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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K

Special Financial Report pursuant to Rule 15d-2 underthe Securities Exchange Act of 1934

    **ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934**

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

OR

    **TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934 COMMISSION FILE NUMBER: 333-119127**

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ALLIED SECURITY HOLDINGSLLC(Exact name of registrant as specified in itscharter)

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|                                                             |  |                                    |  |  |  |  |
|-------------------------------------------------------------|--|------------------------------------|--|--|--|--|
| Delaware                                                    |  | 20-1379003                         |
| (Stateor other jurisdiction ofincorporation ororganization) |  | (I.R.S. EmployerIdentificationNo.) |
|                                                             |

3606 Horizon DriveKing of Prussia, PA19406(Address of principal executiveoffices) Registrant's telephone number, includingarea code: (610) 239-1100

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Securities registered pursuant toSection 12(b) of the Act: NoneSecurities registered pursuant toSection 12(g) of the Act: None

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes     No 

Indicate by check mark if disclosure of delinquent filers pursuantto Item 405 of Regulation S-K is not contained herein, and will not becontained, to the best of the registrant's knowledge, indefinitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Act). Yes    No 

The aggregate market value of theregistrant's common equity held by non-affiliates is notapplicable as there is no public market therefor.

    DOCUMENTS INCORPORATED BY REFERENCE: None.

This Special Financial Report is being filed pursuant to Rule15d-2 under the Securities Exchange Act of 1934, as amended. TheRegistrant's previously filed registration statement on Form S-4(Registration No. 333-119127), as amended, was declared effective bythe Securities and Exchange Commission on January 13, 2005 and did notcontain financial statements for the Registrant's fiscal yearended December 31, 2004. In accordance with Rule 15d-2, this SpecialFinancial Report is being filed under cover of Form 10-K and containsfinancial statements for the Registrant's fiscal year endedDecember 31, 2004.

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PART II

Item 8.    Financial Statements and SupplementaryData.

The information required by Item 8 of Part II isincorporated by reference to the Consolidated Financial Statements ofAllied Security Holdings LLC (the "Company")filed with this Special Financial Report. See Item 15 of PartIV.

Item 9A.    Controls and Procedures.

(a) Disclosure Controls and Procedures. The Company'smanagement, with the participation of the Company's ChiefExecutive Officer and Chief Financial Officer, has evaluated theeffectiveness of the Company's disclosure controls and procedures(as such term is defined in Rules 13a-15(e) and 15d-15(e) under theSecurities Exchange Act of 1934, as amended (the "ExchangeAct")) as of the end of the period covered by this report.Based on such evaluation, the Company's Chief Executive Officerand Chief Financial Officer have concluded that, as of the end of suchperiod, the Company's disclosure controls and procedures wereeffective.

(b) Internal Control Over Financial Reporting. Therehave not been any changes in the Company's internal control overfinancial reporting (as such term is defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act) during the Company's fiscalquarter ended December 31, 2004 that have materially affected, or arereasonably likely to materially affect, the Company's internalcontrol over financial reporting.

1

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PART IV

Item15.    Exhibits and Financial Statement Schedules.

(a) 1.    Consolidated Financial Statements of AlliedSecurity Holdings LLC

See index on Page F-1

2.    Financial Statement Schedule

|        |  |                                                     |  |      |  |  |  |  |  |  |
|--------|--|-----------------------------------------------------|--|------|--|--|--|--|--|--|
|   |  | ScheduleII — Valuation and QualifyingAccounts |  | F-22 |
|        |

All other schedules calledfor under Regulation S-X are not submitted because they are notapplicable, not required, or because the required information is notmaterial or is included in the financial statements or notesthereto.

3.    List ofExhibits

|            |  |                                                                                                                                                                                                                                 |  |  |  |  |
|------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNo. |  |     Description ofExhibit                                                                                                                                                                                   |
| 31.1       |  | Certificationof Chief Executive Officer of Allied Security Holdings LLC pursuant toRule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 (filedherewith)                                                              |
| 31.2       |  | Certification of ChiefFinancial Officer of Allied Security Holdings LLC pursuant to Rule13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 (filedherewith)                                                              |
| 32.1       |  | Certifications of ChiefExecutive Officer and Chief Financial Officer of Allied SecurityHoldings LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002 (furnishedherewith) |
|            |

2

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized on this 30th day of March, 2005.

|        |  |                                |  |                                                             |  |  |  |  |  |  |
|--------|--|--------------------------------|--|-------------------------------------------------------------|--|--|--|--|--|--|
|   |  | **ALLIEDSECURITY HOLDINGSLLC** |
|   |  | By:                            |  | /s/William C. Whitmore, Jr.                                 |
|   |  |                           |  | WilliamC. Whitmore, Jr.President and Chief ExecutiveOfficer |
|        |

Pursuant to the requirements of theSecurities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacitiesand on the dates indicated:

|                             |  |                                                                               |  |                |
|-----------------------------|--|-------------------------------------------------------------------------------|--|----------------|
| Signature                   |  | Title                                                                         |  | Dates          |
|                             |
| /s/William C. Whitmore, Jr. |  | President, Chief Executive Officer and Manager(Principal Executive Officer)   |  | March 30,2005  |
|                             |
| William C. Whitmore,Jr.     |
|                             |
| /s/ William A.Torzolini     |  | SeniorVice President and Chief Financial Officer (Principal FinancialOfficer) |  | March 30, 2005 |
|                             |
| William A. Torzolini        |
|                             |
| /s/ G.Michael Landis        |  | ChiefAccounting Officer (Principal Accounting Officer)                        |  | March30, 2005  |
|                             |
| G. Michael Landis           |
|                             |
| /s/ Albert J.Berger         |  | Chairman andManager                                                           |  | March 30, 2005 |
|                             |
| Albert J. Berger            |
|                             |
| /s/ RonaldO. Perelman       |  | Manager                                                                       |  | March 30,2005  |
|                             |
| Ronald O.Perelman           |
|                             |
| /s/ Floyd I. Clarke         |  | Manager                                                                       |  | March 30,2005  |
|                             |
| FloydI. Clarke              |
|                             |
| /s/ Donald G.Drapkin        |  | Manager                                                                       |  | March 30,2005  |
|                             |
| Donald G.Drapkin            |
|                             |
|         |  | Manager                                                                       |  | March 30,2005  |
|                             |
| John M.Keane                |
|                             |
| /s/ Michael J.Regan         |  | Manager                                                                       |  | March 30,2005  |
|                             |
| Michael J.Regan             |
|                             |
| /s/ Todd J. Slotkin         |  | Manager                                                                       |  | March 30,2005  |
|                             |
| Todd J.Slotkin              |
|                             |

3

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INDEX TOFINANCIAL STATEMENTSALLIED SECURITY HOLDINGSLLC

|                                                                                                                                                                                                                                                                                   |  |        |      |        |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|------|--------|--|--|
|                                                                                                                                                                                                                                                                              |  | PAGE   |
| Reportof Independent Registered Public AccountingFirm                                                                                                                                                                                                                             |  |   | F-2  |   |
| Consolidated Balance Sheets as ofDecember 31, 2004 and December 31, 2003                                                                                                                                                                                                          |  |   | F-3  |   |
| Consolidated Statement of Operationsfor the Year Ended December 31, 2004, for the Period from February 19,2003 to December 31, 2003, for the Period from January 1, 2003 toFebruary 18, 2003 (Predecessor), and for the Year Ended December 31,2002 (Predecessor)                 |  |   | F-4  |   |
| ConsolidatedStatement of Changes in Members' Equity for the Year EndedDecember 31, 2002 (Predecessor) and for the Period from January 1, 2003to February 18, 2003(Predecessor)                                                                                                    |  |   | F-5  |   |
| Consolidated Statement ofChanges in Members' Equity for the Period from February 19, 2003to December 31, 2003 and for the Year Ended December 31, 2004                                                                                                                            |  |   | F-6  |   |
| Consolidated Statement of Cash Flowsfor the Year Ended December 31, 2004, for the Period from February 19,2003 to December 31, 2003, for the Period from January 1, 2003 toFebruary 18, 2003 (Predecessor), and for the Year Ended December 31,2002 (Predecessor)                 |  |   | F-7  |   |
| Notes toConsolidated Financial Statements                                                                                                                                                                                                                                         |  |   | F-8  |   |
| Schedule II – Valuation andQualifying Accounts for the Year Ended December 31, 2004, for thePeriod from February 19, 2003 to December 31, 2003, for the Period fromJanuary 1, 2003 to February 18, 2003 (Predecessor), and for the YearEnded December 31, 2002(Predecessor) |  |   | F-22 |   |
|                                                                                                                                                                                                                                                                                   |

F-1

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REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

Board of ManagersAllied Security Holdings LLC

We have audited the accompanyingconsolidated balance sheets of Allied Security Holdings LLC as ofDecember 31, 2004 and 2003 and the related consolidated statements ofoperations, changes in members' equity, and cash flows for theyear ended December 31, 2004, for the period from February 19, 2003 toDecember 31, 2003, for the period from January 1, 2003 to February 18,2003 (predecessor), and for the year ended December 31, 2002(predecessor). Our audits also included the financial statementschedule listed in the Index to Financial Statements. These financialstatements and schedule are the responsibility of the Company'smanagement. Our responsibility is to express an opinion on thesefinancial statements and schedule based on our audits.

Weconducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. We were not engaged to perform an audit of theCompany's internal control over financial reporting. Our auditincluded consideration of internal control over financial reporting asa basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control over financialreporting. Accordingly, we express no such opinion. An audit alsoincludes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, andevaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

Inour opinion, the financial statements referred to above present fairly,in all material respects, the consolidated financial position of AlliedSecurity Holdings LLC at December 31, 2004 and 2003, and theconsolidated results of its operations and its cash flows for the yearended December 31, 2004, for the period from February 19, 2003 toDecember 31, 2003, for the period from January 1, 2003 to February 18,2003 (predecessor), and for the year ended December 31, 2002(predecessor), in conformity with U.S. generally accepted accountingprinciples. Also, in our opinion, the related financial statementschedule, when considered in relation to the basic financial statementstaken as a whole, presents fairly in all material respects theinformation set forth therein.

|  | /s/ Ernst &Young LLP |
|--|--------------------------|

Philadelphia, PA March 4, 2005

F-2

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Allied Security Holdings LLCConsolidated Balance Sheets(Dollars in thousands, except unitdata)

|                                                                                               |  |                  |         |                  |  |        |         |         |  |  |
|-----------------------------------------------------------------------------------------------|--|------------------|---------|------------------|--|--------|---------|---------|--|--|
|                                                                                          |  | December31, 2004 |         | December 31,2003 |
| **Assets**                                                                                    |  |
| Currentassets:                                                                                |  |             |    |             |  |   |    |    |
| Cash and cashequivalents                                                                      |  | $                | 11,008  |             |  | $      | 8,102   |    |
| Restrictedcash                                                                                |  |             | 7,951   |             |  |   | 4,139   |    |
| Accountsreceivable, net of allowance for doubtful accounts of $1,393 and$1,283                |  |             | 129,729 |             |  |   | 65,438  |    |
| Prepaidexpenses and other currentassets                                                       |  |             | 3,797   |             |  |   | 2,137   |    |
| Prepaidinsurancepremiums                                                                      |  |             | 7,206   |             |  |   | 3,805   |    |
| Totalcurrentassets                                                                            |  |             | 159,691 |             |  |   | 83,621  |    |
| Property andequipment,net                                                                     |  |             | 20,838  |             |  |   | 11,545  |    |
| Goodwill                                                                                      |  |             | 347,766 |             |  |   | 227,347 |    |
| Otherintangible assets,net                                                                    |  |             | 99,683  |             |  |   | 73,598  |    |
| Deferred financingfees, net                                                                   |  |             | 12,897  |             |  |   | 8,002   |    |
| Otherassets                                                                                   |  |             | 489     |             |  |   | 211     |    |
| Totalassets                                                                                   |  | $                | 641,364 |             |  | $      | 404,324 |    |
| **Liabilitiesand members' equity**                                                            |  |
| Currentliabilities:                                                                           |  |             |    |             |  |   |    |    |
| Currentmaturities of long-termdebt                                                            |  | $                | 16,000  |             |  | $      | 6,908   |    |
| Insurancepremiumfinancing                                                                     |  |             | 6,246   |             |  |   | 3,303   |    |
| Accountspayable                                                                               |  |             | 4,046   |             |  |   | 3,182   |    |
| Accruedexpenses                                                                               |  |             | 35,791  |             |  |   | 19,009  |    |
| Accruedclaimsreserves                                                                         |  |             | 25,511  |             |  |   | 15,137  |    |
| Accruedpayroll and related payrolltaxes                                                       |  |             | 40,227  |             |  |   | 26,966  |    |
| Accruedterminationcosts                                                                       |  |             | 6,110   |             |  |   | 1,276   |    |
| Advancepayments                                                                               |  |             | 13,460  |             |  |   | 8,677   |    |
| Totalcurrentliabilities                                                                       |  |             | 147,391 |             |  |   | 84,458  |    |
| Seniorterm loan                                                                               |  |             | 190,000 |             |  |   | 114,155 |    |
| Seniorsubordinatednotes                                                                       |  |             | 177,966 |             |  |   | 57,296  |    |
| Due toaffiliates                                                                              |  |             | 13,323  |             |  |   | 12,156  |    |
| Otherlong-termliability                                                                       |  |             | 1,473   |             |  |   | 1,700   |    |
| Class A unitssubject to put rights: 22,317 and 36,096 units authorized, issued andoutstanding |  |             | 2,710   |             |  |   | 4,354   |    |
| Members'equity:                                                                               |  |             |    |             |  |   |    |    |
| Units:                                                                                        |  |             |    |             |  |   |    |    |
| ClassA, 9,500,000 units authorized, 868,668 and 854,889 units issued andoutstanding           |  |             | 131,618 |             |  |   | 129,974 |    |
| ClassB, 200,000 units authorized, 77,627 units issuedandoutstanding                           |  |             | 50      |             |  |   | 50      |    |
| Class C,300,000 units authorized, 122,750 and 117,500 units issued andoutstanding             |  |             | 44      |             |  |   | 39      |    |
| Additionalpaid-incapital                                                                      |  |             | 393     |             |  |   | 393     |    |
| Accumulateddeficit                                                                            |  |             | (23,641 | )           |  |   | (251    | )  |
| Accumulatedother comprehensiveincome                                                          |  |             | 37      |             |  |   | — |    |
| Totalmembers'equity                                                                           |  |             | 108,501 |             |  |   | 130,205 |    |
| Totalliabilities and members'equity                                                           |  | $                | 641,364 |             |  | $      | 404,324 |    |
|                                                                                               |

F-3

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Allied Security Holdings LLCConsolidated Statements of Operations(Dollars inthousands)

|                                         |  |                       |         |                                             |  |                                                        |         |                                    |  |        |         |         |  |        |         |         |  |  |
|-----------------------------------------|--|-----------------------|---------|---------------------------------------------|--|--------------------------------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                    |  | YearendedDecember 31, |         | Period from February 19through December 31, |  | (Predecessor) Period fromJanuary 1 through February18, |         | (Predecessor)Year endedDecember31, |
|                                    |  | 2004                  |         | 2003                                        |  | 2003                                                   |         | 2002                               |
| Revenues                                |  | $                     | 873,401 |                                        |  | $                                                      | 483,725 |                               |  | $      | 70,419  |    |  | $      | 510,592 |    |
| Costofrevenues                          |  |                  | 736,775 |                                        |  |                                                   | 402,509 |                               |  |   | 59,568  |    |  |   | 425,221 |    |
|                                    |  |                  | 136,626 |                                        |  |                                                   | 81,216  |                               |  |   | 10,851  |    |  |   | 85,371  |    |
| Branchand corporate overheadexpenses    |  |                  | 83,588  |                                        |  |                                                   | 48,014  |                               |  |   | 11,119  |    |  |   | 52,036  |    |
| Depreciationandamortization             |  |                  | 26,301  |                                        |  |                                                   | 15,587  |                               |  |   | 1,447   |    |  |   | 14,566  |    |
| Losson early extinguishment ofdebt      |  |                  | 18,742  |                                        |  |                                                   | — |                               |  |   | 3,291   |    |  |   | — |    |
| Initialpublic offering abandonmentcosts |  |                  | — |                                        |  |                                                   | — |                               |  |   | — |    |  |   | 1,878   |    |
| Operatingincome(loss)                   |  |                  | 7,995   |                                        |  |                                                   | 17,615  |                               |  |   | (5,006  | )  |  |   | 16,891  |    |
| Interestexpense,net                     |  |                  | 31,385  |                                        |  |                                                   | 15,581  |                               |  |   | 6,190   |    |  |   | 12,062  |    |
| Income(loss) before income taxbenefit   |  |                  | (23,390 | )                                      |  |                                                   | 2,034   |                               |  |   | (11,196 | )  |  |   | 4,829   |    |
| Incometaxbenefit                        |  |                  | — |                                        |  |                                                   | — |                               |  |   | (1,421  | )  |  |   | (544    | )  |
| Netincome(loss)                         |  | $                     | (23,390 | )                                      |  | $                                                      | 2,034   |                               |  | $      | (9,775  | )  |  | $      | 5,373   |    |
|                                         |

F-4

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Allied Security Holdings LLC(Predecessor) Consolidated Statements of Changes in Members'Equity Period from January 1, 2003 through February 18, 2003and Year ended December 31, 2002(Dollars in thousands,except share data)

|                                                 |  |                          |         |              |  |                |         |        |  |                           |            |                       |  |                                            |         |                   |  |                      |         |         |  |        |         |         |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------|--|--------------------------|---------|--------------|--|----------------|---------|--------|--|---------------------------|------------|-----------------------|--|--------------------------------------------|---------|-------------------|--|----------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                            |  | SeriesB Preferred Shares |         | CommonShares |  |
|                                            |  | Numberof Shares          |         | Amount       |  | NumberofShares |         | Amount |  | Additional Paid-inCapital |            | Unearned Compensation |  | AccumlatedOther Comprehensive (Loss)Income |         | AccumlatedDeficit |  | TotalMembers' Equity |
| Balance at December 31,2001                     |  |                     | 46,967  |         |  | $              | 59,764  |   |  |                      | 37,817,421 |                  |  | $                                          | 5,582   |              |  | $                    | 951     |    |  | $      | (50     | )  |  | $      | (3,644  | )  |  | $      | (38,658 | )  |  | $      | 23,945  |    |
| StockIssuances,net                              |  |                     | — |         |  |           | — |   |  |                      | 37,241     |                  |  |                                       | 12      |              |  |                 | (16     | )  |  |   | — |    |  |   | — |    |  |   | — |    |  |   | (4      | )  |
| Accretionof preferred stock to redemptionvalue  |  |                     | — |         |  |           | 8,367   |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (8,724  | )  |  |   | (357    | )  |
| Memberdistributionsdeclared                     |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (2,288  | )  |  |   | (2,288  | )  |
| Amortizationof unearnedcompensation             |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | 7       |    |  |   | — |    |  |   | — |    |  |   | 7       |    |
| Warrantsissued in connection with anacquisition |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | 414     |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | 414     |    |
| Netincome                                       |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | 5,373   |    |  |   | 5,373   |    |
| Decreasein fair value of hedgeinstrument        |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | (1,068  | )  |  |   | — |    |  |   | (1,068  | )  |
| Balanceat December 31,2002                      |  |                     | 46,967  |         |  |           | 68,131  |   |  |                      | 37,854,662 |                  |  |                                       | 5,594   |              |  |                 | 1,349   |    |  |   | (43     | )  |  |   | (4,712  | )  |  |   | (44,297 | )  |  |   | 26,022  |    |
| StockIssuances,net                              |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | — |    |
| Accretionof preferred stock to redemptionvalue  |  |                     | — |         |  |           | 1,306   |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (1,359  | )  |  |   | (53     | )  |
| Amortizationof unearnedcompensation             |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | 2       |    |  |   | — |    |  |   | — |    |  |   | 2       |    |
| Decreasein fair value of hedgeinstrument        |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | (352    | )  |  |   | — |    |  |   | (352    | )  |
| Realizationof loss on hedgeinstrument           |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | 5,064   |    |  |   | — |    |  |   | 5,064   |    |
| Netloss                                         |  |                     | — |         |  |           | — |   |  |                      | —    |                  |  |                                       | — |              |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (9,775  | )  |  |   | (9,775  | )  |
| BalanceatFebruary 18,2003                       |  |                     | 46,967  |         |  | $              | 69,437  |   |  |                      | 37,854,662 |                  |  | $                                          | 5,594   |              |  | $                    | 1,349   |    |  | $      | (41     | )  |  | $      | — |    |  | $      | (55,431 | )  |  | $      | 20,908  |    |
|                                                 |

