SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20459

                                   FORM 10-KSB
  (Mark One)

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

For the fiscal year ended September 30, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
                         Commission File Number 0-17580

                                 FIRETECTOR INC.
              (Exact name of Small Business Issuer in its charter)

           Delaware                                 11-2941299
(State  or  other   jurisdiction  of            (I.R.S.   Employer
incorporation or organization)                  Identification No.)

209 Lafayette Drive, Syosset, New York               11791
(Address of  principal executive offices)          (zip code)

Issuer's telephone number, including area code:  (516) 433-4700

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

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

                     Common Stock, $.001 par value per share
                                (Title of Class)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months and (2) has been  subject to such  filing
requirements for the past 90 days. YES X NO

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements by reference in Part III of this Form 10-KSB ( )

     State issuer's revenues for its most recent fiscal year: $19,087,000

     The aggregate  market value of the voting stock held by  non-affiliates  of
the Registrant,  based upon the average bid and ask prices for the  Registrant's
Common Stock, $.001 par value per share, as of December 14, 2000 was $748,536.

      As of December 14, 2000,  the  Registrant  had 1,704,425  shares of Common
Stock outstanding.

Documents Incorporated by Reference: Definitive Proxy Statement to be filed.


<PAGE>







`
PART I

ITEM 1. DESCRIPTION OF BUSINESS

The Company

   Firetector  Inc.  ("Firetector"  or the "Company") is a Delaware  corporation
organized in October 1988 to acquire controlling  interests in companies engaged
in the design,  manufacture,  sale and servicing of fire, life safety  security,
energy  management,  intercom,  audio-video  communication  and  other  systems.
Reference  to  Firetector  or the  Company  include  operations  of  each of its
subsidiaries except where the context otherwise requires.  Firetector's business
is conducted through  subsidiaries in New York City metropolitan area and Dallas
Texas.

Firetector Products

  Firetector designs,  manufactures,  markets and sells its own proprietary life
safety and communication  systems and also engineers,  markets and sells systems
and products  manufactured by other parties.  Firetector's  proprietary  product
line  features  the COMTRAK  1720 and 2000 Life  Safety  Systems and the TELTRAK
Communications System.

    In 1973,  New  York  City  passed  Local  Law 5  requiring  that all  office
buildings  of 100 feet or more be  outfitted  with smoke  detectors,  manual and
audio  communicating  systems for life safety and fire  reporting  purposes.  In
anticipation of the demand that this legislation  would create for equipment and
systems employing improved technology and design features, Firetector engaged in
extensive  research and development  which led to its  proprietary  COMTRAK 1720
Life Safety  System which has been  installed  in scores of buildings  since the
early 1980's.

    To meet the challenges of more stringent  code  requirements  and a sluggish
market for new construction, Firetector developed its new generation proprietary
COMTRAK 2000 Life Safety System which utilizes the latest technology to not only
meet the  current  code  requirements,  and  satisfy  the "wish list" of current
COMTRAK customers,  but many likely future code requirements as well. One of the
improvements  incorporated into the COMTRAK 2000 is a Fire Command Station which
offers a color CRT display  system along with three  sectional  displays.  These
features  provide the operator  with a wide  variety of  pertinent  information,
allowing for quicker response,  which is critical in an emergency.  In addition,
the expanded memory  capability of the new Fire Command Station enables a single
station to control multi-building projects and permits simplified operation.

    COMTRAK 1720 and 2000 Systems are operating in  approximately  100 buildings
in New York City.  Firetector  has approvals from Factory Mutual and various New
York City agencies for the COMTRAK 1720 and COMTRAK 2000 System.



<PAGE>




    TELTRAK  Communications  Systems.  In  the  early  1980s,  Firetector  began
investigating  the  intercom  market  and the  possibilities  of  utilizing  its
computerized multiplex technology for this market.  Significant  construction of
new  high-rise  housing  occurred  in the  1970s and  1980s  and  increased  the
potential demand for  technologically  advanced intercom  systems.  To meet this
demand,  Firetector developed a  micro-processor-based  combination intercom and
security system using Casey's multiplex  technology.  The TELTRAK I intercom and
security  system is capable of a variety of  accessory  functions in addition to
its basic intercom and security function. Firetector added video capabilities to
its TELTRAK I technology and created the TELTRAK II, for  installation in luxury
condominium,  cooperative and apartment buildings.  Over 16,000 TELTRAK I and II
units have been sold.  In 1991,  the  redesigned  TELTRAK III  intercom/security
station  was  introduced,   with  enhanced   features  to  expand  its  use  and
competitiveness  in the face of the  reduced  market  for  these  products.  New
features,  such as public  address,  enable  important  messages  to be given to
building occupants either locally or by groups in case of emergency.

Other Products

    In the past four years  Firetector has sought to diversify its product lines
to establish a greater base to absorb product support,  R & D and other overhead
and to provide product and customer diversification. To that end, Firetector has
augmented its established  position in marketing  engineered life safety systems
(proprietary and third party) by developing a significant business in engineered
sound  systems  for  application  to a  variety  of users  including  hospitals,
educational facilities and transit facilities (e.g. subway stations). Firetector
has developed a focused unit with a high level of  experience to penetrate  this
niche market with significant  success as a substantial  portion of Firetector's
order position derives from this effect. In addition,  Firetector  organized new
marketing  units to focus on marketing,  engineering  and servicing  systems and
products  manufactured by third parties,  particularly  national  manufacturers.
These  units  are   service   oriented   organizations   which  focus  on  close
relationships with customers and key suppliers.

    In 1993,  Firetector  acquired  assets of a company which  manufactured  and
marketed  sophisticated  products and  on-board  information  and  communication
systems  with  applications  for  municipal   transit  carriers,   long-distance
passenger  carriers and bus and train  builders.  Firetector has integrated this
operation  into its New  York  division  and has to date  supplied  products  to
customers such as ABB Traction, Sumitomo, Kawasaki,  Morrison-Knudsen,  Siemens,
the New York City Transit Authority and AMTRAK.


<PAGE>




Service

    Firetector  continues to put an increasing priority on the development of an
integrated  and  efficient  service  organization.  Sales  personnel  have  been
dedicated to securing service  contracts and are intensifying  efforts to market
service to COMTRAK and other Firetector  projects coming out of warranty and the
renewal of such contracts. To improve efficiencies and productivity,  Firetector
organized a division  to perform  cleaning  on life  safety  systems,  which was
previously  subcontracted  to an external entity.  To improve customer  service,
Firetector  maintains  an  office  in New York City  which  houses  its New York
service management.

General Sound (Texas) Company

    Firetector conducts business in Texas through its subsidiary,  General Sound
(Texas) Company, which distributes,  services, installs and designs a variety of
sound, fire alarm, intercom and security systems in the Dallas/Ft.  Worth, Texas
area.  General Sound  concentrates its sales effort on the commercial market and
schools. General Sound provides its customers, primarily electrical contractors,
with  engineered  systems,   assistance  in  design,  installation  support  and
post-installation service.

