Kirsten Chapmen - Lippert/Heilshorn & Associates Don Danks - Chief Executive Officer Brandon Lewis - President and Chief Operating Officer Robert Lewis – Chief Financial Officer Jeff Korn - General Counsel

Neal Goldman - Goldman Capital Management Jeff Bass – Private Investor Eric Fisher - Broadmark Asset Management LLC

I would like to welcome everyone to the iMergent’s fiscal 2008 fourth quarter 2008, and year-end conference call. (Operator Instructions) I would now like to turn the conference over to Kirsten Chapmen.

Good afternoon and thank you for joining us for the iMergent fiscal 2008 fourth quarter and year end conference call. This is Kirsten Chapmen or Lippert/Heilshorn & Associates and if you have not received a press release please call us at 415-433-3777 and we will send it to you immediately. With me today are Don Danks, chief executive officer, Brandon Lewis, president and chief operating officer, Rob Lewis, Chief Financial Officer, and Jeff Korn, general counsel. After reading a short Safe Harbor statement I will turn the call over to Don Danks who will provide a review of the business, and then Jeff Korn will provide a legal update. Rob Lewis will review the financials, Brandon Lewis will discuss the operations, and then Don will open the call for questions. Statements and comments made on this call that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. These statements and comments are based on the current expectations and beliefs of management of iMergent and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements and from management’s current expectations. For a more detailed discussion of factors that affect iMergent’s operating results, please refer to its SEC reports including its most recent Form 10-K and Form 10-Q. The company undertakes no obligation to update this forward-looking information. With that I will turn the call over to Don Danks.

Thank you all for joining us on our call this afternoon. We are very excited about our accomplishments this quarter. I am going to give you a brief introduction. Our fiscal fourth quarter 2008 results were in line with our expectations. Revenue grew 6% and that dollar volume of contracts written grew 7% sequentially over the third quarter. Our StoresOnline Express model continues to perform well and our sales and marketing efforts are delivering results. Advertising initiatives that began in July are beginning to have an impact and as response rates keep increasing we will make adjusted to our infrastructure to ensure those close rates improve at preview sessions, as Brandon will discuss in more detail later on in the call. We worked diligently this quarter to resolve legal matters in six states in the last several months. We are pleased to have resolved these issues in a manner that refined and enhanced our business model and put us on a track for continued profitability and for stronger growth in the future. We continue to focus on returning value to shareholders. During the quarter we repurchased 128,832 shares of common stock for $1.6 million and 948,297 shares for $12.6 million in the year. Since the programs commencement in August 2006 over 1,603,000 shares were purchased for $26.3million. We also paid $5.1 million in dividends during the fiscal 2008 year. I will now turn the call over to Jeff for a brief legal review.

As you have seen from our press releases we have just entered into an agreement with the state of Florida. This culminates a very active and aggressive year of resolving numerous actions and investigations. We are very pleased that we have much of our past issues behind us. I have spent much of the past year meeting and addressing issues with various attorney’s general and regulators. We have always strived to be open, honest and transparent. We believe that is what best serves both our customers and our shareholders. Numerous states have engaged in thorough and complete reviews of our sales practices and our product. We have accepted some suggestions to make changes to our presentations that aid in making our practices even more transparent. Our addition of StoresOnline Express has aided significantly in the ability to resolve historical issues. As you all know we now offer StoresOnline Express at all our preview sessions and those who purchase the Express package are able to attend a workshop where they may, but are not obligated to, upgrade to StoresOnline Pro or Platinum. Purchasers have usually had a week and sometimes as much as two weeks to test drive our best of breed software and work with our award winning customer service. While we believe historically that people understood at the time of purchase both the benefits and limitations of our software, now there is no question a purchaser has full knowledge and has been offered an opportunity to work completely with us before investing an amount in excess of the minimal cost of Express. StoresOnline Express has received universal praise by regulators and I believe substantially aided negotiations in good faith with regulators, which has led to resolutions in various states as well as an agreement to lift an injunction in North Carolina and our ability to prevent an injunction from being entered in Australia. We will continue to work diligently with regulators. We are working to resolve the outstanding issues in Australia and the state of California. I will not publicly discuss the actions we are taking as they are part of a comprehensive litigation and settlement strategy and I think the resolutions over this past year are a testament to my being circumspect. We will continue to aggressively detail to regulators that our sales practices are open, fair and clear. With that I will not turn the call over to Rob for a review of the financials.

As mentioned earlier, in addition to revenue recognized each period in the income statement, management believes in that dollar volume of contracts written is a relevant and meaningful statistic to the understanding of the operations of the business and represents gross dollar contracts written during the period less estimates for bad debts, discounts incurred on sales of trade receivables, and estimates for customer returns. During the three months ended June 30, 2008 the company held 222 workshops including 65 internationally, compared to 333 workshops, including 70 internationally, in the same quarter of last year. Revenues for the for the fourth quarter of fiscal 2008 were $29.1 million net of customer refunds of $724,000 associated with legal settlements compared to $44.3 million for the fourth quarter of fiscal 2007, reflecting the lower number of workshops. In addition, fourth quarter fiscal 2007 revenue included sales from workshops conducted in California. Only one workshop was conducted in California during the fourth quarter of fiscal 2008. Net dollar volume of contracts written was $28.4 million for the quarter, compared to $46.2 million for the fourth quarter of last year. Total operating expenses were $29.6 million including $1.1 million in legal expenses and settlement fees, compared to $38.2 million for the fourth quarter of last year, including $332,000 in legal expenses. General administrative expenses were $5.5 million for the quarter, compared to $5.2 million in the same period of last year. Other income was $2.2 million for the quarter which included $2.0 million in interest income, compared to $2.5 million of other income for the fourth quarter of last year, which included $2.2 million in interest income. For the three months ended June 30, 2008 net income was $545,000 or $0.05 per diluted common share, which included the impacts of customer refunds and legal expenses and settlement fees of $1.9 million related to various legal matters. This compares to net income of $5.3 million or ‘$0.41 per diluted common share in the same quarter of last year. Cash provided by operating activities during the fourth quarter was $3.4 million compared to $8.5 million during the fourth quarter of fiscal 2007. This was offset by purchases of 128,837 shares of our common stock for $1.6 million in dividends paid of $1.3 million. Now for the fiscal 2008-year review: During the year ended June 30, 2008 the company held 1028 workshops including 184 internationally compared to 1,193 workshops including 264 internationally during the year ended June 30, 2007. Revenues for the year ended June 30, 2008 were $128.0 million net of customer refunds associated with legal settlements totaling $1.0 million compared to $152.7 million for the same period last year, reflecting the lower number of workshops. Net dollar volume of contracts written was $128.8 million for the year compared to $165.3 million for the previous year. For the year ended June 30, 2008 net income was $3.1 million or $0.26 per diluted common share. Net income for the year ended June 30, 2007 was $24.2 million or $1.87 per diluted common share. Now for a review of our balance sheet: Net cash provided by operating activities for the year was $10.4 million which was offset by purchases of our common stock during the fiscal year. We purchased 948,297 shares for approximately $12.6 million under our stock repurchase plan. During fiscal 2008 we also paid $5.1 million in dividends to shareholders. Trade receivables, net of allowance for doubtful accounts increased to $38.6 million. As of June 30, 2008 cash and cash equivalents were $26.2 million, working capital was $20.6 million and working capital excluding deferred revenue was $53.4 million.

