<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 2001

                                       OR

( )  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: 0-26580

                        AMERICAN COIN MERCHANDISING, INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      84-1093721
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

                  5660 CENTRAL AVENUE, BOULDER, COLORADO 80301
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (303) 444-2559
                         (Registrant's telephone number)

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

        ASCENDING RATE CUMULATIVE TRUST PREFERRED SECURITIES, LIQUIDATION
                            AMOUNT $10 PER SECURITY

     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 definitive 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 March 22, 2002, the registrant had 1,000 shares of its $0.01 par
value common stock outstanding. None of the registrant's common stock is held by
non-affiliates of the registrant.



<PAGE>



                        AMERICAN COIN MERCHANDISING, INC.

                           ANNUAL REPORT ON FORM 10-K

                                DECEMBER 31, 2001

                                TABLE OF CONTENTS


<Table>
<Caption>
                                                                                                                  Page

<S>                                                                                                               <C>
                                                         PART I

     Item    1     Business.....................................................................................    3

     Item    2     Properties...................................................................................   10

     Item    3     Legal Proceedings............................................................................   10

     Item    4     Submission of Matters to a Vote of Security Holders..........................................   10

                                                        PART II

     Item    5     Market for Registrant's Common Equity and Related Stockholder Matters.......................    11

     Item    6     Selected Financial Data.....................................................................    11

     Item    7     Management's Discussion and Analysis of Financial Condition and Results of Operations.......    12

     Item    8     Financial Statements and Supplementary Data.................................................    20

     Item    9     Changes in and disagreements with Accountants on Accounting and Financial Disclosure........    20


                                                       PART III

     Item    10    Directors and Executive Officers of the Registrant..........................................    21

     Item    11    Executive Compensation......................................................................    22

     Item    12    Security Ownership of Certain Beneficial Owners and Management..............................    25

     Item    13    Certain Relationships and Related Transactions..............................................    25

                                                         PART IV

     Item    14    Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................ 27-28
</Table>



                                       2
<PAGE>



    Statements in this report that are not purely historical are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements with respect to the financial condition
and results of operations of the Company involve risks and uncertainties related
to Shoppe performance and dependence on suppliers and foreign sourcing. These
factors are more fully discussed later in this report under the heading "Risk
Factors." In addition, the Company's results could also be affected by a number
of other risks and uncertainties which are more fully discussed under the
headings "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in this report.

                                     PART I

ITEM 1. BUSINESS

    American Coin Merchandising, Inc. (the "Company") is the leading owner,
operator and franchisor in the United States of coin-operated amusement vending
equipment with more than 26,000 pieces of equipment on location. Over 14,000 of
these machines are skill-crane machines ("Shoppes") that dispense plush toys,
watches, jewelry, novelties and other items. For up to 50(cent) a play,
customers maneuver the skill-crane into position and attempt to retrieve the
desired item in the machine's enclosed display area before play is ended. The
Company's Shoppes are placed in supermarkets, mass merchandisers, restaurants,
bowling centers, truckstops, bingo halls, bars, warehouse clubs and similar
locations ("Retail Accounts") to take advantage of the regular customer traffic
at these locations. The Company utilizes appealing displays of quality
merchandise, new product introductions, including Company-designed products,
licensed products and seasonal items, and other merchandising techniques to
attract new and repeat customers. The Company also places supplementary
amusement vending equipment generally at existing Shoppe locations, including
kiddie rides, bulk vending (novelty items, candy, gum, etc.) and video games.

    On February 11, 2002 the Company was acquired by ACMI Holdings, Inc., a
newly formed corporation organized by two investment firms, Wellspring Capital
Management LLC and Knightsbridge Holdings, LLC. The transaction was approved at
a stockholders meeting held on February 5, 2002. Stockholders received $8.50 in
cash for each outstanding share of the Company's common stock. The Company's
common stock is no longer publicly traded. The Company's mandatorily redeemable
preferred securities remain outstanding and continue to trade on the American
Stock Exchange.

BUSINESS STRATEGY

    The Company's business strategy is to differentiate itself from traditional
amusement vending operators and to strengthen its position as a leading owner
and operator of amusement vending equipment in the U.S. The key elements of the
Company's business strategy are as follows:

        Quality Products. The Company's Shoppes offer a mix of products,
    including selected products of higher quality than the carnival-type
    products traditionally associated with skill-crane and other
    prize-dispensing equipment. The plush toys offered in the Company's Shoppes
    are made with 100% polyester fiberfill and high-grade outer covers and the
    watches include dependable movements. In addition, the Company's Shoppes
    offer licensed products featuring recognizable characters (such as Disney
    and Looney Tunes characters), regional-based and theme-based items (such as
    Christmas and Easter items). All products offered in the Shoppes must adhere
    to the Company's safety and quality standards.

        Machine Appearance, Merchandise and Merchandising Techniques. The
    Company's Shoppes are distinctively marked with the SugarLoaf logo and other
    signage that is readily identifiable with the Company in order to create
    brand recognition. In addition, the Shoppes are well lit and are cleaned and
    serviced regularly to maintain their attractive appearance. The Shoppes
    contain an appealing mix of products arranged by size, color, shape and
    type. Products with higher perceived value are prominently displayed, and
    the Company frequently incorporates new items into the merchandise mix to
    maintain the Shoppes' fresh appearance. Management believes the Shoppes'
    appearance and the Company's merchandising techniques are important factors
    in gaining acceptance of the Company's Shoppes by retailers.

        Product Procurement and Company-Designed Product. The Company controls
    product cost by purchasing a significant portion of its products directly
    from manufacturers in large quantities and acquiring merchandise that has
    been discontinued or is subject to substantial "close-out" discounts. The
    Company also controls product cost by pre-packing products that it
    distributes to Company-owned offices and sells to its franchisees and
    non-franchisees for use in filling and merchandising the Shoppes. These
    pre-packed units include a predetermined mix or "recipe" of



                                       3
<PAGE>

    different types, sizes, shapes and colors of product, which achieve the
    Company's merchandising objectives while also controlling average product
    cost. The Company is able to frequently introduce new product in its Toy
    Shoppes by designing a significant portion of the product and by purchasing
    licensed and other product from suppliers. Designing products at various
    price points furthers the Company's objective of controlling product cost.
    See "Suppliers -- Product."

        Vend Ratio and Revenue Management. The Company closely monitors the
    revenue per product dispensed, or the Vend Ratio, of each of its Shoppes to
    maintain customer satisfaction and to optimize Shoppe revenue and
    profitability. A lower than optimal vend frequency reduces customer
    satisfaction, resulting in less frequent plays and lower revenue at a given
    location, while a higher than optimal vend frequency reduces profitability.
    If the Vend Ratio falls outside of the Company's target range, the route
    merchandiser can influence various factors affecting the Vend Ratio,
    including the mix of products by size and weight, the placement of products
    within the Shoppe's display area, the number of products and the density of
    the products within the Shoppe. If a Shoppe's weekly revenue consistently
    falls below the Company's minimum weekly revenue goal, the Company will
    consider relocating the Shoppe. During 2001, the Company redeployed certain
    underperforming Shoppes as a result of the Company's review of the machines'
    average weekly revenue.

        Location Selection. The Company concentrates its sales efforts on
    placing Shoppes in Retail Accounts such as Wal-Mart, Kmart, Denny's,
    Safeway, Flying J Truckstop and Furrs Family Dining, which have good
    reputations for quality and attract a high level of foot traffic. Within
    these accounts, the Company seeks to secure sites with the greatest
    visibility and accessibility to potential customers. See "Operations --
    Account Acquisition, Location Selection and Shoppe Placement."

        Timely Installation and National Operations. The Company provides Retail
    Accounts with an integrated system of Shoppe and vending installation,
    maintenance, service and an accounting of revenue and commissions on a local
    or national basis. Such services have been deployed rapidly across the
    country to large Retail Accounts.

        Training. The Company conducts comprehensive training for new general
    managers through its "Sugarloaf University" program, which includes a
    five-day seminar and field training held at its corporate offices. It also
    provides operations manuals, training videos and other materials relating to
    office management and route merchandising to assure the achievement of the
    Company's business objectives. See "Operations -- Supervision, Training and
    Support."

SHOPPES

    The Company has sought to position its Shoppes as an entertaining way to
"purchase" quality products. Management believes that the quality of the
Shoppes' products and the entertainment and amusement afforded by their
skill-crane format have broad appeal to adults and adolescents. While
skill-crane machines have been in operation for over 75 years, the Company has
incorporated into its Shoppes several improvements and refinements. The Company
increased the size of the Shoppes to enhance their visibility and to display and
vend more products and created bright, distinctive signage, which is readily
identifiable with the Company. The Company also added exterior lighting,
brightened interior lighting and selected exterior colors of the machines to
attract and focus customer attention on the products in the Shoppes. In
addition, the Company has upgraded the Shoppes' operating mechanisms to achieve
consistency of play and reliability of performance.

    The SugarLoaf Toy Shoppe has been operated by the Company since its
inception. The Company introduced the SugarLoaf Fun Shoppe in 1993, the
SugarLoaf Treasure Shoppe in 1994, the SugarLoaf Bean Bag Shoppe in 1997 and the
SugarLoaf Stop Shoppe in 1998. Management believes that the introduction of new
types of skill-crane and other machines has enabled the Company to capitalize on
its current routes and existing relationships by placing additional machines in
existing locations, thereby increasing revenue at each location with little
incremental service costs. The introductions of SugarLoaf Treasure Shoppes,
SugarLoaf Fun Shoppes, SugarLoaf Bean Bag Shoppes and SugarLoaf Stop Shoppes are
typically made in locations where a SugarLoaf Toy Shoppe is already located.
Currently the Company operates five types of Shoppes as described below.



                                       4
<PAGE>

    The SugarLoaf Toy Shoppe. The SugarLoaf Toy Shoppe features a play price of
50(cent) and dispenses plush toys and other toys. The estimated retail values of
products offered in the SugarLoaf Toy Shoppe generally range from $4.00 to
$30.00. As of December 31, 2001, the Company and its franchisees were operating
8,859 SugarLoaf Toy Shoppes.

    The SugarLoaf Treasure Shoppe. The SugarLoaf Treasure Shoppe features a play
price of 50c. and dispenses jewelry, watches, bolo ties and belt buckles. The
SugarLoaf Treasure Shoppe improves upon traditional skill-crane machines of this
type by dispensing products with estimated retail values ranging from $4.00 to
$30.00 instead of carnival-type merchandise of low retail value. As of December
31, 2001, the Company and its franchisees were operating 2,093 SugarLoaf
Treasure Shoppes, approximately 90% of which were placed within locations in
which another Shoppe was already in operation.

    The SugarLoaf Bean Bag Shoppe. The SugarLoaf Bean Bag Shoppe features a play
price of 50(cent) and dispenses Bean-bag type stuffed toys with estimated retail
values ranging from $3.00 to $6.00. As of December 31, 2001, the Company and its
franchisees were operating 2,433 SugarLoaf Bean Bag Shoppes.

    The SugarLoaf Stop Shoppe. The SugarLoaf Stop Shoppe features a play price
of 50c. and dispenses key-chains featuring NASCAR, bean bags, licensed items and
sports figures. The estimated retail values of products offered in the SugarLoaf
Stop Shoppe generally range from $2.00 to $10.00. As of December 31, 2001, the
Company and its franchisees were operating 1,082 SugarLoaf Stop Shoppes.

    The SugarLoaf Fun Shoppe. The SugarLoaf Fun Shoppe features a play price of
25(cent) and dispenses small toys, novelties and candy. The SugarLoaf Fun Shoppe
is designed to appeal primarily to adolescents and children. The estimated
retail values of products offered in the SugarLoaf Fun Shoppe are generally
under $5.00. As of December 31, 2001, the Company and its franchisees were
operating 301 SugarLoaf Fun Shoppes.

    The following chart indicates the number of certain Company-owned amusement
vending equipment in operation at the indicated date:


<Table>
<Caption>
                                   DECEMBER 31, 2001          DECEMBER 31, 2000           DECEMBER 31, 1999
                                 ---------------------      ---------------------       ---------------------
         TYPE                    NUMBER        PERCENT      NUMBER        PERCENT       NUMBER        PERCENT
         ----                    ------        -------      ------        -------       ------        -------
<S>                              <C>           <C>          <C>           <C>           <C>           <C>
Toy Shoppes ..............        7,863         46.8%        7,580          47.6%        6,402         47.5%
Treasure Shoppes .........        1,766         10.5         1,633          10.3         1,530         11.3
Bean Bag Shoppes .........        2,413         14.4         2,344          14.7         2,151         15.9
Stop Shoppes .............        1,079          6.4         1,058           6.6           932          6.9
Fun Shoppes ..............          190          1.1           129           0.8           171          1.3
                                 ------        -----        ------         -----        ------        -----
    Total Shoppes ........       13,311         79.2        12,744          80.0        11,186         82.9
Video Games ..............        2,087         12.4         1,792          11.3         1,298          9.6
Kiddie Rides .............        1,401          8.4         1,387           8.7         1,011          7.5
                                 ------        -----        ------         -----        ------        -----
                                 16,799        100.0%       15,923         100.0%       13,495        100.0%
                                 ======        =====        ======         =====        ======        =====
</Table>

OPERATIONS

    Management believes that the Company's operations program provides for
efficient and cost-effective purchasing and distribution of product. In
addition, the Company has a route-servicing system that facilitates the
development of a good working relationship with location managers in regional
and national chain accounts. The Company offers its franchisees the same
training programs, product and machine purchasing programs used by the Company,
and they are required to use substantially the same procedures, systems and
methods the Company employs in its own operations.

    Retail Accounts. Currently, the Company's Shoppes are located, in order of
prevalence, in supermarkets, mass merchandisers, restaurants, bingo halls and
bowling centers, bars and similar locations. The Company is focusing on placing
Shoppes in national and regional Retail Accounts to take advantage of the
regular customer traffic of these locations. The following chart identifies some
of the Company's Retail Accounts:



                                       5
<PAGE>


<Table>
<Caption>
                                          RETAIL ACCOUNTS
                                          ---------------
MASS MERCHANDISERS         SUPERMARKETS                 RESTAURANTS                          OTHER
------------------         ------------                 -----------                          -----
<S>                        <C>                        <C>                                <C>
Wal Mart                    Kroger                    Denny's                            Truckstops of America
Kmart                       Safeway                   Ponderosa Steak House              Flying J Truckstop
                            Fred Meyer Stores         Shoney's, Inc.
                            Cub Foods                 Golden Corral
                            Smith's                   Furr's Family Dining
</Table>

    The Company or its franchisees provide the Shoppes and pay certain
installation costs, while the retailer provides a site within the location and
electrical power. The retailers are paid commissions based upon a percentage of
gross revenue, which for the year ended December 31, 2001, generally ranged from
25% to 30%, depending on the dollar volume, number of Shoppes installed and
total number of locations the retailer controls. Management believes that
national and regional supermarket, mass merchandise and restaurant chain
accounts are increasingly aware of the economic benefits of amusement vending
equipment such as the Company's Shoppes, which can provide retailers greater
revenue per square foot than alternative uses of available floor space.

    In individual-location accounts, the Company and its franchisees generally
place Shoppes pursuant to oral agreements with location managers. While the
Company has written agreements with certain major Retail Accounts, the Company
and its franchisees also have placed Shoppes in national and regional Retail
Accounts pursuant to oral or other agreements, which may be terminated at any
time. Management believes that the Company and its franchisees generally have
good relations with their retail accounts.

    Account Acquisition, Location Selection and Shoppe Placement. The Company
acquires new individual-location accounts for the placement of its Shoppes
through regional sales representatives and field office general managers. To
augment its field office general managers' account acquisition activities, the
Company's field sales representatives assist in the marketing effort to national
and regional chain accounts and has entered into new agreements with national
and regional supermarket and mass merchandise chain accounts covering the
placement of Shoppes within the locations of such accounts.

    In August 2000, the Company signed a new two-year agreement with Wal-Mart
that designates the Company as Wal-Mart's principal amusement vending operator.
As of December 31, 2001, the Company had installed more than 9,000 amusement
vending machines in 1,515 Wal-Mart stores nationwide. The Company's largest
account, Wal-Mart accounted for approximately 38% of total revenue in 2001. In
March 2000, the Company signed a new three-year agreement with Safeway that
designates the Company as Safeway's principal operator of skill-cranes through
April 1, 2003. As of December 31, 2001, the Company and its franchisees had
installed more than 828 amusement vending machines in 518 Safeway stores
nationwide. In May 2000, the Company signed a new four-year agreement with
Denny's that designates the Company as Denny's exclusive skill-crane operator
for its company-owned restaurants through June 30, 2005. As of December 31,
2001, the Company and its franchisees had installed 610 Shoppes in company-owned
Denny's restaurants nationwide. Other than Wal-Mart, no account represented 10%
or more of the Company's total revenue in 2001.

    Once the Company enters into a national or regional chain account agreement,
it contacts each location manager to arrange for a review of the location to
confirm its suitability and to obtain the manager's agreement to the placement
of one or more Shoppes within the location. The Company and its regional sales
representatives or franchisee work together to place Shoppes at national and
regional chain account locations.

    For accounts other than national chain accounts, the Company's regional
sales representatives and general managers identify viable locations, contact
the location's owner or manager to confirm the suitability of the location and
obtain the owner's or manager's agreement to the placement of the Shoppes and
related compensation arrangements. The suitability of a location is based upon a
thorough assessment by the Company, including an analysis of the surrounding
trade area in order to determine the neighborhood demographics, local
regulations, the level of overall retail activity and the cost-effectiveness of
servicing the location through existing route merchandisers. The Company also
reviews each site within the location for its visibility and accessibility to
customers.



                                       6
<PAGE>

    The Company and its franchisees compete for limited sites within
supermarkets with purveyors of seasonal and specialty items and with owners and
operators of other amusement and vending machines, ATM machines and coin
counting and redemption equipment. The Company's amusement vending equipment
also competes with vending machine and coin-operated amusement device operators
for sites in mass merchandise and restaurant chains, bowling centers and other
locations. Competition for such sites is based primarily on the amount of
revenue to the location owner that can be generated by a particular use of a
site. Management believes that the revenue potential of the Company's amusement
vending equipment compares favorably to that of competing uses for available
sites within retail locations.

    Other Vending. The Company has introduced new types of complementary
amusement vending machines at existing Shoppe locations which management
believes will expand the potential customers for the Company. As of December 31,
2001, the Company and its franchisees had 1,401 kiddie rides installed in Retail
Accounts nationwide. As of December 31, 2001, the Company and its franchisees
had 7,800 pieces of bulk vending equipment in operation. Bulk vending refers to
the sale of unsorted confections, nuts, gumballs, toys and novelty items (in or
out of capsules) selected by the customer and dispensed through vending
machines. As of December 31, 2001, the Company and its franchisees had 2,087
simulator and traditional video games in operation. From time to time, the
Company has placed, and may continue to place in the future, other types of
coin-operated vending machines in retail accounts in order to leverage the
Company's existing national distribution and service network.

    Supervision, Training and Support. The Company's division vice presidents
are primarily responsible for hiring and training the Company's general managers
and for on-going support and supervision of the Company's field offices.

    Each Company field office is managed by an area general manager or general
manager who is responsible for the management of the office, including inventory
management, and training and monitoring route merchandisers. The Company has
developed a comprehensive training program for area general managers, general
managers and franchisees covering office management, new account acquisition,
inventory control, route merchandising, site selection, machine servicing and
all other aspects of the operation of the business. The area general managers
and general managers attend training programs and receive ongoing field
training. The Company considers its route merchandisers to be a key element of
its merchandising efforts. The Company's area general managers and general
managers provide training of route merchandisers in all aspects of route
management, machine servicing, revenue collection, Vend Ratio monitoring and
product merchandising. See "Employees."

    Route Merchandising. Frequent, regular and reliable service and support is
an important element in the operation of the Company's Shoppes and other
amusement vending equipment. The Company's route merchandisers and franchisee
personnel are trained to perform regularly scheduled merchandising and service
procedures. A route merchandiser has a route consisting of 10 to 33 locations,
depending upon volume, which are visited and serviced two to ten times per week.
The route merchandiser cleans and services the Shoppe, takes inventory of the
Shoppe, replaces product as needed, monitors the Vend Ratio and arranges the
product within the Shoppe in accordance with the Company's merchandising
techniques. The route merchandiser records the number of units of product placed
in the Shoppes and the number of plays for both Shoppes and other amusement
vending equipment from nonresettable meters. The meter readings are subsequently
reconciled against actual collections. All collections are delivered to and
verified by another employee at the field office for deposit.

    Inventory Management and Distribution. The Company's distribution system is
designed to allow efficient and cost-effective distribution of its product to
Company field offices and franchise offices. After the product is procured from
the Company's suppliers, it is shipped to a distribution center where it is
sorted and pre-packed. The Company maintains inventory for the products offered
through its Toy Shoppes, Treasure Shoppes, Bean Bag Shoppes, Stop Shoppes and
Fun Shoppes in a warehouse facility in Kent, Washington and in its regional
distribution warehouse centers in Atlanta, Georgia; Clearwater, Florida;
Chicago, Illinois; and Allentown, Pennsylvania. The Company communicates
appropriate product mix requirements to its warehouse employees on a weekly
basis. The warehouse employees sort the products according to the Company's
specified mix requirements and pack the product for each type of Shoppe into
pre-packed units for shipment to Company field offices and franchises on a
weekly basis.

    At December 31, 2001, the Company was operating in 47 states through a
national network of 34 offices. The field offices average approximately 4,091
square feet and comprise a small office area and a warehouse area where
out-of-service Shoppes and other amusement vending equipment are repaired and
product inventory is maintained. Part of the



                                       7
<PAGE>

route merchandisers' daily route servicing responsibilities is to distribute
product to Shoppes. Pre-packing aids in controlling product cost and facilitates
new product introductions. Pre-packing also substantially reduces the warehouse
space required for inventory, allowing the Company-owned and franchise offices
to service a greater number of Shoppes without a commensurate increase in
warehouse space. In addition, pre-packing significantly reduces the time general
managers and franchise personnel spend on inventory management, which allows
more time for acquiring new accounts and monitoring the quality of Shoppe
merchandising in the field.

    Management Information Systems. In late 2000, the Company implemented new
financial software and a new centralized data base route management information
system that utilizes customized software for monitoring field office amusement
vending equipment results. The software allows the Company to monitor individual
amusement vending equipment placements, revenue, Vend Ratio for Shoppes and tax
and commission payments through reports generated at the corporate offices. The
software also allows the Company to monitor total vending revenue, average
weekly revenue and equipment on location.

MERCHANDISING

    Merchandising Mix. The Company offers merchandise for the Shoppes in
pre-pack bags and in bulk. The pre-pack bags include an assortment of exclusive
SugarLoaf designs, along with licensed and other domestic product. The
merchandise variety is regularly updated, and the Company offers at least 1,500
new items each year. Seasonal goods are placed in Shoppes for all major
holidays. The Company also creates several theme product collectibles and many
players attempt to retrieve all of the products in the series.

    Merchandise Sourcing and Vendor Relationships. The Company purchases product
from several overseas factories and has developed good relationships with these
suppliers over the past ten years. The Company also utilizes several domestic
sources and attempts to take advantage of licensed and closeout merchandise.

SUPPLIERS

    Product. The Company maintains a purchasing and development staff at its
corporate headquarters and contracts with foreign and domestic manufacturers and
outside vendors for its supply of products. The SugarLoaf Toy Shoppes offer a
combination of Company-designed products that are manufactured to the Company's
specifications and "off the shelf" products available from foreign manufacturers
and third-party vendors. Since 1988, all Company-designed toys have been
manufactured to its specifications by foreign manufacturers. Currently, the
Company relies on multiple manufacturers in China to produce its custom designs,
each of whom has the capability to produce a range of the toys required by the
Company. Decisions regarding the choice of manufacturer are based on price,
quality of workmanship, reliability and the ability of a manufacturer to meet
the Company's delivery requirements.

    Shoppes. The Company currently purchases Shoppes from three principal
approved crane manufacturers and may seek to add new suppliers. Management
believes that suitable skill-crane machines are available from a number of
domestic and foreign manufacturers.

FRANCHISE RELATIONS

    As of December 31, 2001, the Company had franchise agreements in effect with
9 franchisees covering 12 territories in the U.S. covering, in the aggregate,
1,457 pieces of amusement vending equipment. The Company does not currently
intend to grant any additional franchises. In the event any franchisee proposes
to transfer to any third party its SugarLoaf business or any rights or interests
granted by the franchise agreement, the Company has up to 45 days to exercise a
right of first refusal to purchase such business, rights or interests on the
same terms and conditions as the franchisee's proposed transfer of such business
rights or interests.

COMPETITION

    The Company competes with a number of regional and local operators of
skill-crane machines. Many of these competitors are engaged in aggressive
expansion programs, and the Company has experienced and expects to continue to
experience intense competition for new locations. There can be no assurance that
the Company will be able to compete effectively with these companies in the
future. The Company's amusement vending equipment also competes



                                       8
<PAGE>

with other vending machines, coin-operated amusement devices, coin counting and
redemption machines and seasonal and bulk merchandise for sites in retail
locations. There can be no assurance that the Company will be able to maintain
its current sites in retail locations or that it will be able to obtain sites in
the future on attractive terms or at all. There also are few barriers to entry
in the Company's business, and it would be possible for well-financed vending
machine manufacturers or other vending machine operators with existing
relationships with supermarkets, mass merchandisers and other venues targeted by
the Company to compete readily with the Company in certain markets.

INTELLECTUAL PROPERTY

    The Company has no patents or patent applications pending and relies
primarily on a combination of trademark, trade dress and unfair competition
laws, trade secrets, confidentiality procedures and agreements to protect its
proprietary rights. The Company owns a number of trademarks that have been
registered with the United States Patent and Trademark Office, including
"Shoppe," "SugarLoaf," "Sugar Loaf," "Toy Shoppe," "Treasure Shoppe," "Fun
Shoppe," "Shoppe of Stickers" and "Kid Shoppe." In addition, the Company claims
common law trademark protection for the mark "A Test of Skill," "ACMI,"
"American Coin," "American Coin Merchandising," and various ones of its logos
and symbols. The Company considers its operations manual, training videos, and
other related materials and portions of its licensed methods to be proprietary
and confidential, and the terms of the Company's franchise agreements require
franchisees to maintain the confidentiality of such information and procedures
and to adopt reasonable precautions to prevent unauthorized disclosure of these
secrets and information. Despite the Company's efforts to protect its
proprietary rights, unauthorized parties may attempt to copy aspects of the
Company's amusement vending equipment and products or to obtain and use
information that the Company regards as proprietary. The Company also may be
involved from time to time in litigation to determine the enforceability, scope
and validity of proprietary rights. The Company believes it has significant
intellectual property protection for its business. Management believes that its
success is likely to depend more upon merchandising skill, location selection
and consumer support than on legal protection of the Company's proprietary
rights.

GOVERNMENT REGULATION

    The Company's business is subject to federal, state and local regulations
relating to product labeling and safety, coin-operated games and franchising.
The Federal Hazardous Substances Act, as amended by the Child Protection Act of
1966, the Child Protection and Toy Safety Act of 1969, the Toy Safety Act of
1984 and the Child Safety Protection Act of 1994 requires the labeling of
articles that bear or contain a hazardous substance as defined in such statutes.
In addition, the Consumer Product Safety Commission may, under these statutes,
ban from the market toys or other articles intended for use by children which
contain hazardous substances or present a public health or safety hazard, and
require the repurchase and reimbursement of certain expenses by the manufacturer
of such banned toys or other articles.

    The distribution and operation of skill-crane machines may be subject to
federal, state and local regulations, including gaming regulations, which vary
from jurisdiction to jurisdiction. Certain jurisdictions may require licenses,
permits and approvals to be held by companies and their key personnel in
connection with the distribution or operation of skill-crane machines.
Currently, the Company believes that it has obtained all necessary governmental
licenses, permits and approvals necessary for the distribution or operation of
Shoppes in Company-owned operations. However, no assurance can be given that
such licenses, permits or approvals will be given or renewed in the future.
Franchisees are responsible for their own regulatory compliance.

    As a franchisor, the Company is subject to various federal and state
franchise and business opportunity laws and regulations. The Company does not
currently intend to grant any additional franchises and it believes it is in
material compliance with such laws in the states in which the Company has
offered and sold franchises.

INSURANCE

    The Company carries property, liability, workers' compensation and directors
and officers liability insurance policies, which it believes are customary for
businesses of its size and type. However, there can be no assurance that the
Company's insurance coverage will be adequate or that insurance will continue to
be available to the Company at reasonable rates. The Company may be subject to
claims for personal injuries resulting from the use of its Shoppes or from
products and other merchandise dispensed from the Shoppes. To date, the Company
has not experienced any material product liability claims or costs, and it
currently maintains product liability insurance that it believes to be



                                       9
<PAGE>

adequate. The Company's product liability insurance coverage is limited,
however, and there can be no assurance that such insurance would adequately
cover future product liability costs or claims.

EMPLOYEES

    As of February 28, 2002, the Company had a total of 770 employees, including
48 employees at its headquarters in Boulder, Colorado. None of the Company's
employees are represented by labor unions or are covered by any collective
bargaining contract. Management believes it has a good relationship with the
Company's employees.

    Generally, each of the Company's field offices employ approximately 10 to 45
persons, including a general manager, an office assistant and an adequate number
of route merchandisers to properly service the Company's Shoppes and other
amusement vending equipment and equipment service managers. The general manager
is responsible for the daily operations of the office, monitoring route
merchandisers and acquiring new accounts. The area general managers oversee the
operations of certain Company field offices and report directly to the Company's
division vice presidents.

    The Company has an incentive bonus program pursuant to which area general
managers, general managers and field office personnel may be eligible to receive
incentive compensation based on office and route profitability. Management
believes that this program rewards excellence in management, gives field office
personnel an incentive to improve operations and results in an overall reduction
in the cost of operations. Corporate personnel are also eligible to receive
incentive compensation based on overall Company performance.

ITEM 2. PROPERTIES

    The Company's principal executive offices are located at 5660 Central
Avenue, Boulder, Colorado and the Denver, Colorado operation occupy
approximately 28,000 square feet of office and warehouse space under a lease
that expires February 28, 2003. The Company's fulfillment warehouse in Kent,
Washington occupies approximately 106,000 square feet under a lease that expires
August 31, 2003. The Company's machine repair and refurbishment facility in
Denver, Colorado occupies approximately 11,000 square feet under a lease that
expires September 30, 2003. The Company also is a party to 53 other leases which
are used for office and warehouse space which average approximately 4,000 square
feet, provide for monthly rental payments ranging from $450 to $5,240 and expire
at various times over the period April 30, 2002 to May 31, 2006.

ITEM 3. LEGAL PROCEEDINGS

    None.

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

    The Company did not submit any matters to a vote of its stockholders during
the fourth quarter of 2001.



                                       10
<PAGE>



                                     PART II

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

    The Company's common stock is no longer publicly traded. As of March 22,
2002, ACMI Holdings, Inc. owns all of the Company's outstanding common stock.
The Company has not declared or paid a cash dividend on its common stock. The
payment of future dividends will be within the discretion of the Company's Board
of Directors and will depend on the earnings, capital requirements, and
restrictions in current and future debt agreements, credit agreements and
operating and financial condition of the Company, among other factors.

ITEM 6. SELECTED FINANCIAL DATA

    The selected financial data set forth below has been derived from the
consolidated financial statements of the Company.

<Table>
<Caption>
                                                                               YEAR ENDED DECEMBER 31,
                                                         ------------------------------------------------------------------
                                                            2001          2000          1999         1998           1997
                                                         ----------    ----------    ----------    ----------    ----------
                                                                   (IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S>                                                      <C>           <C>           <C>           <C>           <C>

STATEMENT OF OPERATIONS DATA:
Revenue:
  Vending ............................................   $  139,670    $  127,076    $  115,835    $   92,854    $   52,866
  Franchise and other ................................        2,257         2,681         4,630         4,857         6,218
                                                         ----------    ----------    ----------    ----------    ----------
    Total revenue ....................................      141,927       129,757       120,465        97,711        59,084
                                                         ----------    ----------    ----------    ----------    ----------
Cost of revenue:
  Vending ............................................      104,758        93,315        84,997        66,070        37,506
  Franchise and other ................................        1,921         1,936         3,104         3,108         3,967
                                                         ----------    ----------    ----------    ----------    ----------
    Total cost of revenue ............................      106,679        95,251        88,101        69,178        41,473
                                                         ----------    ----------    ----------    ----------    ----------
    Gross profit .....................................       35,248        34,506        32,364        28,533        17,611
General and administrative expenses ..................       26,518        25,080        25,668        19,413        10,314
Write off of costs in excess of assets acquired,
  severance and other costs ..........................           --            --         7,536            --            --
                                                         ----------    ----------    ----------    ----------    ----------
    Operating earnings (loss) ........................        8,730         9,426          (840)        9,120         7,297
Interest expense, net ................................        6,127         7,775         6,866         3,368           612
                                                         ----------    ----------    ----------    ----------    ----------
    Earnings (loss) before income taxes and
      extraordinary loss..............................        2,603         1,651        (7,706)        5,752         6,685
Income tax (expense) benefit .........................         (989)         (627)        3,200        (1,854)       (2,256)
                                                         ----------    ----------    ----------    ----------    ----------
    Earnings (loss) before extraordinary loss ........        1,614         1,024        (4,506)        3,898         4,429
Extraordinary loss on debt refinancing, net of
  income tax benefit of $101 .........................           --           165            --            --            --
                                                         ----------    ----------    ----------    ----------    ----------
    Net earnings (loss) ..............................   $    1,614    $      859    $   (4,506)   $    3,898    $    4,429
                                                         ==========    ==========    ==========    ==========    ==========
Basic earnings (loss) per share ......................   $     0.25    $     0.13    $    (0.70)   $     0.60    $     0.80
Diluted earnings (loss) per share ....................   $     0.24    $     0.13    $    (0.70)   $     0.58    $     0.78
Basic weighted average common shares .................        6,526         6,493         6,475         6,467         5,565
Diluted weighted average common shares ...............        6,729         6,493         6,475         6,713         5,694
</Table>

<Table>
<Caption>
                                                            2001          2000          1999          1998          1997
                                                         ----------    ----------    ----------    ----------    ----------
<S>                                                      <C>           <C>           <C>           <C>           <C>

BALANCE SHEET DATA:
Working capital ......................................   $    3,651    $      691    $    9,367    $    9,235    $    3,626
Total assets .........................................      103,362       107,907       104,134       111,782        37,077
Short-term debt and current portion of
  long-term debt .....................................        7,700         7,233         2,463         2,155         1,619
Long-term debt, excluding current portion ............       37,276        44,224        50,230        50,310         1,292
Company obligated mandatorily redeemable preferred
  securities of subsidiary trust holding solely
  junior subordinated debentures .....................       15,644        15,593        15,542        15,492            --
Total stockholders' equity ...........................       31,763        30,089        29,154        33,648        30,092

NUMBER OF SHOPPES:
Company operations ...................................       13,311        12,744        11,186        10,671         6,166
Franchise operations .................................        1,457         1,724         1,878         1,998         3,952
                                                         ----------    ----------    ----------    ----------    ----------
    Total ............................................       14,768        14,468        13,064        12,669        10,118
                                                         ==========    ==========    ==========    ==========    ==========
</Table>



                                       11
<PAGE>




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

GENERAL

    The Company and its franchisees own and operate coin-operated amusement
vending equipment with more than 26,000 pieces of equipment on location. Over
14,000 of these machines are Shoppes that dispense plush toys, watches, jewelry,
novelties and other items. The Company's Shoppes are placed in Retail Accounts
and similar high traffic locations and the Company typically pays 25-30% of
gross revenue to the location owner as a location commission. The Company has
also introduced new types of supplementary vending and amusement machines at
existing Shoppe locations. At December 31, 2001, the Company was operating in 47
states with a national network of 34 offices and there were 9 Company
franchisees operating in 12 territories in the United States. The Company sells
product vended in the machines to its franchisees and collects continuing
royalties ranging from 2% to 5% of its franchisees' gross machine revenue.

    On February 11, 2002 the Company was acquired by ACMI Holdings, Inc., a
newly formed corporation organized by two investment firms, Wellspring Capital
Management LLC and Knightsbridge Holdings, LLC. The transaction was approved at
a stockholders meeting held on February 5, 2002. Stockholders received $8.50 in
cash for each outstanding share of the Company's common stock. The Company's
common stock is no longer publicly traded. The Company's mandatorily redeemable
preferred securities remain outstanding and continue to trade on the American
Stock Exchange.

    For the year ended December 31, 2001, approximately 87% of the Company's
revenue and gross profit were derived from Company-owned Shoppes. The Company's
revenue and gross profit in a particular period is directly related to the
number of Shoppes in operation during the period. Management believes that the
Company's business is somewhat seasonal, with average revenue per machine per
week historically higher during the Easter and Christmas periods. Vending
revenue represents cash receipts from customers using amusement vending
equipment and is recognized when collected. The cost of vending revenue is
comprised of the cost of vended products, location commissions, depreciation and
direct service cost.

    Franchise and other revenue represents the Company's percentage of gross
vending revenue generated by Shoppes owned and operated by franchisees, as well
as product sold to the franchisees and non-franchisee customers. Product sold to
the franchisees and non-franchisee customers consists of goods to vend in
Shoppes. The Company anticipates that franchise and other revenue will remain
consistent with 2001 levels, subject to further franchisee acquisitions.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 VS. YEAR ENDED DECEMBER 31, 2000

Revenue

    The Company's total revenue increased 9.4% from $129.8 million in 2000 to
$141.9 million in 2001. Vending revenue increased $12.6 million or 9.9% in 2001
to $139.7 million, primarily as a result of a 7.1% increase in the average
number of amusement vending equipment in use during 2001, over the average
number of amusement vending equipment in use during 2000.

    Franchise and other revenue decreased $424,000 or 15.8% in 2001 as compared
to 2000, due to the acquisition of a franchise during the second quarter of
2001.

Cost of Revenue and Gross Profit

    The cost of vending operations increased $11.4 million in 2001 to $104.8
million. The vending operations' contribution to 2001 gross profit increased to
$34.9 million, which represents a 3.4% increase over gross profit from vending
operations realized in 2000. The vending gross profit achieved in 2001 was 25.0%
of vending revenue, which represents a 1.6 percentage point decrease from the
gross profit percentage achieved in 2000. The cash vending gross profit (vending
revenue minus cost of vended product, location commissions and direct service
cost) achieved in 2001 was 33.6% of vending revenue, which is .9 percentage
points lower than in 2000. The decrease in cash vending gross



                                       12
<PAGE>

profit is primarily attributable to higher location payments. The cash vending
gross profit achieved during the fourth quarter of 2001 was 34.1%, which is .8
percentage points lower than the comparable period in 2000.

    Gross profit on franchise and other revenue in 2001 decreased to $336,000,
or 14.9% of franchise and other revenue, which is 12.9 percentage points lower
than the gross margin achieved in 2000. The decrease in gross margin as a
percentage of franchise and other revenue resulted primarily from increased
importing related costs partially offset by lower unit costs and lower product
sales to franchisees and non-franchisees.

Operating Expense

    General and administrative expenses including depreciation and amortization
as a percentage of revenue for 2001 decreased to 18.7%, as compared to 19.3% of
revenue in 2000. The decrease in general and administrative expenses resulted
primarily from tighter control on discretionary spending during the year.

Operating Earnings

    Operating earnings in 2001 were $8.7 million or 6.2% of total revenue as
compared to operating earnings of $9.4 million in 2000 or 7.4% of total revenue.
The decrease in operating results is primarily attributable to increased
location payments and placement fees.

Non Operating Income (Expense)

    Interest expense decreased $1.6 million to $6.1 million in 2001 as compared
to 2000. The Company's interest expense is directly related to its level of
borrowings and changes in the underlying interest rates.

Net Earnings and Earnings Per Share

    The net earnings for the year ended December 31, 2001 were $1.6 million, as
compared to net earnings of $859,000 for 2000. Diluted net earnings per share
for 2001 were $0.24, compared to diluted net earnings per share of $0.13 in
2000.

YEAR ENDED DECEMBER 31, 2000 VS. YEAR ENDED DECEMBER 31, 1999

Revenue

    The Company's total revenue increased 7.7% from $120.5 million in 1999 to
$129.8 million in 2000. Vending revenue increased $11.2 million or 9.7% in 2000
to $127.1 million, primarily as a result of a 9.6% increase in the average
number of amusement vending equipment in use during 2000, over the average
number of amusement vending equipment in use during 1999.

    Franchise and other revenue decreased $2.0 million or 42.1% in 2000 as
compared to 1999, due to the closure of Plush 4 Play operations in the third
quarter of 1999.

Cost of Revenue and Gross Profit

    The cost of vending operations increased $8.3 million in 2000 to $93.3
million. The vending operations' contribution to 2000 gross profit increased to
$33.8 million, which represents a 9.5% increase over gross profit from vending
operations realized in 1999. The vending gross profit achieved in 2000 was 26.6%
of vending revenue, which is consistent with the gross profit percentage
achieved in 1999. The cash vending gross profit (vending revenue minus cost of
vended product, location commissions and direct service cost) achieved in 2000
was 34.5% of vending revenue, which is 1.1 percentage points higher than in
1999. The increase in cash vending gross profit is attributable to lower costs
associated with product vended partially offset by higher location payments. The
cash vending gross profit achieved during the fourth quarter of 2000 was 34.9%,
which is .5 percentage points higher that the comparable period in 1999.



                                       13
<PAGE>

    Gross profit on franchise and other revenue in 2000 decreased to $745,000,
or 27.8% of franchise and other revenue, which is 5.2 percentage points lower
than the gross margin achieved in 1999. The decrease in gross margin as a
percentage of franchise and other revenue resulted primarily from increased
warehousing costs, lower product sales to franchisees and non-franchisees
resulting from the closure of Plush 4 Play.

Operating Expense

    General and administrative expenses including depreciation and amortization
as a percentage of revenue for 2000 decreased to 19.3%, as compared to 21.3% of
revenue in 1999. The decrease in general and administrative expenses resulted
primarily from the closing of four offices during the year and tighter control
on discretionary spending during the year.

Operating Earnings (Loss)

    Operating earnings in 2000 were $9.4 million or 7.3% of total revenue as
compared to an operating loss of $840,000 in 1999. The increase in operating
results is primarily attributable to the lower cost of products vended through
the Company's Shoppes, the reduction in general and administrative expenses
discussed above and the write-off of one-time charges recognized in the third
quarter of 1999.

Non Operating Income (Expense)

    Interest expense increased $909,000 to $7.8 million in 2000 as compared to
1999. The Company's interest expense is directly related to its level of
borrowings and changes in the underlying interest rates.

Extraordinary Loss

    The extraordinary loss of $165,000, net of tax benefit, for the year ended
December 31, 2000 relates to the refinancing of the Company's $50 million
reducing revolving loan agreement in December 2000, which was scheduled to
mature in July 2001. The extraordinary loss results from the write-off of loan
origination fees related to the previous credit facility.

Net Earnings (Loss) and Earnings (Loss) Per Share

    The net earnings for the year ended December 31, 2000 were $859,000, as
compared to a net loss of $4.5 million for 1999. Diluted earnings per share for
2000 were $0.13, compared to a diluted net loss per share of $0.70 in 1999.

CRITICAL ACCOUNTING POLICIES

    Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the 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.

    On an on-going basis, management evaluates its estimates and judgments,
including those related to income taxes, inventory, property and equipment and
costs in excess of assets acquired and other intangible assets. Management bases
its estimates and judgments on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.
Management believes the following critical accounting policies, among others,
affect its more significant judgments and estimates used in the preparation of
its consolidated financial statements.



                                       14
<PAGE>


Deferred Taxes

    The Company recognizes deferred tax assets and liabilities based on the
differences between the financial statement carrying amounts and the tax bases
of assets and liabilities. The Company regularly reviews its deferred tax assets
for recoverability and has historically established valuation allowances based
on its taxable income, projected future taxable income, and the expected timing
of the reversals of existing temporary differences. If the Company operates at a
loss or is unable to generate sufficient future taxable income, or if there is a
material change in the actual effective tax rates or time period within which
the underlying temporary differences become taxable or deductible, the Company
could be required to establish a valuation allowance against all or a
significant portion of our deferred tax assets resulting in a substantial
increase in our effective tax rate and a material adverse impact on our
operating results. This could be mitigated by the reversal of future taxable
temporary differences in property, plant and equipment that could create taxable
income to help utilize the deferred tax assets.

Inventory

    The Company writes down its inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of inventory and
the estimated market value based upon assumptions about future demand and market
conditions. The Company recognized a valuation reserve of $394,000 in the third
quarter of 1999 primarily to write-down the cost of inventory being carried at
Plush 4 Play a business that was discontinued. If actual future demand or market
conditions are less favorable than those projected by management, additional
inventory write-downs may be required.

Property and Equipment

    Property and equipment is stated at cost. Major replacements and
improvements are capitalized. When assets are sold, retired or otherwise
disposed of, the cost and related accumulated depreciation are eliminated from
the accounts and the gain or loss is recognized. Repair and maintenance costs
are generally charged to expense as incurred. Vending machines are depreciated
using the straight-line method over useful lives ranging from three to ten
years.

Valuation of long-lived and intangible assets and costs in excess of assets
acquired

    The Company assesses the impairment of identifiable intangibles, long-lived
assets and related costs in excess of assets acquired whenever events or changes
in circumstances indicate that the carrying value may not be recoverable.
Factors considered important that could trigger an impairment review include
significant underperformance relative to expected historical or projected future
operating results, changes in the manner of our use of the acquired assets and
the strategy for our overall business and negative industry or economic trends.

    When the Company determines that the carrying value of costs in excess of
assets acquired and other intangible assets may not be recoverable based upon
the existence of one or more of the above indicators of impairment, the Company
measures any impairment based on the projected discounted cash flow method using
a discount rate determined by our management to be commensurate with the risk
inherent in the Company's current business model.

    In 2002, Statement of Financial Accounting Standards ("SFAS") No. 142,
"Goodwill and Other Intangible Assets" became effective and as a result, the
Company will cease to amortize approximately $33.3 million of costs in excess of
assets acquired. The Company has recorded approximately $2.0 million of
amortization related to these assets during 2001 and would have amortized
approximately $2.0 during 2002. In lieu of amortization, the Company is required
to perform an initial impairment review of our costs in excess of assets
acquired in 2002 and an annual impairment review thereafter. The Company expects
to complete its initial review during the first quarter of 2002.

    The Company currently does not expect to record an impairment charge upon
completion of the initial impairment review. However, there can be no assurance
that at the time the review is completed an impairment charge will not be
recorded, which may be material.



                                       15
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

    The Company's primary sources of liquidity and capital resources
historically have been cash flows from operations, borrowings under the
Company's credit facilities and issuances of its equity securities. These
sources of cash flows have been offset by cash used for acquisitions, investment
in amusement vending equipment and payment of long-term borrowings.

    Net cash provided by operating activities was $15.8 million, $23.4 million
and $7.4 million in 2001, 2000 and 1999, respectively. The decline in 2001 net
cash provided by operating activities results primarily from an increase in
inventory levels and a reduction in level of accounts payable. The Company
anticipates that cash will continue to be provided by operations as additional
skill-crane machines and other amusement devices are placed in service. Cash
required in the future is expected to be funded by existing cash and cash
provided by operations and borrowings under the Company's credit facility.

    Net cash used in investing activities was $7.6 million, $18.1 million and
$9.3 million in 2001, 2000 and 1999, respectively. Capital expenditures amounted
to $4.9 million, $15.6 million and $8.3 million in 2001, 2000 and 1999,
respectively, of which $4.0 million, $15.0 million and $7.9 million were used
for the acquisition of amusement vending equipment. The acquisition of
franchisees and others used $273,000 and $180,000 in 2001 and 1999,
respectively.

    Net cash used by financing activities was $7.0 million and $3.0 million in
2001 and 2000 respectively and consisted primarily of payments on credit
facilities and principal payments on long-term debt. Net cash provided by
financing activities was $240,000 in 1999 and consisted primarily of borrowings
on the Company's credit facility and principal payments on long-term debt.

