Disclaimer

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Q. In your news release of June 23, 2006, you said that the early redemption of your convertible debentures will have no dilutive impact on reported earnings per share. How is this possible, when you have issued 5,849,829 new common shares? (Submitted June 2006)

Q. Why did COM DEV elect early redemption of its convertible debentures? How much interest will the Company save? Does this impact your short-term ability to use cash for other strategic options? (Submitted June 2006)

Q. Could you please provide me with some information regarding the stock repurchase program (ie, has it started already? how many shares have you bought back)? (Submitted February 2006)

Q. COM DEV has made unsuccessful acquisitions in the past. How will this one be any different? (Submitted November 2005)

Q. Does COM DEV management have the bandwidth to shift its focus to integrating an acquisition? (Submitted November 2005)

Q. Why is EMS selling these businesses? Why didn’t MacDonald, Dettwiler and Associates retain them when they bought the other EMS assets? (Submitted November 2005)

Q. You indicated at your Annual Meeting in March 2005 that you were aiming for 10% revenue growth in fiscal 2006. Is the revenue impact of this acquisition considered part of that growth? (Submitted November 2005)

Q. What is the magnitude of the potential upside in revenues resulting from this acquisition? (Submitted November 2005)

Q. Are your profitability estimates dependent on achieving synergies or cost savings in the acquired businesses? (Submitted November 2005)

Q. This acquisition specifically targets the Canadian domestic space market. How attractive is this market? (Submitted November 2005)

Q. The Company has a debenture coming due in December 2006 for $18 million, and you have just announced that you plan to buy back some of the outstanding shares of the Company for up to $10 million. The acquisition just announced will cost at least $5 million and the Company has said it is financing this with debt. Does the Company have the wherewithal to retire the debentures, buy back stock, and deal with the debt associated with this acquisition? (Submitted November 2005)

Q. In your news release of June 23, 2006, you said that the early redemption of your convertible debentures will have no dilutive impact on reported earnings per share. How is this possible, when you have issued 5,849,829 new common shares? (Submitted June, 2006)

A. By opting for early redemption, COM DEV was able to avoid approximately $1 million of expenses associated with the debenture, including $634,000 of cash interest payments originally due to be made to the debenture holders between June 22 and December 31, 2006. Had those expenses been incurred as scheduled, the impact would have been to reduce net income and therefore earnings per share (EPS).

The impact of issuing the new shares will also be to reduce EPS, because earnings are divided among a greater number of shares. However, avoidance of the interest payments means reported earnings will be higher. On balance, management expects that EPS for fiscal 2006 would be roughly equal under either course of action.

Q.Why did COM DEV elect early redemption of its convertible debentures? How much interest will the Company save? Does this impact your short-term ability to use cash for other strategic options? (Submitted June, 2006)

A. As stated in COM DEV’s press release of May 5, the Company’s decision to elect early redemption of the convertible debentures will reduce uncertainty. As long as the potential obligation to repay $18 million on December 31 existed, management faced questions on how it planned finance the repayment.

Management would have preferred to see the debentures retired with cash rather than shares, thus avoiding the issuance of up to 5.89 million new shares. That decision rested with the debenture holders, however, and based on recent trading prices, it was fully expected that most would opt to receive shares rather than cash.

If new shares were to be issued, COM DEV was better off issuing them in June rather than December. The Company stood to save up to $634,000 in interest charges it would have been required to pay in the last six months of calendar 2006.

Furthermore, by removing an $18 million liability from its balance sheet, the Company improved its capacity to take on new debt financing should it be required. Therefore, arguably COM DEV will be better positioned to pursue strategic opportunities over the remainder of the year.

Q.Could you please provide me with some information regarding the stock repurchase program (ie, has it started already? how many shares have you bought back)? (Submitted February, 2006)

A. The Company established the ability to repurchase up to ten percent of the public float of shares through a mechanism called a Normal Course Issuer Bid. The process for a Company to buy its own shares is dictated by regulation, including reporting of any repurchase activity.

The Company has engaged a third party to act upon its instructions to repurchase shares, when and if such instruction is given, and to report this activity in accordance with regulation.

The Company has not initiated any repurchase activity of its stock in the market to date.

When the Normal Course Issuer Bid was announced on November 10, and subsequently when it was announced that the plan had been approved by the TSX on November 17, the Company indicated that the repurchase of the common shares was in the best interest of the Corporation, and represented a desireable use of corporate funds. It further indicated that buying activity was dependant upon future price movements and other factors.

