<PAGE>

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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB

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

       For the year ended December 31, 2000        Commission File No. 0-22810

                       MACE SECURITY INTERNATIONAL, INC.
            (Exact name of registrant as specified in its charter)


                 Delaware                             03-0311630
     (State or Other Jurisdiction of               (I.R.S. Employer
      Incorporation or Organization)             Identification No.)


             1000 Crawford Place, Suite 400, Mt. Laurel, NJ 08054
              (Address of Principal Executive Offices) (Zip Code)

      Registrant's Telephone Number, Including Area Code: (856) 778-2300

       Securities Registered Pursuant to Section 12(b) of the Act: None

          Securities Registered Pursuant to Section 12(g) of the Act:

                    Common Stock, par value $0.01 per share


         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
                                              -

         Indicate by check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB. [_]

         The aggregate market value of the voting stock held by non-affiliates
of the Registrant, based on the last sale price of the Registrant's Common Stock
at the close of business on March 15, 2001, was approximately $14,154,442.
(Reference is made to page 15 herein for a statement of assumptions upon which
this calculation is based.)

         The number of shares of Common Stock, par value $.01 per share, of the
Registrant outstanding as of March 15, 2001 was 25,493,394.

                      Documents Incorporated by Reference
         Portions of the Registrant's definitive Proxy Statement to be filed
with the Commission in connection with the 2001 Annual Meeting of Stockholders
(which proxy statement is expected to be filed with the Commission not later
than 120 days after the end of the Registrant's last fiscal year) are
incorporated by reference into Part III of this Form 10-KSB.

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                                    PART I

ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL

The Company was incorporated in Delaware on September 1, 1993. Before July 1999,
its main business was the production and sale of less-than-lethal defense sprays
and other consumer safety and personal security products. On July 1, 1999, the
Company merged American Wash Services, Inc., a company that was engaged in the
business of acquiring and operating car wash facilities, into a wholly-owned
subsidiary of Mace Security International, Inc. On July 9, 1999, the Company
acquired all the outstanding common stock of Innovative Control Systems, Inc.
("ICS"), a developer of point-of-sale systems for the car wash and oil and
lubrication industries. On June 2, 2000, the Company sold its computer products
subsidiary, ICS, and accordingly, all results of ICS's operations have been
classified as "discontinued operations".

The Company's operations are currently conducted through two primary divisions.
Since July 1999, the Company's main business has been the ownership and
operation of full service car and truck wash facilities. Through a separate
security products division, the Company produces retail sale consumer safety and
personal security products. In the first quarter of 2000, the Company entered
into a Management Agreement with Mark Sport, Inc. ("Mark Sport"). Mark Sport is
controlled by Jon E. Goodrich, a director of the Company. The Management
Agreement entitles Mark Sport to operate the Company's Security Products
Division and receive all profits or losses realized through operation of this
division. Under the Management Agreement, Mark Sport pays the Company $20,000
per month. Additionally, Mark Sport must pay the Company an amount equal to the
amortization and depreciation on the assets of the division. During the term of
the Agreement, Mark Sport must operate the division in substantially the same
manner as it has been operated prior to the Management Agreement.

LINES OF BUSINESS

         Car and Truck Wash Operations. The Company, through its subsidiaries,
owns and operates 57 car washes and five truck washes. The Company operates 16
car wash locations in the region surrounding Philadelphia, Pennsylvania, some of
which are located in New Jersey, Pennsylvania and Delaware. The Company also
operates six car wash locations in the Sarasota, Florida area, 14 car wash
locations in Arizona, and 21 car wash locations in Texas. The Company also owns
five truck washes located in Arizona, Indiana, Ohio and Texas. Except for 12 of
the Philadelphia-region car washes, which provide only exterior washing, the
rest of the Company's locations are full service car washes, providing exterior
washing and drying, vacuuming and dusting of dashboards and door panels, and
cleaning of all windows and glass.

The typical car or truck wash facility consists of a free standing building of
approximately 4,000 square feet, containing a sales area for impulse items and a
car wash tunnel of approximately 75 feet in length. Cars are moved through the
car wash tunnel by a conveyor system where automatic equipment cleans the
vehicle as it moves underneath the equipment. Additional extra services,
including wheel cleaning, fragrance and rust protection treatment, interior and
wheel treatments, waxing and shampooing, are also offered at the locations.
Several locations also offer other consumer products and related car care
services, such as professional detailing services (offered at 45 locations), oil
and lubrication services (offered at 15 locations), gasoline dispensing services
(offered at 24 locations), state inspection services (offered at six locations),
and convenience store sales (offered at eight locations). The truck wash
facilities provide washing and waxing services for tractor-trailer and fleet
transport vehicles. These services are provided by hand and by a unique
automated system designed specifically for washing and waxing large vehicles.
While certain acquisitions were pending, the Company managed several car wash
locations under operating agreements pursuant to which the Company was entitled
to all profits generated by that location.

         Security Products Division. The Security Products Division is divided
into two sub-divisions. The Consumer Division of the Security Products Division
designs, markets and sells consumer products for use in protection of the home
and automobile, and for personal and child protection. These products include a
line of defense sprays, personal alarms, whistles, and window and door lock
alarms. The defense sprays, the Consumer Division's most well-known products,
include tear gas sprays, pepper sprays and sprays with both tear gas and pepper
solution. The Consumer Division markets its products through mass
merchants/department stores, consumer catalogues and guns/sporting goods,
hardware, auto, convenience, and drug stores as well as on the Internet. The
second sub-division of the Security Products Division is Mace Anti Crime
Bureau(R) ("MACB") which develops and markets security products and literature
primarily for the foreign financial community, including a "dye-pack" used by
financial institutions for robbery protection, state-of-the-art training videos
and crisis response materials. MACB markets to foreign financial institutions
and related businesses throughout the world through direct marketing and the use
of independent sales representatives and distributors as well as exhibitions at
national trade shows and advertisement in trade publications.

                                       2
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Substantially all of the Company's manufacturing processes are performed at the
Company's Bennington, Vermont facility under the Management Agreement through
Mark Sport. The Company's defense spray products are manufactured on an aerosol
filling machine. Most products are packaged in sealed, tamper-resistant
"clamshells." The KinderGard(R) product line is primarily manufactured by an
unrelated company and packaged on-site at the Vermont facility. Operating
results of the KinderGard(R) product line are immaterial at this time.

In the first quarter of 2000, the Company entered into a Management Agreement
with Mark Sport, Inc. ("Mark Sport"), a Vermont corporation controlled by Jon E.
Goodrich, a director of the Company. The Management Agreement entitles Mark
Sport to operate the Company's Security Products Division and receive all
profits or losses for a seven-month term beginning January 1, 2000. The
Agreement was extended for two six month periods through July 31, 2001. Under
the Management Agreement, Mark Sport pays the Company $20,000 per month. The
payments commenced in February 2000 and continue through the term of the
Management Agreement. Additionally, Mark Sport must pay the Company an amount
equal to the amortization and depreciation on the assets of the division. During
the term of the Agreement, Mark Sport must operate the division in substantially
the same manner as it has been operated prior to the Management Agreement.

         Point-of-Sale Systems and Software Sales and Development. On July 9,
1999, the Company acquired ICS in exchange for 604,000 shares of company common
stock and the assumption of $750,000 of debt. From July 1999 to June 2000, ICS
was involved in the development, marketing and sale of automated point-of-sale
control systems that are used to monitor, manage and analyze car wash systems
and lubrication centers. On June 2, 2000, the Company sold ICS. Accordingly, all
results of ICS operations have been classified as "discontinued operations".

BUSINESS STRATEGIES

Growth Of Car and Truck Wash Business.

                  . Internal Growth. The Company believes that it can achieve
                    ---------------
internal growth, principally from additional sales into its current markets, by
providing superior and improved service and through its existing marketing
efforts. To improve market share in a given operating region, the Company spends
up to 3% of its regional revenue on strong regional advertising campaigns
emphasizing brand awareness. The Company believes that only about 30% of the
general population routinely use car wash services. The Company believes that
this relatively low level of participation is the result of (i) lack of
effective advertising; (ii) inconsistent wash quality and service levels across
fragmented locations; and (iii) concerns about scratches and other adverse
effects from the automated wash process. The Company believes that through
consumer education and by developing a strong brand reputation, known for
consistent quality and safe, dependable service across locations, it can
increase consumer participation rates and generate significant internal growth
from existing locations. The Company also intends to selectively implement price
increases when competitive advantages and appropriate market conditions exist.
In addition, the Company believes that it can achieve internal growth through
the addition of ancillary profit centers to its existing car wash locations such
as oil and lubrication centers, gasoline dispensing services, professional
detailing centers and convenience stores.

                  . Increasing Productivity and Operating Efficiency. The
                    ------------------------------------------------
Company believes that it can reduce the total operating expenses of its owned
businesses by implementing centralized financial controls. In addition, the
Company is implementing programs to take advantage of certain economies of scale
in such areas as the purchase of equipment, chemicals and supplies, parts,
equipment maintenance, data processing, financing arrangements, employee
benefits, insurance, and communications. The Company trains its operating
personnel to emphasize customer service, labor savings, safe operation and
improved sales of add-on and ancillary services. Location managers, once
trained, will implement the Company's standardized service menu option list and
high-margin service add-ons at each of the Company's present and acquired
operating locations.

Acquisitions.

From May 1999 through December 2000, and including its merger with American Wash
Services, Inc., the Company has acquired 57 car wash facilities and five truck
wash facilities through the acquisition of 17 separate businesses. The majority
of the locations were acquired by acquiring a company, or the assets of a
company, that owned several locations in a given geographic area.

The Company will continue to acquire car washes when it can do so on
advantageous terms. In evaluating potential acquisitions, the Company will
consider: (i) the potential for operating cost reductions, revenue growth
through advertising, and managerial efficiencies; (ii) the commercial viability
and underlying real estate value of each location; (iii) the potential for
geographic diversification throughout the United States; and (iv) other relevant
factors.

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The Company is also exploring potential acquisitions, mergers and strategic
alliances with companies not in the car wash business.

As consideration for future acquisitions, the Company intends to continue to use
combinations of common stock, cash, and assumption of indebtedness. The
consideration for each future acquisition will vary on a case-by-case basis
depending on the financial interests of the Company, the historic operating
results of the acquisition target, and the growth potential of the business to
be acquired. The Company expects to finance future acquisitions through funds
provided by operations, mortgage loans and the proceeds of possible future
equity sales.

     .   Completed Acquisitions in 2000. Since January 1, 2000, the Company
         ------------------------------
acquired three car care companies and a truck wash company.

<TABLE>
<CAPTION>
                                            Completed Acquisitions
                                      January 1, 2000--December 31, 2000

                                              Date Acquired
Company                                    (Accounting Method)              Location           Principal Business
-------                                    -------------------              --------           ------------------
<S>                                       <C>                         <C>                      <C>
Red Baron Truck Washes, Inc.              March 24, 2000              Arizona, Indiana,        Five Truck Washes
                                          (Purchase)                  Texas and Ohio

Sparsupco,   Inc.   (the  "Beneva  Car    June 5, 2000                Sarasota, Florida        Full Service Car Wash
Wash")                                    (Purchase)

Superstar Kyrene                          July 10, 2000               Phoenix, Arizona         Full Service Car Wash
                                          (Purchase)

Blue Planet Car Wash                      July 26, 2000               Dallas, Texas            Full Service Car Wash
                                          (Purchase)
</TABLE>

MARKETING

         Car and Truck Wash Business. The car care industry services customers
on a local and regional basis. The Company employs operational and customer
service people at its operating locations. The operational and customer service
people are supervised by the management of the operating locations. The Company
emphasizes providing quality services as well as customer satisfaction and
retention, and believes that it will attract customers in the future because of
its reputation for quality service. The Company markets its services through
coupon advertising and direct-mail marketing programs. The Company contains a
diverse customer base, with no single customer accounting for five percent or
more of the Company's consolidated revenues for the fiscal year ended December
31, 2000. The Company does not believe that the loss of any single customer
would have a material adverse effect on the Company's business or results of
operations.

         Security Products Division. The Company does not directly market its
line of personal safety and security devices. All marketing and sales are done
by Mark Sport under the Management Agreement. Each market category is reached
through dedicated in-house sales managers, and/or through a nationwide network
of manufacturers' representatives. Market categories are also reached through
catalogue, magazine and trade publication advertising, Internet website and
promotion at industry trade shows. Mark Sport also sells directly to wholesale
distributors and to certain large department stores. Mail order and specialty
accounts are handled directly by Mark Sport.

