<PAGE>

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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 29, 2000

Commission File Number 0-14365

                               ----------------

                        Alpha Technologies Group, Inc.
            (Exact name of registrant as specified in its charter)

              Delaware                                 76-0079338
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
   incorporation or organization)

 11990 San Vicente Blvd., Suite 350                       90049
        Los Angeles, CA 90049                          (Zip Code)
   (Address of principal executive
              offices)

       Registrant's telephone number, including area code: 310-566-4005

                               ----------------

        Securities registered under Section 12(b) of the Exchange Act:

                                     None

        Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $.03 par value
                             (Title of each class)

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) had been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

   Aggregate market value of the voting stock held by non-affiliates of the
registrant.

                        $49,109,524 at January 22, 2001

   Number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

        Common Stock, 7,078,435 shares outstanding at January 22, 2001

                               ----------------

                      DOCUMENTS INCORPORATED BY REFERENCE

   The Company's definitive proxy statement for its Annual Meeting of
Stockholders to be filed on or about February 26, 2001 is incorporated by
reference into Part III of this report.

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<PAGE>

                DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

   In conjunction with the provisions of the "Safe Harbor" section of the
Private Securities Litigation Reform Act of 1995, this Annual Report on Form
10-K may contain forward-looking statements pertaining to future anticipated
projected plans, performance and developments, as well as other statements
relating to future operations. All such forward-looking statements are
necessarily only estimates of future results and there can be no assurance
that actual results will not materially differ from expectations. Further
information on potential factors which could affect the Company, including,
but not limited to, the impact of competitive products and pricing, product
demand and market acceptance, new product development, reliance on key
strategic alliances, availability of raw materials, fluctuations in operating
results, ability to retain and attract personnel including management and
other risks are detailed herein and in the Company's other filings with the
Securities and Exchange Commission.

                                    PART I

Item 1. Description of Business.

Our Company

   As a result of the recent sale of the Company's connector and subsystems
businesses, Alpha Technologies Group, Inc.'s ("Alpha" or the "Company") sole
business is the manufacturer and sale of thermal management products.

   The Company is one of the leading manufacturers of thermal management
products in the United States. Thermal management products, principally heat
sinks, are devices made out of fabricated aluminum extrusions that have high
surface area to volume ratios and are engineered to dissipate unwanted heat
generated by electronic components. As systems become increasingly more
powerful and packaging becomes smaller, the need to dissipate heat becomes
more important to the reliability and functioning of electronic systems. The
Company's thermal management products serve the microprocessor, computer,
automotive, telecommunication, industrial controls, transportation, power
supply, factory automation, consumer electronics, aerospace and the defense
industries.

   During the third quarter of fiscal 2000, the Company's connector operation
was sold, and subsequent to year end, on November 17, 2000, its subsystems
operation was sold for an aggregate of approximately $14,500,000. These
dispositions were made so that the Company could focus on its growing thermal
management business. (See Recent Developments below and Footnote 3:
Discontinued Operations)

   The Company was incorporated as Synercom Technology, Inc., in Texas in
1969. We changed the state of incorporation to Delaware in 1983 and in 1995,
changed our corporate name to Alpha Technologies Group, Inc.

                                       1
<PAGE>

                              RECENT DEVELOPMENTS

   The Company made several significant changes to its business recently. In
July, 2000, Alpha sold its connector business (which was called Uni-Star
Industries, Inc. and sold products principally under the Microdot tradename)
to a subsidiary of Tyco Electronics for approximately $12,300,000. After year
end, on November 17, 2000, the Company sold its subsystems operations, located
near Philadelphia, PA for approximately $2,200,000 in cash and a three year
promissory note in the amount of $300,000.

   On January 8, 2001 the Company completed a rights offering pursuant to
which holders of Alpha common stock on October 25, 2000, received one basic
subscription right for each 25 shares of common stock held as of the close of
business on that date. Holders of subscription rights were entitled to
purchase one share of the Company's common stock at a price of $7.25 per
share. The rights offering was oversubscribed and the Company received
approximately $1,964,000, from the sale of 270,946 shares of common stock.

   As a result of the three transactions described above, the Company raised
approximately $15,500,000 (net of expenses) which has been used to expand its
thermal management business. In that connection, on January 9, 2001, the
Company purchased the stock of National Northeast Corporation ("NNE"), a
leading manufacturer of aluminum extrusions and heat sinks, for $49,900,000.
To fund the acquisition of NNE, on January 9, 2001, Alpha entered into a loan
agreement pursuant to which the Company can borrow up to $50,000,000 from
Union Bank of California, N.A. and other banks in its syndicate. The Company
borrowed approximately $40 million on January 9, 2001 to fund a significant
portion of the NNE purchase price.

   The Company believes the acquisition of NNE will bring new customers and
products to its business and expects NNE's state of the art facility to expand
manufacturing capacity and extrusion capabilities. Alpha believes this
transaction is an important step in the Company's plan to focus its resources
exclusively on building its thermal management business.

   In addition to the recent addition of NNE, which operates in Pelham, New
Hampshire, Alpha conducts its business through several wholly owned
subsidiaries: Wakefield Engineering, Inc. ("Wakefield"), which includes the
Wakefield-Fall River (Fall River, MA) and Wakefield-Temecula (Temecula, CA)
divisions, Specialty Extrusion Corp. ("Specialty", formerly known as Wakefield
Extrusion Corp.) and Lockhart Industries, Inc. ("Lockhart").

 Products

   The Company designs, manufactures and sells thermal management products for
use in a variety of industries, including the microprocessor, computer,
automotive, telecommunication, industrial controls, transportation, power
supply, factory automation, consumer electronics, aerospace and defense
industries.

   The Company's principal thermal management products include:

<TABLE>
<S>                  <C>
Penguin(TM) Coolers  Heat sinks specifically designed to solve thermal
                     problems for the latest high-speed microprocessors
                     offered by major manufacturers. These products are used
                     in personal computers and servers. Older versions of
                     Penguin Coolers are used in embedded microprocessor
                     applications. In addition, these products solve thermal
                     problems for ASICs, ball grid arrays ("BGA") and
                     multichip modules.

Extruded Heat Sinks  Heat sinks and heat sink assemblies designed for high
                     power industrial applications, including transportation
                     equipment; automotive and other stereo amplifiers; and
                     bonded fin heat sinks used by makers of power supplies,
                     transportation equipment and other industrial
                     equipment.
</TABLE>


                                       2
<PAGE>

<TABLE>
<S>                     <C>
Stamped and Low Power   Heat sinks designed to dissipate heat generated by
 Heat Sinks             power semiconductors, transistors, rectifiers, diodes
                        and other electronic components used in electronic
                        applications. Typically, these are smaller components
                        used on printed circuit boards.

Active Cooling          These products use air or liquid to dissipate heat.
 Components             Air-to-air heat exchangers use fans to exchange heat
                        with cooler air and are used in high-performance
                        telecommunications, military and aerospace systems.
                        These products also include sophisticated precision
                        formed fin/fluxless vacuum brazed chassises, heat
                        exchangers and cold plates used to cool and protect
                        computer, radar and laser systems for the aerospace,
                        military and commercial markets. Liquid cooling systems
                        are used in applications which require the removal of
                        significantly greater amounts of heat than can be
                        achieved by air cooling.

Precision Compression   These products are complete mounting clamp and heat
Mounting Clamp Systems  sink assembly systems for proper installation,
                        compression and cooling of high- power compression pack
                        silicon-controlled rectifiers. These products are used
                        in industrial welding, transportation and motor control
                        systems.

Accessory Products      The Company's accessories include high-performance
                        thermal compounds, adhesives, interface materials, and
                        other accessories.
</TABLE>

 Customers

   The principal customers for the Company's thermal management products are
leading original equipment manufacturers ("OEM's") of electronic equipment,
including: Harman, Hewlett-Packard, Selectron, Rockwell, Lockheed Martin,
General Electric, Delco, SCI, Celestica, Gateway, Chrysler Corporation, and
Motorola. The thermal management business has over 3,000 customers. No single
customer accounted for greater than 10% of the Company's revenues during its
2000, 1999 or 1998 fiscal years.

   The Company's thermal management products must meet its OEM customer's
exacting specifications. Some of the Company's thermal management OEM
customers require the Company to qualify as an approved supplier. In order to
so qualify, the Company must satisfy stringent quality control standards and
undergo extensive in-plant inspections of its manufacturing processes,
equipment and quality control systems. In addition, as required by certain of
the Company's automotive customers, the Company's Wakefield-Temecula division
became QS9000 registered (the quality specification required by the automotive
industry).

 Sales, Marketing, and Distribution

   The Company designs, manufactures and sells both standard and customized
thermal management products. The Company seeks to become a strategic supplier
to its customers and to differentiate itself from its competitors by offering
a higher level of service to its customers. The Company has applications
engineers who are dedicated to providing ongoing technical support. These
engineers provide solutions to customers for their thermal management
problems, answer customers' questions on the use and application of the
Company's products, provide field support to customers and work with certain
key customers to develop new thermal management solutions. The Company
believes the technical services provided by its engineers are an important
factor in its thermal management sales.

   The Company sells thermal management products through its in-house sales
personnel and a network of independent manufacturers' representatives and
distributors. In North America, thermal management products sales are
supported by an internal sales support staff of 21 individuals, 16
manufacturers' representatives and 15

                                       3
<PAGE>

distributors. In international markets, the Company's thermal management
products are sold by: 10 companies functioning both as manufacturers'
representatives and distributors, 3 manufacturers' representatives and 6
distributors.

   In general, the Company's thermal management manufacturers' representatives
and distributors enter into agreements that allow for termination by either
party upon 30 to 90 days notice. Generally, distributors are permitted to
return a small portion of products purchased by them during the term of the
agreements and to return all products (other than obsolete or custom products)
purchased by them upon termination of the agreement by the Company.
Historically, the amount of returns has been insignificant to the Company's
business. The Company's distributors are generally not precluded from
marketing competitive products.

 Research and Product Development

   The Company's product development strategy continues to focus on
engineering modifications of existing products to provide customers with
higher performance and lower cost products. The Company maintains technical
relationships with certain key customers in order to understand future thermal
management requirements and focuses on developing new or modifying existing
products to meet such requirements. The Company strives to be included on the
recommended vendor list of its customers, however, such recommendation is
typically not exclusive.

   During fiscal 2000, 1999 and 1998, the Company spent $831,000, $738,000 and
$1,903,000, respectively, on product research and development with respect to
its thermal management products. The Company believes that its technical
capabilities, in conjunction with its relationships with customers, will allow
it to continue to introduce solutions to new thermal management problems
responsively. The reduction in research and development expenses resulted from
the Company's decision to primarily focus its efforts on solving customer's
current thermal management problems rather than the development of next
generation solutions.

 Competition

   The thermal management market is highly competitive. There are many
companies which compete directly with the Company in the thermal management
business and offer products and services similar to those offered by the
Company. In this market, the Company's two principal competitors are Aavid
Thermal Technologies, Inc. (including its recent purchase of Thermalloy) and
Foxconn/Foxflow Thermal Technology, Inc. Subsequent to year end, on January 9,
2001, the Company purchased National Northeast from Mestek, Inc. National
Northeast was previously considered a principal competitor. Additional
competition comes from numerous small machine shops and aluminum extruders
which typically focus on a single product and do not offer complete lines of
thermal management products.

 Backlog

   The thermal management business backlog was approximately $13.6 and $10.0
million on October 29, 2000 and October 31, 1999, respectively. Backlog
typically consists of purchase orders scheduled for shipment within 60 days
following the order date. The Company's backlog at any time is not indicative
of future revenue.

 Proprietary Rights

   The Company applies for patents with respect to its most significant
patentable developments. It owns 18 patents related to its thermal management
products which expire from 2002 to 2016. Management believes that its
competitive position is not dependent on patents and that patent expirations
will not materially adversely affect the Company's competitive position.


