lower commissions due
to sales reduction, and the decrease of bad debt expense of $113,000 and of
$63,000 for the charges paid for content from other search engines.



|General and
administration
|--------------------------

General and
administration expenses in Q4 2005 were $1,145,862 compared to $1,150,933 in Q4
2004, a decrease of $5,071. The decrease is mainly explained by a reduction of
$237,000 in audit fees offset by $108,000 of directors and officers insurance
due to higher risks for the Company, $81,000 of professional fees in relation to
the securities class action lawsuits and SEC investigation, and $40,000 in
consulting fees for SOX 404 compliant requirements.



|Product development and technical
  support
|-------------------------------------------

Product
development and technical support were $345,407 in Q4 2005 compared to $279,283
for the same period last year. The variance of $66,124 is explained by an
increase of approximately $57,000 in salaries and related employment costs due
to an increase in stock-based compensation and accrued retention
bonuses.



|Interest income
|---------------

Interest and
other income increased in Q4 2005 to $264,461 from $116,578 for the same period
in 2004. Interest rates on cash equivalents and temporary investments were
higher in 2005 and during Q4 2005, the Company received $41,878 from Tri-Link
Technologies Inc. as interest from the Companys investment already
written-down.

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Earnings
(loss) from continuing operations and earnings (loss) per share from continuing
operations

The Company
reported a loss from continuing operations of $739,711 ($0.06 per share), in Q4
2005, compared to a loss of $462,582 ($0.04 per share) in Q4 2004.

Results
of discontinued operations and earnings (loss) per share from discontinued
operations

In September
2005, following the poor performance of Digital Arrow located in Florida,
management decided to discontinue its subsidiarys operations. Consequently, the
results of the operations of Digital Arrow were recorded as discontinued
operations and the results of the Company for the three-month periods ended
December 31, 2005 and 2004 were reclassified to account for the closure of the
subsidiarys operations. The loss from discontinued operations for Q4 2005
totalled $22,844 and $208,985 for Q4 2004.

Net
earnings (loss) and net earnings (loss) per share

Net loss for
the three months ended December 31, 2005 totalled $762,555 ($0.06 per share)
compared to a net loss of $671,567 ($0.06 per share) for the same period in
2004.



|Operating activities
|--------------------

In Q4 2005,
operating activities from continuing operations provided cash totalling $521,654
compared to cash outflow of $658,986 for the same period in 2004. The positive
variance is mainly explained by the improvement in net change in non-cash
working capital items of $1,066,776 in Q4 2005 compared to a used of $834,691 in
Q4 2004.



|Investing activities
|--------------------

Investing
activities from continuing operations in Q4 2005 used cash totalling $19,872,778
of which $15,851,922 was used in the acquisition of Copernic and $4,013,312 in
the purchase of temporary investments, compared to $3,883,736 use for the
corresponding quarter of 2004. The use of cash in the fourth quarter of 2004 was
mainly due to the increase in temporary investments.



|Financing activities
|--------------------

In Q4 2005
and 2004, no cash was provided by, nor used in, any financing activities of the
Company.



|Off
      balance sheet arrangements
|------------------------------------

As at
December 31, 2005 and 2004, the Company has no off balance sheet
arrangements.

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Contractual obligations, contingent liabilities and
commitments

The
following table summarizes our contractual obligations as at December 31, 2005,
and the effect such obligations are expected to have on our liquidity and cash
flows in future periods:

Operating
      leasesYears:
    
    $2006
    
    329,0002007
    
    218,0002008
    
    182,0002009
    
    106,0002010
    
    71,000Thereafter
    
    -


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.



|RISKS AND
UNCERTAINTIES
|-----------------------

While
Mamma.coms Management has confidence in the Companys long-term performance
prospects, the following factors, among others, should be considered in
evaluating its future results of operations.

Our
future growth significantly depends to a high degree of our ability to integrate
our recent acquisition of Copernic, failure or delays would adversely affect our
business and results of operations.

On December
22, 2005,we completed
our acquisition of Copernic which should be accretive to earnings in 2006 and
should position the Company as a leader in search technologies and applications
and as a multi-channel on-line marketing services provider. We have high
expectations for the Copernic Desktop Search® (CDS) award-winning product. This
world-class software has already seen a healthy adoption rate in blue chip
customer agreements and we expect that other major portals will also want to
adopt CDS in order to protect against user attrition and generate more cost per
click revenues from their search partners. Any failure or delay in successfully
integrating Copernic into the Companys operations could adversely affect our
business and results of operations

Our
revenues depend to a high degree on our relationship with two customers, the
loss of which would adversely affect our business and results of
operations.

For the year
ended December 31, 2005, approximately 14% and 11% respectively of our revenues
were derived from agreements with our two largest customers. Revenues from these
customers represented 2% and 11% of our revenues in 2004 and 0% and 8% of our
revenues in 2003.

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Although we
monitor our accounts receivable for credit risk deterioration and these
customers have been paying their payables to Mamma.com in accordance with the
terms of their agreements with the Company, there can be no assurance that they
will continue to do so or that they will continue to do so at the volume of
business they have done historically. Our loss of these customers 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
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.

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.

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We are the subject of an SEC investigation which may depress the market price for our Common Shares, reduce the liquidity of the Common Shares trading market and negatively affect our
results of operations.

We are the subject of an SEC investigation. The scope, focus and subject matter of the SEC investigation may change from time to time.  Adverse developments in connection with the investigation
or our internal fact finding could have a negative impact on our Company and on how it is perceived by investors and potential investors and negatively impact our results of operations.  In addition, the management effort and attention required to
respond to the investigation and any such developments could have a negative impact on our business operations. An adverse determination by the SEC in its investigation could result in negative consequences for the Company, including initiation of
enforcement proceedings, fines, penalties and possibly other sanctions that could harm the Companys business, reduce the market value of its Common Shares and negatively affect its results of operations.

Expenses relating to the SEC investigation could negatively affect our results of operations.

While we are not able to estimate, at this time, the amount of the additional expenses that we will incur in future connection with the investigation, we expect that it could negatively affect our
results of operations.

Adverse results in purported securities class action lawsuit could result in significant damages and adversely affect the Companys financial condition and results of
operation.

On February 22, 2005, the first of several purported securities class action lawsuits was filed in the United States District Court, Southern District of New York against the Company, and certain
of the Companys current officers and directors. The plaintiffs allege, among other things, violations of the Securities Exchange Act of 1934 for purportedly failing to disclose and misrepresenting certain allegedly material facts relative to
the market for and trading in the Companys stock, and seek unspecified damages. The purported class actions appear to be based on unsubstantiated rumours, purported statements from unidentified individuals and newspaper reports. All of these
lawsuits have been consolidated and the lead plaintiff has filed an amended complaint in the case. On March 28, 2006, the court in the consolidated case denied a motion the Company filed for dismissal of the consolidated complaint. The Company
denies the allegations against it, believes that the purported claims are without merit, and intends to continue defend itself vigorously. Nevertheless, a finding of liability of the Company in any of these class action lawsuits could result in
significant damages and materially adversely affect the Companys financial condition and results of operations.

We rely on our co-branded web site partners for a significant portion of our net revenues, and otherwise benefit from our association with them. The loss of these co-branded 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 co-branded partner web sites. We expect the percentage of our net revenues generated from this network to increase in the
future.  We consider this network to be critical in the future growth of our net 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 co-branded

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web site partners decide to use a competitors or their own web search or advertising services, our net revenues would decline.

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.

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 2005 and anticipate downward pressure on our operating margin in the future.

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. We also expect that our operating margin may decline as a result of increases in the proportion of our revenues generated from our co-branded partner web sites. The margin on revenues we generate from
our co-branded 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 co-branded partner web

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sites could decrease in the future if our co-branded 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 co-branded web
site partners. Our operating results would also suffer if our innovations were not responsive to the needs of our users, advertisers and co-branded 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
are 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 brand will depend largely on our ability to continue to provide high quality products and services, which we may not do
successfully.

New technologies could block our ads, which would harm our business.

Technologies may be 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 the reduction of spending by or loss of advertisers could seriously harm our business.

We generated all of our revenues in 2005 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. 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. Mamma has on-going efforts to

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maintain a high quality network of publishers in order to offer advertisers high quality users that will provide for a satisfactory ROI. We therefore, from time to time cease sending
advertisements to what we qualify a low quality publishers. This can reduce our revenues in the short term in order to create adverstiser retention in the long term.

Our operating results may be subject to fluctuations.

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.

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 and Google. Microsoft has announced plans to develop a new web search technology that may make web search a more integrated part of the Windows operating system. We
expect that Microsoft will increasingly use its financial and engineering resources to compete with us.  Yahoo has become an increasingly significant competitor, having acquired Overture Services, which offers Internet advertising solutions that
compete with our advertising programs.

Microsoft, Yahoo, Google and Ask.com have more employees and cash resources than we do.  These companies also have longer operating histories 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 traffic could negatively affect our net
revenues.

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. During the twelve-month period ended December 31, 2005, the closing per share price of our Common Shares has
varied from $2.12 to $6.28. During that same period, the daily trading volume of our Common Shares has varied between 22,500 and 12,871,300 with an average daily trading of 325,730 Common Shares. Future market conditions may adversely affect
the market price and trading volume of our

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Common Shares. Furthermore, should the market price of our Common Shares drop below the $1.00 per share minimum bid price requirement, our Common Shares risk being delisted from the NASDAQ
SmallCap Market®, which would have an adverse effect on our business and liquidity of our Common Shares. Brokerage firms may not provide a market for low-priced stock, may not recommend low-priced stock to their clients and may charge a greater
percentage commission on low-priced stock than that which they would charge on a transaction of a similar dollar amount but fewer shares. These circumstances may adversely impact trading in our Common Shares and may also adversely affect our ability
to access capital.

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.

With respect to any intellectual property rights claim, we may have to 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. (recently 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.

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Historical net results include net losses for the years ended
December 31, 1999 to December 31, 2003 and for the year ended December 31, 2005.
Working capital may be inadequate.

Prior to
December 31, 2004 and for the year ended December 31, 2005, we have reported net
losses and net losses per share during these years. We have been financing
operations mainly from funds obtained in several private placements, and from
exercised warrants and options. Management considers that cash and cash
equivalents as at December 31, 2005 will be sufficient to meet normal operating
requirements throughout 2006. 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 $16.3M as at
December 31, 2005, may be written-down in the future which could adversely
effect 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,
plant 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 amounts to
approximately $9.2M as at December 31, 2005, may be written-down in the
future.

Investment in LTRIM may be written-down in the
future.

We have an
investment in LTRIM. LTRIM is a corporation which has started its
commercialization phase and there is no assurance that it will become profitable
in the future or that we will be able to recover the cost of this investment.
Consequently, our investment in LTRIM, which has been written-down in the past
to $720,000, may be written-down again in the future.

Reduced
Internet use may adversely affect our results.

Our business
is based on Internet driven products and services including direct on-line
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

54

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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
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, 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 now 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 that the
measures in place are adequate to prevent security breaches.

If we
fail to detect click fraud, we could lose the confidence of our advertisers,
thereby causing our business to suffer.

We are
exposed to the risk of fraudulent clicks on our ads from a variety of potential
sources. We have regularly refunded revenues that our advertisers have paid to
us that were later attributed to click fraud, and we expect to do so in the
future. 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. If we are unable
to

55

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stop this fraudulent activity, these refunds may increase. If we find new evidence of past fraudulent clicks we may issue refunds retroactively of amounts previously paid to our network of
advertisers. This would negatively affect our profitability, and these types of fraudulent activities could hurt our brand. 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. This could lead the advertisers to become dissatisfied with our advertising programs, which could lead to a loss of advertisers and revenues
and potentially litigation.

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. For example, because our web search technology ranks a web
pages relevance based in part on the importance of the web sites that link to it, people have attempted to link a group of web sites together to manipulate web search 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 index spamming 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, 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.

56

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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.

Websites 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 websites to provide users with a more customized experience. Cookie information is passed to the website through an Internet
users browser software. We currently use cookies to track an Internet users movement through the advertisers website 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 behavioral 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 laws and regulations
relating to Internet unsolicited advertisements, privacy, pricing, taxation and content.  The enactment of any additional laws or regulations in Canada or the United States, or any state or province of either of them 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.  We believe our employee relations are good. 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

57

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future, a work stoppage by a collective bargaining unit could be disruptive and have a material adverse effect on us until normal operations resume.

Possible future exercise of warrants and options could dilute existing and future shareholders.

As at December 31, 2005, we had 646,392 warrants and 661,083 stock options outstanding. As at December 31, 2005, the exercise prices of some of our outstanding options, but none of our
outstanding warrants, issued are lower than the market price of our Common Shares. While the market value of the Common Shares is above the respective exercise prices of some options and all the warrants, their exercise could result in the issuance
of up to an additional 1,307,475 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 the 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.

We have never paid dividends on any class of our shares. Our management anticipates that any earnings generated from our operations will be used to finance our working capital and potential
market expansion opportunities and that for the foreseeable future cash dividends will not be paid to holders of the Common Shares.

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

58

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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.

An inability to protect our intellectual property rights could damage our business.

We rely upon a combination of trade secret, copyright, trademark 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.  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.

To the extent our net revenues are paid in foreign currencies, and currency exchange rates become unfavourable, we may lose some of the economic value of the net revenues in U.S. dollar
terms.

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. If the currency exchange rates were to change unfavourably, the value of net receivables we receive in foreign currencies and later convert to U.S. dollars after the
unfavourable change would be diminished.  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.

59

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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.

DISCLOSURE CONTROLS AND PROCEDURES

An
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures was conducted as of December 31, 2005, by and under the
supervision of Companys management, including the CEO and CFO. Based on this
evaluation, the CEO and CFO have concluded that our disclosure controls and
procedures, as defined in Multilateral Instrument 52-109, Certification of
Disclosure in Issuers Annual and Interim Filings, and in Rule 13a-15(e) under
the Securities and Exchange Act of 1934 (the Exchange Act), are effective to
ensure that information required to be disclosed in reports that we file or
submit under Canadian securities legislation and the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in those
rules and forms.



|CAPITAL STOCK
INFORMATION
|-------------------------

The
following table discloses the Companys outstanding share data:

|              |  | Number of issued
      and     |  |                        
|------------- |  | ------------------------------ |  | -----------------------
|              |  | outstanding shares as
      at |  | Book value as
      at 
|              |  | March 15,
      2006           |  | December 31,
      2005
|             
|Common shares |  | 14,340,864                     |  | 95,298,234             

As at March
29, 2006, the Company had 646,392 warrants and 720,744 stock options
outstanding.



|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

60

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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 that our stock may not satisfy our
requirements for continued listing on the NASDAQ SmallCap Market including
whether the minimum bid price for the stock falls below $1; and the adverse
resolution of litigation. Developments in the SEC inquiry, purported class
action litigation or related events could have a negative impact on the Company,
increase Company expenses or cause events or results to differ from current
expectations. 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
website at www.mammainc.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.

61

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|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,                     |  | 2005    |  | 2004   |  | 2003  
|---------------------------------------------------------- |  | ------- |  | ------ |  | ------
|                                                           |  | $       |  | $      |  | $     
|                                                           |  |         |  |        |  |       
|                                                          
|Revenues                                                   |  | 9,465   |  | 14,636 |  | 8,939 
|Earnings (loss) from
      continuing operations           |  | (3,343) |  | 371    |  | 89    
|Results of discontinued
      operations, net of income    |  | (2,315) |  | 734    |  | (300) 
|taxes                                                      |  |         |  |        |  |       
|Net earnings (loss) for
      the year                     |  | (5,658) |  | 1,104  |  | (211) 
|                                                          
|Earnings (loss) per share
      from continuing operations |  |         |  |        |  |       
|Basic and diluted                                          |  | (0.27)  |  | 0.03   |  | 0.01  
|Net earnings (loss) per
      share                        |  |         |  |        |  |       
|Basic and diluted                                          |  | (0.46)  |  | 0.10   |  | (0.03)
|                                                          
|Total assets                                               |  | 38,327  |  | 35,166 |  | 11,736
|                                                           |  |         |  |        |  |       



|Quarterly Financial
  Highlights
|--------------------------------

(in thousand
of US dollars, except per share data and in accordance with generally accepted
accounting principles in Canada)

|                                         |  |        |  | 2005    |  |         |  |        |  | 2004   |  |      
|---------------------------------------- |  | ------ |  | ------- |  | ------- |  | ------ |  | ------ |  | -----
|                                        
|                                         |  | Q4     |  | Q3      |  | Q2      |  | Q1     |  | Q4     |  | Q3   
|                                         |  | $      |  | $       |  | $       |  | $      |  | $      |  | $    
|                                         |  |        |  |         |  |         |  |        |  |        |  |      
|                                        
|Revenues                                 |  | 1,659  |  | 2,391   |  | 2,413   |  | 3,002  |  | 3,416  |  | 3,291
|Earnings (loss) from continuing          |  |        |  |         |  |         |  |        |  |        |  |      
|operations                               |  | (740)  |  | (574)   |  | (1,375) |  | (654)  |  | (463)  |  | 326  
|Results of discontinued                  |  |        |  |         |  |         |  |        |  |        |  |      
|operations, net of income
      taxes    |  | (23)   |  | (931)   |  | (1,124) |  | (237)  |  | (209)  |  | (42) 
|Net earnings (loss) for the
      period |  | (763)  |  | (1,505) |  | (2,499) |  | (891)  |  | (672)  |  | 284  
|                                        
|Earnings (loss) per share from           |  |        |  |         |  |         |  |        |  |        |  |      
|continuing operations                    |  |        |  |         |  |         |  |        |  |        |  |      
|Basic                                    |  | (0.06) |  | (0.05)  |  | (0.11)  |  | (0.05) |  | (0.04) |  | 0.02 
|Diluted                                  |  | (0.06) |  | (0.05)  |  | (0.11)  |  | (0.05) |  | (0.04) |  | 0.02 
|Net earnings (loss) per share            |  |        |  |         |  |         |  |        |  |        |  |      
|Basic                                    |  | (0.06) |  | (0.13)  |  | (0.20)  |  | (0.07) |  | (0.06) |  | 0.02 
|Diluted                                  |  | (0.06) |  | (0.13)  |  | (0.20)  |  | (0.07) |  | (0.06) |  | 0.02 
|                                         |  |        |  |         |  |         |  |        |  |        |  |      

62

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ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



|DIRECTORS AND SENIOR
  MANAGEMENT
|---------------------------------

Following is
a table, which discloses the names, functions, areas of expertise within the
Company and present principal occupation(s) of the Companys directors and
senior management.

|Name               |  | Functions and areas 
      of experience within  the
Company |  | Present Principal Occupation(s)                                                          |  | Date first elected  Director
      or  appointed Senior  Officer of
      the  Company
|------------------ |  | ------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------
|                   |  |                                                             
|                   |  |                                                             
|                   |  |                                                             
|                   |  |                                                             
|                   |  |                                                              |  |                                                                                          |  |                                                                                       
|Guy Fauré          |  | Director and Officer                                         |  | President & CEO, Mamma.com Inc.                                                          |  | May
      23, 2002                                                                    
|                   |  |                                                             
|                   |  |                                                             
|Claude E. Forget   |  | Director                                                     |  | Consultant  Formerly CEO, Intasys Billing 
      Technologies                            |  | October 11, 1999                                                                      
|                   |  |                                                             
|                   |  |                                                             
|                  
|David Goldman      |  | Director and Officer                                         |  | Executive Chairman, Mamma.com Inc.                                                       |  | May
      24, 2001                                                                    
|                   |  |                                                             
|                   |  |                                                             
|                  
|                  
|Irwin Kramer       |  | Director                                                     |  | President, iCongo, Inc.                                                                  |  | May
      24, 2001                                                                    
|                  
|                  
|Dr. David Schwartz |  | Director                                                     |  | Associate Professor, Bar Ilan  University 
      School of
      Business Administration |  | May
      23, 2002                                                                    
|                   |  |                                                             
|                   |  |                                                             
|                  
|Daniel Bertrand    |  | Officer                                                      |  | Executive Vice-President and  Chief Financial
      Officer  Mamma.com Inc.              |  | July 8, 1999                                                                          
|                   |  |                                                             
|                   |  |                                                             
|                  
|Martin  Bouchard   |  | Officer                                                      |  | Executive Vice-President,  Chief Strategist and
      Technology  Officer                |  | December 22, 2005                                                                     
|                   |  |                                                             
|                   |  |                                                             
|                  
|Patrick Hopf       |  | Officer                                                      |  | Vice-President-Business  Development  Mamma.com
      Inc.                               |  | January 12, 2004                                                                      
|                   |  |                                                             
|                   |  |                                                             
|                  
|Joel Lamantia      |  | Officer                                                      |  | Vice-President-Operations    Mamma.com
      Inc.                                        |  | January 12, 2004                                                                      
|                   |  |                                                             
|                   |  |                                                             
|                  
|Eric Bouchard      |  | Officer                                                      |  | Vice-President-Products                                                                  |  | December 22, 2005                                                                     

63

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Each Directors term of office expires at the earliest of the next annual meeting of shareholders or his resignation as Director.

With the exception of Martin Bouchard and Eric Bouchard who are brothers, to the knowledge of the Company, there is no family relationship among any of the persons named in this Item 6 nor were
any such persons selected as directors or members of senior management pursuant to any arrangement or understanding with major shareholders, customers, suppliers or others.

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

|Statement of Corporate Governance Practices
|-------------------------------------------

The directors of the Corporation strongly believe that sound corporate governance is essential to produce maximum value to shareholders. The following is a summary of the governance practices of
the Corporation:

On August 1, 2002 the Board of Directors approved and adopted a document entitled Responsibilities of the Board of Directors and its Audit and Finance Committee and its Nominating, Human
Resource and Governance Committee which sets forth the responsibilities for the Board and these two committees. This document was revised and approved by the Board of Directors on May 10, 2004. It was prepared in response to certain corporate
governance concerns.  This document includes the Corporations insider trading policy and code of ethics.

|1. |  | Composition
of the Board of Directors
|-- |  | -------------------------------------

Fifty percent of the directors of the Corporation are unrelated directors.  An unrelated director is independent of management and free of any business or other relationship which
could, or could reasonably be perceived to, materially interfere with the directors ability to act in the best interest of the Corporation, other than relationships arising from the holding of shares.

The directors consider the following nominees to be unrelated to the Corporation: Claude E. Forget, Irwin Kramer and Dr. David Schwartz.

|2. |  | Committees
of Directors
|-- |  | -----------------------

As at the date hereof, the members of the Audit and Finance Committee are Irwin Kramer, David Schwartz and Claude Forget. On March 29, 2006, the Board approved a new Charter of the Audit and
Finance Committee of the Company. A copy of this Charter is attached as an exhibit to this Form 20-F. The Charter provide that the Audit and Finance Committee shall assist the Board in fulfilling its responsibilities relating to corporate accounting
and reporting practices of the Company and in the quality and integrity of financial reports of the Company. The Audit and Finance Committee meets with the financial officers of the Company, including the Chief Financial Officer, who reports to the
Chairman of the Audit Committee, and the independent auditors to review financial reporting matters, the system of internal accounting controls and the overall audit plan and examines the quarterly and

64

---

year-end
financial statements before their presentation to the Board. In addition the
Audit Committee fixes the compensation and other terms of engagement of the
Companys independent auditors. In 2005, the Audit and Finance Committee met 8
times and the Companys independent auditors were present at 6 of
them.

The Company
maintains a Nominating, Human Resource and Governance Committee, which is
responsible for overseeing and making recommendations to the Board on the
following matters:

| | (i)   | the search for and
      compensation of all senior executives and management of the Company and
      its subsidiaries, including periodic review of same;          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      
| | (ii)  | the Companys management
      structure and succession plans;                                                                                                       
| |      
| | (iii) | the incentive plans for
      employees of the Company and its subsidiaries; and                                                                                     
| |      
| | (iv)  | the Companys Stock Option
      Plan and the granting of stock options thereunder                                                                                   
| |      
| | (v)   | the recommendation of new
      candidates as potential directors of the Company and the assessment of the
      performance of current directors and committees; and
| |      
| |       |                                                                                                                                                                      
| | (vi)  | the review and
      recommendation of procedures to be followed with respect to corporate
      governance guidelines.                                              
| |      

Composition of the Nominating, Human Resource and Governance
Committee

From January
1, 2005 to August 17, 2005, the members of the Nominating, Human Resource and
Governance Committee, were David Goldman, Claude Forget, Irwin Kramer and David
Schwartz. David Goldman who is Executive Chairman of the Company, resigned from
this Committee on August 17, 2005. During 2000 up to October 2, 2001, Claude
Forget was Chief Executive Officer of Intasys Billing Technologies, a subsidiary
of the Company, whose business was subsequently sold.