         Point-of-Sale and Software Business. The Company, having sold ICS, no
longer markets the point-of-sale systems manufactured by ICS.

PRODUCTION AND SUPPLIES

         Car and Truck Wash Business. The Company does not manufacture any of
the car or truck wash equipment and supplies which it uses. There are numerous
suppliers of the equipment and supplies required by the Company's car and truck
wash operations.

                                       4
<PAGE>

          Security Products Division. Substantially all of the manufacturing
processes for the Security Products Division are performed under the Management
Agreement by Mark Sport at the Company's Bennington, Vermont facility. The
Company's defense spray products are manufactured on an aerosol filling machine.
Most products are packaged in sealed, tamper-resistant "clamshells." The
KinderGard(R)product line and its MaceCash dye pack bag are primarily
manufactured by unrelated companies and packaged on-site at the Vermont
facility. There are numerous potential suppliers of the components and parts
required in the production process. The Company has developed strong beneficial
long-term relationships with many of its suppliers including the following:
Allplax, Inc., Moldamatic, Inc., Piper Impact, Inc., Amber International, Inc.
and Springfield Printing, Inc. In addition, Mark Sport purchases for resale a
variety of products produced by others including whistles, alarms, and window
and door locks, among others.

          Point-of-Sale and Software Business. Prior to the sale of ICS in June
2000, all of the Company's manufacturing processes for its Point-of-Sale and
Software Business were performed at the Company's Nazareth, Pennsylvania
facility. The component parts of the Company's Point-of-Sale systems were
manufactured by unrelated companies and assembled at the Nazareth, Pennsylvania
facility.

COMPETITION

          Car and Truck Wash Business. The car wash industry is a highly
fragmented industry comprised of many "mom and pop" private businesses. At any
wash location the main competitors are privately owned car washes which may, in
many instances, be located near the Company's car washes. The car wash industry
is highly competitive. Competition is based primarily on location, facilities,
customer service, available services and rates. The Company also faces
competition from sources outside the car wash industry, such as gas stations
that offer automated car wash services. Because barriers to entry in the general
car wash industry are relatively low, competition may arise from new sources not
currently competing with the Company. The Company believes that the largest
owner of car washes is currently Wash Depot Holdings, Inc., which presently
operates approximately 68 car washes and five truck washes throughout the United
States. The Company also competes with other companies intending to become a
national car wash chain including, Car Wash Partners, Car Wash of America, Car
Spa and Oasis Car Wash.

          Security Products Division. The Company and Mark Sport face intense
competition in the security products consumer market. Domestically, there
continues to be a number of companies marketing defense sprays to civilian
consumers. While the Company and Mark Sport continue to offer defense spray
products that management believes distinguish themselves through brand name
recognition, superior product features and formulations and research and
development, this division has experienced a sales decline for these products.
The Company attributes this decline not only to the strong competition, but also
to lower demand in general.

TRADEMARKS AND PATENTS

          Car and Truck Wash Business. The Company recently announced that it
selected Super Bright Car Wash as its national car wash chain's new brand name.
This new name marks the beginning of an expanded marketing and advertising
initiative, which will include a modernized image for all of the Company's
existing car wash facilities. The Company filed a U.S. Service Mark application
on March 28, 2000, with the U.S. Patent and Trademark Office.

          Security Products Division. The Company began marketing products in
1988 under the Mace(R) brand name and related trademarks pursuant to an
exclusive license for sales of defense sprays to the consumer market in the
continental United States, and a non-exclusive license for sales to the consumer
market worldwide. The license agreement was renegotiated in 1992 to include a
purchase option. The Company exercised this option and purchased outright the
Mace(R) brand name and related trademarks (Pepper Mace(R), Chemical Mace(R),
Mace . . . Just in Case(R), CS Mace(TM) and Magnum Mace(TM). In conjunction with
this purchase, the Company acquired a non-exclusive worldwide license to promote
a patented pepper spray formula in both markets. The Company also has various
other patents and trademarks for the devices it sells, including, trademarks and
patents for, the Big Jammer(R) door brace, Window Jammer(TM), Sonic Alert(TM),
Safety Flasher(TM), Sport Strobe(TM), Child Safe Alarm(TM), Window Alert(TM),
Motion Alert(TM), Emergency Whistle(TM), and Auto Alert(TM), Screecher(R),
Peppergard(R), Slam(R), and Mace (Mexico)(R), Viper(R) defense spray,
KinderGard(R), Zip-a-Babe(R), Hand n-Hand(R) and Safe-T-Zip(R). The Company has
been issued letters patent on the locking mechanism for the Mark VI defense
spray unit.

In July 1998, in connection with its sale of its Law Enforcement division, the
Company transferred its Mace (R) brand trademark and all related trademarks and
a patent (No. 5,348,193) to its wholly-owned subsidiary, Mace Trademark Corp.
The purchaser

                                       5
<PAGE>

of its Law Enforcement division received a 99 year license to use the Mace (R)
brand, certain other such trademarks and the patent in the Law Enforcement
Market only.

GOVERNMENT REGULATION/ENVIRONMENTAL COMPLIANCE

         Car and Truck Wash Business. The Company is subject to various local,
state and federal laws regulating the discharge of pollutants into the
environment. The Company believes that its operations are in compliance in all
material respects with applicable environmental laws and regulations. Compliance
with these laws and regulations is not expected to materially affect the
Company's competitive position. Three major areas of regulation facing the
Company are disposal of lubrication oil at the Company's oil change centers, the
compliance with all underground storage tank laws in connection with the
Company's gasoline sales and the proper recycling and disposal of water used in
the Company's car washes. The Company uses approved waste-oil haulers to remove
its oil and lubricant waste. The Company, before acquiring a gasoline dispensing
site, investigates it to verify that any underground storage tanks are in
compliance with all legal requirements. The Company recycles its waste water and
where it has proper permits it is disposed of into sewage drains, 70% of the
detergent and wax products used in the car wash are recycled within a built-in
reclaim system.

         Security Products Division. The distribution, sale, ownership and use
of consumer defense sprays are legal in some form in all 50 states and the
District of Columbia. However, in most states, sales to minors are prohibited
and in several states (MA, MI, NE, NY, WI), sales of defense sprays are highly
regulated. On January 1, 1996, California eased restrictions on defense sprays.
On November 1, 1996, New York lifted an overall ban on defense sprays allowing
for the sale of oleoresin capsicum (OC) pepper sprays in licensed pharmacies and
licensed gun stores only. Massachusetts requires both users and sellers to be
licensed. Wisconsin allows the sale of OC pepper sprays only and they must be
sold from behind a counter or under glass. Michigan does not permit sales of
chloroacetophenone (CN) sprays. Nevada permits sales of
orthochlorobenzalmalononitrile (CS) sprays only. The Company has been able to
sell its defensive sprays within the guidelines set by state regulations. There
can be no assurance, however, that broader, more severe restrictions will not be
enacted that would have an adverse impact on the Company's financial condition.
The Company believes it is in compliance with all federal, state, and local
environmental laws.

RESEARCH AND DEVELOPMENT

         Car and Truck Wash Business. The Company has a car wash school
established at its Austin, Texas car washes. The school is used to train
managers and assistant managers for the Company's car washes.

         Security Products Division. The Company has an on-site laboratory.
Research and development is conducted to maintain Mace's reputation in the
defense spray industry. The Company is continually reviewing ideas and potential
licensing arrangements to expand its product lines. The Company spent
approximately $13,000 on research and development in 1999.

INSURANCE

The Company maintains various insurance coverages for its assets and operations.
These coverages include Property coverages including Business Interruption
protection for each location. The Company maintains garage keepers and
commercial general liability coverages in the amount of $1,000,000 per
occurrence and $3,000,000 in the aggregate with an umbrella policy which
provides coverage up to $25,000,000. The Company also maintains workers
compensation policies in every state in which it operates. Nevertheless, there
can be no assurance that the Company's insurance will provide sufficient
coverages in the event a claim is made against the Company, or that the Company
will be able to maintain in place such insurance at reasonable prices. An
uninsured or under insured claim against the Company of sufficient magnitude
could have a material adverse effect on the Company's business and results of
operations.

EMPLOYEES

As of March 15, 2001, the Company had approximately 2,055 employees, of which
approximately 2,011 were employed in the car care services, 39 in clerical,
administrative and sales positions, and five in management. None of the
Company's employees are covered by collective bargaining agreements.

FACTORS INFLUENCING FUTURE RESULTS AND ACCURACY OF FORWARD-LOOKING STATEMENTS

This report includes forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements
other than

                                       6
<PAGE>

statements of historical fact included in this section, are Forward Looking
Statements. Although the Company believes that the expectations reflected in
such Forward Looking Statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Generally, these statements
relate to business plans or strategies, projected or anticipated benefits or
other consequences of such plans or strategies, number of acquisitions and
projected or anticipated benefits from acquisitions made by or to be made by the
Company, or projections involving anticipated revenues, earnings, levels of
capital expenditures or other aspects of operating results. All phases of the
Company's operations are subject to a number of uncertainties, risks and other
influences, many of which are outside the control of the Company and any one of
which, or a combination of which, could materially affect the results of the
Company's operations and whether Forward Looking Statements made by the Company
ultimately prove to be accurate. Such important factors ("Important Factors")
that could cause actual results to differ materially from the Company's
expectations are disclosed in this section and elsewhere in this report. All
subsequent written and oral Forward Looking Statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Important Factors described below that could cause actual
results to differ from the Company's expectations. The forward-looking
statements made herein are only made as of the date of this filing and the
Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

         We need to raise additional capital. At December 31, 2000, we had
negative working capital of approximately $1.0 million. Additional capital will
be needed if acquisitions of car washes or other businesses continue to be made.
Our capital requirements also include working capital for daily operations and
significant capital for equipment purchases. To the extent that we lack cash to
meet our future capital needs, we will be required to raise additional funds
through bank borrowings and additional equity and/or debt financing, which may
result in significant increases in leverage and interest expense and/or
substantial dilution. If we are unable to raise additional capital, we will need
to reduce substantially the scale of our operations and to curtail our business
plan.

         We have a history of losses, we have working capital deficits and we
may incur continuing charges. We have reported net losses and working capital
deficits in prior fiscal years and we have expended substantial funds for
acquisitions and equipment. In connection with financing acquisitions and
business growth, we anticipate that we will continue to incur significant debt
and interest charges. In addition, we will recognize goodwill amortization
charges in connection with our acquisitions that are accounted for under the
"purchase" method of accounting. The amount of goodwill recognized is the amount
by which the purchase price of a business exceeds the fair market value of the
assets acquired. Goodwill is amortized over a period not to exceed 25 years
depending on the business acquired, resulting in an annual non-cash charge to
our earnings during that period. As we continue to acquire additional
businesses, our financial position and results of operations may fluctuate
significantly from period to period.

         Our business plan poses risks for us. Our business objective is to
develop and grow a full service, integrated car care business through some
acquisitions and through the internal development of our car wash facilities. We
have repositioned our company from a company involved primarily in the
production of consumer defense products to a company that provides car wash and
car care services. This strategy involves a number of risks, including:

         Risks associated with growth;
         Risks associated with acquisitions;
         Risks associated with the recruitment and development of management and
         operating personnel; and
         Risks associated with lack of experience in the car care service
         industries.

If we are unable to manage one or more of these associated risks effectively, we
may not fully realize our business plan.

         We have a limited operating history regarding our car wash and car care
service businesses. Since July 1999, our main business has been the acquisition
and operation of car wash and car care service facilities, which now accounts
for substantially all of our revenues. Because of our relatively limited
operating history with respect to these businesses, we cannot assure you that we
will be able to operate them successfully.

         We may not be able to manage growth. If we succeed in growing, growth
will place significant burdens on our management and on our operational and
other resources. We will need to attract, train, motivate, retain and supervise
our senior managers and other employees and develop a managerial infrastructure.
If we are unable to do this, we will not be able to realize our business
objectives.

                                       7
<PAGE>

         Our stock price is volatile. Our common stock's market price has been
and is likely to continue to be highly volatile. Factors like fluctuations in
our quarterly revenues and operating results, our ongoing acquisition program,
market conditions and economic conditions generally may impact significantly our
common stock's market price. In addition, as we continue to acquire additional
car wash businesses, we may agree to issue common stock that will become
available generally for resale and may have an impact on our common stock's
market price.