                                       4
<PAGE>

 Raw Materials

   The principal raw material used in the Company's thermal management
products is extruded aluminum. Raw materials represent a significant portion
of the cost of the Company's thermal management products. Prices for raw
materials are based upon market prices at the time of purchase. Historically,
the price of aluminum has experienced substantial volatility. Although thermal
management products are generally shipped within 60 days following the order
date, increases in raw materials prices cannot always be reflected in product
sales prices. All raw materials are readily available from multiple suppliers
at competitive prices. In addition, Specialty, a wholly-owned subsidiary of
Wakefield Engineering, supplies a portion of the Company's needs for extruded
aluminum. The Company does not believe the price volatility for aluminum
represents a significant risk because the raw materials for an order are
usually purchased within a short time after the order is accepted.

 Environmental Regulations

   Several aspects of the Company's operations utilize hazardous materials,
the removal of which is subject to government regulation. The Company
contracts with licensed third party waste haulers to remove such hazardous
materials. While the Company believes that it conducts its operations in
substantial compliance with applicable environmental laws and regulations and
has all environmental permits necessary to conduct its business, more
stringent environmental regulations may be enacted in the future, and there
can be no assurance that the Company will not incur significant costs in the
future in complying with such regulations. Local environmental agencies
monitor the Company's operations for ongoing compliance with environmental
requirements, and the Company is required to correct any violations revealed
by such monitoring. Although the Company is periodically subject to notices of
violations with respect to environmental requirements, it is not aware of any
violations or events that would require the Company to incur material cost,
nor has the cost of complying with environmental laws represented a material
cost to the Company.

 Employees

   On October 29, 2000, the Company had 506 employees (502 of whom were full
time). Its thermal management business had 453 employees (449 of whom were
full time), all in domestic operations. In addition, the Company had 44
employees (all full time) in its subsystem business, which was sold shortly
after fiscal year end, and 9 corporate employees (all full time). Employees
are not represented by a labor union. Management believes that employee
relations are excellent.

   Product names mentioned herein are for identification purposes only and may
be trademarks or registered trademarks of their respective companies.

Item 2. Description of Property.

   The Company has leases for manufacturing facilities at the following
locations:

<TABLE>
<CAPTION>
                                  Approximate Principal Facility   Expiration
Location                          Square Feet         Use             Date
--------                          ----------- ------------------- -------------
<S>                               <C>         <C>                 <C>
Temecula, California.............   44,200    thermal management
                                                   products       November 2004
Fullerton, California............   15,000    aluminum extrusions
                                                  for thermal
                                              management products   August 2002
Fall River, Massachusetts........   81,000    thermal management
                                                   products           July 2008
Paramount, California............   36,700    thermal management
                                                   products        October 2004
Paramount, California............   25,000    thermal management
                                                   products        October 2004
</TABLE>

                                       5
<PAGE>

   In connection with the purchase of NNE, the Company acquired ownership of a
manufacturing facility in Pelham, NH. Management believes that these
facilities are in good condition suitable for the purposes for which they are
used. The Company has office space for its thermal management sales,
engineering and administrative functions in Beverly, Massachusetts and for its
corporate staff in Houston, Texas, Los Angeles, California and New York, New
York.

Item 3. Legal Proceedings.

   There are no material pending legal proceedings against the Company and, to
the Company's knowledge, no such proceedings are threatened.

Item 4. Submission of Matters to a Vote of Security Holders.

   No matters were submitted during the fourth quarter of fiscal 2000 to a
vote of the holders of the Company's common stock, through the solicitation of
proxies or otherwise.

                                    PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Market for Common Stock

   The Company's common stock is traded on The Nasdaq Stock Market, National
Market System (NMS) under the symbol ATGI. Through the facilities of the
NASDAQ/NMS reporting system, actual sales prices of the Company's common stock
are available.

   The following table sets forth the high and low sales prices of the
Company's common stock as reported on the NASDAQ National Market System for
each full quarterly period within the Company's two most recent fiscal years:

<TABLE>
<CAPTION>
        1999                                                   High      Low
        ----                                                   ----      ---
      <S>                                                      <C>       <C>
      First Quarter...........................................   2        1 1/4
      Second Quarter..........................................  3 1/2     1 11/16
      Third Quarter...........................................   5        3 5/16
      Fourth Quarter..........................................  5 3/4     3 7/8

<CAPTION>
        2000                                                   High      Low
        ----                                                   ----      ---
      <S>                                                      <C>       <C>
      First Quarter...........................................   7        5 1/4
      Second Quarter..........................................   8        5 3/8
      Third Quarter...........................................  16        6 15/16
      Fourth Quarter.......................................... 16 13/16   9 3/16
</TABLE>

Holders of Record

   On December 31, 2000, there were approximately 155 holders of record and
approximately 2,000 beneficial owners of the Company's common stock.

Dividends

   The Company has paid no cash dividends on its common stock during fiscal
years 2000 and 1999. The Board of Directors of the Company does not intend to
authorize the payment of cash dividends to the Company's common stock holders
in the foreseeable future.

                                       6
<PAGE>

Item 6. Selected Financial Data.

   On July 28, 2000, the Company sold (the "Uni-Star Sale") its connector
business, Uni-Star Industries, Inc. ("Uni-Star") to Tyco Electronics
Corporation and Tyco Electronics UK Ltd. The Company received $12,300,000 in
cash, subject to reduction based upon the value of Uni-Star's Net Assets (as
defined in the Stock Purchase Agreement) as of the closing date. Tyco has made
a request for a purchase price adjustment which, the Company is in the process
of negotiating. The Company does not believe that any eventual adjustment will
have a material impact on the Company's financial statements. The sale
resulted in a gain of approximately $6,478,000, net of income tax expense.

   On November 17, 2000, the Company sold its subsystems business (Malco
Technologies, Inc.) for $2,200,000 in cash and a three year promissory note in
the amount of $300,000. In June, 1997, the Company sold its hermetic connector
business.

   Accordingly, the results of operations in the following Selected Financial
Data do not include any information with respect to the businesses sold. In
the consolidated financial statements for the Company which are included in
this document, these businesses are accounted for as discontinued operations.

<TABLE>
<CAPTION>
                                              For the Years Ended
                          -----------------------------------------------------------
                                      October 31, October 25, October 26, October 27,
                          October 29,    1999        1998        1997        1996
                             2000     (Restated)  (Restated)  (Restated)  (Restated)
                          ----------- ----------- ----------- ----------- -----------
                                (In Thousands Except Share and per Share Data)
<S>                       <C>         <C>         <C>         <C>         <C>
RESULTS OF OPERATIONS(1)
Sales...................   $  61,547   $  48,429   $  58,495   $  58,294   $  48,980
Cost of sales...........      43,136      36,121      50,360      47,355      38,878
Gross profit............      18,411      12,308       8,135      10,939      10,102
Income (loss) before
 discontinued
 operations(2)..........       8,498       2,656      (4,345)     (2,934)       (806)
Income (loss) per share
 from continuing
 operations:
  Basic.................   $    1.17   $    0.38   $   (0.64)  $   (0.44)  $   (0.13)
  Diluted...............   $    1.07   $    0.37   $   (0.64)  $   (0.44)  $   (0.13)
Shares used:
  Basic.................   6,759,626   6,935,778   6,753,752   6,682,106   6,277,585
  Diluted...............   7,428,551   7,134,382   6,753,752   6,682,106   6,277,585

BALANCE SHEET DATA(1)
Total assets............   $  45,605   $  32,962   $  36,125   $  39,036   $  42,812
Stockholders' equity....   $  34,515   $  18,502   $  16,317   $  18,801   $  22,117
</TABLE>
--------
(1) See Consolidated Financial Statements and Notes to Consolidated Financial
    Statements on pages F-1 through F-21.
(2) See "Discontinued Operation" in Notes to Consolidated Financial
    Statements.

Item 7. Management's Discussion and Analysis of Operations and Financial
Condition.

Forward Looking Statements

   In conjunction with the provisions of the "Safe Harbor" section of the
Private Securities Litigation Reform Act of 1995, this Annual Report on Form
10-K may contain forward-looking statements pertaining to future anticipated
projected plans, performance and developments, as well as other statements
relating to future operations. All such forward-looking statements are
necessarily only estimates of future results and there can be no assurance
that actual results will not materially differ from expectations. Further
information on potential factors which could affect the Company, including,
but not limited to, the impact of competitive products and

                                       7
<PAGE>

Item 7. Management's Discussion and Analysis of Operations and Financial
Condition--continued

pricing, product demand and market acceptance, new product development,
reliance on key strategic alliances, availability of raw materials,
fluctuations in operating results, ability to retain and attract personnel
including management and other risks are detailed herein and in the Company's
other filings with the Securities and Exchange Commission.

Results of Operations

   The results of operations have been restated to reflect the results of
operations from Uni-Star, the hermetic connector business and Malco
Technologies, Inc. as discontinued operations. See introductory paragraphs in
"Selected Financial Data". Unless otherwise mentioned, the following
discussion reflects results from continuing operations which includes the
thermal management business and Alpha corporate expenses.

 Fiscal Year 2000 versus Fiscal Year 1999 Comparison

   Net Income. The Company reported net income for fiscal 2000 of $15,392,000
which includes $7,918,000 in income from continuing operations, a $6,478,000
gain from the sale of the Company's connector business and $996,000 in income
from discontinued operations. Net income for fiscal 1999 was $4,154,000
including $2,656,000 from continuing operations and $1,498,000 from
discontinued operations.

   Income from Continuing Operations. The increase in income from continuing
operations is primarily due to the increase in sales and gross margin from the
Company's thermal management business.

   Sales. The Company's sales for fiscal 2000 increased 27.1% to $61,547,000
from $48,429,000 for the same period of fiscal 1999. Management believes that
the increase in sales is due to the Company's ability to better serve its
thermal management customers including improvements in customer service,
shorter lead times, and better on-time delivery.

   Gross Profit. The Company's gross profit as a percentage of total revenues
("gross profit percentage") for fiscal 2000 was 29.9% compared to 25.4% for
fiscal 1999. This increase was due to the effects of programs to forgo lower
margin sales, enhance productivity and lower costs. In addition, the Company
has continued to focus on improving manufacturing efficiencies.

   Selling, General and Administrative Expense. Selling, general and
administrative expenses for fiscal 2000 were $8,722,000, or 14.2% of sales,
compared to $8,035,000, or 16.6% of sales, for the 1999 period which included
$180,000 accrued in the first quarter of 1999 for the cancellation of a
contractual obligation. SG&A expenses (excluding the additional accrual in
1999), as a percentage of sales, decreased due to higher sales volume without
a proportional increase in SG&A expenses in fiscal 2000 as compared to the
prior year.

   Interest and Other Income (Net). Interest expense was $692,000 and $898,000
for fiscal 2000 and 1999, respectively. This decrease was due to a decrease in
the average outstanding borrowing base partially offset by an increase in the
effective interest rate paid on outstanding debt. The effective interest rate
increased due to the market increase in the base rate used to calculate the
interest charged on the Company's debt (See "Liquidity and Capital Resources"
below). Interest income for fiscal 2000 was $187,000. During fiscal 2000, the
Company paid off its revolving credit line with the positive cash flow from
operations and, thus, was able to earn interest on the proceeds received from
the sale of the connector business during the fourth quarter of fiscal 2000.

   The Company recorded other income (net) in fiscal 2000 of $145,000 which
was primarily a result of a $160,000 reversal of the accrual expensed in prior
periods for environmental litigation related to the Company's Lockhart
facility. In April 2000, the parties reached a settlement under which the suit
was dismissed.

                                       8
<PAGE>

Item 7. Management's Discussion and Analysis of Operations and Financial
Condition--continued


   Provision for Income Tax. Income from continuing operations reflects a
$580,000 income tax provision. The Company's tax provision is not at statutory
rates due to the Company's utilization of its net operating loss
carryforwards. The Company expects to record a net tax provision at the full
statutory rate of between 36-40% for its fiscal 2001.

   Gain on sale of discontinued operation. On July 28, 2000, as a result of
the Uni-Star Sale discussed previously, the Company recorded a $6,478,000
gain, net of $640,000 in income taxes.