F-5

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Allied Security Holdings LLCConsolidated Statement of Changes in Members' Equity Periodfrom February 19, 2003 through December 31, 2003 and Year endedDecember 31, 2004(Dollars in thousands, except unitdata)

|                                                       |  |               |         |         |  |               |         |        |  |               |         |          |  |        |         |                           |  |                    |         |                                       |  |                      |         |         |  |        |         |         |  |        |         |         |  |        |         |         |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------------------------|--|---------------|---------|---------|--|---------------|---------|--------|--|---------------|---------|----------|--|--------|---------|---------------------------|--|--------------------|---------|---------------------------------------|--|----------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                  |  | ClassA        |         | Class B |  | ClassC        |         |
|                                                  |  |          |         |    |  |          |         |   |  | NumberofUnits |         |
|                                                  |  | NumberofUnits |         | Amount  |  | NumberofUnits |         | Amount |  | Vested        |         | Unvested |  | Amount |         | AdditionalPaid in Capital |  | AccumulatedDeficit |         | Accumulated Other ComprehensiveIncome |  | Total Members'Equity |
| Balance at February 19, 2003(a)                       |  |          | 739,733 |    |  | $             | 112,984 |   |  |          | 77,627  |     |  | $      | 50      |                      |  |               | — |                                  |  |                 | 110,000 |    |  | $      | 37      |    |  | $      | 497     |    |  | $      | — |    |  | $      | — |   |  | $      | 113,568 |    |
| Membercontributions                                   |  |          | 115,156 |    |  |          | 16,990  |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | 7,500   |    |  |   | 2       |    |  |   | — |    |  |   | — |    |  |   | — |   |  |   | 16,992  |    |
| Returnofcapital                                       |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | (104    | )  |  |   | — |    |  |   | — |   |  |   | (104    | )  |
| Netincome                                             |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | 2,034   |    |  |   | — |   |  |   | 2,034   |    |
| Memberdistributionsdeclared                           |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (2,285  | )  |  |   | — |   |  |   | (2,285  | )  |
| Class Cvesting                                        |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | 26,166  |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | — |   |  |   | — |    |
| Balanceat December 31,2003                            |  |          | 854,889 |    |  | $             | 129,974 |   |  |          | 77,627  |     |  |   | 50      |                      |  |               | 26,166  |                                  |  |                 | 117,500 |    |  |   | 39      |    |  |   | 393     |    |  |   | (251    | )  |  |   | — |   |  |   | 130,205 |    |
| Returnofcapital                                       |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | (9,750  | )  |  |   | (5      | )  |  |   | — |    |  |   | — |    |  |   | — |   |  |   | (5      | )  |
| Net(loss)                                             |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | (23,390 | )  |  |   | — |   |  |   | (23,390 | )  |
| Currencytranslationadjustment                         |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | 37      |   |  |   | 37      |    |
| Membercontributions                                   |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | 15,000  |    |  |   | 10      |    |  |   | — |    |  |   | — |    |  |   | — |   |  |   | 10      |    |
| ClassCVesting                                         |  |          | — |    |  |          | — |   |  |          | — |     |  |   | — |                      |  |               | 29,466  |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | — |   |  |   | — |    |
| Reclassificationof Class A Units subject to putrights |  |          | 13,779  |    |  |          | 1,644   |   |  |          | — |     |  |   | — |                      |  |               | — |                                  |  |                 | — |    |  |   | — |    |  |   | — |    |  |   | — |    |  |   | — |   |  |   | 1,644   |    |
| Balanceat December 31,2004                            |  |          | 868,668 |    |  | $             | 131,618 |   |  |          | 77,627  |     |  | $      | 50      |                      |  |               | 55,632  |                                  |  |                 | 122,750 |    |  | $      | 44      |    |  | $      | 393     |    |  | $      | (23,641 | )  |  | $      | 37      |   |  | $      | 108,501 |    |
|                                                       |

|     |                                                                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Beginningbalance at February 19, 2003 reflects certain adjustments recorded as aresult of a change in ownership related to the Mafco acquisition (SeeNote 1.) |

F-6

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Allied Security Holdings LLCConsolidated Statement of Cash Flows (Dollars inthousands)

|                                                                                        |  |                            |          |                                                       |  |                                                                    |         |                                          |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------------------------------------------|--|----------------------------|----------|-------------------------------------------------------|--|--------------------------------------------------------------------|---------|------------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                   |  | YearendedDecember 31, 2004 |          | Period from February19, 2003 through December 31,2003 |  | (Predecessor) Period from January 1, 2003through February 18, 2003 |         | (Predecessor)Yearended December 31, 2002 |
| **Cashflows from operating activities**                                                |  |
| Net income(loss)                                                                       |  | $                          | (23,390  | )                                                |  | $                                                                  | 2,034   |                                     |  | $      | (9,775  | )  |  | $      | 5,373   |    |
| Adjustmentsto reconcile net income (loss) to net cash provided by operatingactivities: |  |
| Depreciation andamortization                                                           |  |                       | 26,301   |                                                  |  |                                                               | 15,587  |                                     |  |   | 1,447   |    |  |   | 14,566  |    |
| Deferredincome taxbenefit                                                              |  |                       | —  |                                                  |  |                                                               | — |                                     |  |   | (461    | )  |  |   | (3,838  | )  |
| Losson early extinguishment ofdebt                                                     |  |                       | 18,742   |                                                  |  |                                                               | — |                                     |  |   | 3,291   |    |  |   | — |    |
| Noncashinterestexpense                                                                 |  |                       | 4,812    |                                                  |  |                                                               | 2,806   |                                     |  |   | 5,112   |    |  |   | 865     |    |
| Changesin assets and liabilities (net of impact of acquiredbusinesses):                |  |
| Accounts receivable,net                                                                |  |                       | (11,514  | )                                                |  |                                                               | (1,389  | )                                   |  |   | 560     |    |  |   | 9,706   |    |
| Othercurrent assets and liabilities,net                                                |  |                       | (5,793   | )                                                |  |                                                               | 3,686   |                                     |  |   | (3,511  | )  |  |   | 3,883   |    |
| Accountspayable and accruedexpenses                                                    |  |                       | 10,468   |                                                  |  |                                                               | (6,326  | )                                   |  |   | 3,924   |    |  |   | (1,426  | )  |
| Advancepayments                                                                        |  |                       | 4,783    |                                                  |  |                                                               | 5,392   |                                     |  |   | — |    |  |   | — |    |
| Non-competepayments                                                                    |  |                       | (400     | )                                                |  |                                                               | — |                                     |  |   | — |    |  |   | — |    |
| Other                                                                                  |  |                       | —  |                                                  |  |                                                               | — |                                     |  |   | — |    |  |   | 7       |    |
| Netcash provided by operatingactivities                                                |  |                       | 24,009   |                                                  |  |                                                               | 21,790  |                                     |  |   | 587     |    |  |   | 29,136  |    |
| **Cashflows from investing activities**                                                |  |
| Considerationpaid for acquisition of businesses, net of cashacquired                   |  |                       | (191,707 | )                                                |  |                                                               | (45,666 | )                                   |  |   | — |    |  |   | — |    |
| Purchasesof property andequipment                                                      |  |                       | (10,879  | )                                                |  |                                                               | (6,064  | )                                   |  |   | (902    | )  |  |   | (5,712  | )  |
| Other                                                                                  |  |                       | —  |                                                  |  |                                                               | — |                                     |  |   | (394    | )  |  |   | — |    |
| Netcash used in investingactivities                                                    |  |                       | (202,586 | )                                                |  |                                                               | (51,730 | )                                   |  |   | (1,296  | )  |  |   | (5,712  | )  |
| **Cashflows from financing activities**                                                |  |
| Repayment ofsenior term loans and relatedpenalties                                     |  |                       | (133,813 | )                                                |  |                                                               | (13,950 | )                                   |  |   | — |    |  |   | (6,484  | )  |
| Repaymentof senior subordinated notes and relatedpenalties                             |  |                       | (69,181  | )                                                |  |                                                               | — |                                     |  |   | — |    |  |   | — |    |
| Proceedsfrom issuance of senior termloans                                              |  |                       | 217,500  |                                                  |  |                                                               | — |                                     |  |   | — |    |  |   | — |    |
| Proceedsfrom issuance of senior subordinatednotes                                      |  |                       | 177,881  |                                                  |  |                                                               | 40,500  |                                     |  |   | — |    |  |   | — |    |
| Netpayments on RevolvingLoan                                                           |  |                       | —  |                                                  |  |                                                               | — |                                     |  |   | — |    |  |   | (15,000 | )  |
| Contributedcapital,net                                                                 |  |                       | 5        |                                                  |  |                                                               | 17,398  |                                     |  |   | — |    |  |   | — |    |
| Memberdistributions                                                                    |  |                       | —  |                                                  |  |                                                               | (2,285  | )                                   |  |   | — |    |  |   | (161    | )  |
| Insurancefinancing proceeds/(payments),net                                             |  |                       | 2,943    |                                                  |  |                                                               | 634     |                                     |  |   | (978    | )  |  |   | (50     | )  |
| Financingfees                                                                          |  |                       | (13,889  | )                                                |  |                                                               | (4,255  | )                                   |  |   | — |    |  |   | — |    |
| Other                                                                                  |  |                       | —  |                                                  |  |                                                               | — |                                     |  |   | (9      | )  |  |   | (33     | )  |
| Netcash provided by (used in) financingactivities                                      |  |                       | 181,446  |                                                  |  |                                                               | 38,042  |                                     |  |   | (987    | )  |  |   | (21,728 | )  |
| Effectof foreign currency rates on cash and cashequivalents                            |  |                       | 37       |                                                  |  |                                                               | — |                                     |  |   | — |    |  |   | — |    |
| Netchange in cash and cashequivalents                                                  |  |                       | 2,906    |                                                  |  |                                                               | 8,102   |                                     |  |   | (1,696  | )  |  |   | 1,696   |    |
| Cashand cash equivalents at beginning ofperiod                                         |  |                       | 8,102    |                                                  |  |                                                               | — |                                     |  |   | 1,696   |    |  |   | — |    |
| Cashand cash equivalents at end ofperiod                                               |  | $                          | 11,008   |                                                  |  | $                                                                  | 8,102   |                                     |  | $      | — |    |  | $      | 1,696   |    |
|                                                                                        |

F-7

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements December 31,2004

1.    Organization and Basis ofPresentation

SpectaGuard Acquisition LLC("SpectaGuard"), a wholly-owned subsidiary ofAllied Security Holdings LLC (the "Company"),was formed on February 19, 2003, as a result of the purchasetransaction by and among MacAndrews & Forbes Holdings Inc.,formally known as Mafco Holdings Inc.("Mafco"), and certain of its relatedparties, as well as management of SpectaGuard's predecessor. As aresult of this transaction, Mafco has a substantial controllinginterest in the Company. Prior to this transaction, the Company alsooperated under the name SpectaGuard Acquisition("Predecessor Company"). These financialstatements include the results of operations prior to and since thedate of Mafco's acquisition of SpectaGuard and reflect allpurchase accounting adjustments required as of that date.

OnAugust 2, 2004, simultaneous with the acquisition of Barton ProtectiveServices Incorporated ("Barton"), the membersof SpectaGuard became the members of the Company through thecontribution of their Class A, Class B, and Class C units, asapplicable, of SpectaGuard in exchange for an identical number of ClassA, Class B and Class C units, as applicable, of the Company. TheCompany has no independent assets or operations, other than itsownership of all of the membership units of SpectaGuard.

TheCompany provides premium contract security officer services tocommercial organizations throughout the United States and tollcollection services to the State of Florida Department ofTransportation ("FDOT"). The consolidatedfinancial statements of the Company include the accounts of the Companyand its wholly-owned subsidiaries, which are (i) Effective ManagementServices, LLC, (ii) Allied Security, LLC, (iii) Allied Security, LP,(iv) Professional Security Bureau, LLC("PSB"), which was acquired on December 19,2003 (see Note 4), (v) Barton Protective Services LLC, which wasacquired on August 2, 2004 (see Note 4), (vi) SpectaGuard AcquisitionLLC, and (vii) AlliedBarton Security Services LLC. All significantintercompany transactions have been eliminated in consolidation.

The Company operates under the names of "AlliedSecurity" and "Barton ProtectiveServices" nationally, as well as under the commonly knownname of "AlliedBarton", and also as"SpectaGuard" and "ProfessionalSecurity Bureau" in the northeast region of the UnitedStates. The Company's wholly-owned international subsidiary isnot significant to the Company's consolidated financialstatements.

2.    Summary of Significant AccountingPolicies

Cash and Cash Equivalents

Cash and cashequivalents include cash on hand and investments with originalmaturities of three months or less.

Restricted Cash

Restricted cash includes balances on deposit with theCompany's insurance carrier to pay workers' compensationclaims.

Accounts Receivable

The Company'scustomers are located throughout the United States. The Company grantscredit to its customers and generally does not require collateral. TheCompany maintains an allowance for doubtful accounts based on priorexperience which management believes to be sufficient to coverpotential credit losses and estimated billing adjustments. Such amountsare charged off against the allowance for doubtful accounts when theCompany concludes that the balances will not be recoverable.

F-8

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Property and Equipment

Propertyand equipment are recorded at cost. Leasehold improvements areamortized over the respective lives of the leases or the service livesof the improvements, whichever is shorter. Depreciation of property andequipment is computed using the straight-line method over the estimateduseful lives of the assets. The useful lives are as follows: leaseholdimprovements – up to 10 years; uniforms – 3 years; computerequipment – 3 to 5 years; office furniture, fixtures andequipment – 5 years.

Goodwill and Intangible Assets

Under SFAS No. 142, goodwill and intangible assets with indefinitelives are not amortized; rather, they are tested for impairment on atleast an annual basis. Additionally, intangible assets, such ascustomer list, with finite lives continue to be amortized over theiruseful lives.

SFAS No. 142 requires a two-step impairment testfor goodwill. The first step is to compare the carrying amount of thereporting unit's assets to the fair value of the reporting unit.If the fair value exceeds the carrying value, no further work isrequired and no impairment loss is recognized. If the carrying amountexceeds the fair value then the second step is required to becompleted, which involves allocating the fair value of the reportingunit to each asset and liability, with the excess being impliedgoodwill. An impairment loss occurs if the amount of the recordedgoodwill exceeds the implied goodwill. The determination of the fairvalue of our reporting unit is based, among other things, on estimatesof future operating performance of the reporting unit being valued. Weare required to complete an impairment test for goodwill and record anyresulting impairment losses annually. Changes in market conditions,among other factors, may have an impact on these estimates. Wecompleted our required annual impairment test in the fourth quarter offiscal 2004 and determined that there was no impairment.

Customer lists are amortized over six years. We perform periodicanalyses and adjust through accelerated amortization any impairment ofcustomer lists.

Long-Lived Assets

The Company hasadopted Statement of Financial Accounting Standards("SFAS") No. 144, Accounting forImpairment or Disposal of Long-Lived Assets. This standard requiresthe Company to review its long-lived assets for impairment wheneverevents or changes in circumstances indicate that the carrying amount ofsuch assets may not be recoverable. If the carrying amount of an assetor group of assets exceeds its net realizable value, the asset will bewritten down to its fair value.

Revenue Recognition

TheCompany recognizes revenue in the period in which services areprovided. Advance payments represent amounts received from customers inadvance of performing the related services.

FinancialInstruments

The carrying value of short-term financialinstruments, such as cash equivalents, accounts receivable, accountspayable and accrued expenses, approximates their fair value based onthe short-term maturities of these instruments.

Use ofEstimates

The preparation of consolidated financial statementsin conformity with U.S. generally accepted accounting principlesrequires management to make estimates and assumptions that affect thereported amounts of certain assets, liabilities, revenues and expensesand the disclosure of certain contingent assets and liabilities. Actualresults may differ from such estimates.

F-9

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Reclassifications

Certain amountsin the prior-year consolidated financial statements have beenreclassified to conform to their current-year presentation.

Statement of Cash Flows

The following noncash transactionshave been excluded from the consolidated statement of cash flows forthe year ended December 31, 2004, the period from February 19, 2003through December 31, 2003, the period from January 1, 2003 throughFebruary 18, 2003, and the year ended December 31, 2002, respectively(inthousands):

|                                                               |  |                            |         |                                                       |  |                                                                    |         |                                           |  |   |         |        |  |   |         |        |  |  |
|---------------------------------------------------------------|--|----------------------------|---------|-------------------------------------------------------|--|--------------------------------------------------------------------|---------|-------------------------------------------|--|---|---------|--------|--|---|---------|--------|--|--|
|                                                          |  | YearendedDecember 31, 2004 |         | Period from February19, 2003 through December 31,2003 |  | (Predecessor) Period from January 1, 2003through February 18, 2003 |         | (Predecessor) Yearended December 31, 2002 |
| Reclass of Class AUnits subject to put rights to Class AUnits |  | $                          | 1,644   |                                                  |  | $                                                                  | — |                                      |  | $ | — |   |  | $ | — |   |
| Mafcogoodwilladjustment                                       |  | $                          | (3,187  | )                                                |  | $                                                                  | — |                                      |  | $ | — |   |  | $ | — |   |
| PSBgoodwilladjustment                                         |  | $                          | (56     | )                                                |  | $                                                                  | — |                                      |  | $ | — |   |  | $ | — |   |
| Accruedmemberdistributions                                    |  | $                          | — |                                                  |  | $                                                                  | — |                                      |  | $ | — |   |  | $ | 2,127   |   |
| Decreasein fair value of interest rate hedge on long-termdebt |  | $                          | — |                                                  |  | $                                                                  | — |                                      |  | $ | 352     |   |  | $ | 1,068   |   |
| Issuanceof warrants in connection with anAcquisition          |  | $                          | — |                                                  |  | $                                                                  | — |                                      |  | $ | — |   |  | $ | 414     |   |
|                                                               |

Cashinterest paid during the year ended December 31, 2004, for the periodfrom February 19, 2003 through December 31, 2003, for the period fromJanuary 1, 2003 through February 18, 2003, and for the year endedDecember 31, 2002, was $17,241,000, $14,606,000, $1,089,000, and$10,772,000, respectively.

