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5 Questions with Paul Timoteo of Armada Data (TSXV:ARD) Whether it's a toaster on eBay or a complex insurance policy, your access to critical decision making information about the purchases in your life has increased ten-fold over the past decade. Paul Timoteo, President and CFO of Armada Data, which operates business to business and business to consumer automobile web sites, takes us inside how this change has affected the car business in Canada. And how it led to a breakout quarter for this decade old venture listed company. 1. (From John in Red Deer) You just had a breakout quarter. Do you think this is an anomaly or can you continue to build from here? PT: This is clearly not an anomaly. If anything we believe this is just the beginning. Our business models are now built and we are profitable. Last year we had $2,157,900 in revs with a net income of $141,146. This year, in the 1st quarter alone we had revenues of $746,695 (up 58%) and a net income of $156,298 or 1.2 cents per share (up 244%). This puts us on pace to finish the year somewhere in the range $3,000,000-$3,200,000 in revenue with a net income of $600,000-$750,000 or 4.5-5.5 cents per share. 2. (From Ranbir in Vancouver) Your website talks about the proprietary nature of the data you collect. Without giving anything away can you talk about barriers to entry to your business and why you feel you have advantages that translate into a higher margin business? PT: After being in business for 10 yrs with very unique data, if we were going to see any serious competition, we would have seen it by now. In fact, we've had a few small competitors come and go along the way. The key to the high barrier of entry is not only our data, but our ability to keep it up to date and have it available 24/7 online. To give you an idea of how difficult it is, in the U.S. there are only three companies that have data similar to ours, but not one of them has as much detail and is kept as up to date as ours. In fact, the largest player in the U.S. in Chrome data. We use some of their "retail data" and combine it with our "wholesale invoice, incentives and dealer data to offer a level of detail that can't be matched. The key to higher margins is all about volume. Our cost of maintaining our data is fairly constant. What we sell is access to our data. The cost to deliver access is virtually nil. Therefore now that we have enough consistent income to cover the cost of maintaining our data, selling access to it gives us an over 90% profit margin on the retail side of the business (CarCostCanada.com). The only additional costs are marketing related, which bring the net profit to approximately 70-75% moving forward. 3. (From Denis in Saint-Foy) Your brand name is becoming recognizable in Canada, do you think this can translate to the rest of the world? Are you making inroads in the US, for instance? PT: For now we are concentrating on Canada. We currently have about 3.5% of all retail new car buyers in Canada joining CarCostCanada.com. Last year we had less than 2%. Our goal over the next 2-3 yrs is to get it to 10%. Based on our cost structure this will make us very profitable. 4. (From Kevin in Toronto) How did you deal with the sudden economic downturn last year? Was Armada seriously affected? Were there any scary moments when you felt you didn't know what might happen? PT: If anything the economic crisis helped us. Our retail division was off a touch from Nov to Jan, but after we cranked up the marketing campaign in Feb we started setting records one after the other. Although the overall market for new cars was down about 15% this year, our market share increased from under 2% last year to about 3.5% this year, so our overall sales climbed significantly. As far as our insurance services division, it does not get affected by the economy. If anything it gets better as well. Since our service offers a net savings on every insurance total-loss claim, companies are more likely to use our service when they are looking to improve their own results. 5. (From Michael in Ottawa) Will you continue to spend money on research and development? if so, what kinds of things, generally, do hope to accomplish with this expenditure? PT: The bulk of our R&D expenses will go toward improving efficiencies in our services to allow us to increase revs and lower expenses at the same time. We are also creating a number of new applications for our data which will to continue to increase the strength of our brands and expand our reach in to new areas.

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