- 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
12. COMMITMENT
The company is committed to operating leases for premises, vehicles, and office equipment expiring at various dates up to June 30, 2011. Future minimum lease payments are as follows:
| Premises | Vehicle | Equipment | Total | |
| $ | $ | $ | $ | |
| 2006 | 121,230 | 33,734 | 22,069 | 177,033 |
| 2007 | 53,055 | 23,182 | 22,649 | 98,886 |
| 2008 | 35,370 | 5,612 | 22,649 | 63,631 |
| 2009 | 10,581 | 10,580 | ||
| 2010 | 8,853 | 8,853 | ||
| 2011 | 4,060 | 4,060 | ||
| Total | 209,656 | 62,528 | 90,861 | 363,044 |
13. EARNINGS PER SHARE
The following table sets forth the calculation of the basic earnings and diluted earnings:
| Basic earnings available to common shareholders | 810,214 | 303,600 |
| Weighted average number of common shares outstanding – basic | 11,615,208 | 10,610,052 |
| Basic earning | ||
| Weighted average number of common shares outstanding | 11,615,208 | 10,610,052 |
| Assumed exercise of outstanding dilutive options | 412,300 | 543,900 |
| Shares purchased from proceeds of assumed exercise of options | (95,492) | (135,970) |
| Weighted average number of common shares outstanding - dilutive | 11,932,016 | 11,017,982 |
| Diluted earnings per share | 0.07 | 0.03 |
Basic net income per common share is determined using the weighted-average number of common shares outstanding during the respective year.
The treasury stock method is used to compute the dilutive effect of options. In determining the denominator for the diluted net income per share computation, 200,000 options (2004 - 200,000) were not added to the denominator because they were anti-dilutive.
14. FINANCIAL INSTRUMENTS
(a) Fair value
The company’s financial instruments consist of cash, short term investments, accounts receivable, other assets, accounts payable and accrued liabilities, and long-term debt. The carrying amounts of financial instruments approximate their fair values due to their short-term maturities, or the market rate of interest in the case of short term investments and long-term debt.
(b) Credit risk
The company does not have a significant exposure to any individual customer or counterpart.
(c) Interest rate risk
The company is exposed to fluctuations in interest rates as described in note 7.
(d) Foreign currency risk
The company’s activities involve purchases denominated in foreign currencies. These activities result in exposure to fluctuations in foreign currency rates. At statement date, the company had net liabilities denominated in U.S. currency of approximately $545,000 (2004 - $ 450,000).
15. COMPARATIVE FIGURES
Certain of the 2004 figures have been reclassified from the preceding year’s presentation to conform to the presentation followed in 2005.
16. SUBSEQUENT EVENTS
On January 11, 2006, 60,000 outstanding stock options that had vested were exercised at a price of $0.85 per share.
On November 29, 2005, the Company entered into a conditional Agreement of Purchase and Sale for land and building in the amount of $1,880,000.
17. SEGMENTED INFORMATION
The company operates primarily in one industry segment, which is the monitoring of residential security systems. The subscribers are located primarily in Canada with the balance in the United States. At the present time, the United States operations are not a material geographic segment and accordingly, no additional information has been presented.