MOSAID Reports Results for Second Quarter Fiscal 2009 and Dividend

For the six months ended October 31, 2008 and October 31, 2007, 269,606 and 17,000 options, respectively, were excluded from the calculation of diluted earnings per share as the exercise price of these options exceeded the average market price of the Company's common stock during this period and were therefore anti-dilutive.

There were 570,808 and 503,369 options issued and outstanding as at October 31, 2008 and October 31, 2007, respectively.

5. Discontinued operations


                                 Quarter Ended            Six Months Ended
                                    October 31,                 October 31,
                            2008          2007          2008          2007
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Revenues                    $134          ($42)         $156          $340

Expenses
  Research and
   development                 8           (46)            8         1,400
  Selling and marketing        5            (2)            5         1,006
  Restructuring                -            12             -           166
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                              13           (36)           13         2,572
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  Gain (loss) from
   operations                121            (6)          143        (2,232)
  Gain on sale of
   assets                    421            (9)          623         9,295
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  Earnings before tax        542           (15)          766         7,063
  Income tax (recovery)
   expense                   (27)         (251)           29         1,027
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Discontinued operations
 (net of tax)               $569          $236          $737        $6,036
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6. Reconciliation of pro forma income with GAAP net income

                                 Quarter Ended            Six Months Ended
                                    October 31,                 October 31,
                            2008          2007          2008          2007
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GAAP net (loss) income   ($3,427)       $4,734       ($2,067)      $14,269
Add (deduct):
  Stock-based
   compensation              168           137           315           235
  Patent amortization
   and imputed interest    3,301         3,436         6,561         6,836
  Restructuring                -             -             -            19
  Foreign exchange
   loss (gain)             6,876        (4,740)        7,455        (6,418)
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  Income tax expense -
   for the above items    (2,223)          465        (3,395)         (199)
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  Discontinued
   operations (net of
   tax)                     (569)         (236)         (737)       (6,036)
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Pro forma income          $4,126        $3,796        $8,132        $8,706
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7. Stock-based Compensation

The Company has an employee stock purchase plan program whereby employees may elect to designate up to 5% of their annual salary to purchase shares of the Company at a 10% discount from the fair market value. The purchase price is deducted over a six month period via payroll.

Also, the Company has an Employee and Director Stock Option Plan. The exercise price is no lower than the closing market price on the trading day immediately preceding the date of grant. Options granted under the Plan expire within a period of six years of granting, with vesting periods determined by the Human Resources Committee.

The Company employs a fair value method of accounting for all options issued to employees or directors on or after April 27, 2002. The fair value of options issued in the quarter was calculated using the Black-Scholes option pricing model and the following assumptions:


                                                 Quarter Ended October 31,
                                                                                                         2008              2007
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Risk  free  interest  rate                                                                      2.71%            4.25%
Expected  life  in  years                                                                          5.5                5.5
Expected  dividend  yield                                                                      8.58%            4.95%
Volatility                                                                                              42.90%          58.37%

 
For the quarter ended October 31, 2008, the Company issued 34,109 Deferred Share Units in lieu of options to directors and officers of the Company under its Deferred Share Unit Plan. Those deferred share units vest evenly over a four year period. Deferred share units do not have an exercise price and can only be settled using cash consideration.
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