    General Sound has non-exclusive  distribution  agreements for the Dallas/Ft.
Worth area with Notifier,  Dukane, and other manufacturers.  The product mix and
dependence  on  individual  suppliers  varies  from  year to year  depending  on
customer requirements and market trends.

Research and Development

     During the fiscal years ended September 30, 2000 and 1999, Firetector spent
approximately $135,000 and $129,000,  respectively, for research and development
of Firetector's life safety and communication systems.

Customers and Suppliers

     For the  fiscal  years  ended  September  30,  2000 and 1999,  no  customer
accounted for more than 10% of Firetector's revenues.

Regulations

    Firetector believes that it is in compliance with applicable building codes,
zoning ordinances,  occupational, safety and hazard standards and other Federal,
state and local ordinances and regulations governing its business activities.


<PAGE>




Competition

    Firetector's business is competitive;  some of Firetector's  competitors may
have greater  financial  resources and may offer a broader line of fire and life
safety products.  Firetector also faces  competition in the servicing of systems
which it sells. Accordingly,  even though Firetector may sell and install a fire
and life  safety  control  and  communications  system,  it may not  receive the
contract to service  that  system.  Firetector,  however,  believes  that it can
effectively  compete with any entity which  conforms with  applicable  rules and
regulations.

Employees

    Firetector and its subsidiaries  have 125 full time employees,  including 44
New York hourly employees that are covered by a Collective  Bargaining Agreement
expiring June 2002.

Business Conditions

    Firetector  believes that its labor and material  sources are sufficient and
that other than normal competitive factors, and what is discussed above or under
"MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN OF  OPERATION",  Firetector's
operations and industry do not have any special characteristics which may have a
material impact upon its future financial performance.

Patents and Trademarks

    The  Company  does  not  have  any  patents  on its  systems,  but,  it uses
proprietary  technology  which  it  seeks  to  protect  as  trade  secrets.  The
"Firetector",  "Casey Systems" and "COMTRAK"  trademarks are registered with the
United States Patent and Trademark Office.

ITEM 2. DESCRIPTION OF PROPERTY

    The Company leases approximately 15,700 square feet of office, manufacturing
and warehouse space in Syosset,  New York under a seven year lease expiring June
2007, The rental schedule  provides for monthly rent of $13,966 during the first
and second  years of the  initial  term and with 3.3% yearly  increases  for the
third thru seventh years.

    The Company has a lease for  approximately  4,000  square feet of office and
warehouse  space in New York  City.  The lease  term runs from  October  1, 2000
through October 1, 2003. The lease agreement  provided for annual rental fees of
$115,000,  which includes the cost of certain  services  including  electricity.
This lease can be terminated by either party giving 180 days notice.

    The Company  leases a 7,700  square foot  office and  warehouse  facility in
Richardson,  Texas, a suburb of Dallas, pursuant to a lease that was extended in
October,  1997 to expire on April 30,  2003  providing  for annual rent on a net
basis of $51,700 escalating  annually to $61,200 in the final year of the lease.
The  Company  has a 24 month  renewal  option on the lease which would allow for
rent at the prevailing market rate and tenant responsibility for any increase in
common  area  expenses  over the 1997 base year.  Management  believes  there is
sufficient space at this facility for its current and intended business.

ITEM 3. LEGAL PROCEEDINGS

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

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

    None


<PAGE>





                              PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Firetector's  Common Stock has been traded on the National  Association  of
Securities  Dealer's Inc. Automated  Quotation System ("NASDAQ") since April 11,
1989 under the "FTEC" symbol. The following table shows the high and low bid and
ask quotations for each fiscal quarter from December 31, 1998 through  September
30,  2000 which  quotations  were  obtained  from the  National  Association  of
Securities Dealers Inc.

Common Stock
Quarter Ended                   BID                         ASK
                         High         Low           High          Low
                         -------------------------------------------------------
December 31, 1998        1 3/8          1/16       1 1/2            7/8
March 31, 1999           2 3/16      1 1/32        2 1/4         1 3/32
June 30, 1999            2 1/8       1 1/8         2 3/16        1 3/16
September 30, 1999       3 3/4       1 5/16        3 7/8         1 13/32
December 31, 1999        2           1 1/8         2 7/32        1 7/32
March 31, 2000           4           1 9/16        4 3/16        1 5/8
June 30, 2000            1 15/16     3 1/8         1 15/16       1 7/16
September 30, 2000       1 7/8       1 1/4         1 31/32       1 5/16

     The above  quotations  represent  prices  between  dealers,  do not include
retail  markups,   markdowns  or  commissions  and  may  not  represent   actual
transactions.  As of  December  14,  2000,  there  were 452  record  holders  of
Firetector's Common Stock.

     On December  14, 2000 the bid and ask prices for the Common Stock were $.90
and $.84, respectively.

     The Company has not paid any cash dividends on its Common Stock. Payment of
cash dividends in the  foreseeable  future is not  contemplated  by the Company.
Whether dividends are paid in the future will depend on the Company's  earnings,
capital  requirements,  financial  condition  along  with  economic  and  market
conditions,  industry  standard  and other  factors  considered  relevant to the
Company's  Board of  Directors.  Payment of dividends is  restricted  in certain
cases by the Company's credit facilities. Accordingly, no assurance can be given
as to the amount or timing of future dividend payments, if any.






<PAGE>





ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

LIQUIDITY AND CAPITAL RESOURCES

In September 2000, the Company's $3 million dollar credit facility with Citizens
Business  Credit of Boston  (the  "Credit  Facility")  was amended to extend the
expiration  date from June 2001 to December,  2004.  The Credit  Facility has an
interest rate of prime plus 3/4% on  outstanding  balances.  Advances  under the
Credit  Facility are measured  against a borrowing  base  calculated on eligible
receivables  and inventory.  The Credit Facility is secured by all assets of the
Company  and all of its  operating  subsidiaries.  Originally  the  terms of the
credit facility also required a $300,000  letter of credit by Mirtronics,  Inc.,
an   Ontario   corporation   which   is  the   Company's   largest   stockholder
("Mirtronics"). The letter of credit was released by the lender in January, 2000
based on the terms of the Credit Facility.

     The Credit Facility includes various  covenants,  which among other things,
impose  limitations on declaring or paying  dividends,  acquisitions and capital
expenditures. The company is also required to maintain certain financial ratios.
At September 30, 2000,  the Company was not in default with any of its financial
covenants and at such time owed $1,433,000 under the credit facility.

     Net cash provided by operations  for the twelve months ended  September 30,
2000 amounted to $621,000 as compared to $3,000 for the comparable prior period.
The primary  reason for the increased  amount of cash provided by operations was
due to an increase of $324,000 in operating profit before taxes.  This increased
profit was achieved with only a $82,000  increase in inventory;  while the prior
year  period  required a $353,000  increase  in  inventory  to support the sales
anticipated in 2000.  Also  contributing to cash being provided by operations in
2000 was a  $352,000  increase  in  accrued  expenses,  as well  as, a  $295,000
increase in taxes payable.  The higher level of revenues in 2000 (an increase of
$2.2 million) was achieved without an increase in working capital  requirements.
Accordingly the resulting cash flow was primarily used to reduce borrowing under
the Credit Facility by $607,000. The Company anticipates  maintaining its future
cash position through  continuation of the negotiation of certain terms with its
customers  prior to the  beginning  of a project,  the  monitoring  of its terms
during a project and completing projects in timely fashion,  resulting in faster
final  payments.  It is the  intention  of the Company to closely  monitor  this
program throughout fiscal 2001.

     The ratio of the Company's current assets to current  liabilities  declined
to  approximately  2.55 to 1 at September 30, 2000 compared to 2.83 at September
30,  1999.  This  decrease  is  primarily  due to the accrual in 2000 of federal
income taxes payable as the company's net operating loss  carryforward was fully
utilized.


<PAGE>




     Firetector's terms of sale are net 30 days. However,  the normal receivable
collection  period is 60-120  days,  exclusive  of  retainage,  because  certain
governmental  regulations  and the Company's  frequent status as a subcontractor
(entitled to pro rata payments as the general  project is completed)  extend the
normal  collection  period.  Firetector  believes  this is a  standard  industry
practice.  Firetector's receivable experience is consistent with the industry as
a whole and will likely  continue.  This could be considered an area of risk and
concern.  However, due to the proprietary nature of Firetector's  systems,  many
projects require  Firetector's  cooperation to secure a certificate of occupancy
and/or to  activate/operate  a life safety system,  thus assisting  Firetector's
collection  of  a  significant   portion  or  even  total  payment,   even  when
Firetector's  immediate  account debtor's  (contractor)  creditors have seized a
project.

RESULTS OF OPERATIONS

Revenues

     Total revenues in 2000 were $19.1  million,  an increase of 13% compared to
revenues of $16.9  million in 1999.  This  increase was  primarily  due to a 17%
increase  in product  revenues  in 2000 to $14.9  million as  compared  to $12.8
million in 1999.  The product  revenue  increase is the result of the  Company's
intensified  and broadened  marketing  which  generated  transit and  commercial
projects including several large audio/visual projects for a museum, a major New
York City rail station  complex,  several  professional  organizations,  and the
second phase of a major airport facility. The Company also experienced increased
revenues  from its fire alarm product line due in part from  expansion  into the
Long Island, NY market area.

     Service  revenues  increased  2% in 2000 to  $4,166,000.  The  increase  in
service  revenues  reflects  higher call-in  maintenance  service on life safety
systems.

Gross Profit

     Gross  profit  dollars  from  product  revenues  increased  19% in  2000 to
$5,025,000 as a result of the 17% increase in product sales. Gross profit margin
on product revenues increased to 34.0% in 2000 compared to 33.0% in 1999, due to
the higher gross profit  contribution  to generally  fixed  overhead and from an
engineering and project management contract which carried a high gross margin.

     Gross profit margin on service revenues increased slightly in 2000 to 29.7%
from  29.1% in 1999.  This  increase  reflects  the  effect  of  higher  call-in
maintenance  service  revenue  in  2000  on  essentially  fixed  overhead.  This
improvement  was  achieved  in  spite  of  certain  wage  increases  to  service
technicians in both New York and Dallas.


<PAGE>




Selling, General and Administrative Expenses

     Selling,  General and  Administrative  Expenses (S G+A) increased by 11% in
2000  over  1999  primarily  as a result  of the  Company's  expanded  marketing
program.  This expansion in marketing effort has resulted in higher revenues and
related  profitability  during 2000. The increase in S G + A includes commission
expense  related to higher  product  revenues and included one time  expenses of
$75,000 (2% of the increase in S G + A) to relocate the Company's  operations to
a new facility in Syosset,  NY. Occupancy costs also increased for the Company's
service facility in New York City due to increasing  rental rates throughout New
York City. However, selling, general and administrative expenses as a percent of
sales declined to 26.3 % from 26.5% due to the increase in revenues.

Income Before Tax

     Operating  income  increased  in 2000 to  $834,000  compared to $510,000 in
fiscal 1999.  The  improvement  in operating  income was primarily the result of
increased  gross  margin from higher  product  revenues  in 2000.  However,  the
improvement  in gross  margin  was  offset by  increased  selling,  general  and
administrative  expenses as noted above and by higher interest expense due to an
increase  in the  prime  lending  rate  under  the  Company's  Credit  Facility.
Favorably  affecting operating income was lower depreciation and amortization in
2000 as certain assets became fully depreciated.

Tax Provisions

     The Company's current income tax provision represent state and local income
taxes as well as a  federal  income  tax  provision,  In 1999,  the  alternative
minimum tax for Federal  income  purposes  also applied.  In addition,  deferred
taxes were provided in 2000 and 1999 on income to be reported in future  taxable
periods.  During 2000,  Firetector fully utilized the balance  ($310,000) of its
net operating loss carry forwards, the accounting benefits of which was realized
in prior periods.

Order Position

     Firetector's order position,  excluding service,  decreased to $7.8 million
at September 30, 2000 from $10.3 million at September  30, 1999  reflecting  the
shipment  in 2000 of  significant  orders  received in 1999 from  several  major
subway complexes, a major transportation center, and an airport facility.  While
quotation  activity is brisk, there is no assurance when orders will be received
and whether the order position will increase. Due to the fact that the Company's
products are sold and installed as part of larger  construction  or mass transit
projects, there is typically a delay between the booking of the contract and its
revenue  realization.  The order position  includes and the Company continues to
bid on projects that might include significant  subcontractor labor, and expects
to be  active  in  seeking  orders  where  the  Company  would  act  as a  prime
contractor.


<PAGE>




Plan of Operations

     During  fiscal  2001,  Management  intends  to  continue  to  focus  on its
intensified  marketing  programs  that  were  begun in 1998 and to  continue  to
contain or monitor fixed  overhead as well as to reduce  variable  costs through
improved   efficiency  and   productivity.   Enhancements  in  recent  years  to
Firetector's  management  information  systems  and  methods  of  approving  and
monitoring  project costs have improved  Management's  ability to pinpoint waste
and/or third party (supplier or customer) cost  responsibility.  Management will
also focus its efforts in 2001 to improve accounts receivable collections.

 INFLATION

     The impact of inflation on the Company's  business  operations has not been
material in the past.  Casey's  labor  costs are  normally  controlled  by union
contracts  covering a period of two years and its material  costs have  remained
relatively  stable.  However  in July of  1999,  after  a  brief  work  stoppage
(strike),  the Company and its union  agreed to a new three year  contract  that
provides for wage  increases  of 5% in each year.  During  2001,  certain  union
members,  upon passing  certain test  requirements,  will be moving up to higher
paying  categories  that have multiple salary steps per year in excess of the 5%
contractual level. In addition,  the demand of highly skilled  professionals has
resulted in the need to assess salary levels in order to remain  competitive  in
both Dallas,  Texas and the New York City, New York  metropolitan  areas.  It is
expected that required salary  adjustments will exceed normal increases given in
the past.  The Company  will try to mitigate  the effect of these  increases  in
labor costs by price increases, if possible, and expense reductions.