I would like to discuss some of our progress this quarter. Our marketing initiatives are working and we’re excited about the results our stores online express model delivered and the attendance at our previous sessions has been fantastic. StoresOnline Express offers our customers a series of benefits including providing the customers a chance to test drive our software before attending a workshop, offering customers a simple and affordable e-commerce solution, providing customers a chance to experience our customer support and giving them a chance to arrive at the workshops more knowledgeable about our products and more qualified to upgrade to StoresOnline Pro or Platinum, which fuel higher close rates. In fact close rates have increased from 27% before Express was rolled out in December of 2007 to 31% at the end of the June quarter. Furthermore, our product offering continues to improve as evidenced by our results. Average selling price increased sequentially from $5,000 in the third quarter of 2008 to $5,500 in the fourth quarter of 2008. Close rates grew from 29% in the third quarter of 2008 to 31% in the fourth quarter of 2008. In addition the customers heightened awareness of the product from using Express has stemmed the number of overall complaints regarding the Pro and Platinum packages. Also Express sales at previous sessions have delivered a great side benefit, increasing the number of activations. As we see response rates go up we continue to make adjustments to scale our existing infrastructure to meet demand; however because our marketing operates so far in advance of our previous sessions and workshops it takes some time for our adjustments to make an impact. For example, some adjustments we are currently making include increasing the size of the venues where we hold our preview sessions and managing preview sessions to keep the number of attendees per preview session at an optimal level. In addition we are working on fine-tuning our presentation so it consistently works across all markets and accommodates the larger crowds we are seeing due to our advertising efforts. These larger crowds are promising for us, so we are working diligently to address our presentation to capture this upside. We believe these adjustments will have an impact beginning in October. While close rates for workshops have increased we are finding more people are financing their purchases which impacts our cash flow and our interest income. A year ago approximately 40% of our customers financed; this shifted to around 50% in the June quarter and approximately 60% in July and August. This is presumably due to the current tough economic environment and we hope it will improve in the coming year. We are taking actions that we anticipate will effectively reduce the percentage of customers financing their purchases. Regarding our product we always strive to improve. From fiscal 2007 to fiscal 2008 we increased R&D 70% to focus on improvements in our StoresOnline product line. These improvements include an integration with over ten drop shippers allowing for seamless product listings, enhanced research tools including search engine optimization, integration of AVAIL, our automated virtual telecommunications email and fax management system and the addition of a social networking feature such as product reviews and customer feedback. All in all we continue to focus on offering our customers new tools and solutions. For example through a recent partnership we are offering customers logo design services to help with branding their online storefronts. We continue to evaluate opportunities to offer our customers innovative new products and services to help them build and run their successful online businesses.

We are all excited about the progress we have made and we believe the financial impact will become material in the second half of fiscal 2009. The company has reduced workshop teams by 33% and introduced its new business model late in December 2007. As such, during the first half of fiscal 2009 the company will have 2/3 of the workshop teams compared to the same period last year and management expects revenue and net dollar volume of contracts written in the first half of fiscal 2009 to decrease about 15% to 20% compared to the same period of last fiscal year 2008; however during the second half of fiscal 2009 the company believes it will have a comparable business model to the second half of fiscal 2008 and management expects revenue in that dollar volume of contracts written for the second half of fiscal 2009 will grow up to 10% compared to the same period of fiscal 2008. Looking ahead we enter fiscal 2009 with increased clarity on our business practices and a stronger business model with leaner and more effective sales teams and improved marketing. Our marketing programs begin months in advance of our previews and workshops and already in the first quarter of 2009 preview demand increased due to our marketing and advertising efforts. We are adjusting our infrastructure to more effectively accommodate more potential customers. Further more in March 2009 we expect to add additional sales teams to strengthen our infrastructure to meet the growing demand as marketing and advertising results continue to improve. We expect the impact of these initiatives to grow our revenue in the second half of the year and we believe we will begin to once again reap the benefits of our operating leverage, increase our profitability in fiscal 2009.

(Operator Instructions) Your first question comes from Neal Goldman of Goldman Capital Management. Neal Goldman - Goldman Capital Management: I know you haven’t settled California, but have you reserved in your mind relatively the full amount that you think will happen?

The amount that was given by Rob and discussed by Don does include my estimate of what we would settle California for. I am obviously not going to break that number out because once I have done that, that becomes the minimum negotiation settlement that they will accept. Neal Goldman - Goldman Capital Management: Rob in the 10-K you have a tax list carry for the 867 and then a state of 7-4, is that against the pre-tax or the after tax?

That’s only the reported after tax. Neal Goldman - Goldman Capital Management: Okay so we have approximately $16 million to shelter future earnings?

The 867 and 2995 those numbers that you just picked up are gross. Neal Goldman - Goldman Capital Management: In terms of the balance sheet you have $3.8 million available for sale. Are those auction rates?

Yes, $3.8 million. Neal Goldman - Goldman Capital Management: Has that been written down to that $3.8 or is that the current estimate by your orders?