         Risks of Acquisitions. Our strategy to grow in part through
acquisitions depends upon our ability to identify suitable acquisition
candidates, and to consummate acquisitions on financially favorable terms. This
strategy involves risks inherent in assessing acquisition candidates' values,
strengths, weaknesses, risks and profitability and risks related to the
financing, integration and operation of acquired businesses, including:

         i.   adverse short-term effects on our reported operating results;
         ii.  diversion of management's attention;
         iii. dependence on hiring, training and retaining key personnel; and
         iv.  risks associated with unanticipated problems or latent
              liabilities.

We cannot assure you that acquisition opportunities will be available, that we
will have access to the capital required to finance potential acquisitions, that
we will continue to acquire businesses, or that any acquired business will be
profitable.

         We may not be able to integrate businesses we acquire and achieve
operating efficiencies. Our future growth and profitability depend substantially
on our ability to operate and integrate acquired businesses. Our strategy is to
achieve economies of scale and brand-name recognition in part through
acquisitions that increase our size. We cannot assure you that our efforts to
integrate acquired operations will be effective or that we will realize expected
results. Our failure to achieve any of these results could have a material
adverse effect on our business and results of operations.

         We face potential liabilities associated with acquisitions of
businesses. The businesses we acquire may have liabilities that we do not
discover or may be unable to discover during our preacquisition investigations,
including liabilities arising from environmental contamination or prior owners'
non-compliance with environmental laws or other regulatory requirements, and for
which we, as a successor owner or operator, may be responsible.

         We face risks associated with our consumer safety products. We face
claims of injury allegedly resulting from our defense sprays. We cannot assure
you that our insurance coverage will be sufficient to cover any judgments won
against us in these lawsuits. If our insurance coverage is exceeded, we will
have to pay the excess liability directly. We are also aware of several claims
that defense sprays used by law enforcement personnel resulted in deaths of
prisoners and of suspects in custody. While we no longer sell defense sprays to
law enforcement agencies, it is possible that the increasing use of defense
sprays by the public could, in the future, lead to additional product liability
claims.

         Our car wash business may suffer under certain weather conditions.
Seasonal trends in some periods may affect our car wash business. In particular,
long periods of rain and cloudy weather can affect adversely our car wash
business as people typically do not wash their cars during such periods.
Additionally, extended periods of warm, dry weather may encourage customers to
wash their own cars which also can affect adversely our car wash business.

         Consumer demand for our car wash services is unpredictable. Our
financial condition and results of operations will depend substantially on
consumer demand for car wash services. Our business depends on consumers
choosing to employ professional services to wash their cars rather than washing
their cars themselves or not washing their cars at all. We cannot assure you
that consumer demand for car wash services will increase as our business
expands. Nor can we assure you that consumer demand will maintain its current
level.

         We must maintain our car wash equipment. Although we undertake to keep
our car washing equipment in proper operating condition, the operating
environment found in car washes results in frequent mechanical problems. If we
fail to properly maintain the equipment, the car wash could become inoperable
resulting in a loss of revenue to us from the inoperable location.

                                       8
<PAGE>

         Our car wash and car services face governmental regulation. We are
governed by federal, state and local laws and regulations, including
environmental regulations, that regulate the operation of our car wash centers
and other car services businesses. Car wash centers utilize cleaning agents and
waxes in the washing process that are then discharged in waste water along with
oils and fluids washed off of vehicles. Other car services, such as gasoline and
lubrication, use of a number of oil derivatives and other regulated hazardous
substances. As a result, we are governed by environmental laws and regulations
dealing with, among other things:

              i.   transportation, storage, presence, use, disposal and handling
                   of hazardous materials and hazardous wastes;
              ii.  discharge of stormwater; and
              iii. underground storage tanks.

If any of the previously mentioned substances were found on our property,
however, including leased properties, or if we were found to be in violation of
applicable laws and regulations, we could be responsible for clean-up costs,
property damage and fines or other penalties, any one of which could have a
material adverse effect on our financial condition and results of operations.

         Our consumer safety product businesses face governmental regulation.
The distribution, sale, ownership and use of consumer defense sprays are legal
in some form in all 50 states and the District of Columbia. We cannot assure
you, however, that restrictions on the manufacture or use of consumer defense
sprays will not be enacted that would have an adverse impact on our financial
condition. Some of our consumer defense spray manufacturing operations currently
incorporate hazardous materials, the use and emission of which are regulated by
various state and federal environmental protection agencies, including the
Environmental Protection Agency. We believe that we are in compliance currently
with all state and local statutes governing our disposal of these hazardous
materials, but if there are any changes in environmental permit or regulatory
requirements, or if we fail to comply with any environmental requirements, these
changes or failures may have a material adverse effect on our business and
financial condition.

         We face significant competition. The extent and kind of competition
that we face varies. The car wash industry is highly competitive. Competition is
based primarily on location, facilities, customer service, available services
and rates. Because barriers to entry into the car wash industry are relatively
low, competition may be expected to continually arise from new sources not
currently competing with us. In this sector of our business we also face
competition from outside the car wash industry, such as gas stations and
convenience stores, that offer automated car wash services. In some cases, these
competitors may have significantly greater financial and operating resources
than we do. In our car service businesses, we face competition from a number of
sources, including regional and national chains, gasoline stations and companies
and automotive companies and specialty stores, both regional and national.

         Our operations are dependent substantially on the services of our
executive officers. If we lose one or more of our executive officers, the loss
could have a material adverse effect on our business and results of operations.
We do not maintain key-man life insurance policies on our executive officers.

         Our Preferred Stock may effect the rights of the holders of our common
stock; it may also discourage another person to acquire control of Mace. Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of Preferred Stock. No shares of Preferred Stock are currently outstanding. It
is not possible to state the precise effect of Preferred Stock upon the rights
of the holders of our common stock until the Board of Directors determines the
respective preferences, limitations and relative rights of the holders of one or
more series or classes of the Preferred Stock. However, such effect might
include: (i) reduction of the amount otherwise available for payment of
dividends on Common Stock, to the extent dividends are payable on any issued
shares of Preferred Stock, and restrictions on dividends on Common Stock if
dividends on the Preferred Stock are in arrears, (ii) dilution of the voting
power of the Common Stock to the extent that the Preferred Stock has voting
rights, and (iii) the holders of Common Stock not being entitled to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the Preferred Stock.

The Preferred Stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person to acquire control of Mace and may
therefore have an anti-takeover effect. Issuances of authorized preferred shares
can be implemented, and have been implemented by some companies in recent years
with voting or conversion privileges intended to make an acquisition of the
company more difficult or costly. Such an issuance could discourage or limit the
stockholders' participation in certain types of transactions that might be
proposed (such as a tender offer), whether or not such transactions were favored
by the majority of the stockholders, and could enhance the ability of officers
and directors to retain their positions.

                                       9
<PAGE>

         Some provisions of Delaware law may prevent us from being acquired. We
are governed by Section 203 of the Delaware General Corporation Law, which
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with a person who is an "interested stockholder" for a period of
three (3) years, unless approved in a prescribed manner. This provision of
Delaware law may affect our ability to merge with, or to engage in other similar
activities with, some other companies. This means that we may be a less
attractive target to a potential acquirer who otherwise may be willing to pay a
price for our common stock above its market price.

         We do not expect to pay cash dividends on our common stock. We do not
expect to pay any cash dividends on our common stock in the foreseeable future.
We will reinvest any cash otherwise available for dividends in our business.

         There are additional risks set forth in the incorporated documents. In
addition to the risk factors set forth above, you should review the financial
statements and exhibits incorporated into this report. Such documents may
contain, in certain instances and from time to time, additional and supplemental
information relating to the risks set forth above and/or additional risks to be
considered by you, including, without limitation, information relating to losses
experienced by Mace in particular historical periods, working capital deficits
of Mace at particular dates, information relating to pending and recently
completed acquisitions, descriptions of new or changed federal or state
regulations applicable to Mace, data relating to remediation and the actions
taken by Mace, and estimates at various times of Mace's potential liabilities
for compliance with environmental laws or in connection with pending litigation.

ITEM 2.    DESCRIPTION OF PROPERTIES

The Company's corporate headquarters is located in Mount Laurel, New Jersey. The
Company rents approximately 10,000 square feet of space at a current annual cost
of $192,000.

         Car and Truck Wash Properties. The principal fixed assets used by the
Company are its car wash facilities used for performing car care services which
are described under "Item 1. Line of Business." The 57 car wash facilities
operated by the Company as of December 31, 2000 are situated on sites owned or
leased by the Company. The Company owns 43 and leases 14 of its car wash
facilities. The locations of its car washes and the services offered at the
locations are set forth in summary fashion in the chart below.

                                           Type of             Number of
      Locations /(1)/                      Car Wash /(2)/      Facilities
      ---------                            --------            ----------

      Philadelphia, Pennsylvania Area  Exterior Washes              4
                                       Full Service                 3

      Southern New Jersey Area         Full Service                 1
                                       Exterior Wash                7

      Smyrna, Delaware                 Exterior Washes              1

      Phoenix, Arizona Area            Full Service                14

      Dallas, Texas Area               Full Service                11

      Austin, Texas                    Full Service                 3

      Lubbock, Texas                   Full Service                 3

      Sarasota, Florida Area           Full Service                 6

      San Antonio, Texas               Full Service                 4

         (1) The majority of the Company's locations are owned except for the
             following number of locations which are leased:

             (i)      Philadelphia, Pennsylvania (3)
             (ii)     Southern New Jersey Area (1)
             (iii)    Smyrna, Delaware (1)
             (iv)     Phoenix, Arizona Area (5)

                                       10
<PAGE>

          (v)  Dallas, Texas Area (4)

     (2)  Several locations also offer other consumer products and related car
          care services, such as professional detailing services (offered at 45
          locations), oil and lubrication services (offered at 15 locations),
          gasoline dispensing services (offered at 24 locations), state
          inspection services (offered at six locations), and convenience store
          sales (offered at eight locations).

The Company owns real estate, buildings, equipment and other properties that it
employs in substantially all of its car and truck washes and security products.
The Company expects to make substantial investments in additional equipment and
property for expansion, replacement of assets, and in connection with future
acquisitions.

Many of the car washes are encumbered by first mortgage loans. Of the 47 car and
truck washes owned by the Company as of December 31, 2000, 30 properties secured
first mortgage loans totaling $36,222,961 and 17 were not encumbered.

The Company also owns and operates five truck wash facilities. The Company owns
all of the buildings and equipment, except for the building in Amarillo, Texas
and leases the land for all five of its truck wash facilities.

          Security Products Division Properties. The Company's operations of its
security products division, including administration and sales, and all of its
production facilities are located in Bennington, Vermont. The Company leases
approximately 34,000 square feet of space in a building from Vermont Mill
Properties, Inc. ("Vermont Mill") at a cost of $80,000 per year. Vermont Mill is
controlled by Jon E. Goodrich, a director of the Company.

ITEM 3.   LEGAL PROCEEDINGS

The following discloses all pending litigation against the Company, other than
routine litigation that is incidental to the business, involving claims for
damages in excess of $1.0 million, which constitutes approximately ten (10%)
percent of the Company's current assets at December 31, 2000, and also discloses
the disposition of claims previously disclosed.

As disclosed in the Company's 1994 Form 10-KSB, on January 25, 1994, a suit was
filed by Carmeta Gentles on her own behalf and as personal representative of the
estate of Robert Gentles in Ontario Court (General Division), Ontario, Canada,
claiming intentional or negligent manufacture and distribution of the Mark V
Mace(R) brand defense spray unit and that its contents contributed to the
suffering and death of Robert Gentles while in the Kingston Penitentiary in
October 1993. The Company was added as a party defendant on February 8, 1995.
The plaintiff seeks five million dollars in damages. The Company forwarded this
suit to its insurance carrier for defense. The Company does not anticipate that
this claim will result in the payment of damages in excess of the Company's
insurance coverage.

On July 27, 1998, the Company was added as a defendant in a suit filed in the
state of West Virginia by Susan H. Jackman, et. al. The litigation concerns an
attack on Mrs. Jackman by two dogs and the alleged failure of a "Muzzle(R)"
product distributed by the Company to repel the dogs. The suit claimed product
liability and negligence and sought one million dollars in damages. In November
2000, the case was settled by the Company's insurance carrier resulting in a
payment of $5,000 by the Company.

