Mamma.com Releases 2005 Q2 Financials

Mamma.com Inc. (NASDAQ:MAMA)

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- Q2 2005 revenue decrease by 35% to $2.6 million due to a decline in
  business with a major customer from $1.4 million to $0.146 million
  partially offset by other Search and Ad Network revenue increases
- Write down and restructuring charges of $0.92 million related to
  Digital Arrow
- Additional expenses of $0.8 million for the purported securities
  class action lawsuits and the SEC investigation.
- Net Loss of $2.5 million ($0.20/share).
- Cash and cash equivalents still remain strong at $24 million.

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   Mamma.com Inc., (the "Company"), (NASDAQ:MAMA), reported its 
financial results for the second quarter ended June 30, 2005. Unless 
otherwise stated, all figures in this release are in US dollars.

   The Company's Q2 2005 net loss was $2,499,253 ($0.20 per share) 
compared to net earnings of $108,387 ($0.01 per share) for the same 
period in 2004. Revenue in the second quarter of 2005 was $2,590,220, 
35% below the $3,957,428 revenue for the same period in 2004. The 
reduction in revenue reflects the decline in business with a major 
customer from over $1.4 million to $146,000.  This is partially 
offset by revenue growth in the Company's Search and Ad Network 
revenue streams.

   Significant cost variances were: professional fees related to the 
purported securities class action lawsuits and SEC investigation of 
$784,000, increased directors and officers insurance of $165,000, 
$794,092 write-down of assets and restructuring charges of $127,874 
related to Digital Arrow due to the poor performance of its opt-in 
e-mail business unit. Payout costs over revenues decreased to 41% 
compared to 44.9% for the same quarter of 2004 due to a decrease in 
the percentage paid to partners combined with an increase in revenue 
generated from our meta search engine for which no payout costs are 
incurred.

   Cash and cash equivalents still remained strong at $23,999,936 
after the redemption of 304,665 common shares for $1,053,155, 
payments of directors and officers' insurance and additional fees 
related to the purported securities class action lawsuits and SEC 
investigation.

   Guy Faure, the Company's President and CEO stated: "Revenues in 
the current second quarter were below Q2 2004 due to a revenue 
decline of a major customer and as we reduced distribution of paid 
advertising in the search and Ad networks offering our advertisers 
only high demand traffic. The Opt-in email operations have not 
delivered management expected results and we are now taking action to 
reduce operational expenses and transfer most of the sales and 
operations to our Montreal head office."

   Guy Faure continued: "On June 20th Mamma announced the launch of 
its Mammahealth.com initiative. This specialised search application 
is the first in a series that will offer Internet users a unique 
search tool that queries "on-line & real-time"specialized data bases. 
The application provides search results from various specialized 
sources, and aggregates and presents content to the user in a 
consistent fashion. We have also recently announced an agreement with 
InfoSpace where they will provide distributed search results to be 
placed on the Mamma.com search engine beginning August 1, 2005. In 
the terms of the deal, InfoSpace will supply search results from some 
of the leading search engines on the Web.  Also, as part of the 
agreement, the distribution of InfoSpace paid links on Mamma.com is 
expected to increase the number of paid clicks to InfoSpace's paid 
search distribution network and increase search revenues for both 
companies.  Our ability to compete should be strengthened as we 
increase distribution and develop premium services, which should 
allow Mamma to increase its average selling price.

   The unaudited financial statements for the second quarter ended 
June 30, 2005 will shortly be available on SEDAR and EDGAR and on our 
Web site www.mammainc.com .

   About Mamma.com Inc.

   Mamma Media Solutions(TM) is focused on providing quality 
information retrieval on the Internet through its metasearch engine 
and is a leading provider of integrated marketing solutions to online 
advertisers. For more information, visit www.mammamediasolutions.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 United States Securities and Exchange 
Commission and the Ontario Securities Commission and include but are 
not limited to the extent to which the results of the SEC 
investigation or the purported securities class action law suits 
negatively affect the Company.  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.