We actually had some liquidation since then and all of our auction rate securities are held by Merrill and as Merrill has announced, they are going to be liquidating all of the auction rate securities that are held by their retail investors and that are represents the liquidation value. Neal Goldman - Goldman Capital Management: Okay, but you are not a retail investor are you?

No, but as far as all people that have money held with them are going to be liquidated. Neal Goldman - Goldman Capital Management: So essentially pro forma your cash will exceed $30 plus million.

That’s correct. Neal Goldman - Goldman Capital Management: You didn’t discuss, Brandon, the potential new marketing for the VARBusiness. Could you discuss it today or where do we stand on that?

Well we have been pursuing that and looking at that. I don’t really like it being called a VAR model, because I don’t necessarily know if that is what we are looking at as much as kind of the SME market, but we are actively engaged in looking at that market and pursing that market. Neal Goldman - Goldman Capital Management: And when would you launch a potential product in marketing into that SME market?

I hope by the end of our calendar year. Neal Goldman - Goldman Capital Management: And you’re not including any potential sales or profitability from that.

No. Neal Goldman - Goldman Capital Management: If I take your 15 to 20%, I think I come out with like $56, $57 million in sales for the first half, which would be somewhat down from the second half of ’08.

I’m sorry, what was that again? Neal Goldman - Goldman Capital Management: In the first half of last year you did $71 million 378, okay? If you are saying it’s down 15 to 20%, that’s anywhere from 57 to 60.6, right?

Correct. Neal Goldman - Goldman Capital Management: So at the low end you could be below what you did in the second half, which I don’t fully understand why, unless that’s the accounting issue of the 40% payments, the 50 [interposing].

You also have to remember that September is also typically our lowest quarter during the year. Neal Goldman - Goldman Capital Management: But you expect to be profitable the first quarter versus the loss of last year right?

Correct. We would expect that. Neal Goldman - Goldman Capital Management: If I look out and take round numbers of a flat year overall, well you were having 123 million. I think historically you have well in excess of 20% margins. Is there any reason you can’t get back to an 18/20% pre-tax margin this year?

Really the key for that is to get our finance rate down so with 50 to 60% of our customers financing it’s difficult to do that. The other critical piece is our marketing conversions and so we have plans in place to make sure that we can maximize on our marketing efforts and we have plans in place to not just sit and wait for the economy to get better but to work on improving our cash rates at our workshops. So those are the two real critical pieces right now in our model to getting those margins where we have had them historically and improving them above that. Neal Goldman - Goldman Capital Management: You made a comment that you’re getting almost too many people in the previews. Have you added more teams to deal with that or to break that down or [interposing].

Yes we have taken ourselves, I think in the December quarter we announced that we went back down to about 16 preview teams and we have about 26 preview teams right now. We need more than that to handle the response rates. One of the difficulties we have is that the marketing is planned, paid for and pushed months in advance of our previews and so we made some adjustments back in May and June based upon our testing of our new marketing efforts and those adjustments weren’t enough. We made another set of adjustments in the end of June, first part of July, which we did not make enough of an adjustment there either. The marketing responses were just so good that we had to make a final set of adjustments which really won’t kick in until the first part of October and that’s why in my portion of the call I talked about that October timeframe. It’s a good problem to have, but the conversion rates, because the crowds have been so large, have not been up to our expectations. Neal Goldman - Goldman Capital Management: How many people were showing up for a typical initial workshop versus under the old model?

One of the things that we haven’t really talked publicly about and I’d prefer not to do is to talk about kind of our optimum levels, where we like the crowd size to be. But, I am comfortable saying that it’s much, much larger than an optimal level and so it’s just made it very, very difficult from a staffing perspective, from a venue perspective and then from a presentation perspective you take a presentation that was designed for a smaller crowd and there’s just dynamics in platform speaking that require a little bit different approach when you get a larger crowd. So, that combined with the venue size has made it very, very difficult. We haven’t necessarily had large enough venues and we’ve had to split people out into separate rooms and have less experienced sales people giving presentations and things of that nature to try to accommodate our customers and we just haven’t gotten the close rates that we really need at those previews. That’s a problem that I would rather have versus the problems that our industry has had over the last year, meaning those companies who sell through seminars and that is that we haven’t been seeing as many people as we would like. Now we just need to make the proper adjustments. Neal Goldman - Goldman Capital Management: In terms of going from the 16 to 20/16s if the quality of the sale people, have you been able to find top talents?

