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Copernic Inc. Announces 2009 Fourth Quarter Results

Fri, 03/26/2010 - 1:30pm
The Associated Press

Copernic Inc., (the "Company"), (NASDAQ: CNIC), a leading software development company in the technology sector, specializing in internet, desktop and mobile search products, today reported its financial results for the fourth quarter ended December 31, 2009 ("Q4 2009"). Unless otherwise stated, all figures in this release are in US dollars. For comparison purposes, comparative figures have been re-casted to reflect the sale of Mamma.com and its AD Network.

Financial Highlights -- Revenues from continuing operations were $0.37 million for Q4 2009,

compared to $0.69 million for Q4 2008. Revenues from continuing

operations for the year 2009 were $1.65 million, compared to $2.22

million for 2008. -- Gross margin from continuing operations in Q4 2009 was 98% compared to

98% for Q4 2008. For the year 2009 gross margin from continuing

operations was 96% compared to 95% for 2008. -- Expenses from continuing operations in the fourth quarter of 2009 were

at $1.1 million, compared to $5.5 million in the comparable period in

2008, including write-downs of $4.3 million. Expenses from continuing

operations for the year 2009 were at $4.5 million, compared to $10.5

million for the year 2008, including write-downs of $4.3 million. -- Net loss in Q4 2009 was $0.7 million ($0.34 per share) compared to a net

loss of $4.2 million ($2.04 per share) for the same period in 2008. Net

income for the year 2009 was $2.1 million ($1.01 per share) compared to

a loss of $6.5 million ($3.10 per share) for 2008. -- Liquidities sufficient to meet normal operating requirements until end

of 2010 were at $4 million as of December 31, 2009, compared to $5.1

million as of December 31, 2008.

Recent Highlights -- As announced on February 12, 2010, Copernic Inc. amended the agreement

signed on November 12, 2009, pursuant to which the Company will issue,

by way of private placement, 500,000 shares at $4.00 per share for a

total proceeds of $2,000,000. The amended agreement also proposes a

purchase, by Copernic, of 70.1% of the common shares outstanding of

Sunbay Canada Corporation ("Sunbay"), a company registered in Ontario.

The Board of Directors of Sunbay will be comprised of three members

elected by Copernic, one of which will be Mr. Marc Ferland, Chief

Executive Officer of Copernic who will also hold this position for

Sunbay. In addition, Newlook Industries Corporation and Sunbay Energy

Corporation will each elect a representative. Based on this amended

agreement, Copernic will issue 150,000 common shares in exchange of its

equity position in Sunbay valued at $600,000 and 450,000 shares for cash

of $1,400,000. The closing is scheduled no later than April 30, 2010.

"Our sales shortfall compared to last year was the result of unfavorable economic conditions, particularly in corporate sales. Therefore we continued our rigorous cost reduction plan in an attempt to offset the sales shortfall and right size our operations as the result of the sale of our AD Network. Since December 2007, we have taken out $3.6 Million in operating expenses", stated Mr. Marc Ferland President and CEO of Copernic.

About Copernic Inc.

Copernic Inc. specializes in developing, marketing and selling cutting-edge search technology, providing innovative home and business software products and solutions for desktop, web and mobile users, through its online properties www.copernic.com (http://www.copernic.com) and www.mycopernic.com (http://www.mycopernic.com) . With its award winning Copernic Desktop Search software search engine product, the Company brings the power of a sophisticated, yet easy-to-use search engine to the user's PC.

More information can be found at www.copernic.com (http://www.copernic.com) .

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that can cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission and the Ontario Securities Commission. The Company expressly disclaims any intent or obligation to update any description of the scope, focus or subject matter of the statements in this press release. Copernic Inc. Condensed Consolidated Balance Sheets As at December 31, 2009 and 2008 ------------------------------------------------------------------- -------- (expressed in U.S. dollars and in accordance

with generally accepted accounting

principles in Canada)

2009 2008

$ $ Assets Current assets Cash 465,949 1,066,817 Temporary investments 3,504,930 4,006,115 Accounts receivable 256,110 907,560 Income taxes receivable 337,802 110,121 Balance of sale receivable 655,131 - Prepaid expenses 118,149 170,864 ------------------------------------------------------------------- --------

5,338,071 6,261,477 Balance of sale receivable 3,694,060 -Property and equipment 115,110 240,094 Intangible assets 202,597 918,485 Goodwill 3,362,003 3,362,003 ------------------------------------------------------------------- --------

12,711,841 10,782,059 ------------------------------------------------------------------- --------------------------------------------------------------------------- -------- Liabilities Current liabilities Accounts payable and accrued liabilities 1,010,140 991,142 Deferred revenue 103,668 156,789 Deferred rent 1,534 4,805 Current portion of obligations under capital

leases 50,630 57,267 ------------------------------------------------------------------- --------

1,165,972 1,210,003 ------------------------------------------------------------------- -------- Obligations under capital leases 7,906 39,992 Future income taxes 45,146 259,848 ------------------------------------------------------------------- -------- Commitments Shareholders' Equity Capital stock Authorized

Unlimited number of common shares, no par

value Issued and outstanding

2,091,437 common shares 96,556,485 96,556,485 Contributed Surplus 5,853,737 5,747,028 Accumulated other comprehensive income 561,137 561,137 Accumulated deficit (91,478,542) (93,592,434) ------------------------------------------------------------------- --------

11,492,817 9,272,216 ------------------------------------------------------------------- --------

12,711,841 10,782,059 ------------------------------------------------------------------- --------------------------------------------------------------------------- -------- Copernic Inc. Condensed Consolidated

Statements of Operations ------------------------------------------------------------------- -------- (expressed in U.S. dollars

and in accordance with

generally accepted

accounting principles in

Canada)