<PAGE>




ITEM 7.  FINANCIAL STATEMENTS

     The consolidated  financial  statements  required to be filed hereunder are
indexed at Page 11 and are incorporated herein by reference.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

Effective September 8, 2000 the Board of Directors elected to change independent
accountants. Accordingly, the public accounting firm of Moore Stephens, P.C. was
notified  that the  client-auditor  relationship  would not be  renewed  and the
public  accounting  firm of  Marcum &  Kliegman,  LLP was  engaged  to audit the
Company's financial statements for the year 2000.


<PAGE>



                                 PART III

         Incorporated by reference to the Registrant's Definitive Proxy.



ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

Exhibit No.            Description of Exhibit                 Page No.

3.1  Certificate of Incorporation of the Company, as amended (Exhibit 3.1)(1)

3.2  By-Laws of the Company (2)

4.1  Specimen Common Stock Certificate (2)

10.1 Credit  Agreement  dated June 23, 1998 between  Firetector Inc. as Borrower
     and Citizens Business Credit Company as Lender (4)

10.2 Debt Matching  Agreement dated as of September 30, 1998 between  Firetector
     Inc. and Mirtronics Inc. (4)

10.3 Amended  Debt/Equity  Agreement dated February 19, 1998 between  Firetector
     Inc. and Mirtronics Inc.(4)

10.4 1997 Non-Qualified Stock Option Plan (Exhibit 10.6)(3)

10.4 Employment  Agreement,  dated as of January 1, 1997 between Firetector Inc.
     and John A. Poserina (Exhibit 10.10)(3)

10.5 Form of First  Amendment to Credit  Agreement  dated October,  2000 between
     Firetector Inc. as Borrower and Citizens Business Credit Company as Lender

10.6 Form of Lease dated  February,  2000  between  Casey  Systems as Tenant and
     First Industrial L.P. as Landlord (5)

22.1 Subsidiaries of the Registrant (Exhibit 22.1)(1)

27   Financial Data Schedule

- --------

(1) Reference is made to the correspondingly numbered Exhibit to Amendment No. 1
to the Company's  Registration Statement on Form S-2, Registration No. 33-51472,
filed with the Commission on December 23, 1992, which is incorporated  herein by
reference.

(2) Reference is made to the correspondingly numbered Exhibit to Amendment No. 1
to the Company's  Registration Statement on Form S-1, Registration No. 22-26050,
filed with the Commission on January 23, 1989,  which is incorporated  herein by
reference.

(3) Reference is made to the  correspondingly  numbered Exhibit to the Company's
Annual Report on Form 10-KSB for the Fiscal Year Ended September 30, 1997, which
Exhibit is incorporated herein by reference.

(4) Reference is made to the  correspondingly  numbered Exhibit to the Company's
Annual Report on Form 10-KSB for the Fiscal Year Ended September 30, 1998, which
Exhibit is incorporated herein by reference.

(5)  To be filed by amendment

     (b)  Reports on Form 8-K

On  September  15,  2000,  the  Registrant  filed a  Current  Report on Form 8-K
reporting on Item 4 Changes in Registrant's Certifying Accountant.


<PAGE>



                                   SIGNATURES

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

                              FIRETECTOR INC.
                              (Registrant)

                              By: /s/ Daniel S. Tamkin
                              Daniel S. Tamkin,
                              Chief Executive Officer and
                              Director

Dated: December 21, 2000

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the Company and in the capacities and on the
dates indicated.

SIGNATURE                          TITLE                               DATE

/s/Daniel S. Tamkin             Chairman,                      December 21, 2000
 ----------------------         Chief Executive Officer
 Daniel S. Tamkin               and Director

/s/Joseph Vitale               President, Chief Operating
                               Officer and Director            December 21, 2000
- ----------------------
  Joseph Vitale

/s/John A. Poserina             Vice President,                December 21, 2000
                                Chief Financial Officer
- ----------------------        Treasurer, Secretary, and Director
 John A. Poserina

/s/Henry Schnurbach             Director                       December 21, 2000
- ----------------------
  Henry Schnurbach

/s/Dennis P. McConnell          Director                       December 21, 2000
- ----------------------
 Dennis P. McConnell






<PAGE>



                       Index to Consolidated Financial Statements

                        Firetector Inc. and Subsidiaries

                                     Item 7

Report of Independent Auditors ..........................................


Audited Consolidated Financial Statements

Consolidated Balance Sheet-September 30, 2000 ...........................

Consolidated Statements of Income
 Years Ended September 30, 2000 and 1999 ................................

Consolidated Statements of Stockholders' Equity
 Years Ended September 30, 2000 and 1999 ................................

Consolidated Statements of Cash Flows
 Years Ended September 30, 2000 and 1999 ................................

Notes to Consolidated Financial Statements ..............................







<PAGE>

                           Independent Auditors Report

To the Stockholders and Board of Directors of
Firetector Inc. and Subsidiaries

We have audited the accompanying  consolidated  balance sheet of Firetector Inc.
and its  subsidiaries  as of  September  30, 2000 and the  related  consolidated
statements of income,  stockholders' equity, and cash flows for year then ended.
These financial  statements are the responsibility of the Company's  management.
Our  responsibility  is to express an  opinion on these  consolidated  financial
statements based on our audit.

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

In our opinion, the consolidated statements referred to above present fairly, in
all material  respects,  the consolidated  financial position of Firetector Inc.
and its  subsidiaries as of September 30, 2000 and the  consolidated  results of
their  consolidated  operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.


November 28, 2000                       MARCUM & KLIEGMAN LLP
New York, NY
<PAGE>



                         Report of Independent Auditors

The Board of Directors and Stockholders
Firetector Inc.

We  have   audited  the   accompanying   consolidated   statements   of  income,
stockholders'  equity, and cash flows of Firetector Inc and its subsidiaries for
the  year  ended  September  30,  1999.  These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash flows of Firetector Inc and its  subsidiaries  for the year ended September
30, 1999, in conformity with generally accepted accounting principles.

New York, NY
December 3, 1999
                                         MOORE STEPHENS,  P. C.





<PAGE>

                         Part I - FINANCIAL INFORMATION
                        FIRETECTOR INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET


                                                                September 30,
                                                                    2000
ASSETS

CURRENT ASSETS
 Cash and cash equivalents                                       $  239,000
 Accounts receivable, principally trade, less allowance
  for doubtful accounts of $349,000                               6,117,000
 Inventories                                                      2,337,000
 Deferred taxes                                                     243,000
 Prepaid expenses and other current assets                          127,000
                                                                 -----------
TOTAL CURRENT ASSETS                                             $9,063,000
                                                                 -----------


PROPERTY, PLANT AND EQUIPMENT -at cost, less
  accumulated depreciation of $1,004,000                            342,000

OTHER ASSETS                                                        174,000

DEFERRED TAXES                                                       34,000

                                                                 -----------
TOTAL ASSETS                                                     $9,613,000
                                                                 ===========

See accompanying Notes to the Consolidated Financial Statements

<PAGE>
                        FIRETECTOR INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET


                                                                September 30,
                                                                    2000

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Note payable to Mirtronics                                    $  243,000
   Other notes payable - principally to related party                85,000
   Accounts payable and accrued expenses                          2,860,000
   Unearned service revenue                                         375,000
   Current portion of capital lease obligations                      23,000
                                                                 -----------
TOTAL CURRENT LIABILITIES                                         3,586,000
                                                                 -----------