 Fiscal Year 1999 versus Fiscal Year 1998 Comparison

   Net Income/Loss. The Company reported net income for fiscal 1999 of
$4,154,000 which included $2,656,000 related to continuing operations and
$1,498,000 related to discontinued operations. For fiscal 1998, the Company
reported a net loss of $2,783,000 which included a net loss of $4,345,000
related to continuing operations and net income of $1,562,000 related to
discontinued operations.

   The net loss reported for 1998 included $99,000 in net benefit for
restructuring and other non-recurring costs, a charge for additional inventory
reserves of $926,000, and a $269,000 charge to write off toolings used in the
manufacturing of certain products within the thermal management stamping
product line. The additional charges recorded in fiscal 1998 are detailed
further below. The improvement in the net results is primarily the result of
improved gross profit and control of operating expenses. See "Gross Profit,
Research and Development and Selling, General and Administrative Expense"
below.

   Net income (loss) from Continuing Operations. Net income from continuing
operations for fiscal 1999, which includes results from the thermal management
business and Alpha corporate expenses, was $2,656,000 compared to a net loss
of $4,345,000 for the 1998 period. The loss in fiscal 1998 included a charge
for additional inventory reserves of $926,000, a $269,000 charge to write off
toolings used in the manufacturing of certain products within the stamping
product line, severance payments of $263,000 and the net reversal of $362,000
accrued in connection with the consolidation of the thermal management
operations begun in the fourth quarter of 1997. Results from operations
improved primarily due to an increase in gross profit margin and a decrease in
operating expenses resulting from the changes implemented at the end of fiscal
1998.

   Sales. Sales decreased to $48,429,000 for fiscal 1999 from $58,495,000 for
fiscal 1998. The decrease in sales primarily resulted from the Company's
decision to no longer pursue certain low margin sales opportunities in thermal
management. Consequently, the Company focused its efforts on serving thermal
management customers who typically purchase highly customized products,
including products serving the personal computer industry. These customers
typically utilize the Company's expertise in developing solutions to their
thermal management problems.

   Gross Profit. The Company's overall gross profit as a percentage of total
revenues ("gross profit percentage") for fiscal 1999 was 25.4% and 13.9% for
fiscal 1998. Excluding the aforementioned additional inventory reserves
recorded in fiscal 1998 and the write off of toolings, the Company's gross
profit percentage was 16.0% for fiscal 1998. The increase in the gross profit
percentage was due to the effects of programs to forego lower margin sales,
enhance productivity and lower costs. During the fourth quarter of fiscal
1998, the Company implemented cost reduction measures, primarily a reduction
in workforce, to bring expenses in line with current sales levels. In
addition, the Company increased its focus on manufacturing efficiencies.

   Research and Development Expense. Research and development expenses for
fiscal 1999 were $738,000, or 1.5% of sales, compared to $1,903,000, or 3.2%
of sales, for fiscal 1998. The reduction in research and development expenses
resulted from the Company's decision to primarily focus its research and
development efforts on solving customer's current thermal management problems
rather than the development of next generation solutions.

                                       9
<PAGE>

Item 7. Management's Discussion and Analysis of Operations and Financial
Condition--continued

   Selling, General and Administrative Expense. Selling, general and
administrative expenses were $8,035,000, or 16.6% of sales. This compares to
$9,660,000, or 16.5% of sales for the prior year period. The $1,625,000
decrease in SG&A expenses for fiscal 1999, compared to the same period of
1998, is attributable to a reduction in operating expenses, primarily
workforce reductions which occurred during the fourth quarter of fiscal 1998.

   Restructuring and Other Expenses. For fiscal 1998, the Company recorded a
benefit of $99,000, for net restructuring and other expenses which include
$263,000 in downsizing severance payments and the net reversal of $362,000
accrued in connection with the consolidation of the thermal management
operations.

   The Company reached an agreement, during fiscal 1998, with the landlord of
the Wakefield facility to transfer its remaining lease commitment on this
facility to a lease for office space owned by the same landlord in Beverly,
Massachusetts. As part of the charge for the consolidation of its Wakefield
and Fall River, Massachusetts plants, the Company had previously provided for
the sublease of this facility at less than the Company's lease commitment. Due
to the agreement with the landlord, the Company reversed $362,000 of this
accrual. The Company does not expect to incur any additional material charges
related to this consolidation.

   Interest and Other Income (Net). Interest expense was $898,000 and $970,000
for fiscal 1999 and 1998, respectively. The decrease in interest expense is
due to the decrease in the average borrowing base partially offset by an
increase in the average interest rate paid on outstanding debt.

Income Taxes

   On October 29, 2000, the Company had, for tax purposes, net operating loss
carryforwards of approximately $3,549,000, unused investment and research and
development tax credits of approximately $255,000, and $488,000 of alternative
minimum tax credits available to offset future taxable income and Federal
income taxes. The net operating loss carryforwards will expire at the end of
fiscal 2018, the investment tax credit and research and development tax credit
carryforwards will expire from 2001 to 2005, and the alternative minimum tax
credit has no expiration.

   All carryforwards are subject to review and possible adjustment by the
Internal Revenue Service. Additionally, Section 382 of the Internal Revenue
Code limits the amounts of net operating loss carryforwards usable by a
corporation following a more than 50 percentage point change in ownership of
the corporation during a three-year period. It is possible that subsequent
transactions involving the Company's capital stock could result in such a
limitation. See "Income Taxes" in Notes to Consolidated Financial Statements.

Liquidity and Capital Resources

   On October 29, 2000, the Company had cash of approximately $12,364,000
compared to $233,000 on October 31, 1999. For the fiscal year ended October
29, 2000, $7,072,000 was provided by operating activities primarily from net
income. During fiscal 2000, $9,083,000 was provided by investing activities
including $12,300,000 in proceeds received from the sale of the connector
business and $3,105,000 used for capital equipment purchases made to improve
manufacturing capabilities and capacity and to refurbish and upgrade existing
machinery. The Company used $4,024,000 in financing activities in fiscal year
2000 including $355,000 received from the issuance of stock pursuant to the
exercise of stock options and used $4,379,000 to reduce debt.

   On October 29, 2000, working capital was $22,646,000 compared to
$11,353,000 on October 31, 1999. The increase in working capital during fiscal
2000 is primarily due to proceeds received from the sale of the Company's
connector business.

   Effective April 16, 1999, the Company and its subsidiaries (hereinafter
referred to as "Borrowers") became parties to a loan and security agreement
(the "Agreement") with a commercial lender. The Agreement provides

                                      10
<PAGE>

Item 7. Management's Discussion and Analysis of Operations and Financial
Condition--continued

for revolving loans of up to $10,500,000, a $5,400,000 term note payable
monthly over five years, and an equipment acquisition facility of up to
$1,000,000 for fiscal 1999. The obligations under the Agreement were secured
by a first lien on and assignment of all of the assets of the Borrowers which
in aggregate totaled $45,605,000 on October 29, 2000. The Company terminated
this Agreement in December 2000 and replaced the facility with the new
facility described below. The Company incurred an extraordinary charge due to
the early extinguishment of debt of approximately $388,000, net of tax.

Liquidity after Closing of Offering and Completing the Purchase of NNE

   In connection with the NNE Transaction(See "Recent Developments" above), on
January 9, 2001, the Company and its subsidiaries, as guarantors, became
parties to a Credit Agreement with Union Bank of California, N.A. as sole lead
arranger and administrative agent and several banks and other financial
institutions.

   The new credit facility provides for revolving loans of up to $15,000,000,
and a $35,000,000 term note payable quarterly, beginning March 31, 2001 over
five years. The advances on the revolving loans are based on the eligible
accounts receivable. The maturity date of the Agreement is January 8, 2006.

   In connection with the NNE acquisition, on January 9, 2001, $35,000,000 was
borrowed on the term loan and $4,800,000 was drawn on the revolving credit
facility. Interest on the revolver accrues at the base rate provided by Union
Bank of California, N.A. pursuant to the terms of the Agreement plus .75%
(9.75% on January 9, 2001). There is an unused line fee equal to .5% per annum
based on the average aggregate amount, for each day during the period, of the
Available Revolving Loan Commitment. The $35,000,000 term note accrues
interest at the base rate provided by Union Bank of California, N.A. pursuant
to the terms of the Agreement plus .75% (9.75% per annum on January 9, 2001)
and is payable in four quarterly installments $1,500,000 beginning March 31,
2001, followed by twelve quarterly installments of $1,750,000, and four final
quarterly installments of $2,000,000, together, in each instance, with
interest thereon to the date of payment. The obligations under the Agreement
are secured by a first lien on and assignment of all of the assets of the
Borrowers.

   The Company raised approximately $1.9 million in its rights offering which
was completed on January 8, 2001 (See "Recent Developments" above). After the
funding of its new credit facility, the completion of the rights offering and
the purchase of NNE, the Company had approximately $3 million in cash and the
ability to borrow an additional $8 million on its revolving credit line.

   The Company believes that its currently available cash, anticipated cash
flow from operations and availability under credit facilities is sufficient to
fund its operations in the near-term.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

   In April 1999, the Company and its subsidiaries entered into a loan and
security agreement with a commercial lender. On October 29, 2000, interest
accrued at the prime rate announced by First Union National Bank plus .25%
(9.75% per annum on October 29, 2000). The average interest rate experienced
on outstanding debt was 9.33% and 8.75% for fiscal 2000 and 1999,
respectively. The Company is not currently engaged in any derivative financial
instrument to manage its interest rate risk.

Item 8. Financial Statements and Supplementary Data.

   Financial statements and supplementary data required pursuant to this Item
are presented on pages F-3 through F-21 and page S-1 of this report.

                                      11
<PAGE>

Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.

   Effective October 8, 1999, the Company engaged Grant Thornton LLP as the
principal accountant to audit the Company's financial statements. The decision
to change accountants was approved by the Board of Directors of the Company.
The Company's previous certifying accountant was Arthur Andersen, LLP.

   The Report of Arthur Andersen LLP on the financial statements of the
Company for either of the past two fiscal years did not contain an adverse
opinion or disclaimer of opinion nor was it modified as to uncertainty, audit
scope or accounting principles. There were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, during the two fiscal
years ending October 26, 1997 and October 25, 1998, and the subsequent interim
period through October 8, 1999 which, if not resolved to Arthur Andersen LLP's
satisfaction, would have caused Arthur Andersen LLP to make reference to the
subject matter of the disagreements(s) in connection with its Reports. Arthur
Andersen has confirmed the foregoing.

   Prior to its engagement as the Company's independent accountant, Grant
Thornton LLP had not been consulted by the Company either with respect to the
application of accounting principles to a specific transaction or the type of
audit opinion that might be rendered on the Company's financial statements.
Grant Thornton has confirmed the foregoing.

   During the twenty-four month period preceding October 29, 2000, the Company
did not have any disagreements with its accountants on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope and procedures.

                                      12
<PAGE>

                                   PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons of the
Registrant.

   The information required by this Item will be contained in the Company's
definitive Proxy Statement, which will be filed on or about February 26, 2001,
and is incorporated herein by reference.

Item 11. Executive Compensation

   The information required by this Item will be contained in the Company's
definitive Proxy Statement, which will be filed on or about February 26, 2001,
and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

   The information required by this Item will be contained in the Company's
definitive Proxy Statement, which will be filed on or about February 26, 2001,
and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

   The information required by this Item will be contained in the Company's
definitive Proxy Statement, which will be filed on or about February 26, 2001,
and is incorporated herein by reference.

