Financial Information

NEW ACCOUNTING PRONOUNCEMENTS

The Canadian Institute of Chartered Accountants has issued new pronouncements for accounting of Financial Instruments and Comprehensive Income that are expected to be applicable for the year ending October 31, 2006. The Company’s financial instruments include cash, accounts receivable, accounts payable and accrued liabilities, and long-term debt that bear market rates of interest. The Company believes that the carrying values of the financial instruments closely approximate their fair values, and does not anticipate any significant impact from the adoption of the recommendations of these pronouncements in the foreseeable future.

OUTLOOK

The company expects continued growth in revenues as it expands its subscriber monitored account base using its mass marketing model and brand recognition, focusing on giving the customer the best value possible through its infrastructure of manufacturing capabilities, customer-focused team culture and financial capital base. The company is committed to differentiating its position in the industry and controlling all aspects of subscriber service delivery. The central station will continue to maintain the most advanced two-way voice home security capabilities in the areas that the company operates in.

Management believes that the company is well positioned to grow the subscriber account base in the foreseeable future, given that the fundamental drivers for the residential alarm industry are considered sound. These are represented by fine-tuning of the low-cost approach, false alarm minimization and up market features, which are expected to be strong drivers and will continue to differentiate the company’s technology and innovative approach.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained herein including (without limitations) financial and business prospects and financial outlooks, may be forward looking statements which reflect management’s current expectations regarding future plans and intentions, growth, results of operations, performance and business prospects and opportunities. Words such as “may”, “will”, “should”, “could”, “anticipate”, “believe,” “expect, “intend”, “plan”, “potential”, “continue” and similar expressions have been used to identify these forward-looking statements.

These statements reflect management’s current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk, uncertainties, estimates and assumptions. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, they are not guarantees of future performance and management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new information, or the occurrence of future events or other circumstances.

Additional information on the Company can be found in the Company’s Annual Information Form (“AIF”) and other information filed with Canadian regulators on SEDAR at www.sedar.com.

OFFICERS AND DIRECTORS

Joel Matlin	President, Chief Executive Office and Secretary, founded AlarmForce Industries Inc. in 1988. Prior thereto he was the founder of Frisco Bay Industries Ltd., a publicly held company, and President from 1970 to 1988.
Anthony Pizzonia	Director and Chief Financial Officer, is a CMA and has been with AlarmForce since 1992.
Richard Boxer	Director, is a C.A. and MBA and has been President of Buckingham Capital Corporation, a Toronto based company which provides capital and advice to early stage Canadian businesses. Prior thereto, Mr. Boxer was President of a Canadian manufacturing company. In addition, he is on the Board of Directors of several public and private companies.
Charles Mayer	Director, is Professor Emeritus of Marketing at the Schulich School of Business, York University, Toronto, Canada, and Professor of International Marketing at he Graduate Business School of the Central European University, Budapest, Hungary. He is also a Core Professor at the Stuttgart Institute of Management and Technology, Stuttgart, Germany. In his consulting, Dr. Mayer focuses on Marketing and Strategic Planning. He helped develop the first Strategic Plan for AlarmForce.
Brian Segal	Director, is President and CEO of Rogers Publishing. Prior thereto he was Vice President of Rogers Publishing and Publisher of Maclean’s Magazine. Before joining Rogers, he was President of the University of Guelph and Chair of the Council of Ontario Universities. He was President of Ryerson University from 1980 to 1988. Mr. Segal is a Director of the Audit Board of Circulation and is past Chairman of the Shaw Festival and Magazine’s Canada and served on the United Way of Toronto Campaign Cabinet. He holds an undergraduate degree from McGill University. He received Masters degrees from Yeshiva University in New York and University of Pittsburgh where he also obtained a Ph.D in 1971.
N. Peter Silverberg	Director, is a solicitor practising in the City of Toronto with the law fi rm Beard Winter LLP. His areas of expertise include Corporate/Commercial, Debtor/ Creditor and Real Estate law. He also sits on the board of a charitable organization in Toronto.