    In conjunction with the acquisition by ACMI Holdings, Inc., in February
2002, the Company has a $65.0 million senior secured credit facility comprised
of a $10.0 million revolving credit facility and $55.0 million of term loans
comprised of a $25.0 million term loan A and a $30.0 million term loan B. Under
the revolving credit facility, the Company may borrow up to $10.0 million
through February 11, 2007, and at February 28, 2002, there was approximately
$2.7 million outstanding and $7.3 million available under the revolving credit
facility. Under both term loan A and B, the Company is required to make
quarterly principal installments that increase in amount through February 11,
2007 for term loan A and February 11, 2008 for term loan B. The revolving
facility and the term loans bear interest at a floating rate at the Company's
option equal to either LIBOR plus the applicable margin or a base rate that is
equal to the higher of the prime rate or the federal funds rate plus one-half
percent plus the applicable margin. The effective rate of interest on both
facilities at February 28, 2002 was 6.0%. The credit facility provides that
certain financial ratios be met and places restrictions on, among other things,
the incurrence of additional debt financing and certain payments to the
Company's parent company. The Company was in compliance with such financial
ratios and restrictions at February 11, 2002.

    The Company has also issued $25.0 million of senior subordinated notes due
in 2009. Interest on these notes is payable on a quarterly basis at the rate of
17% per annum; however, at the option of the Company the minimum cash interest
due on these notes is 13% with the balance of interest due being paid in the
form of additional notes or payment in kind notes in an aggregate amount equal
to the amount of interest that would be payable with respect to the notes, if
such interest were paid in cash. The note agreement provides that certain
financial ratios be met and places restrictions on, among other things, the
incurrence of additional senior subordinated indebtedness and certain restricted
payments. The Company was in compliance with such financial ratios and
restrictions at February 11, 2002.

    The Company has noncancelable commitments for operating leases, debt and
employment contracts. These commitments expire at various times over the next
five years. Future minimum commitments as of December 31, 2001 are as follows
(in thousands):

<Table>
<Caption>
YEAR ENDING DECEMBER 31,                         2002         2003        2004        2005         2006       TOTAL
<S>                                              <C>          <C>        <C>         <C>           <C>        <C>
 Operating leases..........................      2,673        1,411         542         335          133       5,094
 Long-term debt (not including interest)...      7,700        9,719      11,857      15,700           --      44,976
 Employment contracts......................        350          300          --          --           --         650
</Table>

    The Company's long-term debt as described above has materially changed since
December 31, 2001 due to the acquisition of the Company by ACMI Holdings and the
Company's incurrence of additional debt in the form of the $65.0 million senior
secured credit facility and $25.0 million of senior subordinated notes.



                                       16
<PAGE>

    The Company may use a portion of its capital resources to effect
acquisitions of franchisees. Because the Company cannot predict the timing or
nature of acquisition opportunities, or the availability of acquisition
financing, the Company cannot determine the extent to which capital resources
may be used. Company management believes that funds expected to be generated
from operations and borrowings available under its credit facility and the
Company's ability to negotiate additional and enhanced credit agreements will be
sufficient to meet the Company's foreseeable operating and capital expenditure
needs. The Company's liquidity through operating cash flows is subject to
multiple risks associated with the Company's operations including fluctuations
in Shoppe performance, management of growth, payment of the Company's
indebtedness, dependence upon major accounts and competition, among others. The
section entitled "Risk Factors" beginning on page 18 sets forth several of the
risks associated with the Company's operations and is incorporated herein by
reference.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

    On June 30, 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") 141, "Business Combinations", and
SFAS 142, "Goodwill and Intangible Assets". Major provisions of these Statements
are as follows: all business combinations initiated after June 30, 2001 must use
the purchase method of accounting; the pooling of interest method of accounting
is prohibited except for transactions initiated before July 1, 2001; intangible
assets acquired in a business combination must be recorded separately from
goodwill if they arise from contractual or other legal rights or are separable
from the acquired entity and can be sold, transferred, licensed, rented or
exchanged, either individually or as part of a related contract, asset or
liability; goodwill and intangible assets with indefinite lives are not
amortized but are tested for impairment annually, except in certain
circumstances, and whenever there is an impairment indicator; all acquired
goodwill must be assigned to reporting units for purposes of impairment testing
and segment reporting; and effective January 1, 2002, goodwill will no longer be
subject to amortization. The amortization of costs in excess of assets acquired
and other intangible assets was $2.3 million in 2001.

    In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The standard applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and/or normal use of the asset. SFAS 143 requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred if a reasonable estimate of fair value can
be made. The fair value of the liability is added to the carrying amount of the
associated asset and this additional carrying amount is depreciated over the
life of the asset. The liability is accreted at the end of each period through
charges to operating expense. If the obligation is settled for other than the
carrying amount of the liability, the Company will recognize a gain or loss on
settlement. The Company does not expect the impact of adopting SFAS 143 to be
significant.

    On October 3, 2001, the FASB issued SFAS 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. While SFAS 144
supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, it retains many of the fundamental
provisions of that Statement. SFAS 144 also supersedes the accounting and
reporting provisions of APB Opinion 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for
the disposal of a segment of a business. The Company does not expect the impact
of adopting SFAS 144 to be significant.



                                       17
<PAGE>

                                  RISK FACTORS

    This report contains forward-looking statements. Because such statements
include risks and uncertainties, actual results could differ materially from
those expressed or implied by such forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and in the sections entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business."

    Shoppe Performance. A primary key to the financial success of the Company is
the weekly revenue generated per Shoppe, which has a history of fluctuating. The
Company has attributed some of this fluctuation to the effectiveness of its
product mix and has taken steps to address this problem; however, there can be
no assurance that such efforts will continue to have a positive impact on the
performance of the Shoppes. The average weekly revenue generated per Shoppe may
decline or fluctuate in the future, which could have a material adverse effect
on the Company's business, financial condition and results of operations.

    Growth and Management of Growth. The Company has recently experienced
growth. There can be no assurance that the Company will continue to grow at
historical rates or at all. The Company's ability to generate increased revenue
and achieve higher levels of profitability will depend upon its ability and the
ability of its franchisees to place additional Shoppes in Retail Accounts as
well as to maintain or increase the average financial performance of the
Shoppes. The Company's ability to place additional Shoppes depends on a number
of factors beyond the Company's control, including general business and economic
conditions. Installation of additional Shoppes will also depend, in part, upon
the Company's ability to secure additional national and regional Retail Accounts
and to obtain approval to place additional Shoppes in individual locations of
such accounts. The Company, its franchisees and their suppliers also may be
unable to place and adequately service additional Shoppes, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.

    There can be no assurance that the Company will be able to manage its
expanding operations effectively or that it will be able to maintain or
accelerate its growth. The Company's growth has placed, and is expected to
continue to place, significant demands on all aspects of the Company's business,
including Shoppe servicing, merchandising, financial and administrative
personnel and systems. The Company's future operating results are substantially
dependent upon the ability of the Company's officers and key personnel to manage
anticipated growth and increased demand effectively; to attract, train and
retain additional qualified personnel; and to implement and improve technical,
service, administrative, financial control and reporting systems. Either
deterioration in Shoppe performance or the Company's failure to manage growth
effectively could adversely and materially affect the Company's business,
financial condition and results of operations.

    Substantial Indebtedness; Effect of Financial Leverage. The Company intends
to use funds available under its revolving credit facility ($7.3 million at
February 28, 2002) for a number of purposes, including future acquisitions of
franchisees. Further use of funds from the credit facility could result in the
Company incurring additional indebtedness that is substantial in relation to its
stockholders' equity and cash flow available for debt service. As a result of
the issuance of the Ascending Rate Cumulative Trust Preferred Securities and the
amount the Company owes pursuant to its senior secured facilities and senior
subordinated notes, fixed charges could exceed earnings for the foreseeable
future. Substantial leverage poses the risk that the Company may not be able to
generate sufficient cash flow to service its indebtedness, or to adequately fund
its operations. There can be no assurance that the Company will be able to
increase its revenue and leverage the acquisitions it has made to achieve
sufficient cash flow to meet its potential debt service obligations. In
particular, there can be no assurance that the Company's operating cash flow
will be sufficient to meet its debt service obligations under its senior secured
facilities. The Company's leverage also could limit its ability to effect future
financings or may otherwise restrict the Company's operations and growth.

    Trade Relations and Dependence on Major Accounts. The Company's largest
account, Wal-Mart, accounted for approximately 38% of total revenue in 2001. The
loss of the Wal-Mart account, or the loss of a significant number of other major
accounts, or a significant reduction in the number of Shoppes and other
amusement vending equipment placed at such accounts, for any reason, could have
a material adverse effect on the Company's business, financial condition and
results of operations.

    Competition. The Company competes with a number of regional and local
operators of skill-crane machines. Many of these competitors are engaged in
aggressive expansion programs, and the Company has experienced and expects to



                                       18
<PAGE>

continue to experience intense competition for new locations and acquisition
candidates. There can be no assurance that the Company will be able to compete
effectively with these companies in the future. The Company's amusement vending
equipment also competes with other vending machines, coin-operated amusement
devices, coin counting and redemption machines and seasonal and bulk merchandise
for sites within retail locations. There can be no assurance that the Company
will be able to maintain its current sites in the retail locations or that it
will be able to obtain sites in the future on attractive terms or at all. There
also are few barriers to entry in the Company's business, and it would be
possible for well-financed vending machine manufacturers or other vending
machine operators with existing relationships with Retail Accounts targeted by
the Company to compete readily with the Company in certain markets.

    Dependence on Suppliers and Foreign Sourcing. Substantially all of the plush
toys and other products dispensed from the Shoppes are produced by foreign
manufacturers. A majority is purchased directly by the Company from
manufacturers in China. The Company purchases its other products indirectly from
vendors who obtain a significant percentage of such products from foreign
manufacturers. As a result, the Company is subject to changes in governmental
policies, the imposition of tariffs, import and export controls, transportation
delays and interruptions, political and economic disruptions and labor strikes
that could disrupt the supply of products from such manufacturers. Among other
things, the loss of China's "most favored nation" status under U.S. tariff laws
could result in a substantial increase in the import duty of certain products
manufactured in China, which could result in substantially increased costs for
certain products purchased by the Company which could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company also could be affected by labor strikes in the sea shipping,
trucking and railroad industries, all of which the Company utilizes to varying
degrees. Although the Company believes that alternative means of transportation
would be available for its products in the event of a labor strike affecting a
particular mode of transportation, such a disruption could increase the
Company's transportation costs and thereby reduce its profit margins in a
particular period. The Company does not have a long-term supply agreement with
any of its crane suppliers. While the Company believes that it will continue to
be able to purchase skill-crane machines from existing or alternative suppliers,
no assurance can be given that skill-cranes will be available on a
cost-efficient basis or that shortages or other disruptions in the Company's
sources of supply for skill-crane machines and components would not have a
material and adverse effect on the Company's business, financial condition and
results of operations.

    Seasonality and Variability of Results. The financial performance of
amusement vending equipment is substantially dependent on the level of retail
traffic at a particular location. Accordingly, the business, financial condition
and results of operations of the Company can be materially and adversely
affected by factors that reduce retail traffic at such locations. These include
numerous factors beyond the Company's control such as weather, labor strikes and
other disruptions of the business at Retail Accounts and local and national
business and economic conditions. The Company's results are also linked to
seasonal increases in foot-traffic at Retail Accounts, and disruptions of past
trends, including traditional increases during holiday seasons, could decrease
the Company's revenue. As a result, the Company's operating results may vary
significantly over time. Accordingly, period-to-period comparisons of its
results of operations are not necessarily meaningful and the Company's past
results should not be relied upon as an indication of future performance.

    Changing Consumer Trends; Technological Innovations. Consumer preferences
are constantly changing and difficult to predict, and consumer interest in the
Company's Shoppes or the products dispensed could decline suddenly or other
prize-dispensing equipment or amusement devices could replace the Shoppes in
consumer preference. The Company's success will depend in part on its ability to
offer new and appealing products and on the continuing appeal of its Shoppes'
skill-crane format in both existing markets and in new markets into which the
Company may expand. There can be no assurance that the use of skill-crane
machines and the Company's operating results will not be adversely affected by
changing consumer trends. The Company's business also is susceptible to advances
in the design and manufacture of skill-crane machines and other vending
technology. The Company's failure to anticipate or respond adequately to such
technological changes could adversely affect the Company's business and results
of operations.

    Dependence on Key Employees. The Company's success to date has been
dependent in part upon the efforts and abilities of Randall J. Fagundo (its
Chief Executive Officer and President), W. John Cash (its Senior Vice President,
Chief Financial Officer, Treasurer and Secretary), Robert A. Kaslon (its Senior
Vice President of Merchandising) and certain other key personnel. The Company's
continued success will depend upon its ability to retain a number of its current
key employees and to attract, train and retain new key management and
operational personnel. There can be no assurance that the Company will be able
to retain its existing key employees or attract and retain qualified employees
in the future. The Company does maintain "key man" insurance on Randall J.
Fagundo. In addition, executives or other



                                       19
<PAGE>

employees with knowledge of the Company's operations and policies may leave the
Company and establish competitive businesses. There can be no assurance that the
Company would be able to effectively enforce non-compete provisions against
these individuals.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The financial statements and related notes thereto required by this item are
listed and set forth herein beginning on page 29.

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

    None.



                                       20
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The following table sets forth certain information concerning the directors
and executive officers of the Company as of March 22, 2002:

<Table>
<Caption>
                                                                            PRINCIPAL OCCUPATION/
                    NAME                         AGE                     POSITION HELD WITH THE COMPANY
                    ----                         ---                     ------------------------------
<S>                                              <C>
    William F. Dawson Jr.......................  37    Partner, Wellspring Capital Management LLC, Chairman of the Board
                                                         of Directors
    Randall J. Fagundo.........................  42    President, Chief Executive Officer and Director
    Greg S. Feldman............................  45    Managing Partner, Wellspring Capital Management LLC and Director
    Pericles Navab.............................  34    President, Cadigan Investment Partners and Director
    Bruce W. Krysiak...........................  50    Chairman, EDABB, Inc. and Executive Chairman, Cadigan Investment
                                                         Partners and Director
    W. John Cash...............................  54    Senior Vice President, Chief Financial Officer, Treasurer and
                                                         Secretary
    Robert A. Kaslon...........................  37    Senior Vice President of Merchandising
</Table>

----------

    William F. Dawson, Jr. has served as Chairman of the Board since February
2002. Mr. Dawson has been employed by Wellspring Capital Management LLC, a
private equity firm, since May 2001. Mr. Dawson was employed by Whitney & Co.,
an investment management firm, where he served as Managing Director from May
2000 to April 2001. Prior to Whitney & Co., Mr. Dawson was employed by
Donaldson, Lufkin & Jenrette, Inc. from September 1991 to April 2000.

    Randall J. Fagundo, a co-founder of the Company, has served as President and
Chief Executive Officer since June 1999 and served as Senior Vice President and
Chief Operating Officer from January 1999 to June 1999. Mr. Fagundo served as
Secretary from May 1991 to June 1999 and as a director since February 2002. Mr.
Fagundo served as Vice President of Operations from May 1991 to January 1999.

    Greg S. Feldman, has served as a director since February 2002. Mr. Feldman
is co-founder and has been the Managing Partner of Wellspring Capital Management
LLC since its inception in January 1995.

    Pericles Navab, has served as a director since February 2002. Mr. Navab is
the founder and president of Cadigan Investment Partners, an investment firm
specializing in management buyouts. Prior to Cadigan, Mr. Navab was a Principal
at Arena Capital Partners, LLC, and investment holding company, from January
1999 to December 2000. Previously, Mr. Navab was a Principal at GarMark
Partners, a private investment firm, from August 1996 to December 1999.

    Bruce W. Krysiak, has served as a director since February 2002. Mr. Krysiak
joined Cadigan Investment Partners in January 2001 and serves as an Executive
Chairman. Mr. Krysiak has served as Chairman of EDABB, Inc., an investment firm,
for ten years and Executive Partner with Arena Capital Partners, LLC, an
investment holding company, since October 1999. From April 1998 to March 1999,
Mr. Krysiak served as the President, Chief Operating Officer and a director of
Toys "R" Us, Inc., (NYSE:TOY), a toy retailing company. From January 1997 until
April 1998, Mr. Krysiak served as the President and Chief Operating Officer of
Dollar General Corporation, (NYSE:DG), a large retail merchandise company, and
from April 1995 until May 1996 he served as Chief Operating Officer of the
Circle K Corporation, a convenience store operator. Mr. Krysiak is a director of
one of the portfolio companies of Cadigan.