On December 13, 1999, the Company was named as a defendant in a suit filed in
the Supreme Court of New York by Janeen Johnson et. al. The litigation concerns
a claim that a self-defense spray manufactured by the Company and used by a law
enforcement officer contributed to the suffering and death of Christopher
Johnson. The Company forwarded the suit to its insurance carrier for defense.
The Company does not anticipate that this claim will result in the payment of
damages in excess of the Company's insurance coverage.

Although the Company is not aware of any substantiated claim of permanent
personal injury from its products, the Company is aware of reports of incidents
in which, among other things, defense sprays: have been mischievously or
improperly used, in some cases by minors; have not been instantly effective; or
have been ineffective against enraged or intoxicated individuals. Incidents of
this type, or others, could give rise to product liability or other claims, or
to claims that past or future advertising, packaging or other practices should
be, or should have been, modified, or that regulation of products of this nature
should be extended or changed.

                                       11
<PAGE>

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

The Annual Meeting of the Stockholders of Mace Security International, Inc. was
held on December 12, 2000. The following proposals were submitted to a vote: (i)
to approve for a one-year term for the Election of Directors, expiring at the
next Annual Meeting, (ii) to approve an amendment to the Amended and Restated
Certificate of Incorporation for the purpose of decreasing the number of
authorized shares of common stock from 200,000,000 to 100,000,000 and decreasing
the number of authorized shares of preferred stock from 50,000,000 to
10,000,000, and (iii) to ratify the appointment of Grant Thornton LLP as Mace's
independent auditors for fiscal year 2000. All proposals were adopted by the
shareholders. The voting was as follows:

<TABLE>
<CAPTION>
                                                                                                        Broker
Directors:                                 Votes For         Votes Against       Abstentions         Non-Votes
----------                                 ---------         -------------       -----------         ---------
<S>                                       <C>                <C>                 <C>                 <C>
Louis D. Paolino, Jr.                     19,739,189                27,050            12,000                -
Mark S. Alsentzer                         18,471,526             1,294,713            12,000                -
Jon E. Goodrich                           19,739,189                27,050            12,000                -
Robert M. Kramer                          19,739,189                27,050            12,000                -
Richard B. Muir                           19,739,189                27,050            12,000                -
Matthew J. Paolino                        19,738,189                28,050            12,000                -
Constantine N. Papadakis                  19,739,189                27,050            12,000                -

Approve and adopt the amendment
   to Mace's Amended and Restated
   Certificate of Incorporation           19,756,514                21,290             2,310                -

Ratify appointment of Grant
   Thornton LLP                           19,758,229                15,650             4,360                -
</TABLE>


Executive Officers of the Company

The following information is furnished in this Part I pursuant to Instruction 3
to Item 401(b) of Regulation S-K:

There are no family relationships between any of the executive officers of the
Company except that Matthew J. Paolino is a brother to Louis D. Paolino, Jr. The
following table sets forth information regarding certain executive officers of
the Company.

<TABLE>
<CAPTION>
        Name                                                Age                       Position
        ----                                                ---                       --------
        <S>                                                 <C>       <C>
        Louis D. Paolino, Jr.............................    44       Chairman of the Board, President, and Chief
                                                                         Executive Officer
        Gregory M. Krzemien..............................    41       Chief Financial Officer and Treasurer
        Robert M. Kramer.................................    48       General Counsel, Executive Vice President
                                                                         and Secretary
        Ronald R. Pirollo................................    42       Vice President, Corporate Controller
        Matthew J. Paolino...............................    36       Vice President
</TABLE>

     Louis D. Paolino, Jr. serves as the Chairman of the Board, President and
Chief Executive Officer of the Company. From June 1996 through December 1998,
Mr. Paolino served as Chairman of the Board, President and Chief Executive
Officer of Eastern Environmental Services, Inc. Prior thereto, he was President
of Soil Remediation of Philadelphia, Inc., a company engaged in the business of
treating contaminated soil which was sold to USA Waste Services, Inc., a waste
management corporation, in September 1993. From September 1993 to June 1996, Mr.
Paolino served as a Vice President of USA Waste Services, Inc. From November
1995 to January 1996, Mr. Paolino served on the Board of Directors of Metal
Management, Inc., formerly known as General Parametrics Corp., a publicly traded
company. Mr. Paolino received a B.S. in Civil Engineering from Drexel
University. Mr. Paolino is 44 years old.

     Gregory M. Krzemien serves as the Chief Financial Officer and Treasurer of
the Company. From August 1992 through December 1998, he served as Chief
Financial Officer and Treasurer of Eastern Environmental Services, Inc. From
October 1988 to August 1992, Mr. Krzemien was a senior audit manager with Ernst
& Young LLP, and he held other positions with that firm since 1981. Mr. Krzemien
received a B.S. degree in Accounting from Pennsylvania State University and is a
certified public accountant. Mr. Krzemien is 41 years old.

                                       12
<PAGE>

     Robert M. Kramer serves as a director of the Company, and as the General
Counsel, Secretary and Executive Vice President of the Company. From June 1996
through December 1998, he served as General Counsel, Executive Vice President
and Secretary of Eastern Environmental Services, Inc. Mr. Kramer is an attorney
and has practiced law since 1979 with various firms, including Blank Rome
Comisky & McCauley, Philadelphia, Pennsylvania and Arent Fox Kitner Poltkin &
Kahn, Washington, D.C. From 1989 to December 2000, Mr. Kramer had been the sole
partner of Robert M. Kramer & Associates, P.C., a law firm which consisted of
three lawyers. From December 1989 to December 1997, Mr. Kramer served on the
Board of Directors of American Capital Corporation, a registered securities
broker dealer. Mr. Kramer received B.S. and J.D. degrees from Temple University
Law School. Mr. Kramer is 48 years old.

     Ronald R. Pirollo serves as Vice President and Corporate Controller of the
Company. Mr. Pirollo served as Vice President and Corporate Controller of
Eastern Environmental Services, Inc. from July 1997 to June 1999. Prior thereto,
Mr. Pirollo was with Envirite Corporation for ten years, where he served in
various financial management positions including Vice President - Finance. Mr.
Pirollo received a B.S. degree in Accounting from Villanova University in 1981.
Mr. Pirollo is 42 years old.

     Matthew J. Paolino serves as a director and as a Vice President of the
Company. From 1996 to December 1998, Mr. Paolino served as a director of Eastern
Environmental Services, Inc. as well as Vice President of Risk Management, Asset
Management and Special Waste Divisions of Eastern Environmental Services, Inc.
From 1993 to 1996, Mr. Paolino served as Vice President and General Manager -
Soil Remediation Division of USA Waste Services, Inc., which was acquired by
Eastern in August 1997. Mr. Paolino received a B.S. degree in Civil Engineering
from Villanova University in 1986 and a J.D. degree from the Widener School of
Law in 1994. Mr. Paolino is the brother of Louis D. Paolino, Jr., the Chairman,
President and Chief Executive Officer of the Company. Mr. Paolino is 36 years
old.

Note: Michael G. Fazio served as Vice President - Operations of the Company
until his resignation as an officer of Mace effective August 1, 2000.

Employees

As of March 15, 2001, the Company had approximately 2,055 employees, of which
approximately 2,011 were employed in the car care services, 39 in clerical,
administrative and sales positions, and five in management. None of the
Company's employees are covered by collective bargaining agreements.

                                       13
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Price and Dividends of the Registrant's Common Equity

The Company's Common Stock is traded in the over-the-counter market and quoted
on the Nasdaq National Market under the trading symbol "MACE". The common stock
prices reflect inter-dealer quotations, do not include retail markups, markdowns
or commissions and do not necessarily represent actual transactions.

The following table sets forth, for the quarters indicated, the high and low
sale prices per share for the Company's Common Stock, as reported by Nasdaq.

                                                        HIGH             LOW
                                                        ----             ---

Year Ended December 31, 1999
         First Quarter...................                  6           1.5625
         Second Quarter..................             14.125           5.6875
         Third Quarter...................             10.625           6.0625
         Fourth Quarter..................              8.875                4
Year Ended December 31, 2000
         First Quarter...................               6.50                3
         Second Quarter..................             5.0625           1.1875
         Third Quarter..................              1.9375                1
         Fourth Quarter..................             1.5312            0.875

The closing price for the Common Stock on March 15, 2001 was $.9375. For
purposes of calculating the aggregate market value of the shares of Common Stock
of the Company held by nonaffiliates, as shown on the cover page of this report,
it has been assumed that all the outstanding shares were held by nonaffiliates
except for the shares held by directors and executive officers of the Company
and stockholders owning 10% or more of the outstanding shares. However, this
should not be deemed to constitute an admission that all such persons are, in
fact, affiliates of the Company, or that there are not other persons who may be
deemed to be affiliates of the Company. Further information concerning ownership
of the Company's securities by executive officers, directors and principal
stockholders will be included in the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission.

As of March 15, 2001, the Company had 215 holders of record and approximately
2,200 beneficial owners of its Common Stock.

The Company does not anticipate paying any cash dividends in the foreseeable
future and intends to retain all working capital and earnings, if any, for use
in the Company's operations and in the expansion of its business. Any future
determination with respect to the payment of dividends will be at the discretion
of the Board of Directors and will depend upon, among other things, the
Company's results of operations, financial condition and capital requirements,
the terms of any then existing indebtedness, general business conditions, and
such other factors as the Board of Directors deems relevant. Certain of the
Company's credit facilities prohibits or limits the payment of cash dividends
without prior bank approval.

(b) Recent Sales of Unregistered Securities

None.

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

The following discussion reviews the Company's operations for the two years
ended December 31, 2000, and should be read in conjunction with the Company's
consolidated financial statements and related notes thereto included elsewhere
herein. The Company has restated previously issued financial statements for 1999
to reflect the discontinuance of operations and sale of Innovative Control
Systems, Inc.

                                       14
<PAGE>

The following discussion includes statements that are forward-looking in nature.
The accuracy of such statements depends upon a variety of factors that may
affect the business and operations of the Company. Certain of these factors are
discussed under "Business -- Factors Influencing Future Results and Accuracy of
Forward-Looking Statements" included in Item 1 of this report.

Introduction

Results of Operations for the Year ended December 31, 2000 Compared to the Year
                            ended December 31, 1999

Revenues

     Car Care Services

The Company owns full service, exterior only and self-service car wash locations
in New Jersey, Pennsylvania, Delaware, Texas, Florida and Arizona as well as
truck washes in Arizona, Indiana, Ohio and Texas. The Company earns revenues
from washing and detailing automobiles; performing oil and lubrication services,
minor auto repairs, and state inspections; selling fuel; and selling merchandise
through convenience stores within the car wash facilities. Revenues generated
for the year ended December 31, 2000 for the car care segment were comprised of
approximately 79% car wash and detailing, 10% lube and other automotive
services, 11% fuel and merchandise.

The majority of revenues are collected in the form of cash or credit card
receipts, thus minimizing customer accounts receivable.

Weather can have a significant impact on volume at the individual locations.
However, the Company believes that the geographic diversity of its operating
locations minimizes weather-related influence on its volume.

     Security Products

The Company operates its security products segment in two main divisions, the
Consumer Division and the Mace Anti-Crime Bureau Division. The Company's
Consumer Division manufactures and markets personal safety, and home and auto
security products. These products are sold through retail stores, major discount
stores, and at the Company's car care facilities.

The Company is currently being paid $20,000 per month under a management
agreement which allows Mark Sport, an entity controlled by Jon E. Goodrich, a
director of the Company, to operate the security products segment. Total
revenues under the management agreement were $220,000 for 2000.

     Computer Products and Services

The Company's computer products and services subsidiary, ICS, was sold in June
of 2000 and has accordingly been reflected as discontinued operations for 2000
and 1999.

Cost of Revenues

     Car Care Services

Cost of revenues consists primarily of direct labor and related taxes and
benefits, chemicals, wash and detailing supplies, rent, real estate taxes,
utilities, maintenance and repairs of equipment and facilities, as well as the
cost of the fuel and merchandise sold.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of management,
clerical and administrative salaries, professional services, insurance premiums,
and costs relating to marketing and sales.

The Company capitalizes direct incremental costs associated with purchase
acquisitions. Indirect acquisition costs, such as executive salaries, corporate
overhead, public relations, and other corporate services and overhead are
expensed as incurred. The Company also charges as an expense any capitalized
expenditures relating to proposed acquisitions that will not be consummated.

                                       15
<PAGE>

At December 31, 2000, capitalized costs related directly to proposed
acquisitions that were not yet consummated were approximately $47,000. The
Company periodically reviews the future likelihood of these acquisitions and
records appropriate provisions against capitalized costs associated with
projects that are not likely to be completed.