Since announcing the Normal Course Issuer Bid, the Company announced the acquisition of elements of the former EMS Space & Technologies division, based in Ottawa. The Company believes that this acquisition is strategically important to its plans to grow its participation in the Canadian space market, and thus represents a better use of funds as compared to all other alternatives, including share repurchases.

The Company is still prepared to act on its capability to repurchase its common shares as established by virtue of establishing the Normal Course Issuer Bid, but any decision to initiate repurchasing activity will be made in light of many factors, including, but not limited to, share price levels, and the evaluation of alternate uses of available cash. Should the Company repurchase any of its shares in the market, that activity will be reported as required by the rules for Normal Course Issuer Bids.

Q. COM DEV has made unsuccessful acquisitions in the past. How will this one be any different?(Submitted November, 2005)

A. Previous acquisitions were attempts to diversify by expanding into non-core areas such as wireless communications. COM DEV has since refocused on our core space business, and the assets we are acquiring will strengthen and complement our core capabilities. Revenue diversification will be achieved through increased sales in the civil space market segment, which along with the military/defence market is growing in importance relative to our traditional strength in the commercial satellite market.

Q. Does COM DEV management have the bandwidth to shift its focus to integrating an acquisition? (Submitted November, 2005)

A. Strengthening our core operations remains management's top priority, and this acquisition helps us advance that goal. The operations we are buying are very closely related to our existing business. In fact, COM DEV has acted as a subcontractor to one of these units for a number of years. We know these businesses and their markets very well, and we do not anticipate expending significant resources to integrate them into COM DEV.

Q. Why is EMS selling these businesses? Why didn't MacDonald, Dettwiler and Associates retain them when they bought the other EMS assets? (Submitted November, 2005)

A. Both EMS and MDA have made decisions based on their own strategic priorities. COM DEV believes these assets are of strategic importance due to their unique fit with our core business. We are also looking forward to an expanded relationship with MDA and our involvement in these new businesses could provide an additional platform for that to happen.

Q. You indicated at your Annual Meeting in March 2005 that you were aiming for 10% revenue growth in fiscal 2006. Is the revenue impact of this acquisition considered part of that growth? (Submitted November, 2005)

A. Yes. We were aware of the possibility of completing a transaction of this nature at the time we stated that objective.

Q. What is the magnitude of the potential upside in revenues resulting from this acquisition? (Submitted November, 2005)

A. We are not providing information on the dollar value of potential upside business because such revenues are uncertain. If we are successful in attaining this business, the revenue impact would be considered material and we would disclose it accordingly.

Q. Are your profitability estimates dependent on achieving synergies or cost savings in the acquired businesses? (Submitted November, 2005)

A. No. These businesses are profitable in their own right, with a reliable base of recurring revenues.

Q. This acquisition specifically targets the Canadian domestic space market. How attractive is this market? (Submitted November, 2005)

A. The Canadian Space Agency operates with an annual fixed budget of $300 million dollars and gets additional funding for large cabinet-approved space investments such as Canada's radar satellite programs and the robotic arms used on the Space Shuttle and the International space station.

This is a core market for COM DEV. Over the past five years our sales directly and indirectly to the Canadian government have averaged approximately $10 million per year, with most of this from working as a subcontractor to the EMS Space and Technologies Division. This acquisition will more than double our share of the Canadian market immediately, with potential for further growth.

Q. The Company has a debenture coming due in December 2006 for $18 million, and you have just announced that you plan to buy back some of the outstanding shares of the Company for up to $10 million. The acquisition just announced will cost at least $5 million and the Company has said it is financing this with debt. Does the Company have the wherewithal to retire the debentures, buy back stock, and deal with the debt associated with this acquisition? (Submitted November, 2005)

A. This acquisition is of strategic importance to COM DEV. We expect it to be immediately accretive to our shareholders and to be an important element of our growth plans. Management considered various financing options, and based on a share price we consider to be undervalued, determined that debt was most appropriate.

The Company is comfortable with its current debt levels and associated ratios, and will continue to monitor its financial resources on an ongoing basis. We expect our operations, including the newly acquired businesses, to generate cash which is more than adequate to service the debt.

The convertible debenture may be repaid in cash or shares at the Company's option. As the repayment date approaches, management will determine which option is best for shareholders, keeping in mind the need to maintain adequate cash resources in the business.

Similarly, the normal course issuer bid is discretionary and will only be executed to the extent cash resources permit.