    W. John Cash has served as Senior Vice President since January 1999,
Secretary since June 1999 and Chief Financial Officer since July 1995. Prior to
joining the Company he was Vice President and Chief Financial Officer of Kasler
Holding Company, a diversified construction company, from May 1991 to March
1995. From July 1984 to April 1991, Mr. Cash served as a partner of KPMG LLP.

    Robert A. Kaslon has served as a Senior Vice President since May 1999. Mr.
Kaslon served as Vice President of Operations from May 1997 to May 1999. From
May 1994 to May 1997 Mr. Kaslon served as Director of Operations and Franchisee
Relations.



                                       21
<PAGE>



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the SEC initial reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

    To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2001, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

Director Compensation Prior to the Acquisition of the Company by ACMI Holdings,
Inc.

    Prior to the acquisition of the Company by ACMI Holdings, Inc., each
non-employee director of the Company received $8,000 of annual cash
compensation, an initial grant of 15,000 shares of common stock upon election to
the Board of Directors and an annual grant of options for 7,500 shares of common
stock for service as a director each year after the first year of election. All
non-employee directors also receive reimbursement for their reasonable
out-of-pocket expenses related to attendance at Board meetings. In the fiscal
year ended December 31, 2001, the total compensation paid to non-employee
directors was $32,000.

    Prior to the acquisition of the Company by ACMI Holdings, Inc., each
non-employee director of the Company was eligible to receive stock option grants
under the 1995 Non-Employee Director Stock Option Plan (the "Directors' Plan").
Only non-employee directors of the Company or an affiliate of such directors (as
defined in the Internal Revenue Code of 1986, as amended) were eligible to
receive options under the Directors' Plan. Options granted under the Directors'
Plan were intended by the Company not to qualify as incentive stock options
under the Code. In connection with ACMI Holdings' acquisition of the Company,
the Directors' Plan was terminated in February 2002.

    During 2001, the Company granted 30,000 options to non-employee directors of
the Company. On February 11, 2002, all options granted under the Directors' Plan
were terminated pursuant to the Agreement and Plan of Merger and the directors
holding such options were paid the difference between $8.50 and the exercise
price of such options.

Director Compensation Following the Acquisition of the Company by ACMI Holdings,
Inc.

    Following the acquisition of the Company by ACMI Holdings, Inc., the Company
expects that each each non-employee director of the Company will receive $8,000
of annual cash compensation and reimbursement for their reasonable out-of-pocket
expenses related to attendance at Board meetings.



                                       22
<PAGE>



SUMMARY COMPENSATION TABLE

    The following table shows for the fiscal years ended December 31, 2001, 2000
and 1999, compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer and its two other most highly compensated executive officers
for the year ended December 31, 2001 (the "Named Executive Officers"):

<Table>
<Caption>

                                                                                     LONG-TERM
                                                                                    COMPENSATION
                                                              ANNUAL                   AWARDS
                                                           COMPENSATION             ------------
                                                      ---------------------          SECURITIES
                                                      SALARY          BONUS          UNDERLYING           ALL OTHER
      NAME OF PRINCIPAL POSITION           YEAR       ($)(1)         ($)(2)          OPTIONS (3)       COMPENSATION $(4)
      --------------------------           ----       ------         ------         ------------       -----------------
<S>                                        <C>        <C>           <C>             <C>               <C>

Randall J. Fagundo .................       2001       250,000       129,398                 --               8,742
  President and Chief Executive            2000       230,733            --            125,000               7,236
  Officer                                  1999       138,533            --            150,000               9,977

W. John Cash .......................       2001       150,000        37,471                 --               7,150
  Senior Vice President, Chief             2000       145,222            --             50,000               6,979
  Financial Officer, Treasurer and         1999       138,533            --                 --               7,045
  Secretary

Robert A. Kaslon ...................       2001       103,333        36,434                 --               7,513
  Senior Vice President of                 2000        90,000        21,039              5,000               6,708
  Merchandising                            1999        90,000            --                 --               8,050
</Table>

----------
(1) Includes amounts deferred pursuant to Section 401(k) and 125 of the Internal
    Revenue Code of 1986, as amended.

(2) Represents bonus earned during 2000 and paid in 2001 and the 2000 bonus was
    earned and paid during 2000.

(3) Pursuant to the terms of the Agreement and Plan of Merger, the options were
    exercised as of February 11, 2002 and the Named Executive Officers received
    the difference between $8.50 and the exercise price of the options.

(4) Includes value of Company provided automobile, health insurance premiums
    paid by the Company and funds contributed by the Company as matching
    contributions to the Named Executive Officers' 401(k) Plan account.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

    The Company did not grant any options to any of the Named Executive Officers
during the fiscal year ended December 31, 2001.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

     The following table shows for the fiscal year ended December 31, 2001
certain information regarding options exercised and held at year-end by the
Named Executive Officers:

<Table>
<Caption>
                                                                                    NUMBER OF
                                                                                    SECURITIES            VALUE OF
                                                                                    UNDERLYING           UNEXERCISED
                                                                                    UNEXERCISED         IN-THE-MONEY
                                                                                      OPTIONS            OPTIONS AT
                                                 SHARES                             AT 12/31/01           12/31/01
                                               ACQUIRED            VALUE            EXERCISABLE/         EXERCISABLE/
                 Name                        ON EXERCISE(#)   REALIZED($)(1)(3)   UNEXERCISABLE(#)    UNEXERCISABLE($)(2)
                 ----                        --------------   -----------------   ----------------    -------------------
<S>                                          <C>              <C>                 <C>                 <C>
Randall J. Fagundo...........................     --                --            212,500/62,500        834,813/350,312
W. John Cash.................................     --                --             45,000/25,000        214,725/140,125
Robert A. Kaslon.............................     --                --              5,500/2,500          22,113/14,012
</Table>

----------

(1) Based on the fair market value of the common stock as of the date of
    exercise, minus the exercise price, multiplied by the number of shares
    acquired.

(2) Based on the fair market value of the common stock as of December 31, 2001
    of $8.23 per share, minus the exercise price of "in-the-money" unexercised
    options, multiplied by the number of shares represented by such options.



                                       23
<PAGE>

(3) Pursuant to the terms of the Agreement and Plan of Merger, the options were
    exercised as of February 11, 2002 and the Named Executive Officers received
    the difference between $8.50 and the exercise price of the options.

CONSULTING AGREEMENT

    John A. Sullivan served as the non-executive Chairman of the Company's Board
of Directors prior to his resignation pursuant to the acquisition of the Company
by ACMI Holdings. The Company entered into a consulting agreement with Mr.
Sullivan as of December 1, 2000 to render services to the Company as a member of
the Company's Board of Directors through December 31, 2003 which consulting
agreement was subsequently amended on July 31, 2001 (the "Consulting
Agreement"). The Consulting Agreement provided that Mr. Sullivan would receive
compensation of $100,000 as partial consideration for his past services to the
Company. Commencing January 1, 2001, Mr. Sullivan was to receive compensation of
$100,000 per year for his past and present services through December 31, 2003.
In connection with the Consulting Agreement, Mr. Sullivan received a stock
option to purchase 50,000 shares of the Company's common stock pursuant to the
Company's Directors' Plan, effective November 21, 2000. Such option was granted
with an exercise price of $2.625 per share, which was equal to the market price
as of the date of grant and was immediately exercisable. The Consulting
Agreement contains a provision that in the event Mr. Sullivan is terminated
without cause, including after a change of control of the Company, the Company
is obligated to pay Mr. Sullivan an amount equal to Mr. Sullivan's earned
compensation plus an amount equal to the remaining amount payable under the
Consulting Agreement. The Consulting Agreement also contains confidentiality and
noncompete provisions that prohibit Mr. Sullivan from soliciting employees of
the Company, engaging in business similar to the Company's or disclosing
confidential information without the specific authorization of the Company's
Board of Directors after the termination of the Consulting Agreement.

    In connection with the acquisition of the Company by ACMI Holdings, Mr.
Sullivan resigned from the Company's Board of Directors. Accordingly, Mr.
Sullivan received accelerated payment of approximately $200,000 under the
Consulting Agreement.

EMPLOYMENT AGREEMENTS

    The Company entered into employment agreements with its Chief Executive
Officer and President, Randall J. Fagundo and Senior Vice President, Chief
Financial Officer, Treasurer and Secretary, W. John Cash, (each an "Executive")
as of December 1, 2000 and such agreements were subsequently amended on July 31,
2001 (the "Employment Agreements"). The Employment Agreement with Mr. Fagundo
provides that commencing January 1, 2001 he will receive an annual salary of
$250,000. Mr. Fagundo's annual salary will be increased to $275,000 on January
1, 2002, and to $300,000 on January 1, 2003. The Employment Agreement with Mr.
Cash provides that commencing January 1, 2001 he will receive an annual salary
of $150,000. In connection with the Employment Agreements, Mr. Fagundo received
a stock option for 125,000 shares and Mr. Cash received a stock option for
50,000 shares of the Company's common stock pursuant to the Company's Amended
and Restated Stock Option Plan, effective November 21, 2000. Each of these
options had an exercise price of $2.625 per share, which was equal to the market
price as of the date of grant and were subject to vesting over a two year
period. The Employment Agreements with Mr. Fagundo and Mr. Cash expire on
December 31, 2003 and June 30, 2002, respectively. The Employment Agreements
also provide that each Executive will be entitled to (i) participate in any
employee benefits plans the Company makes available to its other employees and
(ii) use of an automobile provided by the Company. Each Employment Agreement
also provides that the Company may terminate the Executive's employment at any
time for cause and with 90 days written notice without cause. If the Executive
is terminated without cause, the Company is obligated to pay the Executive's
earned salary plus an amount equal to one times Mr. Fagundo's current salary and
one-half of Mr. Cash's current salary. The Employment Agreements also provide
that after a change of control of the Company, if the Executive is terminated
without cause, if the Executive terminates the Employment Agreement for good
reason or requires the Executive to move outside the Boulder, Colorado area then
the Executive will be entitled to receive a cash amount equal to three times and
one and one-half times the current annual base salary for Mr. Fagundo and Mr.
Cash, respectively. The Employment Agreements also contain confidentiality and
noncompete provisions which prohibit the Executives from soliciting employees of
the Company, engaging in business similar to the Company's or disclosing
confidential information without the specific authorization of the Company's
Board of Directors after the termination of the Executive's employment with the
Company.



                                       24
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    During the Company's fiscal year ended December 31, 2001, the Company's
Compensation Committee consisted of Messrs. Krysiak, Bermingham and Sullivan.
Following the acquisition of the Company by ACMI Holdings, Inc., the Company's
Compensation Committee consists of Messrs. Dawson, Feldman and Krysiak. No
member of the Compensation Committee of the Company, as constituted before or
after the acquisition by ACMI Holdings, serves as a member of the Board of
Directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Company's Board of Directors or Compensation
Committee.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth certain information regarding the ownership
of the Company's common stock as of March 22, 2002 by: (i) each director; (ii)
each of the Named Executive Officers; (iii) all Named Executive Officers and
directors of the Company as a group; and (iv) all those known by the Company to
be beneficial owners of more than five percent of its common stock. Unless
otherwise indicated, the address for each of the persons listed in the table is
c/o American Coin Merchandising, Inc. 5660 Central Avenue, Boulder, Colorado
80301.

<Table>
<Caption>
                                                                                    BENEFICIAL   OWNERSHIP (1)
                                                                                    ----------   -------------
                                                                                    NUMBER OF     PERCENT OF
                                  BENEFICIAL OWNER                                    SHARES         TOTAL
                                  ----------------                                  ----------   -------------
<S>                                                                                 <C>          <C>
    ACMI Holdings, Inc. (2)......................................................       1,000          100%
      c/o Wellspring Capital Management LLC
      620 Fifth Avenue, Suite 216
      New York, New York 10020-1571
    William F. Dawson, Jr........................................................          --           --
    Randall J. Fagundo...........................................................          --           --
    Greg S. Feldman..............................................................          --           --
    Pericles Navab...............................................................          --           --
    Bryce W. Krysiak.............................................................          --           --
    W. John Cash.................................................................          --           --
    Robert A. Kaslon.............................................................          --           --
    All executive officers and directors as a group (7 persons) .................          --           --%
</Table>

----------

(1) Applicable percentages are based on 1,000 shares outstanding on March 22,
    2002, adjusted as required by rules promulgated by the SEC.

(2) The Company became a wholly owned subsidiary of ACMI Holdings, Inc., a
    Delaware corporation, on February 11, 2002.

    Pursuant to the terms of the Guarantee and Collateral Agreement, dated as of
February 11, 2002, made by the Company and ACMI Holdings, Inc., in favor of
Madison Capital Funding LLC, as agent for the lenders under the Company's senior
secured credit facility, ACMI Holdings has pledged all of the common stock of
the Company as collateral to secure the Company's obligations under the senior
secured credit facility. Accordingly, upon the occurrence of an even of default
under the senior secured credit facility, ACMI Holdings' ownership in the
Company's common stock would transfer to Madison Capital as agent for the
lenders resulting in a change of control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Acquisition of the Company by ACMI Holdings, Inc. and Related Transactions

    On September 9, 2001, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with ACMI Holdings, Inc. and Crane Mergerco
Inc., a wholly owned subsidiary of ACMI Holdings, Inc. ("Merger Sub"). On
February 11, 2002, in accordance with the terms of the Merger Agreement, Merger
Sub merged with and into the Company with the Company as the surviving
corporation (the "Merger"). By virtue of the Merger, the Company



                                       25
<PAGE>

became a wholly owned subsidiary of ACMI Holdings, Inc. As a result of the
Merger, each share of the Company's common stock outstanding immediately prior
to the Merger was converted into the right to receive $8.50 in cash and each
option to purchase shares of the Company's common stock was converted into the
right to receive an amount in cash equal to the number of shares of the
Company's common stock subject to such option multiplied by the excess, if any,
of $8.50 over the exercise price of such stock option.

    The Company retained Batchelder & Partners, Inc., an investment banking and
financial advisory firm, to act as the Company's financial advisor in connection
with the Merger and the transactions contemplated by the Merger Agreement. John
A. Sullivan served as chairman of the Company's Board of Directors prior to the
Merger and is also employed by Relational Investors, an affiliate of Batchelder
& Partners. Batchelder & Partners received a fee of approximately $1.18 million
for services rendered in connection with the Merger. Mr. Sullivan was also party
to a consulting agreement with the Company regarding his service as a member of
the Company's Board of Directors through December 31, 2003. Pursuant to the
terms of the Merger Agreement, Mr. Sullivan resigned from the Company's Board of
Directors and his consulting agreement with the Company terminated prior to the
Merger. Accordingly, Mr. Sullivan received accelerated payment of approximately
$200,000 under his consulting agreement. The summary of Mr. Sullivan's
consulting agreement contained in Item 11. Executive Compensation - Consulting
Agreement is incorporated herein by reference.

    In connection with the Merger, the Company entered into a Services and Fee
Agreement with Wellspring Capital Management LLC and Knightsbridge Holdings, LLC
on February 11, 2002 (the "Fee Agreement"). See Exhibit. Pursuant to the terms
of the Fee Agreement, the Company will pay an annual consulting fee of $400,000
in arrears in equal monthly installments and reimburse Wellspring and
Knightsbridge for all reasonable out-of-pocket costs and expenses incurred in
connection with the performance of their consulting services. The consulting fee
is allocated 66 2/3% to Wellspring and 33 1/3% to Knightsbridge. The Fee
Agreement further provides that the Company will not pay any portion of the
consulting fee to the extent that such payment conflicts with the Company's
covenants pursuant to its senior secured credit facility or senior subordinated
notes. However, such unpaid fees will continue to accrue, without interest, and
the Company will pay such fees if and when such payment is no longer prohibited
under the senior secured credit facility or senior subordinated notes. Pursuant
to the terms the Fee Agreement, the Company has paid to date closing fees of
$1,350,000 and $650,000 to Wellspring and Knightsbridge, respectively. The Fee
Agreement further provides that the Company shall pay all fees and expenses
payable to the lenders pursuant to the terms of the senior secured credit
facility and senior subordinated notes. Any other consulting or similar fees
that may be payable under the Fee Agreement are allocated 65% to Wellspring and
35% to Knightsbridge. Knightsbridge's entitlement to the fees set forth in the
Fee Agreement is contingent upon its continuous ownership of certain warrants to
purchase shares of ACMI Holdings and its maintenance of a representative on the
Board of Directors of ACMI Holdings. Under the terms of the Fee Agreement, the
Company agrees to indemnify Wellspring and Knightsbridge and their respective
representatives in connection with any liabilities or judgments with respect to
the Fee Agreement.

