Financial Information
LIQUIDITY AND CAPITAL RESOURCESAs at October 31, 2004 the Residential alarm 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 home alarm monitoring 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 activitiesThe 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 |
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Testimonials
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AlarmForce is the best choice. They make sure you get the best system that not only works with your budget..and does NOT try to sell you anything you will not need or is no use for your home/garage...I have been fortunate enough not to have any one try to break into my home since I got the system..couldn't say that before...they make me feel more secure because they are very caring and no matter where I am in my travels I know I can count on them to protect my sons and my home..I always worried about my sons and my house when I was away..Not now.. Knowing that even when my sons sleep they are as I say "being watched over by the Angels at AlarmForce" My experience with AlarmForce has always been pleasant and reassuring..They answer all and every question I have..They are always willing to help with testing my equipment.. Letting me know what needs to be replaced if anything(batteries etc)..When I go away they ALWAYS ask details of my departure and arrival back home..who to contact if there is an emergency..t hey never question me why I want the police called and not one of their own security...Full of information and always so caring! My best experience was when I was so unhappy with my other alarm company the staff at AlarmForce made it so easy for me to say YES to using AlarmForce and leaving the 'other" company… that was over 3 years ago!! Thank You for making it so easy! It is a Perfect Fit in Security for My Family! I am always recommending folks to AlarmForce..I simply tell them there is no price you can put on your families safety...with AlarmForce it is cost efficient..You wouldn't get the care their team provides any where else..most of all The Peace of Mind You have knowing not only your house but your family is being taken care of at all times!! They make life simple for you and your family.. Thank You AlarmForce for treating my Family like it is your own, you are keeping safe at all times!
-Kelli P - Edmonton, AB -
I feel very comfortable with your alarm system. When testing and the alarm has gone off, they phone right away. My other alarm company waited 2-3 minutes before they phoned. I'm alone a lot and lot at night and feel very secure with AlarmForce. Thank you.
-Rod, AB -
From the time it was installed (2003), we have had a trouble free system. Thank you.
-Albert, AB -
Thank you very much AlarmForce, we are very satisfied with your service.
-Danielle, ON -
My name is Adey and we have been AlarmForce customers for 3 years and counting. As an Army wife my husband is constantly away on course or exercise so security is a huge issue in our house. While my husband was in Afghanistan it was AlarmForce that kept our house and children safe. Whenever I start to get nervous I just remember that I'm not alone and that someone else is helping to keep watch too. Thank you AlarmForce for being there for us when my husband can't!
-Adey R. - Wainwright AB -
My wife & I are always confident when we leave the house either for a couple of hours or for a month that our home is safe and secure while we are gone. We know that Alarm Force is always on the job protecting it.
-R.W - Gahanna, OH -
Installation representative was very helpful and professional.
-Doris, NC -
It was five days before Christmas in 2009, when I was finally getting off of work, to come home and enjoy my holidays. I had been in Northern Alberta and British Columbia working for awhile and not getting the chance to come home very often. My landlord of the house, my spouse and I were renting, lived across the street and was able to watch our house while we were both out of town. It was 9:00pm the night before I flew home, when my landlord called to say our house had gotten broken into. I was very frustrated, upset and angry mainly because I come from a small town in Saskatchewan and not a lot of crime goes on. I did not know what to expect when I got home to see if all of our belongings were missing and the house destroyed. I remember coming home from the airport, very scared, not wanting to even stay at my house over night. When I got home, there was this feeling of someone there, but really there wasn't. Everything seemed to still be intact, and not missing, but I did not feel safe staying there by myself that night. I decided to stay with family. The next day, I called Alarm Force to have a system set up in our house. I was leaving for Saskatchewan within 72 hours, and no one from alarm force could come. This was very understandable since it was short timing. I explained to AlarmForce over the phone what had happened, how I did not feel safe, and I wanted to purchase a system. AlarmForce was very helpful. Their best intention was to get a system for me installed as soon as possible so I would feel safe in my own home. AlarmForce was very helpful and they worked with my landlord and me in installing a system in my house, even knowing me and my spouse were gone from Christmas. After Christmas I came home to find a wonderful, easy, accessible alarm to use that was very understanding to learn. The best part was how much room the alarm took up, which was not much! The amount of money I have to pay for having the alarm is well worth than having my belongings maybe gone one day, or myself in danger. I like how the payment system is set up on a monthly payment, and I can transfer my system to friends or family if need be. We still live in the house so it is definitely paying off. I also love that if we were to move, we can move our system to different locations. I am more home now, than I used to be but my spouse is still out of town lots. I sometimes get very nervous staying by myself which affects sometimes the way I sleep. Being paranoid about staying in a house by yourself is not a very good feeling. It bothers me a lot that for whoever broke in knows where I live and what belongings are in the house. Will they return? But when I put my alarm system on while I am in the house, and at night going to sleep- the system makes me feel very stress and paranoid free. I know if something was to happen and someone had gotten into my house- help would be around the corner. One time, my family was up visiting with our family dog, and we were going out for supper. I was not used to having a pet around, and I set the alarm not even thinking the dog was in the house. I had received a call from Alarm Force on our way to the restaurant but I missed the call. Next thing I knew, my landlord was calling me to state that he had received a call from AlarmForce. He knew most likely I set the alarm and the dog had been in the house. I was very shocked in how the phone call was sent out asking if everything was okay. This was the first time in over a year, AlarmForce had to call, and it was amazing how comforting the time was and how it did not take long for someone to contact me. This made me feel even better about the purchase we made of installing Alarm Force in our house. I would recommend Alarm Force to anyone who is insisting to have a system put into their house. I have told many people about my story of how Alarm Force was there for me, even if I was not able to be there. I explain to others how comforting it is to have someone “with” you even knowing no body physically is there. It is an affordable way to keep one or one's family safe.
-Sara G. - Edmonton, AB