Depreciation and Amortization

Depreciation and amortization consists primarily of depreciation of buildings
and equipment, and amortization of goodwill and other intangible assets.
Buildings and equipment are depreciated over the estimated useful lives of the
assets using the straight- line method. Goodwill is amortized on a straight-line
basis over 25 years. Other intangibles are amortized over their useful lives
ranging from three to twenty years, using the straight line method.

Costs of Terminated Acquisitions

The Company's policy is to charge as an expense any previously capitalized
expenditures relating to proposed acquisitions that in management's current
opinion will not be consummated. During the quarter ending June 30, 2000,
management decided to terminate certain pending acquisitions the Company
believed would not be consummated as a result of due diligence findings or the
inability of the seller to meet certain terms and conditions precedent to
closing. Costs of previously capitalized expenditures principally relate to the
termination of the Planet Truck Wash acquisition and acquisition related
expenses associated with the proposed Wash Depot Holdings, Inc. ("Wash Depot")
merger. The Company terminated the Wash Depot Merger Agreement on September 30,
2000 as a result of certain conditions precedent to closing not being satisfied
by Wash Depot. Of the $580,000 in costs of terminated acquisitions,
approximately $209,000 represented unrecoverable cash and stock deposits and
approximately $371,000 represented external incremental transaction costs
including legal, accounting, consulting and due diligence costs.

Merger Costs

In 1999, the Company incurred approximately $225,000, $120,000, and $1,530,000
in merger-related costs associated with the ICS, Classic, and Eager Beaver
mergers, respectively. Merger costs consisted of transaction-related expenses of
$680,000 which includes deal costs, legal, accounting and other professional and
consulting fees, filing fees, external due diligence costs, contractual costs,
and finder fees as well as employee severance and termination costs which
totaled $1,195,000. Additionally, tax provisions of $96,000, and $50,000 were
recorded at the date of the mergers relating to net deferred tax liabilities
with respect to the termination of the previous S Corporation elections of
Classic and Eager Beaver, respectively. This total tax provision of $146,000 is
included within income tax expense for 1999.

Restructuring, Asset Write-Downs and Change in Control Charges

In conjunction with the Company's 1999 change in control, the Company
restructured certain of its security products operations, abandoned certain
operations and assets, and incurred certain other change in control related
costs. A restructuring, asset abandonment and change in control charge totaling
$1,519,000 was recorded in the second quarter ending June 30, 1999. Of this
charge, $1,178,000 is non-cash in nature consisting of a $218,000 write-off of
certain assets as a result of management abandoning certain product lines within
the Company's security products segment; a $373,000 write-off of leasehold
improvements related to the Company's plan to abandon a portion of its currently
leased facilities in Vermont; and a $587,000 non-cash compensation charge
relating to the vesting of variable options to certain previous directors of the
Company upon the Company's recent change in control. The remaining charge of
approximately $341,000 includes certain severance costs accrued as well as
legal, accounting and other transaction costs related to the Company's change in
control. Additionally, in 2000, the Company wrote down the value of its Berlin,
New Jersey facility by $137,904 to reflect the sales price of those assets in
January 2001.

Other Income and Expense

Other income and expense includes gains and losses on the sale of equipment and
rental income received on renting out excess space at the Company's car wash
facilities.

Taxes

The Company recorded a tax benefit from continuing operations of $66,000 and
$618,519 for the years ended December 31, 2000 and 1999, respectively. The tax
benefit reflects the recording of federal and state taxes at a rate of 32%. An
effective rate lower than the federal and state statutory rate for 2000 is
primarily due to the use of net operating loss carryforwards.

                                       16
<PAGE>

   The following table presents the percentage each item in the consolidated
statements of operations bears to total revenues:

<TABLE>
<CAPTION>
                                                                                           Year Ended
                                                                                           December 31,
                                                                                  ---------------------------
                                                                                     2000             1999
                                                                                  ----------       ----------
          <S>                                                                     <C>              <C>
          Revenues                                                                   100.0%           100.0%

          Cost of revenues                                                            73.2             64.6

          Selling, general and administrative expenses                                15.2             22.3

          Depreciation and amortization                                                5.1              4.3

          Costs of terminated acquisitions                                             1.2                -

          Merger costs                                                                   -              7.3

          Restructuring, asset write-downs and change in control charges               0.3              5.9
                                                                                  --------         --------
          Operating income (loss)                                                      5.0             (4.4)

          Interest expense, net                                                       (6.3)            (4.0)

          Other income                                                                 0.9              0.8
                                                                                  --------         --------
          Loss from continuing operations before income taxes                         (0.4)            (7.6)

          Income tax benefit                                                           0.1              2.4
                                                                                  --------         --------
          Loss from continuing operations                                             (0.3)            (5.2)

          Income from discontinued operations                                          1.0              0.3
                                                                                  --------         --------
          Net income (loss)                                                            0.7%            (4.9)%
                                                                                  ========         ========
</TABLE>

Revenues

   Car Care Services

Revenues for the year ended December 31, 2000 were $47.8 million as compared to
$22.3 million for the year ended December 31, 1999, an increase of $25.5 million
or 114%. Of the $47.8 million of revenues for the year ended December 31, 2000,
$37.8 million or 79% was generated from car wash and detailing, $4.9 million or
10% from lube and other automotive services, and $5.1 million or 11% from fuel
and merchandise sales. Of the $22.3 million of revenues for the year ended
December 31, 1999, $17.1 million or 77% was generated from car wash and
detailing, $2.7 million or 12% from lube and other automotive services, $2.1
million or 9% from fuel and merchandise sales and $462,000 or 2% from operating
agreements. This increase in total revenue is primarily attributable to the 15
purchase acquisitions completed from May 1999 to December 31, 2000. Revenue
increases were also realized through internal growth from selling detailing and
additional on-line car wash services.

During 1999, the Company managed several car wash locations under operating
agreements, under which the Company was entitled to all profits generated from
the operation of those locations. The income earned under these agreements is
shown as revenues net of related operating expenses. Revenue including gross
revenue generated by locations under operating agreements was $32.0 million
consisting of $25.6 million, or 80%, from car wash and detailing, $3.3 million,
or 10%, from lube and other automotive services, and $3.1 million, or 10%, from
fuel and merchandise sales. Revenues for locations under operating agreements
for 2000 were immaterial.

   Security Products

Revenues for the year ended December 31, 1999 were $3.4 million. During 2000,
pursuant to a Management Agreement, the Company was paid $220,000. This amount
is included under revenues from operating agreements.

                                       17
<PAGE>

Cost of Revenues

   Car Care Services

Cost of revenues for the year ended December 31, 2000 were $35.1 million or 73%
of revenues with car washing and detailing costs at 71% of respective revenues,
lube and other automotive services costs at 78% of respective revenues, and fuel
and merchandise costs at 88% of respective revenues.

Cost of revenues for the year ended December 31, 1999 were $14.8 million, or 64%
of revenues. However, because income earned under operating agreements is shown
as a net figure in revenue, already reduced by cost of revenues, the cost of
revenue percentage for this segment is better analyzed on a gross method. With
revenues and cost of revenues for locations under operating agreement shown on a
gross basis, total cost of revenues for 1999 was $22.2 million or 69% of
revenues for this segment, with car wash and detailing costs at 66% of
respective revenues, lube and other automotive services costs at 78% of
respective revenues, and fuel and merchandise costs at 84% of respective
revenues. Revenues for locations under operating agreements for 2000 were
immaterial.

The increase in cost of revenues as a percent of revenues in 2000 is largely a
result of certain direct labor inefficiencies present when significant inclement
weather exists combined with a greater mix of detailing service revenues which
require more labor than wash services. In 2000, approximately 42.9% of the
Company's operating days within its markets were rainy or cloudy as compared to
33.9% in 1999. Additionally, significant time invested by management on the
terminated Wash Depot acquisition, combined with certain turnover in regional
management resulted in this increase in our labor expense and in labor as a
percent of revenues.

   Security Products

Cost of revenues for the year ended December 31, 1999 was $1.8 million. During
2000, pursuant to a management agreement, no costs were borne by the Company.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31,
2000 were $7.3 million compared to $5.8 million for the year ended December 31,
1999, an increase of $1.5 million, or 26%. The primary reason for this increase
is the infrastructure established during the 21 months ended December 31, 2000
in order to effectively enter the Car Care Industry and execute the Company's
growth strategy. These increased costs included accounting, finance, legal and
administrative costs necessary to integrate the acquisitions consummated. This
increase is partially offset by cost controls placed on previously private
companies and favorable pricing for supplies, insurance, other indirect costs
due to economies of scale, and the elimination of costs at the Company's
security products facility.

Depreciation and Amortization

Depreciation and amortization totaled $2.5 million for the year ended December
31, 2000 as compared to $1.1 million for the same period in 1999. This increase
is the result of entering the Car Care industry, which required a substantial
investment in property and equipment. Additionally, certain acquisitions
resulted in the recording of goodwill, which increased amortization expense.
This increase was partially offset by the elimination of expenses at the
Company's security products facility.

Taxes

The Company recorded a tax benefit from continuing operations of $66,000 and
$618,519 for the years ended December 31, 2000 and 1999, respectively. The tax
benefit reflects the recording of federal and state taxes at a rate of 32%. An
effective rate lower than the federal and state statutory rate for 2000 is
primarily due to the use of net operating loss carryforwards.

At December 31, 2000, the Company has approximately $9.4 million of net
operating loss carryforwards for federal income tax purposes. Components of the
net operating loss carryforwards include $8.2 million from continuing operations
and $1.2 million from acquired net operating losses attributable to the Colonial
Full Service Car Wash, Inc. acquisition.

                                       18
<PAGE>

Liquidity and Capital Resources

The Company's business requires substantial amounts of capital, most notably to
pursue the Company's acquisition strategies and for equipment purchases and
upgrades. The Company plans to meet these capital needs from various financing
sources, including borrowings, internally generated funds, and the issuance of
common stock as the market price of the Company's stock improves.

As of December 31, 2000, the Company had a working capital deficit of
approximately $1.0 million, including cash and cash equivalents of $4.8 million.
For the year ended December 31, 2000, net cash provided by operations was
approximately $1.3 million, net cash provided by financing activities was
approximately $2.9 million and net cash used in investing activities was
approximately $1.7 million resulting in an increase in cash and cash equivalents
for the year of approximately $2.5 million. Capital expended during the period
included $1.9 million for the purchase of operating equipment, real estate, and
intangibles.

The Company's acquisition program and operations to date have required
substantial amounts of working capital, and the Company expects to continue to
expend funds to support its acquisition program and capital needs for equipment.
The Company estimates aggregate capital expenditures, exclusive of acquisitions
of businesses, of approximately $1.0 million for the year ending December 31,
2001.

At December 31, 2000, the Company had borrowings of $36.7 million. The Company
does not have any letters of credit outstanding nor does it maintain a revolving
credit facility. During 2000, the Company refinanced on a long term basis under
favorable terms the majority of its short term debt related to its 1999 and 2000
acquisitions. In February 2000, the Company entered into a $4.8 million term
loan with Bank One, Texas, NA ("Bank One") to refinance the remaining balance of
a short term promissory note related to the Genie acquisition and entered into
several new loan agreements with Bank One to finalize the assumption of notes
held by Bank One relating to the Colonial acquisition. Additionally, in November
2000, the Company entered into a $6.7 million three year term note (15 year
amortization basis) with Bank One to refinance a $1.3 million convertible
promissory note to Bullseye Properties assumed in connection with the
acquisition of Eager Beaver, a $2.1 million SouthTrust Bank note maturing in May
2001, and a $1.0 million promissory note related to the Red Baron Truck Wash
acquisition. The Bank One term note also provided approximately $800,000 for the
purchase of the leased Beneva Car Wash property and approximately $1.6 million
of additional funding, net of loan closing costs, for capital improvements and
working capital.

The Company also has various other long term mortgage notes up for periodic
review during 2001. The Company is currently working on renewals of the notes
with the related financial institutions which the Company expects to receive;
however, no assurances can be given that the loans will be renewed. Several of
the Company's debt agreements contain certain affirmative and negative covenants
and require the maintenance of certain levels of tangible net worth and the
maintenance of certain debt coverage ratios on an individual subsidiary and
consolidated level. All of these covenants were met as of December 31, 2000,
except for a debt coverage ratio related to the Bank One term notes. The Company
has entered into an amendment to the term loan agreements with Bank One and the
Company is currently in compliance with the covenants as amended.