                                      13
<PAGE>

                                    PART IV

Item 14. Exhibits and Reports on Form 8-K

<TABLE>
<CAPTION>
 Exhibit
   No.
 -------
 <C>     <S>
  2.1    --Agreement and Plan of Merger dated as of August 14, 1996 by and
          among Alpha Technologies Group, Inc., Lockie Acquisition Corp.,
          Lockhart Industries, Inc., Eldon H. Lockhart and Marjorie D.
          Lockhart. (The exhibits and schedules to the Agreement and Plan of
          Merger and listed on page v of the Table of Contents of such
          Agreement. Such exhibits and schedules have not been filed by the
          Issuer, who hereby undertakes to file such exhibits upon request of
          the Commission.)(1)

  2.2    --Stock Purchase Agreement Between Mestek, Inc. and Alpha Technologies
          Group, Inc. dated September 18, 2000 (Exhibits and schedules pursuant
          to the Agreement have not been filed by the Registrant, who hereby
          undertakes to file such exhibits and schedules upon request of the
          Commission.)(2)

  2.3    --Amendment No. 1 dated November 10, 2000 to the Stock Purchase
          Agreement dated September 18, 2000 by and between Mestek, Inc. and
          Alpha Technologies Group, Inc.(2)

  2.4    --Stock Purchase Agreement By and Among Alpha Technologies Group,
          Inc., Uni-Star Industries, Inc., Tyco Electronics Corporation and
          Tyco Electronics UK Ltd. dated July 28, 2000. (Exhibits and schedules
          pursuant to the Agreement have not been filed by the Registrant, who
          hereby undertakes to file such exhibits and schedules upon request of
          the Commission.)

  3.1    --Certificate of Incorporation of the Company, as amended through
          April 18, 1995.(3)(4)

  3.1(a) --Amendment to Certificate of Incorporation dated April 19, 1995
          (Filed Herewith)

  3.2    --By-laws of the Company.(Filed Herewith)

  4.1    --Credit Agreement among Alpha Technologies Group, Inc., The Lenders
          Parties thereto, Union Bank of California, N.A. as Sole Lead Arranger
          and Union Bank of California, N.A. as Administrative Agent dated
          December 26, 2000. (Exhibits and schedules pursuant to the Agreement
          have not been filed by the Registrant, who hereby undertakes to file
          such exhibits and schedules upon request of the Commission.)(2)

 10.1    --Registrant's 1985 Stock Option Plan, together with amendments
          thereto.(4)(5)(6)(7)*

 10.2    --Registrant's 401-K Plan as amended.(8)(9)*

 10.3    --Registrant's 1994 Stock Option Plan as amended and
          restated.(10)(11)*

 10.4    --Indenture of Lease Agreement dated as of December 20, 1994 by and
          between Richard J. Tobin, as Trustee of JLN Realty Trust, under
          Declaration of Trust dated June 15, 1981 and filed with Bristol
          County Fall River District Registry of Deeds Land Court Records as
          Document 12977, and Wakefield Engineering, Inc.(Filed Herewith)

 10.4(a) --Lease modification and extension agreement date February 4, 1998 by
          and between Richard J. Tobin as Trustee u/d/t dated June 15, 1981 and
          entitled "J L N Realty Trust" and Wakefield Engineering, Inc.(9)

 10.5    --Industrial Space Lease dated as of September 29, 1995 by and between
          Rancon Income Fund I and Wakefield Engineering, Inc.(Filed Herewith)

 10.6    --Lease dated October 31, 1979 by and between Landcee Investment Co.
          and Lockhart Industries, Inc. together with addendum and amendments
          thereto.(1)

 10.6(a) --Letter Agreement--Lease Extension dated August 8, 1999 between
          Landcee Investment Company and Lockhart Industries, Inc. (12)

 10.7    --Lease dated August 29, 1984 by and between Garfield-Pacific
          Development Co. and Lockhart Industries, Inc., together with
          addendums and amendments thereto.(1)

 10.7(a) --(Letter Agreement--Lease Extension dated August 8, 1999 between
          Garfield Pacific Development Co. and Lockhart Industries, Inc.(12)

 10.8    --Lease dated April 30, 1998 between Cummings Properties Management,
          Inc. and Wakefield Engineering, Inc.(9)
</TABLE>


                                       14
<PAGE>

Item 14. Exhibits and Reports on Form 8-K--continued

<TABLE>
<CAPTION>
 Exhibit
   No.
 -------
 <C>     <S>
 10.8(a) --Amendment to Lease between Cummings Properties Management, Inc. and
          Wakefield Engineering, Inc.(13)

 10.9    --Lease dated September 1, 1993 between B&K Investment Corp. and
          Specialty Extrusions, Ltd., together with assignment thereof dated
          June 30, 1995 from Specialty Extrusions, Ltd. to Specialty
          Acquisition Corp. (now known as Specialty Extrusion Corp.) (Filed
          Herewith)

 10.9(a) --First Amendment of Lease dated September 28, 1999 between B&K
          Investment Company and Wakefield Extrusion Company (now known as
          Specialty Extrusion Corp.) (12)

 10.10   --Employment Agreement dated November 1, 2000 between Lawrence Butler
          and Alpha Technologies Group, Inc. (Filed Herewith)*

 10.11   --Employment agreement dated November 1, 2000 between Robert Streiter
          and Alpha Technologies Group, Inc. (Filed Herewith)*

 21      --Subsidiaries of Registrant. (Filed Herewith)

 23.1    --Consent of Grant Thornton LLP. (Filed Herewith)

 23.2    --Consent of Arthur Andersen LLP. (Filed Herewith)
</TABLE>
--------
  * Management Contract or Compensatory Plan
 (1) Incorporated herein by reference to the Company's Annual Report on Form
     10-K for the year ended October 27, 1996 filed on January 27, 1997.
 (2) Incorporated herein by reference to the Company's Form 8-K filed on
     January 23, 2000.
 (3) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-1 (Reg. No. 33-2979), which became effective March 7,
     1986.
 (4) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-8, filed September 28, 1987 (Reg. No. 33-17359).
 (5) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-8, filed March 17, 1988 (Reg. No. 33-20706).
 (6) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-8, filed June 30, 1989 (Reg. No. 33-29636).
 (7) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-8, filed June 23, 1992 (Reg. No. 33-48663).
 (8) Incorporated herein by reference to the Registrant's Registration
     Statement on Form S-8, filed January 29, 1987 (Reg. No. 33-11627).
 (9) Incorporated herein by reference to the Company's Form 10-Q for the
     quarterly period ended April 26, 1998 filed on June 10, 1998.
(10) Incorporated herein by reference to the Company's Proxy Statement filed
     February 23, 1998
(11) Incorporated herein by reference to the Company's Proxy Statement filed
     April 29, 1999
(12) Incorporated herein by reference to the Company's Annual Report on Form
     10-K for the year ended October 31, 1999 filed on January 31, 2000.
(13) Incorporated herein by reference to the Company's Form 10-Q for the
     quarterly period ended April 30, 2000 filed on June 6, 2000.

 Reports on Form 8-K

   No report on Form 8-K was filed during the fourth quarter of the year ended
October 31, 2000.

                                      15
<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                          Alpha Technologies Group, Inc.

Date: January 29, 2001                             /s/ Lawrence Butler
                                          By: _________________________________
                                                    (Lawrence Butler)
                                          Chairman and Chief Executive Officer

   Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
       /s/ Lawrence Butler             Chairman, Chief Executive
______________________________________  Officer and Director
          (Lawrence Butler)             (Principal Executive
                                        Officer)

      /s/ Robert C. Streiter           Chief Operating Officer,
______________________________________  President and Director
         (Robert C. Streiter)

     /s/ Johnny J. Blanchard           Chief Financial Officer
______________________________________  (Principal Financial and
        (Johnny J. Blanchard)           Accounting Officer)        January 29, 2001

      /s/ Marshall D. Butler           Director
______________________________________
         (Marshall D. Butler)

      /s/ Donald K. Grierson           Director
______________________________________
         (Donald K. Grierson)

       /s/ Frederic A. Heim            Director
______________________________________
          (Frederic A. Heim)

       /s/ Kenneth W. Rind             Director
______________________________________
          (Kenneth W. Rind)
</TABLE>

                                      16
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC., AND SUBSIDIARIES

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
Report of Independent Certified Public Accountants (Grant Thornton)......  F-2
Report of Independent Public Accountants (Arthur Andersen)...............  F-3
Consolidated Balance Sheets-- October 29, 2000 and October 31, 1999
 (restated)..............................................................  F-4
Consolidated Statements of Operations--For the fiscal years ended October
 29, 2000, October 31, 1999(restated)and October 25, 1998 (restated).....  F-5
Consolidated Statements of Stockholders' Equity--For the fiscal years
 ended October 29, 2000, October 31, 1999 and October 25, 1998...........  F-6
Consolidated Statements of Cash Flows--For the fiscal years ended October
 29, 2000, October 31, 1999 (restated) and October 25, 1998 (restated) ..  F-7
Notes to Consolidated Financial Statements ..............................  F-8
Financial Statement Schedule
 Valuation and Qualifying Accounts.......................................  S-1
</TABLE>

                                      F-1
<PAGE>

              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
Alpha Technologies Group, Inc.

   We have audited the accompanying consolidated balance sheets of Alpha
Technologies Group, Inc. (a Delaware corporation) and Subsidiaries as of
October 29, 2000 and October 31, 1999 and the related consolidated statements
of operations, stockholders' equity and cash flows for each of the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

   In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Alpha
Technologies Group, Inc. and Subsidiaries as of October 29, 2000 and October
31, 1999, and the consolidated results of their operations and their
consolidated cash flows for each of the years then ended in conformity with
accounting principles generally accepted in the United States of America.

   We have also audited Schedule II for each of the years ended October 29,
2000 and October 31, 1999. In our opinion, this schedule presents fairly, in
all material respects, the information required to be set forth therein.

/s/ Grant Thornton LLP

Houston, Texas
December 8, 2000


                                      F-2
<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
Alpha Technologies Group, Inc.

   We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows of Alpha Technologies Group, Inc. (a
Delaware corporation) and subsidiaries for the year ended October 25, 1998.
These consolidated financial statements and the schedule referred to below are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

   We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of
operations and cash flows of Alpha Technologies Group, Inc. and subsidiaries
for the year ended October 25, 1998 in conformity with generally accepted
accounting principles.

   Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Financial Statement
Schedule II is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not a required part of the basic
consolidated financial statements. Financial Statement Schedule II has been
subjected to the auditing procedures applied in our audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.

/s/ Arthur Andersen LLP
-------------------------------
Houston, Texas
December 4, 1998, except
with respect to the
restatement discussed in
Note 1 and Note 3 as to
which the date is
July 28, 2000.

                                      F-3
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                (In Thousands, Except Share and per Share Data)

<TABLE>
<CAPTION>
                                                        October 29, October 31,
                                                           2000        1999
                                                        ----------- -----------
                                                                    (Restated)
                        ASSETS
                        ------
<S>                                                     <C>         <C>
CURRENT ASSETS:
  Cash and cash equivalents............................   $12,364     $   233
  Accounts receivable, net of allowance of $270 and
   $298................................................    10,075       7,092
  Inventories, net.....................................     5,935       5,004
  Net assets of discontinued operations................     2,062       6,061
  Prepaid expenses.....................................       976         700
                                                          -------     -------
    Total current assets...............................    31,412      19,090
PROPERTY AND EQUIPMENT, net............................    10,285       9,698
GOODWILL, net..........................................     1,702       1,883
OTHER ASSETS, net......................................     2,206       2,291
                                                          -------     -------
    TOTAL ASSETS.......................................   $45,605     $32,962
                                                          =======     =======
<CAPTION>
         LIABILITIES AND STOCKHOLDERS' EQUITY
         ------------------------------------
<S>                                                     <C>         <C>
CURRENT LIABILITIES:
  Accounts payable, trade..............................   $ 4,392     $ 3,836
  Accrued compensation and related benefits............     1,843       1,325
  Current portion of other liabilities.................     1,451       1,496
  Current portion of long-term debt....................     1,080       1,080
                                                          -------     -------
    Total current liabilities..........................     8,766       7,737
REVOLVING CREDIT FACILITY..............................        --       2,799
LONG-TERM DEBT.........................................     2,200       3,780
OTHER LIABILITIES......................................       124         144
COMMITMENTS AND CONTINGENCIES                                  --          --
STOCKHOLDERS' EQUITY
  Preferred stock, $100 par value; shares authorized
   180,000.............................................        --          --
  Common stock, $.03 par value; shares authorized
   17,000,000; issued 8,169,345 at October 29, 2000 and
   7,959,007 at October 31, 1999;......................       245         239
  Additional paid-in capital...........................    44,421      43,828
  Retained deficit.....................................    (4,347)    (19,739)
  Accumulated other comprehensive income (loss)........        --         (22)
  Treasury stock, at cost (1,394,353 common shares at
   October 29, 2000 and October 31, 1999)..............    (5,804)     (5,804)
                                                          -------     -------
    Total stockholders' equity.........................    34,515      18,502
                                                          -------     -------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.........   $45,605     $32,962
                                                          =======     =======
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.