As part of
its ongoing review of corporate governance matters, on March 29, 2006 the
Companys Board of Directors approved a Charter constituting a Compensation
Committee and a Nominating and Governance Committee to segregate the nominating
and executive compensation functions into separate Charters as required by the
listing standards of the National Association of Securities Dealers. Copies of
the Compensation Committee Charter and Nominating and Governance Committee
Charter are attached as Exhibits 15.4 and 15.5 to this Annual Report on Form
20-F Currently the Nominating, Human Resources and Governance Committee
discharges the functions under each Charter.



|Report on Executive
  Compensation
|----------------------------------

As part of
its ongoing dedication to creating shareholder value and promoting corporate
success, the Compensation Committee establishes executive compensation in order
to attract, retain and motivate key executives and to reward significant
performance achievements.

Consistent
with the Companys objectives, and in order to further align shareholder and
executive interests, the Compensation Committee places emphasis on bonuses based
on performance and granting of stock options in establishing executive
compensation.

65

---

Consequently, the standard executive compensation package of the
Company is composed of three major components: (i) base salary and benefits,
(ii) short-term incentive compensation and (iii) long-term incentive
compensation.



|i) |  | Salary
      and Benefits
|-- |  | -------------------------

Salary and
benefits policies of the Company are determined by looking at similar businesses
in the Internet sector and are targeted at the mid range in the industry, taking
into account the economic trends, the Companys competitive position and
performance and extraordinary contributions to the Company.



|ii) |  | Short
      Term Incentive Compensation
|--- |  | ---------------------------------------

The Company
provides cash bonuses to those individuals of its senior management and its
subsidiaries whose responsibilities and attainment of personal and Company
objectives exceed established expectations, based on individual contributions,
operating results, and financial performance. The amount of these payments are
approved by the Compensation Committee and are based on specific goals in these
areas. Compensation and target bonuses for each individual are set at the
beginning of each year. At the end of the year the Compensation Committee
determines the bonus for each executive based on the attainment of the
performance measures and individual contributions.

For the year
ending December 31, 2005, none of the operating and financial performance
objectives were met, but officers were awarded bonuses for their individual
contribution recognizing the extraordinary efforts they made during the year to
respond to and overcome damage to the Companys business resulting from the SEC
investigation and consolidated class action lawsuit.

In the case
of Named Executive Officers, targeted incentive bonuses vary in proportion to
base salary, depending primarily on the level of responsibility of the
individual. Generally when operating results and financial performance
objectives are exceeded bonuses are higher, when the objectives are not met the
incentive bonuses are lower or nil depending on the circumstances and the
individuals contribution to the Company.

In making
compensation decisions with respect to each of these components, the
Compensation Committee considers external market data for executives. Towers
Perrin was retained by the Chair of the Compensation Committee in the most
recent fiscal year to assist with preparing information and providing advice on
officer and Board of Director compensation arrangements. Materials prepared by
Towers Perrin have been presented by the Chair to the Compensation Committee for
review and decisions. Towers Perrins scope of services in the fiscal year
included providing advice and market data related to Board of Director and
officer compensation arrangements, assisting with the design of special
compensation programs, and other general executive compensation assistance.
Towers Perrin does not provide any other services to the Company.

66

---

The
Compensation Committee uses the compensation data from Towers Perin as one of
several factors in determining the appropriate levels of base salary, short-term
and long-term incentives that fairly compensate the Companys executive
officers.

In setting
the compensation package for executives, the Compensation Committee balances
consideration of base salary with short-term incentive compensation so that a
significant proportion of executive officers compensation is linked to
objectives aligned with the interests of the Companys shareholders.



|iii) |  | Retention
Compensation
|---- |  | ----------------------

In view of
the current circumstances confronting the Company including the continuing
pendency of the SEC investigation, the securities class action lawsuit, and
defection of several of the Companys Ad network sales employees to form a
competing business. In April 2005, the Compensation Committee recommended and
the Board resolved that Guy Fauré, Daniel Bertrand, Patrick Hopf and Joel
Lamantia will receive a lump sum payment (the Award) equivalent to 70% of
their base annual salaries at the end of the retention period. The end of the
retention period will be the date of the 2006 Annual General Meeting (but not
later than June 30, 2006). Awards are forfeited if the executive leaves
voluntarily before the end of the retention period, or is terminated for cause.



|iv) |  | Long
      Term Incentive Compensation
|--- |  | --------------------------------------

The long
term incentive component consists of the stock option plan of the Company which
provides for the issuance of options to executive officers and other employees,
directors or consultants to purchase common shares of the Company. The stock
option plan of the Company is described below under the heading Stock Option
Plan.

The
Compensation Committee determine the executives, employees and directors
eligible for the granting of options pursuant to the stock option plan. It also
determines the size of each grant and the date on which each grant is to become
effective. The exercise price of options granted may not be less than the market
price of the Companys common shares as traded on the NASDAQ in U.S. dollars
determined as of the date the options are granted. The number of options granted
annually to recipients is determined on a discretionary basis.

The
Compensation Committee may, in its discretion, determine when the options
granted under the stock option plan may be exercised or vested, provided that
the term of such options can not exceed ten (10) years.

Unless
otherwise stipulated by the terms of a stock option grant, which terms are
approved by the Compensation Committee, options granted pursuant to the stock
option plan will lapse thirty (30) days after the holders ceases to be employed
by the Company. In the event of death, any vested option of a holder lapses
three (3) months after his or her death. In the event that the holders
employment terminates due to disability, the holder may exercise the vested
options for one (1) year after the date of

67

---

termination of employment.  If the holder is terminated for cause, vested options terminate immediately.

In 2005, the only grants of options to named Executive Officers were made in favour of Mr. Goldman, Mr. Fauré and Mr. Bertrand. During the first quarter of 2005, Messrs Goldman, Fauré, and
Bertrand also voluntarily surrendered their entitlement to options granted on November 2, 2004 and these options were cancelled.

Compensation of the President and Chief Executive Officer

Prior to January 12, 2004, the Chairman and Chief Executive Officer of the Company was David Goldman who is now the Companys Executive Chairman. On January 12, 2004, Guy Fauré was
appointed President and Chief Executive Officer of the Company.  On August 12th, 2004, the Company amended the employment arrangement of the President and Chief Executive Officer. As a result, should there be a change of control in the Company, Guy
Fauré will be entitled to a lump sum payment equal to 200% of his annual base salary if he:

|(i)   | is terminated;                                                                                                                                          
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | does not accept a relocation outside of the greater Montreal area;                                                                                      
|     
|(iii) | does not accept an offer of employment with reduced levels of responsibility; or                                                                        
|     
|(iv)  | does not accept an offer of compensation (including performance/incentive plan targets and long-term compensation) which is less than his current level.
|     

The President and Chief Executive Officers compensation is considered and determined by the Compensation Committee.  The President and Chief Executive Officer does not participate in the
Committees decisions relating to his Compensation.

The aggregate compensation of the President and Chief Executive Officer consists of three components: base salary, annual cash bonus and equity incentives. The Committee strives to balance the
compensation among these three components to stay competitive in the market and align the compensation with shareholder interests.

In 2005, Mr. Faurés base salary was $199,520 US and he received a bonus of $168,952 US based upon individual contribution and extraordinary efforts in overcoming the negative
effect on the Companys business resulting from the SEC investigation, class action lawsuit and defection of several of the Companys Ad network sale force to form a competing business.  He also received taxable benefits of $3,980 US.
In establishing Mr. Faurés salary, the Compensation Committee assesses his overall contribution as well as the publicly disclosed compensation of chief executive officers of companies in the Internet sector, taking into account the
factors described above under Salary and Benefits.

68

---

Conclusion

The
Companys executive compensation policy links executive compensation to
corporate results and individual contribution, as well as stock performance and
long-term results. The Compensation Committee regularly reviews the various
executive compensation components to ensure that they maintain their
competitiveness in the industry and continue to focus on the Companys
objectives, values and business strategies.

Depending on
specific circumstances, the Compensation Committee may also recommend employment
terms and conditions that deviate from the above described policies. The members
of the Compensation Committee are:



| | Claude
      ForgetIrwin KramerDavid
Schwartz
| | ---------------------------------------------



|Statement of Executive
  Compensation
|-------------------------------------

The
following summary table, presented in accordance with applicable securities
legislation, sets forth all compensation provided by the Company and its
affiliates for the fiscal years ended December 31, 2003, 2004 and 2005
to:

|(i)   | the
      Chief Executive Officer;                                                                                                                                                                                                                                                                          
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | the
      Chief Financial Officer;                                                                                                                                                                                                                                                                          
|     
|(iii) | each of the Corporations three most highly compensated
      executive officers, other than the Chief Executive Officer and the Chief
      Financial Officer, who were serving as executive officers at the end of
      December 31, 2005 and whose total salary and bonus exceeded CA$150,000,
      and
|     
|(iv)  | such other individuals for whom the foregoing disclosure
      would have been made but for the fact that such individual was not an
      officer of the Company at the end of December 31, 2005, (collectively, the
      Named Executive Officers).                                                    
|     

69

---



|Summary Compensation
Table
|--------------------------

Compensation
is payable in Canadian dollars and converted by using the yearly average U.S.
exchange rate.

|                             |  |      |  | Annual
      Compensation
|---------------------------- |  | ---- |  | -------------------------
|                             |  |      |  |                          
|                            
|Name andPrincipal Occupation |  | Year |  | Salary  U.S. $           
|                             |  |      | 
|                             |  |      | 
|                             |  |      | 
|                             |  |      | 
|                             |  |      | 
|                             |  |      | 
|                             |  |      | 
|                             |  |      |  |                          
|                            
|Guy
      Fauré              |  | 2005 |  | 199,520                  
|President &
      CEO        |  | 2004 |  | 167,083                  
|                             |  | 2003 |  | 146,840                  
|                            
|                            
|David
      Goldman          |  | 2005 |  | Nil                      
|Executive                    |  | 2004 |  | Nil                      
|Chairman                     |  | 2003 |  | Nil                      
|                            
|                            
|Daniel
      Bertrand        |  |      |  |                          
|Executive
      Vice-        |  | 2005 |  | 136,040                  
|President and
      Chief    |  | 2004 |  | 119,841                  
|Financial
      Officer      |  | 2003 |  | 100,281                  
|                            
|                            
|Patrick
      Hopf           |  |      |  |                          
|VP of
      Business         |  | 2005 |  | 107,016                  
|Development                  |  | 2004 |  | 94,689                   

Annual
compensation is paid in Canadian dollars and converted at the applicable
exchange rates. Exchange rate conversions were .71629 in 2003, .77014 in 2004
and .82622 in 2005.

70

---

|                               |  |                                    |  | Long Term
      Compensation                                |  | All Other      
|------------------------------ |  | ---------------------------------- |  | ----------------------------------------------------------- |  | ---------------
|                               |  |                                    |  |                                                             |  | Compensation   
|                               |  |                                    | 
|Name and  Principal Occupation |  | Year                               |  | Awards                                                      |  | Payouts        
|                               |  |                                    | 
|                               |  |                                    | 
|                               |  |                                    |  |                                                             | 
|                               |  | Securities  Under
      Options  # |  | Shares or  Units Subject 
      to Resale  Restrictions ($) |  | LTIP Payouts  $
|                               |  |                                    |  |                                                            
|                               |  |                                    |  |                                                            
|                               |  |                                    |  |                                                            
|                               |  |                                    |  |                                                            
|                               |  |                                    |  |                                                             |  |                
|                              
|Guy
      Fauré                |  | 2005                               |  | 176,500                                                     |  | Nil            
|President &
      CEO          |  | 2004                               |  | 75,0003                                                     |  | Nil            
|                               |  | 2003                               |  | 69,000                                                      |  | Nil            
|                              
|David
      Goldman            |  | 2005                               |  | 75,000                                                      |  | Nil            
|Executive                      |  | 2004                               |  | 75,0003                                                     |  | Nil            
|Chairman                       |  | 2003                               |  | 54,000                                                      |  | Nil            
|                              
|Daniel
      Bertrand          |  | 2005                               |  | 87,500                                                      |  | Nil            
|Executive
      Vice-          |  | 2004                               |  | 50,0003                                                     |  | Nil            
|President and
      Chief      |  | 2003                               |  | 39,000                                                      |  | Nil            
|Financial
      Officer        |  |                                    |  |                                                             |  |                
|                              
|Patrick
      Hopf2            |  | 2005                               |  | 46,800                                                      |  | Nil            
|VP of
      Business           |  | 2004                               |  | Nil                                                         |  | Nil            
|Development                    |  |                                    |  |                                                             |  |                
|                               |  |                                    |  |                                                             |  |                

|1. | The
      Company and Dave Goldman Advisors Ltd., a company controlled by Mr.
      Goldman, entered into a consulting agreement pursuant to which David
      Goldman provides his services to the Company. In addition, as part of the
      compensation paid to David Goldman, the Company agreed to grant him
      options under the Companys stock option plan.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Appointed officer of the Company in January 2004.                                                                                                                                                                                                                                                                                                                      
|  
|3. | In
      February 2005, David Goldman, Guy Fauré and Daniel Bertrand voluntarily
      surrendered their entitlement to options granted on November 2, 2004
      (expiring November 2, 2009) and the options were cancelled.                                                                                                                                          
|  

Employment Agreements and Change of Control
Provisions

The Company
has entered into employment arrangements and agreements with the following Named
Executive Officers who remain in the employment of the Company. All sums
mentioned herein are in U.S. Dollars.

On July 8,
1999, Daniel Bertrand, Executive Vice-President and Chief Financial Officer of
the Company entered into an employment agreement with the Company. Pursuant to
the terms and

71

---

conditions of his employment agreement, Mr. Bertrand is paid an annual salary of CA$174,000. Mr. Bertrand is also entitled to a bonus ranging from a minimum of 20% of his base salary for
meeting minimum financial and individual performance levels, to a maximum of 60% for far exceeding expected performance levels. Mr. Bertrand is also entitled to receive stock options under the Companys stock option plan.

On August 12, 2004, the Company amended the employment arrangement of the Executive Vice-President and Chief Financial Officer. As a result, if there is a change of control of the Company, Mr.
Bertrand will receive a lump sum payment equal to the greater of the past 18 months salary payments, or CA$225,000 if he:

|(i)   | is terminated;                                                                                                                                          
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | does not accept a relocation outside of the greater Montreal area;                                                                                      
|     
|(iii) | does not accept an offer of employment at reduced levels of responsibility; or                                                                          
|     
|(iv)  | does not accept an offer of compensation (including performance/incentive plan targets and long-term compensation) which is less than his current level.
|     

On September 10, 2001, Guy Fauré, entered into an employment agreement with Mamma.com Enterprises Inc. Pursuant to the terms and conditions of this employment agreement, Mr. Fauré
is entitled to an annual salary of CA$255,000 and an annual bonus ranging from a minimum of 35% of base salary for meeting minimum financial and individual performance levels, to a maximum of 95% for far exceeding expected performance levels.
Mr. Fauré is also entitled to receive stock options under the Companys stock option plan.

On August 12, 2004, the Corporation amended the employment arrangement of the President and Chief Executive Officer. As a result, if there is a change of control of the Company, Guy Fauré
will be entitled to a lump sum payment equal to two times his annual base salary if he:

|(i)   | is terminated;                                                                                                                                          
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | does not accept a relocation outside of the greater Montreal area;                                                                                      
|     
|(iii) | does not accept an offer of employment at reduced levels of responsibility; or                                                                          
|     
|(iv)  | does not accept an offer of compensation (including performance/incentive plan targets and long-term compensation) which is less than his current level.
|     

David Goldman was Chairman and CEO of the Company until January 12, 2004 when he became the Executive Chairman of the Company. During the year ended 2003, Mr. Goldman was not paid any salary or
benefits by the Corporation but rather was rewarded solely through the granting of stock options which are awarded at the discretion of the Nominating, Human Resource and Governance

72

---

Committee.
This position was not considered as a full time position and therefore the level
of this award was based solely on the overall achievements and performance of
the Company.

The Company
has a consulting agreement with David Goldman through Dave Goldman Advisors Ltd.
for consulting services rendered. This Company was remunerated for services
rendered on an hourly rate of CA$250. These consulting arrangements may be
terminated on sixty (60) days notice by either party.

On August
12, 2004, the Company amended the employment arrangement of the Executive
Chairman. As a result, if there is change of control of the Company, Dave
Goldman Advisors Inc. will receive a lump sum payment equal to the greater of
the past 24 months consulting payments or CA$300,000 if Mr. Goldman:

|(v)    | is
      terminated;                                                                                                                                                
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|(vi)   | does not accept a relocation outside of the greater Montreal
      area;                                                                                            
|      
|(vii)  | does not accept an offer of employment with reduced levels of
      responsibility; or                                                                              
|      
|(viii) | does not accept an offer of compensation (including
      performance/incentive plan targets and long-term compensation) which is
      less than his current level.
|      

There are no
service contracts in place between the directors of the Company and the Company
or any of its subsidiaries, save and except for the agreements between the
Company and Dave Goldman Advisors Ltd., pursuant to which David Goldman, the
Executive Chairman of the Company, provides his services to the
Company.

Following
the completion of the Copernic acquisition, Martin Bouchard and Eric Bouchard
became officers of the Company. Martin Bouchard, who is the Companys Executive
Vice-President, Chief Strategist and Technology Officer, is paid annual salary
of CA$200,000 and is also entitled to a target bonus of 50% of base salary for
meeting targeted financial performance ranging from a minimum of 25% of base
salary atminimal acceptable financial performance and operating results levels,
to a maximum of 75% for far exceeding targeted performance levels. Similarly,
Eric Bouchard, who is the Companys Vice-President-Products, is paid annual
salary of CA$170,000 and is also entitled to a target bonus of 40% of base
salary ranging from a minimum of 20% of base salary for meeting minimu
acceptable performance levels to a maximum of 60% for far exceeding targeted
performance levels. Consistent with its executive compensation practices, the
Compensation Committee will also take into account the individual contributions
of Martin Bouchard and Eric Bouchard to the Companys business in determining
the total bonus paid to either of them

73

---



|Compensation of
Directors
|-------------------------

During the
fiscal year ended December 31, 2005, directors were each paid $6,250 quarterly.
Effective April 1, 2005 the Chair of the Board received $12,500/annum and the
Chair of the Audit Committee received a payment of $10,000/annum and the Chair
of the Compensation and the Nominating, and Governance Committees receives a
payment of $5,000/annum. The directors received a combined fee of $1,000 for
attending board and committee meetings on the same day and members of the Audit,
Compensation and Nominating and Governance committees receive a $1,000 payment
if a committee meeting is held on a day other than the day of a Board meeting
and, if a board or committee meetings is held via teleconference, directors
received a payment of $500.

Robert Raich
was a director of the Company until March 11, 2005 and is a partner of Spiegel
Sohmer, a general partnership of attorneys. In 2005, Spiegel Sohmer billed the
Company for the amount of $233,134 for legal services and other
expenses.



|Directors and Officers
  Insurance
|----------------------------------

The Company
has purchased liability insurance covering each director and officer of the
Company. The present insurance policy provides coverage for the directors,
officers and the Company for liability up to $10,000,000 and expires on March
28, 2007. In addition to this coverage, a supplemental $5,000,000 policy was
subscribed for directors and officers on March 28, 2006 effective for twelve
months.



|Indebtedness of Directors and
  Officers
|----------------------------------------

During the
most recently completed financial year, none of the directors and executive
officers of the Company and none of the management nominees for election as a
director nor any associate of the foregoing is, or was at any time since the
beginning of the most recently completed financial year, indebted to the Company
or any of its subsidiaries.



|Stock Option Plan
|-----------------

In 1999, the
Company adopted a new stock option plan (the Plan), replacing all previous
stock option plans of the Company, to provide eligible officers, directors,
employees and consultants of the Company and its subsidiaries compensation
opportunities that will encourage share ownership and enhance the Companys
ability to attract, retain and motivate such persons and reward significant
performance achievements. Options under the Plan may not be granted with a term
exceeding 10 years. The exercise price of the options may not be less than the
market price of the Companys common shares determined as of the date the
options were granted. Unless the Board determines otherwise, options granted
under the Plan are exercisable within 30 days after an optionee ceases to be
employed or retained by the Company (other than for reason of cause in which
event they terminate immediately, death in which event they are exercisable
within 3 months and disability in which event they are exercisable within one
year).

74

---

The Plan,
which was approved by shareholders on June 30, 1999, and subsequently amended as
approved by shareholders on June 20, 2000 and May 23, 2002, provides that the
aggregate number of common shares reserved for issuance under the Plan shall not
exceed 1,000,000 common shares. The granting of options is subject to the
further conditions that: (i) the number of outstanding common shares of the
Company reserved for options to optionees or issued to optionees within any one
year period shall not exceed 15% of the outstanding common shares of the
Company, and (ii) at no time may any optionee hold more than 5% of the
outstanding common shares of the Company under option. The Companys
Compensation Committee has recommended and the Board has approved for submission
to the Companys stockholders at the 2006 Annual General Meeting of an amendment
to the Stock Option Plan to increase the aggregate maximum number of shares
reserved for issuance under the Plan to 1,434,080, an amount less than 10% of
the Companys issued and outstanding shares of Common Stock.

The
following table discloses individual grants of options to the Named Executive
Officers to purchase or acquire common shares of the Company pursuant to the
Plan for the financial year ended December 31, 2005.

Option
Grants During the Most Recently Completed Financial Year

|Names                 |  | Securities  Under  Options 
      Granted  (#) |  | % of Total  Options  Granted in 
      Financial  Year |  | Average  Exercise or
      Base  Price  (U.S.$/Security) |  | Average Market  Value
      of  Securities  Underlying  Options on the 
      Date of Grant  (U.S.$/Security) |  | Expiration  Date 
|--------------------- |  | ---------------------------------------------- |  | ------------------------------------------------------ |  | -------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | -----------------
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                       
|                      |  |                                                |  |                                                        |  |                                                          |  |                                                                                                               |  |                  
|David
      Goldman   |  | 75,000                                         |  | 14.3                                                   |  | 2.28                                                     |  | 2.28                                                                                                          |  | November 8,
2010 
|                     
|Guy
      Fauré       |  | 26,500                                         |  | 5.0                                                    |  | 6.28                                                     |  | 6.28                                                                                                          |  | February 15,
2012
|                      |  | 150,000                                        |  | 28.6                                                   |  | 2.28                                                     |  | 2.28                                                                                                          |  | November 8,
2010 
|                     
|Daniel
      Bertrand |  | 12,500                                         |  | 2.4                                                    |  | 6.28                                                     |  | 6.28                                                                                                          |  | February 15,
2012
|                      |  | 75,000                                         |  | 14.3                                                   |  | 2.28                                                     |  | 2.28                                                                                                          |  | November 8,
2010 
|                     
|Patrick
      Hopf    |  | 6,800                                          |  | 1.3                                                    |  | 6.28                                                     |  | 6.28                                                                                                          |  | February 15,
2012
|                      |  | 40,000                                         |  | 7.6                                                    |  | 2.28                                                     |  | 2.28                                                                                                          |  | November 8,
2010 
|                     
|Joel
      Lamantia   |  | 4,700                                          |  | 0.9                                                    |  | 6.28                                                     |  | 6.28                                                                                                          |  | February 15,
2012
|                      |  | 15,000                                         |  | 2.9                                                    |  | 2.28                                                     |  | 2.28                                                                                                          |  | November 8,
2010 

In February
2005, David Goldman, Guy Fauré and Daniel Bertrand voluntarily surrendered their
entitlement to options granted on November 2, 2004 (expiring November 2, 2009)
and the options were cancelled. The following table discloses the exercise of
options to purchase or acquire common shares of the Company by the Named
Executive Officers during the financial year ended December 31, 2005.