3.    Mafco Acquisition

OnFebruary 19, 2003, Mafco, through its wholly-owned subsidiarySpectaGuard Holding Corporation, acquired the Predecessor Company,which included the former SpectaGuard Acquisition LLC and its whollyowned subsidiaries, for approximately $263,588,000. This purchase wasfunded through borrowings of $151,156,000 and cash contributions of$116,915,000 recorded as follows: $112,983,000 from Mafco and itsaffiliates for Class A Units, $2,307,000 from OCM Specta Holdings Inc.("OCM") for Class A Units, $1,538,000 fromBlackstone SG Mezzanine Corp. ("Blackstone")for Class A units, and $87,000 from members of the Company'ssenior management for Class B and Class C units. (See Note 13.)

In connection with this transaction, a syndication of lendinginstitutions underwrote $125,000,000 of Senior Secured CreditFacilities (the "Refinanced Senior Secured CreditFacilities"). The Refinanced Senior Secured CreditFacilities consisted of (i) a $20,000,000 5-year Revolving CreditFacility (the "Refinanced Revolver") and (ii)a $105,000,000 7-year Senior Term Loan Facility (the"Refinanced Senior Term Loan"). In addition,the Company issued at a discount Senior Subordinated Notes (the"Refinanced Senior Subordinated Notes") toaffiliates of OCM and Blackstone with an aggregate face value of$50,000,000 for net proceeds of $46,156,000. (See Note 9.)

F-10

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

The purchase price has been allocated tothe assets acquired and liabilities assumed based upon the fair valueat the date of acquisition. The cost of the acquisition wasapproximately $263,588,000 and is allocated as follows (inthousands):

|                            |  |        |         |         |  |  |
|----------------------------|--|--------|---------|---------|--|--|
| Currentassets              |  | $      | 55,705  |    |
| Property andequipment      |  |   | 9,913   |    |
| Goodwill                   |  |   | 192,459 |    |
| Customerlist               |  |   | 73,643  |    |
| Otherassets                |  |   | 144     |    |
| Currentliabilities         |  |   | (57,041 | )  |
| Other long-termliabilities |  |   | (11,235 | )  |
|                       |  | $      | 263,588 |    |
|                            |

4.    Acquisitions

On December 19, 2003, the Company acquired all of the outstandingcommon shares of PSB ("PSB Acquisition"). PSBprovides high-quality contract security services to corporate customersprimarily within the same northeast United States region as theCompany. The purchase price has been allocated to the assets acquiredand liabilities assumed based upon the fair value at the date ofacquisition. The cost of the acquisition was subject to a workingcapital purchase price adjustment settled in 2004 for $100,000.

The cost of the acquisition was approximately $45,766,000 and isallocated as follows (inthousands):

|                                            |  |        |        |         |  |  |
|--------------------------------------------|--|--------|--------|---------|--|--|
| Currentassets, net of cash acquired of$485 |  | $      | 12,099 |    |
| Property andequipment                      |  |   | 533    |    |
| Goodwill                                   |  |   | 31,744 |    |
| Customerlist                               |  |   | 8,877  |    |
| Covenantnot-to-compete                     |  |   | 1,700  |    |
| Otherassets                                |  |   | 66     |    |
| Currentliabilities                         |  |   | (7,553 | )  |
| Covenant not-to-competeliability           |  |   | (1,700 | )  |
|                                       |  | $      | 45,766 |    |
|                                            |

Thispurchase was funded through borrowings of $40,500,000 (see Note 9) andcash contributions of $7,500,000 recorded as follows: $6,651,000 fromMafco and its affiliates, $173,000 from OCM, $107,000 Blackstone and$569,000 from members of the Company's senior management in eachcase in exchange for Class A units (see Note 13).

In connectionwith the acquisition of PSB, two former owner/executives entered intocovenant-not-to-compete agreements with the Company. The terms of theagreements are five years from December 19, 2003. In consideration forthese individuals entering into these agreements, the Company will pay$2,250,000 in the aggregate to these individuals over the term of theagreements. Payments under the covenant not-to-compete agreements aresubordinated to the Company's New Credit Facility (as hereinafterdefined) (see Note 9) and have been recorded at the discounted presentvalue of the liability. Covenants not-to-compete are being amortizedover the benefit period of five years and are included in the captionas other long-term liability on the accompanying consolidated balancesheets.

As a result of this transaction, the Company adopted aformal plan (the "PSB Plan") to terminatecertain PSB employees and exit duplicative PSB office facilities. ThePSB Plan includes 

F-11

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

severance-related benefits for approximately120 PSB employees. The PSB Plan also includes lease termination costsin order to exit 14 PSB office facilities. The Company recorded a totalreserve of $1,276,000 related to the PSB Plan as a part of the purchaseprice allocation above. As of December 31, 2004, $750,000 of paymentshave been made related to the PSB Plan. As of December 31, 2004, theseverance-related portion of the plan was complete.

Inconnection with the PSB Acquisition, $3,000,000 has been deposited bythe Company into an escrow account pursuant to the Indemnity EscrowAgreement entered into on December 19, 2003 among the Company, thencurrent shareholders of PSB and the escrow agent. The funds remain inthe escrow account pending a resolution of outstanding claims, and anyremaining balance not disbursed pursuant to the Escrow Agreement willthereafter be remitted to the former PSB shareholders.

On March19, 2004, the Company acquired certain assets of Security Systems, Inc.(the "SSI Acquisition"). Prior to the SSIAcquisition, SSI provided contract security officer services to variouscorporate customers and universities in the Boston Metropolitan area.The purchase price has been preliminarily allocated to the assetsacquired and liabilities assumed based upon the fair value at the dateof acquisition. The cost of the acquisition is subject to revenuerelated purchase price adjustments of which $719,000 has been settledas of December 31, 2004 and any remaining adjustment will be settled in2005. The estimated cost of the acquisition was $10,574,000 and isallocated as follows (inthousands):

|                       |  |        |        |         |  |  |
|-----------------------|--|--------|--------|---------|--|--|
| Currentassets         |  | $      | 2,910  |    |
| Property andequipment |  |   | 120    |    |
| Goodwill              |  |   | 5,090  |    |
| Customerlist          |  |   | 2,808  |    |
| Currentliabilities    |  |   | (354   | )  |
|                  |  | $      | 10,574 |    |
|                       |

Thispurchase was funded through borrowings of $7,500,000 (see Note 9).

On August 2, 2004, the Company acquired Barton (the"Barton Acquisition"). Barton providespremium contract security officer services to commercial organizationsthroughout the United States and toll collection services to the FDOT.The purchase price has preliminarily been allocated to the assetsacquired and liabilities assumed based upon the fair value at the dateof acquisition. The estimated cost of the acquisition was approximately$181,033,000 and is allocated as follows (inthousands):

|                       |  |        |         |         |  |  |
|-----------------------|--|--------|---------|---------|--|--|
| Currentassets         |  | $      | 50,677  |    |
| Property andequipment |  |   | 7,335   |    |
| Goodwill              |  |   | 118,472 |    |
| Customerlist          |  |   | 40,536  |    |
| Otherassets           |  |   | 246     |    |
| Currentliabilities    |  |   | (36,233 | )  |
|                  |  | $      | 181,033 |    |
|                       |

Thispurchase was funded as part of the borrowings of $210,000,000 of NewSenior Term Loans (as hereinafter defined) and $180,000,000 aggregateprincipal amount of Notes (as hereinafter defined) (see Note 9).

As a result of the Barton Acquisition, the Company adopted a formalplan (the "Barton Plan") to terminate certainBarton employees and exit duplicative Barton office facilities. TheBarton Plan includes severance-related benefits for approximately 246Barton employees. The Barton Plan also 

F-12

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

includes lease termination costs in order toexit 21 Barton office facilities. The Company recorded a total reserveof approximately $6,135,000 related to the Barton Plan as part of thepurchase price allocation above. As of December 31, 2004, approximately$429,000 of payments have been made related to the Barton Plan. TheCompany expects to complete the Barton Plan by August 2005.

Inconnection with the Barton Acquisition, $9,000,000 has been depositedby the Company into an escrow account pursuant to the Indemnity EscrowAgreement entered into on August 2, 2004 among the Company, thencurrent shareholders of Barton and the escrow agent. The funds willremain in the escrow account until March 31, 2006 and any remainingbalance not distributed pursuant to the Indemnity Escrow Agreement willthereafter be remitted to the former Barton shareholders.

Thefollowing table shows the activity for the accrued termination costsfor the above acquisitions (inthousands):

|           |  |                               |       |           |  |          |       |             |  |                               |        |         |  |        |      |         |  |        |       |        |  |  |
|-----------|--|-------------------------------|-------|-----------|--|----------|-------|-------------|--|-------------------------------|--------|---------|--|--------|------|---------|--|--------|-------|--------|--|--|
|      |  | Balanceas of December 31,2003 |       | Additions |  | Payments |       | Adjustments |  | Balanceas of December 31,2004 |
| Lease     |  | $                             | 551   |      |  | $        | 3,800 |        |  | $                             | (339   | )  |  | $      | 91   |    |  | $      | 4,103 |   |
| Severance |  |                          | 725   |      |  |     | 2,335 |        |  |                          | (840   | )  |  |   | (213 | )  |  |   | 2,007 |   |
| Total     |  | $                             | 1,276 |      |  | $        | 6,135 |        |  | $                             | (1,179 | )  |  | $      | (122 | )  |  | $      | 6,110 |   |
|           |

Unauditedpro forma results of operations of the Company are as follows assumingthe Barton, SSI, PSB and Mafco acquisitions occurred at the beginningof the periods presented (inthousands):

|                       |  |                            |           |                                                      |  |                                                    |         |                           |  |   |         |         |  |   |         |         |  |  |
|-----------------------|--|----------------------------|-----------|------------------------------------------------------|--|----------------------------------------------------|---------|---------------------------|--|---|---------|---------|--|---|---------|---------|--|--|
|                  |  | YearEndedDecember 31, 2004 |           | Period From February 19,2003throughDecember 31, 2003 |  | Period fromJanuary 1, 2003throughFebruary 18, 2003 |         | YearEndedDecember 31,2002 |
| Revenues              |  | $                          | 1,098,634 |                                                 |  | $                                                  | 880,358 |                      |  | $ | 134,936 |    |  | $ | 940,685 |    |
| Operatingincome(loss) |  | $                          | 1,248     |                                                 |  | $                                                  | 16,550  |                      |  | $ | (23,384 | )  |  | $ | (10,228 | )  |
| Netincome(loss)       |  | $                          | (36,660   | )                                               |  | $                                                  | (16,252 | )                    |  | $ | (33,612 | )  |  | $ | (53,402 | )  |
|                       |

5.    Propertyand Equipment

Property and equipment, consist of the following(inthousands):

|                                         |  |                  |         |                   |  |        |        |         |  |  |
|-----------------------------------------|--|------------------|---------|-------------------|--|--------|--------|---------|--|--|
|                                    |  | December31, 2004 |         | December 31, 2003 |
| Leaseholdimprovements                   |  | $                | 1,004   |              |  | $      | 781    |    |
| Uniforms                                |  |             | 23,544  |              |  |   | 11,575 |    |
| ComputerEquipment                       |  |             | 5,212   |              |  |   | 2,976  |    |
| Officefurniture, fixtures, andequipment |  |             | 2,046   |              |  |   | 1,178  |    |
|                                    |  |             | 31,806  |              |  |   | 16,510 |    |
| Lessaccumulateddepreciation             |  |             | (10,968 | )            |  |   | (4,965 | )  |
| Propertyand equipment,net               |  | $                | 20,838  |              |  | $      | 11,545 |    |
|                                         |

Depreciationexpense for the year ended December 31, 2004, for the period fromFebruary 19, 2003 through December 31, 2003, for the period fromJanuary 1, 2003 through February 18, 2003, and for the year endedDecember 31, 2002, was $9,041,000, $4,965,000, $731,000, and$5,347,000, respectively.

F-13

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

6.    Goodwill and Other IntangibleAssets

Goodwill is deemed to have an indefinite life and is notamortized, but is subject to annual impairment tests. The Companycompleted its annual impairment assessment in the fourth quarter offiscal 2004 using the undiscounted cash flow method and concluded thatthere is no impairment of goodwill.

The change in carryingamount of goodwill for the year ended December 31, 2004 is as follows(inthousands):

|                                        |  |        |         |         |  |  |
|----------------------------------------|--|--------|---------|---------|--|--|
| Balanceas of December 31, 2003         |  | $      | 227,347 |    |
| Adjustmentto Mafco Acquisitiongoodwill |  |   | (3,187  | )  |
| Adjustment to PSBAcquisition goodwill  |  |   | 44      |    |
| SSIAcquisition                         |  |   | 5,090   |    |
| BartonAcquisition                      |  |   | 118,472 |    |
| Balanceas of December 31,2004          |  | $      | 347,766 |    |
|                                        |

Grosscarrying amounts and accumulated amortization for intangible assets asof December 31, 2004 and December 31, 2003 are as follows (inthousands):

|                             |  |                     |         |                         |  |                  |        |                  |  |        |         |         |  |        |         |         |  |  |
|-----------------------------|--|---------------------|---------|-------------------------|--|------------------|--------|------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                        |  | GrossCarryingAmount |         | AccumulatedAmortization |
|                        |  | December31, 2004    |         | December 31, 2003       |  | December 31,2004 |        | December 31,2003 |
| Amortized intangibleassets: |  |                |    |                    |  |             |   |             |  |   |    |    |  |   |    |    |
| Customerlists               |  | $                   | 125,865 |                    |  | $                | 82,520 |             |  | $      | (27,542 | )  |  | $      | (10,622 | )  |
| Covenantsnot-to-compete     |  |                | 1,700   |                    |  |             | 1,700  |             |  |   | (340    | )  |  |   | — |    |
| Total                       |  | $                   | 127,565 |                    |  | $                | 84,220 |             |  | $      | (27,882 | )  |  | $      | (10,622 | )  |
|                             |

Thevalue of the customer lists acquired is being amortized using thestraight-line method over 6 years. Covenants not-to-compete are beingamortized using the straight-line method over 5 years.

Amortization expense for the year ended December 31, 2004, for theperiod from February 19, 2003 through December 31, 2003, for the periodfrom January 1, 2003 through February 18, 2003, and for the year endedDecember 31, 2002, was approximately $17,260,000, $10,622,000,$716,000, and $9,219,000, respectively.

Estimated annualaggregate amortization expense for each of the next five years is asfollows (inthousands):

|      |  |   |        |        |  |  |
|------|--|---|--------|--------|--|--|
| 2005 |  | $ | 21,317 |   |
| 2006 |  | $ | 21,317 |   |
| 2007 |  | $ | 21,317 |   |
| 2008 |  | $ | 21,317 |   |
| 2009 |  | $ | 10,383 |   |
|      |

F-14

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

7.    Accounts Receivable

Accounts receivable consists of the following (inthousands):

|                         |  |                  |         |                   |  |        |        |        |  |  |
|-------------------------|--|------------------|---------|-------------------|--|--------|--------|--------|--|--|
|                    |  | December31, 2004 |         | December 31, 2003 |
| Billedreceivables       |  | $                | 110,791 |              |  | $      | 51,036 |   |
| Unbilledreceivables     |  |             | 18,938  |              |  |   | 14,402 |   |
| Accountsreceivables,net |  | $                | 129,729 |              |  | $      | 65,438 |   |
|                         |

Unbilledreceivables represent work performed for which the invoice has not beensent to the customer by the end of the respective period. Substantiallyall unbilled receivables are invoiced in the month following the monthin which the service was performed.

8.    Deferred FinancingFees

Deferred financing fees are being amortized to interestexpense using the effective interest method over the term of theirrespective financing agreements in relation to the Notes and the NewSenior Term Loans, which mature between June 2010 and July 2011 (seeNote 9).

Amortization of deferred financing fees for the yearended December 31, 2004, for the period from February 19, 2003 throughDecember 31, 2003, and for the period from January 1, 2003 throughFebruary 18, 2003 and for the year ended December 31, 2002, wasapproximately $2,043,000, $1,233,000, $47,000, and $341,000,respectively.

The estimated annual aggregate amortizationexpense, which will be included as interest expense, for each of thenext five fiscal years is as follows (inthousands):

|      |  |   |       |        |  |  |
|------|--|---|-------|--------|--|--|
| 2005 |  | $ | 2,300 |   |
| 2006 |  | $ | 2,244 |   |
| 2007 |  | $ | 2,138 |   |
| 2008 |  | $ | 2,017 |   |
| 2009 |  | $ | 1,907 |   |
|      |

9.    Debt

The Company's debt is summarized as follows (inthousands):

|                                                                                                    |  |                  |         |                   |  |        |         |         |  |  |
|----------------------------------------------------------------------------------------------------|--|------------------|---------|-------------------|--|--------|---------|---------|--|--|
|                                                                                               |  | December31, 2004 |         | December 31, 2003 |
| NewSenior Term Loan, variable rate interest (6.23% at December 31,2004), due through June 30, 2010 |  | $                | 206,000 |              |  | $      | — |    |
| Refinanced Senior Term Loan, variable rateinterest (7.50% at  December 31,2003)                    |  |             | — |              |  |   | 121,063 |    |
| 11.375%Senior Subordinated Notes, due July 15,2011                                                 |  |             | 177,966 |              |  |   | — |    |
| 15.00%Refinanced Senior Subordinated Notes, including 3.00% PIK(paid-in-kind)interest              |  |             | — |              |  |   | 46,796  |    |
| 16.25%Refinanced Senior Subordinated Notes, including 4.25% PIK(paid-in-kind)interest              |  |             | — |              |  |   | 10,500  |    |
| 2.99%fixed rate insurance premium financing, due through May,2005                                  |  |             | 6,246   |              |  |   | — |    |
| 3.38%fixed rate insurance premiumfinancing                                                         |  |             | — |              |  |   | 3,303   |    |
|                                                                                               |  |             | 390,212 |              |  |   | 181,662 |    |
| Lesscurrentmaturities                                                                              |  |             | (22,246 | )            |  |   | (10,211 | )  |
|                                                                                               |  | $                | 367,966 |              |  | $      | 171,451 |    |
|                                                                                                    |

F-15

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

In connection with the February 19, 2003formation of SpectaGuard, a $125,000,000 Refinanced Senior SecuredCredit Facility was executed. The Refinanced Senior Secured CreditFacility consisted of (i) a $20,000,000 5-year Refinanced Revolver and(ii) a $105,000,000 7-year Refinanced Senior Term Loan. The RefinancedSenior Secured Credit Facility was amended on May 2, 2003("First Amended Refinanced Credit Facility")to reduce the Refinanced Senior Term Loan to $95,000,000. As a resultof the First Amended Refinanced Credit Facility, an additional 67,778Class A Units were issued for $10,000,000 to reduce the principalamount of the Refinanced Term Loan (see Note 13). The Refinanced SeniorTerm Loan bore interest on the outstanding principal balance at a rateequal to the three-month LIBOR (with a floor limit of 2.50%)plus a 5.00% margin.