For the twelve months For the three months

ended ended

December 31, December 31,

2009 2008 2009 2008

$ $ $ $ Revenues 1,653,026 2,218,264 372,943 693,467 Cost of revenues 62,304 105,338 7,136 16,513 ------------------------------------------------------------------- -------- Gross Margin 1,590,722 2,112,926 365,807 676,954 ------------------------------------------------------------------- -------- Expenses Marketing, sales and

services 625,243 386,486 193,312 72,239 General and administration 2,329,947 2,907,964 566,536 525,309 Product development and

technical support 1,125,102 1,836,986 271,085 315,403 Amortization of property and

equipment 117,909 89,169 30,834 979 Amortization of intangible

assets 720,729 980,285 182,335 244,688 Write-downs and settlement

costs 10,924 4,381,840 10,924 4,381,840 Restructuring charges 33,677 101,012 13,053 69,621 Interest and other income (333,979) (162,880) (149,272) (40,306) Gain on disposal of an

investment (169,239) - - - Loss (gain) on foreign

exchange 70,772 (24,440) 23,643 (18,218) ------------------------------------------------------------------- --------

4,531,085 10,496,422 1,142,450 5,551,555 ------------------------------------------------------------------- -------- Loss from continuing

operations before income

taxes and discontinued operations (2,940,363) (8,383,496) (776,643) (4,874,601) Current income taxes 1,498 522 - (8,550) Future income taxes (656,347) (854,914) (60,067) (306,410) ------------------------------------------------------------------- -------- Recovery of income taxes (654,849) (854,392) (60,067) (314,960) ------------------------------------------------------------------- -------- Loss from continuing

operations (2,285,514) (7,529,104) (716,576) (4,559,641) Results of discontinued

operations, net of income

taxes 4,399,406 1,038,400 14,295 299,204 ------------------------------------------------------------------- -------- Net earnings (loss) for the

year 2,113,892 (6,490,704) (702,281) (4,260,437) ------------------------------------------------------------------- -------- Basic and diluted loss /

share - continuing

operations (1.09) (3.60) (0.34) (2.18) Basic and diluted earnings /

share - discontinued operations 2.10 0.50 0.01 0.14 ------------------------------------------------------------------- -------- Basic and diluted net

earnings (loss) / share 1.01 (3.10) (0.34) (2.04) ------------------------------------------------------------------- -------- Copernic Inc. Condensed Consolidated Statements of Cash Flows ------------------------------------------------------------------- -------- (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada)

For the twelve months For the three months

ended ended

December 31, December 31,

2009 2008 2009 2008

$ $ $ $ Cash flows from (used for) Operating activities Loss from continuing

operations (2,285,514) (7,529,104) (716,576) (4,559,641) Adjustments for - -

Amortization of property

and equipment 117,909 89,169 30,834 979

Amortization of intangible

assets 720,729 980,285 182,335 244,688

Employee stock-based

compensation 106,709 8,249 21,991 (5,317)

Write-down of goodwill - 3,995,000 - 3,995,000

Write-down of intangible

assets 1,462 343,768 1,462 343,768

Write-down of investment - - - -

Write-down of property and

equipment 9,462 43,072 9,462 43,528

Gain on disposal of an

investment (169,239) - - -

Future income taxes (656,347) (854,914) (60,067) (306,410)

Accreted interest on

balance of sale

receivable (200,823) - (74,730) -

Unrealized loss (gain) on

foreign exchange 10,529 (25,201) 2,027 (18,920) Net change in non-cash

working capital items 130,297 (391,011) (48,642) 439,726 ------------------------------------------------------------------- -------- Cash used for operating

activities from continuing operations (2,214,826) (3,340,687) (651,904) 177,401 Cash provided by

discontinued operations 1,051,219 1,620,116 (18,104) 518,304 ------------------------------------------------------------------- -------- Cash used for operations (1,163,607) (1,720,571) (670,008) 695,705 ------------------------------------------------------------------- -------- Investing activities Proceeds on the disposal of

an investment 169,239 - - - Purchase of intangible

assets (14,373) (5,054) (11,149) - Purchase of property and

equipment (30,627) (15,879) (1,730) (2,837) Net decrease (increase) in

temporary investments 3,005,227 960,157 - (3,005,227) ------------------------------------------------------------------- -------- Cash provided by (used for)

continuing operations 3,129,466 939,224 (12,879) (3,008,064) Cash used in discontinued

operations (579) - 229,090 -------------------------------------------------------------------- -------- Cash provided from (used

for) investing activities 3,128,887 939,224 216,211 (3,008,064) ------------------------------------------------------------------- -------- Financing activities Issuance of capital stock - - - -Repayment of obligations

under capital leases (62,106) (57,976) (17,641) (14,075) ------------------------------------------------------------------- -------- Cash provided from (used

for) financing activities (62,106) (57,976) (17,641) (14,075) ------------------------------------------------------------------- -------- Net change in cash and cash

equivalents during the

period 1,903,174 (839,323) (471,438) (2,326,434) Cash and cash equivalents -

Beginning of the period 2,067,705 2,907,028 4,442,317) 4,394,139 ------------------------------------------------------------------- -------- Cash and cash equivalents -

End of year 3,970,879 2,067,705 3,970,879 2,067,705 ------------------------------------------------------------------- --------------------------------------------------------------------------- -------- Cash and cash equivalents

comprise:

Cash 465,949 1,066,817 465,949 1,066,817

Temporary investments 3,504,930 4,006,115 3,504,930 4,006,115

Less: temporary

investments with maturity

date

in excess of 3 months from

date of issuance - (3,005,227) - (3,005,227) ------------------------------------------------------------------- --------

3,970,879 2,067,705 3,970,879 2,067,705 ------------------------------------------------------------------- --------

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