    William F. Dawson, Jr., a director of the Company following the Merger, is a
partner at Wellspring. Greg S. Feldman, a director of the Company following the
Merger, is the managing partner at Wellspring. Wellspring holds a majority
interest in ACMI Holdings, of which the Company is a wholly owned subsidiary.

    Bruce W. Krysiak, a director of the Company, holds an interest in
Knightsbridge. Pericles Navab, a director of the Company following the Merger,
holds an interest in Knightsbridge. Knightsbridge holds an interest in ACMI
Holdings, which is controlled by Wellspring Capital Management LLC.
Knightsbridge has assigned its rights and duties under the Fee Agreement to its
affiliate, Cadigan Investment Partners. Mr. Krysiak is the Executive Chairman of
Cadigan Investment Partners and Mr. Navab is its President.

Other Transactions

    J. Gregory Theisen was a director of the Company prior to his resignation
pursuant to the Merger Agreement. The Company purchases certain kiddie rides
from Theisen Vending, Inc., which is wholly owned by Thomas N. Theisen, the
brother of J. Gregory Theisen. The Company purchased approximately $662,000 of
kiddie rides and related parts from Theisen Vending, Inc. in the fiscal year
ended December 31, 2001.

    The Company has also entered into employment agreements with Randall J.
Fagundo and W. John Cash. The summary of the terms of the Company's employment
agreements with Messrs. Fagundo and Cash contained in Item 11. Executive
Compensation - Employments is incorporated herein by reference.



                                       26
<PAGE>



                                     PART IV

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

    (a) Exhibits

<Table>
<S>                  <C>

        2.1+         --  Agreement and Plan of Merger, dated as of September 9, 2001, among Crane Mergerco Holdings, Inc., a
                         Delaware corporation, Crane Mergerco Inc., a Delaware corporation and Registrant.

        2.2+         --  Form of Voting Agreement, dated as of September 9, 2001, among Crane Mergerco Holdings, Inc., a
                         Delaware corporation and each of Richard P. Bermingham, Randall J. Fagundo, Richard D. Jones, John
                         A. Sullivan and J. Gregory Theisen.

        3.1++        --  Certificate of Incorporation of the Registrant.

        3.3          --  Certificate of Merger of the Registrant.

        3.4          --  Restated Certificate of Incorporation.

        3.5          --  Amended and Restated Bylaws of the Registrant.

        4.1++        --  Reference is made to Exhibits 3.1 through 3.5.

        4.2          --  Specimen Stock Certificate.

        4.3*         --  Certificate of Trust of American Coin Merchandising Trust I.

        4.4*         --  Trust Agreement of American Coin Merchandising Trust I.

        4.5*         --  Amended and Restated Trust Agreement of American Coin Merchandising Trust I.

        4.6*         --  Form of Junior Subordinated Indenture between the Registrant and Wilmington Trust Company, as
                         Trustee.

        4.7*         --  Form of Guarantee Agreement with respect to Trust Preferred Securities of American Coin
                         Merchandising Trust I.

        4.8*         --  Form of Agreement as to Expenses and Liabilities between the Registrant and American Coin
                         Merchandising Trust I.

        4.9*         --  Form of Certificate Evidencing Trust Preferred Securities.

        4.10*        --  Form of Certificate Evidencing Trust Common Securities.

        4.11*        --  Form of Ascending Rate Junior Subordinated Deferrable Interest Debenture.

        4.12         --  17% Senior Subordinated Notes Due 2009 between the Registrant and each of the parties listed on the
                         attached schedule, dated February 11, 2002.

       10.1++         -- Form of Indemnity Agreement to be entered into between the Registrant and its directors and
                         executive officers.

       10.35#        --  Commercial Lease Amendment Agreement, between the Registrant and Technical Building Company, dated
                         as of November 20, 1997.

       10.47~        --  Premier Amusement Vendor Agreement, dated January 28, 2000, between the Registrant and Best Vendor
                         Co.

       10.48~        --  Addendum to Premier Amusement Vendor Agreement, dated January 28, 2000, between the Registrant and
                         Best Vendor Co.

       10.49~        --  Addendum #2 to Premier Amusement Vendor Agreement, dated February 14, 2000, between the Registrant
                         and Best Vendor Co.

       10.50=        --  Amusement Vending Agreement, effective as of July 1, 2000, between the Registrant and Denny's Inc.

       10.51=        --  Other Income Supplier Agreement--Coin Operated Equipment, dated August 1, 2000 between the
                         Registrant and Wal-Mart Stores, Inc.

       10.54@X       --  Executive Employment Agreement dated December 1, 2000, between the Registrant and Randall J. Fagundo.

       10.55@X       --  Executive Employment Agreement dated December 1, 2000, between the Registrant and W. John Cash.

       10.57$X       --  Amendment to Executive Employment Agreement dated December 1, 2000, between the Registrant and
                         Randall J. Fagundo.
</Table>



                                       27
<PAGE>

<Table>
<S>                  <C>
       10.58$X       --  Amendment to Executive Employment Agreement dated December 1, 2000, between the Registrant and W.
                         John Cash.

       10.60         --  Services and Fee Agreement, dated February 11, 2002, between and among the Registrant, Wellspring
                         Capital Management LLC and Knightsbridge Holdings, LLC d/b/a Krysiak Navab & Co.

       10.61         --  Credit Agreement, dated February 11, 2002, between and among the Registrant and Madison Capital
                         Funding LLC and The Royal Bank of Scotland PLC.

       10.62         --  Guarantee and Collateral Agreement, dated February 11, 2002, between and among the Registrant, ACMI
                         Holdings and Audax Mezzanine Fund, L.P., Royal Bank of Scotland PLC and Upper Colombia Capital
                         Company, LLC.

       10.63         --  Purchase Agreement among ACMI Holdings, Inc., the Registrant, as Issuer and the Purchasers named
                         therein, dated as of February 11, 2002.

</Table>

----------

+   Incorporated by reference to the Company's Current Report on Form 8-K, dated
    September 10, 2001.

++  Incorporated by reference to the Company's Registration Statement on Form
    SB-2, File No. 33-95446-D.

*   Incorporated by reference to the Company's Registration Statement on Form
    S-3, File No. 333-60267.

#   Incorporated by reference to the Company's Annual Report on Form 10-K for
    the year ended December 31, 1997.

**  Incorporated by reference to the Company's Current Report on Form 8-K, dated
    April 29, 1999.

~   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended March 31, 2000.

=   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended September 30, 2000.

@   Incorporated by reference to the Company's Annual Report on Form 10-K for
    the fiscal year ended December 31, 2000.

$   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended June 30, 2001.

X   Indicates management contract or compensatory plan, contract or arrangement.

    (b) REPORTS ON FORM 8-K.

           None.



                                       28

<PAGE>



                        AMERICAN COIN MERCHANDISING, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 2001

<Table>
<Caption>
                                                                                               PAGE
                                                                                               ----
<S>                                                                                            <C>

Independent Auditors' Report................................................................    F-1

Consolidated Financial Statements:

     Balance Sheets.........................................................................    F-2

     Statements of Operations...............................................................    F-3

     Statements of Stockholders' Equity.....................................................    F-4

     Statements of Cash Flows...............................................................    F-5

     Notes to Consolidated Financial Statements.............................................    F-6
</Table>

    All schedules are omitted because of the absence of conditions under which
they are required or because the required information is provided in the
financial statements or notes thereto.



                                       29
<PAGE>

                          Independent Auditors' Report


The Board of Directors and Stockholders
American Coin Merchandising, Inc.:

     We have audited the accompanying consolidated balance sheets of American
Coin Merchandising, Inc. and subsidiaries ("Company") as of December 31, 2001
and 2000, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of American
Coin Merchandising, Inc. and subsidiaries as of December 31, 2001 and 2000, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.



KPMG LLP



Boulder, Colorado
February 12, 2002



                                      F-1
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<Table>
<Caption>
                                                                                                    DECEMBER 31,
                                                                                                2001            2000
                                                                                             ----------      ----------
<S>                                                                                          <C>             <C>
                                                        ASSETS
Current assets:
   Cash and cash equivalents ...........................................................     $    4,066      $    2,986
   Trade accounts and other receivables ................................................            738             608
   Income tax receivable ...............................................................            725           2,098
   Inventories .........................................................................         11,981          10,126
   Prepaid expenses and other assets ...................................................          2,736           1,800
                                                                                             ----------      ----------
       Total current assets ............................................................         20,246          17,618
                                                                                             ----------      ----------

Property and equipment, at cost:
   Vending machines ....................................................................         71,758          67,906
   Vehicles ............................................................................          5,683           6,234
   Office equipment, furniture and fixtures ............................................          5,534           4,557
                                                                                             ----------      ----------
                                                                                                 82,975          78,697
   Less accumulated depreciation .......................................................        (38,943)        (29,178)
                                                                                             ----------      ----------
       Property and equipment, net .....................................................         44,032          49,519

Placement fees, net of accumulated amortization of $4,758 in 2001 and $2,339 in 2000 ...          2,218           2,114
Costs in excess of assets acquired and other intangible assets, net of accumulated
   amortization of $8,481 in 2001 and $6,216 in 2000 ...................................         34,660          36,009
Other assets, net of accumulated amortization of $1,274 in 2001 and $871 in 2000 .......          2,206           2,647
                                                                                             ----------      ----------

       Total assets ....................................................................     $  103,362      $  107,907
                                                                                             ==========      ==========

                                         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt ...................................................     $    7,700      $    7,233
   Accounts payable ....................................................................          4,322           6,096
   Accrued commissions .................................................................          2,766           2,122
   Other accrued expenses ..............................................................          1,807           1,476
                                                                                             ----------      ----------
       Total current liabilities .......................................................         16,595          16,927
                                                                                             ----------      ----------

Long-term debt, net of current portion .................................................         37,276          44,224
Other liabilities ......................................................................            627             449
Deferred tax liabilities ...............................................................          1,457             625
                                                                                             ----------      ----------
       Total liabilities ...............................................................         55,955          62,225
                                                                                             ----------      ----------

Company obligated mandatorily redeemable preferred securities of subsidiary trust
   holding solely junior subordinated debentures .......................................         15,644          15,593

Stockholders' equity:
   Preferred stock, $.10 par value (Authorized 500 shares; none issued) ................             --              --
   Common stock, $.01 par value (Authorized 20,000 shares; issued and
     outstanding 6,538 shares in 2001 and 6,514 shares in 2000 .........................             66              66
   Additional paid-in-capital ..........................................................         22,136          22,076
   Retained earnings ...................................................................          9,561           7,947
                                                                                             ----------      ----------
       Total stockholders' equity ......................................................         31,763          30,089
                                                                                             ----------      ----------
Commitments
       Total liabilities and stockholders' equity ......................................     $  103,362      $  107,907
                                                                                             ==========      ==========
</Table>


          See accompanying notes to consolidated financial statements.


                                      F-2
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                              2001            2000            1999
                                                                           ----------      ----------      ----------
<S>                                                                        <C>             <C>             <C>
Revenue:
   Vending ...........................................................     $  139,670      $  127,076      $  115,835
   Franchise and other ...............................................          2,257           2,681           4,630
                                                                           ----------      ----------      ----------
       Total revenue .................................................        141,927         129,757         120,465
                                                                           ----------      ----------      ----------

Cost of revenue:
   Vending, excluding related depreciation and amortization ..........         92,768          83,282          77,100
   Depreciation and amortization .....................................         11,990          10,033           7,897
                                                                           ----------      ----------      ----------
       Total cost of vending .........................................        104,758          93,315          84,997
   Franchise and other ...............................................          1,921           1,936           3,104
                                                                           ----------      ----------      ----------
       Total cost of revenue .........................................        106,679          95,251          88,101
                                                                           ----------      ----------      ----------

       Gross profit ..................................................         35,248          34,506          32,364

General and administrative expenses ..................................         23,386          21,924          22,141
Depreciation and amortization ........................................          3,132           3,156           3,527
Write off of costs in excess of assets acquired, severance and
   other costs .......................................................             --              --           7,536
                                                                           ----------      ----------      ----------

       Operating earnings (loss) .....................................          8,730           9,426            (840)

Interest expense, net ................................................          6,127           7,775           6,866
                                                                           ----------      ----------      ----------

       Earnings (loss) before income taxes and extraordinary loss ....          2,603           1,651          (7,706)

Income tax (expense) benefit .........................................           (989)           (627)          3,200
                                                                           ----------      ----------      ----------

       Earnings (loss) before extraordinary loss .....................          1,614           1,024          (4,506)

Extraordinary loss on debt refinancing, net of income tax
   benefit of $101 ...................................................             --             165              --
                                                                           ----------      ----------      ----------

       Net earnings (loss) ...........................................     $    1,614      $      859      $   (4,506)
                                                                           ==========      ==========      ==========

       Basic earnings (loss) per share of common stock ...............     $     0.25      $     0.13      $    (0.70)
       Diluted earnings (loss) per share of common stock .............           0.24            0.13           (0.70)
       Basic weighted average common shares ..........................          6,526           6,493           6,475
       Diluted weighted average common shares ........................          6,729           6,493           6,475
</Table>



          See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<Table>
<Caption>
                                                                                                              TOTAL
                                                                         ADDITIONAL                           STOCK-
                                                          COMMON          PAID-IN          RETAINED          HOLDERS'
                                                          STOCK           CAPITAL          EARNINGS           EQUITY
                                                       ------------     ------------     ------------      ------------
<S>                                                    <C>              <C>              <C>               <C>

DECEMBER 31, 1998 ................................     $         65     $     21,989     $     11,594      $     33,648

   Issuance of 5,125 shares of common stock
     in employee stock purchase plan .............               --               12               --                12
   Net loss ......................................               --               --           (4,506)           (4,506)
                                                       ------------     ------------     ------------      ------------

DECEMBER 31, 1999 ................................               65           22,001            7,088            29,154

   Issuance of 33,725 shares of common stock
     in employee stock purchase plan .............                1               75               --                76
   Net earnings ..................................               --               --              859               859
                                                       ------------     ------------     ------------      ------------

DECEMBER 31, 2000 ................................               66           22,076            7,947            30,089

   Issuance of 21,722 shares of common stock
     in employee stock purchase plan .............               --               56               --                56
   Exercise of employee stock options ............               --                4               --                 4
   Net earnings ..................................               --               --            1,614             1,614
                                                       ------------     ------------     ------------      ------------

DECEMBER 31, 2001 ................................     $         66     $     22,136     $      9,561      $     31,763
                                                       ============     ============     ============      ============
</Table>



          See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                               YEAR ENDED DECEMBER 31,
                                                                                        2001            2000            1999
                                                                                     ----------      ----------      ----------
<S>                                                                                  <C>             <C>             <C>
Operating activities:
   Net earnings (loss) .........................................................     $    1,614      $      859      $   (4,506)
   Adjustments to reconcile net earnings (loss) to net cash provided
     by operating activities:
       Depreciation and amortization ...........................................         15,637          13,699          11,950
       Write off of costs in excess of assets acquired, severance and
         other costs ...........................................................             --              --           7,536
       Deferred income tax expense (benefit) ...................................            944           2,725          (3,200)
       Changes in operating assets and liabilities, net of acquisitions:
           Trade accounts and other receivables ................................          1,099          (2,015)          1,123
           Inventories .........................................................         (1,809)          4,680          (2,227)
           Prepaid expenses and other assets ...................................           (971)             84          (1,223)
           Accounts payable, accrued expenses and other liabilities ............           (751)          3,398          (2,086)
                                                                                     ----------      ----------      ----------
         Net cash provided by operating activities .............................         15,763          23,430           7,367
                                                                                     ----------      ----------      ----------

Investing activities:
   Acquisitions of property and equipment, net .................................         (4,857)        (15,618)         (8,267)
   Acquisitions of franchisees and others ......................................           (273)             --            (180)
   Placement fees ..............................................................         (2,517)         (2,441)           (828)
                                                                                     ----------      ----------      ----------
         Net cash used in investing activities .................................         (7,647)        (18,059)         (9,275)
                                                                                     ----------      ----------      ----------

Financing activities:
   Net (payments) borrowings on credit facility, net of issuance costs .........         (5,724)           (576)          2,386
   Principal payments on long-term debt ........................................         (1,372)         (2,464)         (2,158)
   Issuance of common stock, net of offering costs .............................             60              76              12
                                                                                     ----------      ----------      ----------
         Net cash provided by (used in) financing activities ...................         (7,036)         (2,964)            240
                                                                                     ----------      ----------      ----------

         Net increase (decrease) in cash and cash equivalents ..................          1,080           2,407          (1,668)

Cash and cash equivalents at beginning of year .................................          2,986             579           2,247
                                                                                     ----------      ----------      ----------

Cash and cash equivalents at end of year .......................................     $    4,066      $    2,986      $      579
                                                                                     ==========      ==========      ==========
</Table>



          See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2001, 2000 AND 1999

1.   DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     American Coin Merchandising, Inc., d/b/a Sugarloaf Creations, Inc. and
American Coin Merchandising Trust I (the "Company") and its franchisees own and
operate over 14,000 coin-operated amusement vending machines. These machines
dispense plush toys, watches, jewelry, novelties, and other items. The Company's
amusement vending machines are placed in supermarkets, mass merchandisers,
bowling centers, truck stops, bingo halls, bars, restaurants, warehouse clubs
and similar locations. At December 31, 2001, the Company had 34 field offices
with operations in 47 states. The Company also sells products to franchisees. At
December 31, 2001, there were 9 franchisees operating in 12 territories. All
significant intercompany balances and transactions have been eliminated in
consolidation. See note 15.