One of the benefits really is that there has been a number of companies who are in the business of platform sales who have gone out of business in the last year, year and a half and we have been able to recruit some of their professional sales people and speakers, but there still is a training ramp that we’re dealing with and we’re still dealing with a presentation that was designed for smaller crowds and having to tweak that and make that work to a larger crowd. Neal Goldman - Goldman Capital Management: One of the benefits of a new model we always talked about was getting a larger recurring revenue. What was your run rate in the fourth quarter as a percentage in terms of recurring revenue, what’s the longer-term outlook?

Currently it’s still below the 10% of total revenue, but it is increasing quite rapidly and we’re happy with the increase, but there is still a long ways to go and a lot of improvements that need to be made and we have been making systems upgrades and enhancements to our billing system to take advantage of the increased activations and we are still getting to understand our StoresOnline Express customers and figuring out ways that we can assist them and helping them either upgrade to Pro or activate their Express license. We are still learning that, but so far it’s had a positive impact on that recurring revenue stream, but it still does represent less than 10% of our total revenue right now. Neal Goldman - Goldman Capital Management: Just one last comment, you didn’t buy much stock back in the fourth quarter and I would hope, given the $30 million plus in cash and now that we’ve gotten the new model working, although not optimal, that we get much more aggressive going forward, okay!

That’s a reasonable comment and expectation I think from shareholders.

Your next question comes from Jeff Bass who is a private investor. Jeff Bass – Private Investor: To follow up on the comment on infrastructure, what is the advantage of retooling your presentation and having a larger venue as opposed to having smaller venues and keeping the same presentation and the same focus that you know has worked over the last year?

That’s a good question and let me clarify because really the point I was trying to make is that the key for us is to get the crowd size to our optimal level, but that’s October before we can really get there; so in the meantime, really what I was trying to communicate and should have done a better job at this is that we’re not sitting on our hands waiting until October. We’re out there working on the presentation so that it will do a better job at converting to these bigger crowds. Ultimately we want to get the crowds to the optimal size and that’s where we’re moving. Jeff Bass – Private Investor: Am I saying it correctly that now when you have crowds which are larger than the arrangements you may have made for venues months ago, you are temporarily retooling your presentation to take advantage of what you’re stuck with for the time being. My experience in having attended a few of these is that, let’s say 100 is your optimum previews size, when you get to October you are going to be, let’s say back where you want to be.

That’s right. We anticipate we will still be seeing the same number of people, we’ll simply be doing over more sessions, and then we believe that our conversion rates will get where we want them to be. In the meantime we are not going to sit there waiting until October, we are going to be out there trying to make some adjustments to the presentations so that we can convert better to these larger crowds. Jeff Bass – Private Investor: Well it is a terrific problem to have and I am very pleased to hear that you have got it and you’re talking about additional sales teams.

I agree. This problem is much better than the problem of not seeing enough people. So I would much rather have this problem, although they both have their set of issues and trials, but we are working hard at it. Jeff Bass – Private Investor: With respect to alternative marketing, you have made some comments already. I have always felt that that was the only way that you could approach some huge markets, for example like India, perhaps China if you can deal with the language issues. Have you given any though to alternative marketing in those kinds of large markets or do you plan to put one foot on the ground first and start with the US and then go elsewhere as things progress?