On April 5, 2000, the Company executed a master facility agreement with Fusion
Capital Fund II, LLC ("Fusion") pursuant to which Fusion agreed to enter into up
to two equity purchase agreements, each with an aggregate principal amount of
$12.0 million. The equity purchase agreements allow the Company to suspend the
purchasing of its common stock by Fusion if the price of the Company's common
stock is less than $7.00 per share. The Company is currently not permitting the
purchase of its common stock under the equity purchase agreement due to the
current low trading value of the Company's common stock and the potentially
dilutive effect of such stock purchases. When the Company agrees to the purchase
of its stock, Fusion has the right to purchase from the Company shares of common
stock up to $12.0 million at a price equal to the lesser of (1) 140% of the
average of the closing bid prices for our common stock during the 10 trading
days prior to the date of the applicable equity purchase agreement or $7.00,
whichever is greater or (2) a price based upon the future performance of the
common stock, in each case without any fixed discount to the market price. As
long as the Company has not suspended Fusion from purchasing its stock, the
equity purchase agreement requires that at the beginning of each month, Fusion
will pay $1.0 million to the Company as partial prepayment for the common stock.
Once the $1.0 million has been applied to purchase shares of our common stock,
Fusion will pay the remaining principal amount upon receipt of our common stock.
The first equity purchase agreement was executed by Fusion on April 17, 2000.
Proceeds from purchased shares through December 31, 2000 totaled approximately
$1.3 million. The second equity purchase agreement will be executed after
delivery of an irrevocable written notice by the Company to Fusion stating that
we elect to enter into such purchase agreement with Fusion. The second equity
purchase agreement may be entered into only after the principal amount under the
first equity purchase agreement is fully converted into the Company's common
stock.

                                       19
<PAGE>

Seasonality and Inflation

The Company believes that its car washing and detailing operations are adversely
affected by periods of inclement weather. The Company has mitigated and intends
to continue to mitigate the impact of inclement weather through geographic
diversification of its operations.

The Company believes that inflation and changing prices have not had, and are
not expected to have any material adverse effect on its results of operations in
the near future.

Year 2000

The Company completed its year 2000 remediation plan prior to the end of 1999.
Although we believe our year 2000 remediation plan was adequate to address the
year 2000 issue, the Company is continually acquiring new businesses and
locations, which may require an on-going process to convert, assess, and if
necessary, remediate newly acquired systems. This issue is part of our standard
due diligence when evaluating potential acquisitions so that remedial efforts,
if any, can be evaluated and scheduled.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The reports of independent auditors and consolidated financial statements are
included in Part III, ITEM 13. of this Report beginning on page F- 1.

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

The firm of Urbach Kahn & Werlin PC served as the independent accountants of the
Company for the two years ended December 31, 1998 and 1997. In May 1999, Urbach
Kahn & Werlin PC resigned as the Company's independent accountants. The reports
of Urbach Kahn & Werlin PC on the Company's consolidated financial statements
for the two fiscal years did not contain any adverse opinion or disclaimer of
opinion, or modification or qualification as to uncertainty, audit scope or
accounting principles. Additionally, there have been no disagreements between
the Company and Urbach Kahn & Werlin PC on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Urbach Kahn & Werlin
PC, would have caused them to make reference thereto in their report on the
Company's consolidated financial statements for such years.

In May 1999, the Company selected the international accounting firm of Ernst &
Young LLP to serve as the Company's new independent accountants. The appointment
of Ernst & Young LLP as the Company's independent auditors for the fiscal year
1999 was approved by the Company's Board of Directors and ratified at the
Company's annual meeting of the stockholders held on December 15, 1999. Ernst &
Young LLP issued an opinion with respect to the audit of the consolidated
balance sheet of the Company as of December 31, 1998 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the two years in the period ended December 31, 1998, as restated for
three pooling of interest acquisitions completed in 1999. In January 2000, the
Company was advised that Ernst & Young LLP resigned as the Company's independent
accountants due to a business conflict as a result of pending litigation between
two clients and the focus of part of that litigation on financial statements of
another client that Ernst & Young LLP audited. The reports of Ernst & Young LLP
on the Company's consolidated financial statements as restated for the two years
ended December 31, 1998 did not contain any adverse opinion or disclaimer of
opinion, or modification or qualification as to uncertainty, audit scope or
accounting principles. In connection with its audits for the two most recent
years, there have been no disagreements between the Company and Ernst & Young
LLP on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Ernst & Young LLP, would have caused them to make
reference thereto in their report on the Company's consolidated financial
statements for such years.

In January 2000, the Company selected the international accounting firm of Grant
Thornton LLP to serve as the Company's new independent accountants for the audit
of the Company's financial statements for the year ended December 31, 1999. On
December 12, 2000, the appointment of Grant Thornton LLP as continuing auditors
for the year ended December 31, 2000 was approved by the Board of Directors and
ratified by the Stockholders at the Annual Meeting.

                                       20
<PAGE>

                                   PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information concerning directors appearing in the sections entitled
"Election of Directors" in the Company's definitive proxy statement to be filed
with the Securities and Exchange Commission in connection with the Company's
2001 Annual Meeting of Stockholders ("Proxy Statement") is incorporated herein
by this reference. The information concerning executive officers is set forth in
Part I herein.

ITEM 10. EXECUTIVE COMPENSATION

The information contained in the section of the Proxy Statement entitled
"Executive Compensation" is incorporated herein by this reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained in the section of the Proxy Statement entitled
"Security Ownership of Certain Beneficial Owners and Management" is incorporated
herein by this reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained in the section of the Proxy Statement entitled
"Certain Transactions" is incorporated herein by this reference.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) (1)  Consolidated Financial Statements:
         Report of Independent Certified Public Accountants
         Consolidated Balance Sheets as of December 31, 2000 and 1999
         Consolidated Statements of Operations for the years ended December 31,
         2000 and 1999
         Consolidated Statements of Stockholders' Equity for the years ended
         December 31, 2000 and 1999
         Consolidated Statements of Cash Flows for the years ended December 31,
         2000 and 1999
         Notes to Consolidated Financial Statements

(a) (2)  The requirements of Schedule II have been included in the notes to
         the financial statements. All other schedules for which provision is
         made in the applicable accounting regulations of the Securities and
         Exchange Commission are not required under the related instructions or
         are inapplicable and; therefore, have been omitted.

(a) (3)  Exhibits:

         The following Exhibits are filed as part of this report (exhibits
marked with an asterisk have been previously filed with the Commission and are
incorporated herein by this reference):

          (a)   Exhibits:

     *3.1       Certificate of Incorporation of Mace Security International,
                Inc. (Exhibit 3.1 to the Company's Report on Form 10-QSB for the
                quarter ended June 30, 1999 (the "June 30, 1999 Form 10-QSB"))
     *3.2       Certificate of Amendment of Certificate of Incorporation of Mace
                Security International, Inc. (Exhibit 3.2 to the June 30, 1999
                Form 10-QSB)
     *3.3       Amended and Restated Bylaws of Mace Security International, Inc.
                (Exhibit 3.3 to the Company's Report on Form 10-KSB for the year
                ended December 31, 1999 (the "1999 Form 10-KSB"))
     *3.4       Amended and Restated Certificate of Incorporation of Mace
                Security International, Inc. (Exhibit 3.4 to the 1999 Form 10-
                KSB)
      3.5       Certificate of Amendment of Amended and Restated Certificate of
                Incorporation of Mace Security International, Inc.

                                       21
<PAGE>

     *10.3        1993 Non-Qualified Stock Option Plan (1)
     *10.22       Trademarks(1)
     *10.28       Warrants in connection with the acquisition of the assets of
                  the KinderGard Corporation(2) *10.34 Real Estate Purchase
                  Agreement between Vermont Economic Development Authority and
                  Mace Security International, Inc.(2)
     *10.66       Employment Agreement between the Company and Jon E. Goodrich
                  effective as of September 1, 1998 (3)
     *10.67       Employment Agreement between the Company and Mark A. Capone
                  effective as of September 17, 1998 (3)
     *10.68       Settlement Agreement between the Company and MSP Retail, Inc.
                  dated December 2, 1998
     *10.69       Merger Agreement between Louis D. Paolino, Red Mountain
                  Holding, Ltd. and Mace Security International, Inc. dated as
                  of March 26, 1999 +
     *10.70       Stock purchase Agreement, between Louis Paolino, Jr. and Mace
                  Security International, Inc. dated as of March 26, 1999
     *10.71       Employment Contract between Mace Security International, Inc.
                  and Robert M. Kramer dated March 26, 1999 (3)
     *10.72       Employment Contract between Mace Security International, Inc.
                  and Gregory M. Krzemien dated March 26, 1999 (3)
     *10.73       Amendment No. 1 to Merger Agreement between Louis D. Paolino,
                  Red Mountain Holding, Ltd. and Mace Security International,
                  Inc. dated April 13, 1999
     *10.74       Amendment No. 1 to Stock purchase Agreement, between Louis
                  Paolino, Jr. and Mace Security International, Inc. dated April
                  13, 1999
     *10.75       Stock Purchase Agreement dated as of February 4, 1999, by and
                  between Gary Higgins, Rosario Higgins, Rosa Maria Dietrich,
                  Rainer Dietrich, Amy Schmadeke, Elisa Rauch and Gunter Rauch
                  and American Wash Services, Inc. (Exhibit 2.1 to the Company's
                  Current Report on Form 8-K dated May 17, 1999 (the "May 17,
                  1999 Form 8-K")) +
     *10.76       Amendment Number One to Stock Purchase Agreement dated April
                  1, 1999, between Gary Higgins, Rosario Higgins, Rosa Maria
                  Dietrich, Rainer Dietrich, Amy Schmadeke, Elisa Rauch, Gunter
                  Rauch and Steven Sims and American Wash Services, Inc.
                  (Exhibit 2.2 to the May 17, 1999 Form 8-K)
     *10.77       Assignment dated May 17, 1999 between Mace Security
                  International, Inc., Mace Anti Crime Bureau, Inc., and
                  American Wash Services, Inc. (Exhibit 2.3 to the May 17, 1999
                  Form 8-K)
     *10.78       Car Wash Asset Purchase/Sale Agreement dated July 8, 1998
                  between Genie Car Wash Inc. of Austin, Genie Car Care Center,
                  Inc., Genie Car Service Center, Inc., and Cornett Limited
                  Partnership and Millennia Car Wash Group LLC. (Exhibit 2.1 to
                  the Company's Current Report on Form 8-K dated May 18, 1999
                  (the "May 18, 1999 Form 8-K")) +
     *10.79       First Amendment to Car Wash Asset Purchase/Sale Agreement
                  effective July 8, 1998 between Genie Car Wash Inc. of Austin,
                  Genie Car Care Center, Inc., Genie Car Service Center, Inc.,
                  and Cornett Limited Partnership and Millennia Car Wash Group
                  LLC (Exhibit 2.2 to the May 18, 1999 Form 8-K)
     *10.80       Second Amendment to Car Wash Asset Purchase/Sale Agreement
                  effective April 29, 1999 between Genie Car Wash Inc. of
                  Austin, Genie Car Care Center, Inc., Genie Car Service Center,
                  Inc., and Cornett Limited Partnership and Millennia Car Wash
                  Group LLC. (Exhibit 2.3 to the May 18, 1999 Form 8-K)
     *10.81       Third Amendment to Car Wash Asset Purchase/Sale Agreement
                  effective May 17, 1999 between Genie Car Wash Inc. of Austin,
                  Genie Car Care Center, Inc., Genie Car Service Center, Inc.,
                  and Cornett Limited Partnership and Millennia Car Wash Group
                  LLC. (Exhibit 2.4 to the May 18, 1999 Form 8-K)
     *10.82       Fourth Amendment to Car Wash Asset Purchase/Sale Agreement
                  effective May 18, 1999 between Genie Car Wash Inc. of Austin,
                  Genie Car Care Center, Inc., Genie Car Service Center, Inc.,
                  and Cornett Limited Partnership and Millennia Car Wash Group
                  LLC. (Exhibit 2.5 to the May 18, 1999 Form 8-K)
     *10.83       Promissory Note in the amount of $4,750,000 by Mace Car
                  Wash-Arizona, Inc., dated May 18, 1999, payable to Mike W.
                  Cornett as collecting agent for Genie Car Wash Inc. of Austin,
                  Genie Car Care Center, Inc., Genie Car Service Center, Inc.
                  and Cornett Limited Partnership. (Exhibit 2.6 to the May 18,
                  1999 Form 8-K)
     *10.84       Security Agreement dated May 18, 1999 between Mace Car
                  Wash-Arizona, Inc. and Genie Car Wash Inc. of Austin, Genie
                  Car Care Center, Inc., Genie Car Service Center, Inc. and
                  Cornet Limited Partnership. (Exhibit 2.7 to the May 18, 1999
                  Form 8-K)
     *10.85       Agreement of Sale dated as of April 22, 1999 by and among Gabe
                  Kirikian and Alice Kirikian, Gabe's Plaza Car Wash, Inc. and
                  Red Mountain Holdings, Ltd. (Exhibit 2.1 to the Company's
                  Current Report on Form 8-K dated June 1, 1999 (the "June 1,
                  1999 Form 8-K")) +