                                      F-4
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                (In Thousands, Except Shares and per Share Data)

<TABLE>
<CAPTION>
                                                    For the Years Ended
                                            -----------------------------------
                                            October 29, October 31, October 25,
                                               2000        1999        1998
                                            ----------- ----------- -----------
                                                        (Restated)   (Restated)
<S>                                         <C>         <C>         <C>
SALES.....................................   $  61,547   $  48,429   $  58,495
COST OF SALES.............................      43,136      36,121      50,360
                                             ---------   ---------   ---------
    Gross profit..........................      18,411      12,308       8,135
OPERATING EXPENSES
  Research and development................         831         738       1,903
  Selling, general and administrative.....       8,722       8,035       9,660
  Restructuring and other.................          --          --         (99)
                                             ---------   ---------   ---------
    Total operating expenses..............       9,553       8,773      11,464
                                             ---------   ---------   ---------
OPERATING INCOME(LOSS)....................       8,858       3,535      (3,329)
INTEREST INCOME...........................         187          --          35
OTHER INCOME (EXPENSE), net...............         145          19         (81)
INTEREST EXPENSE..........................        (692)       (898)       (970)
                                             ---------   ---------   ---------
INCOME (LOSS) BEFORE INCOME TAXES.........       8,498       2,656      (4,345)
PROVISION FOR (BENEFIT FROM) INCOME TAXES:
  Current.................................         403          34          --
  Deferred................................         177         (34)         --
                                             ---------   ---------   ---------
PROVISION FOR INCOME TAXES................         580          --          --
                                             ---------   ---------   ---------
INCOME (LOSS) BEFORE DISCONTINUED
 OPERATIONS...............................       7,918       2,656      (4,345)
INCOME (LOSS) FROM DISCONTINUED
 OPERATIONS, net of income tax effect.....         996       1,498       1,562
GAIN ON SALE OF DISCONTINUED OPERATION,
 net of income tax effect.................       6,478          --          --
                                             ---------   ---------   ---------
NET INCOME (LOSS).........................   $  15,392   $   4,154   $  (2,783)
                                             =========   =========   =========
EARNINGS (LOSS) PER COMMON SHARE
BASIC
Income (loss) before discontinued
 operations...............................   $    1.17   $    0.38   $   (0.64)
Income (loss) from discontinued
 operations...............................        0.15        0.22        0.23
Gain on sale of discontinued operation....        0.96          --          --
                                             ---------   ---------   ---------
Net income (loss).........................   $    2.28   $    0.60   $   (0.41)
                                             =========   =========   =========
DILUTED
Income (loss) before discontinued
 operations...............................   $    1.07   $    0.37   $   (0.64)
Income (loss) from discontinued
 operations...............................        0.13        0.21        0.23
Gain on sale of discontinued operation....        0.87          --          --
                                             ---------   ---------   ---------
Net income (loss).........................   $    2.07   $    0.58   $   (0.41)
                                             =========   =========   =========
SHARES USED IN COMPUTING NET INCOME (LOSS)
 PER COMMON SHARE
  BASIC...................................   6,759,626   6,935,778   6,753,752
                                             =========   =========   =========
  DILUTED.................................   7,428,551   7,134,382   6,753,752
                                             =========   =========   =========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-5
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

  For the Years Ended October 29, 2000, October 31, 1999 and October 25, 1998

<TABLE>
<CAPTION>
                                                                 Accumulated
                           Common Stock   Additional                Other      Treasury Stock        Total
                         ----------------  Paid in   Retained   Comprehensive -----------------  Stockholders'
                          Shares   Amount  Capital   (Deficit)  Income (Loss)  Shares   Amount      Equity
                         --------- ------ ---------- ---------  ------------- --------- -------  -------------
                                                    (In Thousands, Except Shares)
<S>                      <C>       <C>    <C>        <C>        <C>           <C>       <C>      <C>
BALANCE, October 26,
 1997................... 7,700,733   231    43,523    (21,110)      (125)     1,008,553  (3,718)     18,801
Comprehensive income
 (loss):
Net loss................        --    --        --     (2,783)        --             --      --      (2,783)
Cumulative translation
 adjustments............        --    --        --         --         34             --      --          34
                                                                                                    -------
Comprehensive income
 (loss).................        --    --        --         --         --             --      --      (2,749)
Issuance to employees
 pursuant to stock
 option plans...........    91,834     3       215         --         --             --      --         218
Acquisition of Lockhart
 Industries, Inc........   148,271     4        (4)        --         --             --      --          --
Compensation associated
 with stock options.....        --    --        47         --         --             --      --          47
                         ---------  ----   -------   --------       ----      --------- -------     -------
BALANCE, October 25,
 1998................... 7,940,838   238    43,781    (23,893)       (91)     1,008,553  (3,718)     16,317
Comprehensive income
 (loss):
Net income..............        --    --        --      4,154         --             --      --       4,154
Cumulative translation
 adjustments............        --    --        --         --         69             --      --          69
                                                                                                    -------
Comprehensive income
 (loss).................        --    --        --         --         --             --      --       4,223
Issuance to employees
 pursuant to stock
 option plans...........    18,169     1        33         --         --             --      --          34
Stock repurchases.......        --    --        --         --         --        385,800  (2,086)     (2,086)
Compensation associated
 with stock options.....        --    --        14         --         --             --      --          14
                         ---------  ----   -------   --------       ----      --------- -------     -------
BALANCE, October 31,
 1999................... 7,959,007  $239   $43,828   $(19,739)      $(22)     1,394,353 $(5,804)    $18,502
Comprehensive income
 (loss):
Net income..............        --    --        --     15,392         --             --      --      15,392
Cumulative translation
 adjustments............        --    --        --         --         22             --      --          22
                                                                                                    -------
Comprehensive income
 (loss).................        --    --        --         --         --             --      --      15,414
Issuance to employees
 pursuant to stock
 option plans...........   210,338     6       349         --         --             --      --         355
Compensation associated
 with stock options.....        --    --       244         --         --             --      --         244
                         ---------  ----   -------   --------       ----      --------- -------     -------
BALANCE, October 29,
 2000................... 8,169,345  $245   $44,421   $ (4,347)      $ --      1,394,353 $(5,804)    $34,515
                         =========  ====   =======   ========       ====      ========= =======     =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                      F-6
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                    For the Years Ended
                                            -----------------------------------
                                            October 29, October 31, October 25,
                                               2000        1999        1998
                                            ----------- ----------- -----------
                                                        (Restated)  (Restated)
<S>                                         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).........................    $15,392     $ 4,154     $(2,783)
Adjustments to reconcile net income (loss)
 to net cash provided by operating
 activities:
  Depreciation and amortization...........      2,700       2,600       2,525
  (Gain) loss on sale/disposal of
   equipment..............................         19         (13)        331
  Gain on sale of discontinued operation..     (6,478)         --          --
  Cumulative translation adjustment.......         15          (7)         34
  Stock option compensation expense.......          7          14          47
  Deferred income taxes...................        177         (34)         --
Net cash provided by (used in)
 discontinued operations..................         79        (250)       (246)
Changes in assets and liabilities:
  (Increase) decrease in accounts
   receivable.............................     (2,983)       (484)      2,119
  (Increase) decrease in inventories......       (931)      1,920       1,156
  (Increase) decrease in prepaid
   expenses...............................       (301)        129         457
  Decrease in accounts payable, trade.....       (140)     (1,074)       (332)
  Increase (decrease) in accrued
   compensation and related benefits......        518         288        (171)
  Decrease in other liabilities...........     (1,002)       (696)     (2,221)
                                              -------     -------     -------
    Net cash provided by operating
     activities...........................      7,072       6,547         916
                                              -------     -------     -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from business divestitures.....     12,300          --          --
  Purchase of property and equipment......     (3,105)       (986)     (4,236)
  Proceeds from sale of property and
   equipment..............................         20          96          71
  (Increase) decrease in other assets,
   net....................................       (132)          7          --
                                              -------     -------     -------
    Net cash provided by (used in)
     investing activities.................      9,083        (883)     (4,165)
                                              -------     -------     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock..        355          34         218
  Payments to repurchase common stock.....         --      (1,637)         --
  Payments for debt issue cost............         --        (393)         --
  Proceeds from revolving credit lines....     69,654      59,426      70,917
  Payments on revolving credit lines......    (72,453)    (64,806)    (67,935)
  Proceeds from term debt.................         --       5,400         920
  Payments on term debt...................     (1,580)     (4,335)     (1,485)
                                              -------     -------     -------
    Net cash provided by (used in)
     financing activities.................     (4,024)     (6,311)      2,635
                                              -------     -------     -------
NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS..............................     12,131        (647)       (614)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
 YEAR.....................................        233         880       1,494
                                              -------     -------     -------
CASH AND CASH EQUIVALENTS AT END OF YEAR..    $12,364     $   233     $   880
                                              =======     =======     =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-7
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

   Alpha Technologies Group, Inc. ("Alpha" or the "Company") derives its
revenues from thermal management products, principally heat sinks, which
dissipate heat generated by electronic components. The Company's products
serve the microprocessor, computer, automotive, telecommunication, industrial
controls, transportation, power supply, factory automation, consumer
electronics, aerospace and defense industries.

 Principles of Consolidation

   The consolidated financial statements include the accounts of Alpha and its
wholly-owned subsidiaries. All material intercompany transactions and balances
have been eliminated. As more fully described in Note 3--Discontinued
Operations and Note 17--Subsequent Events--Discontinued Operations, prior year
numbers have been restated, through reclassification, to discontinue the
connector business sold in July 2000 and the subsystems business which was
sold on November 17, 2000.

 Revenue Recognition

   Revenue from product sales is recognized upon shipment to the customer.

 Use of Estimates and Other Uncertainties

   The preparation of the Company's consolidated financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

 Fair Value of Financial Instruments

   The Company's financial instruments consist primarily of cash, trade
receivables, trade payables and debt instruments. The book values of these
instruments are considered to be representative of their respective fair
values.

 Cash and Cash Equivalents

   Cash and cash equivalents include cash in banks and money market accounts
as well as highly liquid investments with initial maturities of less than
three months.

 Inventories

   Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.

 Property and Equipment

   The cost of property and equipment is depreciated using the straight-line
method for financial reporting purposes over the estimated useful lives of
such assets, ranging from three to ten years. Leasehold improvements are
amortized on a straight-line basis over the related lease term.

 Goodwill

   Goodwill represents the excess of cost over fair value of net assets
acquired and is being amortized over 15 years using the straight-line method.
The accumulated amortization for continuing operations on October 29,

                                      F-8
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


1. Significant Accounting Policies--(Continued)

2000 and October 31, 1999 was approximately $1,022,000 and $841,000,
respectively. Amortization expense of approximately $181,000, $181,000, and
$173,000 was recorded in fiscals 2000, 1999, and 1998, respectively.

 Long-Lived Assets

   The Company reviews the valuation of long-lived assets whenever events or
changes in circumstances indicate that the carrying amount of the asset may
not be recoverable. An impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and/or its
disposition is less than its carrying amount. The Company has not identified
any such impairment loss.

 Comprehensive Income

   Comprehensive income includes net earnings, plus other comprehensive
income. The Company's other comprehensive income consists of foreign currency
translation adjustments.

 Stock-Based Compensation

   The Financial Accounting Standards Board issued SFAS 123, "Accounting for
Stock-Based Compensation" during October 1995. The standard establishes a fair
value approach to valuing stock options awarded to its employees as
compensation. The Company has elected, as permitted by the standard, to
continue to follow its intrinsic value based method of accounting for stock
options consistent with Accounting Principals Board No. 25, "Accounting for
Stock Issued to Employees" (APB 25). The intrinsic method measures
compensation cost for stock options as the excess, if any, of the quoted
market price of the Company's stock at the measurement date over the exercise
price.