2.   ACQUISITIONS

     During 2001, the Company acquired certain assets and the business
operations of one of its franchises for approximately $1,125,000. Of this
amount, $487,000 was paid in cash with the balance to be paid over a three-year
period in accordance with the terms of the promissory note issued in connection
with the acquisition. The Company also assumed certain equipment leases in
connection with the acquisition. The Company has recorded approximately $886,000
of costs in excess of assets acquired as a result of this acquisition that was
accounted for using the purchase method of accounting.

     During 1999, the Company acquired certain assets and the business
operations of one of its franchisees for approximately $180,000 in cash. The
Company has recorded approximately $159,000 of costs in excess of assets
acquired as a result of this acquisition that was accounted for using the
purchase method of accounting.

     During the third quarter of 1999, the Company renegotiated a major contract
that was originally assumed with the acquisition of Plush 4 Play. Company-owned
equipment and personnel replaced the equipment and group operators previously
utilized by Plush 4 Play to service these account locations; therefore,
substantially all of the assets and operations obtained in the Plush 4 Play
acquisition no longer have value to the Company. Accordingly, the remaining $6.3
million of net costs in excess of assets acquired and other costs associated
with the Plush 4 Play acquisition were written off.

     All of the acquisitions were accounted for by the purchase method. Results
of operations for all of these acquisitions are included in the consolidated
financial statements from the respective acquisition dates forward. The pro
forma difference between revenue and net earnings (loss) and actual is not
material.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     VENDING

     Vending revenue represents cash receipts from customers using amusement
vending machines and is recognized when collected. The cost of vending is
comprised primarily of the cost of products vended through the machines, the
servicing of machines and commissions paid to retail locations.

     FRANCHISE ROYALTIES

     Typically, franchisees are required to pay continuing royalties ranging
from 2% to 5% of gross machine revenue.

     INCOME TAXES

     The Company accounts for income taxes under the asset and liability method
of accounting for income taxes. Deferred income taxes reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and amounts used for income tax
purposes. Deferred tax assets and liabilities are measured using enacted tax
rates expected to be in effect for the year in which those temporary differences
are expected to be recovered or settled. The effects on deferred tax assets and
liabilities of a change in tax rates are recognized in income in the period that
includes the enactment date.

     ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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



                                      F-6
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


expenses during the reporting period. On an on-going basis, management evaluates
its estimates and judgments, including those related to income taxes, inventory,
property and equipment, costs in excess of assets acquired and other intangible
assets, and placement fees and other assets. Management bases its estimates and
judgments on historical experience and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results could differ
significantly from those estimates.

     CASH EQUIVALENTS

     The Company considers as cash equivalents all highly liquid investments
with an original maturity of three months or less.

     INVENTORIES

     Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method. Inventories consist of purchased items
ready for resale or use in vending operations.

     PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Depreciation is calculated on
the straight-line method over the estimated useful lives of the assets that
range from 3 to 10 years.

     PLACEMENT FEES

     Placement fees are stated at cost and amortized on the straight-line basis
over the term of the related contract.

     COSTS IN EXCESS OF ASSETS ACQUIRED

     Costs in excess of assets acquired represent the purchase amount paid in
excess of the fair value of the tangible net assets acquired and is amortized
using the straight-line method over 20 years. The Company assesses the
impairment of costs in excess of assets acquired whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. Factors
the Company considers important which could trigger an impairment review include
significant underperformance relative to expected historical or projected future
operating results, changes in the manner of our use of the acquired assets or
the strategy for our overall business and negative industry or economic trends.

     IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

     The Company reviews its long-lived assets and intangibles for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of the asset to the future net
cash flows expected to be generated by the asset. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceed the fair value of the assets.

     EARNINGS PER SHARE

     The Company discloses both basic and diluted earnings per share. Basic and
diluted earnings per share are computed by dividing earnings (loss) by the
weighted average number of common shares outstanding during the period and by
all dilutive potential common shares outstanding during the year, respectively.

     RECLASSIFICATIONS

     Certain 1999 amounts were reclassified to conform to the December 31, 2000
presentation.

     SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     A schedule of supplemental cash flow information follows (in thousands):

<Table>
<Caption>
     YEAR ENDED DECEMBER 31,                                                      2001         2000         1999
                                                                                --------     --------     --------
<S>                                                                             <C>          <C>          <C>
     Cash paid during the year:
       Interest ...........................................................     $  5,451     $  7,172     $  6,914
       Income taxes .......................................................           35           69           90
     Significant noncash investing and financing activities:
       Notes payable issued for acquisitions of franchisees and others ....          615           --           --
       Earn-out and hold backs related to acquisition .....................           --           --       (1,442)
</Table>


                                      F-7
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


4.   CREDIT FACILITY

     In December 2000, the Company refinanced its $50 million reducing revolving
loan agreement and replaced it with a $55 million senior secured credit
facility. As a result of the refinancing, the Company recorded an after-tax
extraordinary loss of $165,000, or $0.03 per diluted share, related to the
write-off of loan origination fees related to the previous credit facility.

     The Company has a $55.0 million senior secured facility comprised of a
$10.0 million revolving credit facility and a $45.0 million term loan. Under the
revolving credit facility, the Company may borrow up to $10 million through
December 2003 and at December 31, 2001 there was a principal amount of
approximately $4.0 million outstanding and $6.0 million available under the
revolving credit facility. Under the $45.0 million term loan facility, the
Company is required to make quarterly principal installments that increase in
amount over the four and one half year term of the facility. The revolving
credit facility and term loan bear interest at a floating rate, at the Company's
option, equal to either LIBOR plus the applicable margin or a base rate that is
equal to the higher of the prime rate or the federal funds rate plus one-half
percent plus the applicable margin. The effective rate of interest on both
facilities at December 31, 2001 was 5.5%. The credit facility provides that
certain financial ratios be met and places restrictions on, among other things,
the incurrence of additional debt financing and the payment of dividends on
common stock. The Company was in compliance with such financial ratios and
restrictions at December 31, 2001.

5.       LONG-TERM DEBT

     Long-term debt consists of the following (in thousands):

<Table>
<Caption>
                                                                                                  DECEMBER 31,
                                                                                              2001            2000
                                                                                           ----------      ----------
<S>                                                                                       <C>             <C>

     Senior secured credit facilities (see note 4) ...................................     $   44,500      $   50,224
     Notes payable to former franchisees and others, due in monthly and quarterly
       installments with interest ranging from 8% to 9%; maturing between 2001 and
       2004, secured by certain property and equipment ...............................            476           1,233
                                                                                           ----------      ----------
        Total long-term debt .........................................................         44,976          51,457
     Less current portion ............................................................         (7,700)         (7,233)
                                                                                           ----------      ----------
        Long-term debt, net of current portion .......................................     $   37,276      $   44,224
                                                                                           ==========      ==========
</Table>

     The carrying amount of long-term debt approximates its fair value.

     Maturities of long-term debt as of December 31, 2001 are as follows (in
thousands):

<Table>
<Caption>
               YEAR ENDING DECEMBER 31,
<S>                                                                              <C>

                         2002.................................................   $   7,700
                         2003.................................................       9,719
                         2004.................................................      11,857
                         2005.................................................      15,700
                                                                                 ---------
                                                                                 $  44,976
                                                                                 =========
</Table>

6.   MANDATORILY REDEEMABLE PREFERRED SECURITIES

     In September 1998, American Coin Merchandising Trust I (the "Trust"), a
wholly owned subsidiary trust created under the laws of the State of Delaware,
completed a public offering of $17 million of Ascending Rate (10.5% at December
31, 1998 increasing to 12.0% at September 16, 2005) Cumulative Trust Preferred
Securities (the "Trust Preferred Securities"). The Company recognizes periodic
interest using the interest method over the outstanding term of the debt. The
sole assets of the Trust are American Coin Merchandising, Inc. Ascending Rate
Junior Subordinated Debentures (the "Subordinated Debentures") due September 15,
2028. The obligations of the Trust related to the Trust Preferred Securities are
fully and unconditionally guaranteed by American Coin Merchandising, Inc.
Distributions on the Trust Preferred Securities are payable quarterly by the
Trust. The Trust Securities are subject to mandatory redemption upon the
repayment of the Subordinated Debentures at their stated maturity at $10 per
Trust Preferred Security.



                                      F-8
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


     The Company may cause the Trust to defer the payment of distributions for
successive periods up to eight consecutive quarters. During such periods,
accrued distributions on the Trust Preferred Securities will compound quarterly
and the Company may not declare or pay distributions on its common stock or debt
securities that rank equal or junior to the Trust Preferred Securities.

     Issuance costs of approximately $1.5 million related to the Trust Preferred
Securities were deferred and are being amortized on the interest method over the
period until mandatory redemption at September 15, 2028.

7.   INCOME TAXES

     Income tax expense (benefit) consists of the following (in thousands):

<Table>
<Caption>
          YEAR ENDED DECEMBER 31,         2001          2000          1999
                                        --------      --------      --------
<S>                                     <C>           <C>           <C>
             CURRENT
               Federal ............     $     45      $ (1,911)     $     --
               State ..............           --          (187)           --
                                        --------      --------      --------
                                              45        (2,098)           --
                                        --------      --------      --------
             DEFERRED
               Federal ............          790         2,438        (2,812)
               State ..............          154           287          (388)
                                        --------      --------      --------
                                             944         2,725        (3,200)
                                        --------      --------      --------

                                        $    989      $    627      $ (3,200)
                                        ========      ========      ========
</Table>

     A reconciliation of the expected tax expense (benefit), assuming income
(loss) before taxes is taxed at the statutory federal tax rate of 34%, and the
Company's actual provision for income taxes is as follows (in thousands):

<Table>
<Caption>
          YEAR ENDED DECEMBER 31,                                                     2001          2000          1999
                                                                                    --------      --------      --------
<S>                                                                                 <C>           <C>           <C>

             Expected tax expense (benefit) at the federal statutory rate .....     $    885      $    562      $ (2,620)
             State income taxes, net of federal taxes .........................          106            65          (305)
             Change in valuation allowance ....................................           --            --          (270)
             Other, net .......................................................           (2)           --            (5)
                                                                                    --------      --------      --------

                                                                                    $    989      $    627      $ (3,200)
                                                                                    ========      ========      ========
</Table>

     The sources and tax effects of temporary differences between financial
statement carrying amounts and the tax bases of assets and liabilities are as
follows (in thousands):

<Table>
<Caption>
          DECEMBER 31,                                                                               2001          2000
                                                                                                   --------      --------
<S>                                                                                               <C>           <C>
          DEFERRED TAX ASSETS:
               Costs in excess of assets acquired--basis and amortization differences ........     $     --      $    306
               Net operating loss carry forward ..............................................        2,425         3,361
               Allowance for doubtful receivables ............................................           18            21
               Inventory reserves ............................................................           --             4
               Accrued expenses ..............................................................          173           149
               Alternative minimum tax credit carryforward ...................................           76            --
                                                                                                   --------      --------
                                                                                                      2,692         3,841
                                                                                                   --------      --------
         DEFERRED TAX LIABILITIES:
               Property and equipment--basis and depreciation differences ....................       (3,515)       (4,292)
               Costs in excess of assets acquired-basis and amortization differences .........         (443)           --
               Inventory capitalization ......................................................         (129)           --
                                                                                                   --------      --------
                                                                                                     (4,087)       (4,292)
                                                                                                   --------      --------

                                                                                                   $ (1,395)     $   (451)
                                                                                                   ========      ========
</Table>

     Current deferred tax assets are included in prepaid expenses and other
assets.



                                      F-9
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


8.   RETIREMENT PLAN

     The Company maintains a 401(k) profit sharing plan, which covers
substantially all employees. Employees are permitted to contribute up to 15% of
their eligible compensation. The Company makes contributions to the plan
matching 50% of the employees' contribution up to 10% of compensation. The
Company's matching contributions totaled $286,000, $264,000 and $319,000 in
2001, 2000 and 1999, respectively.

     The Company established a qualified Employee Stock Purchase Plan ("the
Plan"), the terms of which allow for qualified employees (as defined) to
participate in the purchase of designated shares of the Company's common stock
at a price equal to the lower of 85% of the closing price at July 1 or the end
of each quarterly stock purchase period. The Company suspended the Plan
effective October 1, 2001. During 2001, 2000 and 1999 shares totaling 21,722,
33,725 and 5,125, respectively, were purchased under the plan at average prices
of $2.61, $2.23 and $2.34 per share, respectively.

9.   COMMITMENTS

     The Company has noncancelable operating leases, primarily for office and
warehouse facilities, vehicles and certain types of equipment. These leases
expire at various times over the next five years. Rent expense under these
leases totaled $2,697,000, $2,225,000 and $2,063,000 for the years ended
December 31, 2001, 2000 and 1999, respectively.

     Future minimum commitments under operating lease arrangements as of
December 31, 2001 are as follows (in thousands):

<Table>
<Caption>
               YEAR ENDING DECEMBER 31,
<S>                                                                       <C>
               2002.....................................................   $   2,673
               2003.....................................................       1,411
               2004.....................................................         542
               2005.....................................................         335
               2006.....................................................         133
                                                                           ---------
                 Total..................................................   $   5,094
                                                                           =========
</Table>

10.  STOCK OPTIONS

     The Company has two fixed option plans. Under the terms of the amended and
restated stock option plan (the "Option Plan"), the Company may grant to
employees, consultants and advisors options to purchase up to 1,400,000 shares
of common stock. Under the Option Plan, the Company may grant both incentive
stock options and non-statutory stock options, and the maximum term is ten
years. Non-statutory options may be granted at no less than 85% of the fair
value of the common stock at the date of grant. Stock options granted under the
Option Plan vest over two to five year periods.

     Under terms of the amended 1995 Non-Employee Directors' Stock Option Plan
(the "Directors Plan"), the Company may grant to non-employee directors options
to purchase up to 200,000 shares of common stock. Under the Directors Plan,
options granted vest immediately and have a maximum term of ten years.

     The Company applies APB Opinion No. 25 and related interpretations in
accounting for its plans. Accordingly, no compensation cost has been recognized
for options granted at fair value under the plans. Had compensation cost for the
Company's stock-based compensation plans been determined consistent with SFAS
No. 123, the Company's net earnings (loss) and diluted earnings (loss) per share
would have been reduced or increased to the pro forma amounts indicated below
(in thousands, except per share data):

<Table>
<Caption>
                                                                      2001           2000           1999
                                                                   ----------     ----------     ----------
<S>                                                                <C>            <C>            <C>

             Net earnings (loss)                As reported        $    1,614     $      859     $   (4,506)
                                                Pro forma               1,418            501         (5,336)

             Diluted earnings (loss) per share  As reported        $     0.24     $     0.13     $    (0.70)
                                                Pro forma                0.21           0.08          (0.82)
</Table>



                                      F-10
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants in 2001, 2000 and 1999: no dividend yield; expected
volatility of 58 percent for 2001, 86 percent for 2000 and 73 percent for 1999;
risk-free interest rates of 5.6 percent in 2001, 5.7 percent in 2000 and 6.8
percent in 1999; and expected lives of six years.