First of all let me say I agree with you 100% that we need to go after really this small business, this retail and services business and develop an offering for that market. As we fine tune it here domestically we would anticipate being able to go into those larger markets. Our marketing group has visited both of those markets, India and China, as well as a number of other markets. We have and continue to investigate those markets. So I wouldn’t say that we will wait forever, until we have it perfect here in the US before we would go to those markets, but we don’t have anything planned specifically in the coming year for those two major markets. What is interesting about, I think the way the internet is evolving is that, you know there is recently a large hotel chain that announced that they were no longer going to be putting the yellow pages in their hotel rooms and that is primarily because people are going to the internet and to their personal devices for local business listings. So we’re going to continue to see a big push in the United States and abroad of retail and service businesses going to the internet for a presence; if not for e-commerce than just for a simple presence. What we have been working on and we alluded to earlier is a solution for our customers that doesn’t necessarily have the e-commerce piece on it , but would allow for an upgrade to the e-commerce so that we can get to these small businesses, these service businesses that may want to start with a simple presence and then evolve to e-commerce and not have to change their whole web site to do so. We hope we will have that offering out this calendar year and have a plan to go after that market.

One additional comment on a market like India, your experience in the US which is, I hope what you are thinking of takes into account the possibility that an Express purchaser might subsequently sign up to go to a Pro or upgrade to Pro. In a market like India you need a low price point and a low distribution cost, so there are different considerations involved in that market.

Yes and that is also in many of the Spanish speaking markets that we have spoken about in the past where we have gone into a number of these markets and there has been some resistance to that pricing, which I think with this Express model and some of the other products we hope to release, I think that that will help us enter into those markets and be more effective in those markets. Jeff Bass – Private Investor: Two questions related to IMs which are worse in this quarter than the immediately preceding quarter. The first one has to do with the commission revenue which is $6.6 million down from $8.4 million in the March quarter. Would you please comment on that?

Yes a lot of our commission revenues are driven from past sales and so when we went from nine sales teams down to six sales teams we were generating fewer customers and so our commission revenue dropped as our customers dropped and so that was the primary driver behind the drop in our commissions. Jeff Bass – Private Investor: I noticed that the performance of receivables portfolio were, at least the reserve has changed a little. It was approximately 29% of both gross long-term and short-term receivables last quarter. It is now back up to over 32% which while not historically high is up 10% of the percentage from the March quarter. Do you have any comment on that? Is there anything going on there or is this just the mix of the business?

It is primarily the mix of the business. What we are seeing is that some of the financing we are getting some of the lower financing, but primarily during the June quarter we did a lot of sales internationally. We were in Australia and the UK during the quarter and we tend to reserve much more aggressively over there because our collection rates haven’t been as good in those countries. That’s, one of the primary drivers in the June quarter was just simply because we did more international workshops during the quarter compared to our historical quarters. Jeff Bass – Private Investor: So there is nothing particular, bad customers are more than the late that they have been in the past, that is what I would expect considering the economy.

Yes, surprisingly we haven’t had any deterioration in our domestic receivables and we haven’t seen a severe deterioration in our international receivables either, but we continue to monitor that very closely. We are seeing, as Brandon had mentioned and in the statistics that we have given out is that a higher percentage of people are financing and we are seeing that the FICO scores are beginning to lower with a lot of these customers; so I think that that’s a trend that we are seeing in the economy. Jeff Bass – Private Investor: But you have the ability to respond to that quickly if you choose to right?

That’s exactly right. I mean obviously we reserve, we make our reserves based upon FICO score, how current they are and how many payments that they have made, so we are responding to that immediately and from the quality of earnings perspective, just as a reminder to the shareholders and listeners on a call, that we recognize revenue on a cash basis and so any adjustments to the reserve would not impact earnings at all, just as a reminder.

Your last question comes from Eric Fisher with Broadmark Asset Management. Eric Fisher - Broadmark Asset Management LLC: I was just wondering if you have any more progress to announce with the SEC investigation.

As we have discussed before, if there were any requirements to disclose anything relative to the SEC we would do so. I can only point you out to a report by congress last year that indicated there are many, many open SEC investigations where nothing seems to have been done. Read into that what you will, but we have not been required to have anything done which would require disclosure.

We are entering fiscal 2009 with an adjusted and enhanced business model and improved marketing activities and we are very pleased to have resolved legal concerns with several states in the past six months and look forward to resolving the remaining ones in the near future. The refinements we have made to our business model have already begun to yield increased demand at our previews and workshops and we expect this to translate to growth and margins and profitability in the coming year. I would like to thank everybody for joining us on the call. We look forward to talking to you after our fiscal first quarter.