 Income Taxes

   The Company accounts for income taxes under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using current enacted
tax rates. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the results of operations in the period that
includes the enactment date.

 New Accounting Pronouncements

   The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS 133"), Statement of Financial Accounting Standards
No. 137 "Accounting for Derivative Instruments and Hedging Activities--
Deferral of the Effective Date of FASB Statement No. 133, and Amendment of
FASB Statement No. 133" ("SFAS 137") and Statement of Financial Accounting
Standards No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities" ("SFAS 138").

   The effective date for SFAS 133 as amended by SFAS 137 and SFAS 138 is
fiscal years beginning after June 15, 2000. The Company is required to adopt
these Statement for its fiscal year 2001. Management believes that the
adoption of these pronouncements will not have a material effect on the
Company's consolidated financial position or results of operations.

   The Securities and Exchange Commission (SEC) issued Staff Accounting
Bulitin (SAB) 101, Revenue Recognition in Financial Statements, in December
1999. The SAB summarizes certain of the SEC staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. In June 2000,

                                      F-9
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


1. Significant Accounting Policies--(Continued)

the SEC issued SAB 101B, which delays the implementation date of SAB 101 until
no later than the fourth quarter of fiscal years beginning after December 15,
1999. The Company does not believe that adoption of this SAB will have a
material impact on its financial statements.

2. Acquisitions

   On August 21, 1996, the Company, through a newly-organized, wholly-owned
subsidiary, Lockie Acquisition Corp. ("LAC"), purchased all of the outstanding
stock of Lockhart Industries, Inc. ("LII"), a thermal management company,
pursuant to an Agreement and Plan of Merger dated as of August 14, 1996 (the
"Merger Agreement"). Pursuant to the Merger Agreement, the Company issued
280,556 shares of its common stock in exchange for all of the issued and
outstanding common stock of LII. Based upon decreases in LII's working capital
prior to the acquisition and collection of accounts receivable, the purchase
price was reduced by 73,149 shares of the Company's common stock. The number
of shares issued was subject to increase in the event that the Company's
common stock was not trading at $9 or more two years from the date of closing.
Accordingly, on September 23, 1998, the Company issued an additional 148,271
shares of its common stock. Following the merger, the Company transferred all
of LAC's shares to Wakefield Engineering, Inc. ("Wakefield"), a wholly-owned
subsidiary of the Company, and changed LAC's name to Lockhart Industries, Inc.
("Lockhart"). In addition, Wakefield paid off an aggregate of $506,000 of
LII's debt. The acquisition was accounted for as a purchase transaction, as
such, the purchase price was allocated to the assets acquired and liabilities
assumed. The operating results of Lockhart have been included in the Company's
consolidated results of operations since its acquisition. On October 29, 1999,
pursuant to a Stock Purchase Agreement, the Company acquired 350,000 shares of
its common stock from the former owners of its Lockhart subsidiary for
$1,476,096. The acquired shares were issued as consideration for the purchase
of the Lockhart subsidiary in August 1996. As part of the Agreement, the
Company released the former owners from the indemnification provisions related
to the purchase of the Lockhart business.

3. Discontinued Operations

   On July 28, 2000, pursuant to a Stock Purchase Agreement (the "Agreement"),
the Company sold its connector business, Uni-Star Industries, Inc. ("Uni-Star"
or the "Business") to Tyco Electronics Corporation and Tyco Electronics UK
Ltd. (the "Buyer"). The sale included 100% of the outstanding stock of Uni-
Star Industries, Inc. and Microdot Connectors Europe, Ltd. (a wholly owned UK
subsidiary of Uni-Star) and the agreement by Alpha and certain of their
affiliates not to engage in the connector business for five years.

   Alpha received $12,300,000, in cash, subject to reduction based on the
value of Uni-Star Net Assets (as defined in the Stock Purchase Agreement) as
of the closing date. Tyco has made a request for a purchase price adjustment,
which the Company is in the process of negotiating. The Company does not
believe that any eventual adjustment will have a material impact on the
Company's financial statements. The purchase price was a negotiated amount
between Buyer and Seller. The sale resulted in a gain of approximately
$6,478,000, net of income tax expense.

   In addition, on November 17, 2000, the Company sold its subsystems
business. (See Footnote 17 for a discussion of subsequent events.)
Accordingly, the results of operations for the Company's connector business
which was sold during the year and its subsystems business which was sold
shortly after year end are reflected in the accompanying consolidated
financial statements as discontinued operations. Previously these businesses
were reported as the "Connector Segment" and "Subsystems Segment" for
reporting purposes.


                                     F-10
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


3. Discontinued Operations--(Continued)

   Summary operating results of the discontinued operations are as followed
for the fiscal year ended:

 Connector Operations--Sold July 28, 2000

<TABLE>
<CAPTION>
                             October 29, October 31, October 25,
                                2000        1999        1998
                             ----------- ----------- -----------
                                       (in thousands)
   <S>                       <C>         <C>         <C>
   Sales....................   $7,058      $10,623     $12,579
   Costs and expenses.......    6,463        9,635      11,590
                               ------      -------     -------
     Net income of
      discontinued
      operation.............   $  595      $   988     $   989
                               ======      =======     =======
</TABLE>

 Summary Balance Sheet Data For Connector Operation -- Sold July 28, 2000

<TABLE>
<CAPTION>
                                                                     October 31,
                                                                        1999
                                                                     -----------
   <S>                                                               <C>
   Current assets...................................................   $3,212
   Property plant and equipment.....................................    1,515
   Non-current assets...............................................      244
   Current liabilities..............................................     (836)
   Non-current liabilities..........................................     (149)
                                                                       ------
                                                                       $3,986
                                                                       ======
</TABLE>

 Subsystems Operations Held For Sale

<TABLE>
<CAPTION>
                             October 29, October 31, October 25,
                                2000        1999        1998
                             ----------- ----------- -----------
                                       (in thousands)
   <S>                       <C>         <C>         <C>
   Sales....................   $5,585      $6,168      $5,971
   Costs and expenses.......    5,184       5,658       5,398
                               ------      ------      ------
     Net income of
      discontinued
      operation.............   $  401      $  510      $  573
                               ======      ======      ======
</TABLE>

   No income tax provision was provided in income from discontinued operations
due to the Company's use of its net operating loss carryforwards.

 Summary Balance Sheet Data For Subsystem Operations Held For Sale

<TABLE>
<CAPTION>
                                                         October 29, October 31,
                                                            2000        1999
                                                         ----------- -----------
   <S>                                                   <C>         <C>
   Current assets.......................................   $2,248      $2,248
   Property plant and equipment.........................      209         249
   Non-current assets...................................      429         480
   Current liabilities..................................     (811)       (818)
   Non-current liabilities..............................      (13)        (84)
                                                           ------      ------
                                                           $2,062      $2,075
                                                           ======      ======
</TABLE>

                                     F-11
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


4. Inventories

   Inventories consisted of the following on:

<TABLE>
<CAPTION>
                                                         October 29, October 31,
                                                            2000        1999
                                                         ----------- -----------
                                                             (In Thousands)
   <S>                                                   <C>         <C>
   Raw materials and components.........................   $2,255      $2,260
   Work in process......................................    2,387       1,882
   Finished goods.......................................    1,623       2,023
                                                           ------      ------
                                                            6,265       6,165
   Valuation reserve....................................     (330)     (1,161)
                                                           ------      ------
                                                           $5,935      $5,004
                                                           ======      ======
</TABLE>

   Inventory reserves decreased due to the write-off of inventory which was
reserved for in prior years.

5. Property and Equipment

   Property and equipment consisted of the following on:

<TABLE>
<CAPTION>
                                                         October 29, October 31,
                                                            2000        1999
                                                         ----------- -----------
                                                             (In Thousands)
   <S>                                                   <C>         <C>
   Machinery & equipment................................   $19,898     $17,019
   Leasehold improvements...............................     1,281       1,146
                                                           -------     -------
                                                            21,179      18,165
   Accumulated depreciation and amortization............   (10,894)     (8,467)
                                                           -------     -------
                                                           $10,285     $ 9,698
                                                           =======     =======
</TABLE>

6. Accrued Compensation and Related Benefits

   Accrued compensation and related benefits consisted of the following on:

<TABLE>
<CAPTION>
                                                         October 29, October 31,
                                                            2000        1999
                                                         ----------- -----------
                                                             (In Thousands)
   <S>                                                   <C>         <C>
   Accrued compensation.................................   $1,371      $  825
   Other................................................      472         500
                                                           ------      ------
                                                           $1,843      $1,325
                                                           ======      ======
</TABLE>

7. Other Liabilities

   Other liabilities consisted of the following on:

<TABLE>
<CAPTION>
                                                         October 29, October 31,
                                                            2000        1999
                                                         ----------- -----------
                                                             (In Thousands)
   <S>                                                   <C>         <C>
   Accrued commissions..................................   $   511     $   343
   Other................................................     1,064       1,297
                                                           -------     -------
                                                             1,575       1,640
   Less: current portion................................    (1,451)     (1,496)
                                                           -------     -------
                                                           $   124     $   144
                                                           =======     =======
</TABLE>

                                      F-12
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


8. Debt and Revolving Credit Facilities

   Debt and revolving credit facilities consisted of the following on:

<TABLE>
<CAPTION>
                                                        October 29, October 31,
                                                           2000        1999
                                                        ----------- -----------
                                                            (In Thousands)
   <S>                                                  <C>         <C>
   Variable-rate revolving credit facility (effective
    interest rate of 9.75% on October 29, 2000),
    interest payable monthly, principal is repaid and
    re-borrowed based on cash requirements............    $    --     $ 2,799
   Variable-rate term note (effective interest rate of
    9.75% on October 29, 2000), payable in monthly
    installments of $90,000 plus accrued interest.....      3,280       4,860
   Other..............................................         80         320
                                                          -------     -------
                                                            3,360       7,979
   Less amount reflected in net assets of discontinued
    operations........................................        (80)       (320)
   Less current portion...............................     (1,080)     (1,080)
                                                          -------     -------
                                                          $ 2,200     $ 6,579
                                                          =======     =======
</TABLE>

   Effective April 16, 1999, the Company and its subsidiaries (hereinafter
referred to as "Borrowers") became parties to a loan and security agreement
(the "Agreement") with a commercial lender. The Agreement provides for
revolving loans of up to $10,500,000, a $5,400,000 term note payable monthly
over five years, and an equipment acquisition facility of up to $1,000,000 for
fiscal 1999. An additional $2,000,000 of equipment loans will be made
available to Borrowers if the Borrower's earnings before provision for income
taxes, excluding all extraordinary and nonrecurring items, equals or exceeds
$1.00 for the fiscal year ending October 31, 1999, or for any fiscal year
thereafter. The advances on the revolving loans are based on the eligible
accounts receivable and inventories and the advances on the equipment
acquisition facility may be used only for the purpose of funding capital
equipment purchases by the Borrowers. The maturity date of the Agreement is
April 15, 2004.

   On October 29, 2000, there was no outstanding balance on the revolving
credit facility. Outstanding balances on the revolving credit facility accrue
interest accruing at the prime rate announced by First Union National Bank
plus .25% (9.75% per annum on October 29, 2000). There is an unused line fee
equal to .5% per annum on the difference between $10,500,000 and the average
daily outstanding principal balance of Revolving Loans during each month
payable monthly in arrears on the first day of each month. The $5,400,000 term
note accrues interest at the prime rate announced by First Union National Bank
plus .25% (9.75% per annum on October 29, 2000) and is payable in fifty-nine
(59) equal monthly installments of $90,000 beginning April 30, 1999 and a
final installment equal to all unpaid principal on March 31, 2004, together,
in each instance, with interest thereon to the date of payment. On October 29,
2000, $3,280,000 was outstanding on the term loan and no borrowings on the
equipment acquisition facility. The obligations under the Agreement are
secured by a first lien on and assignment of all of the assets of the
Borrowers which in aggregate total $45,605,000 on October 29, 2000.