75

---

Aggregate Options Exercised During the Most Recently Completed
Financial Year and Financial Year-end Option Values

|Name                                                                          |  | Securities  Acquired
      on  Exercise  (#) |  | Aggregate  Value  Realized 
      (U.S. $) |  | Unexercised  Options at
      FY-End  (#)  Exercisable/  Unexercisable |  | Value of  Unexercised  in-the-Money 
      Options at FY-End  (U.S.
      $)  Exercisable/  Unexercisable
|----------------------------------------------------------------------------- |  | -------------------------------------------- |  | ------------------------------------------ |  | ---------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------
|                                                                              |  |                                              | 
|                                                                              |  |                                              | 
|                                                                              |  |                                              | 
|                                                                              |  |                                              | 
|                                                                              |  |                                              | 
|                                                                              |  |                                              | 
|                                                                              |  |                                              |  |                                            |  |                                                                        |  |                                                                                                          
|David Goldman                                                                 |  | Nil                                          |  | Nil                                        |  | 27,000 / 92,000                                                        |  | 3,555 / 13,500                                                                                           
|Guy Fauré                                                                     |  | Nil                                          |  | Nil                                        |  | 38,667 / 199,333                                                       |  | 3,555 / 27,000                                                                                           
|Daniel Bertrand                                                               |  | Nil                                          |  | Nil                                        |  | 18,667 / 97,833                                                        |  | 2,370 / 13,500                                                                                           
|Patrick Hopf                                                                  |  | Nil                                          |  | Nil                                        |  | 9,084 / 50,050                                                         |  | 4,286 / 7,200                                                                                            
|Joel Lamantia                                                                 |  | Nil                                          |  | Nil                                        |  | 4,750 / 21,950                                                         |  | 1,185 / 2,700                                                                                            
|                                                                             
|Option and SAR
      Repricing                                                |  |                                              |  |                                            |  |                                                                       
|                                                                             
|No
      options were repriced during the year ended December 31,
      2005. |  |                                             

76

---

Securities Under Option to Directors and Named Executive Officers
as at December 31, 2005

|Names                  |  | Securities  Under 
      Options  Granted 
      (#) |  | Exercise or Base  Price  (US$/Security) |  | Market Value of  Securities  Underlying
      Options  on the Date of  Grant  (US$/Security) |  | Expiration  Date
|---------------------- |  | ---------------------------------------------------- |  | --------------------------------------- |  | -------------------------------------------------------------------------------------------- |  | ----------------
|                       |  |                                                      | 
|                       |  |                                                      | 
|                       |  |                                                      | 
|                       |  |                                                      | 
|                       |  |                                                      | 
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Daniel
      Bertrand  |  | 10,000                                               |  | 2.57                                    |  | 2.57                                                                                         |  | 4/30/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Daniel
      Bertrand  |  | 5,000                                                |  | 1.99                                    |  | 1.99                                                                                         |  | 1/16/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Daniel
      Bertrand  |  | 12,500                                               |  | 6.28                                    |  | 6.28                                                                                         |  | 2/15/2012       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Daniel
      Bertrand  |  | 75,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Daniel
      Bertrand  |  | 14,000                                               |  | 3.58                                    |  | 3.58                                                                                         |  | 11/5/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Guy
      Fauré        |  | 25,000                                               |  | 2.57                                    |  | 2.57                                                                                         |  | 4/30/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Guy
      Fauré        |  | 7,500                                                |  | 1.99                                    |  | 1.99                                                                                         |  | 1/16/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Guy
      Fauré        |  | 26,500                                               |  | 6.28                                    |  | 6.28                                                                                         |  | 2/15/2012       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Guy
      Fauré        |  | 150,000                                              |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Guy
      Fauré        |  | 29,000                                               |  | 3.58                                    |  | 3.58                                                                                         |  | 11/5/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Claude E.
      Forget |  | 25,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/18/2010      
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|David
      Goldman    |  | 7,500                                                |  | 2.57                                    |  | 2.57                                                                                         |  | 4/30/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|David
      Goldman    |  | 7,500                                                |  | 1.99                                    |  | 1.99                                                                                         |  | 1/16/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|David
      Goldman    |  | 75,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|David
      Goldman    |  | 29,000                                               |  | 3.58                                    |  | 3.58                                                                                         |  | 11/5/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Irwin
      Kramer     |  | 25,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|David
      Schwartz   |  | 25,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Joel
      Lamantia    |  | 2,500                                                |  | 1.99                                    |  | 1.99                                                                                         |  | 1/16/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Joel
      Lamantia    |  | 4,700                                                |  | 6.28                                    |  | 6.28                                                                                         |  | 2/15/2012       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Joel
      Lamantia    |  | 15,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Joel
      Lamantia    |  | 4,500                                                |  | 3.58                                    |  | 3.58                                                                                         |  | 11/5/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Patrick
      Hopf     |  | 2,500                                                |  | 1.99                                    |  | 1.99                                                                                         |  | 1/16/2013       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Patrick
      Hopf     |  | 6,800                                                |  | 6.28                                    |  | 6.28                                                                                         |  | 2/15/2012       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Patrick
      Hopf     |  | 40,000                                               |  | 2.28                                    |  | 2.28                                                                                         |  | 11/8/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Patrick
      Hopf     |  | 6,500                                                |  | 3.58                                    |  | 3.58                                                                                         |  | 11/5/2010       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 
|Patrick
      Hopf     |  | 3 ,334                                               |  | 1.53                                    |  | 1.53                                                                                         |  | 2/25/2009       
|                       |  |                                                      |  |                                         |  |                                                                                              |  |                 

77

---



|Share Ownership
|---------------

The
information with respect to shares beneficially owned, controlled or directed by
directors of the Company or Named Executive Officers is in each instance based
upon information furnished by the person concerned. The Companys articles of
incorporation provide for Common Shares as the only authorized class of shares,
all of which have the same rights. Options to acquire shares held by directors
or Named Executive Officers, are listed in the above table entitledSecurities Under
Option to Directors and Named Executive Officersand not included in the information below.
To the knowledge of the Company, the following directors and Named Executive
Officers hold the following shares of the Company as at February 28,
2006.

|Director/ Named Executive Officer                |  | Number of Company  Shares
      Held |  | % of Total
      Number of  shares Is Issued and 
      Outstanding
|------------------------------------------------ |  | ------------------------------------ |  | -------------------------------------------------------------------
|                                                 | 
|                                                 | 
|                                                 |  |                                      |  |                                                                    
|                                                
|Guy Fauré, President &
      CEO, Director       |  | 3,500                                |  | 0.02%                                                              
|Mamma.com
      Inc.                             |  |                                      |  |                                                                    
|                                                
|Claude E. Forget,
      Director                 |  | 30,000                               |  | 0.21%                                                              
|                                                
|                                                
|                                                
|David Goldman, Executive
      Chairman,         |  | 75,000                               |  | 0.52%                                                              
|Director                                         |  |                                      |  |                                                                    
|Mamma.com
      Inc.                             |  |                                      |  |                                                                    
|Irwin Kramer,
      Director                     |  | 2,000                                |  | 0.01%                                                              
|                                                
|                                                
|Dr. David Schwartz,
      Director               |  | 7,000                                |  | 0.05%                                                              
|                                                
|                                                
|                                                
|Martin Bouchard, Executive
      Vice-President, |  | 669,706                              |  | 4.67%                                                              
|Chief Strategist and
      Technology Officer    |  |                                      |  |                                                                    
|                                                
|                                                
|Daniel Bertrand, Executive
      Vice-President  |  | Nil                                  |  | Nil                                                                
|and Chief Financial
      Officer                |  |                                      |  |                                                                    
|Mamma.com
      Inc.                             |  |                                      |  |                                                                    
|                                                
|                                                
|Patrick Hopf,
      Vice-President-Business      |  | Nil                                  |  | Nil                                                                
|Development                                      |  |                                      |  |                                                                    
|Mamma.com
      Inc.                             |  |                                      |  |                                                                    
|                                                
|Eric Bouchard,
      Vice-President-Products     |  | 334,853                              |  | 2.33%                                                              

78

---



|Employees
|---------

The
following table provides a breakdown of persons employed by main category of
activity for each of the past five financial years.

|     |  | NUMBER OFEMPLOYEES BYCATEGORY OFACTIVITY
|---- |  | ----------------------------------------
|     |  |                                         
|YEAR |  | MAMMA.COMINC.                           
|     |  |                                         
|     |  |                                         
|2005 |  | 39                                      
|2004 |  | 53                                      
|2003 |  | 37                                      
|2002 |  | 43                                      
|2001 |  | 40                                      



|Pension and Retirement
  Benefits
|---------------------------------

The Company
does not set aside nor accrue any amounts to provide pension, retirement or
similar benefits. Copernic has a Structured Group Registered Retirement Savings
Plan which manages the employees contribution to a maximum of 2% of their base
salaries. Copernic matches the employees contribution through a Deferred Profit
Sharing Plan.

ITEM 7.    
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



|MAJOR SHAREHOLDERS
|------------------

To the
knowledge of the Company, no shareholder currently owns, directly or indirectly,
or exercises control or direction over voting securities carrying more than 5%
of the voting rights attaching to any class of voting securities of the Company,
except that a group consisting of Citadel LLC, Limited Partnership, Citadel
Wellington Partnership LLC, Citadel Kensington Strategies Fund Ltd., Citadel
Equity Fund Ltd. Citadel Depuratives Group LLC, Citadel Credit Products Ltd.,
and Kenneth Griffin (collectively Citadel) filed a Form 13-G/A indicating they
beneficially owned 5.1% of our Common Stock on February 13, 2005

The
Companys Common Shares are widely held in the United States, Canada and
Europe.

To the
knowledge of the Company, the Company is not directly or indirectly owned or
controlled by another corporation(s), by any foreign government or by any other
natural or legal person(s), whether severally or jointly acting as a group
within the meaning of the United States Securities Exchange Act of 1934, as
amended. To the knowledge of the Company, there are no arrangements, which may
at a subsequent date result in a change in control of the Company.

79

---



|RELATED PARTY
TRANSACTIONS
|--------------------------

The Company
and Dave Goldman Advisors Ltd., a company controlled by Mr. Goldman, entered
into a consulting agreement pursuant to which David Goldman provides services as
an Executive Chairman. Total fees for 2005 were $202,658 (2004 -$182,687; 2003 -
$171,465). The transactions are in the normal course of operations and are
measured at the exchange amount which is the amount of the consideration
established and agreed to by the related parties.



|INTEREST OF EXPERTS AND
  COUNSEL
|---------------------------------



Not Applicable.

# ITEM 8.   FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL
INFORMATION

The
consolidated financial statements and other financial information of the Company
are included under Item 17 of this Annual Report on Form 20-F.

|LEGAL OR ARBITRATION
  PROCEEDINGS
|----------------------------------

See the
discussions below under the headings SEC Investigation and Purported Securities
Class Action Lawsuits.



|POLICY ON DIVIDEND
  DISTRIBUTIONS
|----------------------------------

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.

80

---



|SIGNIFICANT
CHANGES
|-------------------

There have
been no significant changes since the date of the annual financial statements
included in this Annual Report on Form 20-F.



|SEC
      INVESTIGATION
|-----------------------



|ITEM 9.   THE
      OFFER AND LISTING
|-------------------------------------



|U.S. and German Trading
      Markets
|-------------------------------------

The
Companys Common Shares are quoted on the NASDAQ Stock Market® - Small Cap Tier
under the symbol MAMA and on the Third Market Segment of the Frankfurt and
Berlin stock exchanges in Germany under the symbol IYS1. Prior to April 1999,
the Companys shares were quoted under various other trading symbols. With a
corporate name change taking effect in August 1996 the Companys common share
trading symbol was changed to INTAF and in April 1999 the symbol was changed
to INTA. On January 12, 2004, following the approval of the change of name of
the Company to Mamma.com Inc. the symbol was changed to MAMA. On July 11,
2001, the Company filed articles of amendment consolidating its issued and
outstanding Common Shares on the basis of one post-consolidation common share
for every ten pre-consolidation Common Shares. The Companys Common Shares
started trading on the NASDAQ Small Cap Market® on a consolidated basis at the
opening of the markets on July 13, 2001.

The
following table sets forth the price history of the Companys Common Shares
reported on the NASDAQ Stock Market® and on the Third Market Segment of the
Frankfurt and Berlin stock exchanges in Germany, which reflect inter-dealer
prices without retail mark-ups or commissions and may not represent actual
transactions. As per the Explanatory Notes to this Annual Report on Form 20-F,
all prices referred to below are adjusted to take into account the July 2001
consolidation of the Companys Common Shares on the basis of 1
post-consolidation common share for every 10 pre-consolidation Common
Shares.

NASDAQ
Capital Market®Annual High and Low Market Prices 5 Years Ended December 31,2005(based on closing prices)

Year
    
    High
    
    Low2005
    
    6.28
    
    2.122004
    
    15.90
    
    3.262003
    
    4.51
    
    1.252002
    
    2.70
    
    0.922001
    
    8.40
    
    1.25


81

---

NASDAQ
Capital Market®Quarterly High and Low Market Prices  2 Years EndedDecember
31,
2005 (based on closing prices)

Quarter
      End
    
    High
    
    Low12/31/05
    
    2.75
    
    2.129/30/05
    
    3.27
    
    2.616/30/05
    
    3.83
    
    2.5603/31/05
    
    6.28
    
    3.1112/31/04
    
    7.49
    
    5.8009/30/04
    
    11.82
    
    4.6406/30/04
    
    15.90
    
    10.0603/31/04
    
    13.68
    
    3.26


NASDAQ
Capital Market® Monthly High and Low Market Prices  6 Months Ended February 28,
2006 (based on closing prices)

Month
    
    High
    
    LowFeb
    
    2.93
    
    2.49Jan
    
    3.54
    
    2.35Dec
    
    2.75
    
    2.13Nov
    
    2.43
    
    2.23Oct
    
    2.60
    
    2.12Sep
    
    3.07
    
    2.61


Frankfurt Exchange (based on closing prices) - High and Low Market
Prices  4 Years Ended December 31,2005(in euros)

Year
    
    High
    
    Low2005
    
    4.80
    
    1.772004
    
    13.80
    
    2.582003
    
    4.10
    
    1.002002
    
    2.80
    
    0.85


82

---

Frankfurt Exchange (based on closing prices) Quarterly High and Low
Market Prices  2 Years Ended December 31, 2005 and Latest Quarter (in
euros)

Quarter
    
    High
    
    Low12/31/05
    
    2.22
    
    1.7709/30/05
    
    2.75
    
    2.1506/30/05
    
    3.01
    
    2.0603/31/05
    
    4.80
    
    2.3712/31/04
    
    6.40
    
    4.3509/30/04
    
    9.80
    
    4.0006/30/04
    
    13.80
    
    8.3003/31/04
    
    8.70
    
    2.58


Frankfurt Exchange (based on closing prices) Monthly High and Low
Market Prices  6 Months Ended February 28, 2006 (in euros)

Month
    
    High
    
    LowFebruary 2006
    
    2.49
    
    2.12January 2006
    
    2.65
    
    1.93December 2005
    
    2.22
    
    1.81November 2005
    
    2.03
    
    1.92October 2005
    
    2.19
    
    1.77September 2005
    
    2.40
    
    2.15


Equity
Transfer Services, Inc. of Toronto, Ontario, Canada acts as registrar and
transfer agent for the Companys common shares.

ITEM 10.
ADDITIONAL INFORMATION



|SHARE CAPITALNot
  Applicable.
|------------------------------

MEMORANDUM AND ARTICLES OF ASSOCIATION

The Company
was incorporated under the laws of the Province of Ontario on July 5, 1985 as
Quartet Management Ltd., and has an Ontario Corporation Number of 630609. By
articles of amendment filed on March 27, 1987, the Company changed its name to
Health Care Products Inc.. By articles of amendment filed on March 28, 1994,
the Company changed its name to Celltech Media Inc.. By articles of amendment
filed on June 21, 1995, the Company changed its name to Smartel Communications
Corporation and by articles of amendment filed on July 29, 1996, the Company
changed its name to Intasys Corporation. On July 11, 2001, the Company filed
articles of amendment

83

---

consolidating its issued and outstanding Common Shares on the basis
of one post-consolidation common share for every ten pre-consolidation Common
Shares. By articles of amendment filed on January 8, 2004 the Company changed
its name to Mamma.com Inc.

Section 5 of
the Companys articles of incorporation indicates that there are no restrictions
on the business the Company may carry on or on the powers it may exercise.
Pursuant to Section 15 of theBusiness Corporations Act(Ontario) (OBCA), a corporation has the
capacity and the rights, powers and privileges of a natural person.

With respect
to a material contract, proposal or arrangement between the Company and one or
more directors thereof or between the Company and another person of which a
director of the Company is a director or in which a director has a material
interest, such material contract, proposal or arrangement, as the case may be,
is neither void nor voidable by reason only of that relationship or by reason
only that a director with an interest in the transaction is present at or is
counted to determine the presence of a quorum at a meeting of directors or
committee of directors that authorized the transaction, if (i) the director
disclosed his or her interest in accordance with the OBCA; (ii) the transaction
was approved by the directors or the shareholders of the Company, as applicable;
and (iii) it was reasonable and fair to the Company at the time it was approved.
Generally, the business corporation laws of the United States vary significantly
on this issue from state to state. Delaware Law accords similar treatment (a) if
conditions (i) and (ii) above are satisfied or (b) if (iii), without regard to
conditions (i) and (ii), is satisfied, except that any ratification by the board
must be by a vote of disinterested members.

Neither the
Companys articles of incorporation nor its bylaws restrict the directors from
exercising any power (in the absence of an independent quorum) to approve their
compensation.

The
directors of the Company may from time to time, without the authorization of the
shareholders:

|(a) | borrow money upon the credit of the Company;                                                                                                                                                                                                                                                                                                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | issue, re-issue, sell or pledge debt obligations of the
      Company, including without limitation, bonds, debentures, notes or other
      similar obligations of the Company whether secured or unsecured;                                                                                                                                                                                                             
|   
|(c) | subject to Section 20 of the OBCA, give a guarantee on behalf
      of the Company to secure performance of any present or future
      indebtedness, liability or obligation of any person; or                                                                                                                                                                                                                           
|   
|(d) | charge, mortgage, hypothecate, pledge or otherwise create a
      security interest in all or any currently owned or subsequently acquired,
      real or personal, moveable or immovable property of the Company, including
      without limitation, book debts, rights, powers, franchises and
      undertakings, to secure any present or future indebtedness, liabilities or
      other obligations of the Company.
|   

84

---

Although most progressive U.S. state corporate codes grant similar powers to corporate boards of directors, some U.S. states still require shareholder approval of liens in substantially all of a
corporations assets.

The directors may from time to time, by resolution, delegate any or all of the powers referred to above to a director, committee of directors or one or more officers of the Company. These powers
may be varied by enacting a new by-law by resolution of the directors, which by-law must then be subsequently approved at a meeting of shareholders or by shareholder resolution. U.S. state corporate laws establish no general rule concerning
directors ability to delegate such duties. More progressive U.S. state corporate laws such as Delawares General Corporation Law allow a board of directors to establish a committee of one or more directors and delegate such powers to such
committee without a by-law or stockholder approval.

The Companys articles of incorporation do not contain any provisions for the retirement of directors as the result of reaching a certain age limit.  The Companys by-laws contain a
minimum age requirement of 18 years to be named a director.

Directors need not be shareholders of the Company.

The Company is authorized to only issue, and its share capital consists of only, Common Shares. Each common share entitles the holder to receive notice of, and to vote on the basis of one vote
per common share, at all meetings of shareholders, to receive any dividend declared by the Company on the Common Shares and to receive the remaining property of the Company on its dissolution, liquidation or wind-up. The shareholders do not have the
rights to share in the profits of the Company. The laws of most US states vest Common Shares with similar powers. The Company has never and does not have plans to declare any dividends.

In order to change the rights of holders of Common Shares, an amendment to the Companys articles is required. Pursuant to Section 168 of the OBCA, such an amendment can be effected at a
meeting of shareholders upon agreement by a majority of the shareholders. Pursuant to Section 170, the holders of shares of a class are entitled to vote separately as a class upon a proposal to amend the articles that would have the effect of
altering the rights of that class or altering the rights of that class relative to the other classes of shares. Progressive U.S. state corporate codes generally require similar procedures except that corporate laws such as New Yorks Business
Corporation Law and Delawares General Corporation Law permit stockholders to authorize such amendments by majority consent in writing, without a meeting, subject to certain limitations.

The annual meeting of shareholders shall be held at such time, day and place as the Board, Chairman of the Board or the President may from time to time determine, provided that an annual meeting
must be called not later than 15 months after the holding of the immediately preceding annual meeting. The Board, the Chairman of the Board, the President, the Managing Director or Vice-President shall have the power to call a special meeting of
shareholders at any time.

85

---

In addition, pursuant to Section 105 of the OBCA, the holders of not less than 5% of the issued shares of a corporation that carry the right to vote at a meeting sought to be held, may
requisition the directors to call a meeting of shareholders for the purposes stated in the requisition. Such requisition shall state the business to be transacted at the meeting. Although there is no general rule, progressive U.S. state corporation
laws provide that the by-laws shall determine stockholders rights to call stockholder meetings.  The directors of a corporation shall call a meeting of shareholders upon receiving the requisition unless a meeting of shareholders has already
been called or a record date has been fixed and the appropriate notice has been provided.  If the directors do not, within twenty-one days after receiving the requisition, call a meeting and if the above-noted exceptions are not met, any shareholder
who signed the requisition may call the meeting.

Notice of the time and place of each meeting of shareholders shall be given not less than 21 nor more than 50 days before the date of the meeting to each director and the auditor of the Company
and to each shareholder who, at the close of business on the record date for notice or, if no record date for notice is fixed, at the close of business on the day proceeding the day on which notice is given, is entered in the securities register as
the holder of one or more shares of the Company carrying the right to vote at the meeting. For every meeting of shareholders, the Company shall prepare a list of shareholders entitled to receive notice of the meeting, arranged in alphabetical order
and showing the number of shares entitled to vote at the meeting held by each shareholder.

The only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditors, if any, of the Company and others who, although not
entitled to vote, are entitled or required under the OBCA or the articles or by-laws of the Company to be present at the meeting. Any other person may be admitted on the invitation of the Chairman of the meeting or with the consent of the
meeting.

There are no restrictions in the Companys articles or by-laws, nor under the OBCA or the provision of the Securities Act (Ontario) or Securities Act (Quebec) limiting the right to own, hold
or exercise voting rights on the Companys securities. Most, if not all U.S. states have enacted some form of takeover disclosure law or business combination act requiring certain disclosures and/or limiting the right to own or vote shares
acquired in certain situations including hostile business combinations.

There are no provisions in the Companys articles or by-laws that would have the effect of delaying, deferring or preventing a change in control of the Company and that would operate only
with respect to a merger, acquisition or corporate restructuring involving the Company.

Pursuant to the Securities Act (Ontario) (the Securities Act), any shareholder holding or exercising control over more than 10% of the voting rights attached to all outstanding voting
securities of a Company is considered an insider of that company and among other things is required to disclose any trades in shares of that company. Similarly, Section 16 and Rule 16(a) of the U.S. Securities Exchange Act of 1934 (1934
Act), under which the Company is registered, requires holders of 10% or more of the securities of a 1934 Act registered company to file reports disclosing ownership and transactions in that companys securities. The Company, however,
currently is deemed a foreign private issuer and is exempt from these provisions.  Section 101 of the Securities Act requires that any person who

86

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acquires
beneficial ownership of, or the power to exercise control over, a total of 10%
or more of a companys voting or equity securities in any class shall issue a
news release and file a report containing the particulars and purpose behind the
acquisition. Further reports must be issued every time such person acquires an
additional 2% or more of the companys voting or equity securities, or there is
a change in any of the material facts disclosed in the former report. Similarly,
Section 13(d) and Regulation 13D of the 1934 Act requires any person who
acquires beneficial ownership or more than 5% of an equity security of any
company registered under the 1934 Act to file a report disclosing the
particulars and purpose behind the acquisition. Amendments must be filed to this
report every time such person acquires or disposes of 1% or more of the equity
security or there is some other material change in the report on file. In
addition, Section 14(d) and Regulation 14D of the 1934 Act imposes certain
filing and disclosure requirements on persons making tender offers for equity
securities of a 1934 Act registered company.

The articles
of incorporation and by-laws of the Company do not contain any conditions
governing changes in the Companys capital that are more stringent than the
applicable law.



|MATERIAL CONTRACTS
|------------------

The Company
has not entered into any material contracts during the last two fiscal years
other than in the ordinary course of business and other than those described in
Item 4 - Information on the Company or elsewhere in this Annual Report on Form
20-F.



|EXCHANGE CONTROLS
|-----------------

There is no
Canadian law, government decree or regulation that restricts the export or
import of capital or that affects the remittance of dividends, interest or other
payments to a non-resident holder of Common Shares other than withholding tax
requirements.

There is no
limitation imposed by Canadian law or by the articles or other charter documents
of the Company on the right of a non-resident to hold or vote Common Shares,
other than as provided in the Investment Canada Act, as amended (the Investment
Act). The Investment Act generally prohibits implementation of a reviewable
investment by an individual, government or agency thereof, corporation,
partnership, trust, joint venture or other entity that is not a Canadian, as
defined in the Investment Act (a non-Canadian), unless, after review, the
Minister responsible for the Investment Act is satisfied that the investment is
likely to be of net benefit to Canada based on the criteria set out in the
Investment Act. Investment in Common Shares of the Company (or other voting
shares) by a non-Canadian (other than a WTO investor, as defined below) would
be reviewable under the Investment Act if it constitutes an acquisition of
control of the Company, and the value of the assets of the Company were
$5,000,000 Canadian or more. Such an investment in Common Shares of the Company
by a WTO investor would be reviewable under the Investment Act if the value of
the assets of the Company equalled or exceeded $223,000,000 Canadian for
investments made in 2003. The Investment Act contains rules to determine if an
investment constitutes an acquisition of control of a particular entity. For
example, any non-Canadian, whether a WTO investor or otherwise, would

87

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acquire control of the Company for purposes of the Investment Act if such non-Canadian acquired a majority of the Common Shares of the Company. The acquisition of less than a majority but at
least one-third of the Common shares of the Company is presumed to be an acquisition of control of the Company, unless it could be established that on the acquisition the Company was not controlled in fact by the acquirer through the ownership of
Common Shares. In general, an individual is a WTO Investor if such individual is a national of a country (other than Canada) that is a member of the World Trade Organization (WTO Member) or has a right of permanent residence
in relation to that WTO Member. A corporation or other entity is a WTO investor if it is a WTO Investor-controlled entity pursuant to detailed rules set out in the Investment Act.

Certain transactions involving Common Shares of the Company would be exempt from the Investment Act, including, without limitation: (a) an acquisition of Common Shares of the Company if the
acquisition were made in connection with the persons business as a trader or dealer in securities; (b) an acquisition of control of the Companys business in connection with the realization of a security interest granted for a loan or
other financial assistance and not for any purpose related to the provisions of the Investment Act; and (c) an acquisition of control of the Companys business by reason of an amalgamation, merger, consolidation or corporate reorganization,
following which the ultimate direct or indirect control in fact of the Company, through the ownership of voting interests (as defined in the Investment Act), remains unchanged.

|TAXATION
|--------

The following is a summary of certain income tax provisions applicable to United States corporations, citizens and resident alien individuals who purchase Common Shares and who will hold such
shares as capital property for the purpose of the Income Tax Act (Canada) (the ITA). This discussion does not purport to deal with all relevant aspects of U.S. or Canadian taxation.  Shareholders are advised to consult their own tax
advisors regarding the United States income tax consequences of holding and disposing of the Common Shares as well as any consequences arising under state and local tax laws or the tax laws of jurisdictions outside the United States. The summary is
based on the assumption that, for Canadian tax purposes and at all relevant times, a holder of Common Shares (a) is neither resident nor deemed to be resident in Canada, but is resident in the United States for the purposes of the Canada 
United States Income Tax Convention (1980) (the Treaty); (b) deals at arms length with Mamma and is not affiliated with Mamma; (c) does not use or hold and is not deemed to use or hold the Common Shares in the course of carrying on
a business in Canada; and (d) is not an insurer or a financial institution .

For United States federal income tax purposes, a United States corporation, citizen or resident alien generally will realize, to the extent of the Companys current or accumulated earnings
and profits, taxable ordinary income on the receipt of cash dividends on the Common Shares equal to the gross amount of such dividends without reduction for any Canadian withholding tax.  Subject to certain limitations, such withholding tax
generally may be credited, against the holders United States federal income tax liability or, alternatively, may be deducted in computing the holders United States federal taxable income.  Dividends paid on the Common Shares will not be
eligible for the dividends received deduction, available under certain circumstances to United States corporations.

88

---

Dividends paid on Common Shares will be subject to Canadian non-resident withholding tax, which is generally applicable to dividends paid by a corporation resident in Canada to a resident of the
United States. Under the terms of the Treaty, non-resident withholding tax is generally levied at a rate of 15%. If, however, the beneficial owner of the dividends is a company resident in the United States for the purposes of the Treaty that owns
at least 10% of the voting stock of the Company paying the dividends, the rate of withholding tax under the Treaty is further reduced to 5%.

A holder may be subject to Canadian income tax in respect of any capital gains realized on a disposition or deemed disposition of Common Shares.  However, a holder will be exempt from Canadian
tax on a capital gain realized on an actual or deemed disposition of Common Shares unless the Common Shares are taxable Canadian property (as defined in the ITA) to the holder at the time of the disposition. Provided the Common Shares
are listed on a prescribed stock exchange for the purposes of the ITA (the National Association of Securities Dealers Automated Quotation System is a prescribed exchange under the Regulations to the ITA, the Common Shares will not be taxable
Canadian property to a holder, unless the holder, persons with whom the holder did not deal at arms length for the purposes of the ITA or the holder together with such persons owned or had interests in or options in respect of 25% or
more of the shares of any class or series of the capital stock of the Company at any time during the 60-month period immediately preceding the disposition or deemed disposition of the Common Shares.  The Common Shares may be deemed to be
taxable Canadian property where the holder acquired them in certain circumstances, including upon the disposition of other taxable Canadian property.  In the event that the Common Shares do constitute taxable Canadian
property, any capital gain realized on their disposition by a holder may be exempt from Canadian tax pursuant to the provisions of the Treaty. Holders of Common Shares must consult their own tax advisers to determine if any such Canadian
income tax must be paid.

For United States federal income tax purposes, upon a sale or exchange of a common share, a holder will recognize gain or loss equal to the difference between the amount realized on such sale or
exchange and the holders tax basis in such common share.  For non-corporate taxpayers, the maximum tax rates imposed are 15% on net capital gains and 35% on ordinary income. US capital gains may result in additional taxes by application of the
Alternative Minimum Tax. As a taxpayers income rises, US federal income tax law phases-out US personal exemptions and increasingly limits the availability of itemized deductions which may increase the effective tax rates. The deduction of net
capital losses against ordinary income currently is severely limited under US federal income tax law. Holders of Common Shares must consult their own tax advisers to determine the effect of federal, state and local income taxes upon a sale or
exchange of Common Shares.

|DOCUMENTS ON DISPLAY
|--------------------

Documents concerning the Company which are referred to in the document and otherwise available for public inspection may be inspected at the executive offices of the Company as well as the
executive or operating offices of the Companys operating subsidiaries. Any request for inspection must be made in writing addressed to the Companys executive offices to the attention of Mr. Daniel Bertrand, Executive Vice-President and
Chief Financial Officer. Such request must explicitly identify the person

89

---

making the
request, the documents pertaining to the request as well as the date and time
that the person making such request desires to inspect such documents. The
Company reserves all rights to refuse or limit a request.

|ITEM
      11. |  | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
|-------------- |  | -----------------------------------------------------------
|               |  | RISK                                                       



|CURRENCY RISK
|-------------

The Company
has employees located in Canada and the United States where the local currency
is used. No forward exchange contracts are used to sell currencies at fixed
forward rates.



|INTEREST RATE RISK
|------------------

The Company
has short term investments and temporary investments bearing average interest
rates between 4.06% and 4.12%. No other financial instruments are used.

|ITEM
      12. |  | DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------------- |  | ------------------------------------------------------------



Not applicable.

90

---



|PART II
|-------

|ITEM 13. |  | DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- |  | -----------------------------------------------

Not applicable.

|ITEM 14. |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS
|-------- |  | ----------------------------------------------------------------------------

Not applicable.

|ITEM 15. |  | CONTROLS AND PROCEDURES
|-------- |  | -----------------------

(a)    EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES.

We maintain
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in our Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and
forms, and that such information is accumulated and communicated to our
management, including our Executive Chairman, our President and Chief Executive
Officer, and our Executive Vice-President and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. Management
necessarily applied its judgment in assessing the costs and benefits of such
controls and procedures, which, by their nature, can provide only reasonable
assurance regarding managements control objectives.

We have
carried out an evaluation, under the supervision and with the participation of
our management, including our Executive Chairman, our President and Chief
Executive Officer, and our Executive Vice-President and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, as of the end of the period covered
by this Annual Report on Form 20-F.

Based upon
that evaluation, the President and Chief Executive Officer and our Executive
Vice-President and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of December 31, 2005 at the reasonable
assurance level.

[Paragraph
omitted pursuant to SEC Release Nos. 33-8545 and 34-51293]

91

---

(b)CHANGES IN
INTERNAL CONTROLS.

During the
year ended December 31, 2005, the Company has improved internal controls over
financial reporting.

|ITEM
      16.  |  | [RESERVED]                            
|--------------- |  | --------------------------------------
|ITEM
      16A. |  | AUDIT
      COMMITTEE FINANCIAL EXPERT

The
Companys board of directors has determined that a member of its Audit
Committee, Mr. Irwin Kramer, an independent director, is an Audit Committee
financial expert as defined in Item 16A of Form 20-F.

|ITEM
      16B. |  | CODE OF
      ETHICS
|--------------- |  | --------------------

The
Companys board of directors has adopted a Code of Ethics that applies to all of
the Companys employees, including the Executive Chairman, Chief Executive
Officer, Chief Financial Officer, principal accounting officer and persons
performing similar functions. A copy of the Companys Code of Ethics is attached
as Exhibit II to this report on Form 20-F.

|ITEM
      16C. |  | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
|--------------- |  | --------------------------------------------

RSM Richter
LLP has served as the Companys independent public accountants to audit our
financial statements for the fiscal years ended December 31, 2005 and 2004.
PricewaterhouseCoopers LLP served as the Companys independent public
accountants to audit our financial statements for the fiscal year ended December
31, 2003, for which audited financial statements appear in this annual report on
Form 20-F. The auditors are elected annually by the Companys shareholders at
the Annual General Meeting. In February 2005, PricewaterhouseCoopers LLP
notified the Company that it would not act as the Companys independent auditor
during 2005 in connection with preparation of the Companys 2004 audited
financial statements. In March 2005 the Companys Audit Committee engaged RSM
Richter LLP to audit the Companys financial statements for the 2004 fiscal
year.

92

---

The
following table presents the aggregate fees for professional services and other
services rendered by RSM Richter LLP in 2005.

2005Audit Fees(1)
    
    $351,516Audit Related
Fees(2)
    
    $81,905Tax Fees(3)
    
    --TOTAL:
    
    $433,421




|These
      fees are subject to a pre-approval
policy.
|------------------------------------------------------

|(1) | Audit Fees consist of fees billed for the annual audit
      services engagement and other audit services, which are those services
      that only the external auditor reasonably can provide, and include the
      audit of its financial statements; comfort letters and consents; attest
      services; and services associated with the filing of documents with the
      SEC.                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Audit-Related Fees consist of fees billed for assurance and
      related services that are reasonably related to the performance of the
      audit or review of the Companys financial statements or that are
      traditionally performed by the external auditor, and include consultations
      concerning financial accounting and reporting standards; due diligence
      related to acquisitions.
|   
|(3) | Tax
      Fees include fees billed for tax compliance services, advice on original
      and amended tax returns and claims for refund, tax consultations (such as
      assistance in connection with tax audits and appeals), tax advice related
      to mergers and acquisitions, transfer pricing, tax planning services and
      expatriate tax planning and services.                                
|   

PROCEDURES FOR APPROVAL OF AUDIT AND NON-AUDIT SERVICES BY THE
EXTERNAL AUDITORS

|I. |  | Audit Committee Pre-Approval of Services
|-- |  | ----------------------------------------

In
accordance with the requirements of securities regulations to which the Company
is subject and to safeguard the continued independence of its external auditors,
all audit and non-audit services to be rendered by the Companys external
auditors and any related entities (the Auditors) to the Company, its
subsidiaries and any material related companies over which the Company exercises
significant influence must be the subject of pre-approval by the Audit Committee
of the Board.

Such
pre-approval shall be based on the following detailed policies and procedures
established by the Audit Committee.

93

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II.Services that the Auditors may not Provide

The Auditors
may not act in any capacity where they could reasonably be seen to:

- function in the role of the Companys management;
- audit their own work; or
- serve in an advocacy role on behalf of the Company

Except as
otherwise permitted and pre-approved hereby, the Auditors will not be asked to
provide any services in the following areas (in each case as more fully defined
in applicable corporate and securities regulations or the regulations and
guidelines of the appropriate oversight authorities governing the accounting and
auditing profession):

|1.  | Bookkeeping and related functions;                                            
|--- | ------------------------------------------------------------------------------
|   
|2.  | Financial information systems design and
      implementation;                
|   
|3.  | Appraisal, valuation, fairness opinions or
      contribution-in-kind reports;
|   
|4.  | Actuarial services;                                                           
|   
|5.  | Internal audit outsourcing;                                                   
|   
|6.  | Management functions and human resources functions;                           
|   
|7.  | Broker-dealer, investment advisor or investment banking
      services;       
|   
|8.  | Legal services; and                                                           
|   
|9.  | Expert services.                                                              
|   
|10. | Management consulting services                                                
|   



|III.    Pre-Approval of a Range of Services
|-------------------------------------------

The
engagement for the annual audit of the Companys consolidated financial
statements is specifically approved on an annual basis by the execution of the
audit engagement letter with the Auditors. Subject to paragraph IV below,
engagements of the Auditors involving services for any of the Companys entities
that fall into the following service definitions are pre-approved by the Audit
Committee.

|Type of
      Service          |  | Description                                                                                                                                                                                                                                                            
|------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                                                                                                                                                        
|                              
|Audit
      Services           |  |                                                                                                                                                                                                                                                                        
|                               |  |                                                                                                                                                                                                                                                                        
|Financial statement audit      |  | Recurring audit of consolidated financial
      statements  including subsidiary company and statutory audits and
      tax  services and accounting consultations required to
      perform  an audit in accordance with Generally Accepted
      Auditing  Standards.
|                              
|                              
|                              
|                              
|                               |  |                                                                                                                                                                                                                                                                        
|Regulatory financial filings   |  | Services relating to 1933 and 1934 filings with the
      SEC  including issuance of comfort letters.  Statutory and regulatory
      filings including prospectuses  and registration statements.                                                                     
|                              
|                              
|                              
|                               |  |                                                                                                                                                                                                                                                                        
|                              
|404 attestation
      services |  | Attestation services
      relating to the report on the entitys                                                                                                                                                                                                      

94

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|Type of Service                                                                        |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                      
|                                                                                       |  | internal controls as specified in Section
      404 of the  Sarbanes-Oxley Act and any similar requirements
      that  may be introduced under Canadian  legislation/regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Audit Related
      Services                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Employee benefit plan audits                                                           |  | Audit of pension and other employee benefit
      plans and  funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Financial due diligence in 
      connection with
      acquisitions and  divestitures |  | Assistance in financial and tax due
      diligence, including  review of financial statements, financial
      data and  records, tax returns, tax forms and tax filings,
      discussion  with targets finance and accounting personnel.  Accounting consultation and audits in
      connection with  acquisitions and divestitures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Other attest services                                                                  |  | Attest services that are not required by
      statute or  regulation. Quarterly reviews.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Application and general control 
      reviews                                         |  | Review of IT and general controls related to
      specific  applications, including overall general computer
      controls,  excluding those that are a part of the financial
      statement  audit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Consultation regarding GAAP                                                            |  | Discussions, review and testing of impact of
      new  pronouncements, acquisition accounting, and
      other  GAAP topics.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Tax Services                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Tax compliance                                                                         |  | Preparation and/or review of income,
      capital, sales, use,  property, excise, local, value added (VAT)
      and GST tax  returns, filings and forms. Consultation
      regarding  handling of items for tax returns, required
      disclosures,  elections, and filing positions available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Tax consulting                                                                         |  | Assistance with tax audits, examinations or
      requests for  information. Responding to requests regarding
      technical  interpretations, applicable laws and regulations, and
      tax  accounting. Tax advice on mergers, acquisitions, 
      restructurings,
      financings, inter-company transactions,  foreign tax credits, foreign income
      tax, tax accounting,  foreign earnings and profits, capital tax,
      sales tax, use tax,  property tax, the treatment in any
      jurisdiction of foreign  subsidiary income, VAT, GST, excise tax or
      equivalent  taxes in the jurisdiction. Assistance with tax appeals
      that  are not in front of a tax court or its equivalent.
      Advice  regarding tax legislation or codes including 
      interpretations,
      procedures and advance tax rulings or  private letter rulings thereof, or
      their equivalent, in
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      

95

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|Type of
      Service   |  | Description                                                                                                                                                                                                                                                                                                    
|----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       
|                        |  | applicable jurisdictions in the following areas:
      income,  capital, sales, use, property, excise, local, value
      added  (VAT) and GST taxes.                                                                                                                                                          
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                
|Transfer pricing        |  | Advice and assistance with respect to transfer
      pricing  matters, including preparation of reports used by
      the  company to comply with taxing authority
      documentation  requirements regarding royalties, services and
      inter-  company pricing and assistance with tax
      exemptions. 
|                       
|                       
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                
|Customs and duties      |  | Compliance reviews and advice on compliance in
      the  areas of tariffs and classification, origin, pricing,
      and  documentation. Assistance with customs audits or 
      requests for
      information.                                                                                             
|                       
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                
|Expatriate tax services |  | Preparation of individual income tax returns, advice
      on  impact of changes in local tax laws and consequences
      of  changes in compensation programs or practices. 
      Compliance and
      advice in relation to benefits and  compensation, stock options, and tax
      equalization  policies.
|                       
|                       
|                       
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                
|Other
      Services    |  |                                                                                                                                                                                                                                                                                                                
|                        |  |                                                                                                                                                                                                                                                                                                                
|Valuation               |  | Valuation services for non-financial reporting
      in  connection with tax-only valuations and
      valuation  services to review and comment on tax-related
      valuations  prepared by the Company or third parties.                                                                                    
|                       
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                
|Other                   |  | Fact finding services and forensic investigations
      under  the supervision of the audit committee;
      environmental  audits; non-financial systems design and
      implementation.                                                                                                                     
|                       
|                       
|                        |  |                                                                                                                                                                                                                                                                                                                

96

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IV.    Limits on the Pre-Approval of a Range of Services

In the case
of proposed engagements of the Auditors involving any of the services covered
under the range of services under paragraph III where the fees for a particular
engagement are expected to exceed a total of CDN $5,000, specific pre-approval
must be obtained therefore under the provisions of paragraph V
hereof.

The general
pre-approval of the range of services covered under paragraph III will be
brought to the Audit Committee for review and, if thought appropriate, renewal
on an annual basis.

In respect
of services under paragraph III where the fees for a particular engagement are
expected to be less than or equal to a total of CDN $5,000, the Chairman of the
Audit Committee shall be notified expeditiously of any such services commenced
by the Auditors.

In the event
that services under paragraph III are commenced by the Auditors where the fees
for a particular engagement were expected to be less than or equal to a total of
CDN $5,000, specific pre-approval must be obtained therefore under the
provisions of paragraph V hereof if such fees are later expected to exceed a
total of CDN $5,000.



|V.    Pre-Approval of Individual Services
|-----------------------------------------

The
Companys management and/or the Auditors may seek pre-approval by the Audit
Committee of the engagement of the Auditors to provide particular services in
certain cases.

Where
particular pre-approval is required, the Audit Committee has delegated the
authority to effect such pre-approval to the Chairman of the
Committee.

Under no
circumstances may the Audit Committee delegate its responsibilities to Company
management.

For greater
certainty, if an engagement with the Auditors for a particular service is
contemplated that is neither forbidden under paragraph II hereof, nor covered
under the range of services under paragraph III hereof, in order for such
engagement to proceed it must be the subject of individual pre-approval under
this paragraph.

It is the
responsibility of management to determine whether a particular service is
covered by the pre-approved range of services. Management should seek the
guidance of the audit committee chair where there is any ambiguity about whether
a particular service is pre-approved.

97

---



|VI.    Engagement Letters
|-------------------------

Pre-approved
non-audit services shall be provided by the Auditors pursuant to an engagement
letter with the appropriate Company entity that satisfies each of the following
requirements:

|1. | the
      engagement letter shall be in writing and signed by the Auditors;
      and                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | the
      engagement letter shall set out the particular non-audit services to be
      provided by the Auditors which, unless individually pre-approved, shall be
      within the categories of pre-approved non-audit services described in
      paragraph III hereof.
|  

VII.    Reports of Services to the Audit Committee

At every
regularly-scheduled meeting of the Audit Committee, management shall report on
all new pre-approved engagements of the Auditors since the last such report. The
Auditors may comment on the report if they wish to do so. All engagement letters
entered into pursuant hereto shall be made available to the Audit Committee upon
demand.

ITEM 16D.   EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES



|Not
      applicable.
|---------------------

ITEM 16E.   PURCHASES OF EQUITY SECURITIES BY THE
ISSUER AND AFFILIATED PURCHASERS

The table
below sets forth the information with respect to purchases made by or on behalf
of Mamma or any affiliated purchase, as defined in Rule 10b-18(a)(3) under the
Securities Exchange Act of 1934, of Mammas Common Shares for the year ended
December 31, 2005.

On September
7, 2004, the Company filed a Notice of Intention with the Ontario Securities Commission
to Make a Normal Course Issuer Bid (the Notice). In the Notice, the Company
stated its intention to purchase on the open market at prevailing market prices,
through the facilities of the NASDAQ stock market, up to a maximum of 600,000 of
its common shares, being approximately 5% of the outstanding common shares. The
Company may purchase common shares at any time and from time to time until
September 7, 2005. The common shares will be purchased for cancellation. During
the period from June 8 to June 20, 2005, the Company redeemed 304,665 of its
common shares at a weighted average purchase price of $3.46, for a total amount
of $1,053,155. The $1,195,147 excess of stated capital value over the redemption
amount has been credited to additional paid-in capital. The normal course issuer
bid terminated September 7, 2005 in accordance with the Notice.

98

---

|          |  |         |  |                |  |              |  |                |  |                        |  | Maximum number    
|--------- |  | ------- |  | -------------- |  | ------------ |  | -------------- |  | ---------------------- |  | ------------------
|          |  |         |  |                |  |              |  |                |  | Total Number of Shares |  | of Shares that May
|          |  |         |  |                |  | Total Number |  | Average        |  | Purchased as Part of   |  | Yet Be Purchased  
|          |  |         |  |                |  | of Shares    |  | Price Paid per |  | Publicly Announced     |  | Under the Plans or
|          |  |         |  |                |  | Purchased    |  | Share          |  | Plans or Programs*     |  | Programs          
|          |  |         |  |                |  |              |  |                |  |                       
|January   |  | 1/1/05  |  | -     1/31/05  |  |              |  |                |  |                        |  | N/A               
|February  |  | 2/1/05  |  | -     2/28/05  |  |              |  |                |  |                        |  |                   
|March     |  | 3/1/05  |  | -     3/31/05  |  |              |  |                |  |                        |  |                   
|April     |  | 4/1/05  |  | -     4/30/05  |  |              |  |                |  |                        |  |                   
|May       |  | 5/1/05  |  | -     5/31/05  |  |              |  |                |  |                        |  |                   
|June      |  | 6/1/05  |  | -     6/30/05  |  | 304,665      |  | 3.46           |  | 304,665                |  |                   
|July      |  | 7/1/05  |  | -     7/31/05  |  |              |  |                |  |                        |  |                   
|August    |  | 8/1/05  |  | -     8/31/05  |  |              |  |                |  |                        |  |                   
|September |  | 9/1/05  |  | -     9/30/05  |  |              |  |                |  |                        |  |                   
|October   |  | 10/1/05 |  | -     10/31/05 |  |              |  |                |  |                        |  |                   
|November  |  | 11/1/05 |  | -     11/31/05 |  |              |  |                |  |                        |  |                   
|December  |  | 12/1/05 |  | -     12/31/05 |  |              |  |                |  |                        |  |                   
|          |  |         |  |                |  |              |  |                |  |                       
|Total     |  |         |  |                |  | 304,665      |  | 3.46           |  | 304,665                |  | N/A               
|          |  |         |  |                |  |              |  |                |  |                       

*The total number of shares purchased were purchased through the
Companys Normal Course Issuer Bid. See Item 5 Normal Course Issuer
Bid.

ITEM
17.   FINANCIAL STATEMENTS

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP). There are certain measurement
differences between Canadian GAAP and U.S. GAAP. Differences which relate to the Company are summarized in note 26 to our consolidated financial statements.