                                       22
<PAGE>

     *10.86       First Amendment to Agreement of Sale dated as of May 10, 1999
                  by and among Gabe Kirikian and Alice Kirikian, Gabe's Plaza
                  Car Wash, Inc. and Red Mountain Holdings, Ltd. (Exhibit 2.2 to
                  the June 1, 1999 Form 8-K)
     *10.87       Assignment dated May 17, 1999 between Mace Security
                  International, Inc. and Red Mountain Holdings, Inc. (Exhibit
                  2.3 to the June 1, 1999 Form 8-K)
     *10.88       Agreement of Sale dated as of April 23, 1999 by and among
                  American Wash Services, Inc. and Mario DeBerardinis and
                  Jennifer DeBerardinis. (Exhibit 2.1 to the Company's Current
                  Report on Form 8-K dated June 22, 1999 (the "June 22, 1999
                  Form 8-K")) +
     *10.89       Assignment dated June 15, 1999 between Mace Security
                  International, Inc. and American Wash Services, Inc. (Exhibit
                  2.2 to the June 22, 1999 Form 8-K)
     *10.90       Merger Agreement dated as of March 26, 1999 between Louis D.
                  Paolino, Jr. and Red Mountain Holding, Ltd. on the one hand,
                  and Mace Security International, Inc. on the other hand.
                  (Exhibit 2.1 to the Company's Current Report on Form 8-K dated
                  July 1, 1999 (the " July 1, 1999 AWS Form 8-K")) +
     *10.91       Amendment No. 1 to the Merger Agreement dated as of April 13,
                  1999. (Exhibit 2.2 to the July 1, 1999 AWS Form 8-K)
     *10.92       Amendment No. 2 to the Merger Agreement dated as of May 24,
                  1999. (Exhibit 2.3 to the July 1, 1999 AWS Form 8-K)
     *10.93       The Stock Purchase Agreement dated as of March 26, 1999
                  between Louis D. Paolino, Jr. and Mace Security International,
                  Inc. (Exhibit 2.4 to the July 1, 1999 AWS Form 8-K) +
     *10.94       Amendment No. 1 to the Stock Purchase Agreement dated as of
                  April 13, 1999. (Exhibit 2.5 to the July 1, 1999 AWS Form 8-K)
     *10.95       Amendment No. 2 to the Stock Purchase Agreement dated as of
                  May 24, 1999 (Exhibit 2.6 to the July 1, 1999 AWS Form 8-K)
     *10.96       The Real Estate and Asset Purchase Agreement dated as of March
                  8, 1999, among Stephen B. Properties, Inc., Stephen Bulboff,
                  and American Wash Services, Inc. (Exhibit 2.1 to the Company's
                  Current Report on Form 8-K dated July 1, 1999 (the " July 1,
                  1999 Form 8-K")) +
     *10.97       Lease Assignment and Assumption Agreement dated July 1, 1999
                  among Mace Wash, Inc., a wholly-owned subsidiary of Mace
                  Security International, Inc., Stephen B. Properties, Inc.,
                  Stephen Bulboff and American Wash Services, Inc. (Exhibit 2.2
                  to the July 1, 1999)
     *10.98       Mace Security International, Inc. 1999 Stock Option Plan (3)
     *10.99       Operating Agreement between Millennia Car Wash, LLC, Excel
                  Legacy Corporation and G II Ventures, LLC and Mace Car Wash,
                  Inc.
     *10.100      Employment Contract between Mace Security International, Inc.
                  and Louis D. Paolino, Jr.(3)
     *10.101      Employment Contract between Mace Security International, Inc.
                  and Michael Fazio(3)
     *10.102      Stock Purchase Agreement and Sale Agreement dated June 23,
                  1999 among Mace Security International, Inc. and the
                  Environmental Opportunities Fund II, L.P. and Environmental
                  Opportunities Fund II (Institutional), L.P.
     *10.103      Stock Purchase Agreement and Plan of Reorganization dated as
                  of June 1, 1999, by and between Kevin Detrick, Brian Bath,
                  Michael Ruiz, and Francis Janoski on the one hand, and Mace
                  Security International, Inc. on the other hand. (Exhibit 2.1
                  to the Company's Current Report on Form 8-K dated July 9,
                  1999) +
     *10.104      Stock Exchange Agreement dated as of August 13, 1999, by and
                  between Joe Crawford, Ron Clark, Robert Duggan, Jr., and First
                  National Bank of Abilene, as Trustee of the Wayne V. Ramsey,
                  Jr., and Mira Marie Ramsey Family Trust No. 2 on the one hand,
                  and Mace Security International, Inc. on the other hand.
                  (Exhibit 2.1 to the Company's Current Report on Form 8-K dated
                  August 25, 1999) +
     *10.105      Car Wash Asset Purchase/Sale Agreement dated as of May 11,
                  1999, between The Manus Group, Inc. and Mace Car Wash, Inc.
                  (Exhibit 2.1 to the Company's Current Report on Form 8-K dated
                  August 24, 1999) +
     *10.106      Car Wash Asset Purchase/Sale Agreement dated as of August 26,
                  1998, between Quaker Car Wash, Inc. and Millennia Car Wash,
                  LLC. (Exhibit 2.1 to the Company's Current Report on Form 8-K
                  dated September 9, 1999 (the "September 9, 1999 Form 8-K")) +
     *10.107      Amendment one of the Car Wash Asset Purchase/Sale Agreement
                  dated as of November 23, 1998. (Exhibit 2.2 to the September
                  9, 1999 Form 8-K)
     *10.108      Amendment two of the Car Wash Asset Purchase/Sale Agreement
                  dated as of January 6, 1999. (Exhibit 2.3 to the September 9,
                  1999 Form 8-K)
     *10.109      Amendment three of the Car Wash Asset Purchase/Sale Agreement
                  dated as of February 26, 1999. (Exhibit 2.4 to the September
                  9, 1999 Form 8-K)
     *10.110      Amendment four of the Car Wash Asset Purchase/Sale Agreement
                  dated as of April 7, 1999. (Exhibit 2.5 to the September 9,
                  1999 Form 8-K)

                                       23
<PAGE>

     *10.111      Amendment five of the Car Wash Asset Purchase/Sale Agreement
                  dated as of May 10, 1999. (Exhibit 2.6 to the September 9,
                  1999 Form 8-K)
     *10.112      Amendment six of the Car Wash Asset Purchase/Sale Agreement
                  dated as of June 25, 1999. (Exhibit 2.7 to the September 9,
                  1999 Form 8-K)
     *10.113      Amendment seven of the Car Wash Asset Purchase/Sale Agreement
                  dated as of August 13, 1999. (Exhibit 2.8 to the September 9,
                  1999 Form 8-K)
     *10.114      Amendment eight of the Car Wash Asset Purchase/Sale Agreement
                  dated as of August 27, 1999. (Exhibit 2.9 to the September 9,
                  1999 Form 8-K)
     *10.115      Stock Purchase Agreement dated as of June 21, 1999, by and
                  between Ken H. Bachman, as Trustee under the Kenneth H.
                  Bachman Revocable Trust under agreement dated September 12,
                  1994, Claudia Bachman, as Trustee under the Claudia Bachman
                  Revocable Trust under agreement dated September 12, 1994,
                  Carolyn Schmidt, Daniel Warmbier, and Diane Warmbier on the
                  one hand, and Mace Security International, Inc. on the other
                  hand. (Exhibit 2.1 to the Company's Current Report on Form 8-K
                  dated September 9, 1999) +
     *10.116      Stock Purchase Agreement and Sale Agreement dated September 8,
                  1999 among Mace Security International, Inc. and Park Equity
                  Partners
     *10.117      Car Wash Asset Purchase/Sale Agreement dated as of April 20,
                  1999, between White Glove Partnership and Mace Wash, Inc., a
                  wholly owned subsidiary of Mace Security International, Inc.
                  (Exhibit 2.1 to the Company's Current Report on Form 8-K dated
                  October 18, 1999) +
     *10.118      Amendment one of the Car Wash Asset Purchase/Sale Agreement
                  dated as of April 20, 1999 (Exhibit 2.2 to the Company's
                  Current Report on Form 8-K dated October 18, 1999)
     *10.119      Real Estate and Asset Purchase Agreement dated March 30, 1999,
                  by and among Millennia Car Wash, LLC, Excel Legacy Corporation
                  and G II Ventures, LLC, and Mace Security International, Inc.
                  (Exhibit 2.1 to the Company's Current Report on Form 8-K dated
                  October 29, 1999) +
     *10.120      Amendment No. 1 dated as of March 30, 1999 by and among
                  Millennia Car Wash, LLC, Excel Legacy Corporation and G II
                  Ventures, LLC, and Mace Security International, Inc. (Exhibit
                  2.2 to the Company's Current Report on Form 8-K dated October
                  29, 1999) +
     *10.121      Closing letter to Real Estate and Asset Purchase Agreement
                  dated March 30, 1999 as amended. (Exhibit 2.3 to the Company's
                  Form 8-K dated October 29, 1999)
     *10.122      Agreement of Sale dated as of August 31, 1999, by and among
                  Cherry Hill Car Wash, Inc., 1505 Associates General
                  Partnership, Henry Gorenstein and Joan Rambler, and Mace Car
                  Wash, Inc., a wholly owned subsidiary of Mace Security
                  International, Inc. (Exhibit 2.1 to the Company's Form 8-K
                  dated December 29, 1999) +
     *10.123      Loan Agreement and Promissory Note dated February 17, 2000,
                  between the Company, its subsidiary Mace Car Wash - Arizona,
                  Inc. and Bank One, Texas, NA
     *10.124      Business Loan Agreement dated January 31, 2000, between the
                  Company, its subsidiary - Colonial Full Service Car Wash,
                  Inc., and Bank One, Texas, N.A.; Promissory Note dated
                  February 2, 2000 between the same parties as above in the
                  amount of $400,000 (pursuant to instruction 2 to Item 601 of
                  Regulation S-B, two additional Promissory Notes, which are
                  substantially identical in all material respects except as to
                  the amount of the Promissory Notes) are not being filed in the
                  amount of: $19,643.97 and $6,482; and a Modification Agreement
                  dated as of January 31, 2000 between the same parties as above
                  in the amount of $110,801.55 (pursuant to instruction 2 to
                  Item 601 of Regulation S-B, Modification Agreements, which are
                  substantially identical in all material respects except to the
                  amount of the Modification Agreement) are not being filed in
                  the amounts of: $39,617.29, $1,947,884.87, $853,745.73, and
                  $1,696,103.31.
     *10.125      Asset Purchase Agreement dated as of January 24, 2000, by and
                  among James Grandlich, Raymond Grandlich, and Arthur
                  Grandlich, residents of the state of Arizona, Red Baron Truck
                  Washes, Inc. and Mace Truck Wash, Inc., a wholly owned
                  subsidiary of Mace Security International, Inc. (Exhibit 2.1
                  to the Company's Current Report on Form 8-K dated March 24,
                  2000).+
     *10.126      Merger Agreement and Plan of Reorganization dated March 8,
                  2000, by and among Wash Depot Holdings, Inc., Mace Security
                  International, Inc., and Mace Holdings, Inc., a wholly owned
                  subsidiary of Mace Security International, Inc. (Exhibit 2.1
                  to the Company's Current Report on Form 8-K dated April 27,
                  2000).+
     *10.127      Acknowledgment of Schedules and Clarification of Certain
                  Provisions of Merger Agreement dated April 27, 2000 (Exhibit
                  2.2 to the Company's Current Form on 8-K dated April 27,
                  2000).
     *10.128      Form of Equity Purchase Agreement to be issued by Mace to
                  Fusion Capital (included as Exhibit A to Master Facility
                  Agreement in Exhibit 10.1 of S-3) (Exhibit 4.1 to the
                  Company's Current Form on S-3 dated April 11, 2000).
     *10.129      Master Facility Agreement, dated as of April 5, 2000, between
                  Mace and Fusion Capital (Exhibit 10.1 to the Company's Current
                  Form on S-3 dated April 11, 2000).

