Financial Information

President's Message

To Our Shareholders:

I am pleased to share with you the company’s results and achievements for 2006. Our revenues in the year surpassed the $20 million mark, which represents a record 22% annual growth rate and an exciting milestone in our eighteen years of business. The AlarmForce subscriber base also reached a record level of over 66,000 accounts monitored in Canada and the US, as of the end of our fiscal year. A major contributor to the strong performance and the accompanying financial results continues to be our exclusively organic model of expanding the monitored account base. This model maintains our cost of creating accounts at a low level while maximizing economies of scale, operating efficiency and profit margins.

In 2006, we added 15,000 new accounts, the highest figure recorded in the history of the company. The record results achieved in 2006 validate the company’s pre-eminent position in the residential security market, with our subscriber base continuing to increase at a rate more than double the average in our industry in North America. Our recurring monthly revenues and cash flows increased as a result of this positive growth.

Our subscriber growth and revenues are key performance benchmarks as companies in our business are typically valued as a multiple of recurring revenues. This is an important factor for investors and our shareholders.

Other achievements in 2005 consisted of the following milestones: