FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
      EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 1998

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from ________ to ______

                         Commission File Number 0-18684

                          COMMAND SECURITY CORPORATION
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             (Exact name of registrant as specified in its charter)

           New York                                        14-1626307
-------------------------------                       -------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)

Lexington Park, Lagrangeville, New York                      12540
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(Address of Principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:  (914) 454-3703

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

     Common Stock
-----------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) 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 registrant's knowledge, in definite proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K |_|

      As of June 30, 1998, the aggregate market value of the voting stock held
by non-affiliates of the registrant, based on the last sales price of $.81 on
that date, was approximately $3,602,000.

      As of June 30, 1998, the registrant had issued and outstanding 6,658,143
shares of common stock.


                                       


                                     PART I

                                ITEM 1. BUSINESS

     Command Security Corporation ("Company") is a corporation formed under
the laws of the State of New York on May 9, 1980. It principally provides
uniformed security services from its eighteen operating offices in New York,
New Jersey, Illinois, California, Pennsylvania, Connecticut, Florida and
Georgia to commercial, financial, industrial, aviation and governmental
clients in the United States. Security services include providing uniformed
guards for access control, theft prevention, surveillance, vehicular and foot
patrol and crowd control. The Company employs a total of approximately 3,700
hourly guards, including those employed under security service agreements
with other security guard companies for which the Company administers
billing, collection and payroll ("service company clients") and approximately
65 other employees indirectly attributable to guard services including
supervisors and dispatchers. The Company also employs approximately 68
administrative employees, including the executive staff.

     Management believes there is heightened attention to security matters
due to the ongoing threat of criminal and terrorist activities. As a result
of such attention, management further believes that the urban commercial
centers served by the Company provide an opportunity for increased market
participation and growth.

     From 1983, when William C. Vassell, the Company's Chairman of the Board
acquired control, to June 1990, the Company expanded its business through
internal sales efforts and by acquisitions of the customer lists of smaller
security firms in markets the Company was already serving. In July 1990, the
Company implemented an expansion program emphasizing growth by providing back
office services to service company clients.

     This program capitalizes on the Company's proprietary computerized
scheduling and information systems, which incorporates administrative
programs and other data processing procedures. Pursuant to written "Service
Agreements", the Company provides service company clients with the benefits
of its proprietary computerized scheduling and information system and
programs, as well as its accounts receivable financing and insurance
resources, for a fee equal to a percentage of the service company clients'
revenue or gross profits. Under these agreements, the Company's program is
designed to take over the "back office" functions of these clients, enabling
them to reduce their general and administrative expenses and thereby increase
profitability, while also freeing their managers to service existing
customers and to solicit new business.

      In connection with these service agreements, the Company may provide to
its service company clients financial accommodations, typically in the form of
loans. The loans are secured by accounts receivable, customer lists, contracts
and all other assets of the independent firm and are personally guaranteed by
the owner(s) of the service company.

     The Company has begun providing guard services for ATM companies
nationwide through a network of sub-contractor affiliates. The Company
expects to be fully functional in all fifty states through approximately 175
affiliates by October, 1998 and believes this is a growing niche business.

Operations

     As a licensed watchguard and patrol agency, the Company furnishes guards
to its customers to protect people or property and to prevent the theft of
property. In this regard, the Company principally conducts business by
providing guards and other personnel who are, depending on the particular
requirements of the customer, uniformed or plainclothed, armed or unarmed,
and who patrol in marked radio cars or stand duty on the premises at
stationary posts such as fire stations, reception areas or video monitors.
The Company's guards maintain contact with headquarters or supervisors via
car radio or hand-held radios. In addition to the more traditional tasks
associated with access control and theft prevention, guards respond to
emergency situations and report to appropriate authorities fires, natural
disasters, work accidents and medical crises. The Company also provides
private investigation services.

      The Company provides a variety of uniformed services for domestic and
international air carriers including pre-board passenger screeners, checkpoint
security supervisors, wheelchair escorts, skycaps, baggage handlers and
uniformed guards for cargo security areas.

     The Company provides guard services to many of its industrial and
commercial customers on a 24-hour basis, 365 days per year. For these
customers, guards are on hand to provide plant security, access control,
personnel security checks and traffic and parking control and to protect
against fire, theft, sabotage and safety hazards. The remaining customers
include retail establishments, hospitals, governmental units and promoters of
special events. The services provided to these customers may require armed as
well as unarmed guards. The Company also provides specialized vehicle patrol
and inspection services and personal protection services to key executives
and high profile personalities from time to time.

     To ensure that adequate protection requirements have been established
prior to commencing service to a customer, the Company evaluates the
customer's site and prepares a recommendation for any needed changes to
existing security programs or services. Surveys typically include an
examination and evaluation of perimeter controls, lighting, personnel and
vehicle identification and control, visitor controls, electronic alarm
reporting systems, safety and emergency procedures, key controls and security
force manning levels. While surveys and recommendations are prepared by the
Company, the security plan and coverage requirements are determined by the
customer. Operational procedures and individual post orders are reviewed
and/or rewritten by the Company to meet the requirements of the security plan
and coverage determined by the customer.

     In order to provide a high level of service without incurring large
overhead expenses, the Company establishes offices close to its customers and
delegates responsibility and decision making to its local managers. The
Company emphasizes the role of its managers by assigning to each one
responsibility for both sales and service. The Company believes that in most
situations the combination of both sales and service responsibilities in a
single individual results in better supervision and quality control and
greater responsiveness to customer concerns.

     The Company generally renders its security services pursuant to a
standard form security services agreement which specifies the personnel
and/or equipment to be provided by the Company at designated locations and
the rates therefor, which typically are hourly rates per person. Rates vary
depending on base, overtime and holiday time worked, and the term of
engagement. In most cases, the Company assumes responsibility for scheduling
and paying all guards and to provide uniforms, equipment, instruction,
supervision, fringe benefits, bonding and workers' compensation insurance.
These agreements also provide customers with flexibility by permitting
reduction or expansion of the guard force on relatively short notice. The
Company is responsible for preventing the interruption of security service as
a consequence of illness, vacations or resignations. In most cases the
customer also agrees not to hire any security personnel used by the Company
for at least one year after the termination of the engagement. Each agreement
may be terminated by the customer, typically with no prior notice or short
notice (usually 30 days). In addition, the Company may terminate an agreement
immediately upon default by the customer in payment of monies due thereunder
or if there is filed by or against the customer a bankruptcy petition or if
any other act of bankruptcy occurs.

      The Company has its own proprietary computerized scheduling and
information system. The scheduling of guards, while time-consuming, is a most
important function of any guard company. Management believes the system
substantially reduces the time a manager must spend on scheduling daily guard
hours and allows the Company to fulfill customer needs by automatically
selecting those guards that fit the customer's requirements.

Employee Recruitment and Training

      The Company believes that the quality of its guards is essential to its
ability to offer effective and reliable service, and it believes diligence in
their selection and training produces the level of performance required to
maintain customer satisfaction and internal growth.

     All selected applicants for Company guard positions undergo a detailed
pre-employment interview and a background investigation covering such areas
as employment, education, military service, medical history and, subject to
applicable state laws, criminal record. In certain cases the Company employs
psychological testing and, where permitted, uses pre-employment polygraph
examinations. Personnel are selected based upon physical fitness, maturity,
experience, personality, stability and reliability. Medical examinations and
substance abuse testing may also be performed. Prerequisites for all Company
guards include a good command of the English language and the ability to
communicate well and write a comprehensive and complete report. Preference is
given to applicants with previous experience, either as a military or a
civilian security-police officer.

     The Company trains accepted applicants in three phases: Pre-assignment;
On-the-job; and Refresher. The Company's training programs utilize current
curricula and audio-visual materials. Pre-assignment training explains the
duties and powers of a security guard, report preparation, emergency
procedures, general orders, regulations, grounds for discharge, uniforms, 
personal appearance and basic post responsibilities. On-the-job assignment 
training covers specific duties as required by the post and job orders. 
Ongoing refresher training is given on a periodic basis as determined by 
the local area supervisor and manager.

      Command treats all employees and applicants for employment without
unlawful discrimination as to race, creed, color, national origin, sex, age,
disability, marital status or sexual orientation in all employment-related
decisions.

Significant Customers

      No customer of the Company accounted for more than 10% of its gross
revenue in the fiscal year ended March 31, 1998.

Competition

     Competition in the security service business is intense. It is based
primarily on price and the quality of service provided, the scope of services
performed, name recognition and the extent and quality of security guard
supervision, recruiting and training. As the Company has expanded its
operations it has had to compete more frequently against larger national
companies, such as Pinkerton's, Inc., The Wackenhut Corporation, Burns
International Security Services, Inc. and Wells Fargo Guard Services, which
generally have substantially greater financial resources, personnel and
facilities than the Company. These competitors also offer a range of security
and investigative services which are at least as extensive as, and directly
competitive with, those offered by the Company. In addition, the Company
competes with numerous regional and local organizations which offer
substantially all of the services provided by the Company. Although
management believes that, especially with respect to certain of its markets,
the Company enjoys a favorable competitive position because of its emphasis
on customer service, supervision and training and is able to compete on the
basis of the quality of its service, personal relationships with customers
and reputation, there can be no assurance that it will be able to maintain
its competitive position in the industry.

Government Regulation

     The Company is subject to city, county and state firearm and
occupational licensing laws that apply to security guards and private
investigators. In addition, many states have laws requiring training and
registration of security guards, regulating the use of badges and uniforms,
prescribing the use of identification cards or badges, and imposing minimum
bond, surety or insurance standards. The Company may be subjected to
penalties or fines as the result of licensing irregularities or the
misconduct of one of its guards or investigators from time to time in the
ordinary course of its business. Management believes the Company is in
material compliance with all applicable laws and regulations. Under the law
of negligence, the Company can be liable for acts or omissions of its agents
or employees performed or occurring in the course of their employment. In
addition, some states have statutes that expressly impose legal
responsibility on the Company for the conduct of its employees. The nature of
the services provided by the Company potentially exposes it to greater risks 
of liability for employee conduct than are experienced by non-security 
businesses. The Company currently maintains general liability insurance 
in the amount of $1.0 million per occurrence and umbrella liability insurance 
in the amount of $30 million per occurrence and $30 million in the aggregate, 
which it believes is suitable and at a level customary for the industry 
for a business of its size.

     New York State's Security Guard Act of 1992 ("Security Guard Act"),
previously known as the "Mega Bill", has been implemented in stages since
December 26, 1993. The purpose of the Security Guard Act is to regulate the
security guard industry by insuring proper screening, hiring and training of
security guards through the implementation of minimum recruitment and
training standards. This legislation affects all in-house (or proprietary)
guard forces as well as security guard companies such as the Company.
Legislation has also been introduced at the federal level which would be
expected to require regulations similar to those imposed under the Security
Guard Act. The New York regulation has created, and the federal regulation is
expected to create, increased marketing opportunities for the Company's guard
business since compliance with increased training requirements by in-house
security forces results in disproportionately large cost increases for them
compared to the Company. Compliance with the Security Guard Act has not, and
with respect to the proposed federal legislation is not expected to
materially increase the cost of the Company's operations. The Committee of
National Security Companies supports the federal legislation and management
believes the prospects for its eventual passage are good.

Employees

      The Company currently employs approximately 3,700 hourly workers
performing guard services and approximately 65 other employees indirectly
attributable to guard services including supervisors and dispatchers. The
Company also employs approximately 68 executive, sales, administrative or
clerical staff, most of whom are salaried.

     The Company's business is labor intensive and, as a result, is affected
by the availability of qualified personnel and the cost of labor. Although
the security guard industry is characterized by high turnover, the Company
believes its experience compares favorably with that of the industry. The
Company has not experienced any material difficulty in employing suitable
numbers of qualified security guards, although, when labor has been in short
supply, it has been required to pay higher wages and incur overtime charges.

     Approximately 70% of the Company's employees hired for guard service
customers do not belong to a labor union. The Company's New York City
employees, who represent approximately 30% of the Company's employees for
guard service customers, work under collective bargaining agreements with the
following unions: Local 32B-32J, Service Employees International Union;
Allied International; and Special & Superior Officers Benevolent Association. 
Most of the Company's New York City and Chicago competitors also are unionized.
The Company has experienced no work stoppages attributable to labor disputes. 
The Company believes that its relations with its employees are satisfactory. 
Guards and other personnel supplied by the Company to its customers are 
employees of the Company, even though they may be stationed regularly at 
the customer's premises.

Service Marks

     The Company believes itself to be the owner of the service marks
"Command", "CSC" and "CSC Plus" design for security guard, detective, private
investigation services and related consulting services. On October 22, 1991,
the mark "CSC" for the above services was registered with the U.S. Patent and
Trademark Office, Registration No. 1,662,089. It appears on the principal
register. The service mark registration applications for "Command" and "CSC
Plus" design relative to the above services are pending before the United
States Patent and Trademark Office. Once registered, the marks are expected
to appear on the principal register.

     The Company also believes itself to be the owner of the service marks
"STAIRS", "Smart Guard" and "Smartwheel." The respective registration dates
and numbers for "STAIRS" and "Smart Guard" are September 15, 1992; No.
1,715,363 and December 19, 1992; No. 1,742,892. The service mark application
filed on March 24, 1994, for "Smartwheel" is pending before the U.S. Patent
and Trademark Office. Once registered, the mark is expected to appear on the
principal register.

                               ITEM 2. PROPERTIES

     As of March 31, 1998, the Company owned and used in connection with its
business approximately 70 vehicles. The Company also owns three vehicles used
in connection with the business of one of its service company clients.

     As of March 31, 1998, the Company did not own any real property. It
occupies executive offices at Route 55, Lexington Park, Lagrangeville, New
York, of approximately 4,760 square feet with a base annual rental of $75,744
under a five-year lease expiring November 1, 2000. The Company also occupies
the following offices:

<TABLE>
<CAPTION>

                                                       Square       Base Annual
Location                               When Opened     Footage      Rent
--------                               -----------     -------      -----------

<S>                                    <C>             <C>          <C>
The Poughkeepsie Plaza Mall
Poughkeepsie, NY                        9/1/83           920        $12,000

17 Lewis Street
Hartford, CT                            5/1/92         1,075        $13,320

331 Park Avenue South
10th Floor
New York, NY                           11/1/91         3,400        $60,300

331 Park Avenue South                   2/1/93         3,400        $60,300
11th Floor
New York, NY

300 Hamilton Avenue
White Plains, NY                        8/15/96        1,538        $27,444

505 Main Street
Suite #2
Williamsville, NY                       5/1/93           680        $ 5,400

9415 S. Western Avenue                  9/10/95        1,444        $20,820
Chicago, IL

5801 E. Slauson Avenue                 11/9/94         1,689        $28,375
Suite G-160
Commerce, CA

One Corporate Drive                     2/1/93         1,712        $34,634
Suite 218
Shelton, CT

96A Allen Boulevard                     1/1/94           950        $10,381
East Farmingdale, NY

1185 Morris Avenue                      1/1/96         1,983        $20,340
Suite 301A
Union, NJ

Cargo Building 78                       6/10/93        1,642        $43,205
JFK International Airport
Jamaica, NY

Los Angeles International               8/15/96          647        $17,236
  Airport
Los Angeles, CA

1237 Central Avenue #210               10/19/93          400        $ 4,800
Albany, NY

2144 Doubleday Avenue                    4/1/93          800        $12,420
Ballston Spa, NY

2777 Summer Street                      3/13/95         1515        $30,300
Stamford, CT

224 Datura Street                       9/17/96          250        $ 4,134
West Palm Beach, FL

124 Chestnut Street, Suite 5           11/25/96          500        $ 4,260
Philadelphia, PA

</TABLE>

     The Company believes its properties are adequate for its current needs.

                            ITEM 3. LEGAL PROCEEDINGS

      The nature of the Company's business subjects it to claims or litigation
alleging that it is liable for damages as a result of the conduct of its
employees or others. Except for such litigation incidental to its business,
other claims or actions that are not material and the lawsuits described below,
there are no pending legal proceedings to which the Company is a party or to
which any of its property is subject. See "EXHIBITS, FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K."

     On or about December 4, 1997, an outside shareholder and four of the
Company's directors (Sands, P. Kikis, Saunders, and T. Kikis) commenced 
an action in the Supreme Court of the State of New York, County of New York 
(Index No. 606166/97) against the other four directors (Vassell, Robinett, 
Nekos and Miller), the Company's outside corporate and securities counsel 
and the Company itself in a lawsuit characterized as a derivative action. 
The complaint alleges one or more of the defendant-directors engaged in 
improper activities, including ultra-vires acts, breach of fiduciary duty, 
fraud against the Company, constructive fraud, waste of corporate assets 
and concealment of information from the plaintiff-directors regarding the 
Company's earnings, lacked power to enter into an employment agreement on
behalf of the Company with Mr. Robinett, and entered into service contracts 
with financially unstable companies without performing due diligence. The 
complaint further alleges that the Company has failed to appoint a 
replacement to the office of president and that the directors have entered 
into a shareholder agreement which is violative of public policy. Plaintiffs 
seek the award of money damages in an amount which is "not less than" 
$11 million from the individual defendants, a declaratory judgment that 
the shareholder agreement is void, an order for an accounting, certain 
other injunctive relief and attorneys' fees and disbursements.

     The Company has interposed an answer denying the allegations contained
in the complaint. The individual defendants have stated that they believe the
allegations are completely without merit and intend to vigorously defend
against each and every claim. The Company's Certificate of Incorporation and
the Business Corporation Law of New York provide for indemnification of
officers and directors with respect to damages and legal fees incurred in
connection with lawsuits against them arising by reason of serving the
Company. Due to the fact that certain members of the board have chosen to
participate as plaintiffs in this lawsuit, the Company may not have coverage
under its officers and directors liability insurance policy. The
defendant-directors intend to seek indemnification, and have received
advancements of legal fees incurred in connection with their defense, from
the Company. Through March 31, 1998, the Company has expended approximately
$120,000 in legal fees in defense of this matter on its own behalf as well as
on behalf of the defendant officers and directors. An additional $65,000 in
legal fees has been incurred through May 31, 1998. On or about March 25,
1998, the plaintiffs filed a motion for the appointment of a temporary
receiver. On June 5, 1998, the Court ordered the appointment of a temporary
receiver, but prior to the order taking effect, the parties agreed to a
stipulation pursuant to which Franklyn H. Snitow, Esq., was appointed acting
President and Chief Executive Officer and acting ninth Board member during
the pendency of the defendants' appeal to the Appellate Division of the
decision to appoint a receiver. Based on the stipulation, the defendant's
request to the Appellate Division for a stay pending the appeal of the order
appointing the receiver was granted. At a duly convened meeting of the board
of directors on June 22, 1998, the board voted unanimously to elect Mr.
Snitow as an acting director and to appoint him acting president and chief
executive officer pending the outcome of the appeal. Mr. Snitow is a partner
in the law firm of Snitow & Cunningham, LLP, located in New York, New York.
The Company is unable to reasonably estimate the potential impact on the
Company's financial condition and results of operations from this lawsuit.

     In May, 1996, a complaint was filed in Queens County Civil Court by
three former employees alleging emotional distress, anguish, mental distress
and injury to their professional reputation due to retaliatory discharge and
related matters. Plaintiffs each seek $2 million for compensatory damages and
$2 million in punitive damages in addition to payment of overtime wages of
$25,000. The Company's customer, also a defendant and a former employer, has
engaged counsel representing all defendants. At this time the Company is
unable to estimate the possible loss, if any, that may be incurred as a
result of this action. The ultimate outcome may or may not have a material
impact on the Company's financial position or results of operations.

     The Company has been named as a defendant in several other employment
related claims, including claims of sexual harassment by current and former
employees, which are currently under investigation by the New York State
Division of Human Rights. At this time the Company is unable to determine the
impact on the financial position and results of operations that these claims
may have should the investigation conclude that they are valid.

     In August, 1997, a complaint was filed in Los Angeles County Superior
Court by six former employees alleging discrimination, wrongful termination,
breach of employment contract and intentional infliction of emotional
distress. The complaint alleges that plaintiffs have suffered damages in
excess of $1 million. After filing the complaint, the plaintiffs, through
counsel, agreed to submit the dispute to binding arbitration and a request
for dismissal, without prejudice, was filed with the Court. At this time the
Company is unable to estimate the possible loss, if any, that may be incurred
as a result of such arbitration. The ultimate outcome of such arbitration may
or may not have a material impact on the Company's financial position or
results of operations.

The Company has been charged with unfair labor practices by the
Service Employees International Union 32B-J, claiming the Company
refused to bargain with the Union and that the Company unilaterally
changed terms and conditions of employment without bargaining. The
charge seeks back dues, wages and health and welfare contributions
for all employees covered by the collective bargaining agreement
between 32B-J and the Company. The matter is being held in
suspension pending a decision on a similar case before the National
Labor Relations Board. At this time the Company is unable to
estimate the impact on the financial position and results of
operations as a result of a decision on such case. The ultimate
outcome may or may not have a material impact on the Company's
financial position or results of operations.


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

      There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

                                     PART II

          ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
                               STOCKHOLDER MATTERS

     Since July 10, 1995 the Company's common stock has been traded on the
over-the-counter NASDAQ SmallCap market under the symbol "CMMD". For several
years prior to that time the Company's common stock was traded on the NASDAQ
National Market.

     The following table sets forth, for the calendar periods indicated, the
last sales price for the Common Stock as reported by the NASDAQ Stock Market, 
Inc. for each full quarterly period within the two most recent fiscal Years.

<TABLE>
<CAPTION>

             Period<F1>                         Last Sales Price
             ---------                          ----------------                                      

             1997                               High         Low
             ----                               ----         ---
             <S>                                <C>          <C>
             First Quarter                      1.625        1.125
             Second Quarter                     2.156        1.250
             Third Quarter                      2            1.125
             Fourth Quarter                     2.844        1.125
 
             1998
             ----
             First Quarter                      2.125        1.343
             Second Quarter                     1.50         0.968
             Third Quarter                      1.125        0.687
             Fourth Quarter                     1.437        0.750
 
<FN>
<F1> Reflects fiscal years ended March 31 of the year indicated.
</FN>
</TABLE>

      The above quotations do not include retail mark-ups, mark-downs or
commissions and represent prices between dealers and not necessarily actual
transactions. The past performance of the Company's securities is not
necessarily indicative of future performance.

As of June 30, 1998 there were approximately 250 holders of record of
the Company's common stock. Management believes there are in excess of 1500
beneficial holders of the Company's common stock.

      The last sales price of the Company's common stock on June 30, 1998, was
$.81.

      The Company has never paid cash dividends on its common stock. Payment
of dividends, if any, will be within the discretion of the Company's Board of
Directors and will depend, among other factors, on earnings, capital
requirements and the operating and financial condition of the Company. At
present, the Company's anticipated capital requirements are such that it
intends to follow a policy of retaining earnings, if any, in order to
finance, in part, the development of its business.



                          COMMAND SECURITY CORPORATION

                         ITEM 6. SELECTED FINANCIAL DATA

The financial data included in this table have been derived from the financial
statements as of and for the years ended March 31, 1998, 1997, 1996, 1995,  and
1994, which have been audited by independent certified public accountants. The
information should be read in conjunction with "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and with the
financial statements and related notes included in the Report.

<TABLE>
<CAPTION>
                                                              Statement of Operations Data
                                                                  Years Ended March 31,
                                              1998          1997          1996          1995<F1>     1994<F2>

<S>                                           <C>           <C>           <C>           <C>          <C>
Revenue (excluding service company revenue)   $51,796,882   $49,237,418   $54,995,444   $39,595,272  $25,393,933
Gross profit                                  $ 7,340,096   $ 8,443,578   $ 8,496,499   $ 4,527,365  $ 2,914,928

Service contract revenue                      $ 1,450,592   $ 1,471,313   $ 1,519,803   $ 1,291,943  $ 1,022,684
Operating profit/(loss)                       $(2,915,001)  $ 1,267,805   $ 1,250,713   $(2,412,603) $(2,227,936)

Net income/(loss)                             $(4,013,890)  $   450,030   $   511,650   $(2,983,823) $(2,727,102)
Income/(loss) per common share                $      (.62)  $       .05   $       .06   $      (.70) $      (.96)

Weighted average number of common 
  shares outstanding                            6,689,352     6,955,548     6,663,986     4,274,657    2,827,297

</TABLE>

<TABLE>
<CAPTION>

                                                               Balance Sheet Data as of March 31,

                                              1998          1997          1996          1995         1994

<S>                                           <C>           <C>           <C>           <C>          <C>
Working capital/(deficiency)                  $(1,122,869)  $ 1,413,212   $   218,968   $  (531,602) $  (772,143)
 
Total assets                                  $17,697,259   $23,188,576   $22,384,414   $20,267,099  $17,733,634

Short-term debt<F3>                           $ 7,994,445   $ 8,817,997   $ 8,506,911   $ 6,095,183  $ 6,936,086
Long-term debt<F4>                            $   531,323   $ 1,284,423   $ 1,194,505   $ 1,229,773  $ 1,106,221
Redeemable convertible preferred stock        $         0   $ 1,743,555   $ 1,614,525   $ 1,495,065  $         0
Stockholders' equity                          $ 3,134,474   $ 5,731,180   $ 5,189,226   $ 4,993,859  $ 5,135,744


<FN>
<F1> Includes the operations of United Security Group Inc. from its
     acquisition date of February 24, 1995.

<F2> Includes the operations of ISS International Service System, Inc. and
     Madison Detective Bureau, Inc. from the acquisition dates of October 27, 1993
     and November 1, 1993, respectively.

<F3> The Company's short-term debt includes the current maturities of 
     long-term debt, obligations under capital leases, and short-term borrowings. 
     See Notes 6 and 9 of "Notes to Financial Statements."

<F4> The Company's long-term debt includes the long-term portion of
     obligations under capital leases.
</FN>
</TABLE>


                  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      Management's Discussion and Analysis should be read in conjunction with
the Financial Statements and Notes to Financial Statements.

     The following can be interpreted as including forward looking statements
under the Private Securities Litigation Reform Act of 1995. Such statements
are typically identified by the words "intends", "plans", "efforts",
"anticipates", "believes", "expects", or words of similar import. Various
important factors that could cause actual results to differ materially from
those expressed in the forward looking statements are identified below and
may vary significantly based on a number of factors including, but not
limited to, availability of labor, marketing success, competitive conditions, 
and the change in economic conditions of the various markets the Company 
serves. Actual future results may differ materially from those suggested in 
the following statements.

     The Company's March 31, 1998, audited financial statements include a
qualification regarding the Company's ability to continue as a going concern.
As described in the auditor's opinion and at Notes 2, 6 and 9 to the
financial statements, the qualification was based on the Company's loss and
working capital deficit on March 31, 1998; the Company's default on certain
of its debt covenants; and, as described in Notes 14 and 20 to the financial
statements, contingencies arising from potential legal actions against the
Company based on claims for rescission and in connection with the 1993
private placement; and the contingencies arising from various litigation,
including the shareholder derivative action described below. The following 
discussion addresses management's position with respect to the auditor's 
concerns.

     The Company's management is in the process of developing a national
network of independent security guard companies in order to service clients
with sites throughout the United States without incurring the costs of
maintaining additional branch offices. Management believes that the
implementation of this network will increase its ability to compete against
larger national companies and significantly increase its profit margins. In
addition, the Company has implemented a plan to actively seek rate increases
from its existing clients and to sign new contracts in existing markets in
order to realize better economies of scale. Furthermore, management has
implemented a centralized purchasing function in order to better control
operating costs. Management is in discussions with the Company's lenders
in order to obtain waivers of loan covenant defaults triggered primarily
by the legal action brought by the plaintiffs in the shareholders 
derivative action to appoint a receiver. Although the Company was
successful in obtaining a stay of that appointment pending the appeal
(see the description of the shareholder derivative action below under 
"Liquidity and Capital Resources"), management considers such a waiver a 
remote possibility. In the event the waivers are not obtained, the Company's
lenders may call the loans and, in the case of CIT, terminate the Company's 
line of credit. If this occurs, the Company would be forced to cease 
operations and/or file for protection under bankruptcy laws. Management
cannot predict the liklihood of these events. Expenses to be incurred in 
connection with the shareholder derivative action cannot be quantified at 
this time. The Company has no knowledge of any claims for rescission in 
connection with private placements and believes that the current reserves 
and insurance is adequate to cover the various litigation matters arising 
to date as disclosed herein with the exception of the shareholder 
derivative action. 

Although the results of these actions are uncertain, the Company believes 
that these steps will help the Company improve its operations and generated 
sufficient cash flow to improve its working capital and satisfy its cash 
requirements.

At this time, management is unable to reasonably estimate the potential 
impact on the Company's financial condition and the results of operations based 
on the defaults, legal actions and contingencies.

Results of Operations

Fiscal Year ended March 31, 1998 Compared with March 31, 1997

     During the fiscal year ended March 31, 1998, revenue increased by
$2,559,464 to $51,796,882 from $49,237,418 for fiscal year ended March 31,
1997. The major components of this increase are: approximately $1,840,000
increase due to acquisitions; approximately $1,040,000 decrease due to the
sale of the Miami business in December, 1996; and approximately $1,760,000
increase due to new contract starts net of contract cancellations.

     Gross profit decreased by $1,103,483 to $7,340,096 or 14.2% of revenue
for the fiscal year ended March 31, 1998 compared to $8,443,578 or 17.1% of
revenue for the fiscal year ended March 31, 1997. This decrease resulted from
higher payroll costs of approximately $497,000 due to new contracts replacing
old contracts at lower prices and margins and the current shortage of
qualified labor and increases in overtime. Insurance costs increased by
approximately $607,000 primarily due to higher general liability self-insured
reserves. The charges for self-insurance reserves are based on actuarial
computations and the timing of reported claims and it is, therefore, not
known at this time if these increases will continue in future periods.

     Management expects the trend of increasing pressures on margins to
continue primarily due to the intense competition which is characteristic of
the industry, and current tight labor markets. Management carefully analyzes
each of its bids for security guard services in order to assure reasonably
adequate profit margins. Management has determined that the jobs with
inadequate margins will not be accepted. Management is also pursuing 
ATM-related security guard contracts which provide higher margins. 

     The Company provides payroll and billing services and accounts
receivable financing through contracts with service company clients for a
percentage of the revenue or gross profit generated from their business. The
Company owns the accounts receivable and, depending on the individual
contract, may be the employer of record. The caption "Service Contract
Revenue" represents the income earned on the Service Agreements.

     Service contract revenue decreased by $20,721 to $1,450, 592 for the
fiscal year ended March 31, 1998 compared to $1,471,313 for the fiscal year
ended March 31, 1997. The decrease is primarily due to the termination of one
service agreement with a client who filed Chapter 7 bankruptcy on August 28,
1997 as well as the terminations of three other service contracts, and offset
by an increase of $194,000 generated by one employer of record service
contract. Currently over seventy percent of service fee revenue is generated
from one contract which is currently being renegotiated and is expected to
result in less revenue as the result thereof. Although there are prospective
clients, the Company did not sign new service agreements in the fiscal year
ended March 31, 1998. If no new contracts are signed, service contract
revenue will decrease as current contracts expire.

     General and administrative expenses increased by $634,248 to $7,748,726
in the fiscal year ended March 31, 1998 from $7,114,478 in the fiscal year
ended March 31, 1997. The major areas of increase were insurance costs
($206,000), rent, utilities & telephone ($157,000), professional fees
($167,000) and travel costs ($84,000).

     Amortization of intangibles decreased by $121,710 to $1,651,889 for the
fiscal year ended March 31, 1998 from $1,773,599 for the fiscal year ended
March 31, 1997. This decrease is primarily due to the full amortization of
capitalized borrowing costs incurred in 1995.

     The provisions for bad debts increased by $1,003,992 to $1,451,151 for
the fiscal year ended March 31, 1998 from $447,159 for the fiscal year ended
March 31, 1997. The increase of approximately $764,000 was caused by the
Chapter 7 bankruptcy filing of GFM Bayview, a service agreement client, in
August, 1997. The remaining increase of approximately $240,000 is
management's estimate of accounts that may be uncollectible based on the
results of its continuous monitoring of accounts outstanding in excess of 60
days. It is not known if bad debts will increase in future periods nor is the
increase necessarily indicative of a trend.

     Bad debt recoveries increased by $155,582 to $245,593 for the fiscal
year ended March 31, 1998 from $90,011 for the fiscal year ended March 31,
1997. Significant bad debt recoveries during fiscal 1998 were realized from
the accounts of former service agreement clients in Texas ($120,000) and
Florida ($60,000).

     A labor claim settlement resulted from a default judgment against the
Company in the amount of $314,376.58 by the Eastern District Court of New
York in favor of a guard who alleged unjust termination. The claim was
settled for $180,000. In addition, the Company has accrued $174,000 for loss
contingencies in connection with certain labor claims.

     There was no insurance rebate for the fiscal year ended March 31, 1998
compared with $598,139 received in the fiscal year ended March 31, 1997.
Insurance rebates received by the Company for the fiscal years ended March
31, 1997 and 1996 of $598,139 and $742,305 represent dividends received from
the Company's former worker's compensation insurance carrier for a
multi-state program that was in effect for the three years ended September
30, 1995. The net premium was based on ultimate losses pursuant to a
predetermined calculation with rebates of excess premiums refundable to the
Company in the form of dividends at the discretion of the insurance carrier.
Those excess premiums have been paid to the Company in full. The policies in
effect for periods after September 30, 1995 are also loss sensitive but
provide for a contractual obligation on the part of the insurance carrier to
refund premiums paid, in excess of actually determined premiums. As such, the
Company has calculated its insurance expense for the fiscal years ended March
31, 1998 and 1997 on the basis of estimated losses plus certain minimum
premium amounts. Therefore, although the Company anticipates that it will
receive future cash rebates of premiums for the policy years ended September
30, 1996 and 1997, those rebates will only be reflected on the Statements of
Operations in future periods to the extent that actual losses differ from
estimated losses.

     The Company recorded a loss on the value of intangible assets of
$745,516 for the fiscal year ended March 31, 1998 which is the result of
management's re-evaluation of the business retained from certain prior
acquisitions in Illinois and California.

     Interest income increased by $49,894 to $229,493 for the fiscal year
ended March 31, 1998 compared to $179,599 for the fiscal year ended March 31,
1997 primarily due to interest earned on restricted cash deposits for the
benefit of the Company's insurance carrier as collateral for workers
compensation claims.

     Interest expense increase by $3,371 to $1,069,223 for the fiscal year
ended March 31, 1998 compared to $1,065,852 for the fiscal year ended March
31, 1997.

     Loss on equipment dispositions primarily represents older vehicles sold
or retired from service.

     Other income of $35,000 for the fiscal year ended March 31, 1998
represents a fee earned by the Company for its assistance in a financial
transaction involving one of its service agreement clients.

     Management expects the Company to incur modest losses at least through
the fiscal year ending March 31, 1999 in part due to continuing amortization
charges (see footnote #4 on page F-10) and legal fees incurred in connection
with the shareholder's derivative suit. (See footnote 14 of the Company's
Financial Statements for the years ended March 31, 1998 and 1997). The
Company's performance will be dependent on its ability to reduce corporate
overhead costs, develop new higher margin product lines and to obtain
profitability for under performing branches through acquisitions and/or
internal sales. The Company's Board of Directors has not agreed on a policy
with respect to costs of financing, the availability of well-priced targets
and the Company's capacity for integrating new acquisitions on a profitable
basis. Management regularly evaluates the feasibility of selling existing
branch offices, with emphasis on those five of the Company's eighteen offices
which are generating losses prior to the allocation of corporate overhead.

Fiscal Year ended March 31, 1997 Compared with March 31, 1996

     During the fiscal year ended March 31, 1997, revenue decreased by
$5,758,026 to $49,237,418 from $54,995,444 for the fiscal year ended March
31, 1996. Of this decrease, approximately $967,000 represents revenue lost as
a result of the sale of the Company's Boston operation (sold October, 1995)
and Miami operation (sold December, 1996). Approximately $1,200,000 of the
decrease is due to the loss of an aviation client on October 1, 1995,
$2,400,000 resulted from low-margin contracts that were not renewed during
the year and $2,900,000 due to other contract cancellations net of new
contract starts. This was partially offset by approximately $1,700,000 of
revenue generated by acquisitions closed throughout the fiscal year ended
March 31, 1997.

     Gross profit as a percentage of revenue decreased by $52,921 to
$8,443,578 or 17.1% of revenue for the fiscal year ended March 31, 1997,
compared to $8,496,499 or 15.4% of revenue for the prior fiscal year. Gross
profit decreased by approximately $900,000 as a result of lower revenue. This
decrease was offset by cost savings in the areas of insurance expense
($895,000), union benefits ($222,000), and payroll taxes ($155,000).

     Service contract revenue decreased by $48,490 to $1,471,313 for the
fiscal year ended March 31, 1997 from $1,519,803 for the fiscal year ended
March 31, 1996. $216,451 of this decrease is attributable to lower fees
earned from existing contracts due to contract terminations offset by higher
fees earned from the Company's non-employer of record program of $167,961. 
The Company purchased the customer lists from two service companies in 
October, 1996 and in March, 1996, and converted one service company from 
an "employer of record" to a "non-employer of record" arrangement.

     General administrative expenses decreased by $1,021,485 to $7,114,478 in
fiscal year 1997 from $8,135,963 in fiscal 1996. The major areas of decrease
are administrative salaries and related payroll taxes ($643,000), rents and
utilities ($106,000), insurance ($140,000), professional fees ($96,000), and
bank fees ($75,000). These decreases were offset by increases in various
other expenses categories of $40,000.

     Amortization of intangibles increased by $570,371 to $1,773,599 for
fiscal year 1997 compared to $1,203,228 for the fiscal year 1996. Of the
total increase $393,600 is the result of management's re-evaluation, during
the quarter ended June 30, 1996, of the useful lives of the customer lists
acquired from ISS in October, 1993. Based on the contract retention since the
acquisition, the Company has reduced the useful life from 15 years to 5
years. The remaining increase is due to the amortization of new customer
lists purchased and a non-compete covenant.

     The provision for doubtful accounts increased by $93,852 to $447,159 for
the fiscal year ended March 31, 1997 compared to $353,307 for fiscal year
1996. This increase in the provision is management's estimates of accounts
that may be uncorrectable, based on continuous monitoring of accounts
outstanding in excess of 60 days. It is not known if bad debts will increase
in future periods nor is the increase necessarily indicative of a trend.

      Bad debt recoveries decreased by $130,907 to $90,011 for the fiscal year
ended March 31, 1997 compared to $220,918 for fiscal year 1996. The amount
reported for fiscal year 1997 represents funds collected on an old receivable
from a former client that had been previously written off. Of the amount
reported for fiscal year 1996, $200,000 represented the amount collected, in
excess of book value, from Polygram Diversified Ventures, Inc. and Woodstock
Ventures, Inc., on the WOODSTOCK `94 receivable.

     Insurance rebates received by the Company for fiscal years ended March
31, 1997 and 1996 of $598,139 and $742,305 represent dividends received from
the Company's former worker's compensation insurance carrier for a
multi-state program that was in effect for the three years ended September
30, 1995. The net premium paid by the Company was based on ultimate losses
pursuant to a predetermined calculation with rebates of excess premiums
refundable to the Company in the form of dividends at the discretion of the
insurance carrier. Those excess premiums have now been paid to the Company in
full. The policy for the current policy year is also loss sensitive but
provides for a contractual obligation on the part of the insurance carrier to
refund premium deposits paid, in excess of actual losses and costs as finally
determined. As such, the Company has calculated its insurance expense for the
last six months of the fiscal year ended March 31, 1996 and for the entire
fiscal year ended March 31, 1997 on the basis of estimated losses plus
certain minimum premium amounts. Therefore, although the Company anticipates
that it will receive future cash rebates of premiums for the policy years ended
September 30, 1996 and 1997, those rebates will only be reflected on the
Statements of Operations in future periods to the extent that actual losses
differ from estimated losses.

     Interest expense decreased by $116,927 to $1,065,852 for the fiscal year
ended March 31, 1997 compared to $1,182,779 for the prior fiscal year. This
decrease is due to lower debt levels, as well as the elimination of interest
accruals in connection with the Company's settlement agreement with ISS
International Service System, Inc. (ISS) in October, 1996, under which all
pending issues between the two companies, including interest on the note
payable to ISS, were settled (See Note 9 to "Notes to Financial Statements").

     Interest income increased by $10,322 to $179,599 for the fiscal year
ended March 31, 1997 compared to $169,277 for the prior fiscal year.

     Equipment dispositions primarily represent older cars sold or taken out
of service

 Liquidity and Capital Resources

      The Company pays its guard employees and those of its Service Agreement
Clients on a weekly basis, while its customers and the customers of service 
company clients pay for the services of such employees generally  within 60 
days after billing by the Company. In order to provide funds for payment to 
its guard employees, on February 24, 1995, the Company entered into a 
commercial revolving loan arrangement with CIT Group/Credit Finance (CIT).

     This agreement was amended as of January 30, 1997 to provide for an
initial two year renewal to February 23, 1999 and automatic two year renewal
terms thereafter as well as other changes in terms and conditions. Under this
agreement, borrowings may be made in an amount up to 85% (previously 82.5%)
of eligible accounts receivable, but in no event more than $10,000,000. The
amendment also provides for a term loan in the amount of $500,000 to be
repaid in equal monthly installments over five years. Outstanding balances
under the revolving loan and the term loan bear interest at a per annum rate
of 1 and 1/2% (previously 2% on the revolving loan) in excess of the "prime
rate" and are collateralized by a pledge of the Company's accounts receivable
and other assets. As of March 31, 1998, the Company was not in compliance
with several of the non-financial covenants contained in the loan agreement
as a result of the shareholder derivative action described below.
Accordingly, all amounts due under the term loan have been classified as
short-term on the Company's balance sheet as of March 31, 1998. The Company
has requested waivers from CIT. Management considers such waivers a 
remote possibility.

     At March 31, 1998, the Company had borrowed $6,616,928 representing
virtually 100% of its maximum borrowing capacity based on the definition of
"eligible accounts receivable" under the terms of the revolving loan
agreement.
 
      Generally the Company borrows a high percentage of its available
borrowing, which can fluctuate materially from day to day due to changes in the
status of the factors used to determine availability (such as billing, payments
and aging of accounts receivable).

     Due primarily to the bankruptcy filing by GFM Bayview, a former service
agreement client, and increased expenditures due to the start-up of a large
contract, the Company has experienced continued cash overdrafts and a working
capital deficit. This has impacted accounts payable and management is
carefully monitoring its relationships with vendors. The Company has been
able to reduce its cash overdraft by $304,000 since March 31, 1997 and
management expects to further decrease the overdraft with future cash flows
from operations as well as a significant cash receipt expected in July, 1998
in connection with its workers compensation insurance policy. This receipt,
however, will not have any impact on the Company's profit or loss.

     In February, 1995 the Company entered into a subordinated loan
arrangement with Deltec Development Corporation (Deltec) pursuant to which
the Company borrowed $1.5 million, the proceeds of which were used primarily
to acquire the assets of United Security Group Inc. (United). The
subordinated loan has a term of four years, calls for quarterly principal and
interest payments and bears interest at fourteen percent (14%) per annum. It
is collateralized, on a subordinated basis, by all of the Company's assets,
properties and other revenue. The balance due Deltec at March 31, 1998 was
$375,000. The Company was not in compliance with several loan covenants at
March 31, 1998. The Company may request waivers from Deltec, if waivers from
CIT are forthcoming (see above disclosure regarding CIT).

     Long term debt was reduced by $489,188 from $2,172,606 at March 31, 1997
to $1,683,418 (including current maturities) at March 31, 1998 and consisted
of $375,000 due to Deltec; $82,500 due to Gordon Robinett, a Director and 
former Treasurer of the Company, issued in consideration of a covenant; 
$294,107 due to Capital Resource Company assumed in connection with the 
purchase of certain guard service accounts from a former service company 
in March, 1996, the foreclosure on two service companies in July and 
December, 1997 and the bankruptcy of a former service agreement client 
in August, 1997; $391,667 due to CIT Group/Credit Finance; with the 
remainder of $540,144 representing various auto and other installment loans.

     The Company completed a series of private placements of 2,087,508 Shares
of Common Stock and 9,061 shares of Series A Preferred Stock as of February
24, 1995. The total capital raised was approximately $4,160,000. The capital
was used for working capital purposes as well as for the acquisition of
United. Expenses incurred in connection with the acquisition and private
placements were approximately $1,150,000. Approximately $500,000 was used for
working capital purposes.

     On October 27, 1993, the Company completed a private placement of 1.6
million units at $2.50 per unit. Each unit consists of one share of common
stock and one warrant for one-half share exercisable at $3.50 per full share.
The private placement raised $4,000,000 of which $2,250,000 was used together
with a $1,000,000 bank term loan and promissory notes to the seller for
$750,000 and $1,000,000 due October 27, 1994 and October 27, 1995,
respectively, to close the acquisition of the security guard business of ISS.
Expenses in connection with the private placement were approximately
$677,000. Expenses relating to the acquisition were approximately $146,000.
The remainder of $927,000 was used for working capital purposes. The Company
and ISS have agreed to a reduction of $1,250,000 in the purchase price of the
ISS acquisition for accounts lost during the guarantee period and other
offsets.

     The Private Placement Memorandum issued by the Company in connection
with both the 1993 and 1995 Private Placements and the interim financial
reports for the first three quarters in the fiscal year ended March 31, 1994
and 1995 filed by the Company contained financial information which has since
been restated. A legal action has been filed against the Company and is
described in greater detail below. It includes claims based on the
restatements. It is possible that other purchasers of Units pursuant to the
1993 offering and the purchasers of shares in connection with the offerings
that were consummated in February, 1995 may make further claims against the
Company, alleging as the basis, among other possible claims, the above
mentioned restatements.

     On or about December 4, 1997, an outside shareholder and four of the
Company's directors (Sands, P. Kikis, Saunders, and T. Kikis) commenced 
an action in the Supreme Court of the State of New York, County of New York 
(Index No. 606166/97) against the other four directors (Vassell, Robinett, 
Nekos and Miller), the Company's outside corporate and securities counsel 
and the Company itself in a lawsuit characterized as a derivative action. 
The complaint alleges that one or more of the defendant-directors engaged in 
improper activities, including ultra-vires acts, breach of fiduciary duty, 
fraud against the Company, constructive fraud, waste of corporate assets and 
concealment of information from the plaintiff-directors regarding the 
Company's earnings, lacked power to enter into an employment agreement 
on behalf of the Company with Mr. Robinett, and entered into service 
contracts with financially unstable companies without performing due 
diligence. The complaint further alleges that the Company has failed to 
appoint a replacement to the office of president and that the directors 
have entered into a shareholder agreement which is violative of public 
policy. Plaintiffs seek the award of money damages in an amount which 
is "not less than" $11 million from the individual defendants, a
declaratory judgment that the shareholder agreement is void, an order for 
an accounting, certain other injunctive relief and attorneys' fees and
disbursements.

     The Company has interposed an answer denying the allegations contained
in the complaint. The individual defendants have stated that they believe the
allegations are completely without merit and intend to vigorously defend
against each and every claim. The Company's Certificate of Incorporation and
the Business Corporation Law of New York provide for indemnification of
officers and directors with respect to damages and legal fees incurred in
connection with lawsuits against them arising by reason of serving the
Company. Due to the fact that certain members of the board have chosen to
participate as plaintiffs in this lawsuit, the Company may not have coverage
under its officers and directors liability insurance policy. The
defendant-directors intend to seek indemnification, and have received
advancements of legal fees incurred in connection with their defense, from
the Company. Through March 31, 1998, the Company has expended approximately
$120,000 in legal fees in defense of this matter on its own behalf as well as
on behalf of the defendant officers and directors. An additional $65,000 in
legal fees has been incurred through May 31, 1998. On or about March 25,
1998, the plaintiffs filed a motion for the appointment of a temporary
receiver. On June 5, 1998, the Court ordered the appointment of a temporary
receiver, but prior to the order taking effect, the parties agreed to a
stipulation pursuant to which Franklyn H. Snitow, Esq., was appointed acting
President and Chief Executive Officer and acting ninth Board member during
the pendency of the defendants' appeal to the Appellate Division of the
decision to appoint a receiver. Based on the stipulation, the defendant's
request to the Appellate Division for a stay pending the appeal of the order
appointing the receiver was granted. At a duly convened meeting of the board
of directors on June 22, 1998, the board voted unanimously to elect Mr.
Snitow as an acting director and to appoint him acting president and chief
executive officer pending the outcome of the appeal. Mr. Snitow is a partner
in the law firm of Snitow & Cunningham, LLP, located in New York, New York.
The Company is unable to reasonably estimate the potential impact on the
Company's financial condition and results of operations from this lawsuit.

     Accounts receivable, net of allowance for doubtful accounts, from guard
service customers increased by approximately $1,286,000 primarily as a result
of higher revenue. Net accounts receivable from service contract customers
decreased by approximately $2,552,000; $666,000 of which is due to the
bankruptcy of a former service agreement client; $411,000 of which is due to
the foreclosure and acquisition of three service agreement clients; and the
remainder of $1,475,000 which is due to improved collection of accounts
receivable by our remaining service agreement clients. This net decrease
resulted in lower borrowings on the line of credit. Accounts payable and
accrued expenses increased by approximately $535,000 due to an increase in
workers compensation accrued expenses of $353,000; accrued labor claims of
$174,000; and an increase in subcontractor payables of $159,000 offset by
reductions in sales tax payable of $130,000.

     The Company has negative working capital as of March 31, 1998 of
$1,122,869 compared to positive working capital of $1,413,212 as of March 31,
1997. This deterioration in working capital during the fiscal year 1998 was
due primarily to the bankruptcy of a former service agreement client,
reductions in long-term debt and to finance operating losses.

      The Company finances vehicle purchases typically over three years and
insurance through short-term borrowings. The Company has no additional lines of
credit other than discussed herein.

Cautionary Statement

     As provided for under the Private Securities Litigation Reform Act of
1995, the Company wishes to caution shareholders and investors that the
following important factors, among others, could cause the Company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements in
this report.

     1. The Company's assumptions regarding projected results depend largely
upon the Company's ability to retain substantially all of the Company's
current clients. Retention is affected by several factors including but not
limited to the quality of the services provided by the Company, the quality
and pricing of comparable services offered by competitors, continuity of
management and continuity of non-management personnel. There are several
major national competitors with resources far greater than those of the
Company which therefore have the ability to provide service, cost and
compensation incentives to clients and employees which could result in the
loss of such clients and/or employees.

     2. The Company's ability to realize its projections will be largely
dependent upon its ability to maintain margins, which in turn will be
determined in large part by management's control over costs. To a significant
extent, certain costs are not within the control of management and margins
may be adversely affected by such items as significant inflation, labor
unrest and increased payroll and related costs.

     3. Although management currently has no reasonable basis of information
upon which to conclude that any significant service company client or
security guard customers will default in payment for the services rendered by
the Company, any such default by a significant client would have a material
adverse impact on the Company's liquidity, results of operations and
financial condition.

     Additional detailed information concerning a number of factors that
could cause actual results to differ materially from the information
contained herein is readily available in the Company's most recent reports on
Forms 10-K, 10Q and 8-K and its current registration statement on Form S-3
and any amendments thereto (all as filed with the Securities and Exchange
Commission from time to time).

               ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See ITEM 14, "EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
SCHEDULES, AND REPORTS ON FORM 8-K."

              ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                    PART III

           ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     On or about December 4, 1997, an outside shareholder and four of the
Company's directors commenced an action against the other four directors, the
Company's outside corporate and securities counsel and the Company itself in
a lawsuit characterized as a derivative action. Please refer to Item 3, Legal
Proceedings, above, for a more complete description of this action. The
Company's by-laws provide for a two-class Board of Directors. The first class
consists of directors Steven B. Sands, Peter T. Kikis, Lloyd H. Saunders, III
and Thomas P. Kikis. The second class consists of Franklyn H. Snitow, William
C. Vassell, Gordon Robinett, Peter J. Nekos and Gregory J. Miller. The terms
of the directors in the first class will expire at the annual meeting of
shareholders in 1998 or until their successors have been elected and
qualified. The terms of the directors in the second class, with the exception
of Mr. Snitow, will expire at the annual meeting of shareholders in 1999 or
until their successors are elected and qualified. Mr. Snitow's term will
expire upon the ruling of the Appellate Division in connection with the
lawsuit referred to above, unless otherwise extended by the Company's Board
of Director's. Each director's term, with the exception of Mr. Snitow, is for
two years. A classified board makes it more difficult for shareholders to
change the majority of directors. Depending on the number of people in each
class it could take two (2) annual meetings to replace a majority of the
Board. This provision is applicable to every election of directors after the
initial classification.

     Each member of the Board, with the exception of Mr. Snitow, has entered
into a Shareholder Voting Agreement dated March 8, 1995, which was finally
revised on March 24, 1995, and thereafter amended on June 2, 1995 and on
September 22, 1997. It provides that each person then on the Board and a
party to the agreement will (i) vote all shares beneficially owned by him
(his "Shares") for the election to directorships of each of the other members
of the Board, (ii) refrain from voting any of his Shares for any action that
would result in the increase or decrease of the number of positions on the
Board or for the removal, without cause, of any member of the Board, and
(iii) in the event of death, resignation or removal of any director, vote all
of his Shares in favor of the election of the person designated as
replacement in accordance with the Shareholders Voting Agreement.

     Simultaneously with the execution of the Shareholders Voting Agreement,
all of the persons then on the Board signed a Unanimous Written Consent which
provides for them to designate certain members of the Board as replacements
for any current director upon death, resignation, removal or inability to
serve. Messrs. Vassell, Nekos, Miller and Robinett were given the authority
to nominate their replacements; Messrs. Thomas Kikis, Sands and Saunders were
given the authority to nominate their replacements; and Mr. Peter Kikis was
given the authority to nominate his replacement. The Board members agreed
that their respective nominees of any replacements could be provided at a
later date.

      The following table provides information concerning each person who
was an executive officer or director of the Company as of June 30, 1998.

<TABLE>
<CAPTION>

Name                         Age      Title
----                         ---      -----

<S>                          <C>      <C>
Franklyn H. Snitow           __       Acting President, CEO and Director

William C. Vassell           40       Chairman of the Board

Gordon Robinett              62       Vice Chairman of the Board

Gregory J. Miller            38       Director

Peter J. Nekos               70       Director

Peter T. Kikis               75       Director

Steven B. Sands              39       Director

Lloyd H. Saunders, III       44       Director

Thomas P. Kikis              37       Director

Eugene U. McDonald           48       Sr. Vice President--Operations

Debra M. Miller              43       Secretary
 
</TABLE>
 
     Franklyn H. Snitow was elected Acting President, Chief Operating Officer
and Director by the Board at a meeting conducted on June 22, 1998. As
disclosed under Item 3, Legal Proceedings, above,, Mr. Snitow's election was
the result of a stipulation entered into by the other eight members of the
Board of Directors pursuant to the derivative action commenced on or about
December 4, 1997. During the past five years, Mr. Snitow has been a partner
in the law firm of Snitow & Pauley. On July 1, 1998 he became a partner in
the law firm of Snitow & Cunningham, LLP. Mr. Snitow will be compensated at
the rate of $300 per hour for services rendered to the Company. He will be
reimbursed for any expenses incurred in connection with the rendering of such
services and is authorized to engage the services of others at the expense of
Command to assist in performance of his duties and responsibilities. Mr.
Snitow will be indemnified by the Company pursuant to an Indemnification
Agreement to the extend permitted in accordance with New York law, the
Company's Certificate of Incorporation and its Bylaws. Mr. Snitow has been a
director of Tofutti Brands, Inc. since 1990. Mr. Snitow obtained a Bachelor
of Arts Degree from American University in 1967 and a Juris Doctor Degree
from New York Law School in 1970.

     William C. Vassell had been Chairman of the Board, President and Chief
Executive Officer of the Company since 1983, when the Company repurchased the
remaining 50% of its then-outstanding common stock (he became a 50% owner of
the Company in 1980). In connection with the acquisition of United, Mr.
Vassell resigned as President and Chief Executive Officer on February 24,
1995, and retained his position as Chairman of the Board. He has been a
director of the Company since 1980, and has been a member of the Executive
Committee since March 1995. Mr. Vassell is active in various industry and
trade associations. He twice was Chairman of the Mid-Hudson Chapter of the
American Society for Industrial Security (the nationally recognized security
association), and he is a Certified Protection Professional within the
Society. He is also a director of the Associated Licensed Detectives of New
York State and a member of the Committee of National Security Companies.

      Gordon Robinett was appointed Vice Chairman of the Board of Directors on
February 24, 1995. He was Treasurer of the Company from May, 1990 through July,
1996 and has been a director since 1990.
 
     Peter T. Kikis became a director of the Company on February 24, 1995 in
connection with the acquisition of United. He has also served as Chairman of
the Company's Executive Committee of the Board of Directors since March,
1995. He is a director of Deltec International S.A., the parent of Deltec
Development Corporation, the subordinated debt lender to the Company. Since
1950, Mr. Kikis has been the President and a principal in Spencer Management
Company, a real estate development and management company in New York, New
York. From 1972 to 1992, Mr. Kikis was Chairman of the Board of Directors and
a principal of McRoberts Protective Agency, a New York based provider of
security guard services.  Mr. Kikis is the father of Thomas P. Kikis who is 
also a director of the Company.

     Gregory James Miller has been a director of the Company since September
1992. Since 1987 he has served as General Counsel for Goldline Connectors,
Inc., a Connecticut-based electronics manufacturer, and sits on its board of
directors. Mr. Miller also serves "of counsel" to Benenson & Kates, in New
York, handling labor law and contract negotiations for security guard
clients, and has handled various legal matters for the Company since 1985.
Mr. Miller is currently employed by Goldline Connectors, Inc. He has a
Bachelors Degree from Kalamazoo College, and a Juris Doctor Degree from New
York Law School, where he was an Editor of the Journal of Human Rights. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

     Peter J. Nekos has been a director of the Company since March 1991. Mr.
Nekos is a certified public accountant and, since July 1986, he has operated
his own accounting firm in Mamaroneck, New York, from July 1984 to June 1986
he was a partner of Nekos & Kilduff, an accounting firm located in New
Rochelle, New York.

     Steven B. Sands was placed on the Board on April 13, 1994, in accordance
with the provisions an agreement with Sands Brothers executed in connection
with the Company's 1993 Private Placement. Mr. Sands is Chairman of the Sands
Brothers & Co., Ltd., a Delaware corporation, registered as a broker-dealer.
Mr. Sands also has interests in certain entities which own the Company's
stock. Mr. Sands is also currently on the board of directors of the following
publicly-traded companies: The Village Green Bookstore, Inc.; Semi-Conductor
Packaging Materials, Inc.; and Digital Solutions, Inc.

     Lloyd H. Saunders, III, became a director of the Company on February 24,
1995, in connection with the acquisition of United. He is a managing director
at Sands Brothers and has been so since 1991.

     Thomas P. Kikis became a Director of the Company on September 22, 1997
in accordance with the terms of the Shareholders Voting Agreement entered
into by the Directors of the Company as of March 8, 1995. For the last six
years, Mr. Kikis' principal occupation has been president of Kikis Asset
Management located in New York, New York. He recently formed Arcadia 
Securities, LLC, a New York registered broker-dealer. Mr. Kikis is the son 
of Mr. Peter T. Kikis who is also a director of the Company. 

      Eugene U. McDonald has more than 20 years experience in the security
business. He joined the Company in October of 1992 as Vice President of
Corporate Services, and recently took over the position of Senior Vice
President-Operations. Mr. McDonald has held senior management positions with
Globe Security (1973-1990) and Burns International Security Services
(1990-1992). He has extensive direct personal experience with the handling 
of specialized security personnel for cleared facilities as evidenced by 
his duties as Group Vice President of Energy Services for Globe Security. 
He is active in the American Nuclear Society, Institute of Nuclear 
Materials Management, American Society for Industrial Security and the 
Connecticut Police Chiefs Association.

      Debra Miller has been employed by the Company since September 1983,
initially as Office Manager and, since March 1986, as Corporate Secretary.

     Based solely on a review of Forms 3, 4 and 5 and any amendments thereto,
and written representations to the Company with respect to the fiscal year
ended March 31, 1998, the Company is not aware of any person who, at any time
during the fiscal year ended March 31, 1998, was a director, officer or
beneficial owner of more than ten percent (10%) of the Company's common stock
and who failed to file reports required by Section 16(a) of the Securities
Exchange Act of 1934, as amended, during the fiscal year ended March 31,
1998, except that: the reports of the expiration of certain warrants are late
in being filed by Mssrs. Kikis, Sands, and Saunders on Form 5. Mssrs. Sands 
and Saunders have not filed a Form 5 for the fiscal year ended March 31, 1998.

                         ITEM 11. EXECUTIVE COMPENSATION

     The following table sets forth for the fiscal year ended March 31, 1998,
all plan and non-plan compensation paid to, earned by, or awarded to William
C. Vassell, Chairman of the Board, Gordon Robinett, Vice Chairman of the
Board and Former Treasurer and Eugene U. McDonald, Senior Vice President --
Operations. No other executive officer of the Company received total annual
salary and bonus in excess of $100,000 for the fiscal year ended March 31,
1998, and, therefore, compensation for such other executive officers is not
disclosed.




                           SUMMARY COMPENSATION TABLE

                        FOR THE FISCAL YEAR ENDED March 31,1998

<TABLE>
<CAPTION>
                                                            Annual Compensation                   Long-Term Compensation

                                                               Other Annual             Shares Underlying
Name and Principal         Fiscal Year Ended                   Salary                   Warrants             Shares Underlying
Position                   March 31           Annual Salary    Compensation    Bonus    Granted              Repriced Warrants
--------                   --------           -------------    ------------    -----    -------              ----------------
<S>                        <C>                <C>              <C>             <C>      <C>                  <C>
William C. Vassell<F1>
Chairman of the Board
                           1996               $150,000         <F2>                  0  0                          0
                           1997               $150,000         <F2>                  0  0                          0
                           1998               $174,579         <F2>


Gordon Robinett
Vice Chairman
of the Board and Former    1996               $100,000         <F2>                  0  0                          0
Treasurer                  1997               $ 37,692         <F2>                  0  0                    227,500<F3>
                           1998               $ 39,923         $54,500<F2><F4>       0  0                          0
 

Eugene U. McDonald
Senior Vice President -
Operations                 1996               $ 88,461         <F2>            $15,000  0                          0
                           1997               $105,270         <F2>            $10,000  0                          0
                           1998               $125,794         <F2>            $  6620

<FN>
<F1>  As of March 31, 1998, Mr. Vassell held a total of 961,950 shares and
      warrants for 350,000 shares of the Company's common stock.

<F2>  All perquisites and other personal benefits, securities or property do not
      exceed 10% of the total annual salary and bonus of the executive officer.

<F3>  Includes repricing of the: 107,500 shares issued on January 19, 1991, with
      exercise price at market value of $5.00, reduced to market value of $3.25
      as of August 16, 1993 and reduced on July 15, 1996 to $2.50; 60,000 shares
      issued on April 8, 1991, with exercise price at market value of $3.375,
      reduced to market value of $3.25 as of August 16, 1993 and reduced on July
      15, 1996 to $2.50; and 60,000 shares issued on May 15, 1992, with exercise
      price at market value of $3.88, reduced to market value of $3.25 as of
      August 16, 1993 and reduced on July 15, 1996 to $2.50.

<F4>  Mr. Robinett also received $52,500 under his termination agreement (see 
      below) and $2,000 in Director's fees.

</FN>
</TABLE>

Stock Options/Warrants

      The Company did not grant any stock options or warrants during the last 
fiscal year to the Company's chief executive officer or to any of the Company's 
executive officers whose total annual salary and bonus exceeded $100,000. There 
were no tandem or free standing stock appreciation rights granted to any person 
during the fiscal year shown.

Compensation Committee Interlocks and Insider Participation in Compensation 
Decisions

      The Company's Compensation Committee is intended to make all 
recommendations to the Board related to compensation issues with respect to 
executive officers. It is comprised of William C. Vassell, Peter T. Kikis 
and Steven B. Sands. While Mr. Vassell will participate in decisions relating
to compensation for executive officers, he will not vote on matters relating 
to his own compensation. Likewise, none of the directors or executive 
officers serve on the compensation committee of any other entity with the
exception of Gorden Robinett, who serves on the compensation committee of
Uniforce Temporary Personnel, Inc. None of the other members of the 
Company's Board of Directors is an officer, director or employee of 
Uniforce Temporary Personnel, Inc.

Employment Agreements and Warrants and Termination of Employment and Change of
Control Agreements.

     The Company has entered into an engagement letter and an indemnification
agreement with Mr. Snitow. In accordance with the engagement letter, Mr.
Snitow shall be compensated at the rate of $300.00 per hour, plus
reimburseable expenses, based on his hourly billing to the Company. The
indemnification agreement between the Company and Mr. Snitow provides for the
maximum indemnification permitted under New York law, and the Company's
Certificate of Incorporation and By-Laws.

     The Company has entered into employment agreements with Messrs. Vassell
and Robinett. These agreements were amended in April of 1991 and were amended
and restated in June of 1991. In September 1992, the terms of these
agreements were extended for two years to July 19, 1996, and were further
amended as of February 24, 1995, to extend the terms to July 19, 2000. Mr.
Robinett's employment agreement terminated on July 19, 1996. Following the
resignation in August of 1997 of H. Richard Dickinson, the Company's former
Chief Financial Officer and Executive Vice President, Mr. Robinett was
engaged on a per diem basis to temporarily perform the functions of Mr.
Dickinson until a replacement was approved by the Board. Mr. Robinett works
an average of three days per week and is compensated therefor at the rate of
$385 per day.

     Pursuant to his employment agreement, as amended as of February 24,
1995, Mr. Vassell serves as Chairman of the Board of the Company and is
entitled to an annual salary of $150,000. Mr. Vassell is also entitled to an
annual bonus equal to 5% of the Company's pre-tax profit for each fiscal year
exclusive of (a) capital gains and losses; (b) the annual bonus; and (c)
federal state and local income and franchise taxes for that year ("Pre-Tax
Operating Profit") from $.5 million to $1.0 million, and 2% of all Pre-Tax
Operating Profit in excess of $1.0 million. Mr. Vassell is provided with the
use of a Company-owned automobile and reimbursement for automobile insurance
and operating expenses. Also pursuant to the employment agreement, Mr.
Vassell was awarded a warrant to purchase 175,000 shares of Common Stock at a
price of $3.375 per share, exercisable on or after March 31, 1992.

      Mr. Robinett's former employment agreement provided a non-qualified,
non-forfeitable five-year stock option to purchase 107,500 shares at a price of
$5.00 per share, a warrant to Purchase 60,000 shares at a price of $3.375 per
share and a five-year warrant to purchase 75,000 shares at a price of $6.00 per
share. The 75,000 share warrant was canceled as a result of certain financial
goals not being met for the fiscal year ended March 31, 1992.

     In May, 1992 in recognition of sales and profit achievements for fiscal
year 1992, the Board of Directors issued to Mr. Vassell a five-year warrant
to purchase 125,000 shares at an exercise price of $3.88 per share and issued
to Mr. Robinett a five-year warrant to purchase 60,000 shares at an exercise
price of $3.88 per share. Also in May 1992, as an incentive for outside
directors, the Board of Directors issued to Peter J. Nekos a five-year
warrant to purchase 10,000 shares at an exercise price of $3.88 per share. 
The exercise price of the foregoing warrants was the market value on the date 
of grant.

      In recognition of certain voluntary salary reductions by Messrs. Vassell
and Robinett during 1993, and the contributions of Mr. Nekos, the Board of
Directors authorized the extension of Mr. Robinett's option and all of Messrs.
Vassell's, Robinett's and Nekos' outstanding warrants by two years and the
adjustment of the exercise prices under all of their warrants and option to
$3.25, the fair market value of the Company's stock as of August 16, 1993 (the
date of the extension).

     In September of 1992, the Company entered into a Compensation
Continuation Agreement with Mr. Vassell in consideration of his agreement to
extend the term of his employment for two years. This Agreement provides
that, if, within specified periods of a Change of Control of the Company (as
defined in the Agreement) Mr. Vassell's employment is terminated by the
Company without Cause (as defined in said Agreement), or if Mr. Vassell
terminates his employment for Good Reason (as defined in the Agreement), Mr.
Vassell will be paid 2.99 times the greater of his annual compensation as in
effect on the date of the Agreement or the highest annual compensation for
any of the three years preceding the termination. All awards previously
granted under any performance incentive plan, the actual payment of which may
be deferred, will be vested as a result of the Change of Control and all
options and warrants held by Mr. Vassell will become immediately exercisable.
Currently, the aggregate amount payable to Mr. Vassell upon his termination
in the event of a change in control would be 2.99 times his total
compensation of approximately $175,000 for the fiscal year ended March 31,
1998, or approximately $525,000.

     Other than pursuant to the Employment Agreement and the Compensation
Continuation Agreement for Mr. Vassell (see "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS"), there is no compensation plan or arrangement for the
benefit of any person named in the Summary Compensation Table that would
result from the resignation, retirement or other termination of such person's
employment.

      Other than the compensation described above, there are no long-term
incentive plans for the persons named in the Summary Compensation Table.
Furthermore, the Company does not have a pension plan.

Board of Directors Compensation

     No executive officer receives any additional compensation for serving as
a director, except in the case of Mr. Snitow who is compensated at the rate
of $300 per hour in accordance with the engagement letter referenced above
in this Item 11. Directors who are not employees of the Company, and
excluding Mr. Snitow, receive a meeting fee of $1,000 for each meeting
attended, and all directors are reimbursed for expenses incurred in attending
Board meetings. With the exception of Gregory J. Miller and Peter T. Kikis,
no other directors who are not also executive officers received any plan or
non-plan compensation from the Company during the last three fiscal years.

     On April 30, 1997, the Board voted to pay Mr. Kikis $2,500 per month
starting as of April 1, 1996 in recognition of his successfully negotiating
certain matters on the Company's behalf and for his continuing contributions
to the Company, particularly in his capacity as chairman of the Executive
Committee of the Board of Directors.

      During the fiscal year 1998, Mr. Miller performed miscellaneous legal
services on behalf of the Company and was compensated therefor in an amount
approximating $6,000.

     In May 1992, as an incentive for outside directors, the Board of
Directors issued to Peter J. Nekos a five-year warrant to purchase 10,000
shares at an initial exercise price of $3.88 per share, the market value on
the date of grant. In recognition of Mr. Nekos' contributions to the Company,
in August 1993 the Board of Directors authorized the extension of Mr. Nekos'
outstanding warrants by two years and reduced the purchase price to $3.25 per
share, the fair market value on the date of the extension. In October 1996
the Board of Directors granted Messrs. Nekos and Miller five-year warrants
for 10,000 shares with a purchase price of $1.875 per share, the fair market
value at the time of issuance. On that same date the Board granted to Mr.
Kikis a warrant for 150,000 shares, also with a purchase price of $1.875 per
share, the fair market value at the time of issuance.

Limited Directors' Liability

      Pursuant to the New York Business Corporation Law, the Company's
certificate of incorporation, as amended, eliminates to the fullest extent of
such Law the liability of the Company's Directors, acting in such capacity, for
monetary damages if they should fail through negligence or gross negligence to
satisfy their duty of exercising proper business judgment in discharging their
duties, but not for acts or omissions in bad faith, or involving intentional
misconduct or amounting to a knowing violation of law or under other limited
circumstances.

                     ITEM 12. SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the number
and percentage of common stock (being the Company's only voting securities)
beneficially owned by (i) each person who owns of record (or is known by the
Company to own beneficially) 5% or more of the Company's common stock or as
to which he has the right to acquire within 60 days of June 30, 1998, (ii)
each director and executive officer and (iii) all of said beneficial owners,
officers and directors as a group, as of June 30, 1998. The address for each
director and executive officer is the Company's principal office at Lexington
Park, Route 55, Lagrangeville, New York 12540.

     Other than as set forth in the following table or pursuant to the
Shareholders Voting Agreement, the Company is not aware of any person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934) who owns more than 5% of the common stock of
the Company.

<TABLE>
<CAPTION>

                          Amount and
                          Nature of
                          Beneficial
Name                      Ownership<F1>      Percent of Class<F11>
----                      -------------      ---------------------

<S>                       <C>                <C>                  
William C. Vassell        1,311,950<F2>      17.3%

Steven B. Sands/            844,311<F3>      11.1%
Sands Brothers &
Co., Ltd.
101 Park Avenue
New York, NY

Franklyn H. Snitow                0          <F12>

Gordon Robinett             262,500<F4>       3.5%

Peter T. Kikis              350,270<F5>       4.6%

Peter Nekos                  22,500<F6>      <F12>

Debra Miller                 17,600<F7>      <F12>

Lloyd H. Saunders, III          500          <F12>

Gregory J. Miller            10,000<F8>      <F12>

Thomas P. Kikis             677,559<F9>       8.9%

Eugene U. McDonald           16,250<F10>     <F12>


All Officers and          3,163,170          41.6%
Directors as a Group      <F2><F3><F4>
(11 Persons)              <F5><F6><F7>
                          <F8><F9><F10>

<FN>

<F1>  The Company has been advised that all individuals listed above, except
Steven B. Sands (see Note (3), below) and Peter T. Kikis (see Note (5),
below) have the sole power to vote and dispose of the number of shares set
forth opposite their names.

<F2>  Includes 350,000 shares underlying warrants that are currently
exercisable.

<F3> A Schedule 13D filed by Mr. Sands, Sands Brothers and the parties
listed below, filed with the Commission on or about November 8, 1993, and
amended on April 7, 1994, December 13, 1994, March 31, 1995 and November 9,
1995, indicates that these shares are beneficially owned by: Katie and Adam
Bridge Partners, L.P.; Jenna Partners, L.P.; Jenna Partners, II, L.P.; Owl-I
Partners, L.P.; Lily Capital Appreciation Partners, LP and Ponderosa
Partners, LP ("Ponderosa"). The corporate general partners of the above-named
limited partnerships are, respectively, K & A Bridge Partners Corp., Jenna
Capital Corp., Jenna II Capital Corp., Owl Capital Management, Inc., Lily
Capital Corp. and Ponderosa Capital Corp. Mr. Steven B. Sands is the chief
executive officer of Sands Brothers as well as a director and the owner of
50% of the capital stock of K & A Bridge Partners Corp., Jenna Capital Corp.,
Jenna II Capital Corp. and Owl Capital Management, Inc. Mr. Martin S. Sands
is the President of Sands Brothers as well as a director and 50% owner of the
above-referred corporate general partners. Steven B. Sands and Martin P.
Sands are the only executive officers, directors and controlling persons of
Sands Brothers. Based on information provided by Sands Brothers to the
Company, Steven B. Sands and Martin S. Sands each share voting power over
1,261,311 shares. This amount includes (i) 64,390 shares issuable upon
exercise of the Sands Warrant issued to Sands Brothers in connection with the
Company's 1993 Private Placement; (ii) 100,610 shares issuable upon exercise
of the Sands 95 Placement Warrant, issued to Sands Brothers in connection
with the Company's 1996 Private Placement that have been transferred to
Ponderosa; and (iii) 7,000 shares issuable upon exercise of the Sands
Consulting Warrant, issued to Sands Brothers in connection with consulting
services provided to the Company. As disclosed in the November, 1995 13D
Sands Brothers transferred to its designees warrants to purchase 95,610
shares underlying the Sands Warrant and approximately 149,390 under the Sands
95 Placement Warrant. Katie and Adam Bridge Partners, L.P. has sole voting
and dispositive power over 746,061 shares; Jenna Partners, L.P. has sole
voting and dispositive power over 122,500 shares; Jenna Partners, II, L.P.
has sole voting and dispositive power over 85,750 shares; Owl-I Partners,
L.P. has sole voting and dispositive power over 35,000 shares; Lily Capital
Appreciation Partners, L.P. has sole voting and dispositive power over
100,000 shares and Ponderosa has sole voting and dispositive power over
165,000 shares. On March 30, 1994, Mr. Steven B. Sands was elected to the
Company's Board of Directors. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS". Notwithstanding the disclosures above, all of the 417,000 
Shares issuable upon exercise of the various warrants therein described
Expired prior to the fiscal year ending March 31, 1998. The number of 
shares over which Steven B. Sands/Sands Brothers & Co., Ltd. share voting 
power is therefore reduced to 844,311.

<F4>  Includes 107,500 shares underlying presently exercisable non-qualified
stock options and 120,000 shares underlying warrants that are currently
exercisable.

<F5>  Includes 150,000 shares underlying warrants currently exercisable, 93,306
shares issuable upon conversion of Series A Preferred Stock .

<F6>  Includes 20,000 shares underlying options currently exercisable.

<F7>  Includes 17,500 shares underlying options currently exercisable.

<F8>  Includes 10,000 shares underlying warrants currently exercisable.

<F9>  A schedule 13D filed by Thomas P. Kikis, President of Kikis Asset
Management Corporation (KAMC), filed with the Commission on or about March
12, 1998, indicates that these shares are beneficially owned by KAMC on
behalf of its clients: Peter T. Kikis, 285,306 shares; and Thomas P. Kikis,
136,653 shares. Of the 285,306 shares owned beneficially by Peter T. Kikis,
162,000 are issuable on exercise of currently exercisable warrants held by
him and 93,306 are issuable on conversion of shares of Series A Preferred
Stock held by him which are currently convertible. Of the 136,653 shares
owned beneficially by Thomas P. Kikis, 46,653 are issuable on conversion of
shares of the Series A Preferred Stock held by him which are currently
convertible. KAMC, as investment advisor to its advisory clients, has sole
voting power and dispositive power over all 677,559 shares. Such power is
exercised by Thomas P. Kikis.
 
<F10> Includes 15,000 shares underlying options currently exercisable.

<F11> Percent of class for each shareholder is calculated as if all options and
warrants included in the table for such shareholder are outstanding. The
number of outstanding shares of common stock is 6,658,143.
The percent of class for all executive officers and directors as a group
is calculated as if all options and warrants held by any shareholders
included in the group are outstanding. The denominator for the group
calculation is 7,595,556.

<F12> Less than 1 percent.

</FN>
</TABLE>

                       ITEM 13. CERTAIN RELATIONSHIPS AND
                              RELATED TRANSACTIONS

     A description of the engagement letter and indemnification agreement
between the Company and Franklyn H. Snitow, acting president and director of
the Company is found in Item 11 herein.

     Gregory J. Miller has been a director of the Company since 1992. Mr.
Miller is general counsel for Goldline Connectors, Inc. and has rendered
legal services to the Company during his tenure as a director. Mr. Miller has
rendered legal services in connection with various litigation and contractual
matters during the last three fiscal years. During each of the last three
fiscal years, payments to Mr. Miller for legal services were minimal. It is
expected that Mr. Miller will continue to render minimal legal services to
the Company from time to time. Management believes that the terms of the
various transactions between the Company and Mr. Miller were as favorable as
those which might have been obtained from an unaffiliated party.

     Peter T. Kikis became a director of the Company on February 24, 1995, in
connection with the acquisition of United. Mr. Kikis is a director of Deltec
International, S.A., of which Deltec Development Corporation ("Deltec"), the
lender of the Company's $1.5 million subordinated secured indebtedness
obtained in connection with the United acquisition, is an indirect,
wholly-owned subsidiary. The terms of the loan agreement provide for interest
at the rate of 14% per annum and 16 equal quarterly payments of principal.
Deltec received a financing fee of $180,000 in connection with the loan to
help defray certain costs, including legals fees, associated with the
transaction. Deltec also purchased 3,000 shares of the Company's Series A
Convertible Preferred Stock at $165 per share. Management believes that the
terms of the various transactions between the Company and Deltec were as
favorable as those which might have been obtained from an unaffiliated party.

     Gordon Robinett, a member of the Company's Board of Directors and former
Treasurer, entered into a Covenant Not to Compete with the Company on July
23, 1996 in connection with his termination of employment with the Company.
Under that agreement, the Company is to make periodic payments to Mr.
Robinett over four years totalling $180,000, the exercise price of Mr.
Robinett's options and warrants was reduced to $2.50, and an expiration date
was fixed at July 19, 2000. In return, Mr. Robinett is prohibited from
directly or indirectly competing with the Company until July 19, 2000. In
August of 1997, Mr. Robinett was engaged by the Company on a per diem
basis to temporarily perform the functions of Mr. Dickinson until a replacement 
was approved by the Board.  Mr. Robinett works an average of three days per 
week and is compensated therefor at the rate of $385 per day. 

                                     PART IV

          ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
                        SCHEDULES AND REPORTS ON FORM 8-K

(A)(1) Financial statements filed as part of this report:

                                                                  Page
                                                                  ----

   Reports of Independent Accountants                             F-1

   Balance Sheets - March 31, 1998 and 1997                       F-2

   Statements of Operations - Years Ended                         F-3
     March 31, 1998, 1997, and 1996

   Statements of Changes in Stockholders'                         F-4
     Equity - Years Ended March 31, 1998, 1997, and 1996

   Statements of Cash Flows - Years Ended                         F-5 - F-7
     March 31, 1998, 1997, and 1996

   Notes to Financial Statements                                  F-8 - F-22

   (2) Financial statement schedule filed as part of this report:

   Valuation and qualifying accounts - years ended                F-23
     March 31, 1998, 1997, 1996****

      All other schedules are omitted since the required information is not
present or is not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements and notes thereto.

3.1    Amended & Restated Articles     Incorporated by reference to Exhibit 3.3
       of Incorporation                of the form 10-K for the fiscal year
                                       ending March 31, 1993 (the "1993 10-K")

3.2    By-Laws                         Incorporated by reference to Exhibit 3.3
                                       of the Form 10-K for the fiscal year
                                       ended March 31, 1991 (the "1991 10-K")

3.3    Amendments to By-Laws           Incorporated by reference to Exhibit 3.3
                                       of the Form 10-K/A for the fiscal year
                                       ended March 31, 1994 (the "1994 10-K/A)

3.4    Certificate of Amendment of     Incorporated by reference to Exhibit 3.4
       Certificate of                  of the Eighth Amendment to the
       Incorporation                   Registration Statement filed on Form 
                                       S-1, File No. 33-75336 (the "S-1").

4.1    Specimen Stock Certificate      Incorporated by reference to Exhibit 4.A
                                       to amendment #1 to Registrant's
                                       Registration Statement on Form S-18, 
                                       file number 33, 35007-NY (the "S-18")

4.2    Reclassified as Exhibit
       10.37

4.3    Reclassified as Exhibit
       10.38

4.4    Reclassified as Exhibit
       10.39

4.5    Reclassified as Exhibit
       10.40

4.6    Warrant (50,000) to the CIT     Incorporated by reference to Exhibit 4.2
       Group/Credit Finance            of the Form 8-K filed on March 13, 1996.

4.7    Specimen Series A Preferred     Incorporated by reference to Exhibit 4.2
       Stock Certificate               of the Third Amendment to the S-1

10.1   Form of Amendment to
       Employment Agreement for        Incorporated by reference to Exhibit 
       William C. Vassell dated        10.1 of the 10-K for the fiscal year 
       April 8, 1991                   ended March 31, 1992 (the "1992 10-K")

10.2   Amended and Restated
       Employment Agreement for        Incorporated by reference to Exhibit 
       William C. Vassell dated        10.3 of the 1992 10-K
       June 18, 1991

10.3   Amendment #1 to Amended &       Incorporated by reference to Exhibit 
       Restated Employment             10.5 to the 1993 10-K
       Agreement for William C.
       Vassell dated September 25,
       1992

10.4   Form of Amendment to            Incorporated by reference to Exhibit 
       Employment Agreement for        10.2 of the 1992 10-K
       Gordon Robinett dated
       April 8, 1991

10.5   Amended and Restated            Incorporated by reference to Exhibit 
       Employment Agreement for        10.4 of the 1992 10-K
       Gordon Robinett dated
       June 18, 1991

10.6   Amendment #1 to Amended         Incorporated by reference to Exhibit 
       & Restated Employment           10.6 of the 1993 10-K
       Agreement for Gordon
       Robinett dated
       September 25, 1992

10.7   Form of Warrant Agreement       Incorporated by reference to Exhibit 
       and Warrant for William C.      10.3 of the 1991 10-K
       Vassell (175,000 shares)
       and Gordon Robinett
       (60,000 shares)

10.8   Form of Warrant Agreement       Incorporated by reference to Exhibit 
       dated May 15, 1992              10.7 to the 1992 10-K
       for William C. Vassell
       (125,000 shares), Gordon
       Robinett (60,000 shares)
       and Peter J. Nekos (10,000
       shares)

10.9   Compensation Continuation       Incorporated by reference to Exhibit 
       Agreement for William           10.9 of the 1993 10-K
       C. Vassell dated September
       25, 1992

10.10  Consulting Agreement with       Incorporated by reference to Exhibit
       Robert Ellin dated              10.10 of the 1992 10-K
       December 2, 1992

10.11  Warrant Agreement for           Incorporated by reference to Exhibit
       William C. Vassell              10.16 of the Form 10-K for fiscal year
       (500,000)                       ended March 31, 1994 (the "1994 10-K")

10.12  Franchise Offering              Incorporated by reference to Exhibit
       Prospectus dated                10.11 of the 1993 10-K
       December 1, 1992

10.13  Warrant Agreement and           Incorporated by reference to Exhibit 4.B
       Warrant for Stuart James        of S-18

Company, Inc.

10.14  Form of Second Amendment to     Incorporated by reference to Exhibit
       May 15, 1992 Warrant            10.13 in 1994 10-K
       Agreement and Warrant
       Certificate for William
       C. Vassell and Gordon Robinett

10.15  Form of Third Amendment to      Incorporated by reference to Exhibit
       April 8, 1991 Warrant           10.14 in the 1994 10-K
       Agreement and Warrant
       Certificate for William C.
       Vassell and Gordon Robinett

10.16  Form of Third Amendment to      Incorporated by reference to Exhibit
       May 15, 1992 Warrant Agreement  10.15 in the 1994 10-K
       and Warrant Certificate for
       William C. Vassell and Gordon
       Robinett

10.17  Placement Agent Agreement       Incorporated by reference to Exhibit 1.1
                                       of the Form 8-K filed October 17, 1993

10.18  Registration Agreement          Incorporated by reference to Exhibit 4.1
                                       to the Form 8-K filed October 17, 1993

10.19  Form of Warrant for Private     Incorporated by reference to Exhibit
       Placement                       4.2 to the Form 8-K filed October 27,
                                       1993

10.20  Warrant Agreement               Incorporated by reference to Exhibit
       (Placement Agreement)           4.3 to the Form 8-K filed October 27,
                                       1993

10.21  William C. Vassell Indemnity    Incorporated by reference to Exhibit
       Agreement                       10.17 of the 1994 10-K

10.22  Plan of Acquisition,            Incorporated by reference to Exhibit
       Reorganization, Liquidation     2 of the Form 8-K filed October 27, 1993
       or Succession of ISS
       International Service
       Systems, Inc.

10.23  Amendment to ISS Purchase       Incorporated by reference to Exhibit
       Agreement                       10.23 of the 1994 10-K/A

10.24  Plan of Acquisition,            Incorporated by reference to Exhibit
       Reorganization, Liquidation     2 of the Form 8-K filed November 12, 
       or Succession of Madison        1993

10.25  Purchase and Sale Agreement     Incorporated by reference to Exhibit
       dated February 24, 1996, for    2.1 of the Form 8-K filed March 24, 1996
       the acquisition of United
       Security Group Inc.

10.26  Placement Agent Agreement       Incorporated by reference to Exhibit
       dated February 24, 1996,        10.26 to the Third Amendment to the
       between the Company and         Form S-1.
       Sands Brothers & Co., Ltd.
       with Amendment as of
       March 24, 1996

10.27  Shareholders Voting Agreement   Incorporated by reference to Exhibit
       dated March 8, 1996, by all     10.27 of the Third Amendment to the S-1
       directors in their capacities
       as Shareholders

10.28  Amendment No. 2 to Amended and  Incorporated by reference to Exhibit
       Restated Employment Agreement   10.28 of the Third Amendment to the S-1
       for William C. Vassell dated
       February 24, 1996

10.29  Amendment No. 2 to Amended and  Incorporated by reference to Exhibit
       Restated Employment Agreement   10.29 of the Third Amendment to the S-1
       for Gordon Robinett dated
       February 24, 1996

10.31  Form of Warrant (250,000) to    Incorporated by reference to Exhibit
       Sands Brothers & Co., Ltd.      10.31 of the Third Amendment to the S-1
 
10.32  Warrant Reduction Agreement     Incorporated by reference to Exhibit
       (275,000) William C. Vassell    10.32 of the Third Amendment to the S-1
 
10.34  Loan and Security Agreement     Incorporated by reference to Exhibit
       with CIT Group/Credit Finance,  4.7 of the Third Amendment to the S-1
       Inc.

10.35  Term Loan Agreement with        Incorporated by reference to Exhibit
       Deltec Development Corp.        4.8 of the Third Amendment to the S-1

10.36  Promissory Note to William C.   Incorporated by reference to Exhibit
       Vassell ($85,000) dated August  Exhibit 10.36 of the form 10-K for the
       22, 1994                        fiscal year ending March 31, 1995 (the
                                       "1995 10-K")
10.37  Notes Payable - ISS             Incorporated by reference as Exhibit
                                       4.2 to the 1994 10-K/A
10.38  Bank Note - September 1, 1992   Incorporated by reference as Exhibit
       maturity                        4.2 to the l994 l0-K/A

10.39  Bank Note - November 1, 1997    Incorporated by reference as Exhibit
       maturity                        4.4 of the 1994 10-K/A

10.40  Mehlich Notes                   Incorporated by reference as Exhibit
                                       4.5 of the 1994 10-K/A

11.00  Computation of Income Per       Incorporated by reference to Exhibit
       Share of Common Stock           11 annexed to Financial Statements.

24.00  Power of Attorney               E-1

27.00  Financial Data Schedule         E-2

99.2   Placement Agent Agreement       Incorporated by reference to Exhibit
       dated February 24, 1995         1.1 to the Form 8-K/A dated February 24,
                                       1995

99.3   Amendment to Exhibit C to the   Incorporated by reference to Exhibit
       Placement Agent Agreement       1.2 to the Form 8-K dated March 24, 1995
       dated March 24, 1995

99.4   Agreement with John B.          Incorporated by reference to Exhibit
       Goldsborough                    99.3 to the Fourth Amendment to the S-1

99.5   Warrant Standstill Agreement    Incorporated by reference to Exhibit
       from William C. Vassell         99.4 to the Fourth Amendment to the S-1

99.6   Shareholders Voting Agreement   Incorporated by reference to Exhibit
       dated March 8, 1995             99 to the Form 8-K dated March 24, 1995

99.7   Letter to Company from          Incorporated by reference to Exhibit
       D'Arcangelo & Co. L.L.P.        99.7 to the Form 8-K dated February 9,
       dated February 28, 1994.        1996

99.8   Letter to Company from          Incorporated by reference to Exhibit
       Coopers & Lybrand L.L.P.        99.8 to the Form 8-K dated February 9,
       dated February 7, 1996          1996.
       confirming  termination
       of engagement.

99.9   Letter to Company from          Incorporated by reference to Exhibit
       Coopers & Lybrand,L.L.P.        99.9 to the Form 8-K dated February 9,
       dated February 9, 1996.         1996.

99.10  Letter (revised) to Commission  Incorporated by reference to Exhibit
       from Coopers & Lybrand L.L.P.   99.10 to the Form 8-K/A filed March 11,
       dated March 8, 1996.            1996.

99.11  Press Release dated June 25,    Incorporated by reference to Exhibit 
       1997 re: FYE 1997 results       99.11 to the 1997 10-K.

(b)   Reports on Form 8-K



        (i) Report on Form 8-K dated April 16, 1996 Item 7 (c) - Exhibit Press
            release dated April 15, 1996

       (ii) Report on Form 8-K dated September 10, 1996 Item 7(c) - Exhibits
            Press release dated August 19, 1996 Press release dated September
            05, 1996 Press release dated September 09, 1996

      (iii) Report on Form 8-K dated September 26, 1996 Item 7(c) - Exhibit
            Press release dated September 17, 1996

       (iv) Report on Form 8-K dated November 13, 1996 Item 7(c) - Exhibits
            Press release dated October 23, 1996 Press release dated November
            06, 1996

        (v) Report on Form 8-K dated November 19, 1996 Item 7(c) - Exhibit 
            Press release dated November 13, 1996

       (vi) Report on Form 8-K dated February 14, 1997 Item 7(c) - Exhibits
            Press release dated February 07, 1997 Press release dated February
            10, 1997

      (vii) Report on Form 8-K dated August 15, 1997 Item 7(c) - Exhibits
            Press release dated August 11, 1997

     (viii) Report on Form 8-K dated Septemebr 11, 1997 Item 7(c) - Exhibits
            Press release dated September 10, 1997

       (ix) Report on Form 8-K dated November 19, 1997 Item 7(c) - Exhibits
            Press release dated November 19, 1997

        (x) Report on Form 8-K dated Decemebr 18, 1997 Item 5

                                   SIGNATURES

      PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

                               COMMAND SECURITY CORPORATION

                                  By:/s/ Franklyn H. Snitow
                                  -------------------------------------
                                  Franklyn H. Snitow
                                  Acting President and Chief Executive Officer
 
 
Date:  July 13, 1998

      PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATE INDICATED.

/s/ Franklyn H. Snitow        Acting Director, Acting           July 13, 1998
----------------------------- President and Chief Executive 
Franklyn H. Snitow            Officer


/s/ *                         Chairman of the                   July 13, 1998
----------------------------- Board and Director
William C. Vassell


/s/ *                         Vice Chairman of the              July 13, 1998
----------------------------- Board and Director
Gordon Robinett


/s/ *                         Director                          July 13, 1998
-----------------------------
Peter T. Kikis


/s/ *                         Director                          July 13, 1998
-----------------------------
Peter J. Nekos


/s/ *                         Director                          July 13, 1998
-----------------------------
Gregory J. Miller


                              Director                          July 13, 1998
-----------------------------
Steven B. Sands


                              Director                          July 13, 1998
-----------------------------
Lloyd H. Saunders, III


/s/ *                         Director                          July 13, 1998
-----------------------------
Thomas P. Kikis

* Signed on behalf of the signator by Franklyn H. Snitow pursuant to Power of
Attorney.

/s/ Franklyn H. Snitow
------------------------------                                  July 13, 1998

Attorney-in-Fact

The Registrant has not sent an annual report or proxy material to its
shareholders. The Registrant intends to send an annual report and proxy 
material to its shareholders subsequent to the date hereof in connection 
with its 1998 annual meeting to be conducted later this year.


PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
           SCHEDULES AND REPORTS ON FORM 8-K




(A) (1) Financial statements filed as part of this report:

                                                                    Page No.

      Independent auditor's report                                       F-1

               Balance sheets - March 31, 1998 and 1997                  F-2

               Statements of operations - years ended
                March 31, 1998, 1997 and 1996                            F-3

               Statements of changes in stockholders' equity -
                years ended March 31, 1998, 1997 and 1996                F-4

               Statements of cash flows - years ended
                March 31, 1998, 1997 and 1996                      F-5 - F-7

               Notes to financial statements                      F-8 - F-22


      (2)     Financial statement schedule filed as part of this report:

               Valuation and qualifying accounts - years ended
               March 31, 1998, 1997 and 1996                            F-23


      All other schedules are omitted since the required information is not
      present or is not present in amounts sufficient to require submission
      of the schedule, or because the information required is included in the
      financial statements and notes thereto.





<PAGE>



                           COMMAND SECURITY CORPORATION

                               FINANCIAL STATEMENTS
                        (and Independent Auditor's Report )

                                   YEARS ENDED
                              MARCH 31, 1998 AND 1997




<PAGE>


Independent Auditor's Report
on the Financial Statements


To the Board of Directors
  and Stockholders of
Command Security Corporation

We have audited the financial statements and financial statement schedule of
Command Security Corporation listed in item 14(a) of this Form 10-K as of
March 31, 1998 and 1997, and for each of the three years in the period ended
March 31, 1998. These financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Command Security Corporation
as of March 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended March 31, 1998, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole, presents
fairly, in all material respects, the information required to be included
therein.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Notes 2, 6 and 9 to
the financial statements, the Company incurred losses for the year ended
March 31, 1998, and a working capital deficit at March 31, 1998, is in
default on certain of its debt covenants, and, as described in Notes 14 and
20, there is a contingency and litigation for which the outcomes are
uncertain. The Company's continuation is dependent on the forbearance of its
lenders, its ability to achieve profitability from its operations, to
generate adequate working capital to meet its current operating expenses and
debt obligations and to favorably and quickly resolve the contingency and
litigation. These factors raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note 2. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern or satisfactorily resolve the contingency and litigation.



June 8, 1998
Poughkeepsie, New York


                                     F-1
<PAGE>

<TABLE>

Command Security Corporation

Balance Sheets
March 31, 1998 and 1997

<CAPTION>
                                                                                         1998                1997
<S>                                                                                      <C>                 <C>
ASSETS 
Current assets:
   Cash and cash equivalents                                                             $       -0-         $       -0-
   Accounts receivable from guard service customers, less allowance for
    doubtful accounts of $414,851 and $337,273, respectively                               8,877,428           7,591,010
   Accounts receivable from service contract customers, less allowance for
              doubtful accounts of $301,496 and $282,348, respectively                     2,628,838           5,180,682
   Prepaid expenses                                                                          493,870           1,322,918
   Notes receivable, current maturities, less allowance for doubtful
    accounts of $273,715 and $450,653, respectively                                           12,272             218,267
   Other receivables, less allowance for doubtful accounts
    of $1,024,319 and $104,138, respectively                                                  92,376             699,248
                                                                                         -----------         -----------
               Total current assets                                                       12,104,784          15,012,125

Furniture and equipment at cost, net                                                       1,176,246           1,105,473

Notes and long-term receivables, less allowance for doubtful
   accounts of $785,360                                                                          -0-             387,327

Intangible assets, net                                                                     2,714,550           5,033,566

Deferred income taxes                                                                            -0-             259,835

Other assets                                                                               1,701,679           1,390,250
                                                                                         -----------         -----------

    Total assets                                                                         $17,697,259         $23,188,576
                                                                                         ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Cash overdraft                                                                        $   449,895         $   753,644
   Current maturities of long-term debt                                                    1,224,423             977,372
   Current maturities of obligations under capital leases                                     71,115              77,047
   Short-term borrowings                                                                   6,698,907           7,763,578
   Accounts payable and accrued expenses                                                   4,050,758           3,342,122
   Due to service companies                                                                  732,555             685,150
                                                                                         -----------         -----------
    Total current liabilities                                                             13,227,653          13,598,913

Deferred revenue                                                                                 -0-             391,685

Self-insurance reserves                                                                      803,809             438,820

Long-term debt, net                                                                          458,995           1,195,234

Obligations under capital leases, net                                                         72,328              89,189
                                                                                         -----------         -----------
                                                                                          14,562,785          15,713,841

Commitments and contingencies (Notes 14 and 16)

Redeemable, convertible Series A preferred stock, $.0001 par value
   per share, 10,567 shares designated, issued and outstanding                                   -0-           1,743,555
                                                                                         -----------         -----------

Stockholders' equity:
   Preferred stock, convertible Series A, $.0001 par value per share,
    authorized 1,000,000 shares, 11,412 shares issued and outstanding                      1,883,039                 -0-
   Common stock, $.0001 par value per share, authorized 20,000,000
    shares, issued 8,013,543 and 8,424,332, respectively                                         801                 842
   Paid-in capital                                                                         9,431,505           9,897,319
   Deficit                                                                                (8,177,871)         (4,163,981)
                                                                                         -----------         -----------
                                                                                           3,137,474           5,734,180
   Common stock in treasury, at cost, 1,355,400 shares                                        (3,000)             (3,000)
                                                                                         -----------         -----------

                                                                                           3,134,474           5,731,180
                                                                                         -----------         -----------

   Total liabilities and stockholders' equity                                            $17,697,259         $23,188,576
                                                                                         ===========         ===========

See accompanying notes and auditor's report
</TABLE>
                                     F-2
<PAGE>

<TABLE>
Command Security Corporation

Statements of Operations
Years Ended March 31, 1998, 1997 and 1996

<CAPTION>
                                                                     1998                1997                1996
<S>                                                                  <C>                 <C>                 <C>
Revenue                                                              $ 51,796,882        $ 49,237,418        $ 54,995,444
Cost of revenue                                                        44,456,786          40,793,840          46,498,945
                                                                     ------------        ------------        ------------

       Gross profit                                                     7,340,096           8,443,578           8,496,499

Service contract revenue                                                1,450,592           1,471,313           1,519,803
                                                                     ------------        ------------        ------------
                                                                        8,790,688           9,914,891          10,016,302
                                                                     ------------        ------------        ------------

Operating expenses:
   General and administrative expenses                                  7,748,726           7,114,478           8,135,963
   Amortization of intangibles                                          1,651,889           1,773,599           1,203,228
   Provision for doubtful accounts and notes                            1,451,151             447,159             353,307
   Bad debt recoveries                                                   (245,593)            (90,011)           (220,918)
   Labor claims contingencies and settlements                             354,000                 -0-                 -0-
   Insurance rebates                                                          -0-            (598,139)           (742,305)
   Loss on value of intangible assets, net                                745,516                 -0-              36,314
                                                                     ------------        ------------        ------------

                                                                       11,705,689           8,647,086           8,765,589
                                                                     ------------        ------------        ------------

       Operating income/(loss)                                         (2,915,001)          1,267,805           1,250,713
                                                                     ------------        ------------        ------------

Other income/(expense)
   Interest income                                                        229,493             179,599             169,277
   Interest expense                                                    (1,069,223)         (1,065,852)         (1,182,779)
   Loss on equipment dispositions                                         (34,324)            (71,882)            (28,952)
   Other income                                                            35,000                 -0-              (2,850)
                                                                     ------------        ------------        ------------

                                                                         (839,054)           (958,135)         (1,039,604)
                                                                     ------------        ------------        ------------

       Income/(loss) before income tax benefit                         (3,754,055)            309,670             211,109

Income tax (expense)/benefit                                             (259,835)            140,360             300,541
                                                                     ------------        ------------        ------------

       Net income/(loss)                                               (4,013,890)            450,030             511,650

Preferred stock dividends                                                (139,484)           (129,030)           (119,460)
                                                                     ------------        ------------        ------------

Net income/(loss)
   applicable to common stockholders                                 $ (4,153,374)       $    321,000        $    392,190
                                                                     ============        ============        ============

Income/(loss) per share of common stock                              $       (.62)       $        .05        $        .06
                                                                     ============        ============        ============

Weighted average number of common and
   common equivalent shares outstanding                                 6,689,352           6,955,548           6,663,986
                                                                     ============        ============        ============



See accompanying notes and auditor's report

</TABLE>

                                     F-3
<PAGE>


<TABLE>

Command Security Corporation

Statements of Changes in Stockholders' Equity
Years Ended March 31, 1998, 1997 and 1996

<CAPTION>
                                                                                    Retained
                                       Preferred      Common         Paid-In        Earnings       Stock In
                                       Stock          Stock          Capital        (Deficit)      Treasury       Total
<S>                                    <C>            <C>            <C>            <C>            <C>            <C>

Balance at April 1, 1995               $        -0-   $       799    $10,121,721    $(5,125,661)   $    (3,000)   $ 4,993,859

Issuance/(return) of
   escrowed common stock
   - Accrued fees                                              15            (15)                                         -0-
   - Retention settlement                                      (2)       (64,685)                                     (64,687)

Deferred stock
   compensation expense                                                    4,300                                        4,300

Common stock
   registration costs                                                   (136,436)                                    (136,436)

Preferred stock dividends                                               (119,460)                                    (119,460)

Net income                                                                              511,650                       511,650
                                       ------------   -----------    -----------    -----------    -----------    -----------

Balance at March 31, 1996                       -0-           812      9,805,425     (4,614,011)        (3,000)     5,189,226

Exercise of
   common stock put                                                     (218,765)                                    (218,765)

Common stock issued                                            21        439,198                                      439,219

Issuance/(return) of
   escrowed common stock
   - Note collateral                                           24            (24)                                         -0-
   - Accrued fees                                             (15)            15                                          -0-

Common stock warrants
  subscribed                                                                 500                                          500

Preferred stock dividends                                               (129,030)                                    (129,030)

Net income                                                                              450,030                       450,030
                                       ------------   -----------    -----------    -----------    -----------    -----------

Balance at March 31, 1997                       -0-           842      9,897,319     (4,163,981)        (3,000)     5,731,180

Common stock issued                                             5         54,008                                       54,013

Return of escrowed
  common stock
    o Note collateral                                         (35)            35                                          -0-
    o Retention adjustment                                    (11)      (294,394)                                    (294,405)

Cash paid in lieu of
  compensatory stock warrants                                            (85,979)                                     (85,979)

Transfer of
  preferred stock                         1,813,297                                                                 1,813,297

Preferred stock dividends                    69,742                     (139,484)                                     (69,742)

Net loss                                                                             (4,013,890)                   (4,013,890)
                                       ------------   -----------    -----------    -----------    -----------    -----------

Balance at
   March 31, 1998                      $  1,883,039   $       801    $ 9,431,505    $(8,177,871)   $    (3,000)   $ 3,134,474
                                       ============   ===========    ===========    ===========    ===========    ===========

See accompanying notes and auditor's report

</TABLE>

                                     F-4

<PAGE>



Command Security Corporation

Statements of Cash Flows
Years Ended March 31, 1998, 1997 and 1996


<TABLE>

                                        INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
<CAPTION>

                                                                        1998                1997                 1996
<S>                                                                     <C>                 <C>                  <C>
OPERATING ACTIVITIES
   Net income/(loss)                                                    $(4,013,890)        $   450,030          $   511,650
    Adjustments to reconcile net income/(loss) to net
    cash provided by/(used in) operating activities:
      Depreciation and amortization                                       2,038,794           2,133,715            1,587,832
      Provision for doubtful accounts and
        notes receivable                                                  1,451,151             447,159              353,307
      Deferred income                                                           -0-                 -0-               15,734
      Loss on equipment dispositions                                         34,324              71,882               28,952
      Loss on value of intangible assets, net                               745,516                 -0-               36,314
      Deferred income taxes                                                 259,835            (140,360)            (300,541)
      Compensatory common stock purchase warrants                               -0-                 -0-                4,300
      Self insurance reserves                                               900,128             293,238              171,704
      Changes in operating assets and liabilities, 
        net of effects of business acquisitions:
          Accounts receivable, current and long-term                        780,602            (854,845)          (2,300,578)
          Prepaid insurance                                                 880,665             (38,813)             326,796
          Other receivables                                                 (88,574)           (413,779)             168,365
          Other assets                                                     (244,246)           (336,850)            (379,972)
          Accounts payable and accrued expenses                             124,665            (611,286)          (1,036,351)
          Income taxes                                                          -0-                 -0-                  -0-
          Due to service companies                                           28,495             105,139              259,382
                                                                        -----------         -----------          -----------
                 Net cash provided by/(used in)
                   operating activities                                   2,897,465           1,105,230             (553,106)
                                                                        -----------         -----------          -----------

INVESTING ACTIVITIES
   Purchase of equipment                                                   (153,298)            (98,760)            (124,838)
   Business acquisitions and purchase of
    intangible assets                                                      (116,521)           (281,246)            (249,034)
   Proceeds from equipment dispositions                                      27,122              75,902               18,153
   Proceeds from sale of intangible assets                                      -0-             210,000               69,825
   Issuance of notes by service companies
    and other third parties                                                     -0-            (252,208)            (138,450)
   Principal collections on notes receivable                                113,828             246,207              258,039
                                                                        -----------         -----------          -----------
                 Net cash used in investing activities                     (128,869)           (100,105)            (166,305)
                                                                        ------------        ------------         -----------

FINANCING ACTIVITIES
   Net borrowings/(payments) on line of credit                             (533,908)          1,186,632            2,149,686
   Proceeds from long-term debt                                                 -0-             500,000                  -0-
   Repayments on other short and long-term debt                          (1,763,505)         (2,480,414)          (1,380,126)
   Repayments on capital lease obligations                                  (81,455)            (96,762)            (116,458)
   Net proceeds from/(cost of) issuance of stock                                -0-              45,219             (136,436)
   Proceeds from common stock warrants subscribed                               -0-                 500                  -0-
   Cash paid in lieu of compensatory stock warrants                         (85,979)                -0-                  -0-
   Cash overdraft                                                          (303,749)           (160,300)             202,745
                                                                        ------------        ------------         -----------
                 Net cash provided by/(used in)
                    financing activities                                 (2,768,596)         (1,005,125)             719,411
                                                                        -----------         -----------          -----------

Net (decrease)/increase in cash and cash equivalents                            -0-                 -0-                  -0-

Cash and cash equivalents, beginning of year                                    -0-                 -0-                  -0-

Cash and cash equivalents, end of year                                  $       -0-         $       -0-          $       -0-
                                                                        ===========         ===========          ===========

See accompanying notes and auditor's report

</TABLE>
                                     F-5
<PAGE>

Command Security Corporation

Statements of Cash Flows (Continued)
Years Ended March 31, 1998, 1997 and 1996


1.    SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

<TABLE>

      Cash paid during the period for:
<CAPTION>
                             1998           1997           1996
<S>                          <C>            <C>            <C>
        Interest             $1,100,903     $1,045,238     $1,190,675
        Income Taxes                -0-            -0-            -0-

</TABLE>


2.    SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

        For the years ended March 31, 1998, 1997 and 1996, the Company
        purchased transportation and security equipment with direct
        installment and lease financing of $365,825, $566,709 and $354,493,
        respectively.

        The Company generally obtains short-term financing to meet its
        insurance needs. For the years ended March 31, 1998, 1997 and 1996,
        $133,055, $576,991 and 593,530, respectively, have been borrowed for
        this purpose. These borrowings have been excluded from the statements
        of cash flows.

        For the years ended March 31, 1998, 1997 and 1996, the Company
        accrued accumulated dividends of $139,484, $129,030 and $119,460 and
        issued 845, 782 and 724 additional shares of its Series A convertible
        preferred stock for the years ended March 31, 1998, 1997 and 1996,
        respectively, to its preferred stockholders. These charges to paid-in
        capital and credits to preferred stock have been excluded from the
        statements of cash flows.

        In March, 1998, the Company settled the retention adjustment in
        connection with the sale of certain customer lists originally closed
        in December, 1996. The resultant charge to deferred income of
        $103,989 and credits to notes receivable and accrued expenses of
        $63,159 and $40,830, respectively, have been excluded from the
        statement of cash flows.

        During the year ended March 31, 1998, the Company settled various
        retention issues related to customer list purchases. The resultant
        net charge to equity and credit to intangible assets of $240,392 have
        been excluded from the statement of cash flows.

        During the year ended March, 1998, the Company acquired certain guard
        service accounts from three former service agreement clients in
        settlement of outstanding advances and the assumption of certain loan
        guarantees. Debt assumed of $150,006 and net advances of $94,655 have
        been excluded from the purchase of intangible assets in the statement
        of cash flows.

        In June, 1997, the Company purchased certain guard service accounts
        for a total consideration of $144,684. The Company paid $56,717,
        issued a note for $56,717 and entered into an agreement for
        consulting services for $31,250 to effect the transition of the
        accounts. The non-cash portions have been excluded from the purchase
        of accounts and issuance of notes in the statement of cash flows.

        On December 30, 1996, the Company entered into an agreement for the
        sale of its Miami operations for a total consideration of $318,878,
        including $40,000 for related transportation and other equipment. The
        Company received $250,000 in cash and a note for $68,878. The
        resultant gain of $76,866 has been deferred pending collection of the
        note and the reduction of a guarantee provided by the Company in
        connection with this transaction. The deferred gain and the receipt
        of the note have been excluded from the statement of cash flows.

        In November, 1996, the Company finalized an agreement reached with
        ISS International Service System, Inc., whereby it has adjusted the
        notes payable to ISS from $1,000,000 to $500,000 in consideration for
        lost accounts and settlement of certain other claims. The resultant
        decreases in intangibles of $410,000 and notes payable of $500,000,
        offset by a net increase in accrued expenses of $90,000, have been
        excluded from the statement of cash flows.



See accompanying notes and auditor's report

                                     F-6
<PAGE>



Command Security Corporation

Statements of Cash Flows (Continued)
Years Ended March 31, 1998, 1997 and 1996




2.    SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES 
      (Continued)

        In November, 1996, the Company purchased certain guard service
        accounts for a total consideration of $144,966. The Company paid
        $36,241 and issued two short-term notes for $108,725. The cost of the
        guard service accounts and one of the related notes were subsequently
        reduced by $26,390 due to a retention adjustment. The issuance of the
        notes and subsequent retention adjustment have been excluded from the
        purchase of intangible assets in the statement of cash flows.

        In October, 1996, the Company purchased certain guard service
        accounts for a total consideration of $169,590. The Company paid
        $75,590 and issued 47,000 shares of its common stock at a capitalized
        value of $94,000. The issuance of common stock has been excluded from
        the purchase of intangible assets in the statement of cash flows.

        In August, 1996, the Company purchased certain guard service accounts
        for a total consideration of $606,164. The Company paid $115,000,
        issued two short-term notes for $191,164 and issued 150,000 shares of
        its common stock at a capitalized value of $300,000. The issuance of
        the notes and the common stock have been excluded from the purchase
        of intangible assets in the statement of cash flows.

        In July, 1996, the Company entered into a non-compete agreement with
        its former Treasurer for $180,000. This charge to intangible assets
        and credit to notes payable has been excluded from the statement of
        cash flows.

        In June, 1996, the Company negotiated a settlement with NSC
        Shareholder Trust in connection with a put offer given for common
        stock issued in consideration for the purchase of customer accounts.
        The resultant charge to paid-in capital and intangibles of $218,765
        and $3,512, respectively, and credit to notes payable of $222,277
        have been excluded from the statement of cash flows.

        In March, 1996, the Company purchased certain guard service accounts
        from a former service company for a total consideration of $224,764.
        A portion of the purchase price was paid via the assumption of
        long-term debt ($104,770) and cancellation of cash statement deficits
        ($42,013) and notes receivable ($7,650). These amounts have been
        excluded from the purchase of intangibles, proceeds from long-term
        debt, collection of notes and increase in amounts due to service
        companies.

        In January, 1996, the Company reached an agreement with a union
        covering certain guard service sites whereby it has converted amounts
        owed for past union contract health and welfare benefit obligations
        in the amount of $579,541 to a non interest bearing note payable over
        one and one-half years. The discounted amount of $536,103 has been
        reclassified to long-term debt and has been excluded from proceeds
        from other borrowings in the statement of cash flows.

        In December, 1995, the Company purchased certain guard service
        accounts and related assets for a total consideration of $201,497.
        The Company paid $120,254 and issued a short-term note for $81,243,
        payable in three quarterly installments. This amount has been
        excluded from the purchase of intangible assets in the statement of
        cash flows.

        In October, 1995, the Company sold its Boston office for a total
        consideration of $146,925. The Company received $75,000 in cash and a
        note for $71,925, which has been excluded from the proceeds from the
        sale of intangible assets in the statement of cash flows.



See accompanying notes and auditor's report

                                     F-7
<PAGE>



Command Security Corporation

Notes to Financial Statements
March 31, 1998, 1997 and 1996





1.    Business Description and Summary of Accounting Policies

      The following is a description of the principal business activities and
      significant accounting policies employed by Command Security
      Corporation.

        Principal business activities

          Command Security Corporation (the Company) is a uniformed security
          guard service company operating in New York, Connecticut,
          California, Florida, Illinois and New Jersey. In addition, the
          Company also provides other security guard companies (service
          companies) in various states with administrative services, such as
          billing, collection and payroll, for a percentage of the related
          gross revenue or gross profit.

        Estimates

          The preparation of financial statements in conformity with
          generally accepted accounting principles requires management to
          make estimates and assumptions that affect the reported amounts of
          assets and liabilities and disclosure of contingent assets and
          liabilities at the date of the financial statements and the
          reported amounts of revenue and expenses during the reporting
          period. Such estimates include provisions for uncollectible
          accounts and notes receivable, recoverability and attrition rates
          of purchased customer lists, and reserves for general liability and
          workers compensation claims. Actual results could differ from those
          estimates.

        Revenue recognition

          The Company records revenue as services are provided to its
          customers and to its service companies. Revenue consists primarily
          of security guard services and administrative services provided to
          service companies. Sale of service contracts to service companies
          is recognized as cash is received and is recorded as other income.
          Any proceeds given in the form of notes are deferred pending the
          collection of the principal portion of such notes.

        Cash and cash equivalents

          For purposes of the cash flows statement, the Company defines cash
          and cash equivalents as cash and investments with maturities of
          three months or less.

        Equipment

          Equipment is stated at cost. Depreciation is accumulated using
          the straight-line method over the estimated useful lives of the
          equipment ranging from 3 to 7 years.

        Intangible assets

          Intangible assets are stated at cost and consist primarily of
          customer lists which are being amortized on a straight-line basis
          over five to fifteen years. The life assigned to customer lists
          acquired is based on management's estimate of the attrition rate.
          The attrition rate is estimated based on historical contract
          longevity and management's operating experience. Recoverability is
          evaluated annually based on anticipated expected future cash flows
          and actual customer attrition. Due to a significant increase in the
          attrition rate in connection with some of the Company's New York
          area customer lists, in April, 1996, the Company reduced the
          estimated remaining lives of these customer lists from 15 years to
          5 years, resulting in an increase in amortization expense of
          $393,600 for the years ended March 31, 1998 and 1997.

        Advertising costs

          The Company expenses advertising costs as incurred. Amounts
          incurred for recruitment and general business advertising were
          $129,400, $140,600 and $106,400 for the years ended March 31, 1998,
          1997 and 1996, respectively.

                                     F-8



<PAGE>


Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996



1.    Business Description and Summary of Accounting Policies, continued

        Income/(loss) per common share

          In February 1997, the Financial Accounting Standards Board issued
          Statement No. 128 (SFAS 128), "Earnings Per Share," which is
          required to be adopted for periods ending after December 15, 1997.
          Under the new requirements for calculating basic earnings per
          share, the dilutive effect of potential common shares, if any, is
          excluded. No diluted earnings per share are presented because the
          effect of assumed issuance of common shares in connection with
          warrants and stock options outstanding and preferred stock
          conversions was antidilutive. The implementation of SFAS 128 had no
          effect on the calculation of the Company's earnings per share for
          the years ended March 31, 1997 and 1996.

        Accounting for stock options

          During the year ended March 31, 1997, the Company adopted the
          Financial Accounting Standards Board Statement No. 123 (SFAS 123),
          "Accounting for Stock Based Compensation." SFAS 123 provides
          companies with a choice to follow the provisions of SFAS 123 in the
          determination of stock-based compensation expenses or to continue
          with the provisions of APB 25, "Accounting for Stock Issued to
          Employees." The Company will continue to follow APB 25 and will
          provide pro forma disclosures as required by SFAS 123. SFAS 123 did
          not have an impact on the Company's financial condition or results
          of operations.


2.    Going Concern Matters and Management's Plans for Continued Operations

         The Company's financial statements have been presented on a going
         concern basis, which contemplates the realization of assets and the
         satisfaction of liabilities in the normal course of business. As
         shown in the financial statements, the Company's operations resulted
         in a net loss of $4,013,890 for the year ended March 31, 1998, and a
         working capital deficit at March 31, 1998, of $1,122,869. As
         described in Notes 6 and 9, the Company is in default on certain of
         its debt covenants and, as described in Notes 14 and 20, there is
         litigation and a contingency for which the outcomes are uncertain.
         These factors, among others, may indicate that the Company will be
         unable to continue as a going concern for a reasonable period of
         time.

         The Company's management is in the process of developing a national
         network of independent security guard companies in order to service
         clients with sites throughout the United States without incurring
         the costs of maintaining additional branch offices. Management
         believes that the implementation of this network will increase its
         ability to compete against larger national companies and
         significantly increase its profit margins. In addition, the Company
         has implemented a plan to actively seek rate increases from its
         existing clients and to sign new contracts in existing markets in
         order to realize better economies of scale. Furthermore, management
         has implemented a centralized purchasing function in order to better
         control operating costs.

         Although the results of these actions are uncertain, the Company
         believes that these steps will help the Company improve its
         operations and generate sufficient cash flow to improve its working
         capital and satisfy its cash requirements.


                                     F-9


<PAGE>


Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

3. Furniture and Equipment

<TABLE>
<CAPTION>

Furniture and equipment at March 31, consist of the following:
                                                                         
                                      1998                    1997
<S>                                   <C>                     <C>
Transportation equipment              $ 1,095,712             $   955,195
Security equipment                        438,311                 397,746
Office furniture and equipment          1,520,997               1,476,536
                                      -----------             -----------
                                        3,055,020               2,829,477
Accumulated depreciation                1,878,774               1,724,004
                                      -----------             -----------
                                      $ 1,176,246             $ 1,105,473
                                      ===========             ===========
</TABLE>

Depreciation expense for the years ended March 31, 1998, 1997 and
1996 was $386,905, $360,116 and $388,904, respectively, and includes
amortization of assets purchased under capital lease arrangements
(see Note 16).


4. Intangible Assets

Intangible assets at March 31, consist of the following:
                                                                              
<TABLE>
<CAPTION>
                                   1998                    1997
<S>                                <C>                     <C>
Customer lists                     $ 6,048,491             $ 7,713,983
Borrowing costs                        165,000                 165,000
Covenant not to compete                180,000                 180,000
Goodwill                                34,007                  34,007
                                   -----------             -----------
                                     6,427,498               8,092,990
Accumulated amortization             3,712,948               3,059,424
                                   -----------             -----------

                                   $ 2,714,550             $ 5,033,566
                                   ===========             ===========
</TABLE>

Amortization expense for the years ended March 31, 1998, 1997 and
1996, was $1,651,889, $1,773,599 and $1,198,928, respectively. During
the year ended March 31, 1998, the Company removed intangibles and
related accumulated amortization of $1,743,880 and $998,364,
respectively, from its accounts and recognized impairment losses of
$745,516 on its purchased customer lists due to lack of retention in
some of its branches. Management believes that the future expected
cash flows will not be sufficient to recover the remaining
unamortized costs associated with these lists. During the year ended
March 31, 1996, the Company recognized an impairment loss of $101,002
on certain purchased customer lists and recovered $64,688 in
connection with another purchased customer list previously written
off.

5. Other Assets

Other assets at March 31, consist of the following:

<TABLE>
<CAPTION>

                                                                              1998                    1997
<S>                                                                           <C>                     <C>
Restricted cash                                                               $ 1,040,853             $   813,430
Insurance deposits                                                                551,296                 469,858
Security deposits                                                                  99,420                  92,707
Other                                                                              10,110                  14,255
                                                                              -----------             -----------

                                                                              $ 1,701,679             $ 1,390,250
                                                                              ===========             ===========

</TABLE>

Restricted cash represents deposits for the benefit of the Company's
insurance carrier as collateral for workers compensation claims.
Insurance deposits represent estimated premium amounts returnable to
the Company over a period of two to seven years based on the excess
of premium deposits over actual workers compensation claims.

                                     F-10

<PAGE>
Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996


6. Short-Term Borrowings

Short-term borrowings at March 31, consist of the following:

<TABLE>
<CAPTION>

                                                                                1998                  1997
<S>                                                                             <C>                   <C>
Bank line of credit                                                             $ 6,616,928           $ 7,150,836
Various insurance financing arrangements,
 interest ranging from 7.04% to 8.53%                                                49,029               403,167
Other obligations                                                                    32,950               209,575
                                                                                -----------            ----------

                                                                                $ 6,698,907           $ 7,763,578
                                                                                ===========           ===========

</TABLE>

In February, 1995, the Company entered into an agreement with the
CIT Group/Finance, Inc. ("CIT") under a revolving loan and security
agreement. The agreement, as amended on January 30, 1997, provides
for a discretionary line of credit of up to 85% of eligible
accounts receivable, as defined, but in no event in excess of
$10,000,000. At March 31, 1998, the Company had used $6,616,928 of
this line, representing virtually 100% of its maximum borrowing
capacity. Interest is payable monthly at 1.5% over prime, or 10.0%
at March 31, 1998. The line is collateralized by customer accounts
receivable and substantially all other assets of the Company. The
term of the agreement is initially until February, 1999, with
automatic two year renewal terms thereafter.

The Company relies heavily on its revolving loan from CIT which
contains numerous non-financial covenants. As of March 31, 1998,
the Company was not in compliance with several of the non-financial
covenants.

7. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at March 31, consist of the following:

<TABLE>
<CAPTION>
                                                                                1998                  1997
<S>                                                                             <C>                   <C>
Trade accounts payable                                                          $   817,126           $   654,339
Payroll and related expenses                                                      2,165,737             2,187,132
Independent contractors                                                             163,867                 4,403
Insurance                                                                           361,937                18,925
Interest                                                                              5,480                37,160
Sales tax                                                                           119,392               249,411
Accrued professional fees                                                            60,000                50,000
Accrued loss contingencies                                                          174,000                   -0-
Liabilities assumed in acquisitions                                                  27,816                33,067
Other                                                                               155,403               107,685
                                                                                -----------           -----------

                                                                                $ 4,050,758           $ 3,342,122
                                                                                ===========           ===========

</TABLE>

As of March 31, 1998, the Company has accrued $174,000 for loss
contingencies in connection with certain labor claims that
management has determined are probable that a liability has
incurred.

8. Deferred Revenue

Deferred revenue of $391,685 included on the balance sheet at March
31, 1997, represents gain on the sale of certain of the Company's
service contracts and billings for services to service companies in
exchange for notes and interest thereon. These gains have been
deferred pending cash collections on the notes and elimination of
certain debt guarantees extended (see Note 14).

                                     F-11
<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

9. Long-Term Debt

Long-term debt at March 31, consists of the following:
 
<TABLE>
<CAPTION>
                                                                              1998                    1997

<S>                                                                           <C>                     <C>
NSC Shareholder Trust, due July, 1997, interest at 6%,
collateralized by common stock                                                $       -0-             $    88,911

32 B-J Pension, Health and Annuity Fund, due
July, 1997, net of imputed interest of $2,769                                         -0-                 126,018

Deltec Development Corporation, due February 24,
1999, interest at 14%<F1>                                                         375,000                 750,000

Gordon Robinett (Director), due October, 1999,
no interest, collateralized by related covenant                                    82,500                 135,000

Capital Resource Company, (five notes and one note)
due April, 1998, to June, 2001, interest at 14%, unsecured                        294,107                  81,246

Various installment loans due at various dates
through December, 2000, with interest ranging
from 3.8% to 15.90%                                                               540,144                 499,764

CIT Group/Credit Finance, Inc., due February 1, 2002
interest at prime plus 1.5%, currently 10.0%<F2>                                  391,667                 491,667
                                                                              -----------             -----------
                                                                                1,683,418               2,172,606
Less: Current maturities                                                        1,224,423                 977,372
                                                                              -----------             -----------

                                                                              $   458,995             $ 1,195,234
                                                                              ===========             ===========

<FN>
<F1> The term loan from Deltec Development Corporation ("Deltec"), payable
in quarterly installments of $93,750 plus interest at 14%
per annum, is collateralized by substantially all of the assets of
the Company and is subordinate to the CIT borrowings.

<F2> The term loan from CIT Group/Credit Finance, Inc., payable in
monthly installments of $8,333 plus interest at prime plus 1.5% per
annum, is collateralized with security pledged under the revolving
loan and security agreement (see Note 6).

</FN>
</TABLE>

As described in Note 6, the Company is in violation of certain debt
covenants of the debt agreement with CIT. The loan agreement with
Deltec also incorporates the CIT covenants. As such, all outstanding
balances from CIT and Deltec have been included in current
maturities of long-term debt as of March 31, 1998.

The aggregate amount of required principal payments of long-term
debt is as follows:

<TABLE>
<CAPTION>

<S>                                           <C>
Year ending: March 31, 1999                   $ 1,224,423
             March 31, 2000                       335,345
             March 31, 2001                       119,626
             March 31, 2002                         4,024
                                              -----------
                                              $ 1,683,418

</TABLE>

                                      F-12
<PAGE>


Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

10. Stockholders' Equity

Changes in the number of equity shares of the Company's preferred
and common stock for the years ended March 31, 1998, 1997 and 1996,
are as follows:

<TABLE>
<CAPTION>

                                                                   Preferred            Common           Treasury
                                                                   Stock                Stock            Stock
<S>                                                                <C>                  <C>              <C>
Balance at April 1, 1995                                              -0-               7,989,332        1,355,400

Issuance/(return) of escrowed common stock
  Accrued fees                                                                            152,774
  Retention settlement                                                                    (22,500)
                                                                   ------               ---------        ---------

Balance at March 31, 1996                                             -0-               8,119,606        1,355,400

Common stock issued                                                                       219,500

Issuance/(return) of escrowed common stock
  Note collateral                                                                         238,000
  Accrued fees                                                                           (152,774)
                                                                   ------               ---------        ---------
Balance at March 31, 1997                                             -0-               8,424,332        1,355,400

Transfer of preferred stock                                        10,567

Preferred stock dividend shares issued                                845

Common stock issued                                                                        57,447

Return of escrowed common stock
  Note collateral                                                                        (350,911)
  Retention adjustment                                                                   (117,325)
                                                                   ------               ---------        ---------

Balance at March 31, 1998                                          11,412               8,013,543        1,355,400
                                                                   ======               =========        =========
</TABLE>

11. Concentration of Risk

The Company extends credit to the various service companies for
which it administers billings, collection and payroll functions. At
March 31, 1998 and 1997 the Company had loans and advances
outstanding to current and former service companies of $10,000 and
$1,137,453, net of reserves of $1,194,110 and $909,007,
respectively. The notes are collateralized by customer lists and
other general intangibles in accordance with the service company
agreements. The service companies operate in New York, Florida,
Illinois, New Jersey, Texas, Virginia, Arizona, California,
Massachusetts and Washington.

Geographic concentrations of credit risk with respect to trade
receivables are primarily in the New York Metropolitan area
consisting of 45% and 40% of total receivables as of March 31, 1998
and 1997, respectively. The remaining trade receivables consist of a
large number of customers dispersed across many different geographic
regions. During the years ended March 31, 1998, 1997 and 1996, the
Company generated 31%, 24% and 23%, respectively, of its revenue
from the commercial airline industry. During the years ended March
31, 1998, 1997 and 1996, 52%, 38% and 33% of service fee revenue,
respectively, was earned from one service company. The Company's
remaining customers are not concentrated in any specific industry.

The Company maintains its cash accounts in commercial banks.
Accounts at each bank are guaranteed by the Federal Deposit
Insurance Corporation (FDIC) up to $100,000.

                                      F-13

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

12. Insurance Rebates

In January, 1997 and 1996, the Company received rebates of $598,139
and $603,033, respectively, on its workers' compensation policies
for the three year period ended September 30, 1995, based on a
favorable loss ratio experience. Such rebates are non-contractual
and are recorded when the amounts are ascertainable. As of October
1, 1995, the Company has procured a workers' compensation retro
insurance policy and pays premiums based on incurred losses and,
therefore, is no longer eligible for such rebates.

13. Self-Insurance

The Company adopted a partially self-insured health insurance
program that covers all eligible administrative personnel, effective
as of March 1, 1997. There is a maximum of $30,000 per year per
employee and an aggregate amount per year, based on the number of
participants (currently 103 employees, or $348,200), that the
Company can be responsible for. A stop-loss insurance policy covers
all claims in excess of the above amounts.

The Company has an insurance policy to cover workers compensation
claims in most states that the Company performs services. Annual
premiums are based on incurred losses as determined at the end of
the coverage period, subject to a minimum and maximum premium.
Insurance providers assist the Company in determining its estimated
liability for these claims.

The nature of the Company's business also subjects it to claims or
litigation alleging that it is liable for damages as a result of the
conduct of its employees or others. The Company insures against such
claims and suits through policies with third-party insurance
companies. Such policies have limits of $1,000,000 per occurrence
and $10,000,000 in the aggregate. In addition, the Company has
obtained an excess liability policy that covers claims for an
additional $30,000,000 in the aggregate ($25,000,000 prior to
October 1, 1997). The Company retains the risk for the first $50,000
per occurrence. Charges for general liability self-insurance
reserves of $900,128, $293,238 and $171,704, are included in cost of
sales for the years ended March 31, 1998, 1997 and 1996,
respectively.

Cumulative amounts estimated to be payable by the Company with
respect to pending and potential claims for all years in which the
company is liable under its self-insurance retention and retro
workers compensation policies have been accrued as liabilities. Such
accrued liabilities are necessarily based on estimates; thus, the
company's ultimate liability may exceed or be less than the amounts
accrued. The methods of making such estimates and establishing the
resultant accrued liability are reviewed continually and any
adjustments resulting therefrom are reflected in current earnings.

14. Contingent Liabilities

The Company has guaranteed certain installment loans extended to
various service companies and customer list purchasers by Capital
Resources Company. The total outstanding balance of such loans as of
March 31, 1998, was approximately $627,800.

In May, 1996, a complaint was filed in Queens County Civil Court by
three former employees alleging emotional distress, anguish, mental
distress and injury to their professional reputation due to
retaliatory discharge and related matters. Plaintiffs each seek $2
million for compensatory damages and $2 million in punitive damages
in addition to payment of overtime wages of $25,000. The Company's
customer, also a defendant and a former employer, has engaged
counsel representing all defendants. At this time the Company is
unable to estimate the possible loss, if any, that may be incurred
as a result of this action. The ultimate outcome may or may not have
a material impact on the Company's financial position or results of
operations.

The Company has been named as a defendant in several other
employment related claims, including claims of sexual harassment by
current and former employees, which are currently under
investigation by the New York State Division of Human Rights. At
this time the Company is unable to determine the impact on the
financial position and results of operations that these claims may
have should the investigation conclude that they are valid.

                                     F-14
<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

14. Contingent Liabilities, continued

In August, 1997, a complaint was filed in Los Angeles County
Superior Court by six former employees alleging discrimination,
wrongful termination, breach of employment contract and intentional
infliction of emotional distress. The complaint alleges that
plaintiffs have suffered damages in excess of $1 million. After
filing the complaint, the plaintiffs, through counsel, agreed to
submit the dispute to binding arbitration and a request for
dismissal, without prejudice, was filed with the Court. At this time
the Company is unable to estimate the possible loss, if any, that
may be incurred as a result of such arbitration. The ultimate
outcome of such arbitration may or may not have a material impact on
the Company's financial position or results of operations.

The Company has been charged with unfair labor practices by the
Service Employees International Union 32B-J, claiming the Company
refused to bargain with the Union and that the Company unilaterally
changed terms and conditions of employment without bargaining. The
charge seeks back dues, wages and health and welfare contributions
for all employees covered by the collective bargaining agreement
between 32B-J and the Company. The matter is being held in
suspension pending a decision on a similar case before the National
Labor Relations Board. At this time the Company is unable to
estimate the impact on the financial position and results of
operations as a result of a decision on such case. The ultimate
outcome may or may not have a material impact on the Company's
financial position or results of operations.

The Private Placement Memorandum issued in connection with the
Company's 1993 Private Placement and the interim financial reports
for the first three quarters in the fiscal years ended March 31,
1994 and 1995, filed by the Company contained financial information
which has since been restated. A legal action has been filed against
the Company and is described in greater detail below. It includes
claims based on the restatements. It is possible that other
purchasers of Units pursuant to the 1993 offering and the purchasers
of shares in connection with the offerings that were consummated in
February, 1995, may make further claims against the Company,
alleging, as the basis, among other possible claims the
above-mentioned restatements.

On or about December 4, 1997, an outside shareholder and four of the
Company's directors (Sands, P. Kikis, Saunders,and T. Kikis) commenced 
an action in the Supreme Court of the State of New York, County of 
New York (Index No.606166/97 against the other four directors (Vassell, 
Robinett, Nekos and Miller), the Company's outside corporate and 
securities counsel and the Company itself in a lawsuit characterized 
as a derivative action. The complaint alleges that one or more of the 
defendant-directors engaged in improper activities, including 
ultra-vires acts, breach of fiduciary duty, fraud against the Company, 
constructive fraud, waste of corporate assets and concealment of 
information from the plaintiff-directors regarding the Company's 
earnings, lacked power to enter into an employment agreement 
on behalf of the Company with Mr. Robinett, and entered into service 
contracts with financially unstable companies without performing due 
diligence. The complaint further alleges that the Company has failed 
to appoint a replacement to the office of president and that the
directors have entered into a shareholder agreement which is violative of
public policy. Plaintiffs seek the award of money damages in an amount which
is "not less than" $11 million from the individual defendants, a declaratory
judgment that the shareholder agreement is void, an order for an accounting,
certain other injunctive relief and attorneys' fees and disbursements.

The Company has interposed an answer denying the allegations contained
in the complaint. The individual defendants have stated that they believe the
allegations are completely without merit and intend to vigorously defend
against each and every claim. The Company's Certificate of Incorporation and
the Business Corporation Law of New York provide for indemnification of
officers and directors with respect to damages and legal fees incurred in
connection with lawsuits against them arising by reason of serving the
Company. Due to the fact that certain members of the board have chosen to
participate as plaintiffs in this lawsuit, the Company may not have coverage
under its officers and directors liability insurance policy. The
defendant-directors intend to seek indemnification, and have received
advancements of legal fees incurred in connection with their defense, from
the Company. Through March 31, 1998, the Company has expended approximately
$120,000 in legal fees in defense of this matter on its own behalf as well as
on behalf of the defendant officers and directors. An additional $65,000 in
legal fees have been incurred through May 31, 1998. On or about March 25,
1998, the plaintiffs filed a motion for the appointment of a temporary
receiver. On June 5, 1998, the Court ordered the appointment of a temporary
receiver, but prior to the order taking effect, the parties agreed to a
stipulation pursuant to which Franklyn H. Snitow, Esq., was appointed acting
President and Chief Executive Officer and acting ninth Board member during
the pendency of the defendants' appeal to the Appellate Division of the
decision to appoint a receiver. Based on the stipulation, the defendants'
request to the Appellate Division for a stay pending the appeal of the order
appointing the receiver was granted. At this time the Company is unable to
reasonably estimate the potential impact on the Company's financial condition
and results of operations from this lawsuit.

                                     F-15
<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

15. Deferred Stock Compensation Expense

In May 1990, the President (now Chairman of the Board) and then sole
shareholder of the Company sold 43,000 shares of his stock in the
Company to the then Treasurer of the Company at a price below that
of the anticipated public offering. As a result, the Company
recognized deferred compensation expense of $129,000 and has
amortized the deferred cost over five years, the vesting period,
with a corresponding credit to paid-in capital. At March 31, 1996,
the amount was fully amortized.

16. Lease Commitments

The Company is obligated under various operating lease agreements
for office space, equipment and auto rentals. Rent expense under
operating lease agreements approximated $605,000, $631,000 and
$778,000, for the years ended March 31, 1998, 1997 and 1996,
respectively.

The Company leases certain equipment and vehicles under agreements
which are classified as capital leases. Most equipment leases have
purchase options at the end of the original lease term. Cost and
related accumulated depreciation of leased capital assets included
in furniture and equipment at March 31, 1998, are $345,444 and
$120,409 and at March 31, 1997, $355,054 and $95,960, respectively.

The future minimum payments under long-term noncancellable capital
and operating lease agreements are as follows:

<TABLE>
<CAPTION>
                                             Capital               Operating
                                             Leases                Leases
<S>                                          <C>                   <C>
Year ending: March 31, 1999                  $    85,304           $   294,917
             March 31, 2000                       60,251               247,328
             March 31, 2001                       17,899               204,807
             March 31, 2002                        2,686               140,270
             March 31, 2003                          -0-                17,295
                                             -----------           -----------
                                                 166,140           $   904,617
                                                                   ===========
             Amounts representing interest       (22,697)
                                             -----------
                                             $   143,443
                                             ===========
</TABLE>

17. Stock Option Plan and Warrants

In May, 1990, the Company's Board of Directors and stockholders
approved the adoption of a qualified stock option plan. Under the
option plan, substantially all employees are eligible to receive
options to purchase up to an aggregate of 107,500 shares at an
exercise price which cannot be less than the fair market value of the
shares on the date the options are granted.

The Company issued warrants to its former Treasurer to purchase
107,500 shares of its common stock at an exercise price of $5 per
share. In July, 1996, the exercise price of these warrants was
adjusted to $2.50 and the expiration date extended to July, 2000.

On April 8, 1991, as amended on June 18, 1991, the Board of Directors
approved the issuance to each of the Company's President (now
Chairman of the Board) and former Treasurer, for $100, a five-year
warrant to purchase 175,000 and 60,000 shares of common stock,
respectively, at an exercise price of $3.375 per share, the market
value at the time of the grant. The warrants vested on March 31,
1992. The exercise price was adjusted to $3.25, fair value on date of
adjustment, and the expiration date extended to April, 1998, during
fiscal 1994. The exercise price for the warrant extended to the
former Treasurer was adjusted again in July, 1996 to $2.50 per share
and the expiration date extended to July, 2000.

                                     F-16

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

17. Stock Option Plan and Warrants, continued

In May 1992, the Board of Directors approved the issuance to the
Company's Chairman, former Treasurer and Board member a five year
warrant to purchase 125,000, 60,000 and 10,000 shares of common
stock, respectively, at an exercise price of $3.88 per share, the
fair market value at the time of the grant. The exercise price was
adjusted to $3.25, the fair value on date of adjustment, and the
expiration date extended to May, 1999, during fiscal 1994. The
exercise price for the warrant extended to the former Treasurer was
adjusted again in July, 1996 to $2.50 per share and the expiration
date extended to July, 2000.

Pursuant to the 1993 Private Placement (see Note 20), the Company
issued Unit Warrants to purchase an aggregate of up to 800,000 shares
to investors and warrants to purchase 160,000 shares to the placement
agent. Each Unit Warrant represents the right to purchase one-half of
a share at a price of $4.50 per full share. The placement agent
warrants are exercisable at $2.50 per share. The Company has the
right to redeem the Unit Warrants at $0.10 per warrant at any time
after April 27, 1994, if, at any time, the mean of the closing market
price quotations for the shares over 20 consecutive trading days is
at least $6.00 or the closing market price quotations for the shares
is at least $6.00 for 10 consecutive trading days. During the fiscal
year ended March 31, 1995, the exercise price of the Unit Warrants
was adjusted to $3.50 per full share, the fair value on the date of
adjustment. As of March 31, 1998, the options have expired.

The Company entered into a Consultant's Agreement dated November 1,
1993, under which the Company has agreed to issue stock or warrants
in exchange for consulting services. The aggregate value of such
stock or warrants to be granted will not exceed $300,000. During the
fiscal year ended March 31, 1994, the Company issued warrants for
200,000 shares and in July, 1994 issued additional warrants for
100,000 shares. The warrants expired in July, 1997, however, the
Company has reserved 150,000 shares of common shares to provide the
consultant with up to $300,000 of compensation. During the year ended
March 31, 1998, $85,979 has been paid in cash, reducing the stock to
be released to a value not to exceed $214,021. As of March 31, 1998,
no shares of common stock have been released.

On December 16, 1993, the Company granted to the Chairman of the
Board a five-year warrant for 500,000 shares of common stock at an
exercise price of $3.75, the fair value at time of grant, for
services rendered in connection with the ISS acquisition. On March
31, 1995, the Chairman relinquished and waived his right to purchase
275,000 shares underlying this warrant. The warrant expires in
December, 1998.

On September 12, 1994, the Company entered into a consulting
agreement with a firm owned by a member of the Company's Board of
Directors to provide stockholder relations for a term of one year. In
conjunction with this agreement, the Company issued certain employees
of this firm warrants to purchase up to 100,000 shares of common
stock, exercisable through September 30, 1997, at exercise prices of
$3.00 per share. As of March 31, 1998, all of these warrants have
expired.

On September 28, 1994, the Company issued a warrant for 25,000 shares
of common stock exercisable at $3.63 per share in connection with the
signing of a non-employer of record service agreement to provide
scheduling, payroll, billing and receivable financing services for an
independent guard service company. The warrant expired in October,
1997.

On February 24, 1995, the Company issued warrants for 250,000 shares
of common stock to a firm owned by a member of the Company's Board of
Directors and warrants for 50,000 shares of common stock to a lender
who provides the Company's working capital line of credit,
respectively, in connection with the financing for the acquisitions
of the security guard business of United Security Group Inc. The
waarants issued to the firm expired in February, 1998. The warrants
issued to the lender are exercisable at $2.10 per share and expire in
February 2001.

On October 4, 1996, the Company issued warrants for 35,000, 150,000,
10,000 and 10,000 shares of common stock to the Company's then Chief
Financial Officer and three Board members, respectively. The warrants
are exercisable at $1.875 and expire on September 30, 2001.

On November 25, 1996, warrants to purchase 50,000 shares of common
stock were subscribed to for $500 by the Company's public relations
firm. The warrants are exercisable at $2.25 per share and expire in
November, 2001.

Certain of the option and warrant agreements contain anti-dilution
adjustment clauses.

                                     F-17

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

17.   Stock Option Plan and Warrants, continued

The following is a summary of activity related to all Company stock
option and warrant arrangements:

<TABLE>
<CAPTION>

                                     Options                          Warrants

                           Exercise          Number of      Exercise          Number of
                           Price             Shares         Price             Shares
<S>                        <C>               <C>            <C>               <C>
Outstanding at
  April 1, 1995            $2.25<F1>-$5.00   167,500        $2.10-$6.00        2,350,000

Expired/Canceled                      5.00    (7,500)              6.00          (75,000)
                           ---------------  --------        -----------        ---------

Outstanding at
  March 31, 1996            2.25    - 2.50   160,000         2.10- 3.75        2,275,000

Granted                                                      1.87- 2.25          255,000
                           ---------------  --------        -----------        ---------

Outstanding at
  March 31, 1997            2.25    - 2.50   160,000         1.87- 3.75        2,530,000

Expired                                                      1.87- 2.25       (1,570,000)
                           ---------------  --------        -----------       ----------

Outstanding at
  March 31, 1998           $2.25    -$2.50   160,000        $1.87-$3.75          960,000
                           ===============  ========        ===========       ==========

<FN>
<F1> Adjusted
</FN>
</TABLE>

At March 31, 1998, there were 160,000 and 960,000 options and
warrants outstanding, respectively, exercisable at prices ranging
from $1.87 to $3.75, and 1,167,500 shares reserved for issuance
under all stock arrangements.

Significant option and warrant groups outstanding at March 31,
1998, and the related weighted average exercise price and life
information are as follows:

<TABLE>
<CAPTION>
                                                                  Weighted             Weighted
                             Options/            Options/         Average              Average
Range of                     Warrants            Warrants         Exercise             Remaining
Exercise Price               Outstanding         Exercisable      Price                Life (years)

<S>                          <C>                 <C>              <C>                  <C>
$1.875                         205,000             205,000        $1.875               3.50
 2.10   to   2.50              380,000             380,000         2.380               2.07
 3.00   to   3.50              310,000             310,000         3.250                .76
             3.75              225,000             225,000         3.750                .71
                             ---------           ---------
 1.875  to   3.75            1,120,000           1,120,000         2.804               2.10
                             =========           =========

</TABLE>

As disclosed in Note 1, the Company continues to follow the
provisions of APB 25, "Accounting for Stock Issued to Employees,"
when determining the value of stock based compensation.
Accordingly, no compensation expense has been recognized for its
stock based compensation. If the Company had used the fair value
method of accounting for stock based compensation, there would have
been no effect on the net loss of the Company for the year ended
March 31, 1998. For the year ended March 31, 1997, net income would
have been reduced by approximately $45,000, or $.01 per share. The
impact of the fair value method takes into account options and
warrants granted since April 1, 1995. The weighted fair value of
options and warrants granted during the year ended March 31, 1997,
was $.18. There were no options or warrants issued during the years
ended March 31, 1998 or 1996. For the year ended March 31, 1997,
the fair value was estimated using the exercise price on the date
of the grant and the following assumptions: risk free interest rate
of 5.41%, volatility of 64.30% and a dividend yield of 0.00%.

                                      F-18

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

18. Income Taxes

Income tax expense/(benefit) for the years ended March 31 consists
of the following:

<TABLE>
<CAPTION>

                               1998               1997            1996
<S>                            <C>                <C>             <C>
Current:
  Federal                      $    -0-           $(181,066)      $     -0-
  State and local                   -0-                 -0-             -0-
                               --------           ---------       ---------
                                    -0-            (181,066)            -0-
Deferred:
  Federal                       181,283              28,400        (209,680)
  State and local                78,552              12,306         (90,861)
                               --------           ---------       ---------
                                259,835              40,706        (300,541)
                               --------           ---------       ---------

Income tax expense/(benefit)   $259,835           $(140,360)      $(300,541)
                               ========           =========       =========

</TABLE>

The deferred tax expense for March, 1998, represents an increase in
the beginning-of-year valuation allowance for deferred tax assets.
The current income tax benefit for March, 1997, consists of the
reversal of a previously established allowance in connection with
certain Federal net operating loss carry-backs.

The differences (expressed as a percentage of pretax income)
between the statutory Federal income tax rate and the effective
income tax rate as reflected in the accompanying statements of
operations are as follows:

<TABLE>
<CAPTION>

                                                      1998              1997                1996

<S>                                                   <C>               <C>                 <C>
Statutory federal income tax rate                      34.0              34.0                 34.0
State and local income taxes,
  net of federal benefit                                9.8               9.8                  9.8
Valuation allowance and reserves                      (50.7)            (82.9)              (178.0)
Permanent differences                                  (0.5)             (6.2)                (8.2)
                                                      -----             -----               ------

  Effective tax rate                                   (7.4)%           (45.3)%             (142.4)%
                                                      =====             =====               ======
</TABLE>

The significant components of deferred tax assets and liabilities
as of March 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>

                                          1998                        1997

<S>                                       <C>                         <C>
Current deferred assets:
  Accounts receivable                     $   150,769                 $    98,377
  Accrued expenses                            272,459                     269,404
                                          -----------                 -----------
                                              423,228                     367,781
  Valuation allowance                        (423,228)                   (367,781)
                                          -----------                 -----------

    Net current deferred asset            $       -0-                 $       -0-
                                          ===========                 ===========

Non-current deferred assets/(liabilities):
  Notes receivable                        $       -0-                 $   312,608
  Equipment                                  (100,280)                    (79,138)
  Intangible assets                         1,196,499                     591,649
  Self-insurance                              345,638                     188,693
  Deferred revenue                                -0-                      99,127
  Net operating loss carryover              1,757,431                     527,551
                                            3,199,288                   1,640,490
    Valuation allowance                    (3,199,288)                 (1,380,655)
                                          -----------                 -----------

      Net non-current deferred asset      $       -0-                 $   259,835
                                          ===========                 ===========

</TABLE>

The valuation allowance increased by $1,874,080 during the year
ended March 31, 1998 and decreased by $429,464 and $300,541 during
the years ended March 31, 1997 and 1996, respectively. Federal and
State net operating loss carry-overs were approximately $3,709,000
and $4,093,200, respectively, at March 31, 1998. They begin to
expire in 2010.

                                     F-19

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

19. Service Agreements

The Company has entered into agreements with various security guard
companies (service companies) whereby the Company administers the
billing, collection and payroll functions and the service companies
administer the operations of the respective guard contracts. Under
these arrangements, the Company receives title to all the
receivables generated and under some arrangements may become the
employer of record for all applicable guard personnel. All
contracts contain renewal provisions based on the volume of
business generated by the respective service companies.

The Company records the billings for service company contracts in
accounts receivable with a corresponding liability, "due to service
companies," net of the Company's administrative fees and payroll
and related expenses paid by the Company, at the time the services
are provided to the service companies' customers. The
administrative fees charged to the service companies are included
in "service contract revenue" on the Company's statements of
operations.

The following is a summary of the service companies' activities for
the years ended March 31, 1998, 1997 and 1996, respectively, the
components of which have been excluded from the Company's financial
statements:

<TABLE>
<CAPTION>

                                              1998                    1997                   1996

<S>                                           <C>                     <C>                    <C>
Service companies' guard
  service revenue                             $17,913,206             $17,241,188            $20,267,157
Cost of revenue                                13,286,869              13,757,683             16,657,284
                                              -----------             -----------            -----------
Gross profit                                    4,626,337               3,483,505              3,609,873
Service companies' share of gross profit        3,551,906               2,455,187              2,365,104
                                              -----------             -----------            -----------
                                                1,074,431               1,028,318              1,244,769
Other service revenue                             376,161                 442,995                275,034
                                              -----------             -----------            -----------

Service contract revenue                      $ 1,450,592             $ 1,471,313            $ 1,519,803
                                              ===========             ===========            ===========

</TABLE>

The Company has extended various operating loans to these service
companies. Interest charged varies between 2% above the prime
lending rate of the Chase Manhattan Bank and 14% per annum.
Principal repayment terms extend through the fiscal year ending
March 31, 2002. In addition, the Company has guaranteed bank loans
to certain service companies (see Note 14).

20. Private Placements

During January and February, 1995, the Company completed several
private equity offerings including the issuance of 9,061 shares of
convertible preferred stock with a liquidation value of $165 per
share for a total of $1,495,065 (each share of preferred stock is
convertible into 100 shares of the Company's common stock, provides
a yield of 8% per annum and is redeemable upon certain future
financing events); 950,002 shares of common stock for a total of
$1,377,500 pursuant to an offering exempt from registration under
Regulation D; and 1,137,506 shares of common stock for a total of
$1,287,174 pursuant to various offerings exempt from registration
under Regulation S promulgated under the Securities Act of 1933. In
addition, the Company issued warrants to purchase 250,000 shares to
the placement agent. Proceeds to the Company, net of placement
agent fees of $356,000 and offering costs of $281,397, amounted to
$3,522,342.

In October, 1993, the Company completed a private placement of
1,600,000 units, at $2.50 per unit, each consisting of one share of
the Company's common stock and one three year redeemable warrant to
purchase one-half common share. In addition, the Company issued
warrants to purchase 160,000 shares to the placement agent (see
Note 17). Proceeds to the Company, net of placement agent fees of
$520,000 and offering costs of $156,926, amounted to $3,323,074.
The Company was obligated to register the shares issued in
connection with this offering by February, 1994, and has attempted
to do so. The registration, however, was not completed until
November, 1995, and in December, 1994, the Company authorized the
issuance of an additional 400,000 shares to the initial investors
in accordance with the provisions of the private placement
agreement.

In connection with the above private placement offerings, the
Company has certain risks that are described in Note 14.

                                     F-20

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

21. Preferred Stock

The Board of Directors has been authorized to issue preferred stock
in series and to fix the number, designation, relative rights,
preferences and limitations of each series of such preferred stock.
Of the 1,000,000 shares authorized for issuance, 11,412 have been
designated as Series A Convertible Preferred Stock ("Series A").

The Series A shareholders are entitled to receive annual dividends
equal to 8% of the liquidation value of their shares, payable by the
issuance of additional Series A stock until such time as all amounts
due on the Deltec debt (see Note 9) have been paid in full and then
in cash thereafter. During the years ended March 31, 1998, 1997 and
1996, 845, 782 and 724 Series A shares have been issued, representing
dividends accrued through February 24, 1998, 1997 and 1996,
respectively. Accrued dividends at March 31, 1998, approximated 88
shares of Series A stock ($14,400). Upon liquidation or redemption
the Series A shareholders are entitled to $165 per share.

Any holder of Series A shares may at any time convert their shares
into common stock of the Company at a conversion ratio of 100 shares
of common stock for each share of Series A stock.

The Company was obligated to redeem any unconverted Series A shares
at such time as the Deltec debt is paid in full. However, no
redemption was required until all outstanding warrants issued in the
Company's October 1993 private placement were exercised. All such
warrants expired in October, 1997, and the Company is no longer
obligated to redeem the Series A preferred stock. Consequently, the
preferred stock has been transferred and included with stockholders'
equity on the balance sheet as of March 31, 1998.

22. Fair Value

The fair value of the Company's long-term notes receivable is based
on the current rates offered by the Company for notes of the same
remaining maturities. The fair value of the Company's long-term debt
is based on the borrowing rates currently available to the Company
for loans with similar terms and average maturities. At March 31,
1998 and 1997, the fair value of long-term notes receivable and
long-term debt approximates their carrying amounts.

23. Related Party Transactions

The Company's former general counsel is also a member of the Board of
Directors. Legal fees paid amounted to $6,238, $4,202 and $1,826 for
the years ended March 31, 1998, 1997 and 1996, respectively.

A director of Deltec International SA, the parent of Deltec
Development Corporation, the subordinated debt lender to the Company
(see Note 9), is also a member of the Board of Directors of the
Company. Interest paid in connection with this debt amounted to
$85,312, $137,813 and $192,318 for the years ended March 31, 1998,
1997 and 1996, respectively. In addition, Deltec acquired 3,000
shares of the Company's preferred stock at a cost of $495,000 (see
Note 21). Dividends accrued and paid in additional shares of
preferred stock for the years ended March 31, 1998, 1997 and 1996,
amounted to $46,035, $42,735 and $39,600, or 279, 259 and 240 shares,
respectively. Expenses of $28,100 and $28,670 were paid on behalf of
this director as compensation for services rendered for the years
ended March 31, 1998 and 1997, respectively.

24. Operating Licenses

The Company is subject to regulation and licensing by various state
government agencies. The Chairman of the Company currently holds
virtually all of the required state operating licenses. In the event
the Company were to lose the services of the Chairman, an officer of
the Company would have to obtain the necessary licenses, or the
Company would have to hire someone who holds the required licenses
for the Company to continue to conduct its business.

                                     F-21

<PAGE>



Command Security Corporation

Notes to Financial Statements, Continued
March 31, 1998, 1997 and 1996

25. Acquisitions

During fiscal years 1998 and 1997, the Company acquired several
smaller security guard businesses, principally customer lists, for an
aggregate final cost of approximately $378,000 and $603,000,
respectively, payable in cash, notes and Company stock. The Company
accounted for these acquisitions using the purchase method. The
financial statements include the operations of these businesses from
the respective acquisition dates. The customer lists are being
amortized over a five year period, the estimated economic lives of
the lists. Common stock issued in connection with the 1997
acquisitions amounted to 137,122 shares with a fair value of $153,600
on date of issue. No stock was issued in connection with the fiscal 
1998 acquisitions.

26. Year 2000 Conversion

The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. Software failures
due to processing errors potentially arising from calculations using
the Year 2000 date are known risks. The Company is addressing this
risk to the availability and integrity of financial systems and the
reliability of operational systems. The Company has evaluated the
risks and costs associated with this problem and completed the
initial assessment. The cost of achieving Year 2000 compliance is
estimated to be between $29,000 and $36,000. The Company expects to
complete the project in the fourth quarter of 1998 and will expense
theses costs as they are incurred.

27. Fourth Quarter Adjustments

During the quarter ended March 31, 1998, the Company had fourth
quarter adjustments which included a write down of the carrying value
of intangibles ($745,516), an increase in the valuation allowance for
the beginning-of-the-year balance of deferred taxes ($259,835) and an
accrual for loss contingencies in connection with certain labor
claims ($174,000). The aggregate effect of such adjustments was to
increase net loss and net loss per share by approximately $1,179,000
and $.18, respectively.

                                     F-22

<PAGE>

<TABLE>

                         COMMAND SECURITY CORPORATION

                 SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS

<CAPTION>

                                                                Against
                                                                Amounts                              Uncollectible
                                      Balance at   Charged to   Due         Charged                  Accounts       Balance
                                      Beginning    Costs and    to Service  to Other                 Written        at End of
                                      of Period    Expenses     Companies   Accounts     Recoveries  Off            Period

<S>                                   <C>          <C>          <C>         <C>          <C>         <C>            <C>
Year ended March 31, 1998: 
  Deducted from asset accounts:
    Allowance for doubtful accounts 
     receivable - current maturities  $  619,621   $ 376,404    $119,847    $            $   5,837   $393,688       $  716,347

    Allowance for doubtful notes 
     receivable - current maturities     450,653     180,360                  37,867<F1>     1,978    393,187          273,715

    Allowance for other doubtful 
     receivables - current maturities    104,138     837,129       7,000     196,829<F1>     7,000    113,777        1,024,319

    Allowance for doubtful notes 
     and long-term receivables,
      net of current maturities          785,360      57,258                               230,778    611,839              -0-



Year ended March 31, 1997: 
  Deducted from asset accounts:
    Allowance for doubtful accounts 
     receivable - current maturities     842,006     316,828      47,024                    90,011    496,226          619,621

    Allowance for doubtful notes 
     receivable - current maturities     362,164      43,565                  11,000<F2>                               450,653
                                                                              33,924<F3>
    Allowance for other doubtful 
     receivables - current maturities     17,372      86,766                                                           104,138

    Allowance for doubtful notes and 
     long-term receivables,
      net of current maturities                      737,436                 (11,000)<F2>                              785,360
                                                                              58,924<F3>

Year ended March 31, 1996: 
  Deducted from asset accounts:
    Allowance for doubtful accounts 
     receivable - current maturities     903,899     203,307      57,285      58,601<F2>              381,093          842,006

    Allowance for doubtful notes 
     receivable - current maturities     340,045                              22,119<F2>                               362,164

    Allowance for other doubtful 
     receivables - current maturities    122,513                  69,280     (54,557)<F2>   18,253    101,611           17,372

    Allowance for doubtful notes and 
     long-term receivables,
      net of current maturities        1,650,272     150,000     115,616     (26,170)<F2>  220,918    931,364          737,436



<FN>

<F1> Represents deferred revenue reduction related to non-performing
receivable.

<F2> Represents reclassifications between short-term and long-term 
receivables.

<F3> Represents retention and other adjustments related to customer list
purchases.
</FN>
</TABLE>

                                        F-23


Exhibit 24

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that each of the undersigned directors and 
officers of Command Security Corporation, (the "Company"), hereby constitutes 
and appoints Franklyn H. Snitow, his true and lawful attorney of 
attorney-in-fact, with full power of substitution and resubstitution, for 
him and his name, place, and stead, to sign on his behalf as a director 
or officer, or both, as the case may be, of the Company Form 10-K pursuant 
to the Securities Act of 1934 and to sign any and all amendments to such 
From 10-K, and to file the same, with all exhibits thereto, and other 
documents in connection therewith, with the Securities and Exchange 
Commission or any state regulatory authority, granting unto said attorney 
or attorney-in-fact, and each of them, full power and authority to do and 
perform each and every act and thing they deem necessary, advisable or 
appropriate in connection therewith, as fully to all intents and purposes 
as they might or could do in person, hereby ratifying and confirming all 
that said attorney or attorneys-in-fact or any of them or their substitute 
or substitutes may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be signed in multiple counterparts all of which, 
taken together, shall constitute one original Power of Attorney, Faced 
signatures of the respective Directors shall be deemed to be originals 
for purposes of this Power of Attorney.
 
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of 
the 13th day of July, 1998.

/s/
William C. Vassell, Chairman of the Board and Director

/s/
Peter T. Kikis
Director

/s/
Gregory J. Miller
Director

/s/
Thomas P. Kikis
Director

/s/
Gordon Robinett
Vice Chairman of the Board

/s/
Peter J. Nekos
Director

/s/
Steven B. Sands
Director

/s/
Lloyd H. Saunders, III
Director



                        EXHIBIT 27 - FINANCIAL DATA SCHEDULE

[ARTICLE]
[MULTIPLIER] 1,000
[CURRENCY] U.S. DOLLARS
<TABLE>
<S>                                                                               <C>
[PERIOD-TYPE]                                                                                   YEAR
[FISCAL-YEAR-END]                                                                        MAR-31-1998
[PERIOD-START]                                                                           APR-01-1997
[PERIOD-END]                                                                             MAR-31-1998
[EXCHANGE-RATE]                                                                                 1.00
[CASH]                                                                                          (450)
[SECURITIES]                                                                                       0
[RECEIVABLES]                                                                                 12,509
[ALLOWANCES]                                                                                     990
[INVENTORY]                                                                                        0
[CURRENT-ASSETS]                                                                              12,105
[PP&E]                                                                                         3,055
[DEPRECIATION]                                                                                 1,879
[TOTAL-ASSETS]                                                                                17,697
[CURRENT-LIABILITIES]                                                                         13,228
[BONDS]                                                                                        8,526
[PREFERRED-MANDATORY]                                                                              0
[PREFERRED]                                                                                    1,883
[COMMON]                                                                                           1
[OTHER-SE]                                                                                     1,250
[TOTAL-LIABILITY-AND-EQUITY]                                                                  17,697
[SALES]                                                                                            0
[TOTAL-REVENUES]                                                                              53,247
[CGS]                                                                                              0
[TOTAL-COSTS]                                                                                 44,457
[OTHER-EXPENSES]                                                                                   0
[LOSS-PROVISION]                                                                               1,451
[INTEREST-EXPENSE]                                                                             1,069
[INCOME-PRETAX]                                                                               (3,754)
[INCOME-TAX]                                                                                     260
<INCOME-CONTINUED>                                                                            (4,014)
[DISCONTINUED]                                                                                     0
[EXTRAORDINARY]                                                                                    0
[CHANGES]                                                                                          0
[NET-INCOME]                                                                                  (4,014)
<EPS-BASIC>                                                                                     (.62)
[EPS-DILUTED]                                                                                   (.62)
</TABLE>