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Mamma.com Inc.
Condensed Consolidated Balance Sheets
(Unaudited) (expressed in U.S. dollars and in accordance with 
generally accepted accounting principles in Canada)

                                                 As at         As at
                                               June 30,  December 31,
                                                  2005          2004
                                                     $             $
Assets

Current assets
Cash and cash equivalents                   23,999,936    20,609,089
Restricted cash                                      -       148,000
Temporary investments                                -     6,874,155
Accounts receivable                          2,232,084     2,689,540
Income taxes receivable                         71,920       120,590
Prepaid expenses                               663,392       135,110
Assets of discontinued operations               35,180        82,045
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                                            27,002,512    30,658,529

Investments                                    720,000       720,000

Property, plant and equipment                  373,619       374,819

Intangible assets                            1,390,242     2,010,244

Goodwill                                     1,008,868     1,402,506
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                                            30,495,241    35,166,098
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities     2,542,710     2,646,316
Deferred revenue                               289,466       256,984
Liabilities of discontinued operations          88,582       227,226
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                                             2,920,758     3,130,526
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Shareholders' Equity

Capital stock
Authorized
  Unlimited common shares, no par value
Issued and outstanding  11,958,364 common
 shares (12,263,029 in 2004)                88,247,786    90,496,088

Additional paid-in capital                   5,495,206     5,255,249

Deferred stock-based compensation             (396,112)   (1,333,443)

Cumulative translation adjustment              360,884       360,884

Accumulated deficit                        (66,133,281)  (62,743,206)
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                                            27,574,483    32,035,572
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                                            30,495,241    35,166,098
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Mamma.com Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (expressed in U.S. dollars and in accordance with 
generally accepted accounting principles in Canada)

                For the six months ended  For the three months ended
                                 June 30                     June 30
---------------------------------------------------------------------
                        2005        2004          2005          2004
                           $           $             $             $

Revenue            5,835,534   8,169,908     2,590,220     3,957,428
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Expenses
Search, graphic
 ad and email
 serving             138,545     104,954        64,050        50,399
Marketing, sales
 and services      3,828,433   4,698,891     1,811,514     2,318,989
General and
 administration    3,612,071   1,760,315     1,915,227     1,109,280
Product
 development and
 technical support   698,997     380,871       370,196       159,527
Amortization of
 property, plant
 and equipment        59,734      62,681        29,627        32,722
Amortization of
 intangible assets   276,743     116,952       139,697        69,172
Interest income     (311,156)    (29,218)     (160,385)      (21,486)
Loss (gain) on
 foreign exchange        276      (7,240)       (2,419)        1,491
Restructuring
 charges             127,874           -       127,874             -
Write-down of
 property, plant
 and equipment,
 intangible assets
 and goodwill        794,092           -       794,092             -
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                   9,225,609   7,088,206     5,089,473     3,720,094

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Earnings (loss)
 from continuing
 operations before
 income taxes     (3,390,075)  1,081,702    (2,499,253)      237,334

Provision for
 (recovery of)
 current income
 taxes                     -     168,299             -      (138,244)
Provision for
 future income
 taxes                     -     388,200             -       259,484
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Earnings (loss)
 from continuing
 operations       (3,390,075)    525,203    (2,499,253)      116,094

Results of
 discontinued
 operations                -     966,862             -        (7,707)
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Net earnings
 (loss) for the
 period           (3,390,075)  1,492,065    (2,499,253)      108,387
---------------------------------------------------------------------
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Net earnings
 (loss) per common
 share - basic
  Earnings (loss)
   from continuing
   operations          (0.28)       0.06         (0.20)         0.01
  Results of
   discontinued
   operations              -        0.10             -          0.00
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  Net earnings
   (loss) per
   common share
   - basic             (0.28)       0.16         (0.20)         0.01

Net earnings
 (loss) per common
 share - diluted
  Earnings (loss)
   from continuing
   operations          (0.28)       0.05         (0.20)         0.01
  Results of
   discontinued
   operations              -        0.09             -          0.00
---------------------------------------------------------------------
  Net earnings
   (loss) per
   common share
   - diluted           (0.28)       0.14         (0.20)         0.01

