- We protect over 150,000 people across North America
- Over 20 years experience in the industry
- One of the few alarm companies to manufacture our own technology
- You deal directly with AlarmForce at all times
- Lowest prices and best value in the business
Financial Information
LIQUIDITY AND CAPITAL RESOURCES
As at October 31, 2004 the company has cash and cash equivalents of approximately $4,369,000, and unused credit facilities of approximately $3,000,000 available for future operating and capital requirements.
As at October 31, 2004, the company’s assets totalled $24,896,782 of which the majority represented revenue generating capital assets including tangible and intangible assets. The outstanding long-term debt at October 31,2004 consisted of revolving bank loans of $2,216,600 under credit facilities that are available to be used by the company to finance the growth in the subscriber base, which in turn will contribute to additional recurring revenues and cash flows.
| 2004 | 2003 | 2002 | 2001 | 2000 | |
| $ | $ | $ | $ | $ | |
| Cash flow from operations | 7,906,761 | 5,251,930 | 4,320,259 | 3,058,456 | 2,122,169 |
| Cash flow from financing activities | 3,802,947 | 296,869 | 323,058 | 815,136 | 1,426,276 |
| Cash flow used in investing activities | |||||
| (excluding short-term investments) | 7,361,794 | 5,570,915 | 4,751,421 | 3,968,222 | 3,671,732 |
The company expects to continue to invest significantly in growth of the subscriber base, through direct-response marketing programs which have been highly effective historically, and in the installation of new security systems in subscriber homes. Security systems are installed under four-year contracts, which are subsequently renewable annually. The company manufactures the equipment that it installs and the manufacturing process involves purchasing various key components from foreign and domestic manufacturers, and utilizing local subcontractors in certain parts of the manufacturing process. The Company’s manufacturing operations are housed in Toronto where the alarm system is manufactured. In addition to the standard system, the company also manufactures AlarmPlus telephone line-cut technology that is available exclusively to subscribers of AlarmForce, which is the only Canadian alarm company that manufactures and installs AlarmPlus.
Financing activities
The company successfully completed two major private placements as follows. On December 2, 2003, the company issued 1,000,000 common shares at a share price of $2.50 for net proceeds of $2,258,818. On June 29, 2004, the company issued an additional 1,000,000 common shares at a share price of $ $3.25 for net proceeds of $3,003,848. Both offerings were completed on a bought deal financing basis, raising a total of $5,262,666, which is net of share issuance costs of $311,333 (which is net of related income tax recovery of $176,000).
The company is authorized to issue an unlimited number of common shares. The changes in the issued common shares of the company during 2004 and 2003 were as follows:
| Number of | Value | |
| Shares | $ | |
| Balance, October 31, 2002 | 8,895,403 | 5,539,042 |
| Issued during the year: | ||
| For cash pursuant to options | 167,500 | 142,375 |
| For other consideration pursuant to options | 26,400 | 35,112 |
| For other consideration | 50,000 | 92,500 |
| Balance, October 31, 2003 | 9,139,303 | 5,809,029 |
| Issued during the year: | ||
| For cash pursuant to two private placements | 2,000,000 | 5,438,686 |
| For other consideration pursuant to options | 406,600 | 353,810 |
| For other consideration | 28,985 | 107, 245 |
| Balance, October 31, 2004 | 11,574,888 | 11,708,770 |
| Balance, February 21, 2005 | 11,606,688 | 11,735,800 |
The company is committed to issuing 743,900 common shares under options that were outstanding at the end of the 2004 fiscal year (1,008,000 at the end of the 2003 fiscal year). Exercise prices under the options and the remaining life of options are summarized below.
| Expiry Date | Number as October 31, 2004 |
Remaining contractual life (Years) |
Exercise Price |
| $ | |||
| October 10, 2005 | 70,000 | 0.9 | 0.85 |
| February 5, 2006 | 473,900 | 1.25 | 0.85 |
| July 17, 2009 | 200,000 | 4.75 | 3.78 |
| 743,900 |