   Note payable to bank                                           1,433,000
   Notes payable - principally to related party,
    less current portion                                            155,000
   Capital lease obligations, less current portion                   89,000
                                                                 -----------
TOTAL LIABILITIES                                                 5,263,000
                                                                 -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

  Preferred stock, 2,000,000 shares authorized-
     none issued and outstanding
  Common stock, 10,000,000 shares authorized, $.001
     par value; issued and outstanding 1,704,425 shares               2,000
  Capital in excess of par                                        5,279,000
  Deficit                                                          (931,000)
                                                                 -----------
TOTAL STOCKHOLDERS' EQUITY                                        4,350,000
                                                                 -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $9,613,000
                                                                 ===========

See accompanying Notes to the Consolidated Financial Statements


<PAGE>



                        FIRETECTOR INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                            For the Year Ended September 30,
                                                               2000                  1999
                                                          -----------            -------------
<S>                                                       <C>                    <C>
Net sales                                                 $14,921,000            $12,795,000
Service revenue                                             4,166,000              4,097,000
                                                          ------------           ------------
Total revenues                                             19,087,000             16,892,000
                                                          ------------           ------------


Cost of sales                                               9,896,000              8,562,000
Cost of service                                             2,928,000              2,873,000
Selling, general and administrative                         5,016,000              4,485,000
Interest expense                                              249,000                240,000
Depreciation and amortization expense                         164,000                228,000
Other (income) - net                                                                  -6,000
                                                          ------------           ------------
                                                           18,253,000             16,382,000
                                                          ------------           ------------
Income from  operations before provision
  for income taxes                                            834,000                510,000

Provision  for income taxes:
   Current                                                    335,000                128,000
   Deferred                                                    25,000                 72,000
                                                          ------------           ------------
                                                              360,000                200,000

                                                          ------------           ------------
Net Income                                                   $474,000               $310,000
                                                          ============           ===========
Earnings Per Common Share
  Basic Earnings Per Share                                      $0.28                  $0.20
  Diluted  Earnings Per Share                                   $0.26                  $0.18
                                                                =====                  =====

Weighted Average Number of Common Shares Outstanding        1,682,198              1,571,097

Weighted Average Number of Common and Potential Dilutive
   Common Shares Outstanding                                1,853,792              1,723,653
</TABLE>


See accompanying Notes to the Consolidated Financial Statements




<PAGE>
                        FIRETECTOR INC. and SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2000 and 1999
<TABLE>
<CAPTION>
                                                TOTAL
                                            STOCKHOLDERS'                  PREFERRED STOCK                     COMMON STOCK
                                                EQUITY                SHARES               AMOUNT            SHARES         AMOUNT
                                            ------------             ----------          --------         ----------     ----------
<S>                                          <C>                           <C>                 <C>        <C>               <C>
Balance at September 30, 1998                $3,446,000                      0                 $0         1,571,097         $2,000

Net Income                                     $310,000
                                            -----------                --------          ---------       -----------       --------
Balance at September 30, 1999                $3,756,000                      0                  0         1,571,097         $2,000
                                            -----------                --------          ---------       -----------       --------
Issuance of shares from exercise
  of options                                    120,000                                                     133,333              0

Net Income                                      474,000
                                            -----------                --------          ---------       -----------       --------
Balance at September 30, 2000                $4,350,000                      0                 $0         1,704,430         $2,000
                                            ===========                ========          =========       ===========       ========
</TABLE>

See accompanying Notes to the Consolidated Financial Statements
<PAGE>

                        FIRETECTOR INC. and SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2000 and 1999


                                                  CAPITAL
                                                 IN EXCESS
                                                  OF PAR             DEFICIT
                                                -----------       -------------

Balance at September 30, 1998                    $5,159,000        $(1,715,000)

Net Income                                                            $310,000
                                                ------------      -------------
Balance at September 30, 1999                    $5,159,000        $(1,405,000)
                                                ------------      -------------
Issuance of shares from exercise
  of options                                        120,000

Net Income                                                             474,000
                                                ------------       ------------
Balance at September 30, 2000                    $5,279,000          $(931,000)
                                                ============       ============

See accompanying Notes to the Consolidated Financial Statements
<PAGE>

                        FIRETECTOR INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                           For the Year Ended September 30,
                                                               2000                  1999
                                                           -----------            ----------
<S>                                                          <C>                    <C>
OPERATING ACTIVITIES
Net income                                                   $474,000               $310,000
 Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
  Depreciation and amortization                               163,000                228,000
  Provision for doubtful accounts                             128,000                 72,000
 Changes in operating assets and liabilities:
  Accounts receivable                                        (712,000)              (736,000)
  Inventories, prepaid expenses and other current assets      (34,000)              (388,000)
  Deferred taxes                                               25,000                 72,000
  Other assets                                                  1,000                 17,000
  Accounts payable and accrued expenses                       732,000                390,000
  Unearned service revenue                                     33,000                 -1,000
  Due to affiliated companies                                (189,000)                39,000
                                                          ------------            -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                     621,000                  3,000
                                                          ------------            -----------
INVESTING ACTIVITIES
 Purchases of property, plant and equipment                   (97,000)               (62,000)
                                                          ------------            -----------
NET CASH (USED IN) INVESTING ACTIVITIES                       (97,000)               (62,000)
                                                          ------------            -----------
FINANCING ACTIVITIES

 Proceeds from exercise of stock options                      120,000
 Principal payments on revolving line of credit,
  long-term debt, notes payable and capital lease
  obligations                                                (719,000)              (105,000)
 Proceeds from revolving line of credit, notes payable
   and capital lease obligations                               80,000                292,000
                                                          ------------            -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES          (519,000)               187,000
                                                          ------------            -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                       5,000                128,000

Cash and cash equivalents at beginning of period              234,000                105,000
                                                          ------------            -----------
Cash and cash equivalents at end of period                   $239,000               $233,000
                                                          ============            ===========
SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the period for:
     Income taxes                                             $67,000                $73,000
     Interest                                                $234,000               $192,000
</TABLE>
<PAGE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the years ended September 30, 2000 and 1999, the Company incurred capital
lease  obilgations of $94,000 and $26,000  respectively , for the acquisition of
equipment.


See accompanying Notes to the Consolidated Financial Statements
<PAGE>


                          Firetector Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                               September 30, 2000



1. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at September 30, 2000, and reported amounts of
revenues and expenses  during the fiscal year.  Actual results could differ from
those estimates.

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its  subsidiaries,  all of which  are  wholly  owned.  The  principal  operating
subsidiaries  are: Casey Systems Inc.  ("Casey"),  General Sound (Texas) Company
("GenSound"),  Pyrotech Service Inc.  ("Pyrotech"),  Systems Service  Technology
Corp. ("SST") and Amco Maintenance  Corporation  ("AMCO").  Effective October 1,
1999, the operations of Pyrotech Service Inc. and Amco  Maintenance  Corporation
became  part of the  operation  of  Systems  Service  Technology  and  these two
companies became inactive.  Significant intercompany items and transactions have
been  eliminated in  consolidation.  The Company is a subsidiary of  Mirtronics,
Inc. ("Mirtronics"), an Ontario publicly-held corporation.