99

---

| | RSM
Richter S.E.N.C.R.L./LLP
Comptables agréés
Chartered Accountants2, Place
Alexis Nihon
Montréal (Quebec) H3Z 3C2
Téléphone: / Telephone :
(514) 934-3400
Télécopieur / Facsimile : (514) 934-3408
www.rsmrichter.com
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Independent Registered Public Accounting
Firms Reports

To the Shareholders and Board of Directors of Mamma.com Inc.

We have audited the accompanying consolidated balance sheets of Mamma.com Inc. as at December 31, 2005 and 2004 and the related consolidated statements of operations, shareholders
equity and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). These
standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  We were not engaged to perform an audit of the Companys internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2005 and 2004 and the results
of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Montreal, CanadaMarch 15, 2006, except for note 27 which is dated March 28, 2006

| | RSM Richter S.E.N.C.R.L. est un cabinet indépendant membre de RSM
International, association de cabinets indépendants d'expertise comptable
et de
services conseils. | RSM Richter LLP is an independent member firm of RSM International, an
affiliation of independent accounting and consulting firms. | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | 

100

---



101

---

|Mamma.com
      Inc                                      |  |              |  |             
|-------------------------------------------------------- |  | ------------ |  | ------------
|Consolidated Balance
      Sheets                        |  |              |  |             
|As at December 31, 2005 and
      2004                   |  |              |  |             
|                                                        
|                                                        
|(Expressed in
      U.S. dollars)                        |  | 2005         |  | 2004        
|                                                         |  | $            |  | $           
|Assets                                                   |  |              |  |             
|Current
      assets                                     |  |              |  |             
|Cash and cash
      equivalents                          |  | 4,501,201    |  | 20,609,089  
|Restricted cash (note
      5)                           |  | -            |  | 148,000     
|Temporary investments
      (note 7)                     |  | 4,013,312    |  | 6,874,155   
|Accounts receivable (note
      8)                       |  | 2,623,940    |  | 2,502,535   
|Income taxes
      receivable                            |  | 606,226      |  | 120,590     
|Prepaid
      expenses                                   |  | 295,288      |  | 129,390     
|Future income taxes (note
      20)                      |  | 33,505       |  | -           
|Current assets of
      discontinued operations (note 5) |  | 9,694        |  | 274,770     
|                                                         |  |              |  |             
|                                                         |  | 12,083,166   |  | 30,658,529  
|Future income
      taxes(note 20)                       |  | 13,483       |  | -           
|Income tax
      credit                                  |  | 54,912       |  | -           
|Assets of
      discontinued operations(note 5)          |  | -            |  | 1,882,857   
|Investments(note
      9)                                |  | 720,000      |  | 720,000     
|Property,
      plant and equipment(note 10)             |  | 598,758      |  | 304,624     
|Intangible
      assets(note 11)                         |  | 8,601,848    |  | 753,778     
|Goodwill(note
      11)                                  |  | 16,255,031   |  | 846,310     
|                                                         |  |              |  |             
|                                                         |  | 38,327,198   |  | 35,166,098  
|                                                         |  |              |  |             
|Liabilities                                              |  |              |  |             
|Current
      liabilities                                |  |              |  |             
|Accounts payable and
      accrued liabilities (note 12) |  | 2,690,943    |  | 2,244,958   
|Deferred
      revenue                                   |  | 249,953      |  | 233,459     
|Income tax
      payable                                 |  | 8,062        |  | -           
|Liabilities of
      discontinued operations (note 5)    |  | 189,223      |  | 652,109     
|                                                         |  |              |  |             
|                                                         |  | 3,138,181    |  | 3,130,526   
|                                                         |  |              |  |             
|Future income
      taxes(note 20)                       |  | 2,672,036    |  | -           
|                                                         |  |              |  |             
|Contingencies
      and commitments(note 24)             |  |              |  |             
|                                                         |  |              |  |             
|                                                        
|Shareholders
      Equity                               |  |              |  |             
|Capital stock(note
      13)                             |  |              |  |             
|Authorized                                               |  |              |  |             
|Unlimited common shares, no par value                    |  |              |  |             
|Issued and
      outstanding                             |  |              |  |             
|14,340,864 common shares (2004-12,263,029)               |  | 95,298,234   |  | 90,496,088  
|Additional
      paid-in capital(note 14)                |  | 5,985,077    |  | 5,255,249   
|Deferred
      stock-based compensation(note 14)         |  | (735,175)    |  | (1,333,443) 
|Cumulative
      translation adjustment                  |  | 370,369      |  | 360,884     
|Accumulated
      deficit                                |  | (68,401,524) |  | (62,743,206)
|                                                         |  |              |  |             
|                                                         |  | 32,516,981   |  | 32,035,572  
|                                                         |  |              |  |             
|                                                         |  | 38,327,198   |  | 35,166,098  
|                                                         |  |              |  |             



|See accompanying
      notes.
|-----------------------------

|Approved by
      the Board of Directors             |  |                                                              
|---------------------------------------------------- |  | -------------------------------------------------------------
|/s/ David
      Goldman                              |  | /s/ Irwin
      Kramer                                       
|David Goldman, Executive
      Chairman of the Board |  | Irwin Kramer, Director and
      Chair of the Audit Committee

102

---

|Mamma.com Inc                                                    |  |             |  |            |  |          
|---------------------------------------------------------------- |  | ----------- |  | ---------- |  | ---------
|Consolidated Statements of Operations                            |  |             |  |            |  |          
|For the years ended December
31                                  |  |             |  |            |  |          
|                                                                
|                                                                
|                                                                
|                                                                
|(Expressed in U.S. dollars)                                      |  | 2005        |  | 2004       |  | 2003     
|                                                                 |  | $           |  | $          |  | $        
|                                                                
|Revenues(note 16)                                                |  | 9,464,560   |  | 14,636,318 |  | 8,938,863
|                                                                 |  |             |  |            |  |          
|                                                                
|Cost of revenues(note 17)                                        |  | 4,204,030   |  | 6,539,213  |  | 3,991,265
|                                                                 |  |             |  |            |  |          
|                                                                
|Gross Margin                                                     |  | 5,260,530   |  | 8,097,105  |  | 4,947,598
|                                                                 |  |             |  |            |  |          
|                                                                
|Expenses                                                         |  |             |  |            |  |          
|Marketing, sales and services                                    |  | 2,023,925   |  | 2,188,488  |  | 1,600,643
|General and administration                                       |  | 5,692,092   |  | 3,567,247  |  | 2,255,099
|Product development and technical support (note 21)              |  | 1,286,345   |  | 891,541    |  | 599,383  
|Amortization of property, plant and equipment                    |  | 106,788     |  | 133,123    |  | 140,090  
|Amortization of intangible assets                                |  | 242,031     |  | 191,218    |  | 178,509  
|Realized gain on disposal of investment (note 9)                 |  | -           |  | -          |  | (32,499) 
|Write-down of investment (note 9)                                |  | -           |  | 365,286    |  | -        
|Interest and other income                                        |  | (768,738)   |  | (233,506)  |  | (15,869) 
|Loss on foreign exchange                                         |  | 47,080      |  | 68,275     |  | 210,888  
|                                                                 |  |             |  |            |  |          
|                                                                
|                                                                 |  | 8,629,523   |  | 7,171,672  |  | 4,936,244
|                                                                 |  |             |  |            |  |          
|                                                                
|Earnings (loss) from continuing operations                       |  |             |  |            |  |          
|before income taxes                                              |  | (3,368,993) |  | 925,433    |  | 11,354   
|                                                                
|Provision for (recovery of) income taxes (note 20)               |  | (26,010)    |  | 554,680    |  | (77,636) 
|                                                                 |  |             |  |            |  |          
|                                                                
|Earnings (loss) from continuing operations                       |  | (3,342,983) |  | 370,753    |  | 88,990   
|                                                                
|Results of discontinued operations, net of income taxes (note 5) |  | (2,315,335) |  | 733,654    |  | (300,053)
|                                                                 |  |             |  |            |  |          
|                                                                
|Net earnings (loss) for the year                                 |  | (5,658,318) |  | 1,104,407  |  | (211,063)
|                                                                 |  |             |  |            |  |          
|Basic and diluted earnings (loss) per share from continuing      |  |             |  |            |  |          
|operations                                                       |  |             |  | 0.03       |  | 0.01     
|Basic and diluted earnings (loss) per share from                 |  |             |  |            |  |          
|discontinued operations                                          |  | (0.19)      |  | 0.07       |  | (0.04)   
|                                                                 |  |             |  |            |  |          
|Basic and diluted net earnings (loss) per share                  |  | (0.46)      |  | 0.10       |  | (0.03)   
|                                                                 |  |             |  |            |  |          
|                                                                
|                                                                
|See accompanying notes.                                          |  |             |  |            |  |          

103

---

|Mamma.com
      Inc                                        |  |                 |  |             |  |             |  |              |  |             |  |             
|---------------------------------------------------------- |  | --------------- |  | ----------- |  | ----------- |  | ------------ |  | ----------- |  | ------------
|Consolidated
      Statements of Shareholders Equity      |  |                 |  |             |  |             |  |             
|For the
      years ended December 31, 2005, 2004 and 2003 |  |                 |  |             |  |            
|                                                          
|                                                          
|                                                          
|                                                          
|(Expressed in
      U.S. dollars)                          |  | Number
      of |  |             |  | Additional  |  | Deferred     |  | Cumulative  |  |             
|                                                           |  | common          |  | Common      |  | paid-in     |  | stock-based  |  | translation |  | Accumulated 
|                                                           |  | shares          |  | shares      |  | capital     |  | compensation |  | adjustment  |  | deficit     
|                                                           |  |                 |  | $           |  | $           |  | $            |  | $           |  | $           
|                                                          
|Balance,
      December 31, 2002                           |  | 6,094,842       |  | 69,873,994  |  | 750,111     |  | (10,667)     |  | (275,693)   |  | (63,636,550)
|                                                          
|Effect of changes on
      shares and warrants             |  |                 |  |             |  |             |  |              |  |             |  |             
|issued for financial services                              |  | -               |  | 6,333       |  | -           |  | 10,667       |  | -           |  | -           
|Warrants issued for
      financial services               |  | -               |  | -           |  | 84,566      |  | -            |  | -           |  | -           
|Options
      granted                                      |  | -               |  | -           |  | 388,391     |  | (376,171)    |  | -           |  | -           
|Amortization of deferred
      stock-based                 |  |                 |  |             |  |             |  |              |  |             |  |             
|compensation                                               |  | -               |  | -           |  | -           |  | 113,365      |  | -           |  | -           
|Options
      exercised                                    |  | 129,678         |  | 185,887     |  | (12,220)    |  | -            |  | -           |  | -           
|Warrants
      exercised                                   |  | 284,090         |  | 455,965     |  | (44,034)    |  | -            |  | -           |  | -           
|Translation adjustment for
      the year                  |  | -               |  | -           |  | -           |  | -            |  | 717,257     |  | -           
|Net loss for the
      year                                |  | -               |  | -           |  | -           |  | -            |  | -           |  | (211,063)   
|                                                           |  |                 |  |             |  |             |  |              |  |             |  |             
|                                                          
|Balance,
      December 31, 2003                           |  | 6,508,610       |  | 70,522,179  |  | 1,166,814   |  | (262,806)    |  | 441,564     |  | (63,847,613)
|                                                          
|Warrants issued for
      financial services               |  | -               |  | -           |  | 260,301     |  | -            |  | -           |  | -           
|Options
      granted                                      |  | -               |  | -           |  | 1,378,787   |  | (1,378,787)  |  | -           |  | -           
|Amortization of deferred
      stock-based                 |  |                 |  |             |  |             |  |              |  |             |  |             
|compensation                                               |  | -               |  | -           |  | -           |  | 301,944      |  | -           |  | -           
|Options
      exercised                                    |  | 255,561         |  | 483,593     |  | (82,127)    |  | -            |  | -           |  | -           
|Warrants
      exercised                                   |  | 3,892,878       |  | 6,430,500   |  | (671,687)   |  | -            |  | -           |  | -           
|Forfeited
      options                                    |  | -               |  | -           |  | (18,967)    |  | 6,206        |  | -           |  | -           
|Shares issued for
      acquisition of Digital             |  |                 |  |             |  |             |  |              |  |             |  |             
|Arrow                                                      |  | 90,000          |  | 740,782     |  | -           |  | -            |  | -           |  | -           
|Shares and warrants issued
      on private                |  |                 |  |             |  |             |  |              |  |             |  |             
|placement                                                  |  | 1,515,980       |  | 13,158,329  |  | 3,441,652   |  | -            |  | -           |  | -           
|Share issue
      cost                                     |  | -               |  | (839,295)   |  | (219,524)   |  | -            |  | -           |  | -           
|Translation adjustment for
      the year                  |  | -               |  | -           |  | -           |  | -            |  | (80,680)    |  | -           
|Net earnings for the
      year                            |  | -               |  | -           |  | -           |  | -            |  | -           |  | 1,104,407   
|                                                           |  |                 |  |             |  |             |  |              |  |             |  |             
|                                                          
|Balance,
      December 31, 2004                           |  | 12,263,029      |  | 90,496,088  |  | 5,255,249   |  | (1,333,443)  |  | 360,884     |  | (62,743,206)
|                                                          
|Redemption of common
      shares (note 13)                |  | (304,665)       |  | (2,248,302) |  | 1,195,147   |  | -            |  | -           |  | -           
|Options
      granted                                      |  | -               |  | -           |  | 994,908     |  | (994,908)    |  | -           |  | -           
|Options
      exercised                                    |  | 2,500           |  | 10,408      |  | (3,984)     |  | -            |  | -           |  | -           
|Amortization of deferred
      stock-based                 |  |                 |  |             |  |             |  |              |  |             |  |             
|compensation                                               |  | -               |  | -           |  | -           |  | 136,933      |  | -           |  | -           
|Options
      forfeited                                    |  | -               |  | -           |  | (1,456,243) |  | 1,456,243    |  | -           |  | -           
|Shares issued for
      acquisition of Copernic            |  |                 |  |             |  |             |  |              |  |             |  |             
|(note 6)                                                   |  | 2,380,000       |  | 7,040,040   |  | -           |  | -            |  | -           |  | -           
|Translation adjustment for
      the year                  |  | -               |  | -           |  | -           |  | -            |  | 9,485       |  | -           
|Net loss for the
      year                                |  | -               |  | -           |  | -           |  | -            |  | -           |  | (5,658,318) 
|                                                           |  |                 |  |             |  |             |  |              |  |             |  |             
|                                                          
|Balance,
      December 31, 2005                           |  | 14,340,864      |  | 95,298,234  |  | 5,985,077   |  | (735,175)    |  | 370,369     |  | (68,401,524)
|                                                           |  |                 |  |             |  |             |  |              |  |             |  |             
|                                                          
|                                                          
|                                                          
|See accompanying notes.                                    |  |                 |  |             |  |             |  |              |  |             |  |             

104

---

|Mamma.com
      Inc                                                              |  |              |  |             |  |          
|-------------------------------------------------------------------------------- |  | ------------ |  | ----------- |  | ---------
|Consolidated Statements of Cash
      Flows                                      |  |              |  |             |  |          
|For the years ended December
      31                                            |  |              |  |             |  |          
|                                                                                
|                                                                                
|(Expressed in U.S. dollars)                                                      |  | 2005         |  | 2004        |  | 2003     
|                                                                                 |  | $            |  | $           |  | $        
|                                                                                
|Cash flows
      from (used for)                                                 |  |              |  |             |  |          
|                                                                                
|Operating
      activities                                                       |  |              |  |             |  |          
|Earnings (loss) from
      continuing operations                                 |  | (3,342,983)  |  | 370,753     |  | 88,990   
|Adjustments
      for                                                            |  |              |  |             |  |          
|Amortization of property, plant and equipment                                    |  | 106,788      |  | 133,123     |  | 140,090  
|Amortization of intangible assets                                                |  | 242,031      |  | 191,218     |  | 178,509  
|Realized gain on disposal of property, plant and
      equipment                 |  | -            |  | -           |  | (455)    
|Realized gain on disposal of investment (note 9)                                 |  | -            |  | -           |  | (32,499) 
|Employee stock-based compensation                                                |  | 136,933      |  | 281,367     |  | 94,654   
|Former Board member compensation paid by
      issuance                          |  |              |  |             |  |          
|of capital
      stock                                                           |  | -            |  | -           |  | 12,220   
|Write-down of investment (note 9)                                                |  | -            |  | 365,286     |  | -        
|Financial fees paid by issuance of capital stock and
      warrants              |  | -            |  | 260,301     |  | 101,566  
|Future income taxes                                                              |  | (13,964)     |  | 400,855     |  | (77,636) 
|Income tax credits                                                               |  | -            |  | 81,505      |  | (77,925) 
|Unrealized loss on foreign exchange                                              |  | -            |  | 14,622      |  | -        
|                                                                                
|Net change in non-cash
      working capital items (note 19)                     |  | 1,420,013    |  | (302,567)   |  | (969,323)
|                                                                                 |  |              |  |             |  |          
|Cash from (used for)
      operating activities from continuing operations       |  | (1,451,182)  |  | 1,796,463   |  | (541,809)
|Cash from (used for)
      operating activities from discontinued operations     |  | (630,288)    |  | (790,370)   |  | 479,852  
|                                                                                 |  |              |  |             |  |          
|                                                                                 |  | (2,081,470)  |  | 1,006,093   |  | (61,957) 
|                                                                                 |  |              |  |             |  |          
|Investing
      activities                                                       |  |              |  |             |  |          
|Business acquisitions
      (note 6)                                             |  | (15,851,922) |  | -           |  | -        
|Purchase of intangible
      assets                                              |  | (54,943)     |  | (9,434)     |  | (3,026)  
|Purchase of property,
      plant and equipment                                  |  | (85,687)     |  | (70,284)    |  | (47,432) 
|Net decrease (increase) in
      temporary investments                           |  | 2,860,843    |  | (6,850,979) |  | (6,217)  
|Proceeds on disposal of
      investments                                        |  | -            |  | -           |  | 32,499   
|Proceeds on disposal of
      property, plant and equipment                      |  | -            |  | -           |  | 1,199    
|                                                                                 |  |              |  |             |  |          
|Cash used for investing
      activities from continuing operations              |  | (13,131,709) |  | (6,930,697) |  | (22,977) 
|Cash from (used for)
      investing activities from discontinued operations     |  | -            |  | 434,975     |  | (72,190) 
|                                                                                 |  |              |  |             |  |          
|                                                                                 |  | (13,131,709) |  | (6,495,722) |  | (95,167) 
|                                                                                 |  |              |  |             |  |          
|Financing
      activities                                                       |  |              |  |             |  |          
|Issuance of capital
      stock                                                  |  | 6,424        |  | 22,760,261  |  | 585,598  
|Share issue
      costs                                                          |  | -            |  | (1,058,819) |  | -        
|Redemption of common
      shares                                                |  | (1,053,155)  |  | -           |  | -        
|                                                                                 |  |              |  |             |  |          
|                                                                                 |  | (1,046,731)  |  | 21,701,442  |  | 585,598  
|                                                                                 |  |              |  |             |  |          
|Effect of
      foreign exchange rate changes on cash and cash
      equivalents |  | 4,022        |  | 79,375      |  | 250,063  
|                                                                                 |  |              |  |             |  |          
|Net change in
      cash and cash equivalents and restricted cash during the     |  |              |  |             |  |          
|year                                                                             |  | (16,255,888) |  | 16,291,188  |  | 678,537  
|Cash and cash
      equivalents  Beginning of year                              |  | 20,757,089   |  | 4,465,901   |  | 3,787,364
|                                                                                 |  |              |  |             |  |          
|Cash and cash
      equivalents and restricted cash  End of year                |  | 4,501,201    |  | 20,757,089  |  | 4,465,901
|                                                                                 |  |              |  |             |  |          
|Cash and cash equivalents
      comprise:                                        |  |              |  |             |  |          
|Cash                                                                             |  | 4,501,201    |  | 1,565,600   |  | 2,265,000
|Short-term investments                                                           |  | -            |  | 19,043,489  |  | 2,200,901
|                                                                                 |  |              |  |             |  |          
|                                                                                 |  | 4,501,201    |  | 20,609,089  |  | 4,465,901
|Restricted
      cash                                                            |  | -            |  | 148,000     |  | -        
|                                                                                 |  |              |  |             |  |          
|                                                                                 |  | 4,501,201    |  | 20,757,089  |  | 4,465,901
|                                                                                 |  |              |  |             |  |          
|Supplemental
      cash flow information                                         |  |              |  |             |  |          
|Cash paid for
      interest                                                     |  | 16,097       |  | 673         |  | 328      
|Cash paid for income
      taxes                                                 |  | 17,189       |  | 288,147     |  | -        
|                                                                                 |  |              |  |             |  |          
|                                                                                
|See accompanying notes.                                                          |  |              |  |             |  |          

105

---



|1   Nature of business
|----------------------

Mamma.com
Inc. is a provider of search technology for both the Web and desktop space,
delivered through its properties, www.mamma.com and www.copernic.com,
respectively. The Company, through its Mamma Media Solutions brand, is also a
provider of online marketing solutions to advertisers, providing keyword and
graphic ad placement on its publisher network.

Mamma.com
The Mother of All Search Engines® is a metasearch engine for the Internet; it
makes it easier and faster for people to find information by gathering results
from the Internet.

Through its
Copernic Desktop Search product, Copernic Technologies Inc. (Copernic)
develops cutting edge search solutions bringing the power of a sophisticated,
yet easy-to-use search engine right to the users PC. It allows for instant
searching of files, emails, and email attachments stored anywhere on a PC hard
drive.

|2   Significant accounting policies
|-----------------------------------

These
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada (Canadian GAAP). There are
certain measurement differences between Canadian GAAP and United States
generally accepted accounting principles (U.S. GAAP). Differences which relate
to the Company are summarized in note 26.



|a)   Basis of presentation
|--------------------------

These
consolidated financial statements include the accounts of the Company and its
subsidiaries, all of which are wholly owned. All intercompany balances and
transactions have been eliminated on consolidation.



|b)   Use
      of estimates
|---------------------------

The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
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, valuation of investments, determination of the fair value of
the intangible assets on recent acquisitions, determination of the fair value of
the warrants issued on the private placement and the resulting impact on the
allocation of the proceeds between the shares and warrants. Actual results could
differ from those estimates.



|c)   Cash and cash equivalents
|------------------------------

Cash and
cash equivalents consist of cash on hand, bank balances available, and highly
liquid investments with an initial term of three months or less that are stated
at cost, which approximates market value.



|d)   Temporary investments
|--------------------------

Temporary
investments are valued at the lower of cost and market value.

106

---



|e)   Income tax credits
|-----------------------

Income tax
credits are accounted for using the cost reduction method. Under this method,
tax credits relating to eligible expenditures are deducted from the cost of the
related assets or included in the consolidated statements of operations as a
reduction of the related expenses. Tax credits are recorded in the year in which
the expenditures are incurred provided there is reasonable assurance of
realization.



|f)   Investments
|----------------

The Company
has investments in equity instruments of privately-held companies. These
investments are generally accounted for under the cost method, as the Company
does not have the ability to exercise significant influence over operations. The
Company records an investment impairment charge when it believes an investment
has experienced a decline in value that is judged to be other than temporary.
The Company monitors its investments for impairment by considering current
factors including economic environment, market conditions and operational
performance and other specific factors relating to the business underlying the
investment, and records reductions in carrying values when necessary. The fair
value for privately held securities is estimated using the best available
information as of the valuation date, including the quoted market prices of
comparable public companies, recent financing rounds of the investee and other
investee specific information.

g)   Property, plant and equipment

Property,
plant and equipment are recorded at cost, less applicable tax credits and
accumulated amortization. Amortization is calculated using the following methods
and annual rates or period:

|   |  | Computer equipment      |  | Declining
      balance |  | 30%                    
|-- |  | ----------------------- |  | ----------------------- |  | -----------------------
|   |  | Furniture and fixtures  |  | Declining
      balance |  | 20%                    
|   |  | Leasehold improvements  |  | Straight-line           |  | Duration of
      lease
|  
|h) |  | Intangible
      assets |  |                         |  |                        

Intangible
assets with finite useful lives are recorded at cost less accumulated
amortization. The Company provides for the amortization of intangible assets
over their estimated useful lives using the straight-line method at the
following annual rates:

|Trade names                  |  | 14% |  | to |  | 25%
|---------------------------- |  | --- |  | -- |  | ---
|Technology                   |  | 20% |  | to |  | 25%
|Customer
      relationships |  | 10% |  | to |  | 33%
|Software and
      patents   |  | 25% |  |    |  |    



|i)   Goodwill
|-------------

Goodwill
represents the excess of purchase price of businesses acquired over the fair
value of the underlying net identifiable assets acquired. Goodwill related to
business combinations is not amortized.

Goodwill is
evaluated for impairment annually, 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

107

---

impairment.
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.



|j)   Impairment of long-lived assets
|------------------------------------

The Company
assesses the carrying value of its long-lived assets, which include property,
plant and equipment and intangible assets, for future recoverability when events
or changed circumstances indicate that the carrying value may not be
recoverable. 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.



|k)   Revenue recognition
|------------------------

The Company
recognizes revenue from search advertising, graphic advertising services, sale
of software and support services when the following criteria are
satisfied:

|i)   | persuasive evidence of an arrangement exists;
|---- | ---------------------------------------------
|    
|ii)  | service is performed;                        
|    
|iii) | the
      fee is fixed or determinable;      
|    
|iv)  | collectibility is reasonably assured.        
|    

Search
service revenue is generated as users click on an advertisers sponsored link,
giving rise to direct revenue or a revenue share if the paid placement was
provided by a third party provider (partner). Advertisers buy key words, and
when these key words are searched by a user, the advertisers website will be
listed in a premium position in the search results. Advertisers are charged on a
pay-per-click basis. Revenue from such clicks is recognized as the clicks occur,
provided the above criteria are met.

Graphic
advertising revenue is generated from advertising delivered on a Web page, at an
agreed rate per thousand impressions delivered, or based on user clicks on
displayed advertising graphic advertisement. Advertising includes different size
banners, pop-ups and rich media which are targeted through the Companys network
of publishers (members). The publisher network consists of small to medium
size websites that subscribe to the Companys service through an on-line
contract. Revenue from advertising arrangements is recognized as the impressions
are delivered or as clicks on displayed graphic advertisement occur, provided
the above criteria are met and that no significant Company obligations or
commitments relating to a minimum number of impressions remain.

The majority
of arrangements for all types of revenue have terms of less than one year and
may be terminated at any time by the advertiser. In accordance with Emerging
Issues Committee 123 Reporting Revenue Gross as a Principal versus Net as an
Agent, search and graphic advertising derived from arrangements that involve
services supplied by partners and members respectively is reported gross of the
payment to them. This revenue is reported gross due to the fact that the Company
is the primary obligor to the advertisers who are customers of the advertising
service.

108

---

Support
revenue is recognized on a straight-line basis over the term of the
agreements.

Deferred
revenue is recorded when payments are received in advance of the Companys
performance in the underlying agreement on the accompanying consolidated balance
sheets.

l)   Research and development costs

Research
costs are expensed as incurred. Development costs are also expensed as incurred
unless such costs meet the criteria under generally accepted accounting
principles for deferral and amortization. To qualify for deferral, the costs
must relate to a technically feasible, identifiable product which the Company
intends to produce and market, there must be a clearly defined market for the
product, and the Company must have the resources, or access to the resources,
necessary to complete the development. The Company has not deferred any such
development costs during the years ended December 31, 2005 and 2004.



|m)   Income taxes
|-----------------

The Company
provides for income taxes using the liability method of tax allocation. Under
this method, future income tax assets and liabilities are determined based on
deductible or taxable temporary differences between financial statement values
and tax values of assets and liabilities using substantively enacted income tax
rates expected to be in effect for the year in which the differences are
expected to reverse.

The Company
establishes a valuation allowance against future income tax assets if, based
upon available information, it is more likely than not that some or all of the
future income tax assets will not be realized.

n)   Foreign currency translation

The
functional and reporting currency of the Company is the U.S. dollar. The
functional currency of the Companys subsidiaries is the local currency.
Accordingly, the financial statements of the Companys subsidiaries, except for
Copernic, have been translated into the reporting currency as follows: monetary
assets and liabilities have been translated at the exchange rate in effect at
the balance sheet date, non-monetary assets and liabilities have been translated
at the historical exchange rate. Revenue and expenses have been translated at
the average exchange rate for each year. All gains or losses resulting from the
application of this translation method are included in net earnings (loss) for
the year.

Copernic
follows the current rate method of accounting for translation of foreign
currency amounts into Canadian dollars. Under this method, all assets and
liabilities denominated in foreign currencies are translated at the exchange
rate in effect at the balance sheet date. Revenues and expenses denominated in
foreign currencies are translated at the exchange rate in effect at the time of
the transaction. Exchange gains or losses resulting from translation are
included in the cumulative translation adjustment. Changes in the cumulative
translation adjustment during the year result solely from the application of
this translation method.

109

---



|o)   Foreign currency transactions
|----------------------------------

Transactions
concluded in currencies other than the functional currency have been translated
as follows: monetary assets and liabilities have been translated at the exchange
rate in effect at the balance sheet date and revenue and expenses have been
translated at the average exchange rate for each period; non-monetary assets and
liabilities have been translated at the rates prevailing at the dates of the
respective transactions. Exchange gains and losses arising from such
transactions are included in net earnings (loss) for the year.



|p)   Earnings (loss) per share
|------------------------------

Basic
earnings (loss) per share are calculated using the weighted average number of
shares outstanding during each of the years (note 15).

Diluted
earnings (loss) per share are calculated based on the weighted average number of
common shares outstanding in each of the years, plus the effects of dilutive
common share equivalents, such as options and warrants outstanding. This method
requires that the dilutive effect of outstanding options and warrants be
calculated using the treasury stock method, as if all dilutive options and
warrants had been exercised at the later of the beginning of the reporting
period or date of issuance, and that the funds obtained thereby were used to
purchase common shares of the Company at the average trading price of the common
shares during the year.



|q)   Comparative figures
|------------------------

Certain
comparative figures have been reclassified to conform with the current years
presentation.



|3   Change in accounting policiesa)   For changes affecting
      2003
|----------------------------------------------------------------------

Stock-based compensation and other stock-based
payments

During the
fourth quarter of 2003, the Company adopted, retroactive to January 1, 2003, the
fair value method of accounting for stock options granted to employees. Under
this method, the fair value of options granted to employees is charged to
expense over the future vesting period. In accordance with the transitional
provisions of the Canadian Institute of Chartered Accountants (CICA) Handbook
Section 3870, Stock-Based Compensation and Other Stock-Based Payments, the
Company has elected to apply this new method prospectively to options granted to
employees on or after January 1, 2003. Consequently, prior period financial
statements have not been restated; however, the Company continues to provide pro
forma disclosures as if the fair value method of accounting had been applied
retroactively.



|Impairment of long-lived
assets
|-------------------------------

CICA
Handbook section 3063, Impairment of Long-Lived Assets, provides guidance on
the recognition, measurement and disclosure of the impairment of long-lived
assets. It replaces the write-down provisions in Section 3061, Property, Plant
and Equipment. The provisions of the Section require an impairment loss for a
long-lived asset to be held and used to be recognized when its carrying amount
exceeds the sum of the undiscounted cash flows expected from its use and
eventual disposition. The impairment loss is measured as the amount by which its
carrying amount exceeds its fair value. The adoption of this section did not
have a significant impact on the

110

---



|financial
      statements.
|---------------------------



|Disposal of long-lived assets and discontinued
      operations
|---------------------------------------------------------------

CICA
Handbook section 3475, Disposal of Long-Lived Assets and Discontinued
Operations, provides guidance on recognizing, measuring, presenting and
disclosing long-lived assets to be disposed of and replaces the disposal
provisions in Section 3475, Discontinued Operations and Section 3061,
Property, Plant and Equipment. The Section provides criteria for classifying
assets as held for sale to be measured at the lower of carrying value and fair
value less costs to sell, provides criteria for classifying a disposal as a
discontinued operation and specifies presentation and disclosure for
discontinued operations and other disposals of long-lived assets. The adoption
of this section did not have a significant impact on the financial
statements.



|b)   For
      changes affecting 2004Asset retirement
    obligations
|---------------------------------------------------------------------

CICA
Handbook section 3110, Asset Retirement Obligations, focuses on the
recognition and measurement of liabilities for obligations associated with the
retirement of property, plant and equipment when those obligations result from
the acquisition, construction, development or normal operation of the assets.
The adoption of this section did not have a significant impact on the financial
statements.



|c)For changes affecting 2005
      and future yearsConsolidation of variable interest
      entities
|----------------------------------------------------------------------------------------------------

CICA
Accounting Guideline 15, Consolidation of Variable Interest Entities, provides
clarification on the consolidation of those entities defined as variable
interest entities, when equity investors are not considered to have a
controlling financial interest or they have not invested enough equity to allow
the entity to finance its activities without additional subordinated financial
support from other parties. Variable interest entities are commonly referred to
as special purpose entities. The guideline comes into effect for interim periods
beginning on or after November 1, 2004. The adoption of this section did not
have a significant impact on the financial statements.



|Financial instruments
|---------------------

On April 1,
2005, the CICA issued three new Handbook sections: Section 1530 Comprehensive
Income, Section 3855 Financial Instruments  Recognition and Measurement, and
Section 3865 Hedges. These new sections apply to fiscal years beginning on or
after October 1, 2006 with earlier adoption permitted as of the beginning of a
fiscal year ending on or after December 31, 2004.

Section 3855
Financial Instruments  Recognition and Measurement requires all financial
instruments to be classified as either Held to Maturity, Loans and Receivables,
Held for Trading, or Available for Sale. The Held to Maturity classification is
restricted to fixed maturity instruments that the Company intends and is able to
hold to maturity. Loans and Receivables and Held to Maturity investments are
accounted for at amortized cost. Securities that are acquired for selling in the
near term are classified as Held for Trading are accounted for at fair value
with realized and unrealized gains and losses reported in net income. The
remaining financial instruments are classified

111

---

as Available
for Sale and are measured at fair value with unrealized gains and losses, not
affecting income, but reported in a new category in Shareholders equity called
Other Comprehensive Income.

Section 3865
Hedges which replaces Accounting Guideline 13 Hedging Relationships requires
that all derivatives, including hedges, be measured at fair value. Changes in
the fair value of a derivative which hedges the Companys exposure that the fair
value of an asset or liability will change due to a particular risk are
recognized in net income together with those of the respective offsetting hedged
item. However, changes in the fair value of a derivative which hedges the
Companys exposure to changing cash flows are accumulated in Other Comprehensive
Income until the transaction being hedged affects net income.

Section 1530
Other Comprehensive Income, a new category in the Shareholders equity
section, includes in addition to the items mentioned above, unrealized foreign
currency translation gains and losses, net of hedging activities.

The Company
will adopt these recommendations for its fiscal year 2007.



|4   Functional currency
|-----------------------

During the
first quarter of fiscal 2004, the Company determined that the functional
currency of its wholly owned subsidiary, Mamma.com Enterprises Inc., had clearly
changed from the Canadian dollar to the U.S. dollar as at the beginning of the
quarter. As a result of this change, which has been applied prospectively from
January 1, 2004, transactions entered into by Mamma.com Enterprises Inc. which
are denominated in currencies other than the U.S. dollar are translated into
U.S. dollars using the temporal method. Under this method, monetary assets and
liabilities are translated into U.S. dollars at the exchange rate in effect on
the balance sheet date.

Non-monetary
assets and liabilities are translated into U.S. dollars at historical exchange
rates. Revenues and expenses are translated into U.S. dollars at the exchange
rates prevailing at the dates of the respective transactions. Gains and losses
resulting from translation of monetary assets and liabilities into U.S. dollars
are reflected in the consolidated statements of operations.

Prior to
this change, the functional currency of Mamma.com Enterprises Inc. was the
Canadian dollar. Accordingly, the financial statements of Mamma.com Enterprises
Inc. were translated from Canadian dollars into U.S. dollars using the current
rate method. Gains and losses resulting from translation of these financial
statements were included in the cumulative translation adjustment in
shareholders equity. The translated amounts for non-monetary items as at
January 1, 2004 are the historical basis for those items in subsequent
periods.



|5   Discontinued operations
|---------------------------

Digital
Arrow LLC and High Performance Broadcasting, Inc.

In September
2005, following the poor performance of Digital Arrow LLC and High Performance
Broadcasting, Inc. (Digital Arrow) located in Florida, management decided to
discontinue its subsidiarys operations. The Company has therefore not renewed
the lease in Florida and recorded closing costs.

Consequently, the results of the operations of Digital Arrow were
recorded as discontinued operations and the results of the Company for the years
ended December 31, 2005 and 2004 were reclassified to account for the
closure

112

---

of the
subsidiarys operations. The Company had acquired Digital Arrow on June 10,
2004, a privately held marketing company that was engaged in the distribution of
on-line, opt-in e-mail marketing solutions via the Internet. In that
acquisition, the Companys wholly owned subsidiary, Mamma.com USA, Inc., entered
into a Securities Purchase Agreement with Digital Arrow and their equity
holders, pursuant to which Mamma.com USA, Inc. acquired all equity interests in
Digital Arrow. The consideration for the acquisition, including costs directly
related to the acquisition, consisted of $1,264,210 in cash, net of cash
acquired, and 90,000 of the Companys common shares. The fair value of the
Company shares issued to owners of Digital Arrow was determined to be $8.23 per
share. This value has been determined using the average closing price of the
Companys common stock for five days before and five days after March 3, 2004,
the date the significant terms and conditions of the transaction were agreed to
and publicly announced. The operations of the business have been included in
these financial statements since June 1, 2004.

This
acquisition has been accounted for using the purchase method. The fair value of
the net assets acquired was $1,535,744 and goodwill of $556,196, for a total
purchase price of $2,091,940. From this purchase price, $740,782 was paid by
issuance of the Companys common shares, $86,948 was cash acquired at the
transaction for a cash paid net of cash acquired of $1,264,210.



|IBT
|---

On September
9, 2003, the Company announced that it had received and accepted, subject to
completion of due diligence, an offer for the sale of its wireless billing
subsidiary, IBT. The results of operations and cash flows for IBT have been
reported separately as discontinued operations in the consolidated statements of
operations and cash flows, and the remaining assets and liabilities of IBT have
been segregated on the consolidated balance sheets. Comparative figures for the
year ended December 31, 2004 and 2003 have been reclassified in order to comply
with this presentation.

On February
12, 2004, the Company concluded the sale of IBTs assets which include
contracts, customer lists, intellectual property, fixed assets and tangible and
intangible assets relating to the business.

The proceeds
of disposal was $1,699,185 with a gain on disposal of $1,588,923 which has been
included in the Results of discontinued operations line in the consolidated
statements of operations. The Company was entitled to additional consideration
of up to a maximum of $250,000 should certain events occur or conditions be met.
As of December 31, 2004, an amount of $100,000 of such contingent consideration
had been earned by the Company and recorded in results of discontinued
operations. The Company recorded, for 2004, net costs for an amount of $544,927
which represented the net of revenue of $621,296 and expenses of $1,166,223
including closing costs. An amount of $148,000 has been kept in escrow and has
been released in 2005. In 2005, no events occurred or conditions were met for
the remaining contingent consideration of $150,000.

113

---

|The gain on disposal is
      detailed as follows:                  |  |             |  |                          |  |          
|------------------------------------------------------------------- |  | ----------- |  | ------------------------ |  | ---------
|                                                                   
|                                                                    |  |             |  |                          |  | $        
|Proceeds                                                            |  |             |  |                          |  | 1,699,185
|                                                                   
|Assets disposed and related
      fees                              |  |             |  |                          |  |          
|Equipment                                                           |  |             |  |                          |  | 210,916  
|Other assets, net                                                   |  |             |  |                          |  | (22,843) 
|Legal and other fees                                                |  |             |  |                          |  | 133,579  
|Cumulative translation
      adjustment related to the sales of IBT |  |             |  | (211,390)               
|                                                                    |  |             |  |                         
|                                                                    |  |             |  |                          |  | 110,262  
|                                                                    |  |             |  |                         
|                                                                   
|Gain on disposal                                                    |  |             |  |                          |  | 1,588,923
|                                                                    |  |             |  |                         
|                                                                   
|Summary of assets and liabilities of discontinued
      operations  |  |             |  |                         
|                                                                   
|                                                                   
|                                                                   
|                                                                    |  |             |  | As at
      December 31,
|                                                                    |  |             |  | 2005                     |  | 2004     
|                                                                    |  |             |  | $                        |  | $        
|                                                                   
|Current assets                                                      |  |             |  |                          |  |          
|Accounts receivable                                                 |  |             |  | 9,694                    |  | 268,246  
|Other
      current assets                                          |  |             |  | -                        |  | 6,524    
|                                                                    |  |            
|                                                                    |  |             |  | 9,694                    |  | 274,770  
|                                                                    |  |            
|                                                                   
|Assets                                                              |  |             |  |                          |  |          
|Property, plant and equipment                                       |  |             |  | -                        |  | 70,195   
|Intangible assets                                                   |  |             |  | -                        |  | 1,256,466
|Goodwill                                                            |  |             |  | -                        |  | 556,196  
|                                                                    |  |            
|                                                                    |  |             |  | -                        |  | 1,882,857
|                                                                    |  |            
|                                                                   
|Liabilities                                                         |  |             |  |                          |  |          
|                                                                   
|Accounts payable and accrued liabilities                            |  |             |  | 189,223                  |  | 543,584  
|Deferred revenue                                                    |  |             |  | -                        |  | 23,525   
|Income
      taxes payable                                          |  |             |  | -                        |  | 85,000   
|                                                                    |  |            
|                                                                    |  |             |  | 189,223                  |  | 652,109  
|                                                                    |  |            
|                                                                   
|Summary of
      discontinued operations                            |  |             |  |                          |  |          
|                                                                   
|                                                                    |  | 2005        |  | 2004                     |  | 2003     
|                                                                    |  | $           |  | $                        |  | $        
|                                                                   
|Revenues                                                            |  | 474,409     |  | 1,793,977                |  | 6,493,986
|                                                                    |  |            
|Earnings (loss) before income taxes                                 |  | (2,315,335) |  | 733,654                  |  | (32,220) 
|                                                                    |  |            
|Net earnings (loss)                                                 |  | (2,315,335) |  | 733,654                  |  | (300,053)
|                                                                    |  |            

114

---

For the years 2005 and 2004,
earnings (loss) before income taxes are the same as net earnings (loss). In 2004, this
was due to benefits arising to prior years tax losses not previously recognized. In 2003,
the Company recorded a provision for income taxes due to a tax assessment disallowing
research and development tax credits claimed in prior years.



|6   Business
acquisitions
|-------------------------



|Copernic Technologies
Inc.
|--------------------------

On December
22, 2005, the Company acquired 100% of the issued and outstanding securities of
Copernic including an amount to cover Copernic's outstanding stock appreciation
right obligations.

Copernic
develops cutting-edge search and information management solutions that enable
home and business PC users to maximize their information assets and become more
efficient and proactive in their daily activities. Copernic is dedicated to
providing its customers with cost-effective Web and desktop search technology
that enables better decision-making and increased productivity.

The
consideration for the acquisition, including costs directly related to the
acquisition, consisted of $15,851,922 in cash including $3,297,007 paid to
settle Copernics stock appreciation right and severance obligations net of cash
acquired. The Company also issued 2,380,000 common shares as part of the
consideration paid. The fair value of the Company shares issued to owners of
Copernic has been determined to be $2.958 per share. This value has been
determined using the average closing price of the Companys common stock for two
days before and after August 17, 2005, the date the significant terms and
conditions of the transaction were agreed to and publicly announced.

This
acquisition has been accounted for using the purchase method and the results of
operations have been included in the statement of operations from the date of
acquisition. The purchase price allocation was finalized upon receipt of a
valuation report.

This
acquisition has been accounted for using the purchase method. The fair value of
the net assets acquired is summarized below:

Copernic2005$Cash
    
    851,130Accounts
      receivable
    
    1,383,228Prepaid
    
    65,994Income tax
      receivable
    
    496,219Future income taxes
      (current)
    
    33,403Future income taxes
      (long-term)
    
    13,442Income tax
      credit
    
    54,746Property, plant and
      equipment
    
    314,284Software
    
    65,220


115

---

|Patents                                                   |  | 69,527    
|--------------------------------------------------------- |  | ----------
|Trade names                                               |  | 2,500,000 
|Customer relationships                                    |  | 2,000,000 
|Technology                                                |  | 3,400,000 
|                                                          |  |           
|                                                         
|Total assets acquired                                     |  | 11,247,193
|                                                         
|Accounts payable and accrued liabilities                  |  | 226,822   
|Future income taxes                                       |  | 2,686,000 
|                                                          |  |           
|Total liabilities assumed                                 |  | 2,912,822 
|                                                         
|Net identifiable assets acquired                          |  | 8,334,371 
|Goodwill                                                  |  | 15,408,721
|                                                          |  |           
|                                                         
|Purchase price                                            |  | 23,743,092
|Less:                                                     |  |           
|Common shares issued                                      |  | 7,040,040 
|Cash acquired                                             |  | 851,130   
|                                                          |  |           
|Consideration paid net of cash acquired                   |  | 15,851,922
|                                                          |  |           
|                                                         
|Goodwill is not deductible
      for income tax purposes. |  |           



|7   Temporary
Investments
|-------------------------

Temporary
investments consist of commercial paper bearing a weighted average interest rate
4.09% per annum (2004  2.29%) and maturing on various dates up to April 2006.
The market value of the commercial paper as at December 31, 2005 and 2004
approximates its book value.

|8   Accounts receivable                           |  |           |  |          
|------------------------------------------------- |  | --------- |  | ---------
|Accounts receivable
      comprise the following: |  |           |  |          
|                                                  |  | 2005      |  | 2004     
|                                                  |  | $         |  | $        
|Trade accounts receivable                         |  | 2,689,648 |  | 2,578,745
|Allowance for doubtful accounts                   |  | (276,402) |  | (205,223)
|                                                  |  |           |  |          
|                                                  |  | 2,413,246 |  | 2,373,522
|Other                                             |  | 210,694   |  | 129,013  
|                                                  |  |           |  |          
|                                                  |  | 2,623,940 |  | 2,502,535
|                                                  |  |           |  |          

116

---

|9      Investments                                                  |  |         |  |        
|------------------------------------------------------------------- |  | ------- |  | -------
|                                                                   
|Investments comprise the
      following:                           |  |         |  |        
|                                                                   
|                                                                    |  | 2005    |  | 2004   
|                                                                    |  | $       |  | $      
|                                                                   
|LTRIM Technologies Inc. (4,891,686 Class A                        |  |         |  |        
|common shares
      and 359,281 Class A preference shares) (i)    |  | 720,000 |  | 720,000
|Tri-Link Technologies Inc. (4,054,874 Preference shares)
      (ii) |  | -       |  | -      
|TECE, Inc. (5,000,000 Common shares) (ii)                           |  | -       |  | -      
|                                                                    |  |         |  |        
|                                                                   
|                                                                    |  | 720,000 |  | 720,000
|                                                                    |  |         |  |        

The fair
value of LTRIM Technologies Inc. has been established at $720,000 by independent
appraisal and nil for Tri-Link Technologies Inc. and TECE, Inc. as of December
31, 2005.

|i)   | In
      2004, due to a permanent impairment in value, the Company wrote off
      $365,286 of its investment in LTRIM Technologies Inc.                                                                                                                                                                   
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|ii)  | In
      2001 and 2002, due to a permanent impairment in value, the Company wrote
      off its investments in Tri-Link Technologies Inc. (Tri-Link) and TECE,
      Inc. In 2005, The Company received $41,878 from Tri-Link, this amount has
      been recorded in other income.                      
|    
|iii) | On
      August 28, 2003, the Company sold its entire investment in uPath.com Inc.
      for CA$45,000 (US$32,499). As this investment had been written off in its
      entirety in 2002 due to a permanent impairment in value, the gain on
      disposal of the investment amounted to $32,499 in 2003.
|    

|10 |  | Property, plant and
      equipment |  |           |  |              |  |        
|-- |  | ----------------------------------- |  | --------- |  | ------------ |  | -------
|  
|   |  |                                     |  |           |  |              |  | 2005   
|   |  |                                    
|   |  |                                     |  |           |  | Accumulated  |  |        
|   |  |                                     |  | Cost      |  | amortization |  | Net    
|   |  |                                     |  | $         |  | $            |  | $      
|   |  |                                     |  |           |  |              |  |        
|   |  | Computer
      equipment            |  | 1,221,578 |  | 821,160      |  | 400,418
|   |  | Furniture and
      fixtures        |  | 171,485   |  | 62,921       |  | 108,564
|   |  | Leasehold
      improvements        |  | 177,642   |  | 87,866       |  | 89,776 
|   |  |                                     |  |           |  |              |  |        
|  
|   |  |                                     |  | 1,570,705 |  | 971,947      |  | 598,758
|   |  |                                     |  |           |  |              |  |        
|  
|   |  |                                     |  |           |  |              |  | 2004   
|   |  |                                     |  |           |  |              |  |        
|  
|   |  | Computer
      equipment            |  | 1,022,586 |  | 754,127      |  | 268,459
|   |  | Furniture and
      fixtures        |  | 87,104    |  | 53,825       |  | 33,279 
|   |  | Leasehold
      improvements        |  | 87,181    |  | 84,295       |  | 2,886  
|   |  |                                     |  |           |  |              |  |        
|  
|   |  |                                     |  | 1,196,871 |  | 892,247      |  | 304,624
|   |  |                                     |  |           |  |              |  |        