Weighted average
 number of shares
 outstanding
  - basic         12,261,346   9,275,229    12,259,681    10,542,582
Additions to
 reflect the
 impact of:
  Exercise of
   stock options           -     195,791             -       126,630
  Exercise of
   warrants                -     885,330             -        84,525
---------------------------------------------------------------------
Weighted average
 number of shares
 outstanding
 - diluted        12,261,346  10,356,350    12,259,681    10,753,737
---------------------------------------------------------------------
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Mamma.com Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (expressed in U.S. and dollars in accordance with
generally accepted accounting principles in Canada)

                For the six months ended  For the three months ended
                                 June 30                     June 30
---------------------------------------------------------------------
                        2005        2004          2005          2004
                           $           $             $             $

Cash flows from

Operating
 activities
  Earnings (loss)
   from continuing
   operations     (3,390,075)    525,203    (2,499,253)      116,094
  Adjustments for
   Amortization of
    property,
    plant and
    equipment         59,734      62,681        29,627        32,722
   Amortization of
    intangible
    assets           276,743     116,952       139,697        69,172
   Employee
    stock-based
    compensation     (17,859)     71,486        74,649        35,743
   Tax credits             -      81,505             -        91,379
   Future income
    taxes                  -     388,200             -       259,484
   Unrealized loss
    on foreign
    exchange               -      13,362             -         6,095
   Financial fees
    paid by
    issuance of
    capital stock
    and warrants           -     210,392             -       210,392
   Write-down of
    property,
    plant and
    equipment,
    intangible
    assets and
    goodwill         794,092           -       794,092             -
Net change in
 non-cash working
 capital items       (93,280)    333,233      (886,525)      551,074
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Cash from (used
 for) operating
 activities from
 continuing
 operations       (2,370,645)  1,803,014    (2,347,713)    1,372,155
Cash from (used
 for) operating
 activities from
 discontinued
 operations          (91,779)   (869,119)      (30,280)        5,383
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                  (2,462,424)    933,895    (2,377,993)    1,377,538
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Investing
 activities
Business
 combination, net
 of cash acquired          -  (1,264,210)            -    (1,264,210)
Purchase of
 property, plant
 and equipment       (73,534)    (31,990)      (24,684)      (12,722)
Purchase of
 intangible assets   (42,195)     (1,511)      (32,717)       (1,511)
Net decrease in
 temporary
 investments       6,874,155           -     6,912,561             -
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Cash from (used
 for) investing
 activities from
 continuing
 operations        6,758,426  (1,297,711)    6,855,160    (1,278,443)
Cash from investing
 activities from
 discontinued
 operations                -   1,744,185             -       287,228
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                   6,758,426     446,474     6,855,160      (991,215)
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Financing
 activities
Issuance of capital
 stock and warrants        -  22,493,871             -    16,735,575
Share issue costs          -  (1,034,999)            -    (1,034,999)
Redemption of
 common shares    (1,053,155)          -    (1,053,155)            -
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Cash from (used
 for) financing
 activities       (1,053,155) 21,458,872    (1,053,155)   15,700,576
---------------------------------------------------------------------

Effect of foreign
 exchange rate
 changes on cash
 and cash
 equivalents               -      79,375             -             -
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Net change in cash
 and cash
 equivalents and
 restricted cash
 during the period 3,242,847  22,873,616     3,424,012    16,086,899

Cash and cash
 equivalents and
 restricted cash
 - Beginning of
 period           20,757,089   4,489,077    20,575,924    11,275,794
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Cash and cash
 equivalents and
 restricted cash
 - End of period  23,999,936  27,362,693    23,999,936    27,362,693
---------------------------------------------------------------------
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Cash and cash
 equivalents
 comprise:
  Cash             1,494,165  27,193,347     1,494,165    27,193,347
  Short-term
   investments    22,505,771      21,346    22,505,771        21,346
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                  23,999,936  27,214,693    23,999,936    27,214,693
Restricted cash            -     148,000             -       148,000
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                  23,999,936  27,362,693    23,999,936    27,362,693
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   Mamma.com Inc. (NASDAQ:MAMA)