Business

The Company operates in one industry segment: the design, manufacture, marketing
and  service  of a variety  of data  communications  product  and  systems  with
applications   in  the  fire  alarm,   life   safety,   transit,   security  and
communications industry.

Revenue Recognition

Sales are recognized when product is shipped to customers.  Service revenue from
maintenance  contracts is recognized on a straight-line  basis over the terms of
the  respective  contract,  which is generally  one year.  Non-contract  service
revenue is recognized when services are performed.



<PAGE>




1. Summary of Significant Accounting Policies (continued)

Inventories

Inventories are priced at the lower of cost (first-in,  first-out) or market and
consist primarily of raw materials.

Property and Equipment

Property  and  equipment  are stated at  historical  cost.  Leases  meeting  the
criteria for  capitalization  are recorded at the present  value of future lease
payments.

Depreciation  and  amortization  of machinery  and  equipment  and furniture and
fixtures are provided primarily by the straight-line method over their estimated
useful lives. The Company depreciates  machinery and equipment over periods of 3
to 10 years and  amortizes  leasehold  improvements  and assets  acquired  under
capitalized  leases over the life of the lease or their  economic  useful  life,
whichever is shorter.

Other Assets

Other assets are comprised principally of the excess of cost over the fair value
of the assets acquired in the formation of certain  subsidiaries.  The excess of
cost over the fair value of the assets  acquired  approximates  $117,000 (net of
accumulated  amortization  of  $57,000)  and  relates  principally  to the  1990
acquisition of GenSound.  This amount is being  amortized over forty years under
the straight line method.

The Company evaluates the periods of goodwill  amortization to determine whether
later events and  circumstances  warrant revised  estimates of useful lives. The
Company  also  evaluates  whether  the  carrying  value of  goodwill  has become
impaired.


<PAGE>




1. Summary of Significant Accounting Policies (continued)

Income Taxes

The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes". Under SFAS No. 109, the
asset  and  liability  method  is used to  determine  deferred  tax  assets  and
liabilities based on differences  between  financial  reporting and tax bases of
assets and  liabilities  and are  measured  using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

Earnings Per Share

SFAS No. 128 "Earnings Per Share" requires companies to report basic and diluted
earnings per share  ("EPS")  computations.  Basic EPS  excludes  dilution and is
based on the  weighted-average  common shares  outstanding and diluted EPS gives
effect to potential  dilution of securities  that could share in the earnings of
the Company. Diluted EPS reflects the assumed issuance of shares with respect to
the Company's employee stock options,  non-employee stock options,  warrants and
convertible  notes and  preferred  stock.  The EPS and Weighted  Average  Shares
Outstanding  reflect a 1 for 3 reverse  split of common stock that was effective
in September 1998.

Cash Equivalents

The Company  considers all highly liquid  investments  with  maturities of three
months or less when purchased to be cash equivalents.

Concentration of Credit Risk

The Company's  operations  are located in two large U.S.  cities (New York City,
New York and Dallas, Texas), each of which is an independent market. The Company
grants  credit  to its  customers,  principally  all of  which  are  general  or
specialized construction  contractors,  none of which individually constitutes a
significant  portion  of  outstanding  receivables.  Approximately  85% of  such
outstanding  receivables  at  September  30, 2000 are due from  customers in New
York.

At September 30, 2000,  the Company had  approximately  $150,000 based on checks
that had not  cleared  the  financial  institutions  that are subject to insured
amount limitations. The Company does not require collateral to support financial
instruments subject to credit risk.

Stock Options and Similar Equity Instruments

The Company  adopted the  disclosure  requirements  of  Statement  of  Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation," for stock options and similar equity  instruments  (collectively,
"Options") issued to employees;  however, the Company will continue to apply the
intrinsic  value based  method of  accounting  for options  issued to  employees
prescribed by Accounting  Principles  Board ("APB") Opinion 25,  "Accounting for
Stock  Issues  to  Employees,"  rather  than  the fair  value  based  method  of
accounting prescribed by SFAS No. 123. SFAS No. 123 also applies to transactions
in which an entity  issues its equity  instruments  to acquire goods or services
from  non-employees.  Those transactions must be accounted for based on the fair
value of the consideration  received or the fair value of the equity instruments
issued, whichever is more reliably measured. (see Note 9).

2. Transactions with Related Parties

Mirtronics  is the  largest  shareholder  of the  Company.  In  1994  and  1995,
Mirtronics  provided  financial  assistance to the Company by way of a Letter of
Credit in support of the  Company's  credit  facility,  further  advances to the
Company,  and an exchange of debt for equity.  In connection with this financial
assistance, the Company had granted Mirtronics options to acquire 613,333 shares
of common stock and had issued Series 1 Convertible  Preferred Stock in exchange
for debt.  The preferred  stock was  convertible  into 450,000  shares of common
stock.

In February 1998,  the Company and Mirtronics  agreed to reorganize the options,
convertible debt and convertible  preferred stock (so as to reduce the potential
dilution of these  securities by 366,667 shares of common  stock).  In September
1998,  the Company and  Mirtronics  entered  into a Debt  Matching  agreement to
offset  an  aggregate  of  $508,619  of  obligations  with  each  other  and for
Mirtronics  to surrender the  conversion  option on one of the Notes for 413,333
shares of common  stock for a new warrant for  310,000  shares of common  stock.
These 1998 warrants are  exercisable  at anytime  until  December 31, 2003 at an
exercise price of $1.02 per share.

In  consideration  of collateral  support for the Company's  Credit  Facility in
1994, the Company granted Gentura Capital  Corporation,  an Ontario Corporation,
("GCC") options for 166,667 unregistered shares of the Company's common stock at
$.90 per share through  December 31, 1999. In July 1996, GCC exercised 33,334 of
these options at $.90 per share. In December 1999, GCC exercised the outstanding
balance of these  options for $120,000 and the Company  reduced its note payable
to  Mirtronics  for a like  amount.  An  officer  of GCC is also a  director  of
Mirtronics (See Note 9).

Notes Payable  Principally  to Related Party  includes  $156,000 due to a former
officer/director  of the Company under a seven year installment  promissory note
dated January 1, 1997 that bears interest at 4% per annum.


3. Property, Plant and Equipment

Property  and  equipment  (including  those  arising  from  capital  leases) are
summarized as follows:

                                                                September 30,
                                                                    2000
                                                              ---------------
  Machinery and equipment                                         $1,200,000
  Furniture and fixtures                                             130,000
  Leasehold improvements                                              16,000
                                                              ---------------
                                                                   1,346,000
  Less accumulated depreciation and amortization
                                                                   1,004,000
                                                              ---------------
                                                                    $342,000
                                                              ===============

Annual   amortization  of  equipment  under  capital  leases  is  included  with
depreciation and amortization expense.

Depreciation expense was $127,000 and $173,000 for the years ended September 30,
2000 and 1999, respectively.