                                     F-13
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


8. Debt and Revolving Credit Facilities

   Cash paid for interest on all outstanding debt amounted to approximately:

<TABLE>
<CAPTION>
                                                      Fiscal Year Ended
                                             -----------------------------------
                                             October 29, October 31, October 25,
                                                2000        1999        1998
                                             ----------- ----------- -----------
                                                       (In Thousands)
   <S>                                       <C>         <C>         <C>
   Continuing Operations....................    $566       $1,215      $  970
   Discontinued Operations..................      22           60          41
                                                ----       ------      ------
     Total..................................    $588       $1,275      $1,011
                                                ====       ======      ======
</TABLE>

   The amount paid in fiscal 1999 includes $393,000 in debt issue costs,
including origination fees, incurred in connection with the refinancing of the
Company's credit facilities. These fees will be expensed over the term of the
agreement.

   Aggregate payments of debt and revolving credit facilities outstanding as
of October 29, 2000 for the next five years are summarized below:

<TABLE>
<CAPTION>
                                                  Continuing Discontinued
   Fiscal Years                                   Operations  Operations  Total
   ------------                                   ---------- ------------ ------
                                                          (In Thousands)
   <S>                                            <C>        <C>          <C>
   2001..........................................    1,080        67       1,147
   2002..........................................    1,080        13       1,093
   2003..........................................    1,080        --       1,080
   2004..........................................       40        --          40
   2005..........................................       --        --          --
                                                    ------       ---      ------
                                                    $3,280       $80      $3,360
                                                    ======       ===      ======
</TABLE>

   The above credit facility was paid off in December of 2000, see "Footnote
17--Subsequent Events" for discussion of new loans and payoff of the above
credit facilities.

9. Preferred Stock

   On October 29, 2000 and October 31, 1999, the Company had authorized
180,000 shares of unissued, preferred stock with a par value of $100 per
share. The Board of Directors has the authority to issue such preferred stock
and to set the terms thereof, including the dividend rate, conversion rights,
redemption rights, voting rights and liquidation preferences. There are no
shares of preferred stock outstanding as of October 29, 2000.

10. Repurchase of Common Stock

   In October 1999, the Board of Directors of the Company approved a plan to
purchase up to $500,000 of the Company's common stock in the open market.
Pursuant to the stock repurchase plan, the Company purchased 35,800 shares of
common stock during fiscal year 1999 at an aggregate price of $161,011.

   On October 29, 1999, pursuant to a Stock Purchase Agreement, the Company
acquired 350,000 shares of its common stock from the former owners of its
Lockhart subsidiary. The acquired shares were issued as consideration for the
purchase of the Lockhart subsidiary in August 1996. As part of the Agreement,
the Company released the former owners from the indemnification provisions
related to the purchase of the Lockhart business. A $449,000 indemnification
liability was established representing the difference between the market value
of the shares repurchased of $1,975,000 and the consideration paid of
$1,476,000 to the former owners.

                                     F-14
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


11. Stock Option Plans

   The Company has in effect nonqualified and incentive stock option plans
under which shares are available for exercise. As of October 29, 2000, the
Board of Directors has reserved 1,620,647 shares of common stock for issuance
under the plans. The prices at which substantially all stock options
outstanding have been granted have been equal to or in excess of the fair
market value of the Company's stock at the time of the grant. These options
vest over periods up to five years. On October 29, 2000, there were 412,365
shares available for future grants.

   The following table summarizes activity and outstanding options under the
plans:

<TABLE>
<CAPTION>
                                                        Shares       Weighted
                                                        Under        Average
                                                        Option    Exercise Price
                                                      ----------  --------------
   <S>                                                <C>         <C>
   Outstanding on October 26, 1997...................  1,223,500       4.13
     Granted-Option Price=FMV........................    393,720       3.34
     Granted-Option Price>FMV........................     54,780       4.26
     Forfeited.......................................   (318,785)      4.14
     Exercised.......................................    (91,815)      2.66
                                                      ----------      -----
   Outstanding on October 25, 1998...................  1,261,400       4.00
     Granted-Option Price=FMV........................    581,276       3.09
     Granted-Option Price>FMV........................     26,274       4.95
     Forfeited.......................................   (509,631)      3.99
     Exercised.......................................    (18,169)      1.88
                                                      ----------      -----
   Outstanding on October 31, 1999...................  1,341,150      $3.66
     Granted-Option Price=FMV........................    362,836       7.94
     Granted-Option Price>FMV........................     66,664       6.60
     Forfeited.......................................    (99,916)      4.40
     Exercised.......................................   (462,452)      4.40
                                                      ----------      -----
   Outstanding on October 29, 2000...................  1,208,282      $4.76
                                                      ==========      =====
   Exercisable as of:
   October 29, 2000..................................    582,289      $3.07
   October 31, 1999..................................    780,640      $3.77
   October 25, 1998..................................    735,733      $4.03
</TABLE>

<TABLE>
<CAPTION>
          Options Outstanding                     Options Exercisable
-----------------------------------------   ----------------------------------
                               Weighted
                                Average     Weighted                 Weighted
  Range of      Outstanding    Remaining    Average    Exercisable   Average
  Exercise         As of      Contractual   Exercise      as of      Exercise
   Prices        10/29/00        Life        Price      10/29/00      Price
  --------      -----------   -----------   --------   -----------   --------
<S>             <C>           <C>           <C>        <C>           <C>
$ 1.00-$ 3.00      402,662     2.9 Years     $ 2.11      322,834      $2.15
$ 3.01-$ 5.00      328,620     3.1 Years     $ 4.21      228,620      $4.08
$ 5.01-$ 7.00      322,500     4.3 Years     $ 5.98       30,835      $5.22
$ 7.01-$ 9.00       17,000     4.5 Years     $ 7.13           --         --
$ 9.01-$11.00       87,500     4.6 Years     $ 9.41           --         --
$11.01-$13.00       50,000     4.7 Years     $13.00           --         --
                 ---------                               -------
                 1,208,282     3.5 Years     $ 4.76      582,289      $3.07
                 =========                               =======
</TABLE>

                                     F-15
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


11. Stock Option Plans--(Continued)

   On October 21, 1998, the Board of Directors granted replacement options for
certain outstanding options issued to employees, who were not executive
officers or directors of the Company. The replacement options will have an
exercise price equal to the fair market value of the common stock on such date
and would vest 1/3 immediately and the remainder over two years. The
replacement has been treated as the surrender and cancellation of the original
outstanding stock options in conjunction with the grant of replacement
options.

   On August 21, 2000, the Board of Directors of the Company authorized an
increase in the shares issuable under the 1994 Stock Option Plan by 325,000,
which is subject to approval by shareholder vote. On April 21, 1998, the
shareholders approved an amendment to the 1994 Stock Option Plan to provide
for an automatic grant of 10,000 options to each non-employee director at the
annual meetings held in 1998, 1999 and 2000. Such options will be exercisable
at the fair market value of the shares on the date of grant, will vest in one
year, and will be exercisable for five years from the date of grant.

   For fiscal 2000, 1999 and 1998, $7,000, $14,000 and $47,000, respectively,
was recognized as expense for options issued to non-employees under the
Company's stock option plans. Pro forma information regarding net income and
earnings per share is required by SFAS 123 and has been determined as if the
Company has accounted for options issued to employees under the fair value
method of that statement. The fair value of these options was estimated at the
date of grant using the Black-Scholes option pricing model with the following
weighted average assumptions for fiscal 1998 were: expected volatility 51.72%,
risk free interest rate of 5.11%, expected option life of 4.5 years, and no
expected dividends. The weighted average assumptions used for fiscal 1999
were: expected volatility 74.5%, risk free interest rate of 5.78%, expected
option life of 4.0 years, and no expected dividends. The weighted average
assumptions for fiscal 2000 were: expected volatility 73.45%, risk free
interest rate of 6.35%, expected option life of 4.0 years, and no expected
dividends. In addition, adjustments were made for estimated cancellations.

   The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options and because changes in
the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

   For pro forma disclosures, the estimated fair value of the options is
amortized to expense over the options' vesting period. If the fair value based
method of accounting defined in SFAS 123 had been applied, the Company's net
income and net income per share would have decreased by $919,000, or $0.14 per
basic and $0.12 per diluted share, in fiscal 2000, by $516,000, or $0.07 per
basic and diluted share, in fiscal 1999, and its net loss and net loss per
share would have been increased by approximately $472,000, or $0.07 per basic
and diluted share, in fiscal 1998. The estimated weighted average fair value
of options granted during fiscal 2000, 1999 and fiscal 1998 was $4.53, $2.32,
and $1.63, respectively. This pro forma information is not meant to be
representative of the effects on reported net income for future years, because
as provided by SFAS 123, only the effects of awards granted after the
Company's 1995 fiscal year are considered in the pro forma calculation.

                                     F-16
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. Net Income (Loss) Per Share

   Basic net income (loss) per common share is computed by dividing income
(loss) available to common shareholders by the weighted average number of
shares of common stock outstanding during each year. Diluted earnings per
common share are calculated to give effect to stock options outstanding during
the period. The treasury stock method is used to calculate dilutive shares and
reduces the gross number of dilutive shares by the number of shares
purchasable from the proceeds of the options assumed to be exercised. For
fiscal year 1998, potentially dilutive shares were not considered in the
computation as their effect would have been antidilutive. The amounts used in
calculating basic and dilutive earnings per share and the amounts that would
have been used in fiscal 1998 were:

<TABLE>
<CAPTION>
                                            October 29, October 31, October 25,
                                               2000        1999        1998
                                            ----------- ----------- -----------
                                                      (In Thousands)
   <S>                                      <C>         <C>         <C>
   Income (loss) used in basic and diluted
    EPS:
     Income (loss) from continuing
      operations...........................   $ 7,918     $2,656      $(4,345)
     Gain on sale of discontinued
      operation............................     6,478         --           --
     Income from discontinued operation....       996      1,498        1,562
                                              -------     ------      -------
     Net income (loss) available to common
      share holders........................   $15,392     $4,154      $(2,783)
                                              =======     ======      =======
   Shares:
     Weighted average common shares
      outstanding--used in basic EPS.......     6,760      6,936        6,754
     Net dilutive potential common shares
      issuable on exercise of stock
      options..............................       668        198          106
                                              -------     ------      -------
     Weighted average common shares and
      dilutive potential common shares--
      used in dilutive EPS.................     7,428      7,134        6,860
                                              =======     ======      =======
</TABLE>

13. Income Taxes

   Income (loss) before income taxes from continuing operations was as follows
for the fiscal years ended:

<TABLE>
<CAPTION>
                                             October 29, October 31, October 25,
                                                2000        1999        1998
                                             ----------- ----------- -----------
                                                       (In Thousands)
   <S>                                       <C>         <C>         <C>
   Domestic.................................   $16,157     $4,489      $(2,527)
   Foreign (Discontinued)...................      (185)      (335)        (256)
                                               -------     ------      -------
                                               $15,972     $4,154      $(2,783)
   Less: Discontinued operations............     7,474      1,498        1,562
                                               -------     ------      -------
   Continuing operations....................   $ 8,498     $2,656      $(4,345)
                                               =======     ======      =======
</TABLE>

   The provision (benefit) for income taxes for continuing operations was as
follows for the fiscal years ended:

<TABLE>
<CAPTION>
                                           October 29, October 31, October 25,
                                              2000        1999        1998
                                           ----------- ----------- -----------
                                                     (In Thousands)
   <S>                                     <C>         <C>         <C>
   Federal income tax.....................   $2,889      $1,526       $(946)
   State income tax.......................      403         267          --
                                             ------      ------       -----
                                              3,292       1,793        (946)
   Federal--Valuation allowance provided
    (reversed)............................   (2,712)     (1,793)        946
                                             ------      ------       -----
                                             $  580      $   --       $  --
                                             ======      ======       =====
</TABLE>

                                     F-17
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


13. Income Taxes--(Continued)

   The differences in the income taxes provided for and the amounts determined
by applying the Federal statutory rate to income before taxes of the Company
are summarized as follows:

<TABLE>
<CAPTION>
                                           October 29, October 31, October 25,
                                              2000        1999        1998
                                           ----------- ----------- -----------
   <S>                                     <C>         <C>         <C>
   Federal income statutory rate..........     34.0%       34.0%      (34.0)%
   State income taxes, net of federal
    income tax benefit....................      2.1%        5.9%         --
   Valuation allowance provided
    (reversed)............................    (26.7)%     (39.9)%      34.0%
   Other..................................     (3.2)
                                              -----       -----       -----
     Total Provision for income taxes.....      6.2%         --          --
                                              =====       =====       =====
</TABLE>

   The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities and their changes during
the year ended October 29, 2000 were as follows:

<TABLE>
<CAPTION>
                                                         Deferred
                                            October 29, (Provision) October 31,
                                               2000       Benefit      1999
                                            ----------- ----------- -----------
                                                      (In Thousands)
   <S>                                      <C>         <C>         <C>
   Deferred Tax Assets:
     Net operating loss carryforwards......   $1,207      $(4,497)    $ 5,704
     Tax credits...........................      740          222         518
     Accrued liabilities...................      227          122         105
     Other.................................      684         (585)      1,269
                                              ------      -------     -------
     Total gross deferred tax assets.......    2,858       (4,738)      7,596
     Less: Valuation allowance.............     (454)       4,338      (4,792)
                                              ------      -------     -------
     Net deferred tax asset................    2,404         (400)      2,804
   Deferred Tax Liabilities:
     Amortization and depreciation.........     (835)         223      (1,058)
     Other.................................       --
                                              ------      -------     -------
     Total deferred tax liabilities........     (835)         223      (1,058)
                                              ------      -------     -------
     Net deferred tax asset................   $1,569         (177)    $ 1,746
                                              ======      =======     =======
</TABLE>

   Due to the Company's historical results of operations, a valuation
allowance has been provided for certain deferred tax assets that may not be
realized. The valuation allowance decreased by $4,338,000 and $1,682,000 in
fiscal 2000 and 1999, respectively and increased by $819,000 in fiscal 1998.
During fiscal 2000 and 1999, the net deferred tax asset decreased primarily
due to the utilization of net operating loss carryforwards.

   On October 29, 2000, the Company had, for tax purposes, net operating loss
carryforwards of approximately $3,549,000, unused investment and research and
development tax credits of approximately $255,000, and $488,000 of alternative
minimum tax credits available to offset future taxable income and Federal
income taxes. The net operating loss carryforward will expire at the end of
fiscal 2018, the investment tax credit and research and development tax credit
carryforwards will expire from 2001 to 2005, and the alternative minimum tax
credit has no expiration.

   All carryforwards are subject to review and possible adjustment by the
Internal Revenue Service. In compliance with the Tax Reform Act of 1986,
investment tax credits carried forward were reduced by 35%. The Company's
ability to utilize the net operating loss carryforwards to offset alternative
minimum taxable income is limited to 90% for tax years after fiscal 1987.

                                     F-18
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


13. Income Taxes--(Continued)

   Additionally, Section 382 of the Internal Revenue Code limits the amounts
of net operating loss carryforwards usable by a corporation following a more
than 50 percentage point change in ownership of the corporation during a
three-year period. It is possible that subsequent transactions involving the
Company's capital stock could result in such a limitation. As of October 29,
2000, management does not believe that a 50 percentage point change in
ownership has occurred during a three year period.

   Cash paid for income taxes for approximately:

<TABLE>
<CAPTION>
                                             October 29, October 31, October 26,
                                                2000        1999        1998
                                             ----------- ----------- -----------
   <S>                                       <C>         <C>         <C>
   Continuing Operations....................   156,000    $ 96,000          --
   Discontinued Operations..................   477,000      50,000     $28,000
                                              --------    --------     -------
     Total..................................  $633,000    $146,000     $28,000
                                              ========    ========     =======
</TABLE>

14. Commitments and Contingencies

   The Company has operating lease commitments for certain office equipment
and manufacturing, administrative and support facilities. Minimum lease
payments under noncancellable leases on October 29, 2000 are as follows:

<TABLE>
<CAPTION>
                                                                        Total
                                              Continuing Discontinued Operating
   Fiscal                                     Operations  Operations   Leases
   ------                                     ---------- ------------ ---------
                                                       (In Thousands)
   <S>                                        <C>        <C>          <C>
   2001......................................   $1,497       $224      $1,721
   2002......................................    1,410        222       1,632
   2003......................................    1,248        215       1,463
   2004......................................    1,130        208       1,338
   2005......................................      697        103         800
   Thereafter................................    1,101         --       1,101
                                                ------       ----      ------
   Minimum lease payments....................   $7,083       $972      $8,055
                                                ======       ====      ======
</TABLE>

   Rent expense (exclusive of operating expenses and net of sublease rents)
for operating leases for continuing operations was approximately $1,157,000,
$1,140,000 and $1,067,000 in fiscal 2000, 1999 and 1998, respectively. Total
rent expense (exclusive of operating expenses and net of sublease rents) for
all operating leases was approximately $1,617,000, $1,692,000 and $1,584,000
in fiscal 2000, 1999 and 1998, respectively.

   There are no material legal proceedings against the Company and, to the
Company's knowledge, no such proceedings are threatened. (See Footnote 3:
Discontinued Operations)

15. Retirement Plans

   The Company sponsors a defined contribution plan which is available to all
domestic employees. This plan provides for employer contributions based on
employee participation. The total expense under the plan was:

<TABLE>
<CAPTION>
                                                      Fiscal Year Ended
                                             -----------------------------------
                                             October 29, October 31, October 25,
                                                2000        1999        1998
                                             ----------- ----------- -----------
   <S>                                       <C>         <C>         <C>
   Continuing Operations....................  $ 260,000   $231,000    $327,000
   Discontinued Operations..................     80,000    113,000     125,000
                                              ---------   --------    --------
     Total..................................  $ 340,000   $344,000    $452,000
                                              =========   ========    ========
</TABLE>

                                     F-19
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


16. Business Segment Information

<TABLE>
<CAPTION>
                                                    Fiscal Year Ended
                                           -----------------------------------
                                           October 29, October 31, October 25,
                                              2000        1999        1998
                                           ----------- ----------- -----------
   <S>                                     <C>         <C>         <C>
   Net sales by geographic area:
   Sales to Customers Within the
    Continental US........................   $57,026     $44,690     $53,032
   Exports From the US to Unaffiliated
    Customers.............................     4,521       3,739       5,463
                                             -------     -------     -------
     Total Sales..........................   $61,547     $48,429     $58,495
                                             =======     =======     =======
</TABLE>

17. Subsequent Events--(UNAUDITED)

   On November 17, 2000, Malco Technologies Group, Inc., ("Seller") a wholly-
owned subsidiary of Alpha Technologies Group, Inc. ("Alpha", or the
"Registrant"), pursuant to an asset purchase agreement, sold substantially all
of the assets and business of Seller's subsystems business (the "Business")
located in Colmar, Pennsylvania, which operated under the trade name Malco
Technologies, Inc. ("Malco") to a privately owned company (the "Buyer"). The
sale included Malco's accounts receivable, inventory, machinery, equipment,
tools, business machines, office furniture and fixtures and certain
intangibles including but not limited to customer lists, trade names and
engineering designs and the agreement by Alpha and certain of their affiliates
engage not to engage in any business, directly or indirectly, that competes
with Malco for three years.

   Seller received $2,200,000, in cash plus a three-year, 12% note for
$300,000 and Buyer assumed certain payables and liabilities of the Business.
The purchase price was a negotiated amount between Buyer and Seller.

   On January 8, 2001 the Company completed a rights offering pursuant to
which holders of Alpha common stock on October 25, 2000, received one basic
subscription right for each 25 shares of common stock held as of the close of
business on that date. Holders of subscription rights were entitled to
purchase one share of the Company's common stock at a price of $7.25 per
share. The rights offering was oversubscribed and the Company received
approximately $1,964,000, from the sale of 270,946 shares of common stock.

   On January 9, 2001, pursuant to a Stock Purchase Agreement (the "SPA")
dated September 18, 2000, as amended by Amendment No. 1 dated November 10,
2000, Alpha Technologies Group, Inc. ("Alpha"), purchased all of the
outstanding Common Stock of National Northeast Corporation ("NNE") from
Mestek, Inc. (the "Seller") of Westfield, Massachusetts. NNE is engaged, and
Alpha intends to continue to engage through NNE, in the thermal management and
aluminum extrusion business in Pelham, New Hampshire.

   The purchase price was $49,900,000 in cash, subject to adjustment based
upon working capital as of the Closing. Pursuant to the SPA, the Seller and
certain of its affiliates agreed not to engage in the manufacture and sale of
aluminum extrusions and aluminum heat sinks for four and one half years. The
terms of the transaction, including the purchase price, were the result of
arms length negotiations between Alpha and Seller.

   Alpha used $14,800,000 of its cash on hand and $39,800,000 in borrowings
under its new credit facility to pay: (i) the purchase price, (ii) $1,300,000
in transaction costs and costs for the new credit facility and (iii)
$3,400,000 in outstanding debt under its old credit facilities, including a
$378,000 early termination fee.

   Simultaneously with the closing of the SPA, the Company and its
subsidiaries, as guarantors, entered into a Credit Agreement (the "Credit
Agreement') with Union Bank of California, N.A. ("Union Bank") as sole lead
arranger and administrative agent and several banks and other financial
institutions named in the Credit Agreement. The Credit Agreement provides for
a revolving loan facility of up to $15,000,000, and a

                                     F-20
<PAGE>

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


17. Subsequent Events--(UNAUDITED)--(Continued)

$35,000,000 term facility, maturing on January 8, 2006. The advances on the
revolving loans are based on eligible accounts receivable. Prior to the
closing under the Credit Agreement, the Company paid off, with its cash on
hand, the credit facility entered into on April 16, 1999.

   On January 9, 2001, in connection with the NNE acquisition $35,000,000 was
borrowed on the term loan and $4,800,000 was drawn on the revolving credit
facility. Interest on the revolver accrues at the base rate provided by Union
Bank pursuant to the terms of the Credit Agreement plus .75% (9.75% on January
9, 2001). There is an unused line fee equal to .5% per annum based on the
average aggregate amount, for each day during the period, of the Available
Revolving Loan Commitment payable quarterly in arrears on the last day of each
quarter. The $35,000,000 term note accrues interest at the base rate provided
by Union Bank pursuant to the terms of the Credit Agreement plus .75%(9.75%
per annum on January 9, 2001) and is payable in four quarterly installments
$1,500,000 beginning March 31, 2001, followed by twelve quarterly installments
of $1,750,000, and four final quarterly installments of $2,000,000, together,
in each instance, with interest thereon to the date of payment. The
obligations under the Agreement are secured by a first lien on and assignment
of all of the assets of Alpha and its subsidiaries.

                                     F-21
<PAGE>

                                                                     SCHEDULE II

                ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                          Additions
                               Balance at Charged to                Balance at
                               Beginning  Costs and                   End of
         Description           of Period   Expenses   Deductions      Period
         -----------           ---------- ----------  ----------    ----------
<S>                            <C>        <C>         <C>           <C>
CONTINUING OPERATIONS
Allowance for doubtful
 accounts deducted from
 accounts receivable in the
 balance sheet--
  2000........................  $ 297,900 $   46,000  $   73,345(1) $  270,555
  1999........................    410,254         --     112,354(1)    297,900
  1998........................    240,808    188,575      19,129(1)    410,254
Allowance for obsolete
 inventory deducted from
 inventories in the balance
 sheet--
  2000........................ $1,161,366 $  166,682  $  998,900(2) $  329,148
  1999........................  1,320,745    309,000     468,379(2)  1,161,366
  1998........................    748,356  1,237,481     665,092(2)  1,320,745
Allowance for Wakefield
 facility consolidation
  2000........................ $    7,036 $       --  $    7,036    $       --
  1999........................    105,064         --      98,028         7,036
  1998........................  1,749,983   (362,000)  1,282,919(3)    105,064
</TABLE>
--------
(1)  Uncollectible accounts written off, net of recoveries.
(2) Obsolete inventory written off at cost, net of value recovered.
(3) Primarily severance and equipment write offs.

                                      S-1