Financial Information

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.

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.

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.