SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549
          ----------------------------------------------------------------
                                     FORM 10-KSB

               (Mark One)
         [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES ACT OF 1934 
               [FEE REQUIRED]
               For the fiscal year ended April 30, 1997

                                          OR

         [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                            COMMISSION FILE NUMBER 0-12873

                                    FIRECOM, INC.
          ----------------------------------------------------------------
                 (Exact name of Small Business Issuer in its charter)

                    New York                      13-2934531                
                    --------                      ----------
          (State or other jurisdiction of    (I.R.S. Employer 
          incorporation or organization)     Identification No.)

          39-27 59th Street, Woodside, New York        11377
          -------------------------------------        -----
          (Address of principal executive offices)     (zip code)

          Issuer's telephone number, including area code: (718) 899-6100
          Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock, $.01 par value per share
                        --------------------------------------
                                   (Title of Class)

          Indicate by check mark whether the Issuer (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
          and (2) has 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 the Issuer's knowledge,
          in definitive proxy or information statements by reference in
          Part III of this Form 10-KSB or any amendment to this 
          Form 10-KSB ( x )

          State issuer's revenues for its most recent fiscal year-
          $15,336,000

          The aggregate market value of the voting stock held by non-
          affiliates of the Issuer, based upon the average bid and asked
          prices for the Registrant's Common Stock, $.01 par value per
          share, as of July 28, 1997 was $3,609,750.

          As of July 28, 1997, the Registrant had 5,908,194 shares of
          Common Stock outstanding.    
          Documents incorporated by Reference: None.

     <PAGE>
                                        PART I
                                        ------

          ITEM 1. BUSINESS
          ----------------

          GENERAL.
          --------

          Firecom, Inc. (the "Company") was formed as a New York
          corporation in March 1978 to acquire the business and operating
          assets of Fire Controls, Inc and Commercial Radio-Sound Corp.,
          which were engaged in the design and manufacture of custom fire
          detection, communications and control systems for commercial
          buildings and commercial audio-visual systems. The acquisition
          was completed in May 1978.

          Through its Fire Controls division, the Company designs,
          manufactures and distributes, under the Firecom brand name, 
          safety and security systems for high rise office buildings,
          hotels, apartment buildings and other large commercial buildings. 
          This division also is a distributor of Life Safety and other
          electronic building systems manufactured by other companies. 
          Subsidiaries handle the maintenance of systems sold by the
          Company and others.

          The Company's principal executive office is located at 39-27 59th
          Street, Woodside, New York 11377 and its telephone number is
          (718) 899-6100.

          FIRE ALARM AND COMMUNICATIONS SYSTEMS
          -------------------------------------

          The fire alarm and communication systems or "life safety systems"
          designed, assembled and sold by the Company through its Fire
          Controls division have the following functions: (i) sensing and
          reporting fires, (ii) sounding alarms in the event of a fire,
          (iii) notifying the Fire Department of a fire through a "central
          station" connection, (iv) controlling basic building functions to
          prevent the spread of fire and smoke, and (v) allowing building-
          wide communication between fire fighters and building occupants. 
          The Company designs systems for both new and existing buildings. 
          The Company assembles the manual fire alarm station, floor warden
          stations, remote data gathering panels and the main fire command
          station which is typically located in the building's lobby. The
          Company purchases the sensing devices and speakers used in the
          system from other manufacturers.  Once the system has been
          installed by independent electrical contractors, the Company
          tests and services the system.  Additionally, the life safety
          systems have two auxiliary capabilities, energy management and
          security.

          During the fiscal year ended April 30, 1997, revenues from the
          sale of the fire alarm, communication systems and other building
          systems constituted approximately 57% of the Company's
          consolidated revenues.

          FIRECOM LIFE SAFETY NET 2000 SYSTEM
          -----------------------------------

          The new Firecom LSN 2000 System represents the latest state-of-
          the-art technology available in Life Safety equipment.  The
          Firecom LSN 2000 System integrates addressable and intelligent
          fire alarm sensing devices such as smoke detectors, manual fire
          alarm stations and sprinkler waterflow switches, and displays the
          status of these devices. This Firecom Systems includes a
          communication system consisting of amplifiers and loudspeakers
          for sounding alarms and paging from either a floor warden station
          or a fire command station. The newly designed LSN 2000 fire alarm
          and communication system, manufactured by Firecom, will be
          replacing the older 8500 System and is completely backward
          compatible to upgrade the older Firecom 8500 System as well as
          designed to meet the needs of the national market.

          OTHER FIRE CONTROL AND COMMUNICATION SYSTEMS
          --------------------------------------------

          The Company designs, assembles and markets fire control systems
          other than the Firecom 8500 System.  The Company does not
          manufacture the control unit for these systems.  Additionally,
          the Company distributes other electronic building systems and
          equipment under OEM agreements for Uninterrupted Power Supplies.

                                      2 
     <PAGE>                                       

          SERVICE
          -------

          The Company's life safety systems are covered by a one-year
          warranty. The Company offers service contracts covering such
          systems during and after the warranty period.  Several other
          companies compete with the Company for the servicing business. 
          The Company's subsidiaries handle maintenance services for the
          Company  s products as well as products of other Life Safety
          equipment manufacturers.

          For the fiscal year ended April 30, 1997, revenues earned from
          servicing systems constituted approximately 43% of the Company's
          consolidated revenues.

          MARKETING
          ---------

          The Company's fire alarm, communication and other building
          systems are sold in the New York area through an in-house sales
          and marketing department. Much of the Company's new business
          arises because building owners, electrical contractors and
          professional engineers in the New York City area who are familiar
          with the Company generally include the Company on project bidding
          lists.

          Firecom began marketing the LSN 2000 System in January of 1997 in
          New York City and the rest of the country. Outside of New York
          City, the Company markets the LSN 2000 through a network of
          regional managers, sales representatives and distributors.
                   
          The Company's service contracts are sold through an in-house
          sales and marketing department.

          CUSTOMERS AND SUPPLIERS
          -----------------------

          The principal customers for the Company's fire alarm and
          communications systems are electrical contractors who install
          such systems and building owners.

          The Company purchases parts for its systems from a variety of
          suppliers.  The Company believes that all such parts or alternate
          parts are available from several sources and has not experienced
          any material difficulty in obtaining supplies.

          REGULATIONS
          -----------

          The Company believes that it currently complies with all
          applicable building codes, zoning ordinances, occupational safety
          and hazard standards and other applicable federal, state and
          local ordinances and regulations.

          COMPETITION
          -----------

          The Company's businesses are highly competitive, with the price
          of products and warranty terms offered by competitors being very
          similar to those of the Company.  The Company believes that its
          products perform as well or better than those of its competitors.
          Some of the Company's competitors offer a broader line of
          products and are better financed than the Company.  Additionally,
          the Company faces competition in the servicing of systems which
          the Company sells.

          PATENT AND TRADEMARKS
          ---------------------

          The Company holds four patents on its fire alarm products. One
          covers the parallel binary system and another upgrades the
          parallel system to a serial system.  The serial system collects
          data from all sensors (emergency, energy or security) within the
          building, continuously monitoring and recording the data on a
          hard copy printer. The serial system could be used in facilities
          other than buildings, including oil refineries, mining facilities
          and cable TV stations, for site security, to prevent off-the-wire
          theft of services and to monitor interruptions in service.  In
          addition, the system can monitor mechanical and electrical
          systems on board naval and merchant vessels. The third patent on
          the Company's multiplex system covers an integrated alarm,

                                      3
     <PAGE>

          security building management and communication system.  This
          integrated system provides voice communication to all emergency
          areas, monitors all fire alarms, security functions--such as card
          access, door control, intrusion and surveillance--and controls
          all lights, pumps and other building functions.

          The Company has received of its fourth patent for a mechanical
          device called PULLplus.  Currently, most alarm pull stations are
          mounted 60 to 64 inches above the finished floor.  However, new
          Federal government regulations under The Americans with
          Disabilities Act, enacted in 1990, requires that manual stations
          for fire alarms must be mounted so that the pull handle is no
          greater than 48 inches from the finished floor.  PULLplus is an
          economical; easy to install mechanical add-on that lowers the
          height at which existing alarm pull stations can be actuated. 

          The Company has a patent pending on its LSN 2000 System.

          The Company has several trademarks, including the name "Firecom"
          and "Technology Protecting Life," that are registered with the
          United States Patent and Trademark Office.

          EMPLOYEES
          ---------

          As of July 28, 1997, the Company employs approximately 130 full-
          time employees, 37 of whom are salaried and 93 of whom are paid
          on an hourly basis.  With the exception of the Company's 3
          regional managers for its LSN 2000 System, all of its employees
          are located in the Woodside, New York facility.  The Company
          believes its relationship with its employees is satisfactory and
          has not experienced work stoppages of a material nature.

          BACKLOG
          -------

          As of April 30, 1997, the Company had a backlog for fire control
          and other systems of approximately $2,372,000, substantially all
          of which it anticipates completing in the current fiscal year. 
          The backlog at April 30, 1996 was approximately $3,178,000.


          ITEM 2.  PROPERTY
          -----------------
          
          The Company owns property and a building in Woodside, New York
          where it maintains manufacturing, sales, service and engineering
          operations.  The two story building is fire resistant and
          approximately 16,000 square feet.  The underlying property is
          approximately one acre.  
                
          As a result of the accounting treatment of the original bargain
          purchase of the Company, the value of the building and property
          is not reflected on the Company's Balance Sheet.  A 1994
          independent appraisal indicates a current value of the property
          of approximately $650,000.  The Company leases a 5,000 square
          foot building in Woodside, New York, which it utilizes for
          additional warehouse space under a lease, which will expire on
          March 31, 1998.  It has an annual average rent of $30,450.  The
          Company also leases 1,000 square feet of additional space in
          Woodside, New York under a lease which expired on March 31, 1997. 
          It had an average annual rent of $9,600.  This lease is being
          continued on a month-to-month basis while its terms are being
          negotiated.


          ITEM 3. LEGAL PROCEEDINGS
          -------------------------

          In the normal course of its operations, the Company has been
          named in various legal actions seeking monetary damages.  While
          the outcome of some of these matters cannot be estimated with
          certainty, management does not expect, based upon consultation
          with legal counsel, that they will have a material effect on the
          Company's business.

                                      4
     <PAGE>

          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
          -------------------------------------------------------------

          None


                                       PART II
                                       -------

          ITEM 5.   MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
          -----------------------------------------------------------
                    SECURITY HOLDER MATTERS
                    -----------------------

               (a) The Company's Common Stock is traded in the over-the-
          counter market.  The following table shows the high and low bid
          quotations for the Company's Common Stock for the quarters
          indicated.