The Refinanced Revolver included upto $20,000,000 of letter of credit availability. Amounts outstandingunder the Refinanced Revolver would have been due on February 19, 2008.Interest was payable based on LIBOR or base rate plus the applicablemargin of 5.00% or 4.00%, respectively.

TheCompany issued $50,000,000 face value Refinanced Senior SubordinatedNotes at a $3,844,000 discount in connection with its February 19, 2003formation. The terms of the Refinanced Senior Subordinated Notesincluded 12.00% annual cash interest and 3.00% PIK(paid-in-kind) interest. Interest was payable quarterly. At itselection, the Company could have paid the PIK interest, or added it tothe principal balance as new Refinanced Senior Subordinated Notes. TheRefinanced Senior Subordinated Notes were due June 30, 2010. The debtdiscount was being amortized to interest expense over the term of theRefinanced Senior Subordinated Notes.

In connection with the PSBAcquisition on December 19, 2003, the First Amended Refinanced CreditFacility was amended and restated (the "Second AmendedRefinanced Credit Facility"). The Second AmendedRefinanced Credit Facility provided for an add-on Refinanced SeniorTerm Loan in the amount of $30,000,000 and an additional $10,000,000 inRefinanced Revolver availability resulting in total availability underthe Refinanced Revolver of up to $30,000,000. Other terms of the SecondAmended Refinanced Credit Facility were substantially identical to theFirst Amended Refinanced Credit Facility.

Also as a result ofthe PSB Acquisition, the Company issued an additional $10,500,000 inRefinanced Senior Subordinated Notes. The terms included 12.00%annual cash interest and 4.25% PIK interest payable quarterly.At its election, the Company could have paid the PIK interest, or addedit to the principal balance as new Refinanced Senior SubordinatedNotes. The Refinanced Senior Subordinated Notes were due June 30,2010.

On March 19, 2004, in connection with the SSI Acquisition,the Company issued a $7,500,000 add-on term loan which was permitted asa delayed draw in the Second Amended Refinanced Credit Facility.

Simultaneous with the closing of the Barton Acquisition on August 2,2004, the Company entered into a new senior secured credit facility(the "New Credit Facility") with Bear StearnsCorporate Lending Inc., as Administrative Agent, and a syndicate oflenders arranged by Bear, Stearns & Co. Inc. The New CreditFacility provides for (i) a $210,000,000 six-year term loan facility(the "New Senior Term Loan") and (ii) a$50,000,000 five-year revolving loan (the "NewRevolver") with certain sub-limits for letters of creditand swingline loans. In addition, the Company issued $180,000,000 inaggregate principal amount of senior subordinated notes (the"Notes"), at a discount of $2,118,600 andbearing interest of 11.375%, which mature on July 15, 2011. TheCompany used initial borrowings under the New Credit Facility, togetherwith the net proceeds from the Notes, to finance the purchase price forBarton, to repay amounts outstanding under the Refinanced CreditFacility, to redeem the then outstanding Refinanced Senior SubordinatedNotes and to pay related fees, expenses and redemption premiums. As ofAugust 2, 2004 and prior to giving effect to the Transactions, theCompany had $125,000,000 in term loans outstanding under the RefinancedCredit Facility, which term loans provided for interest at a rate of7.50% per annum at such date. The Refinanced Senior

F-16

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Subordinated Notes comprised $50,000,000aggregate face value of senior subordinated notes due June 30, 2010which provided for cash interest at 12.00% per annum andpaid-in-kind interest at 3.00% per annum, each payablequarterly, and $10,500,000 aggregate face value of senior subordinatednotes due June 30, 2010 which provided for cash interest at12.00% per annum and paid-in-kind interest at 4.25% perannum, each payable quarterly. The Company had $61,900,000 principaloutstanding, including paid-in-kind interest, of Refinanced SeniorSubordinated Notes as of August 2, 2004 prior to redemption of theRefinanced Senior Subordinated Notes.

For the New Senior TermLoan, each eurodollar rate loan bears interest at a rate per annumequal to the eurodollar rate for such day plus 4.25%. Each baserate loan bears interest at a rate per annum equal to the base rateplus 3.25%. As of December 31, 2004, the principal amountoutstanding was $206,000,000 bearing an interest rate of6.23%.

The New Revolver includes a sublimit of up to$40,000,000 of letter of credit availability. The New Revolveravailability is reduced by outstanding letters of credit, which totaled$26,387,670 as of December 31, 2004. For the New Revolver, eacheurodollar rate loan bears interest at a rate per annum equal to theeurodollar rate for such day plus 4.50%. Each base rate loanbears interest at a rate per annum equal to the base rate plus3.50%. Amounts outstanding on the New Revolver are due on August2, 2009. As of December 31, 004, the interest rate was 4.50% andthe outstanding New Revolver balance, excluding the outstanding lettersof credit, was zero.

The Company's assets were pledged ascollateral for the Refinanced Credit Facility. The Company'sassets are pledged as collateral for the New Credit Facility.

The New Credit Facility and the Notes are guaranteed by each of theCompany's current and future domestic subsidiaries. Theseguarantees are joint and several obligations of the domesticsubsidiaries. The Company has a non-guarantor subsidiary located in theUnited Kingdom, which generates less than one percent of theconsolidated revenues and holds less than one percent of theconsolidated assets as of December 31, 2004. The parent company, AlliedSecurity Holdings LLC, has no independent assets or operations.

Based on the borrowing rates currently available for loans withsimilar terms and maturities, the fair value of the long-term debtapproximated its carrying value at December 31, 2004.

The NewCredit Facility and the Notes contain various financial and othercovenants. The Company was in compliance with all such financialcovenants at December 31, 2004.

In the ordinary course ofbusiness, the Company enters into short-term financing agreements inorder to fund its business insurance policy premiums. On August 4,2003, the Company entered into such a financing agreement withCananwill, Inc. for a total amount of $5,863,000. Payments were due inequal monthly installments through May 1, 2004 and bore an annualinterest rate of 3.38%. As of December 31, 2004, all obligationsof the Company under this financing agreement had been satisfied. OnAugust 13, 2004, the Company entered into a new financing agreementwith Cananwill, Inc. for a total amount of $11,242,000. Payments aredue in equal monthly installments through May 1, 2005 and bear anannual interest rate of 2.99%. As of December 31, 2004, theremaining balance of this financing agreement including accruedinterest was $6,246,000.

F-17

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Debt maturities for the succeeding fivefiscal years are as follows (inthousands):

|            |  |        |         |        |  |  |
|------------|--|--------|---------|--------|--|--|
| 2005       |  | $      | 22,246  |   |
| 2006       |  |   | 25,000  |   |
| 2007       |  |   | 30,000  |   |
| 2008       |  |   | 30,000  |   |
| 2009       |  |   | 30,000  |   |
| Thereafter |  |   | 252,966 |   |
| Total      |  | $      | 390,212 |   |
|            |

10.    ContingentLiabilities

In the normal course of operations, various legalclaims are filed against the Company. The Company has provided forcertain of these claims based upon insurance coverages,management's judgment, and the advice of counsel. In the opinionof management, the ultimate outcome of these actions is not expected tohave a material adverse effect on the consolidated financial position,results of operations, or cash flows of the Company.

11.    Comprehensive Income (Loss)

Comprehensive income(loss) is defined as net income (loss) and other changes inmembers' equity (deficit) from transactions and other events fromsources other than members. A reconciliation of net income (loss) toother comprehensive income (loss) is as follows (inthousands):

|                                                    |  |                           |         |                                                 |  |                                                           |         |                                         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------|--|---------------------------|---------|-------------------------------------------------|--|-----------------------------------------------------------|---------|-----------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                               |  | YearendedDecember 31,2004 |         | Period from February 19through December 31,2003 |  | (Predecessor) Periodfrom January 1 through February182003 |         | (Predecessor) Year endedDecember31,2002 |
| Net income(loss)                                   |  | $                         | (23,390 | )                                          |  | $                                                         | 2,034   |                                    |  | $      | (9,775  | )  |  | $      | 5,373   |    |
| Changein fair value of interest rate swapcontracts |  |                      | — |                                            |  |                                                      | — |                                    |  |   | (352    | )  |  |   | (1,068  | )  |
| Realizationof loss on hedgeinstruments             |  |                      | — |                                            |  |                                                      | — |                                    |  |   | 5,064   |    |  |   | — |    |
| Foreigncurrency translationadjustments             |  |                      | 37      |                                            |  |                                                      | — |                                    |  |   | — |    |  |   | — |    |
| Comprehensiveincome(loss)                          |  | $                         | (23,353 | )                                          |  | $                                                         | 2,034   |                                    |  | $      | (5,063  | )  |  | $      | 4,305   |    |
|                                                    |

12.    IncomeTaxes

The members of the Company have elected to be treated asa partnership for both federal and state income tax purposes. Inaccordance with applicable regulations, taxable income or loss of theCompany is required to be reported in the income tax returns of theCompany's members in accordance with the Company'sOperating Agreement, dated as of August 2, 2004 (the"Operating Agreement"). The OperatingAgreement enables the Company to make distributions to each member tosatisfy their respective tax liability arising in connection with theirrespective ownership interest in the Company. Accordingly, no provisionfor income taxes has been made in the Company's consolidatedfinancial statements. These distributions were $2.3 million in 2003 and$0 for 2004. Due principally to differences in depreciation andamortization, taxable income may vary substantially from incomereported for financial statement purposes.