4. Long-Term Debt

In 1998,  the Company  entered into a revolving  credit  facility  with Citizens
Business  Credit  Company of Boston,  Mass (the "Credit  Facility").  The credit
facility was revised in September  2000 and provides for a $3,000,000  revolving
line of credit through  December 2004 and carries an interest rate of prime plus
3/4% on outstanding balances (10.25% at September 30, 2000). The Credit facility
limits  capital  expenditures  to $250,000 in each year.  At September  30, 2000
$1,433,000  was  outstanding  under  this  facility.  Advances  under the credit
facility  are  measured   against  a  borrowing  base   calculated  on  eligible
receivables  and inventory.  The credit facility is secured by all of the assets
of the Company and all of its operating subsidiaries.

The Credit Facility includes certain  restrictive  covenants,  which among other
things,  impose  limitations on declaring or paying dividends,  acquisitions and
capital expenditure.  The Company is also required to maintain certain financial
ratios.  At  September  30,  2000,  the Company was not in default of any of its
financial covenants.

Annual maturities of Loans and Notes Payable are as follows:

                Bank           Other Notes
                Loan             Payable
            ------------      ------------
 2001                           $328,000
 2002                             77,000
 2003                             62,000
 2004                             16,000
 2005        $1,433,000
            -----------       ------------
 Total       $1,433,000         $483,000
            ===========       ============

At September 30, 2000, the notes payable to Mirtronics  totaled $243,000.  While
these  notes are  payable on demand,  they are  subordinate  to and subject to a
payment  restriction under the Company's Credit Facility with its bank (See Note
2).

5. Leases

The Company  leases  certain  office and  warehouse  space  under  noncancelable
operating  leases  expiring at various times through 2007. In February 2000, the
Company  signed a new lease for office,  manufacturing  and  warehouse  space in
Syosset,  New York.  This lease  expires in June 2007.  In September  2000,  the
Company also  entered into a new lease for its service  center in New York City.
This lease expires in August 2003. However, either party may terminate the lease
with six months notice.  The Company also leases  certain  office  equipment and
vehicles under  noncancelable  capital and operating  leases expiring in various
years through fiscal 2005.

The  following  is a schedule  of future  minimum  payments,  by year and in the
aggregate,  under non  cancelable  capital and operating  leases with initial or
remaining terms of one year or more at September 30, 2000:

                                       Capital Leases    Operating Leases
                                       --------------     ---------------
2001                                       $35,000              $355,000
2002                                        31,000               353,000
2003                                        31,000               326,000
2004                                        26,000               180,000
2005                                        21,000               186,000
2006                                                             192,000
2007                                                             148,000
                                       ------------         -------------
Total minimum lease payments               144,000            $1,740,000
                                                            =============
Less amount representing interest           33,000
                                       ------------
Present value of net minimum
 lease payments (including current
 portion of $23,000)                      $111,000
                                       ============

Rental   expense   amounted  to  $307,000   and  $258,000  for  2000  and  1999,
respectively.

6. Significant Customers
During fiscal 2000 and 1999, no customer accounted for more than 10% of sales.

7. Income Taxes

During the year ended  September 30, 2000, the Company  recorded a tax provision
of $360,000  compared to  $200,000  for the year ended  September  30,  1999.  A
reconciliation  of such with the  amounts  computed by  applying  the  statutory
federal income tax rate is follows:

                                                        Year ended September 30,
                                                          2000        1999
                                                        -----------------------
Statutory federal income tax rate                         34%         34%
Computed expected tax from income                       $284,000    $173,000
Increase in taxes resulting from:
 State and local income taxes, net of Federal
  tax benefit                                             97,000      77,000
 Nondeductible expenses                                    8,000       8,000
 Alternative minimum tax                                              11,000
(Decrease) in taxes resulting from
  benefit of future tax deductible items                 (29,000)    (69,000)
                                                       ----------    --------
Provision                                               $360,000    $200,000
                                                       ==========   ========


The Company  provided  $13,000 and  $32,000  for state and local  franchise  and
capital  taxes for the years ended  September  30, 2000 and 1999,  respectively.
These  expenses  have been  included  in  selling,  general  and  administrative
expenses for each of the years presented.

During  2000,  the  Company  completely  used up the  remaining  $310,000 of net
operating loses that were carried over from prior periods,  the benefit of which
was recognized in prior years.

The  Company  has  recorded a deferred  tax asset of  approximately  $277,000 at
September  30, 2000 related to certain book  provisions to be deducted in future
tax returns. Management anticipates profitable operations to continue at a level
that will result in the utilization of the entire deferred tax asset.


<PAGE>




8. Earnings Per Share

Shown below is a table that presents for 2000 and 1999 the  computation of basic
earnings per share, diluted earnings per share, weighted shares outstanding, and
weighted average shares after potential dilution.



                                                             Year Ended
Basic EPS Computation                                  2000              1999
  Net Income available to common
   shareholders                                      $474,000         $310,000
  Weighted average outstanding shares               1,682,198        1,571,097

  Basic EPS                                              $.28             $.20
                                                        =====            =====
Diluted EPS Computation
--------------------------------------------
  Income available to common
   shareholders                                      $474,000         $310,000
  Diluted net income                                  474,000         $310,000

  Weighted-average shares                           1,682,198        1,571,097
    Plus:  Incremental shares from
           assumed conversions
      Non Employee Stock Options                       10,242           49,855
      Employee Stock Options                           40,693           21,831
      Warrants*                                       120,659           80,870
                                                    ---------        ---------
  Dilutive potential common shares                    171,594          152,556
                                                    ---------        ---------
  Adjusted weighted-average shares                  1,853,792        1,723,653
  Diluted EPS                                            $.26             $.18
                                                    =========        =========

*Warrants  convertible  into 16,667 and 33,334 shares were  antidilutive  in the
years ended September 30, 2000 and 1999, respectively.

9.  Employee Stock Options, Options, and Warrants

On April 30, 1997, the Company and its shareholders adopted a nonqualified stock
option plan ("1997  Plan"),  which  expires  September  30,  2002,  except as to
options then outstanding  under the 1997 Plan. Under the 1997 Plan, the Board of
Directors  may grant options to eligible  employees at exercise  prices not less
than 100% of the fair market  value of the common  shares at the time the option
is granted.  The number of shares of Common  Stock that may be issued  shall not
exceed an aggregate of up to 10% of its issued and outstanding  shares from time
to time.  Options vest at a rate of 20% per year  commencing one year after date
of grant. Issuances under the 1997 Plan are to be reduced by options outstanding
under a 1990  nonqualified  stock  option  plan  (replaced  by the  1997  Plan).
Effective September 30, 1998, all outstanding  employee stock options were reset
to an exercise price of $1.00 per share.

