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.

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Testimonials

  • We were having trouble with our door alarm and it was going off without reason. In one way it was annoying as Alarmforce kept calling us, but it was good to know they were protecting our home. Alarmforce corrected the problem and the problem stopped. I have accidentally set of the alarm myself, but the Alarm Force personnel were extremely patient with me and I am glad that they were there. Thanks Alarm Force, your staff is amazing and I have already recommended you to other people including my sister-in-law who lives alone and feels very secure now knowing she has the two-way voice in case of emergency.
    -Brenda M.- Edmonton, AB
  • The ease of mind with AlarmForce and the overall service I have received so far have been outstanding - thank you.
    -Bettina, BC
  • First time in my life I feel safer!
    -Joe, NC
  • Very happy from first call to install. The people in the call department very helpful. New installer very good. Nothing but impressed.
    -Bill, AB
  • We have been with Alarm Force for two years now.  When we were considering what type of protection we wanted, we asked different neighbors who had your security system, if they felt it was good coverage. They did reply that they felt very safe because of the “real” voice that comes on when someone has entered without the code. Now that we have purchased this system, we have had good success for far. There have been a couple of incidents where my family has come into my home and forgotten to shut off alarm, but very quickly the voice comes on, and rectifies the problem right away. So far, we haven’t been charged for this, and we thank you.  We had one incident where we were away and our neighbors were watching our home for us. We didn’t know that my sister was going to come to our house, and she did not realize that we had put a security system in our home. So of course, the alarm went off, she panicked and our neighbor, Mike, came to her rescue. The AlarmForce staff was very co-operative and polite when she responded to the phone.  I am not often at home by myself, but I do know that I would feel very safe in knowing the alarm is set and I can relax. I would definitely recommend your system to anyone looking for security.
    -Omer D. - Alberta
  • 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
  • The Tech that was sent was great in not only setting up our system, but he answered every question that we had for him. Not too many companies left out there that really know all about their product, but Alarm Force certainly does. He made us feel not as though we were just a sale, but rather a member of the Alarm Force Family. We are a family of four, Mom, Dad and two children. Both children are special needs as they both have Autism. Not only do we feel safer with the Alarm Force running at night or when we are away, but with the chime on the door alerts us when anyone goes out, and this is a VERY GOOD thing because we can now keep track of both of our children, and they cannot run off. Thank you again Alarm Force. We love the service that you provide, and the price is the best in the business.
    -Doug, NC
  • Absolutely outstanding service and peace of mind.
    -Marc, OH
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