                                                                            
                                              CLOSING BID

                                         HIGH               LOW

          Fiscal 1996:

               First quarter          $ 11/16             $ 17/32

               Second quarter           23/32               11/16

               Third quarter             7/10               23/32

               Fourth quarter           23/32                9/16

          Fiscal 1997:

               First quarter          $ 12/16             $ 11/16

               Second quarter           1.063               15/16

               Third quarter            1.125               1.070

               Fourth quarter           1.125               1.031
                   
          The above information was obtained from stock brokers and
          represent prices between dealers and do not include retail
          markups, markdowns or commissions and may not necessarily
          represent actual
          transactions.

               (b)  As of July 28, 1997, there were 356 record holders of
          the Company's Common Stock.  The closing bid and asked prices for
          the Company's Common Stock on July 28, 1997 were  $1.07 and $1.14
          respectively.

               (c)  The Company has not paid any cash dividends on its
          common stock to date, and the payment of cash dividends in the
          foreseeable future is not contemplated by the Company.  The
          Company's loan agreements prevent it from paying dividends.  The
          Company's future dividend policy will depend on the earnings,
          capital requirements, financial condition and other factors
          considered relevant by the Company's Board of Directors.  On June
          11, 1997, the Board declared payable all cumulative dividends in
          arrears ($905,000) on the Company's Series A Preferred Stock. 
          This amount was paid on July 22, 1997 (see Note 13 in the

                                      5  
     <PAGE>                                  

          accompanying "Notes to the Consolidated Financial Statements"). 
          At that same time, all of this Preferred Stock was exchanged for
          the Company's Common Stock.


          ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -----------------------------------------------------------
                    CONDITION AND RESULTS OF OPERATIONS
                    -----------------------------------

          RESULTS OF OPERATIONS
          ---------------------

               The following table sets forth items in the Consolidated
          Statements of Income as a percentage of sales:

                                                                        
                                        Relationship to Net Sales
                                        For the Years Ended April 30,
                                        -----------------------------

                                             1997        1996
                                             ----        ----

          Net Sales                          100.0%    100.0%
          Cost of Sales                       52.5      51.8
          Selling, General and
            Administrative Expenses           25.9      24.1
          Research & Development               4.7       3.6
                                               ---       ---
          Operating Income                    16.9      20.5
          Other Income (Expense)             (0.1)     (0.6)
          Income Tax Expense                   7.6       9.4
                                               ---       ---
          Net Income                           9.2      10.5
                                               ---      ----


          1997 FISCAL YEAR COMPARED TO 1996 FISCAL YEAR
          ---------------------------------------------

          Consolidated sales for the Company's operations increased by
          approximately 3%. Sales for the Fire Controls division, which
          sells life safety and other electronic systems for high rise
          buildings, were slightly higher than the prior year. Sales for
          Company's Fire Service, Inc. subsidiary declined by 2% versus
          1996.  Revenues for the Company's FRCM Case-Acme, Inc. subsidiary
          increased by 18% versus prior year.  Fire Controls generated
          47.0% of total revenues, Fire Service 29.1% and FRCM Case-Acme
          23.9%.

          The small increase in revenues for the Fire Controls division
          reflects the continued weakness in the New York City market place
          with regards to new construction of buildings.  Offsetting this
          weakness was the increase in contracts for new systems in
          existing buildings together with increased demand for upgrades
          and renovations to existing buildings to bring them into
          conformity with New York City building codes.  The decline in
          sales for the Fire Service, Inc. subsidiary, which services
          systems sold by the Fire Controls Division and other Life Safety
          equipment manufacturers, resulted from intense competition for
          new or expanded contracts and a resulting adverse pressure on
          contract prices.  The increase in  FRCM CaseAcme, Inc. subsidiary
          revenues primarily reflects a strong market for upgrades and
          renovations to existing Case-Acme systems together with service
          contract revenues on these systems.

          The Fire Controls division backlog for its Life Safety and other
          systems totaled $1,853,000 at April 30, 1997, a decrease of
          $986,000 from the backlog of April 30, 1996.  FRCM Case-Acme had
          a backlog of approximately $519,000 for additions and retrofits
          to its systems at April 30, 1997 an increase of $180,000 from the
          backlog of April 30, 1996.  The poor new construction environment
          and highly competitive New York market for fire protection
          systems and services were the primary reasons for the reduction
          in the Company's total backlog.

                                      6
     <PAGE>

          Selling, general and administrative expenses for the year ended
          April 30, 1997 increased approximately $385,000 as compared to
          the year ended April 30, 1996 primarily due to increases in staff
          (3 regional managers) and sales and marketing expense aimed at
          the Company's launching of its LSN 2000 System in the national
          market.

          Research and development costs were $721,000 for the year ended
          April 30, 1997 as compared to $531,000 in the year ended April
          30, 1996.  These expenditures primarily reflect the development
          of the LSN 2000 System and the Company's commitment to be able to
          provide its current and future customers with the latest stateof-
          the-art fire and life safety systems.

          Operating income for the 1997 fiscal year was $2,589,000 as
          compared to $3,051,000 for fiscal 1996.  The decrease in
          operating income for fiscal 1997 of 15.1% from fiscal 1996
          resulted primarily from the higher marketing, sales and research
          and development costs associated with the introduction of the LSN
          2000 System and expansion from New York City into the national
          market.

          Significant changes in balance sheet items from April 30, 1996 to
          April 30, 1997 are highlighted as follows:

               1:   Accounts receivable increased by $623,000 (17%), due to
                    an increase in sales of $452,000 and a slowdown in
                    collections due to a general weakness throughout the
                    New York City construction industry.  Management
                    believes that reserves for doubtful accounts are
                    adequate to cover anticipated losses in collection.
               2:   Inventories were $112,000 or 10% higher at April 30,
                    1997 than at April 30, 1996, primarily due to   
                    material requirements for the LSN 2000 System and the
                    national market.
               3:   The increase in Property, plant and equipment and Other
                    assets primarily reflect the acquisition of computers
                    and computer peripheral equipment.
               4:   The increase in debt resulted from the acquisition of
                    stock from the Norwood Venture Corporation (see Notes
                    5, 6 & 8 in the accompanying "Notes to the Consolidated
                    Financial Statements") on March 27, 1997 less
                    reductions in debt from scheduled payments to debt as
                    of April 30, 1996.  The debt incurred in the Norwood
                    transaction was $1,283,332.
               5:   Equity changes resulted from purchase of shares from
                    the Norwood Venture Corp. on March 27, 1997.

          Interest expense for fiscal 1997 was $84,000, 27% less than
          fiscal 1996 due to the reduction in the outstanding debt as of
          April 30, 1996.  This reduction in debt was partially offset by
          the debt incurred with the Norwood Venture Corp. transaction on
          March 27, 1997.


          LIQUIDITY
          ---------

          Net cash provided from operations was $849,000.  After taking
          into account funds used for the repayment of debt ($112,000), net
          common stock transactions ($234,000) and toward capital
          expenditures ($203,000), this resulted in a net increase in cash
          of $300,000.  The Company has a revolving line of credit up to a
          maximum of $2,000,000 (there was no outstanding balance at April
          30, 1997) and a first mortgage note of $377,000 at April 30,
          1997.  These notes are collateralized by substantially all of the
          Company's assets and are subject to certain covenants.  As of
          April 30, 1997, preferred dividends in arrears were approximately
          $876,000.  These dividends in arrears were satisfied subsequent
          to year-ended April 30, 1997 (see Notes 7 & 13 of the "Notes to
          the Consolidated Financial Statements") and the preferred stock
          was exchanged for common stock.  There are restrictions on the
          payment of dividends in the Company's loan documents.

          Availability under the terms of the revolver is based on eligible
          accounts receivable and inventory.  The initial commitment for
          $2,000,000 under the terms of the revolving note is reduced by
          $500,000 each six months commencing October 1, 1999.  There were
          no borrowings against the revolving loan as of April 30, 1997. 
          In late July of 1997, the Company borrowed $500,000 against the
          line in order to support the working capital requirements of its
          national expansion.

                                      7
     <PAGE>

          During the fiscal year ending April 30, 1998 ("Fiscal 1998"), the
          Company intends to spend approximately $650,000 on research to
          develop new fire alarm and communication systems.  These R & D
          expenditures will be financed from the Company's working capital
          and/or its line of credit.

          On June 21, 1995, the Company signed a Stock Purchase Agreement
          to purchase 536,494 shares of the Company's $.01 par Value Common
          Stock held by certain members of the May family (the
          "Shareholders") at $.90 per share.  Terms of the agreement
          provide for a cash payment in the amount of $174,448 and a five
          (5) year note in the amount of $308,396, bearing interest at 12%
          per annum.  Interest is to be paid monthly.  The principal is to
          be paid in five equal annual installments of $61,679. The
          Company's obligation under the note is collateralized by a pledge
          by the Company to the noteholder of 342,663 shares of the
          Company's Common Stock.

          At the same time, the Company and the Shareholders entered into
          an Option and Escrow Agreement relative to an additional 536,494
          shares of the Company's Common Stock (the "Option Shares"). 
          Under the terms of this agreement, on September 1, 1998 each
          Shareholder has the right, but not the obligation, to require the
          Company to purchase, in whole or in part, his Option Shares (the
          "Put Option") at a price of $1.10 per share. The Put Option is
          conditional upon the Company meeting certain financial targets. 
          At any time under this agreement, the Company shall have the
          right, but not the obligation, to purchase all of the Option
          Shares, in whole or in part (the "Call Option") at a purchase
          price of $1.25 per share.  Payment for the Option Shares upon
          exercise of the Put or Call Option shall be one-half (1/2) in
          cash and one-half (1/2) with a five (5) year note bearing
          interest at prime plus 3%. The notes issued upon purchase of the
          Option Shares will be secured by a pledge by the Company of
          shares of its Common Stock.

          On March 27, 1997, the Company signed a Purchase Agreement to
          purchase 583,331 shares of the Company's $.01 per value stock at
          $1.40 per share and 750,002 warrants at $1.05 per warrant held by
          Norwood Venture Corporation ("Norwood").  As part of the terms of
          purchase the Company issued to Norwood a six-year subordinated
          promissory note in the amount of $1,283,332 bearing interest at
          10% per annum.  Principal and interest totaling $71,755 is to be
          paid quarterly commencing June 27, 1997 through March 27, 2003
          (see Notes 5, 6 & 7 in the accompanying "Notes to the
          Consolidated Financial Statements").

          The Company's net working capital was approximately $6,627,000 at
          April 30, 1997.  While revenues from the New York City market,
          where the Company historically operated, continue to be weak,
          management believes that this weakness will be more than offset
          by the successful introduction of its new product into the
          national market.  Management believes that it will be able to
          maintain adequate working capital and cash balances to meet the
          needs of the Company.


          INFLATION
          ---------

          The impact of inflation on the Company's contracts is not
          material since the Company's labor contracts are normally
          controlled by union contracts covering a period of two or more
          years.


          SUBSEQUENT EVENTS
          -----------------

          On June 26, 1997, the Company acquired certain service contracts
          and intellectual property rights from a New York supplier of Life
          Safety systems for $285,200.  $150,000 was paid at closing and
          the balance of $135,200 is payable quarterly through August 2000,
          with interest of 10% (see Note 13 in the accompanying "Notes to
          the Consolidated Financial Statements").

          On July 22, 1997, the Company exchanged of all of the Series A
          Preferred Stock having a liquidation preference of $1,437,000 for
          an aggregate of 1,149,600 shares of the Company's common stock
          (see Note 13 in the accompanying "Notes to the Consolidated
          Financial Statements").

                                      8
     <PAGE>

          RECENT PRONOUNCEMENTS
          ---------------------

          NEWLY ISSUED ACCOUNTING STANDARD - In March 1997, the Financial
          Accounting Standards Board released Statement No. 128 (SFAS No.
          128) "Earnings per Share".  SFAS No. 128 requires dual
          presentation of basic and diluted earnings per share on the face
          of the income statement for all periods presented.  Basic per
          share excludes dilution and is computed by dividing income
          available to common shareholders by the weighted number of common
          shares outstanding for the period.  Diluted earnings per share
          reflects the potential dilution that could occur if securities or
          other contracts to issue common stock were exercised or converted
          into common stock or resulted in the issuance of common stock
          that then share in the earnings of the entity.  Diluted earnings
          per share is computed similarly to fully diluted earnings per
          share pursuant to APB No. 15.  SFAS No. 128 is effective for
          fiscal years ending after December 15, 1997, and when adopted, it
          will require restatement of prior year's earnings per share.  

          Management does not believe that SFAS No. 128 will have a
          material impact upon historical net income per share as reported.

          COMPANY'S STATEMENT FOR FORWARD-LOOKING INFORMATION
          ---------------------------------------------------

          This annual report, including management's discussion and
          analysis set forth above, contains certain forward-looking
          statements, including statements regarding the Company's results
          of operations, financial position and potential competition. 
          These forward-looking statements are based on current
          expectations that involve a number of risks and uncertainties,
          including the ability to market and sell its new LSN 2000 product
          nationally, outside of the Company's traditional New York City
          market.  


          ITEM 7. FINANCIAL STATEMENTS
          ----------------------------

          The consolidated financial statements and independent auditors'
          report required to be filed hereunder are indexed at Page F-1 and
          are incorporated herein by reference.


          ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
          -----------------------------------------------------

          None. 


                                      9
     <PAGE>

                                       PART III
                                       --------
          ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          --------------------------------------------------------------
                    PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
                    ------------------------------------------------------
                    ACT
                    ---

          NAME                     AGE            OFFICE
          ----------------------------------------------------------------

          Paul Mendez              54             Chairman of the Board,
                                                  President and Director

          Howard L. Kogen          57             Executive Vice President

          Antoine J. Sayour        47             Senior Vice President

          William J. Lazich        53             Vice President-Finance

          Peter Barotz             68             Director

          Orhan I. Sadik-Khan      67             Director

          Ronald A. Levin          54             Director

          Hilary B. Miller         46             Director

          Harry B. Levine          61             Director


          Directors hold office for a period of two years from the Annual
          Meeting of Shareholders at which they are elected or until their
          successors are duly elected and qualified. At the 1995 Annual
          Meeting, Mr. Mendez and Mr. Barotz were elected to serve until
          the 1997 Annual Meeting.  At the 1996 Annual Meeting, Mr. Sadik-
          Khan, Mr. Ronald Levin and Mr. Harry Levine were elected to serve
          until the 1998 Annual Meeting.  The holder of the Company's
          Series A Preferred Stock elected Mr. Miller in September of 1996.
          The Company's officers are appointed by the Board of Directors
          and hold office at the will of the Board.

          Paul Mendez was elected a Director, Chairman of the Board and
          President on July 19, 1991.  He is also employed as Vice
          President of Multiplex Electrical Services, Inc., a company,
          which is engaged in the business of manufacturing, installing and
          servicing fire alarm systems.

          Howard L. Kogen joined the Company as Vice President-Sales and
          Marketing in March 1984.  He was appointed Executive Vice
          President and Chief Operating Officer in 1990.

          Antoine J. Sayour joined the Company as Chief Engineer in 1984.
          He is now Senior Vice President of the Company and President of
          the Fire Service Subsidiary.

          William J. Lazich joined the Company as Vice President-Finance in
          July 1996.  Prior to joining the Company, Mr. Lazich had been the
          Controller, for more than five years, of a direct
          marketing/manufacturing firm headquartered in Westchester County,
          New York

          Peter Barotz was elected a director of the Company in April 1993. 
          Mr. Barotz, for more than the last five years, has been engaged
          primarily as a private investor.  Mr. Barotz has also served as
          President of Panda Capital Corp.; a New Rochelle, New York based
          business engaged in the export business.

          Orhan Sadik-Khan was elected a director of the Company in April
          1993.  Mr. Sadik-Khan serves as an advisory director of Paine
          Webber Incorporated and as an advisory director of Russian

                                      10
     <PAGE>

          Partners Management, LLC, a venture capital fund.  Previously he
          served as a managing director of each of these companies.

          Ronald A. Levin, since 1991, has been a partner in the certified
          public accounting firm of Levin, Bartlett & Co., Franklin Lakes,
          New Jersey. 

          Hilary B. Miller has been President of Stranger, Miller, Inc.
          since 1987.  His company is a private investment 
          firm located in Greenwich, CT.

          Harry B. Levine has served as President of Levine Securities,
          Inc. for more than five years.  His firm is a member of the New
          York Stock Exchange.

          There are no family relationships between any director or officer
          and any other director or officer.

          The Board of Directors has no standing committees.

          The Registrant is not aware of any Section 16(a) filing
          deficiencies.


          ITEM 10. EXECUTIVE COMPENSATION
          -------------------------------

          The following table sets forth certain information with respect
          to cash compensation paid or accrued by the Company, for services
          rendered to the Company during the fiscal year ended April 30,
          1997, to each of the executive officers of the Company whose
          aggregate remuneration exceeded $100,000.

                              SUMMARY COMPENSATION TABLE
                                                                            

                              Annual Compensation
                                                               Long-Term
            Name and                                          Compensation
            Principal       Fiscal                            Options/SAR
            Position         Year      Salary       Bonus        Awards
          --------------------------------------------------------------------

          Paul Mendez         1997    $200,000     $184,031       -0-
          Chairman and        1996     200,000      223,731       -0-
          President           1995     150,000      201,264       -0-


          Howard L. Kogen     1997    $138,000      $47,186
          Executive Vice      1996     132,000       54,203
          President           1995     129,000       49,566   66,000shs(1)


          Antoine J. Sayour   1997    $118,420      $32,267
          Senior Vice         1996     110,430       39,694
          President           1995     106,430       39,075   63,000shs(1)

          (1)  Stock Option Award

                                      11
     <PAGE>
                   
          AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
          --------------------------------------------------------------  
          OPTION/SAR VALUES
          -----------------

                                      NUMBER OF
                                      SECURITIES     VALUE OF
                                      UNDERLYING     UNEXERCISED
                                      UNEXERCISED    IN-THE-MONTY
                                      OPTION/SAR'S   OPTIONS/SAR'S
                  SHARES              AT FY-END (#)  AT FY-END ($)
                ACQUIRED ON  VALUE    EXERCISABLE/   EXERCISABLE/
       NAME      EXERCISE   REALIZED  UNEXERCISABLE  UNEXERCISABLE
       ----      --------   --------  -------------  -------------

    Paul Mendez     -0-       -0-        400,000/      $170,000/
                                         100,000        $42,500

    Howard L.       -0-       -0-        160,400/      $110,410
      Kogen                               39,600        $20,790

    Antoine J.      -0-       -0-        112,200/      $76,605/
      Sayour                              37,800       $19,845


          STOCK OPTIONS
          -------------

          The Company adopted an Incentive and Non-Qualified Stock Option
          Plan (the "Plan") which provided for the granting of not more
          than 600,000 shares of Common Stock.  The Plan is open to
          officers, directors and certain employees of the Company and will
          expire on April 30, 2001.  Subject to the provisions of the Plan
          with respect to death, retirement and termination of employment,
          the maximum period during which each Option may be exercised may
          be fixed by the Board at the time each Option is granted but
          shall in no event exceed ten (10) years.  The price at which
          shares may be purchased upon exercise of a particular Option
          shall be not less than eighty-five percent (85%) of the fair
          market value of such shares on the date such Option is granted,
          as determined by the Board.  Options for an aggregate of 506,670
          shares of Common Stock at exercise prices ranging from $0.30 to
          $0.75 were outstanding under the Plan as of April 30, 1997.

          Included in the aggregate outstanding were options to purchase
          51,000 shares at $.75 per share issued during the fiscal year
          ended April 30, 1997.  No options were exercised during the
          fiscal year.  40,000 options expired.

          DIRECTORS' COMPENSATION AND SAR AWARDS
          --------------------------------------

          Directors of the Company who are not also executive officers of
          the Company receive an annual retainer of $12,000 plus $1,000 for
          each Board meeting they attend.  In addition each director, other
          than Mr. Mendez, is granted the right to receive a cash payment
          equal to the increase in value of 20,000 shares of the Company's
          Common Stock from the date of their first election or appointment
          to the Board, and payable upon, the earliest to occur of various
          qualifying events. The Company may, at its sole option, defer
          payment for a maximum of 24 months from the date of a valid
          notice of exercise of these rights.  The Company recorded a total
          liability of approximately $55,000 as of April 30, 1997 (versus
          an accrual of $40,000 at April 30, 1996) in respect of these
          rights.  

          Concurrently with the execution of Mr. Mendez' Employment
          Agreement, and as additional consideration thereunder, Mr. Mendez
          and the Company entered into a stock appreciation rights
          agreement pursuant to which Mr. Mendez was granted the right to
          receive, in cash, the appreciation value (the "Appreciation
          Rights") with respect to 500,000 shares of Common Stock.  The
          Appreciation Rights are exercisable in pro rata installments over

                                      12
     <PAGE>

          a five-year period and have initial value prices ("base prices")
          as follows: 200,000 Appreciation Rights have a base price of $.25
          per share; 100,000 Appreciation Rights have a base price of $.50
          per share; 100,000 Appreciation Rights have a base price of $1.00
          per share; and 100,000 Appreciation Rights have a base price of
          $1.50 per share. Notwithstanding anything in the above agreement,
          Mr. Mendez shall not be entitled to receive any cash payment as a
          result of the exercise of Rights under the Agreement prior to May
          1, 1996.  The Company recorded a total liability of approximately
          $202,000 as of April 30, 1997 (versus an accrual of $64,000 at
          April 30, 1996) in respect of these rights.  

          EMPLOYMENT AGREEMENTS
          ---------------------

          On December 31, 1992, Mr. Mendez and the Company entered into an
          employment agreement (the "Mendez Employment Agreement") which
          provides, among other things, that Mr. Mendez, in consideration
          for his services as Chairman of the Board and Chief Executive
          Officer of the Company, will be paid a base salary at the rate of
          $150,000 per annum and incentive compensation equal to a
          percentage of the annual earnings, before interest and taxes (as
          adjusted by the Board of Directors for certain extraordinary and
          other non-recurring events and as more fully described in the
          Mendez Employment Agreement)("Adjusted EBIT") of the Company. 
          Generally, Mr. Mendez will be entitled to receive an amount equal
          to 6% of Adjusted EBIT if the Company's Adjusted EBIT for any
          fiscal year is between $500,000 and $1 million and 8% of the
          Adjusted EBIT if the Company's Adjusted EBIT for any fiscal year
          is greater than $1 million.  In addition, Mr. Mendez is entitled
          to participate, at no cost or expense to him, in all employee
          benefit programs maintained by the Company to the extent that
          such programs are available generally to executive officers,
          provided that the aggregate annual value to Mr. Mendez of such
          benefits does not exceed $30,000.  To the extent that the
          aggregate value of such benefits does not exceed $30,000, Mr.
          Mendez may elect to receive the differential in cash or applied
          to other fringe benefits of his selection.

          The Mendez Employment Agreement also provides that Mr. Mendez'
          employment is terminated by him for "Good Reason"(as defined
          below) or by the Company without Mr. Mendez' consent and without
          Cause (as defined in the Mendez Employment Agreement) and not due
          to death or disability of Mr. Mendez, Mr. Mendez shall be
          entitled to receive (in addition to continuation of his executive
          benefits) his base salary for the greater of two full years from
          the date of termination or the remainder of the Mendez Employment
          Agreement and whatever incentive compensation he would otherwise
          been entitled to receive for the fiscal year during which his
          employment is terminated.  Good Reason is defined as the
          occurrence, without Mr. Mendez' prior consent of (i) a reduction
          in rank or an assignment of duties materially inconsistent with
          Mr. Mendez' positions as Chairman of the Board and Chief
          Executive Officer of the Company, without any substantial failure
          of Mr. Mendez to perform such duties properly and effectively;
          (ii) a reduction by the Company in Mr. Mendez' annual base salary
          or a material reduction or elimination of his perquisites of
          office or a substantial reduction or elimination of his aggregate
          available employee benefits as in effect at December 31, 1992 or
          as the same may be increased from time to time;(iii) a change in
          the location at which Mr. Mendez' services are to be regularly
          performed to a location out of the 30-mile radius of the Empire
          State Building, New York, New York, without a comparable change
          for other executive officers of the Company, or any willful,
          material breach by the Company of any provision of Mr. Mendez'
          Employment Agreement not cured within a period of ten business
          days after receipt by the Company of written notice from Mr.
          Mendez of his intention to resign for Good Reason because of such
          breach; or(iv) the merger or consolidation of the Company with or
          into any other entity as a result of which Mr. Mendez is reduced
          in rank or is assigned duties with the surviving entity that are
          materially inconsistent with his then present position(s) with
          the Company.  In addition. the Mendez Employment Agreement
          provides that in the event of termination of Mr. Mendez'
          employment thereunder due to death or disability (as defined
          therein), the Company shall pay Mr. Mendez (or his estate, as the
          case may be) his annual base salary for one year following his
          termination of employment and whatever incentive compensation Mr.
          Mendez would otherwise been entitled to receive for the fiscal
          year during which his employment is terminated.  The Mendez
          Employment Agreement expires on April 30, 2000.

          The Mendez Employment Agreement acknowledges Mr. Mendez'
          beneficial ownership and involvement in Multiplex and permits Mr.
          Mendez to devote reasonable periods of time to the business of
          Multiplex, provided that his involvement with Multiplex' business
          does not interfere with the performance of his duties and

                                      13
     <PAGE>

          obligations under the Mendez Employment Agreement and that Mr.
          Mendez at all times complies with the guidelines for limiting
          conflicts of interest between the Company and Multiplex as
          previously adopted by the Board of Directors of the Company and
          accepted by Mr.  Mendez.

          On March 28, 1995, the Mendez Employment Agreement was amended to
          (i) extend the term of the Agreement through April 30, 2000, (ii)
          increase Mr. Mendez's annual base salary to $200,000, effective
          May 1. 1995, and (iii) to increase Mr. Mendez's annual benefit
          value threshold from $30,000 to $37,000.

          The Company entered into a new employment agreement with Mr.
          Kogen effective May 1, 1994 and expiring April 30, 1999.  In
          consideration of his services as Executive Vice President and
          Chief Operating Officer of the Company, (i) Mr. Kogen is to
          receive an annual salary of $129,000 effective May 1, 1994 and
          (ii) is entitled to annual increases of approximately 3% to a
          total of $145,000 effective on May 1, 1998 and (iii) will receive
          a bonus based on the Operating Income of the Company.  Kogen's
          employment agreement also contains a six-month non-competition
          provision following the term of the agreement or any extension
          thereof.

          The Company entered into a new employment agreement with Mr.
          Sayour effective May 1, 1994 and expiring April 30, 1999.  In
          consideration of his services as Senior Vice President of the
          Company, (i) Mr. Sayour is to receive an annual salary of
          $106,430 effective May 1, 1994 and (ii) is entitled to annual
          increases of approximately $4,000 per year to a total of $122,857
          effective on May 1, 1998 and (iii) will receive a bonus based on
          the Operating Income of the Company.  Sayour's employment
          agreement also contains a six-month non-competition provision
          following the term of the agreement or any extension thereof.


          ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          -------------------------------------------------------------
                    MANAGEMENT.
                    ----------

          The following table sets forth certain information as of July 28,
          1997 (except for employee stock option information which is as of
          April 30, 1997) regarding (i) the ownership of Common Stock of
          the Company by each person who is known to the management of the
          Company to have been the beneficial owner of more than 5% of the
          outstanding shares of the Company's Common Stock, (ii) the
          ownership interests of each present director, (iii) the ownership
          interests of the Chief Executive Officer and other executive
          officers of the Company whose total annual salary and bonus
          exceeded $100,000 during the fiscal year ended April 30, 1997 and
          (iv) the ownership interests of all directors and executive
          officers of the Company as a group.

                 Name and                             Amount and
      Title      Address of             Position      Nature of
       of        Beneficial               with        Beneficial     % of
      Class        Owner                 Company      Ownership     Class
     -----------------------------------------------------------------------

     Common    Paul Mendez            Chairman of the   2,663,646   45.1%
     Stock     13 Coventry Road       Board             (1)(2)(3)
     $.01 par  Livingston, NJ         Chief Executive
     value                            Officer and
                                      Director

               Firecom Holdings, L.P. None              1,526,850   25.8%
               13 Coventry Road                         (1)
               Livingston, NJ

               Ildar Idris            None              353,354(2)  6.0%
               15 Horvath Strasse
               Grfeling 8032
               West Germany

               Carol Mendez           None              514,800(2)  8.7%
               13 Coventry Road
               Livingston, NJ

                                      14
     <PAGE>

               Howard L. Kogen        Executive Vice    179,500(4)  3.0%
                                      President

               Antoine J. Sayour      Senior Vice       132,500(5)  2.2%
                                      President

               Orhan I. Sadik-Khan    Director          51,500(2)   0.8%

               Hilary B. Miller       Director            -0-       --

               Ronald A. Levin        Director            -0-       --

               Peter Barotz           Director            -0-(2)    --

               Harry B. Levine        Director          5,000       --

               All executive officers                   3,032,146   49.1%
               and directors as a                       (1)(2)(3)(4)
               group (5 persons)                        (5)
                                                          

          (1) Includes 1,526,850 shares of Common Stock held by Firecom
          Holdings, L.P., a Delaware limited partnership ("Firecom
          Holdings"), of which Paul Mendez is the general partner.  Firecom
          Holdings is in the process of liquidation, following which
          approximately 40% of the shares owned by it will be distributed
          to Mr. Mendez and 40% to Carol Mendez.

          (2) Pursuant to a voting agreement with certain shareholders of
          the Company, Paul Mendez, Carol Mendez and the other parties
          thereto agreed that all shares of Common Stock held by Naomi
          Pollack, Nathan Barotz, Celia Barotz and Lam Investment Co. (the
          "Barotz Group"), Orhan Sadik-Khan, Dr. Ildar Idris, Karim Sadik-
          Khan, Janette Sadik-Khan, Karen Sadik-Khan, Jan Sadik-Khan and
          Kadria Sadik-Khan (the "Sadik-Khan Group"), Carol Mendez and Mr.
          Mendez shall be voted so that the Board of Directors of the
          Company shall consist of six persons elected by the holders of
          the Common Stock as follows: Mr. Sadik-Khan (or his designee),
          Mr. Barotz (or his designee), Mr. Mendez and three persons
          designated by Mr. Mendez.

          (3) Includes 536,494 shares (the "Option Shares") for which Paul
          Mendez has an irrevocable proxy to vote pursuant to an Option and
          Escrow Agreement, dated as of July 18, 1995 (the "Option and
          Escrow Agreement") between the Company and certain members of the
          May family (the "Selling Shareholders").  Under the terms of the
          Option and Escrow Agreement, each Selling Shareholder has the
          right, but no the obligation, to require the Company to purchase,
          on September 1, 1998, his or her Option Shares at a price of
          $1.10 per share.  At any time under the Option and Escrow
          Agreement, the Company shall have the right, but not the
          obligation, to purchase all of the Option Shares at a purchase
          price of $1.25 per share.  Under the terms of the Option and
          Escrow Agreement, Mr. Mendez has an irrevocable proxy to vote the
          Option Shares until the termination of the agreement.  See
          "Related Transactions."

          (4) Includes 19,100 shares of Common Stock beneficially owned by
          Mr. Kogen with his wife as joint tenants and 160,400 shares of
          Common Stock underlying presently exercisable options.

          (5) These shares include 20,300 shares of Common Stock
          beneficially owned by Mr. Sayour with his wife as joint tenants
          and 112,200 of Common Stock underlying presently exercisable
          options.

                                      15
     <PAGE>

          ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          -------------------------------------------------------

          On June 21, 1995, the Company signed a Stock Purchase Agreement
          to purchase 536,494 shares of the Company's $.01 par Value Common
          Stock held by certain members of the May family (the
          "Shareholders") at $.90 per share.  Terms of the agreement
          provide for a cash payment in the amount of $174,448 and a five
          (5) year note in the amount of $308,396 bearing interest at 12%
          per annum.  Interest is to be paid monthly.  The principal is to
          be paid in five equal annual installments of $61,679. The
          Company's obligation under the note is collateralized by a pledge
          by the Company to the noteholder of 342,663 shares of the
          Company's Common Stock.

          At the same time, the Company and the Shareholders entered into
          an Option and Escrow Agreement relative to the Option Shares.
          Under the terms of this agreement, on September 1, 1998 each
          Shareholder has the right, but not the obligation, to require the
          Company to purchase, in whole or in part, his Option Shares at a
          price of $1.10 per share. The Put Option is conditional upon the
          Company meeting certain financial targets.  At any time under
          this agreement, the Company shall have the right, but not the
          obligation, to purchase all of the Option Shares, in whole or in
          part, at a purchase price of $1.25 per share.  Payment for the
          Option Shares upon exercise of the Put or Call Option shall be
          one-half (1/2) in cash and one-half (1/2) with a five (5) year
          note bearing interest at prime plus 3%. The notes issued upon
          purchase of the Option Shares will be secured by a pledge by the
          Company of shares of its Common Stock. Upon final execution of
          this agreement, the Shareholders will deliver to the Company
          irrevocable proxies to permit Mr. Paul Mendez, Chairman of the
          Company, to vote the Option Shares until the expiration of this
          agreement.

          This agreement was entered into because management believes it
          represents a good value for the Company. Taking into
          consideration the Company's financial condition and the thinly
          traded nature of the stock, management believes that the price
          paid for the stock is reasonable. The Board of Directors secured
          a fairness opinion from an independent investment banker
          supporting the fairness of the transaction from the Company's
          point of view.


          ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
          -----------------------------------------

          (a)  Exhibits

               3(a)      Certificate of Incorporation of the Company filed
                         March 16, 1978.  [incorporated by reference to
                         Exhibit 3(a) to the Company's Registration
                         Statement on Form S-18 (Commission File No. 2-
                         87583-NY), filed on October 31, 1983].
           
               3(b)      Certificate of Amendment to the Certificate of
                         Incorporation of the Company filed December 6,
                         1979 [incorporated by reference to Exhibit 3(b) to
                         the Company's Registration Statement on Form S-18
                         (Commission File No. 2-87583-NY), filed on October
                         31, 1983].

               3(c)      Certificate of Amendment to the Certificate of
                         Incorporation of the Company filed December 31,
                         1980 [incorporated by reference to Exhibit 3(c) to
                         the Company's Registration Statement on Form S-18
                         (Commission File No. 2-87583-NY), filed on October
                         31, 1983]. 

               3(d)      Certificate of Amendment to the Certificate of
                         Incorporation of the Company filed April 23, 1981
                         [incorporated by reference to Exhibit 3(d) to the
                         Company's Registration Statement on Form S-18
                         (Commission File No. 2-87583-NY), filed on October
                         31, 1983].

               3(e)      Certificate of Amendment to the Certificate of
                         Incorporation of the Company filed August 12, 1983
                         [incorporating by reference to Exhibit 3(e) to the
                         Company's Registration Statement on Form S-18
                         (Commission File No. 2-87583-NY), filed on October
                         31, 1983].

                                      16
     <PAGE>

               3(f)      Certificate of Amendment to the Certificate of
                         Incorporation of the Company filed February 4,
                         1985 [incorporated by reference to Exhibit 3(f) to
                         the Company's Annual Report on Form 10-K for the
                         fiscal year ended April 30, 1985].

               3(g)      Certificate of Amendment of the Certificate of
                         Incorporation of the Company filed August 4, 1986
                         stating the Designation and Preference of the
                         Company's Series A Preferred Stock [incorporated
                         by reference to Exhibit 3 (g) to the Company's
                         Annual Report on Form 10-K for the fiscal year
                         ended April 30, 1987].

               3(h)      Certificate of Amendment of the Certificate of
                         Incorporation of the Company filed March 1987,
                         limiting the director's liability in certain
                         circumstances [incorporated by reference to
                         Exhibit 3(j) to the Company's Annual Report on
                         Form 10-K for the fiscal year ended April 30,
                         1988].

               3(i)      Certificate of Amendment of the Certificate of
                         Incorporation of the Company filed June 5, 1991,
                         changing the Designation and Preference of the
                         Company's Series A Preferred Stock. [incorporated
                         by reference to Exhibit 3(I) to the Company's
                         Report on Form 8-K dated April 30, 1991].

               3(j)      Certificate of Amendment to the Certificate of
                         Incorporation ratified and adopted April 1, 1993
                         (incorporated by reference to Exhibit A to the
                         Company's Proxy Statement for the Annual Meeting
                         of Shareholders held on April 1, 1993)

               3(k)      By-laws of the Company (incorporated by reference
                         to Exhibit 3(f) to the Company's Registration
                         Statement on Form S-18 (Commission File No. 2-
                         87583-NY), filed on October 31, 1983].

               3(l)      Amendment to the By-laws of the Company approved
                         and adopted by the Company's Board of Directors on
                         May 13, 1987 [incorporated by reference to Exhibit
                         3(i) to the Company's Annual Report on Form 10-K
                         for the fiscal year ended April 30, 1987].

               3(m)      Amendment to the By-laws of the Company approved
                         and adopted by the Company's Board of Directors on
                         May 2, 1991 [incorporated by reference to Exhibit
                         3.1 to the Company's Report on Form 8-K dated May
                         3, 1991].

               4(a)      Form of Common Stock Certificate [incorporated by
                         reference to Exhibit 4 to Amendment No. 2 to the
                         Company's Registration Statement on Form S-18
                         (Commission File No. 2-87583-NY) filed on January
                         16, 1984].

               4(b)      Warrant dated July 31, 1986 entitling Mobex
                         Corporation (transferred to Jindas B. Shah on June
                         1, 1990 and transferred to Firecom Holdings, L.P.
                         on July 18, 1991) to purchase 500,000 shares of
                         the Company's Common Stock [incorporated by
                         reference to Exhibit C to Exhibit 1 to the
                         Company's Report on Form 8-K dated August 14,
                         1986] as amended by the Modification Agreement
                         dated March 24, 1989, by and among Mobex
                         Corporation, the Company and Fire Service, Inc.
                         [incorporated by reference to Exhibit 10.2 to the
                         Company's Report on Form 8-K dated April 11,
                         1989].

               4(c)      Registration Rights Agreement dated July 31, 1986,
                         between Mobex Corporation and the Company
                         (assigned to Jindas B. Shah June 1, 1990 and
                         assigned to Firecom Holdings L.P. on July 18,
                         1991) [incorporated by reference to Exhibit 2 to
                         the Company's Report on Form 8-K dated August 14,
                         1986]. Voting Trust Agreement dated July 31, 1986
                         between Mobex Corporation, as trustor and Gregory
                         Katz, as trustee (transferred to Firecom Holdings,
                         L.P. on July 18, 1991) [incorporated by reference
                         to Exhibit 3 to the Company's Report on Form 8-K
                         Dated August 14, 1986].

               10(a)     Employment Agreement dated as of December 31, 1992
                         with Paul Mendez, and Amendment thereto dated

                                      17
     <PAGE>

                         March 28, 1995 [incorporated by reference to
                         Exhibit 10(a) to the Company's Report on Form 8-K
                         dated April 30, 1995].

               10(b)     Stock Appreciation Rights Agreement dated as of
                         December 31, 1992 with Paul Mendez [incorporated
                         by reference to Exhibit 10(b) to the Company's
                         Report on Form 8-K dated April 30, 1993].

               10(c)     Company's 1986 Non-Qualified Stock Option Plan
                         [incorporated by reference to Exhibit A to the
                         Company's Proxy Statement for the Annual Meeting
                         of Shareholders dated January 5, 1987].

               10(d)     Purchase Agreement dated as of May 8, 1993 with
                         Case Acme Inc. [incorporated by reference to
                         Exhibit 10(i) to the Company's Report on Form 8-K
                         dated April 30, 1993].

               10(e)     Employment Agreement dated May 1, 1994 between the
                         Company and Howard Kogen and [incorporated by
                         reference to Exhibit 10(e) to the Company's Report
                         on Form 8-K dated April 30, 1994].

               10(f)     Employment Agreement dated May 1, 1994 between the
                         Company and Antoine J. Sayour and [incorporated by
                         reference to Exhibit 10(f) to the Company's Report
                         on Form 8-K dated April 30, 1994].

               10(g)     Stock Purchase Agreement dated June 21, 1995
                         between the Company and Helen May, etal  and
                         [incorporated by reference to Exhibit 10(l) to the
                         Company's Report on Form 10-K dated April 30,
                         1995].

               10(h)     Option & Escrow Agreement dated July 14, 1995
                         between the Company and Helen May, etal and
                         [incorporated by reference to Exhibit 10(m) to the
                         Company's Report on Form 10-K dated April 30,
                         1995].

               10(i)     Purchase Agreement dated as of March 27, 1997
                         between Norwood Venture Corporation and the
                         Company and related subordinated promissory note
                         [incorporated by reference to Exhibit 2.1 and 4.1
                         to the Company's Report on Form 8-K dated March
                         27, 1997].


          22 SUBSIDIARIES OF THE COMPANY

          (b) Reports on Form 8-K  NONE

                                      18
     <PAGE>

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

                                             FIRECOM, INC.

                                              s/s Paul Mendez
          Date: August 4, 1997               By __________________
                                              Paul Mendez, Chairman of
                                              the Board, President and
                                              Chief Executive Officer

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

          Signature                        Title           Date

          s/s Paul Mendez                  Chairman of     August 4, 1997
          ----------------------           the Board,
          Paul Mendez                      President and
                                           Chief Executive
                                           Officer


          s/s William J. Lazich            Vice-President  August 4, 1997
          ----------------------           -Finance
          William J. Lazich                (Principal
                                           Financia
                                           Officer)


          s/s Peter Barotz                 Director        August 4, 1997
          --------------------
          Peter Barotz


          s/s Hilary B. Miller             Director        August 4, 1997
          --------------------
          Hilary B. Miller


          s/s Ronald A. Levin              Director        August 4, 1997
          ----------------------
          Ronald A. Levin


          s/s Orhan I. Sadik-Khan          Director        August 4, 1997
          ----------------------
          Orhan I. Sadik-Khan


          s/s Harry B. Levine              Director        August 4, 1997
          ---------------------
          Harry B. Levine

                                      19
     <PAGE>

                         
                         FIRECOM, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                                 APRIL 30, 1997


<PAGE>
      
                         FIRECOM, INC. AND SUBSIDIARIES



                                    CONTENTS


INDEPENDENT AUDITORS' REPORT                                               F-2

CONSOLIDATED FINANCIAL STATEMENTS:

  CONSOLIDATED BALANCE SHEET                                               F-3

  CONSOLIDATED STATEMENTS OF INCOME                                        F-4

  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                          F-5

  CONSOLIDATED STATEMENTS OF CASH FLOWS                              F-6 - F-7

  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                        F-8 - F-17
  




                                       F-1

<PAGE>
                            INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders of
 Firecom, Inc. and Subsidiaries


We have audited the accompanying consolidated balance sheet of
Firecom, Inc. and Subsidiaries as of April 30, 1997 and the related
consolidated statements of income, stockholders' equity and cash flows
for the years ended April 30, 1997 and 1996. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Firecom, Inc. and Subsidiaries at April 30,
1997, and the consolidated results of their operations and their cash
flows for the years ended April 30, 1997 and 1996 in conformity with
generally accepted accounting principles.



/s/ Rothstein, Kass & Company, P.C.


Roseland, New Jersey
July 3, 1997, except for Note 13 as to
 which the date is July 29, 1997


                                       F-2

<PAGE>

                         FIRECOM, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                 April 30, 1997


                                     ASSETS

CURRENT ASSETS:
   Cash And Cash Equivalents                    $     2,465,000
   Accounts Receivable, Net Of Allowance For
    doubtful Accounts of $293,000                     4,340,000
   Inventories                                        1,264,000
   Deferred tax assets                                  406,000
   Prepaid expenses and other                            82,000
                                                ---------------
        Total current assets                                          8,557,000

PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $692,000                            575,000
                                                                
OTHER ASSETS:
   Product enhancement costs, less accumulated
    amortization of $433,000                             75,000
   Deferred tax asset                                    60,000
   Prepaid loan fees                                     22,000
                                                ---------------
                                                                        157,000
                                                                ---------------

                                                                $     9,289,000
                                                                ===============


                 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of notes payable             $       236,000
   Accounts payable                                     692,000
   Accrued expenses and other                           900,000
   Income taxes payable                                 102,000
                                                ---------------
Total current liabilities                                             1,930,000

LONG-TERM LIABILITIES:
   Notes payable                                      1,671,000
   Accrued compensation                                 256,000
                                                ---------------
        Total long-term liabilities                                   1,927,000

MANDATORY REDEEMABLE COMMON STOCK                                       590,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, par value $1,
    authorized 1,000,000 shares, none issued
  Series A preferred stock, stated value
   $1,197.50, authorized, issued and
   outstanding 1,200 shares                           1,437,000
  Common stock, par value $.01, authorized
   10,000,000 shares, issued 5,412,338,
   outstanding 4,381,344                                 54,000
  Capital in excess of par value                        890,000
  Retained earnings                                   3,687,000
                                                ---------------
                                                      6,068,000

Less treasury stock, at cost,
  1,030,994 shares                                    1,226,000
                                                ---------------
     Total stockholders' equity                                       4,842,000
                                                                ---------------


                                                                $     9,289,000
                                                                ===============

          See accompanying notes to consolidated financial statements.

                                       F-3

<PAGE>
                         FIRECOM, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                       Years Ended April 30, 1997 and 1996

                                                       1997            1996
                                                   ------------    ------------
NET SALES:
  Product                                          $  8,813,000    $  8,530,000
  Services                                            6,523,000       6,354,000
                                                   ------------    ------------
                                                     15,336,000      14,884,000
                                                   ------------    ------------
COST OF SALES:
  Product                                             4,896,000       4,698,000
  Services                                            3,156,000       3,015,000
                                                   ------------    ------------
                                                      8,052,000       7,713,000
                                                   ------------    ------------ 

GROSS PROFIT                                          7,284,000       7,171,000
                                                   ------------    ------------

OPERATING EXPENSES:
  Selling, general and administrative                 3,974,000       3,589,000
  Research and development                              721,000         531,000
                                                   ------------    ------------
       Total operating expenses                       4,695,000       4,120,000
                                                   ------------    ------------

INCOME FROM OPERATIONS                                2,589,000       3,051,000
                                                   ------------    ------------

OTHER INCOME (EXPENSE):
  Interest income                                        74,000          30,000
  Interest expense                                      (84,000)       (115,000)
                                                   ------------    ------------
                                                        (10,000)        (85,000)
                                                   ------------    ------------

INCOME BEFORE INCOME TAX EXPENSE                      2,579,000       2,966,000

INCOME TAX EXPENSE                                    1,170,000       1,404,000
                                                   ------------    ------------

NET INCOME                                         $  1,409,000    $  1,562,000
                                                   ============    ============

NET INCOME APPLICABLE TO COMMON SHAREHOLDERS
  Primary and fully diluted                        $  1,295,000    $  1,463,000
                                                   ============    ============

NET INCOME PER COMMON SHARE
  Primary and fully diluted                        $        .23    $        .25
                                                   ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN
 COMPUTING NET INCOME PER SHARE
  Primary                                             5,610,000       5,801,000
                                                   ============    ============


  Fully diluted                                       5,708,000       5,960,000
                                                   ============    ============


          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>


                                 FIRECOM, INC. AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               Years Ended April 30, 1997 and 1996


                                    Series A
                                Preferred Stock                Common Stock
                                ---------------                ------------
                               Shares      Amount          Shares      Amount
                               ------      ------          ------      ------

BALANCES, April 30, 1995        1,200    $ 1,437,000     5,031,038    $50,000

PURCHASE OF TREASURY
 STOCK

ISSUANCE OF PUT OPTION

RETIREMENT OF TREASURY
 STOCK                                                    (202,031)    (2,000)

WARRANTS EXERCISED                                         333,332      4,000

NET INCOME                      -----    -----------     ---------     ------

BALANCES, April 30, 1996        1,200      1,437,000     5,162,339     52,000

PURCHASE OF TREASURY STOCK
 AND WARRANTS

WARRANTS EXERCISED                                         249,999      2,000

NET INCOME                      -----    -----------     ---------     ------

BALANCES, April 30, 1997        1,200    $ 1,437,000     5,412,338    $54,000
                                =====    ===========     =========    =======




                              Capital in
                              Excess of     Retained        Treasury Stock
                              Par Value     Earnings      Shares      Amount
                              ---------     --------      ------      ------

BALANCES, April 30, 1995    $ 2,242,000   $   716,000      13,000   $  (1,000)

PURCHASE OF TREASURY
 STOCK                                                    636,694    (583,000)

ISSUANCE OF PUT OPTION         (590,000)

RETIREMENT OF TREASURY
 STOCK                         (172,000)                 (202,031)    174,000

WARRANTS EXERCISED              113,000

NET INCOME                                  1,562,000
                              ---------     ---------   ---------  ---------- 

BALANCES, April 30, 1996      1,593,000     2,278,000     447,663    (410,000)

PURCHASE OF TREASURY STOCK
 AND WARRANTS                  (788,000)                  583,331    (816,000)
 

WARRANTS EXERCISED               85,000

NET INCOME                                  1,409,000
                              ---------     ---------   ---------  ----------- 

BALANCES, April 30, 1997    $   890,000   $ 3,687,000   1,030,994  $(1,226,000)
                            ===========   ===========   =========  ===========
                  

                                             Total
                                             -----

BALANCES, April 30, 1995 

PURCHASE OF TREASURY
 STOCK                                $     4,444,000

ISSUANCE OF PUT OPTION                       (583,000)

RETIREMENT OF TREASURY
 STOCK                                       (590,000)

WARRANTS EXERCISED                               --

NET INCOME                                    117,000

BALANCES, April 30, 1996                    1,562,000
                                      ---------------

PURCHASE OF TREASURY STOCK
 AND WARRANTS                              (1,604,000)

WARRANTS EXERCISED                             87,000

NET INCOME                                  1,409,000
                                      ---------------

BALANCES, April 30, 1997              $     4,842,000
                                      ===============



            See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>
                           FIRECOM, INC. AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Years Ended April 30, 1997 and 1996

                                                      1997          1996
                                                  -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                      $ 1,409,000    $ 1,562,000
                                                  -----------    -----------
  Adjustments to reconcile net income
    to net cash provided by operating 
    activities:
   Depreciation and amortization                      154,000        132,000
   Provision for doubtful accounts                    148,000        259,000
   Amortization of loan fees                           10,000         10,000
   Deferred income tax credit                         (91,000)       (30,000)
   Changes in operating assets
     and liabilities:
    Increase in accounts receivable                  (771,000)      (482,000)
    Increase in inventories                          (112,000)      (252,000)
    (Increase) decrease in prepaid expenses
     and other                                        (71,000)        46,000
    Increase in accounts payable                      185,000         55,000
    Decrease in accrued expenses and other            (63,000)        (5,000)
    Increase (decrease) in income taxes payable      (101,000)       190,000
    Increase in accrued compensation                  152,000         20,000
                                                  -----------    -----------
            Total adjustments                        (560,000)       (57,000)
                                                  -----------    -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES             849,000      1,505,000
                                                  -----------    -----------

NET CASH USED IN INVESTING ACTIVITY,
  acquisition of property, plant, and equipment      (203,000)       (95,000)
                                                  -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of notes payable                         (112,000)      (791,000)
  Proceeds from the sale of common stock               87,000        117,000
  Payments for the purchase of treasury stock        (321,000)      (275,000)
                                                  -----------    -----------

NET CASH USED IN FINANCING ACTIVITIES                (346,000)      (949,000)
                                                  -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS             300,000        461,000

CASH AND CASH EQUIVALENTS:
  Beginning of year                                 2,165,000      1,704,000
                                                  -----------    -----------

  End of year                                     $ 2,465,000    $ 2,165,000
                                                  ===========    ===========



            See accompanying notes to consolidated financial statements.

                                       F-6

<PAGE>


                         FIRECOM, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
                       Years Ended April 30, 1997 and 1996

                                                         1997           1996
                                                      ----------     ----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest during the year                $   76,000     $  119,000
                                                      ==========     ==========

Cash paid for income taxes during the year            $1,244,000     $1,244,000
                                                      ==========     ==========


SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITY;
  note payable issued for the purchase of treasury 
    stock and warrants                                $1,283,000     $  308,000
                                                      ==========     ==========





          See accompanying notes to consolidated financial statements.

                                       F-7
<PAGE>

                         FIRECOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          NATURE OF BUSINESS - Firecom, Inc. and Subsidiaries (the
          "Company") operate in the building products industry
          including the design, manufacture and service of fire safety
          systems and products. The Company sells its products and
          services to a variety of end users (i.e., building owners
          and managers) and contractors, primarily in the New York
          metropolitan area. None of the Company's customers exceed
          10% of consolidated net sales. The majority of the Company's
          employees are employed under a union contract.

          PRINCIPLES OF CONSOLIDATION - The consolidated financial
          statements include the accounts of Firecom, Inc. and its
          wholly-owned subsidiaries, Fire Service, Inc. and FRCM
          Case-Acme, Inc. All intercompany balances and transactions
          have been eliminated in consolidation.

          FAIR VALUE OF FINANCIAL INSTRUMENTS - The fair value of the
          Company's assets and liabilities, which qualify as financial
          instruments under Statement of Financial Accounting
          Standards No. 107 (SFAS 107), "Disclosures about Fair Value
          of Financial Instruments," approximates the carrying amounts
          presented in the consolidated balance sheet.

          CASH EQUIVALENTS - Cash equivalents include all highly
          liquid instruments having a maturity of less than three
          months from the purchase date. Cash equivalents include
          certificates of deposit.

          INVENTORIES - Inventories, which include material, labor and
          overhead costs, are stated at the lower of cost or market,
          with cost determined on the first-in, first-out (FIFO)
          method.

          IMPAIRMENT OF LONG-LIVED ASSETS - The Company periodically
          assesses the recoverability of the carrying amounts of
          long-lived assets, including intangible assets. A loss is
          recognized when expected undiscounted future cash flows are
          less than the carrying amount of the asset. The impairment
          loss is the difference by which the carrying amount of the
          asset exceeds its fair value.

          PROPERTY, PLANT AND EQUIPMENT - Property, plant and
          equipment are stated at cost and are being depreciated and
          amortized using the straight-line method over the estimated
          useful lives of the assets ranging from 5 to 15 years.

          OTHER ASSETS - Product enhancement costs are amortized using
          the straight-line method over five years.

          INCOME TAXES - The Company complies with Statement of
          Financial Accounting Standards No. 109 (SFAS 109),
          "Accounting for Income Taxes," which requires an asset and
          liability approach to financial reporting of income taxes.
          Deferred income tax assets and liabilities are computed for
          differences between financial statement and tax bases of
          assets and liabilities that will result in taxable or
          deductible amounts in the future, based on enacted tax laws
          and rates applicable to the periods in which the differences
          are expected to affect taxable income. Valuation allowances
          are established, when necessary, to reduce the deferred
          income tax assets to the amount to be realized.


                                        F-8
<PAGE>

                         FIRECOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



 NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (CONTINUED):

          REVENUE RECOGNITION - Revenues related to manufacturing
          operations are recognized when goods are shipped. Revenues
          related to service contracts are recognized on a
          straight-line basis over the contract period.

          The Company uses the percentage-of-completion method of
          accounting to determine income on its fire safety system
          contracts. The percentage-of-completion is determined by
          relating the total costs incurred to date to management's
          estimate of total contract costs. Revisions in estimates and
          projected losses on contracts are recognized in the period
          when they become known.

          NET INCOME PER COMMON SHARE - Net income per common share is
          computed based on net income applicable to common
          shareholders divided by the weighted average number of
          common and common equivalent shares outstanding. Net income
          applicable to common shareholders is computed by reducing
          net income for preferred stock dividends and adjusting
          interest as a result of applying the Modified Treasury Stock
          Method. Common equivalent shares include shares issuable
          upon exercise of outstanding stock options and warrants, net
          of shares assumed to have been purchased with the resultant
          proceeds, if dilutive. Fully diluted weighted average number
          of common shares outstanding assumes shares issued from the
          exercise of stock options and warrants to have been
          outstanding for the full year.

          USE OF ESTIMATES - The preparation of 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 consolidated financial
          statements and the reported amounts of revenues and expenses
          during the reporting period. Actual results could differ
          from those estimates.

          NEWLY ISSUED ACCOUNTING STANDARD - In March 1997, the
          Financial Accounting Standards Board released Statement No.
          128 (SFAS 128), "Earnings Per Share". SFAS 128 requires dual
          presentation of basic and diluted earnings per share on the
          face of the income statement for all periods presented.
          Basic earnings per share excludes dilution and is computed
          by dividing income available to common shareholders by the
          weighted average number of common shares outstanding for the
          period. Diluted earnings per share reflects the potential
          dilution that could occur if securities or other contracts
          to issue common stock were exercised or converted into
          common stock or resulted in the issuance of common stock
          that then shared in the earnings of the entity. Diluted
          earnings per share is computed similarly to fully diluted
          earnings per share pursuant to APB No. 15. SFAS 128 is
          effective for fiscal years ending after December 15, 1997,
          and when adopted, it will require restatement of prior
          years' earnings per share.

          Management does not believe that SFAS 128 will have a
          material impact upon historical net income per share as
          reported.

                                        F-9
<PAGE>

                         FIRECOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


 NOTE 2 - INVENTORIES:

          Inventories consist of the following at April 30, 1997:

             Raw materials and sub-assemblies                      $1,257,000
             Work-in-process                                            7,000
                                                                   ----------

                                                                   $1,264,000
                                                                   ==========


 NOTE 3 - PROPERTY, PLANT AND EQUIPMENT:

          Property,  plant and  equipment  consist of the following at April 30,
          1997:

             Leasehold improvements                                $  254,000
             Machinery and equipment                                  565,000
             Furniture and fixtures                                   448,000
                                                                   ----------
                                                                    1,267,000
             Less accumulated depreciation and amortization           692,000
                                                                    ---------

                                                                   $  575,000
                                                                   ==========


          The Company owns its headquarters building located in
          Woodside, New York. The building is approximately 16,000
          square feet. Because of purchase accounting, it is carried
          at no value on the books of the Company.

 NOTE 4 - ACCRUED EXPENSES AND OTHER:

          Accrued expenses and other consist of the following at April 30, 1997:

             Professional fees                                     $   25,000
             Vacation                                                 237,000
             Incentive compensation                                   262,000
             Payroll                                                  128,000
             Fringe benefits                                          107,000
             Sales tax                                                 74,000
             Warranty                                                  31,000
             Other                                                     36,000
                                                                   ----------
                                                                   
                                                                   $  900,000
                                                                   ==========

                                        F-10

<PAGE>

                         FIRECOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 -  NOTES PAYABLE:

          Notes payable consist of the following at April 30, 1997:

                                                          Interest
                                                            Rate
                                                          --------

     Note payable to May Family, pursuant to Stock
      Purchase Agreement, (See Note 8) in annual
      installments of $61,679, plus interest, through
      June 21, 2000                                          12%   $  247,000

     Note  payable  to  Norwood  Venture  Corp.,  pursuant
      to  Purchase Agreement,  (See  Note 8) in  quarterly
      installments  of  $71,755 including  interest,
      commencing June 27, 1997,  through March 27, 2003      10%    1,283,000

     First mortgage note payable in monthly
      installments of $4,333, plus interest,
      through July 8, 1999 and collateralized by
      substantially all of the Company's assets              10.2%    377,000
                                                                   ----------
                                                                    1,907,000
     Less current portion                                             236,000
                                                                   ----------

                                                                   $1,671,000
                                                                   ==========

     The notes are subordinate to the first mortgage note.

     Aggregate future principal payments are as follows:

     Years ending April 30:
              1998                                                 $  236,000
              1999                                                    291,000
              2000                                                    530,000
              2001                                                    278,000
              2002                                                    239,000
              Thereafter                                              333,000
                                                                   ----------

                                                                   $1,907,000
                                                                   ==========

     At April 30, 1997, the Company had an unused line of credit at prime of 
     up to $2,000,000 which expires in July 1999.


     At April 30, 1997, the prime interest rate was 8.5%.


                                        F-11
<PAGE>
                           FIRECOM, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 -  STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS:

          STOCK OPTIONS - The Company maintains a stock option plan
          (the "Plan") which expires April 30, 2001. The common stock
          reserved for issuance under the Plan is 600,000 shares. The
          exercise price of options granted under the Plan shall not
          be less than 85% of the fair market value of the shares at
          the date of grant. Information relating to the stock options
          under the Plan during the years ended April 30, 1997 and
          1996 is as follows:

                                                   Number          Per Share
                                                 of Shares        Option Price
                                                 ---------        ------------

             Outstanding at April 30, 1995         498,670        $    .30-.60
             Expired                                (3,000)                .30
                                                  --------        ------------

             Outstanding at April 30, 1996         495,670        $    .30-.60

             Granted                                51,000                 .75
             Expired                               (40,000)            .30-.60
                                                   -------        ------------

             Outstanding at April 30, 1997         506,670            $.30-.75
                                                  ========        ============

             Exercisable at April 30, 1996         304,950        $    .30-.60
                                                  ========        ============

             Exercisable at April 30, 1997         331,230        $    .30-.75
                                                  ========        ============

          The exercise price of the above options approximated or
          exceeded fair market value at the date of grant.

          In 1995, the Financial Accounting Standards Board issued
          Statement of Financial Accounting Standards No. 123,
          "Accounting for Stock-Based Compensation" (SFAS 123). As
          permitted by SFAS 123, the Company continues to apply the
          recognition and measurement provisions of Accounting
          Principles Board Opinion No. 25, "Accounting for Stock
          Issued to Employees" (APB 25). The differences between the
          recognition and measurement provisions of SFAS 123 are not
          significant to the Company's results of operations.



                                        F-12
<PAGE>

                    FIRECOM, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 -  STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS(CONTINUED):

          STOCK APPRECIATION RIGHTS - The Company has stock
          appreciation rights agreements (SARs) with certain officers
          and directors which grants them the right to receive in cash
          the excess of the fair market value (FMV) of a common share
          over the base prices (as defined in the agreements). The
          following summarizes the SARs at April 30, 1997:

                         Rights         Rights           Base
                         Granted        Exercisable      Price              FMV
                         -------        -----------      -----              ---

                (A)      200,000        160,000        $   .25        $    1.13
                (A)      100,000         80,000            .50             1.13
                (A)      100,000         80,000           1.00             1.13
                (A)      100,000         80,000           1.50             1.13
                (B)       20,000         20,000            .94             1.13
                (B)       20,000         20,000           1.20             1.13
                (B)       60,000         60,000            .28             1.13

          (A)  These rights have been granted pursuant to an agreement
               with the Chairman of the Company and are exercisable in
               pro-rata installments over a five year period. All
               unexercised rights will expire December 2002.

          (B)  These rights have been granted to directors upon their
               being elected to the Board of Directors.

          Selling, general and administrative expenses include charges
          of approximately $182,000 and $29,000 for the years ended
          April 30, 1997 and 1996, respectively, for compensation as a
          result of the SARs. As of April 30, 1997, 40,000 rights have
          been exercised amounting to approximately $30,000 pursuant
          to the SARs. At April 30, 1997, the Company has accrued
          compensation of approximately $256,000 as a result of the
          SARs.

          WARRANTS - In 1987, in connection with an acquisition, the
          Company issued warrants to purchase 500,000 shares of the
          Company's common stock with an exercise price, as amended,
          of $1.20 per share. The warrants are exercisable beginning
          July 31, 1987 for a period of ten years of which 377,250
          shares were exercised on July 22, 1997 (See Note 13). Upon
          redemption of the Series A preferred stock (See Note 7) by
          the Company, a proportionate amount of the warrants
          terminate.

          As a result of repaying the convertible notes on July 8,
          1994, the rights to purchase 1,333,333 shares of common
          stock were converted into warrants with an exercise price of
          $.35 per share. The warrants were exercisable immediately
          with 83,333 shares expiring quarterly beginning June 1995
          through March 1999. As of April 30, 1997, 583,331 shares
          were exercised of which all were repurchased by the Company
          along with the remaining 750,002 warrants (See Note 8).


                                        F-13
<PAGE>

                    FIRECOM, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 -  SERIES A PREFERRED STOCK:

          The Series A preferred stock was issued to a company owned
          by certain directors of the Company and is redeemable at its
          option for $1,197.50 per share plus dividends accrued as
          outlined below from and after May 1, 1990. The Series A
          preferred stock was exchanged for common stock on July 22,
          1997 (See Note 13).

          Dividends are cumulative and accrue as follows:

                Amount of
           Dividend Per Share                           Period
           ------------------                           ------

               $    50.00                     August 1, 1986 - July 31, 1988
               $    70.00                     August 1, 1988 - July 31, 1990
               $    90.00                     August 1, 1990 - May 31, 1991
               $   107.75                     Annually beginning June 1, 1991

          As of April 30, 1997, dividends in arrears were approximately 
          $876,000. These were paid on July 22, 1997 (See Note 13).

NOTE 8 - COMMON STOCK:

          On June 21, 1995, the Company signed a Stock Purchase
          Agreement to purchase 536,494 shares of the Company's $.01
          par value common stock held by certain members of the May
          family (the "Shareholders") at $.90 per share. Terms of the
          agreement provided for a cash payment in the amount of
          $174,448 and a five (5) year note in the amount of $308,397,
          bearing interest at 12% per annum. Interest is to be paid
          monthly. The principal is to be paid in five equal annual
          installments of $61,679. The Company's obligation under the
          note is collateralized by a pledge by the Company to the
          noteholder of 342,663 shares of the Company's common stock.

          At the same time, the Company and the Shareholders entered
          into an Option and Escrow Agreement relative to an
          additional 536,494 shares of the Company's common stock (the
          "Option Shares"). Under the terms of this agreement, on
          September 1, 1998, the Shareholders have the right, but not
          the obligation, to require the Company to purchase, in whole
          or in part, their Option Shares (the "Put Option") at a
          price of $1.10 per share. The Put Option is conditional upon
          the Company meeting certain financial targets. At any time
          under this agreement, the Company shall have the right, but
          not the obligation, to purchase all of the Option Shares, in
          whole or in part (the "Call Option") at a purchase price of
          $1.25 per share. Payment for the Put Option or the Call
          Option shall be one-half (1/2) in cash and one-half (1/2)
          with a five (5) year note bearing interest at prime plus 3%.
          The Shareholders delivered to the Company irrevocable
          proxies to permit Mr. Paul Mendez, Chairman of the Company,
          to vote the Option Shares until the expiration of this
          agreement.


                                        F-14
<PAGE>

                    FIRECOM, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - COMMON STOCK (CONTINUED)

          On March 27, 1997, the Company signed a Purchase Agreement
          to purchase 583,331 shares of the Company's $.01 per value
          common stock at $1.40 per share and 750,002 warrants at
          $1.05 per warrant held by Norwood Venture Corp. (See Note
          6). The terms of the agreement provide for a cash payment in
          the amount of $320,833 and a six-year subordinated
          promissory note in the amount of $1,283,332, bearing
          interest at 10% per annum. Principal and interest totaling
          $71,755 is to be paid quarterly commencing June 27, 1997
          through March 27, 2003. The note also contains certain
          financial covenants.

NOTE 9 - PENSION PLAN CONTRIBUTIONS:

          The Company makes contributions to a union-sponsored
          multi-employer defined contribution pension plan based on
          the wages paid to union employees covered under union
          contracts. Contributions to the multi-employer plan amounted
          to approximately $82,000 and $74,000 in 1997 and 1996,
          respectively. The Company has no intention of withdrawing
          from the plan nor has the Company been informed that there
          is any intention to terminate the plan.

NOTE 10 - INCOME TAXES:

          The provision for income taxes in the accompanying
          consolidated statements of income consists of the following:

                                                    Year Ended April 30,
                                              -------------------------------

                                                  1997              1996
                                              -----------        -----------

              Current:
                Federal                       $   757,000        $   854,000
                State and City                    504,000            580,000
                                              -----------        -----------
                                                1,261,000          1,434,000

              Deferred:
                Federal                           (54,000)           (19,000)
                State and City                    (37,000)           (11,000)
                                              -----------        -----------
                                                  (91,000)           (30,000)

                  Total                       $ 1,170,000        $ 1,404,000
                                              ===========        ===========


          The following reconciles the Federal statutory rate to the
          effective income tax rate:

                                                              1997      1996
                                                            -------    ------
              Computed tax expense at Federal
               statutory rate                                 35 %       35 %
              State and city provision,                    
               net of Federal tax                             12         13
              Other                                           (2)        (1)
                                                             ----       ----

                                                              45 %       47 %
                                                             ====       ==== 

                                        F-15
<PAGE>

                    FIRECOM, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 - INCOME TAXES (CONTINUED):

          No valuation allowance was deemed necessary at April 30,
          1997 as the Company believes that it is more likely than not
          that the deferred tax asset will be fully realized based on
          current projections of future pre-tax income.

          The components of the Company's deferred tax assets and
          liability at April 30, 1997 under SFAS 109 are as follows:

            Deferred tax assets:
             Tax benefit attributable to:
               Allowance for doubtful accounts               $ 137,000
               Stock appreciation rights                       115,000
               Accrued incentive compensation                  124,000
               Inventories                                      86,000
               Other                                            59,000
                                                             ---------
                                                               521,000
             Deferred tax liability, tax 
               depreciation in excess of 
               book depreciation                               (55,000)
                                                             ---------

            Net deferred tax asset                           $ 466,000
                                                             =========

NOTE 11 - COMMITMENTS AND CONTINGENCIES:

          On December 31, 1992, the Company entered into an employment
          agreement with the Chairman of the Company, which was
          amended on March 28, 1995, providing for base salary plus
          incentive compensation and fringe benefits as defined in the
          agreement, through April 30, 2000. At April 30, 1997, the
          Company has accrued $184,000 of incentive compensation and
          $107,000 of accrued fringe benefits.

          Various lawsuits and claims arising in the ordinary course
          of business have been instituted against the Company. While
          the ultimate effects of such litigation cannot be determined
          at the present time, it is management's opinion, based on
          the advice of legal counsel, that any liabilities resulting
          from the actions would not have a material effect on the
          Company's financial position, results of operations or cash
          flows.

NOTE 12 - CONCENTRATION OF CREDIT RISK:

          The Company's cash, including certificates of deposit of
          approximately $1,088,000, are maintained in a financial
          institution, and at times exceeds the Federal Deposit
          Insurance Corporation coverage of $100,000. Management
          regularly monitors the financial condition of the financial
          institution in order to keep the potential risk to a
          minimum.

                                        F-16
<PAGE>

                    FIRECOM, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13 - SUBSEQUENT EVENTS:

          On June 26, 1997, the Company entered into an agreement to
          purchase various assets totaling $285,200, of which $150,000
          was paid upon closing and the balance of $135,200 is payable
          quarterly through August 2000, with interest at 10%. In
          connection with this agreement, the Company entered into a
          Consulting and Noncompetition Agreement with the President
          of the Company from whom the assets were acquired, which
          requires $65,000 to be paid at closing and the balance of
          $325,000 to be paid quarterly over a three year period.

          On June 11, 1997, the Board of Directors declared payable
          all of the cumulative dividends in arrears on the Series A
          Preferred Stock which approximated $905,000. These dividends
          were paid on July 22, 1997. In addition, 50% of the payment
          was used to exercise warrants which expire July 31, 1997
          (See Note 6), for 377,250 shares of the Company's common
          stock.

          On July 22, 1997, the Company had borrowed $500,000 on its
          line of credit.

          On July 22, 1997, the Company entered into a Stock Exchange
          Agreement for the exchange of all of the Series A preferred
          stock for an aggregate of 1,149,600 shares of the Company's
          common stock.

          The following unaudited pro forma information for the years
          ended April 30, 1997 and 1996 give effect to the Stock
          Exchange Agreement as though it were effective at the
          beginning of those periods.

                                                      1997           1996
                                                   ----------     ----------

             NET INCOME APPLICABLE TO COMMON
              SHAREHOLDERS
                Primary and fully diluted          $1,424,000     $1,592,000
                                                   ==========     ==========

             NET INCOME PER COMMON SHARE
               Primary                             $      .21     $      .23
                                                   ==========     ==========

               Fully diluted                       $      .21     $      .22
                                                   ==========     ==========

            WEIGHTED AVERAGE NUMBER OF COMMON
             SHARES USED IN COMPUTING EARNINGS
             PER SHARE
               Primary                              6,759,000      6,950,000
                                                   ==========     ==========

               Fully diluted                        6,857,000      7,109,000
                                                   ==========     ==========

          On July 29, 1997, the Company obtained a waiver from Norwood
          Venture Corporation regarding noncompliance with an
          administrative covenant relating to the note payable.


                                        F-17
     <PAGE>


                                   EXHIBIT INDEX

          Exhibit           Description
          -------           -----------

            27              Financial Data Schedule