F-18

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Under the Predecessor Company, EffectiveHoldings Inc. and its subsidiaries and AS Acquisition Inc. and itssubsidiaries, all of which corporations were converted to limitedliability companies, were taxed under Subchapter C of the InternalRevenue Code. The effective tax rate for the Predecessor Companydiffered from the federal statutory rate due primarily to state taxes,nondeductible items, and operating results not taxed at the corporatelevel.

13.    Units Subject to Put Rights and Members'Equity

The capital structure of the Company consists of threeclasses of interests which are designated as Class A Units, Class BUnits, and Class C Units (collectively,"Units"). The Company is authorized to issueup to 10,000,000 Units. The Units do not have any voting or consentrights. Class A and Class B Units represent vested ownership interestsin the Company. Class C Units generally vest 50% based onpassage of time ("Time Based") and 50%based on achievement of defined performance targets("Performance-Based") over periods rangingfrom three to five years.

Pursuant to the Operating Agreement,cash distributions may be made to the members in the following orderand priority: (i) among the Units in proportion to, and to the extentof, initial contributed capital attributable to the Units (excludingany capital attributable to unvested Class C Units) until all initialcontributed capital has been returned, and (ii) any remaining balance,to the members in proportion to their ownership percentage.

Uponformation of the Company on February 19, 2003, initial capitalcontributed was approximately $116,915,000. This consisted of$112,983,000 (739,733 Class A Units) from Mafco and its affiliates,$2,307,000 (19,584 Class A Units subject to put rights) from OCM,$1,538,000 (13,056 Class A Units subject to put rights) fromBlackstone, and $50,000 (77,627 Class B Units) from members of theCompany's senior management. The Class A Units subject to putrights for both OCM and Blackstone are classified as a liability,outside of Members' Equity. Members of senior management alsocontributed $37,000 for 110,000 unvested Class C Units.

On May2, 2003, an additional 67,778 Class A Units were issued for $10,000,000to reduce the principal amount outstanding under the Refinanced SeniorTerm Loan (see Note 9). Of these units, 1,562 units were subject to putrights and had a fair value of $230,000.

On December 19, 2003,50,834 Class A Units were issued for $7,500,000 related to the PSBAcquisition (see Note 4). Of these units, 1,894 units were subject toput rights and had a fair value of $279,000.

As of December 31,2003, an additional 7,500 unvested Class C Units were issued to anexecutive for approximately $2,000.

On December 31, 2003, 13,083Time-Based Class C Units and 13,083 Performance-Based Class C Unitsvested.

On June 1, 2004, an additional 7,500 unvested Class CUnits were issued to an executive for approximately $5,000, 3,750 ofwhich were subsequently repurchased from the employee as of December31, 2004.

On August 2, 2004, an additional 7,500 Class C Unitswere issued, of which 750 units were immediately vested, to anexecutive for approximately $5,000.

On August 2, 2004, a directsubsidiary of Mafco acquired all of the shares of Blackstone. As aresult, the put rights associated with the 13,779 Class A Units werecanceled. The Class A Units formerly held by Blackstone are now held byMafco's indirect subsidiary, SpectaGuard Holding TwoCorporation.

On October 5, 2004, 2,250 unvestedPerformance-Based Class C Units were forfeited and 2,250 Time-BasedClass C Units vested due to an employment termination.

F-19

----

AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

On December 31, 2004, 3,750 unvestedPerformance-Based Class C Units were forfeited due to an employmenttermination.

On December 31, 2004, 13,083 Time-Based Class CUnits and 13,383 Performance-Based Class C Units vested.

TheOperating Agreement includes put rights issued to OCM that give OCM theoption to cause the Company to purchase all of the Class A Unitssubject to put rights held by them at specified periods of time, theearliest of which is 2007, at an estimated fair value at the time theput right is exercised. As of December 31, 2004, no fair valueadjustments to the Class A redemption amounts were required.

Pursuant to the Operating Agreement, a member of senior managementhas the right to cause the Company to purchase all, but not less thanall, of his outstanding Class B Units during a 90 day period beginningon February 19, 2006 in accordance with a specified calculation asdefined in the Operating Agreement. The fair value of the Class B Unitssubject to put rights was $0 for units issued during 2003. As ofDecember 31, 2004, no adjustments to the Class B redemption amountswere required. There were no Class B Units issued in 2004.

14.    Related Party Transactions

In connection with theMafco acquisition, senior management of the Company canceled theirvested options in the Predecessor Company. The Company's majoritymember, SpectaGuard Holding Corporation, is obligated to return tomembers of senior management the amount of deferred payment totaling$15,730,000 including estimated taxes, in periods ranging from three tofive years. This amount has been recorded at its present value and isincluded on the accompanying consolidated balance sheets in due toaffiliates. The Company is obligated to reimburse SpectaGuard HoldingCorporation for all costs and expenses incurred in connection with itsperformance under the Amended and Restated Management Agreement betweenSpectaGuard and SpectaGuard Holding Corporation dated as of August 2,2004 including amounts of such deferred payments to seniormanagement.

Gryphon charged the Predecessor Company anadministrative fee for management services that Gryphon performed onbehalf of the Predecessor Company. The total expense incurred by thePredecessor Company related to this fee for the period from January 1,2003 through February 18, 2003 was approximately $96,000 which has beenincluded in branch and corporate overhead expenses on the consolidatedstatements of operations.

The Predecessor Company reimbursedGryphon for certain costs that Gryphon incurred in connection with itsservices to the Predecessor Company. The amount reimbursed for theperiod from January 1, 2003 through February 18, 2003 was $92,000.

The Predecessor Company had a note receivable from an executive andstockholder in the amount of approximately $268,000 plus interestpayable of 10%. The loan was settled and subsequently paid onFebruary 19, 2003 in conjunction with the sale of the PredecessorCompany. (See Note 4.)

During fiscal 2004 and fiscal 2003, weprovided contract security officer services to Revlon and itssubsidiaries. For fiscal 2004 and fiscal 2003, we received aggregatepayments from Revlon for such services of $0.40 million and $0.02million, respectively.

During fiscal 2004 and fiscal 2003, weprovided contract security officer services to Panavision Inc. and itssubsidiaries. For fiscal 2004 and fiscal 2003, we received aggregatepayments from Panavision Inc. for such services of $0.14 million and$0.05 million, respectively.

During fiscal 2004 and fiscal 2003,we provided contract security officer services to M & F Worldwideand its subsidiaries. For fiscal 2004 and fiscal 2003, we receivedaggregate payments from M & F Worldwide for such services of $0.27million and less than $0.01 million, respectively.

F-20

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AlliedSecurity Holdings LLCNotes to Consolidated FinancialStatements (Continued) December 31,2004

Mafco is the controlling stockholder ofeach of Revlon and Panavision Inc. and as of December 31, 2004,beneficially owned approximately 37.9% of the outstanding commonstock of M & F Worldwide. The rates charged for these services werecompetitive with industry rates for similarly situated securityfirms.

15.    Leases

The Company has commitmentsunder operating leases for certain equipment and facilities used in itsoperations. Total rental expense for the year ended December 31, 2004,the period from February 19, 2003 through December 31, 2003, and forthe period from January 1, 2003 through February 18, 2003, and for theyear ended December 31, 2002, was approximately $6,399,000, $3,833,000,$561,000, and $3,928,000, respectively. Future minimum rental paymentsrequired under those operating leases that have an initial or remainingnoncancelable lease term in excess of one year are as follows (inthousands):

|            |  |        |        |        |  |  |
|------------|--|--------|--------|--------|--|--|
| 2005       |  | $      | 7,830  |   |
| 2006       |  |   | 6,139  |   |
| 2007       |  |   | 4,132  |   |
| 2008       |  |   | 2,086  |   |
| 2009       |  |   | 1,236  |   |
| Thereafter |  |   | 1,060  |   |
| Total      |  | $      | 22,483 |   |
|            |

F-21

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ALLIEDSECURITY HOLDINGS LLC

SCHEDULE II – VALUATIONAND QUALIFYINGACCOUNTS

|                                                   |  |                               |         |                                       |  |            |        |                         |  |        |        |         |  |        |        |        |  |  |
|---------------------------------------------------|--|-------------------------------|---------|---------------------------------------|--|------------|--------|-------------------------|--|--------|--------|---------|--|--------|--------|--------|--|--|
|                                              |  | Balanceat Beginning of Period |         | AdditionsCharged toCosts and Expenses |  | Deductions |        | Balance at Endof Period |
|                                              |  | (InThousands)                 |
| Year ended December 31,2002:                      |  |                          |    |                                  |  |       |   |                    |  |   |   |    |  |   |   |   |
| Allowancefor doubtfulaccounts                     |  | $                             | 1,908   |                                  |  |       | 111    |                    |  |   | (313   | )  |  | $      | 1,706  |   |
| Periodfrom January 1, 2003 to February 18,2003:   |  |                          |    |                                  |  |       |   |                    |  |   |   |    |  |   |   |   |
| Allowancefor doubtfulaccounts                     |  | $                             | 1,706   |                                  |  |       | 160    |                    |  |   | (6     | )  |  | $      | 1,860  |   |
| Periodfrom February 19, 2003 to December 31,2003: |  |                          |    |                                  |  |       |   |                    |  |   |   |    |  |   |   |   |
| Allowancefor doubtful accounts (a)                |  | $                             | — |                                  |  |       | 1,502  |                    |  |   | (219   | )  |  | $      | 1,283  |   |
| Yearended December 31,2004:                       |  |                          |    |                                  |  |       |   |                    |  |   |   |    |  |   |   |   |
| Allowancefor doubtfulaccounts                     |  | $                             | 1,283   |                                  |  |       | 648    |                    |  |   | (538   | )  |  | $      | 1,393  |   |
|                                                   |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                             |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Beginningbalance is $0 as a result of a change in ownership related to the Mafcoacquisition as discussed in Note 1 to the Consolidated FinancialStatements. |

F-22

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