117

---

|11      Goodwill and other intangible
      assets |  |           |  |              |  |          
|-------------------------------------------------- |  | --------- |  | ------------ |  | ---------
|                                                  
|Intangible
      assets                            |  |           |  |              |  |          
|                                                  
|                                                   |  |           |  |              |  | 2005     
|                                                  
|                                                   |  |           |  | Accumulated  |  |          
|                                                   |  | Cost      |  | amortization |  | Net      
|                                                   |  | $         |  | $            |  | $        
|                                                  
|Trade
      names                                  |  | 2,912,869 |  | 276,148      |  | 2,636,721
|Technology                                         |  | 3,705,217 |  | 211,961      |  | 3,493,256
|Customer
      relationships                       |  | 2,424,985 |  | 149,210      |  | 2,275,775
|Software                                           |  | 181,760   |  | 56,920       |  | 124,840  
|Patents                                            |  | 71,439    |  | 183          |  | 71,256   
|                                                   |  |           |  |              |  |          
|                                                  
|                                                   |  | 9,296,270 |  | 694,422      |  | 8,601,848
|                                                   |  |           |  |              |  |          
|                                                  
|                                                   |  |           |  |              |  | 2004     
|                                                  
|                                                  
|Trade
      names                                  |  | 412,869   |  | 185,745      |  | 227,124  
|Technology                                         |  | 305,217   |  | 132,289      |  | 172,928  
|Customer
      relationships                       |  | 424,985   |  | 92,100       |  | 332,885  
|Software                                           |  | 63,098    |  | 42,257       |  | 20,841   
|                                                   |  |           |  |              |  |          
|                                                  
|                                                   |  | 1,206,169 |  | 452,391      |  | 753,778  
|                                                   |  |           |  |              |  |          

Goodwill

The changes
in the carrying amount of goodwill for the years ended December 31, 2005 and
2004 are as follows:

|                                                           |   | Copernic   |   | focusIN |   | Total     
|---------------------------------------------------------- | - | ---------- | - | ------- | - | ----------
|                                                           |   |            |   |         |  
|                                                           | $ |            | $ |         | $
|                                                           |   |            |   |         |  
|Balance    December 
      31, 
      2003 and
      2004 |   | -          |   | 846,310 |   | 846,310   
|Business acquisitions
      (note 6)                       |   | 15,408,721 |   | -       |   | 15,408,721
|                                                           |   |            |   |         |   |           
|Balance    December 
      31, 
      2005                |   | 15,408,721 |   | 846,310 |   | 16,255,031
|                                                           |   |            |   |         |   |           

118

---

|12      Accounts payable and accrued
      liabilities                 |  |           |  |          
|---------------------------------------------------------------------- |  | --------- |  | ---------
|                                                                      
|Accounts payable and
      accrued liabilities comprise the following: |  |           |  |          
|                                                                      
|                                                                       |  | 2005      |  | 2004     
|                                                                       |  | $         |  | $        
|                                                                      
|                                                                      
|Trade accounts payable                                                 |  | 1,860,183 |  | 1,513,127
|Other                                                                  |  |           |  |          
|Accrued employee
      costs                                           |  | 415,942   |  | 285,666  
|Directors and officers
      payable                                   |  | 384,102   |  | 433,401  
|Payable to a company owned
      by a current director (a) (b)         |  | 30,716    |  | 12,764   
|                                                                       |  |           |  |          
|                                                                      
|                                                                       |  | 2,690,943 |  | 2,244,958
|                                                                       |  |           |  |          

| | (a) | The
      amount payable to a company owned by a current director relates to
      consulting agreement between the Company and the company owned by a
      current director.                                                                                                                                                               
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Services provided by a director acting as an Executive
      Chairman for 2005 were $202,658 (2004  $182,687; 2003  $171,465). The
      transactions are in the normal course of operations and are measured at
      the exchange amount which is the amount of the consideration established
      and agreed to by the related parties.
|



|13      Capital stock
|---------------------

On September
7, 2004, the Company filed a Notice of Intention with the Ontario Securities
Commission to make a Normal Course Issuer Bid (the Notice). In the Notice, the
Company stated its intention to purchase on the open market at prevailing market
prices, through the facilities of the NASDAQ stock market, up to a maximum of
600,000 of its common shares, being approximately 5% of the outstanding common
shares, and common shares comprising the public float, as at December 31, 2004.
At the expiration period, on September 7, 2005, the Company did not file a new
notice.

During the
year ended December 31, 2004, the Company did not purchase any of its
outstanding common shares. During the year ended December 31, 2005, the Company
redeemed 304,665 of its common shares at a weighted average purchase price of
$3.46, for a total amount of $1,053,155. The $1,195,147 excess of stated capital
value over the redemption amount has been credited to additional paid-in
capital.



|Stock
      options
|-------------------

The
Companys stock option plan is administered by the Compensation Committee, which
is a subcommittee of the Board of Directors. The Compensation Committee
designates eligible participants to be included under the plan, and designates
the number of options and the share price pursuant to the new options, subject
to applicable securities laws and stock exchange regulations. The options, when
granted, will have an exercise price of no less than the market price of shares
at the date of grant and a life not exceeding 10 years. The options vest in
equal increments over a period of three or four years, commencing one year from
the grant date. The number of options granted in any fiscal year shall not
exceed 15% of the issued and outstanding common shares at the date of the
grant.

119

---

In 2003,
227,500 stock options at exercise prices between $1.99 and $3.58 expiring
between seven and ten years were granted to officers and employees of the
Company.

In 2004,
10,000 stock options were cancelled and granted with new conditions. The fair
value of these new granted options were estimated as the date of grant using the
Black-Scholes option pricing model.

On November
2, 2004, the Company granted to Officers and Members of the Board of the
Company, 295,000 stock options at an exercise price of $7.08 expiring in five
years.

On February
2, 2005, the Officers and Members of the Board of Directors of the Company to
whom the above-mentioned stock options had been granted, waived and renounced
any and all rights that each had or may have had on the options. Consequently,
the options were cancelled as of that date. The stock-based compensation costs
of $138,395 recorded as of December 31, 2004 pertaining to these options was
reversed in the first quarter of 2005.

On February
16, 2005, 55,800 and 39,196 stock options at an exercise price of $6.28 expiring
in five years were granted to officers and employees of the Company,
respectively.

On November
8, 2005, the Company granted to Officers and Members of Board of the Company,
430,000 stock options at an exercise price of $2.28 expiring in five years.

|Information with respect to stock option activity for, 2003,
      2004 and 2005 is as follows: |  |                  
|----------------------------------------------------------------------------------------------- |  | -----------------
|                                                                                               
|                                                                                                |  |                  
|                                                                                                |  | Number of options
|                                                                                                |  |                  
|                                                                                                |  |                  
|Outstanding  December 31,
      2002                                                           |  | 377,180          
|                                                                                               
|Granted                                                                                         |  | 227,500          
|Forfeited                                                                                       |  | (28,357)         
|Exercised                                                                                       |  | (129,678)        
|                                                                                                |  |                  
|Outstanding  December 31,
      2003                                                           |  | 446,645          
|                                                                                               
|Granted                                                                                         |  | 305,000          
|Forfeited                                                                                       |  | (16,000)         
|Expired                                                                                         |  | (18,750)         
|Exercised                                                                                       |  | (255,561)        
|                                                                                                |  |                  
|Outstanding  December 31,
      2004                                                           |  | 461,334          
|                                                                                                |  |                  
|                                                                                               
|Granted                                                                                         |  | 524,996          
|Forfeited                                                                                       |  | (322,747)        
|Exercised                                                                                       |  | (2,500)          
|                                                                                                |  |                  
|Outstanding  December 31,
      2005                                                           |  | 661,083          
|                                                                                                |  |                  

120

---

|Details of stock options outstanding as at December 31, 2005
      are as follows: |  |                 |  |                        
|---------------------------------------------------------------------------------- |  | --------------- |  | -----------------------
|                                                                                  
|                                                                                   |  |                 |  | Outstanding options    
|                                                                                   |  |                 |  |                        
|                                                                                  
|Range
      of                                                                     |  | Number
      of |  | Weighted               
|exercise
      prices                                                              |  | options         |  | average
      remaining
|$                                                                                  |  |                 |  | contractual
      life 
|                                                                                   |  |                 |  | (years)                
|1.50  1.99                                                                        |  | 30,834          |  | 6.51                   
|2.38  3.58                                                                        |  | 555,500         |  | 5.05                   
|6.28                                                                               |  | 74,749          |  | 6.13                   
|                                                                                   |  |                 |  |                        
|                                                                                   |  | 661,083         |  | 5.24                   
|                                                                                   |  |                 |  |                        

As at
December 31, 2004 and 2003 there were 33,667 and 222,478 options exercisable at
weighted average prices of $3.15 and $1.99, respectively.

The fair
values of all options granted during 2005, 2004 and 2003 were estimated as of
the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions:

|                                   |  | 2005  |  | 2004  |  | 2003 
|---------------------------------- |  | ----- |  | ----- |  | -----
|                                   |  | $     |  | $     |  | $    
|                                  
|Expected option life
      (years) |  | 4.21  |  | 4.00  |  | 4.04 
|Volatility                         |  | 79%   |  | 88%   |  | 82%  
|Risk-free interest
      rate      |  | 3.78% |  | 3.70% |  | 4.00%
|Dividend
      yield               |  | nil   |  | nil   |  | nil  

The weighted
average grant-date fair values for stock options granted during 2005, 2004 and
2003 were $1.90, $4.61 and $2.71 per option, respectively.

Stock-based
compensation expense recognized in 2005, 2004 and 2003 in regards to the stock
options was $136,933, $301,944 and $113,365, respectively.



|Pro
      forma stock-based compensation
disclosures
|----------------------------------------------------

As described
in note 3, the Company adopted, retroactive to January 1, 2003, the fair value
method of accounting for stock options granted to employees and has applied this
new method on a prospective basis. Following is a summary of what the net
earnings (loss) and related per share figures would have been for 2005, 2004 and
2003 if the Company had applied this change retroactively to all prior
years.

121

---

|   |  |                                                                        |  | 2005        |  | 2004      |  | 2003     
|-- |  | ---------------------------------------------------------------------- |  | ----------- |  | --------- |  | ---------
|   |  |                                                                        |  | $           |  | $         |  | $        
|   |  | Net earnings (loss) for the year                                       |  | (5,658,318) |  | 1,104,407 |  | (211,063)
|   |  | Additional compensation costs                                          |  | 17,496      |  | 17,496    |  | 14,203   
|   |  |                                                                        |  |             |  |           |  |          
|   |  | Pro forma net earnings (loss)                                          |  | (5,675,814) |  | 1,086,911 |  | (225,266)
|   |  |                                                                        |  |             |  |           |  |          
|   |  | Pro forma net earnings (loss) per share:                               |  |             |  |           |  |          
|   |  | Basic                                                                  |  | (0.47)      |  | 0.10      |  | (0.04)   
|   |  | Diluted                                                                |  | (0.47)      |  | 0.10      |  | (0.04)   
|   |  |                                                                        |  |             |  |           |  |          
|  
|  
|14 |  | Additional paid-in capital and deferred
      stock-based compensation |  |             |  |          

On March 16,
2004, the Company retained Merriman Curhan Ford & Co. (MCF) as a financial
advisor and as an investment banking advisor. The Company then signed two
separate agreements. In consideration for financial services, the Company had
committed to pay MCF a monthly fee of $5,000 for a minimum obligation of $30,000
and 10,000 warrants per month with a minimum issuance of 60,000 warrants, each
warrant gives the rights to purchase one common share of the Company. Warrants
are issuable at an exercise price equal to the average closing bid for the last
five trading days at the end of the month of issue, for the duration of the
agreement upon the same terms and conditions. The warrants have a life of five
years from the issuance date. For the investment banking services, the Company
had committed to pay a cash financing completion fee equal to 6% of the total
amount of capital received by the Company from the sale of its equity securities
and warrants to purchase common shares of the Company in an amount equal to 6%
of the number of common shares purchased by investors in capital raising
transactions. The warrants are immediately exercisable at the higher of the
price per share at which the investor can acquire common shares or the closing
price of the Company's common shares at the date of the capital raising
transaction. For mergers and acquisitions, the Company had committed to pay a
success fee upon closing equal to the sum of 4% of up to $10,000,000 transaction
value, 3% of $10,000,000 to $15,000,000 transaction value and 2% of greater than
$15,000,000 transaction value, provided that MCF either introduces and/or
performs specific services for the transaction. The minimum success fee for a
transaction is $200,000. For a sale transaction, the Company had committed to
pay a success fee with the same parameters of an acquisition except for the
minimum fee which is $500,000.

For the
period ended December 31, 2004, 40,000 warrants were issued to MCF at an average
price of $12.31, the fair value of which was $260,301 estimated as of grant date
using the Black-Sholes pricing model, and charged to expense with a
corresponding credit to additional paid-in capital. The following weighted
average assumptions were used:

|Expected option
      life    |  | 3.5 years
|----------------------------- |  | ---------
|Volatility                    |  | 86%      
|Risk-free interest
      rate |  | 3.99%    
|Dividend
      yield          |  | nil      

On July 16,
2004, the agreement for financial services, dated March 16, 2004 was
amended.The
Company committed to pay MCF a monthly fee of $5,000 for eight months from July
16, 2004. The agreement for investment banking services was amended on July 16,
2004, on September 8, 2004 and subsequently on October 12, 2005. The Company
then is committed to pay a success fee upon closing equal to the sum of 3% of up
to $20,000,000 transaction value, 1.5% of the excess of $20,000,000. If an
acquisition transaction is less than 50% interest in the Company or the Target,
a fee shall be payable in cash for 7% of the transaction value. If transaction
is not

122

---

consummated
and the Company is entitled to receive break-up fee and other form of
compensation, the Company then will pay to MCF 30% of Company's entire
entitlement. In the event that the Board deems it necessary or appropriate for a
fairness opinion to be rendered in connection with an acquisition transaction,
MCF will receive a Fairness Opinion Fee of $200,000 for rendering its opinion,
payable upon delivery of the Fairness Opinion and will be credited against the
M&A Completion Fee due to MCF.

On June 30,
2004, the Company sold under a securities purchase agreement an aggregate of
1,515,980 common shares and 606,392 warrants to certain accredited investors for
an aggregate price of $16,599,981. Net proceeds from the offering amounted to
$15,541,162, net of issue cost of $1,058,819, $996,000 of which was paid to MCF.
For this specific transaction, MCF waived their entitlement to a warrant
component of the financing completion fee. Each warrant entitles the accredited
investors to purchase one additional common share at an exercise price equal to
$15.82 per share. The warrants will be exercisable beginning six months after
the closing date, and will have a term of five years from the closing
date.

The amounts
allocated to the shares and warrants totalled $13,158,329 and $3,441,652,
respectively. These amounts have been allocated based upon the relative fair
values of the shares and warrants at the date they were issued. The estimated
fair values of the warrants have been determined using the Black-Scholes pricing
model and the following weighted average assumptions:

|Expected option
      life    |  | 5 years
|----------------------------- |  | -------
|Volatility                    |  | 86%    
|Risk-free interest
      rate |  | 4.19%  
|Dividend
      yield          |  | nil    

In 2003, the
Company granted 105,000 warrants at an average price of $2.50 to Maxim Group,
LLC for financial advisory fees, the fair value of which was $84,566 estimated
as of the grant date using the Black-Scholes pricing model, and charged to
expense during the year with a corresponding credit to additional paid-in
capital. These warrants vested immediately and expire after three
years.

On December
12, 2002, the Company completed a private placement of 1,893,939 units, each
unit consisting of one common share and one A warrant, for total gross proceeds
amounting to $2,500,000, or $1.32 per unit. Each A warrant vests immediately,
expires on November 30, 2004, and permits the holder to purchase one additional
common share of the Company at an exercise price of $1.40 per share. The private
placement agreement provides for a reload feature, whereby upon exercise of the
entire A warrants, the holders are entitled to receive one new B warrant for
each A warrant exercised. The B warrant vests immediately upon issuance, expires
on November 30, 2006, and permits the holder to purchase an additional common
share at an exercise price of $1.50 per share. As at December 31, 2004, the
totality of the A and B warrants had been exercised.

123

---

Information
with respect to warrant activity for 2003, 2004 and 2005 is as
follows:

|                                               |  |                 |  | Weighted
|---------------------------------------------- |  | --------------- |  | --------
|                                               |  |                 |  | average 
|                                               |  | Number
      of |  | exercise
|                                               |  | warrants        |  | price   
|                                               |  |                 |  | $       
|                                              
|Outstanding  December 31,
      2002          |  | 2,037,409       |  | 1.42    
|                                              
|Issued (i)                                     |  | 247,045         |  | 1.94    
|Forfeited                                      |  | (1,425)         |  | 30.80   
|Exercised                                      |  | (284,090)       |  | 1.45    
|                                               |  |                 |  |         
|                                              
|Outstanding  December 31,
      2003          |  | 1,998,939       |  | 1.46    
|                                              
|Issued - B
      warrants                      |  | 1,893,939       |  | 1.50    
|Issued -
      Other                           |  | 646,392         |  | 15.60   
|Exercised                                      |  | (3,892,878)     |  | 1.48    
|                                               |  |                 |  |         
|                                              
|Outstanding  December 31,
      2004 and 2005 |  | 646,392         |  | 15.60   
|                                               |  |                 |  |         

(i) Does not include warrants to be issued
in connection with the B warrant reload feature described above. For various
price ranges, the weighted average characteristics of warrants outstanding and
exercisable as at December 31, 2005 were as follows:

|                      |  |                 |  | Weighted
      average |  |                 
|--------------------- |  | --------------- |  | ---------------------- |  | ----------------
|Range
      of        |  | Number
      of |  | remaining              |  | Weighted average
|exercise
      prices |  | warrants        |  | contractual
      life |  | exercise price  
|$                     |  |                 |  | (years)                |  | $               
|                     
|11.34  13.89         |  | 40,000          |  | 3.41                   |  | 12.31           
|15.82                 |  | 606,392         |  | 3.50                   |  | 15.82           
|                      |  |                 |  |                        |  |                 
|                     
|                      |  | 646,392         |  | 3.49                   |  | 15.60           
|                      |  |                 |  |                        |  |                 

15      Earnings (loss) per share

|                                                  |  | 2005       |  | 2004       |  | 2003     
|------------------------------------------------- |  | ---------- |  | ---------- |  | ---------
|                                                  |  | $          |  | $          |  | $        
|                                                 
|Weighted average number of
      shares  Basic   |  | 12,168,117 |  | 10,758,604 |  | 6,207,360
|                                                 
|Additions to reflect the
      impacts of:        |  |            |  |            |  |          
|Exercise of stock
      options                   |  | -          |  | 121,195    |  | 93,854   
|Exercise of warrants
      (i)                    |  | -          |  | 330,107    |  | 1,740,022
|                                                  |  |            |  |            |  |          
|                                                 
|Weighted average number of
      shares  Diluted |  | 12,168,117 |  | 11,209,906 |  | 8,041,236
|                                                  |  |            |  |            |  |          

124

---

(i) In 2003,
includes B warrants issuable upon exercise of the A warrants described in note
14.

Options to
purchase 309,895 common shares (2004  48,361; 2003  18,750), warrants to
purchase 646,392 common shares (2004  327,712; 2003  16,000) have been
excluded from the above calculations since they would have an anti-dilutive
effect.

|16 |  | Revenues                  |  |           |  |            |  |          
|-- |  | ------------------------- |  | --------- |  | ---------- |  | ---------
|  
|   |  |                           |  | 2005      |  | 2004       |  | 2003     
|   |  |                           |  | $         |  | $          |  | $        
|  
|  
|   |  | Search
      advertising  |  | 4,935,617 |  | 9,659,024  |  | 5,787,980
|   |  | Graphic
      advertising |  | 4,456,399 |  | 4,965,198  |  | 3,150,883
|   |  | Other                     |  | 72,544    |  | 12,096     |  | -        
|   |  |                           |  |           |  |            |  |          
|  
|   |  |                           |  | 9,464,560 |  | 14,636,318 |  | 8,938,863
|   |  |                           |  |           |  |            |  |          

17      Cost of revenues

| |  |                       |  | 2005      |  | 2004      |  | 2003     
| |  | --------------------- |  | --------- |  | --------- |  | ---------
| |  |                       |  | $         |  | $         |  | $        
| |  |                      
| |  |                      
| |  | Partner
      payouts |  | 1,637,878 |  | 3,940,350 |  | 2,471,927
| |  | Media
      Purchase  |  | 2,264,700 |  | 2,384,262 |  | 1,213,387
| |  | ISP Charges           |  | 279,965   |  | 214,601   |  | 305,951  
| |  | Other                 |  | 21,487    |  | -         |  | -        
| |  |                       |  |           |  |           |  |          
| |  |                       |  | 4,204,030 |  | 6,539,213 |  | 3,991,265
| |  |                       |  |           |  |           |  |          

18      Consolidated statement of cash flows

In 2005, the
consideration for the acquisition of Copernic (Digital Arrow in 2004) includes
2,380,000 (90,000 for Digital Arrow) of the Companys common shares at a
determined fair value of $2.958 ($8.23 for Digital Arrow) per share. Therefore,
$7,040,040 ($740,782 for Digital Arrow) representing the value of the
consideration paid by the issuance of capital stock are excluded from business
acquisitions and issuance of capital stock.

In 2003,
financial fees paid in lieu of cash amounted to $17,000.