     A summary of the status of the Company's two fixed stock option plans as of
December 31, 2001, 2000 and 1999, and changes during the years ended on those
dates is presented below:

<Table>
<Caption>
                                                      2001                           2000                           1999
                                           --------------------------     --------------------------     --------------------------
                                                            WEIGHTED-                      WEIGHTED-                      WEIGHTED-
                                                            AVERAGE                        AVERAGE                        AVERAGE
                                                            EXERCISE                       EXERCISE                       EXERCISE
                 FIXED OPTIONS               SHARES          PRICE          SHARES          PRICE          SHARES          PRICE
                 -------------             ----------      ----------     ----------      ----------     ----------      ----------
<S>                                        <C>             <C>            <C>             <C>            <C>             <C>

         Outstanding at beginning
              of year .................     1,008,792      $     5.19        672,017      $     7.10        461,417      $     8.30
            Granted ...................        30,000            3.75        399,675            2.65        308,500            5.76
            Exercised .................        (1,938)           2.63             --              --             --              --
            Forfeited .................       (10,800)           3.43        (62,900)           8.72        (97,900)           8.52
            Cancelled .................      (325,950)           8.17             --              --             --              --
                                           ----------                     ----------                     ----------
         Outstanding at end of year ...       700,104            3.76      1,008,792            5.19        672,017            7.10
                                           ==========                     ==========                     ==========

         Options exercisable at
            year-end ..................       531,886                        436,187                        280,397
</Table>

     The following table summarizes information about fixed stock options
outstanding at December 31, 2001:

<Table>
<Caption>
                                                OPTIONS OUTSTANDING                          OPTIONS EXERCISABLE
                                  -------------------------------------------------   -------------------------------
             RANGE                               WEIGHTED AVERAGE
              OF                     NUMBER          REMAINING     WEIGHTED AVERAGE      NUMBER      WEIGHTED AVERAGE
        EXERCISE PRICES           OUTSTANDING    CONTRACTUAL LIFE   EXERCISE PRICE    EXERCISABLE     EXERCISE PRICE
        ---------------           -----------    ----------------  ----------------   -----------    ----------------

<S>                               <C>            <C>               <C>                <C>            <C>
         $2.00 to $3.50               389,937              8.8       $     2.65          236,719       $     2.67
          4.00 to 7.00                310,167              7.1             5.16          295,167             5.16
                                   ----------                                         ----------
          2.00 to 7.00                700,104              8.0             3.76          531,886             4.05
                                   ==========                                         ==========
</Table>

11.  STOCKHOLDERS' EQUITY

     COMMON STOCK

     The Company was originally incorporated in Colorado in 1988 and was
reincorporated in Delaware effective July 1995. In November 1997, the Company
completed a follow-on public offering of its common stock, whereby the Company
sold 1,000,000 shares at $15 per share. Total proceeds, net of underwriting
commission and other expenses of $1,075,000, were $13,925,000.

     PREFERRED STOCK

     The Board of Directors has the authority to issue up to 500,000 shares of
$.10 par value preferred stock in one or more series and to fix the rights,
preferences, privileges and distributions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences,
sinking fund terms and the number of shares constituting any series or the
designation of such series, without any further vote or action by stockholders.
No shares of preferred stock have been issued.

12.  CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

     CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS:

     SUPPLIERS

     Substantially all of the plush toys and other products dispensed from the
Shoppes are produced by foreign manufacturers. A majority are purchased directly
by the Company from manufacturers in the People's Republic of China ("China").
The Company purchases its other products indirectly from vendors who obtain a
significant



                                      F-11
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


percentage of such products from foreign manufacturers. As a result, the Company
is subject to changes in governmental policies, the imposition of tariffs,
import and export controls, transportation delays and interruptions, political
and economic disruptions and labor strikes, which could disrupt the supply of
products from such manufacturers. Among other things, the loss of China's "most
favored nation" status under U.S. tariff laws could result in a substantial
increase in the import duty of certain products manufactured in China, which
could result in substantially increased costs for certain products purchased by
the Company which could have a material adverse effect on the Company's
financial performance.

     CUSTOMERS

     The Company had amusement vending machines placed with one retail customer
that accounted for 38%, 37%, and 34% of the Company's revenue for the years
ended December 2001, 2000, and 1999 respectively.

13.  EARNINGS (LOSS) PER SHARE

     Basic and diluted earnings (loss) per share for 2001, 2000 and 1999 were
computed as follows:

<Table>
<Caption>
                                                                                        YEAR ENDED DECEMBER 31,
                                                                                2001             2000             1999
                                                                            ------------     ------------     ------------
<S>                                                                         <C>              <C>              <C>

     Net earnings (loss) ..............................................     $  1,614,000     $    859,000     $ (4,506,000)
                                                                            ============     ============     ============

     Common shares outstanding at beginning of year ...................        6,513,919        6,480,194        6,475,069

          Effect of shares issued during the year .....................           12,121           12,318               14
                                                                            ------------     ------------     ------------

     Basic weighted average common shares .............................        6,526,040        6,492,512        6,475,083
     Incremental shares from assumed conversions:

          Stock options ...............................................          202,710               --               --
                                                                            ------------     ------------     ------------
     Diluted weighted average common shares ...........................        6,728,750        6,492,512        6,475,083
                                                                            ============     ============     ============
       Basic earnings (loss) per share before extraordinary loss ......     $       0.25     $       0.16     $      (0.70)
       Diluted earnings (loss) per share before extraordinary loss ....             0.24             0.16            (0.70)
       Basic earnings (loss) per share ................................             0.25             0.13            (0.70)
       Diluted earnings (loss) per share ..............................             0.24             0.13            (0.70)
</Table>

14.  UNAUDITED QUARTERLY FINANCIAL INFORMATION (In thousands, except per share
     data)

<Table>
<Caption>
                                         DEC. 31    SEPT. 30   JUNE 30    MAR. 31    DEC. 31    SEPT. 30   JUNE 30    MAR. 31
                                           2001       2001       2001       2001       2000       2000       2000       2000
                                         --------   --------   --------   --------   --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>

Total revenue .........................  $ 37,537   $ 35,021   $ 34,973   $ 34,396   $ 34,448   $ 32,933   $ 30,878   $ 31,499
Total cost of revenue .................    27,911     26,509     26,503     25,756     25,494     24,242     22,704     22,812
                                         --------   --------   --------   --------   --------   --------   --------   --------
  Gross profit ........................     9,626      8,512      8,470      8,640      8,954      8,691      8,174      8,687
General and administrative expenses ...     6,990      6,666      6,457      6,405      6,394      6,211      6,094      6,381
  Operating earnings ..................     2,636      1,846      2,013      2,235      2,560      2,480      2,080      2,306
Interest expense, net .................     1,106      1,494      1,679      1,848      1,928      1,958      1,970      1,919
                                         --------   --------   --------   --------   --------   --------   --------   --------
  Earnings before income taxes and
    extraordinary loss ................     1,530        352        334        387        632        522        110        387
Income tax expense ....................      (581)      (134)      (127)      (147)      (239)      (199)       (42)      (147)
                                         --------   --------   --------   --------   --------   --------   --------   --------
  Earnings before extraordinary loss ..       949        218        207        240        393        323         68        240
Extraordinary loss on debt
  refinancing, net of income tax
  benefit .............................        --         --         --         --        165         --         --         --
                                         --------   --------   --------   --------   --------   --------   --------   --------

Net earnings ..........................  $    949   $    218   $    207   $    240   $    228   $    323   $     68   $    240
                                         ========   ========   ========   ========   ========   ========   ========   ========

Basic earnings per share ..............  $   0.15   $   0.03   $   0.03   $   0.04   $   0.04   $   0.05   $   0.01   $   0.04
Diluted earnings per share ............  $   0.14   $   0.03   $   0.03   $   0.04   $   0.04   $   0.05   $   0.01   $   0.04
Basic weighted average common shares ..     6,536      6,532      6,522      6,514      6,505      6,497      6,488      6,480
Diluted weighted average common
  shares ..............................     6,903      6,809      6,638      6,527      6,505      6,497      6,488      6,480
</Table>

     The basic and diluted earnings per share before the extraordinary loss in
the fourth quarter of 2000 was $0.06.



                                      F-12
<PAGE>

               AMERICAN COIN MERCHANDISING, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)


15.  SUBSEQUENT EVENT

     On February 11, 2002 the Company was acquired by ACMI Holdings, Inc., a
newly formed corporation organized by two investment firms, Wellspring Capital
Management LLC and Knightsbridge Holdings, LLC. The transaction was approved at
a stockholders meeting held on February 5, 2002. Stockholders received $8.50 in
cash for each outstanding share of the Company's common stock. The Company's
common stock is no longer publicly traded. The Company's mandatorily redeemable
preferred securities remain outstanding and continue to trade on the American
Stock Exchange.

     Bruce W. Krysiak, a director of the Company prior to the Merger, has a
minority interest in Knightsbridge Holdings, LLC d/b/a Krysiak Navab & Company.
Knightsbridge holds an interest in ACMI Holdings, Inc., which is controlled by
Wellspring Capital Management LLC.


                                      F-13
<PAGE>
                                   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, thereto duly authorized.

                                       AMERICAN COIN MERCHANDISING, INC.

                                       By /s/ Randall J. Fagundo
                                          -------------------------------------
                                          Randall J. Fagundo

                                          President and Chief Executive Officer

                                POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Randall J. Fagundo and W. John Cash, or any of
them, his or her attorney-in-fact, each with the power of substitution, for him
or her in any and all capacities, to sign any amendments to this report, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.

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

<Table>
<Caption>
               SIGNATURE                                      TITLE                                 DATE
               ---------                                      -----                                 ----
<S>                                                  <C>                                       <C>
    /s/  WILLIAM F. DAWSON JR.*                      Chairman of the Board                     March 26, 2002
    ---------------------------------------
         William F. Dawson, Jr.

    /s/  RANDALL J. FAGUNDO                          President and Chief Executive             March 26, 2002
    ---------------------------------------          Officer and Director
         Randall J. Fagundo

    /s/  W. JOHN CASH*                               Senior Vice President, Chief Financial    March 26, 2002
    ---------------------------------------          Officer, Treasurer and Secretary
         W. John Cash                                (Principal Financial and Accounting
                                                     Officer)


    /s/  GREG S. FELDMAN*                            Director                                  March 26, 2002
    ---------------------------------------
         Greg S. Feldman

    /s/  PERICLES NAVAB*                             Director                                  March 26, 2002
    ---------------------------------------
         Pericles Navab

    /s/  BRUCE W. KRYSIAK*                           Director                                  March 26, 2002
    ---------------------------------------
         Bruce W. Krysiak

    *  /s/ RANDALL J. FAGUNDO                                                                  March 26, 2002
    ---------------------------------------
          Randall J. Fagundo
          Attorney-in-Fact
</Table>

<PAGE>

                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER               DESCRIPTION
-------              -----------
<S>                  <C>

        2.1+         --  Agreement and Plan of Merger, dated as of September 9, 2001, among Crane Mergerco Holdings, Inc., a
                         Delaware corporation, Crane Mergerco Inc., a Delaware corporation and Registrant.

        2.2+         --  Form of Voting Agreement, dated as of September 9, 2001, among Crane Mergerco Holdings, Inc., a
                         Delaware corporation and each of Richard P. Bermingham, Randall J. Fagundo, Richard D. Jones, John
                         A. Sullivan and J. Gregory Theisen.

        3.1++        --  Certificate of Incorporation of the Registrant.

        3.3          --  Certificate of Merger of the Registrant.

        3.4          --  Restated Certificate of Incorporation.

        3.5          --  Amended and Restated Bylaws of the Registrant.

        4.1++        --  Reference is made to Exhibits 3.1 through 3.5.

        4.2          --  Specimen Stock Certificate.

        4.3*         --  Certificate of Trust of American Coin Merchandising Trust I.

        4.4*         --  Trust Agreement of American Coin Merchandising Trust I.

        4.5*         --  Amended and Restated Trust Agreement of American Coin Merchandising Trust I.

        4.6*         --  Form of Junior Subordinated Indenture between the Registrant and Wilmington Trust Company, as
                         Trustee.

        4.7*         --  Form of Guarantee Agreement with respect to Trust Preferred Securities of American Coin
                         Merchandising Trust I.

        4.8*         --  Form of Agreement as to Expenses and Liabilities between the Registrant and American Coin
                         Merchandising Trust I.

        4.9*         --  Form of Certificate Evidencing Trust Preferred Securities.

        4.10*        --  Form of Certificate Evidencing Trust Common Securities.

        4.11*        --  Form of Ascending Rate Junior Subordinated Deferrable Interest Debenture.

        4.12         --  17% Senior Subordinated Notes Due 2009 between the Registrant and each of the parties listed on the
                         attached schedule, dated February 11, 2002.

       10.1++         -- Form of Indemnity Agreement to be entered into between the Registrant and its directors and
                         executive officers.

       10.35#        --  Commercial Lease Amendment Agreement, between the Registrant and Technical Building Company, dated
                         as of November 20, 1997.

       10.47~        --  Premier Amusement Vendor Agreement, dated January 28, 2000, between the Registrant and Best Vendor
                         Co.

       10.48~        --  Addendum to Premier Amusement Vendor Agreement, dated January 28, 2000, between the Registrant and
                         Best Vendor Co.

       10.49~        --  Addendum #2 to Premier Amusement Vendor Agreement, dated February 14, 2000, between the Registrant
                         and Best Vendor Co.

       10.50=        --  Amusement Vending Agreement, effective as of July 1, 2000, between the Registrant and Denny's Inc.

       10.51=        --  Other Income Supplier Agreement--Coin Operated Equipment, dated August 1, 2000 between the
                         Registrant and Wal-Mart Stores, Inc.

       10.54@X       --  Executive Employment Agreement dated December 1, 2000, between the Registrant and Randall J. Fagundo.

       10.55@X       --  Executive Employment Agreement dated December 1, 2000, between the Registrant and W. John Cash.

       10.57$X       --  Amendment to Executive Employment Agreement dated December 1, 2000, between the Registrant and
                         Randall J. Fagundo.
</Table>



<PAGE>

<Table>
<S>                  <C>
       10.58$X       --  Amendment to Executive Employment Agreement dated December 1, 2000, between the Registrant and W.
                         John Cash.

       10.60         --  Services and Fee Agreement, dated February 11, 2002, between and among the Registrant, Wellspring
                         Capital Management LLC and Knightsbridge Holdings, LLC d/b/a Krysiak Navab & Co.

       10.61         --  Credit Agreement, dated February 11, 2002, between and among the Registrant and Madison Capital
                         Funding LLC and The Royal Bank of Scotland PLC.

       10.62         --  Guarantee and Collateral Agreement, dated February 11, 2002, between and among the Registrant, ACMI
                         Holdings and Audax Mezzanine Fund, L.P., Royal Bank of Scotland PLC and Upper Colombia Capital
                         Company, LLC.

       10.63         --  Purchase Agreement among ACMI Holdings, Inc., the Registrant, as Issuer and the Purchasers named
                         therein, dated as of February 11, 2002.

</Table>

----------

+   Incorporated by reference to the Company's Current Report on Form 8-K, dated
    September 10, 2001.

++  Incorporated by reference to the Company's Registration Statement on Form
    SB-2, File No. 33-95446-D.

*   Incorporated by reference to the Company's Registration Statement on Form
    S-3, File No. 333-60267.

#   Incorporated by reference to the Company's Annual Report on Form 10-K for
    the year ended December 31, 1997.

**  Incorporated by reference to the Company's Current Report on Form 8-K, dated
    April 29, 1999.

~   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended March 31, 2000.

=   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended September 30, 2000.

@   Incorporated by reference to the Company's Annual Report on Form 10-K for
    the fiscal year ended December 31, 2000.

$   Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended June 30, 2001.

X   Indicates management contract or compensatory plan, contract or arrangement.