The Company  applies the intrinsic  value base method of accounting  for options
issued to employees  rather than the fair value based method of  accounting.  No
options  were issued  during  2000.  If the  Company  had  elected to  recognize
compensation  expense  based  upon the fair  value at the grant  date for awards
under these plans  consistent with the  methodology  prescribed by SFAS 123, the
Company's  net  income and net income per share for 1999 would be reduced to the
pro forma amounts indicated below:

                                              2000                      1999
Net Income:
       As reported                          $474,000                  $310,000
       Pro forma                             474,000                   294,000

Fully diluted earnings per common share:
        As reported                            $0.26                     $0.18
        Pro forma                               0.26                      0.17

These pro forma amounts may not be  representative  of future  disclosures since
the  estimated  fair value of stock  options is  amortized  to expense  over the
vesting  period for  purposes of future pro forma  disclosures,  and  additional
options  may be granted in future  years.  The fair value of these  options  was
estimated at the date of grant using the Black-Scholes option-pricing model with
the following  weighted  average  assumptions for 1999 : dividend yield of zero;
expected  volatility of 85% and expected life of 4 years.  The weighted  average
risk fee interest rates for 1999 were 5.40%.  The weighted average fair value of
options  granted  during 1999,  for which the exercise  price equaled the market
price on the grant dates,  was $1.125.  The option price for all employee  stock
options  outstanding prior to fiscal 1999 was reset to $1.00 effective September
30,1998.

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

Transactions involving stock options are summarized as follows:
                                                             Weighted  Average
                                                             Exercise Price of
                              Stock Options Outstanding      Options Outstanding
Balance September 30, 1998             72,958                       1.00
  Options granted                      35,000                       1.13
Balance September 30, 1999            107,958                       1.04
Balance September 30, 2000            107,958                       1.04

There  were  75,402  exercisable  options  at  September  30,  2000  and  54,136
exercisable options at September 30, 1999.
 .
The following table summarizes  information concerning currently outstanding and
exercisable stock options.

                       Outstanding at      Weighted Average    Exercisable at
Exercise Price       September 30, 2000    Contractual Life   September 30, 2000
$1.00                     27,250              .5 years            27,250
  1.00                    16,125              .5 years            16,125
  1.00                     4,500             1.3 years             3,375
  1.00                    25,083             2.0 years            18,812
  1.13                    35,000             4.0 years             8,750


Mirtronics  is the  largest  shareholder  of the  Company.  In  1994  and  1995,
Mirtronics  provided  financial  assistance to the Company by way of a Letter of
Credit in support of the  Company's  Credit  Facility,  further  advances to the
Company,  and an exchange of debt for equity.  In connection with this financial
assistance,  the Company granted  Mirtronics options to acquire common stock and
issued  Series 1 Preferred  Stock in exchange for debt.  In February  1998,  the
Company and Mirtronics  agreed to restructure the options,  convertible debt and
preferred stock, and in September 1998, the Company and Mirtronics  entered into
a Debt  Matching  Agreement  to  offset  obligations  with  each  other  and for
Mirtronics to surrender the conversion  option on 413,333 shares of common stock
for a new warrant for 310,000 shares of common stock.  (See Note 2 - Transaction
with Related Parties).

In February 1994, the Company  issued options to purchase  166,667  unregistered
shares of common stock at a $.90 per share to GCC in  consideration of providing
an income guaranty to support the Company's Credit Facility.  Options for 33,334
shares were  exercised  in July 1996 and options for 133,333  were  exercised in
December 1999 (also see Note 2 - Transactions with Related Parties).

In May 1995, the Company  granted  Judson  Enterprises,  Ltd.  33,334 options to
purchase  common stock at a price of $3.00 per share in exchange for  investment
banking  services.  In April 1997,  the Company  entered  into an  agreement  to
exchange 16,667 of these options for 16,667 new options to purchase common stock
at a price of $4.50 and  expire in April  2002.  The  remaining  16,667  options
expired  in May  2000.  Based  on  calculations  done  in  accordance  with  the
requirements of SFAS 123, stock based  compensation  expense resulting from this
transaction was immaterial.

Transactions involving non-employee stock options and warrants are summarized as
follows:

                                                              Weighted Average
                                   Options and Warrants       Exercise Price of
                                       Outstanding           Options Outstanding
Balance September 30, 1998                486,667                 $1.17
Balance September 30, 1999                486,667                  1.17
Balance September 30, 2000                326,667                 $1.20

All of these options were exercisable at the end of the periods indicated in the
above schedule.

The following table summarizes  information concerning currently outstanding and
exercisable non-employee stock options and warrants.

                    Outstanding at       Weighted Average       Exercisable at
Exercise Price    September 30, 2000     Contractual Life     September 30, 2000
  $4.50                16,667               1.5 years              16,667
  $1.02               310,000               3.3 years             310,000


10. Contingencies

In the normal  course of its  operations,  the Company has been or, from time to
time, may be named in legal actions seeking  monetary  damages.  Management does
not expect,  based upon consultation with legal counsel,  that any material item
exists that will affect the Company's business or financial condition.

11. Other

Approximately  35%  of  the  Company's   employees  are  covered  by  collective
bargaining agreements. The present contract expires in June 2002.

Effective  January 1, 1996,  the Board of  Directors  instituted a 401K plan for
nonunion  employees.  The  plan  includes  a  profit  sharing  provision  at the
discretion  of the  Board  of  Directors.  In 2000  and  1999 a  profit  sharing
contribution of $44,000 and $28,000, respectively, was charged to expense.

12. Fair Value of Financial Instruments

SFAS No. 107, "Disclosures about Fair Values of Financial Instruments", requires
disclosing fair value to the extent practicable for financial  instruments which
are  recognized  or  unrecognized  in the balance  sheet.  The fair value of the
financial instruments disclosed herein is not necessarily  representative of the
amount  that  could be  realized  or  settled,  nor does the fair  value  amount
consider the tax consequences of realization or settlement.

For certain financial  instruments,  including cash and cash equivalents,  trade
receivables and payables,  and short-term debt, it was assumed that the carrying
amount  approximated  fair  value  because of the near term  maturities  of such
obligations.  The fair value of long-term debt was  determined  based on current
rates at which the Company could borrow funds with similar remaining maturities,
which amount approximates its carrying value.

13.  Authoritative Pronouncements

The FASB has  issued  Statement  of  Financial  Accounting  Standards  No.  133,
Accounting  for  Derivative  Instruments  and Hedging  Activities.  SFAS No. 133
establishes  accounting  and  reporting  standards for  derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging activities.

SFAS No. 133 requires that an entity  recognize all derivatives as either assets
or  liabilities  in the  statement  of  financial  position  and  measure  those
instruments  at fair value.  The  accounting  for changes in the fair value of a
derivative  depends on the intended use of derivative  and how it is designated,
for example, gain or losses related to changes in the fair value of a derivative
not  designated as a hedging  instrument is recognized in earnings in the period
of the change,  while  certain  types of hedging may be initially  reported as a
component  of  other   comprehensive   income   (outside   earnings)  until  the
consummation of the underlying transaction.

SFAS No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15,  2000.  Initial  application  of SFAS No. 133 should be as of the
beginning  of a fiscal  quarter;  on that date,  hedging  relationships  must be
designated  anew and  documented  pursuant  to the  provisions  of SFAS No, 133.
Earlier  application  of all of the  provisions  of  SFAS  No.  133 is not to be
applied retroactively to financial statements of prior periods. The requirements
do not have a material impact on the Company's results of operations,  financial
position, or cash flows.