125

---

19      Net
change in non-cash working capital items

|                                         |  | 2005      |  | 2004      |  | 2003       
|---------------------------------------- |  | --------- |  | --------- |  | -----------
|                                         |  | $         |  | $         |  | $          
|                                        
|Cash flows from (used
      for):        |  |           |  |           |  |            
|                                        
|Accounts receivable                      |  | 1,266,077 |  | (215,782) |  | (1,033,078)
|Income taxes receivable                  |  | 12,100    |  | (104,129) |  | (15,259)   
|Prepaid expenses and other assets        |  | (99,707)  |  | (39,651)  |  | (3,083)    
|Accounts payable and accrued liabilities |  | 227,841   |  | (35,737)  |  | 81,709     
|Deferred revenue                         |  | 13,702    |  | 92,732    |  | 388        
|                                         |  |           |  |           |  |            
|                                        
|                                         |  | 1,420,013 |  | (302,567) |  | (969,323)  
|                                         |  |           |  |           |  |            

20      Income taxes a)      The provision for (recovery of) income taxes is detailed as
follows:

|                         |  | 2005     |  | 2004    |  | 2003    
|------------------------ |  | -------- |  | ------- |  | --------
|                         |  | $        |  | $       |  | $       
|                        
|Current                  |  | (12,046) |  | 153,825 |  | -       
|Future
      (recovered) |  | (13,964) |  | 400,855 |  | (77,636)
|                         |  |          |  |         |  |         
|                         |  | (26,010) |  | 554,680 |  | (77,636)
|                         |  |          |  |         |  |         

126

---

|b) | A
      reconciliation of the combined Canadian Federal and provincial income tax
      rate with the Companys effective income tax rate is as follows:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|  

|                                                        |  | 2005        |  | 2004      |  | 2003     
|------------------------------------------------------- |  | ----------- |  | --------- |  | ---------
|                                                        |  | $           |  | $         |  | $        
|                                                       
|Earnings (loss) from
      continuing operations        |  |             |  |           |  |          
|before income taxes                                     |  | (3,368,993) |  | 925,433   |  | 11,354   
|                                                        |  |             |  |           |  |          
|Expected provision for
      (recovery of) income       |  |             |  |           |  |          
|taxes at the statutory rate                             |  | (1,070,666) |  | 287,069   |  | 3,749    
|                                                        |  |             |  |           |  |          
|Impact of foreign and
      provincial rates            |  | (348)       |  | 10,965    |  | -        
|Change in future income
      tax balance due to        |  |             |  |           |  |          
|change in rate                                          |  | (947,104)   |  | -         |  | -        
|Unrecognized benefit of
      current year tax losses   |  |             |  |           |  |          
|and undeducted research and development                 |  |             |  |           |  |          
|expenses, and other temporary differences               |  | 2,067,696   |  | 500,116   |  | 465,295  
|Benefit of prior years
      tax losses not previously |  |             |  |           |  |          
|recognized                                              |  | (93,681)    |  | (17,178)  |  | -        
|Recognition of future
      benefit of prior years     |  |             |  |           |  |          
|temporary differences, including tax                    |  |             |  |           |  |          
|losses and undeducted research and                      |  |             |  |           |  |          
|development expenses                                    |  | -           |  | -         |  | (577,482)
|Permanent difference,
      including amortization      |  |             |  |           |  |          
|and impairment of goodwill and write-                   |  |             |  |           |  |          
|down of investment                                      |  | 18,093      |  | (226,292) |  | 30,802   
|                                                        |  |             |  |           |  |          
|                                                       
|Provision for (recovery
      of) income taxes          |  | (26,010)    |  | 554,680   |  | (77,636) 
|                                                        |  |             |  |           |  |          

127

---

|c) | The
      major components of the net future income tax asset classified by the
      source of temporary differences are as follows:
|-- | -------------------------------------------------------------------------------------------------------------------------------------
|  

|                                                    |  | 2005         |  | 2004        
|--------------------------------------------------- |  | ------------ |  | ------------
|                                                    |  | $            |  | $           
|                                                   
|Assets                                              |  |              |  |             
|Property, plant and
      equipment                 |  | 2,839,093    |  | 2,558,945   
|Non-capital losses
      (expiring 2006-2015)       |  | 8,635,786    |  | 6,443,236   
|Unrealized impairment
      losses on investments   |  | 764,853      |  | 740,295     
|Research and development
      expenses             |  | 362,077      |  | -           
|Financing
      expenses                            |  | 257,648      |  | 341,871     
|Intangible
      assets                             |  | 217,521      |  | -           
|Goodwill                                            |  | 188,693      |  | 116,079     
|Other                                               |  | 39,971       |  | -           
|                                                    |  |              |  |             
|                                                    |  | 13,305,642   |  | 10,200,426  
|                                                    |  |              |  |             
|                                                   
|Liabilities                                         |  |              |  |             
|Intangible
      assets                             |  | 2,672,036    |  | -           
|                                                    |  |              |  |             
|                                                   
|Net future income tax
      assets before valuation |  | 10,633,606   |  | 10,200,426  
|Valuation
      allowance                           |  | (13,258,654) |  | (10,200,426)
|                                                    |  |              |  |             
|                                                    |  | (2,625,048)  |  | -           
|                                                    |  |              |  |             
|                                                   
|                                                   
|Presented as:                                       |  |              |  |             
|Current asset                                       |  | 33,505       |  | -           
|Long-term
      asset                               |  | 13,483       |  | -           
|Long-term
      liability                           |  | 2,672,036    |  | -           
|                                                    |  |              |  |             
|                                                    |  | (2,625,048)  |  | -           
|                                                    |  |              |  |             

As at
December 31, 2005, the Company also has temporary differences in United Kingdom
of $60,974 (2004-nil), in United States of America for $2,084,346
(2004-$1,088,042) and in Australia for $628,937 (2004- $678,675) with no
expiration date. No future tax assets were recognized in 2005 and in 2004 for
these temporary differences.

In addition,
the Company has capital losses amounting to $14,724,484 in 2005
(2004-$14,107,504) without expiring date. No future tax assets were recognized
in 2005 and in 2004 for these capital losses.

128

---

|d) | As
      at December 31, 2005, the Company has non-capital loss carryforwards
      totalling approximately $25,210,000 for Federal and provincial income tax
      purposes which may be used to reduce taxable income in future
      years.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | These losses may be claimed no later than fiscal years ending
      December 31:                                                                                                                                                              
|  

|     |  | $        
|---- |  | ---------
|    
|2006 |  | 4,438,000
|2007 |  | 4,817,000
|2008 |  | 3,509,000
|2009 |  | 2,558,000
|2010 |  | 3,417,000
|2014 |  | 852,000  
|2015 |  | 5,619,000

21      Product development and technical support expenses

The
following details the net product development and technical support expenses
included in the consolidated statements of operations:

|                                                         |  | 2005      |  | 2004    |  | 2003   
|-------------------------------------------------------- |  | --------- |  | ------- |  | -------
|                                                         |  | $         |  | $       |  | $      
|                                                        
|Product development and
      technical support expenses |  | 1,276,346 |  | 809,347 |  | 477,634
|Research and development
      expenses                  |  | 31,600    |  | 168,715 |  | 249,906
|                                                         |  |           |  |         |  |        
|                                                         |  | 1,307,946 |  | 978,062 |  | 727,540
|                                                        
|Less: research and
      development tax credits         |  | 21,601    |  | 86,521  |  | 128,157
|                                                         |  |           |  |         |  |        
|                                                        
|                                                         |  | 1,286,345 |  | 891,541 |  | 599,383
|                                                         |  |           |  |         |  |        

22      Segment information

The Company
had a single reporting segment until the acquisition of Copernic on December 22,
2005, resulting in the creation of a second reporting segment from that date
forward. Since the Company reports Copernics operations from the date of the
acquisition transaction (duration of 8 days), revenues of this segment are
included in Other specified in the table below.

129

---

|Geographic
      segment              |  |            |  |            |  |          
|------------------------------------- |  | ---------- |  | ---------- |  | ---------
|                                     
|                                      |  | 2005       |  | 2004       |  | 2003     
|                                      |  | $          |  | $          |  | $        
|Revenues:                             |  |            |  |            |  |          
|Canada                                |  | 207,048    |  | 225,773    |  | 238,655  
|United States                         |  | 7,449,614  |  | 13,427,257 |  | 8,499,380
|Europe                                |  | 1,650,907  |  | 873,924    |  | 126,272  
|Other                                 |  | 156,991    |  | 109,364    |  | 74,556   
|                                      |  |            |  |            |  |          
|                                      |  | 9,464,560  |  | 14,636,318 |  | 8,938,863
|                                      |  |            |  |            |  |          
|                                     
|                                      |  | 2005       |  | 2004       |  | 2003     
|                                      |  | $          |  | $          |  | $        
|Long-lived
      assets and goodwill: |  |            |  |            |  |          
|Canada                                |  | 25,455,637 |  | 1,904,712  |  | 2,149,336
|                                      |  |            |  |            |  |          
|                                      |  | 25,455,637 |  | 1,904,712  |  | 2,149,336
|                                      |  |            |  |            |  |          

23      Major Customers

The Company
has two major customers, each account for more than 10% of the Company's sales.
Sales for each of them represented approximately 14% (2004 - 2%; 2003 - 0%) and
11% (2004 - 11%; 2003 - 8%), respectively, of the Company's sales. The
outstanding accounts receivable from these customers as at December 31, 2005
amount to approximately 8% (2004 - 4%) and 1% (2004 - 14%), respectively, of the
total accounts receivable.

24      Contingencies and commitments

Informal
SEC inquiry to formal investigation

On March 18,
2004, the United States Securities and Exchange Commission (SEC) notified the
Company that the SEC had begun an informal inquiry relating to trading activity
in the Companys securities. During March of 2004, trading in the Companys
common stock had been intense and the market price of the common stock had risen
sharply.

The SEC has
since issued a formal order of investigation in this matter. As a part of its
investigation, the Company believes the SEC may consider matters related to
trading in the Companys securities and whether an individual and persons acting
jointly or in concert with him may have had a significant influence on the
Company in the past as a result of undisclosed shareholdings. (See
Special
Investigation of Independent Committee below.) The Company also believes that the
Commissions staff may consider matters relating to the Companys financial
reporting and internal controls. The scope, focus and subject matter of the SEC
investigation may change from time to time and the Company may be unaware of
matters under consideration by the SEC. The Company intends to continue
cooperating with the SEC in its investigation

130

---



|Purported Securities Class Action
  Lawsuit
|-------------------------------------------

On February
22, 2005, the first of several purported securities class action lawsuits was
filed in the United States District Court, Southern District of New York against
the Company, and certain of the Companys current officers and directors. The
plaintiffs allege, among other things, violations of the Securities Exchange Act
of 1934 for purportedly failing to disclose and misrepresenting certain
allegedly material facts relative to the market for and trading in the Companys
stock, and seek unspecified damages. The purported class actions appear to be
based on unsubstantiated rumours and newspaper reports. All of these lawsuits
have been consolidated. The Company denies the allegations of wrongdoing against
it, believes that the purported claims are without merit, intends to defend
itself vigorously, and has moved for dismissal of the consolidated
lawsuit.

The
Companys director and officer liability insurance is expected to cover most of
the costs incurred in defending the purported securities class action in excess
of the $250,000 retention paid. The insurer has paid most of the fees and
expenses to date, except an amount of approximately $26,000 which has not been
paid; the insurer is asserting that some fees and expenses of the class action
defense counsel were outside the scope of coverage. The Company does not believe
the insurer will successfully maintain this position with respect to the minimal
unpaid amount of fees and expenses.



|Special Investigation of Independent
    Committee
|--------------------------------------------------

Following
press reports in January 2005 and in response to recommendations made by the
Companys former independent auditor, the Companys Board of Directors initiated
an investigation under the supervision of a Special Independent Committee
consisting of independent directors of the Audit Committee with independent
legal counsel to investigate the allegations in the press reports. Those press
reports claimed that Irving Kott and persons acting jointly or in concert with
him may have had a controlling influence on the Company in the past as a result
of undisclosed shareholdings. The Special Committee and its independent counsel
have reviewed the relevant information available at the time of the
investigation relating to the period from January 1, 1999 to December 31, 2004.
While the Special Committee did note some evidence of contacts with and
involvement by Mr. Kott and persons with whom he may have had an association,
based on its review, the Special Committee has not found evidence establishing
that Mr. Kott had a controlling influence on the Corporation during such
period.

131

---



|Commitments
|-----------

The Company
is committed under operating lease agreements. Future minimum payments under
these leases as of December 31, 2005 are as follows:

|                                |  |      |  | $      
|------------------------------- |  | ---- |  | -------
|                               
|Years ending December
      31, |  |      |  |        
|                                |  | 2006 |  | 329,000
|                                |  | 2007 |  | 218,000
|                                |  | 2008 |  | 182,000
|                                |  | 2009 |  | 106,000
|                                |  | 2010 |  | 71,000 
|Thereafter                      |  |      |  | -      

Other
commitments

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.



|25      Financial instrumentsCurrency
risk
|------------------------------------------

The Company
operates internationally and is exposed to market risks principally from changes
in foreign currency rates. The Company does not hold any financial instruments
that mitigate this risk.



|Credit
      risk
|-----------------

Financial
instruments which potentially subject the Company to credit risk consist
principally of cash, short-term investments, temporary investments and accounts
receivable. The Companys cash, short-term investments and temporary investments
are maintained at major financial institutions; therefore, the Company considers
the risk of non-performance on these instruments to be remote.

The Company
is exposed to credit risk on accounts receivable from its customers. The Company
performs ongoing credit evaluations of its customers financial condition and
generally requires no collateral from its customers. As at December 31, 2005,
approximately 39% of accounts receivable are due from two customers, as compared
to 30% from four customers in the previous year.

132

---



|Fair
      value of financial instruments
|-----------------------------------------

The carrying
amounts reflected in the consolidated balance sheets for cash and cash
equivalents, bank overdraft, temporary investments, accounts receivable and
accounts payable and accrued liabilities approximate their respective fair
values due to the short maturities of those instruments. The fair value of the
Companys investments is presented in note 9.



|Interest rate risk
|------------------

As at
December 31, 2005, the Companys exposure to interest rate risk is summarized as
follows:

|Cash and cash
      equivalents                |  | Variable interest
      rates
|---------------------------------------------- |  | -----------------------------
|Temporary
      investments                    |  | From 4.06% to
      4.12%    
|Accounts
      receivable                      |  | Non-interest
      bearing   
|Accounts payable and
      accrued liabilities |  | Non-interest
      bearing   

26     United States generally accepted
accounting principles

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 U.S. GAAP as they specifically
relate to the Company.

For the
years ended December 31, 2005, 2004 and 2003, the Company does not have any
significant adjustments to record in order to reconcile its reported net
earnings (loss) under Canadian GAAP and U.S. GAAP.

|                                                       |  | 2005        |  | 2004      |  | 2003     
|------------------------------------------------------ |  | ----------- |  | --------- |  | ---------
|                                                       |  | $           |  | $         |  | $        
|Other
      comprehensive income (loss)                |  |             |  |           |  |          
|Foreign currency translation adjustment (a)            |  | 9,485       |  | (80,680)  |  | 717,257  
|                                                       |  |             |  |           |  |          
|Net earnings (loss) in
      accordance with U.S. GAAP |  | (5,658,318) |  | 1,104,407 |  | (211,063)
|                                                       |  |             |  |           |  |          
|Comprehensive income
      (loss)                      |  | (5,648,833) |  | 1,023,727 |  | 506,194  
|                                                       |  |             |  |           |  |          

133

---

The effects
of these adjustments on the consolidated balance sheets of the Company are as
follows:

|                                                                  |  | 2005         |  | 2004        
|----------------------------------------------------------------- |  | ------------ |  | ------------
|                                                                  |  | $            |  | $           
|Capital
      stock                                               |  |              |  |             
|Capital stock in
      accordance with Canadian GAAP              |  | 95,298,234   |  | 90,496,088  
|Reduction of stated
      capital (b)                             |  | 16,769,570   |  | 16,769,570  
|                                                                  |  |              |  |             
|                                                                 
|Capital stock in
      accordance with U.S. GAAP                  |  | 112,067,804  |  | 107,265,658 
|                                                                  |  |              |  |             
|                                                                 
|Additional
      paid-in capital                                  |  |              |  |             
|Additional paid-in capital
      in accordance with Canadian GAAP |  | 5,985,077    |  | 5,255,249   
|Stock-based compensation
      costs (c)                          |  |              |  |             
|Cumulative effect of prior
      years                            |  | 1,037,690    |  | 1,037,690   
|                                                                  |  |              |  |             
|                                                                 
|Additional paid-in capital
      in accordance with U.S. GAAP     |  | 7,022,767    |  | 6,292,939   
|                                                                  |  |              |  |             
|                                                                 
|Deferred
      stock-based compensation costs in accordance with  |  |              |  |             
|Canadian and U.S.
      GAAP                                      |  | (735,175)    |  | (1,333,443) 
|                                                                  |  |              |  |             
|                                                                 
|Accumulated
      other comprehensive gain (loss)(a)              |  |              |  |             
|Cumulative translation
      adjustment in accordance with        |  |              |  |             
|Canadian GAAP                                                     |  | 370,369      |  | 360,884     
|                                                                  |  |              |  |             
|                                                                 
|Accumulated
      deficit                                         |  |              |  |             
|In accordance with
      Canadian GAAP                            |  | (68,401,524) |  | (62,743,206)
|Reduction of stated
      capital to deficit (b)                  |  | (16,769,570) |  | (16,769,570)
|Stock-based compensation
      costs (c)                          |  |              |  |             
|Cumulative effect of prior
      years                            |  | (1,037,690)  |  | (1,037,690) 
|                                                                  |  |              |  |             
|                                                                 
|Accumulated deficit in
      accordance with U.S. GAAP            |  | (86,208,784) |  | (80,550,466)
|                                                                  |  |              |  |             
|                                                                 
|Total
      shareholders equity in accordance with U.S. GAAP     |  | 32,516,981   |  | 32,035,572  
|                                                                  |  |              |  |             

134

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|Consolidated statement of cash
  flows
|--------------------------------------

The
consolidated statement of cash flows was prepared under Canadian GAAP. There are
no measurement differences between Canadian GAAP and U.S. GAAP as they
specifically apply to the Company.



|a)      Comprehensive income (loss)
|-----------------------------------

U.S. GAAP
requires disclosures of comprehensive income (loss) which comprises any charges
or credits to shareholders equity not related to investments or distributions
to shareholders and not otherwise classified in the consolidated statements of
operations for the year. Under Canadian GAAP, there is no requirement to report
comprehensive income (loss).



|b)      Reduction of stated capital
|-----------------------------------

Under U.S.
GAAP, the reduction of stated capital in the amount of $16,769,570 undertaken by
the Company on June 28, 1995 would not be permitted.



|c)      Stock-based compensation costs
|--------------------------------------

As described
in note 3, the Company prospectively adopted the fair value method of accounting
for stock options granted to employees. As a result of this change, there is no
difference between the Companys net earnings (loss) for 2005, 2004 and 2003
under U.S. GAAP as compared to Canadian GAAP.



|d)      Non-refundable tax credits
|----------------------------------

Under U.S.
GAAP, non-refundable tax credits must be presented as a reduction of the
provision for income taxes. Under Canadian GAAP, these tax credits are presented
as a reduction of the related research and development expenses. Under U.S.
GAAP, there would be no change in earnings (loss) from continuing operations and
net earnings (loss) for the year; however, earnings (loss) from continuing
operations before income taxes and recovery of income taxes under U.S. GAAP
would be as follows:

|                                                                     |  | 2005        |  | 2004    |  | 2003     
|-------------------------------------------------------------------- |  | ----------- |  | ------- |  | ---------
|                                                                     |  | $           |  | $       |  | $        
|Earnings (loss)
      from continuing operations before income taxes |  | (3,368,993) |  | 871,711 |  | (66,571) 
|Provision for (recovery)
      of income taxes                       |  |             |  |         |  |          
|Current                                                              |  | (12,046)    |  | 153,825 |  | -        
|Future                                                               |  | (13,964)    |  | 347,133 |  | (155,561)

135

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|27
      Subsequent EventsFees incurred in SEC
      investigation
|------------------------------------------------------------------

On March 28,
2006, the Company's insurance broker advised the Company's that its insurance
carrier was willing to pay an amount up to $460,000 in settlement of claims to
date for the legal representation costs incurred in 2005 for directors and
officers of the Company with respect to their appearance at the SEC
investigation and for legal counsel for named individuals in the securities
class action. The settled amount will be recorded in the first quarter of
2006.



|Purported Securities Class Action
  Lawsuits
|--------------------------------------------

On March 28,
2006, the court in the consolidated case denied a motion the Company filed for
dismissal of the consolidated complaint. The Company denies the allegations
against it, believes that the purported claims are without merit, and intends to
continue defend itself vigorously (see note 24).



136

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|ITEM 18.   FINANCIAL STATEMENTSNot applicable.See Item 17
      above.ITEM 19.   EXHIBITS
|-----------------------------------------------------------------------------------------

The
following exhibits are filed in support of the statements contained herein and
are in addition to those exhibits previously filed with the
Commission:

| | 1.1 | Articles of Incorporation of Mamma.com Inc, as amended.
      (Filed as Exhibit 1.1 to the Companys Form 20-F filed May 31,
      2005)                                                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 1.2 | Bylaws of Mamma.com Inc., as amended. (Filed as Exhibit 1.2
      to the Companys Form 20-F filed May 31, 2005)                                                                                                                                                                                                                                                                             
|
| | 4.1 | Consulting Agreement between Dave Goldman Advisors Ltd. and
      Intasys Corporation dated October 30, 2001 and renewed on May 1, 2002.
      (Filed as Exhibit 4.4 to the Companys Form 20-F filed May 31,
      2005)                                                                                                                                                                    
|
| | 4.2 | Consulting Agreement between Maxim Group LLC and Intasys
      Corporation dated January 29, 2003, the Amended Agreement dated May 5,
      2003 and the termination letter regarding the investment banking
      agreement. (Filed as Exhibit 4.5 to the Companys Report on Form 20-F
      filed May 31, 2005)                                                                           
|
| | 4.3 | Consulting Agreement between Sam Luft and Intasys Corporation
      dated April 1, 2002 and expired on March 1, 2003. (Filed as Exhibit 4.6 to
      the Companys Form 20-F filed May 31, 2005)                                                                                                                                                                                             
|
| | 4.4 | Asset Purchase Agreement dated January 27, 2004 (without
      Exhibits and Schedules), the Amendment to Asset Purchase Agreement dated
      February 12, 2004, the Escrow Agreement dated February 12, 2004 and the
      Indemnity Agreement dated February 12, 2004 between Mamma.com Inc. and
      ACE*COMM. (Filed as Exhibit 4.7 to the Companys Form 20-F filed May 31,
      2005)
|
| | 4.5 | Merriman Curhan Ford & Co. Advisory Agreement and
      Engagement Letter dated March 16, 2004 (Filed as Exhibit 4.8 to the
      Companys Form 20-F filed May 31, 2005)                                                                                                                                                                                                                    
|

137

---

| | 4.6   | Securities Purchase Agreement among the Company, Chris Tsistinas, Erik
Kretschmar, Digital Arrow LLC and High Performance Broadcasting, Inc. dated June 10, 2004. (Filed as Exhibit 4.9 to the
Companys Report on Form 20-F filed May 31, 2005)
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 4.7   | Securities Purchase Agreement among the Company and the several
purchasers thereunder dated June 30, 2004. (Filed as Exhibit 4.10 to the Companys Form 20-F filed May 31,
2005)                                                                
|
| | 4.8   | Revised Merriman Curhan Ford & Co. Advisory Agreement and Engagement Letters dated July 16 and September 8, 2004. (Filed as
Exhibit 4.11 to the Companys Form 20-F filed May 31, 2005).                                                        
|
| | 4.9   | Amendment to Consulting Agreement among Mamma.com Inc. and Dave Goldman Advisors Ltd. and David Goldman dated May 23,
2005.                                                                                                                     
|
| | 4.10  | Share Purchase Agreement among Mamma.com Inc., Martin
Bouchard, Eric Bouchard, 4332903 Canada, Inc., 4332911 Canada, Inc. and others, (Filed as Exhibit 99.2 to the Companys
Form 6-K filed December 29, 2005)                                 
|
| | 4.11  | Share Purchase Agreement among Mamma.com Inc., Copernic
      Technologies, Inc. and others dated December 22, 2005 (Filed as Exhibit 99.3 to the Company Form 6-K filed December 29,
2005).                                                    
|
| | 8.1*  | List of Subsidiaries of Mamma.com Inc.                                                                                                                                                                                                          
|
| | 11*   | Code of Ethics                                                                                                                                                                                                                                  
|
| | 12.1* | Certification of Guy Fauré under Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934.                                                                                                                                       
|
| | 12.2* | Certification of Daniel Bertrand under Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934.                                                                                                                                 
|
| | 13.1* | Certifications under Rule 13a-14(a) or Rule 15d-14(a) of
the Securities Exchange Act of 1934 and Section 1350 of Chapter 18 of Title 18 of the United States Code.                                                                              
|
| | 15.1* | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                          
|
| | 15.2* | Consent of RSM Richter LLP.                                                                                                                                                                                                                     
|
| | 15.3* | Audit and Finance Committee Charter                                                                                                                                                                                                             
|
| | 15.4* | Compensation Committee Charter                                                                                                                                                                                                                  
|
| | 15.5* | Nominating and Corporate Governance Committee
Charter                                                                                                                                                                                           



|*Filed as an Exhibit to this Annual Report on Form
      20-F.
|--------------------------------------------------------------

138

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SIGNATURES

Pursuant to
the requirements of Section 12 of the Securities Exchange Act of 1934, the
registrant certifies that it meets all requirements for filing an Annual Report
on Form 20-F and has duly caused this Annual Report to be signed on its behalf.

|Dated:March 29,
      2006 |  |     |  |                     |  |                                                           
|-------------------------- |  | --- |  | ------------------- |  | ----------------------------------------------------------
|                           |  |     |  | MAMMA.COM INC.     
|                          
|                          
|                           |  | By: |  | /s/ David Goldman  
|                           |  |     |  | Name:               |  | David Goldman                                             
|                           |  |     |  | Title:              |  | Executive
      Chairman                                  
|                          
|                          
|                           |  |     |  | /s/ Guy Fauré      
|                           |  |     |  | Name:               |  | Guy Fauré                                                 
|                           |  |     |  | Title:              |  | President and Chief
Executive Officer                     
|                          
|                          
|                           |  |     |  | /s/ Daniel Bertrand
|                           |  |     |  | Name:               |  | Daniel
      Bertrand                                     
|                           |  |     |  | Title:              |  | Executive Vice President
      and Chief Financial Officer

139