                                       24
<PAGE>

     10.130       Loan Agreement and Promissory Note dated November 28, 2000,
                  between the Company, its subsidiary Eager Beaver Car Wash,
                  Inc. and Bank One, Texas, N.A. in the amount of $6,754,400.
     10.131       Lease Agreement dated August 1, 2000 among Mace Security
                  International, Inc. and Bluepointe, Inc.
     10.132       Amendment dated March 13, 2001, to Business Loan Agreement
                  between the Company, its subsidiary Colonial Full Service Car
                  Wash, Inc., and Bank One, Texas, N.A. (pursuant to instruction
                  2 to Item 601 of Regulation S-B, two additional amendments
                  which are substantially identical in all material respects,
                  except as to the borrower being Eager Beaver Car Wash, Inc.
                  and Mace Car Wash - Arizona, Inc., are not being filed).

     11           Statement Re: Computation of Per Share Earnings
     21           Subsidiaries of the Company
     23.1         Consent of Grant Thornton LLP
     24           Power of Attorney (included on signature page)


-------------------

     * Incorporated by reference
     + Schedules and other attachments to the indicated exhibit have been
       omitted. The Company agrees to furnish supplementally to the Commission
       upon request a copy of any omitted schedules or attachments.

     (1)          Incorporated by reference to the exhibit of the same number
                  filed with the Company's registration statement on Form SB-2
                  (33-69270) that was declared effective on November 12, 1993.
     (2)          Incorporated by reference to the Company's Form 10-QSB report
                  for the quarter ended 9/30/94 filed on November 14, 1994. It
                  should be noted that Exhibits 10.25 through 10.34 were
                  previously numbered 10.1 through 10.10 in that report.
     (3)          Indicates a management contract or compensation plan or
                  arrangement.

 (b) Current Reports on Form 8-K or 8-K/A:

     None.

                                       25
<PAGE>

                                  SIGNATURES

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

      MACE SECURITY INTERNATIONAL, INC.

      By:  /s/ Louis D. Paolino, Jr.
         --------------------------------------------
      Louis D. Paolino, Jr.
      Chairman of the Board,
      Chief Executive Officer,
      and President

DATED the 20th day of March, 2001.

      KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby constitute
and appoint Louis D. Paolino, Jr. and Gregory M. Krzemien, or either of them
acting alone, his true and lawful attorney-in-fact and agent, with full power of
substitution and revocation for him and in his name, place and stead, in any and
all capacities, to sign this Report on Form 10-KSB of Mace Security
International, Inc. and any and all amendments to the Report and to file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

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

<TABLE>
<CAPTION>
Name                                                       Title                               Date
----                                                       -----                               ----
<S>                                            <C>                                            <C>
/s/ Louis D. Paolino, Jr.                      Chairman of the Board,                         3/20/01
-----------------------------------
Louis D. Paolino, Jr.                          Chief Executive Officer,
                                               President and Director
                                               (Principal Executive Officer)

/s/ Gregory M. Krzemien                        Chief Financial Officer                        3/20/01
-----------------------------------
Gregory M. Krzemien                            and Treasurer (Principal
                                               Financial and Accounting Officer)

/s/ Ronald R. Pirollo                          Chief Accounting Officer and                   3/20/01
-----------------------------------
Ronald R. Pirollo                              Controller

/s/ Jon E. Goodrich                            Director                                       3/20/01
-----------------------------------
Jon E. Goodrich

/s/ Robert M. Kramer                           Director                                       3/20/01
-----------------------------------
Robert M. Kramer

/s/ Matthew J. Paolino                         Director                                       3/20/01
-----------------------------------
Matthew J. Paolino

/s/ Constantine N. Papadakis                   Director                                       3/20/01
-----------------------------------
Constantine N. Papadakis

/s/ Mark S. Alsentzer                          Director                                       3/20/01
-----------------------------------
Mark S. Alsentzer

/s/ Richard B. Muir                            Director                                       3/20/01
-----------------------------------
Richard B. Muir
</TABLE>

                                       26
<PAGE>

                       Mace Security International, Inc.
                       Consolidated Financial Statements
                    Years ended December 31, 2000 and 1999
                        Index to Financial Information


Contents

<TABLE>
<S>                                                                                                          <C>
(a) Financial Information

        Report of Independent Certified Public Accountants................................................    F-2

        Audited Consolidated Financial Statements
        -----------------------------------------

        Consolidated Balance Sheets.......................................................................    F-3

        Consolidated Statements of Operations.............................................................    F-5

        Consolidated Statements of Stockholders' Equity...................................................    F-6

        Consolidated Statements of Cash Flows.............................................................    F-7

        Notes to Consolidated Financial Statements........................................................    F-8
</TABLE>

                                      F-1
<PAGE>

              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Shareholders and Board of Directors
Mace Security International, Inc.

We have audited the accompanying consolidated balance sheets of Mace Security
International, Inc. and subsidiaries as of December 31, 2000 and 1999 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Mace Security
International, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
consolidated results of their operations and their consolidated cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
March 2, 2001

                                      F-2
<PAGE>

              Mace Security International, Inc. and Subsidiaries

                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                         ASSETS                                             December 31,
                                                                                 --------------------------------------
                                                                                      2000                 1999
                                                                                 ----------------     -----------------
<S>                                                                              <C>                  <C>
          Current assets:
              Cash and cash equivalents                                          $      4,838,023     $     2,320,804
              Accounts receivable, less allowance for doubtful
                 accounts of $260,825 and $102,393 in 2000 and 1999,
                 respectively                                                             737,547           1,874,547

              Inventories                                                               2,256,477           2,800,853
              Deferred income taxes                                                       118,575             139,705
              Prepaid expenses and other current assets                                 2,699,996           2,506,853
                                                                                 ----------------     ---------------
          Total current assets                                                         10,650,618           9,642,762
          Property and equipment:
              Land                                                                     32,597,872          30,429,075
              Buildings and leasehold improvements                                     36,739,752          31,718,084
              Machinery and equipment                                                   8,223,801           6,329,030
              Furniture and fixtures                                                      257,549             231,936
                                                                                 ----------------     ---------------
          Total property and equipment                                                 77,818,974          68,708,125
          Accumulated depreciation and amortization                                    (5,423,330)         (3,826,784)
                                                                                 ----------------     ---------------
                                                                                       72,395,644          64,881,341




          Excess of cost over net assets of acquired businesses, net of
              accumulated amortization of $1,143,239 and $276,605 in 2000 and
              1999, respectively                                                       20,881,085          20,723,085

          Other intangible assets, net of accumulated amortization
              of $1,223,702 and $1,144,428 in 2000 and 1999, respectively               1,142,485           1,029,347

          Other assets                                                                  1,061,596           1,838,821
                                                                                 ----------------     ---------------
          Total assets                                                           $    106,131,428     $    98,115,356
                                                                                 ================     ===============
</TABLE>

                            See accompanying notes.

                                      F-3
<PAGE>

<TABLE>
<CAPTION>

                LIABILITIES AND STOCKHOLDERS' EQUITY                              December 31,
                                                                       ------------------------------------
                                                                             2000                1999
                                                                       ----------------      --------------
<S>                                                                    <C>                   <C>
Current liabilities:
    Current portion of notes payable to related parties                $              -      $    1,493,806
    Current portion of long-term debt                                         6,264,630           3,102,003
    Current portion of capital lease obligations                                 57,633              66,371
    Accounts payable                                                          2,821,752           3,372,950
    Income taxes payable                                                        190,127             110,725
    Deferred revenue                                                            315,743             557,154
    Accrued expenses and other current liabilities                            2,003,370           2,342,299
                                                                       ----------------      --------------
Total current liabilities                                                    11,653,255          11,045,308

Deferred income taxes                                                           272,473             587,625
Long-term debt, net of current portion                                       30,094,300          27,794,865
Capital lease obligations, net of current portion                               268,455             327,232
Other liabilities                                                               965,625           1,792,498

Stockholders' equity:
    Preferred stock, $.01 par value:
       Authorized shares - 10,000,000
       Issued and outstanding shares - none                                           -                   -
    Common stock, $.01 par value:
       Authorized shares - 100,000,000
       Issued shares of 25,480,590 and
          22,821,675 in 2000 and 1999, respectively                             254,806             228,216

    Additional paid-in capital                                               69,905,062          63,992,607
    Accumulated deficit                                                      (7,282,548)         (7,600,607)
                                                                       ----------------      --------------
                                                                             62,877,320          56,620,216

    Less treasury stock at cost -256,666 common shares                                -             (52,388)
                                                                       ----------------      --------------
Total stockholders' equity                                                   62,877,320          56,567,828
                                                                       ----------------      --------------
Total liabilities and stockholders' equity                             $    106,131,428      $   98,115,356
                                                                       ================      ==============
</TABLE>

                            See accompanying notes.

                                      F-4
<PAGE>

              Mace Security International, Inc. and Subsidiaries

                     Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                             Year ended December 31,
                                                                                       ----------------------------------
                                                                                            2000                 1999
                                                                                       -------------        -------------
                                                                                                              (Restated)
<S>                                                                                    <C>                  <C>
   Revenues:
       Car wash and detailing services                                                 $  37,811,611        $  17,073,284
       Lube and other automotive services                                                  4,869,506            2,692,532
       Fuel and merchandise sales                                                          5,061,351            2,092,082
       Security product sales                                                                      -            3,435,312
       Operating agreements                                                                  260,756              462,582
                                                                                       -------------        -------------
                                                                                          48,003,224           25,755,792

   Cost of revenues:
       Car wash and detailing services                                                    26,855,854           11,136,729
       Lube and other automotive services                                                  3,789,164            1,992,025
       Fuel and merchandise sales                                                          4,472,026            1,707,925
       Security product sales                                                                      -            1,818,316
                                                                                       -------------        -------------
                                                                                          35,117,044           16,654,995

   Selling, general and administrative expenses                                            7,302,912            5,753,194
   Depreciation and amortization                                                           2,467,217            1,095,517
   Costs of terminated acquisitions                                                          580,000                    -
   Merger costs                                                                                    -            1,875,000
   Restructuring, asset write-downs and change in control charges                            137,904            1,519,000
                                                                                       -------------        -------------

   Operating income (loss)                                                                 2,398,147           (1,141,914)

   Interest expense, net                                                                  (3,012,686)          (1,033,564)
   Other income                                                                              407,618              205,465
                                                                                       -------------        -------------
   Loss from continuing operations before income taxes                                      (206,921)          (1,970,013)

   Income tax benefit                                                                        (66,000)            (618,519)
                                                                                       -------------        -------------
   Loss from continuing operations                                                          (140,921)          (1,351,494)

   Discontinued Operations:
       (Loss) gain from discontinued operations, net of applicable income tax
       benefit of $130,000 in 2000 and income tax expense of $30,000 in 1999                (264,601)              91,379
       Gain on disposal of ICS, net of $107,000 of applicable income tax expense             723,581                    -
                                                                                       -------------        -------------

   Net income (loss)                                                                   $     318,059        $  (1,260,115)
                                                                                       =============        =============

   Basic and diluted income (loss) per share
       From continuing operations                                                      $       (0.01)       $       (0.10)
       From discontinued operations                                                             0.02                    -
                                                                                       -------------        -------------
       Total                                                                           $        0.01        $       (0.10)
                                                                                       =============        =============

   Weighted average number of shares outstanding                                          24,476,842           13,159,154
                                                                                       =============        =============
</TABLE>

                            See accompanying notes.

                                      F-5
<PAGE>

              Mace Security International, Inc. and Subsidiaries
                Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                          Additional
                                             Common         Common          Paid-in        Accumulated       Treasury
                                             Shares         Stock           Capital          Deficit           Stock       Total
                                           ----------     ---------       -----------      -----------       --------   -----------
<S>                                        <C>            <C>             <C>              <C>               <C>        <C>
Balance at December 31, 1998............    8,179,620      $ 81,796       $14,272,243      $(4,985,528)      $(52,388)  $ 9,316,123

Exercise of common stock options
  and warrants..........................    1,305,746        13,057         2,135,704                               -     2,148,761

Proceeds from sale of common stock,
  less commissions and issuance
  expenses of $457,201..................    6,295,558        62,956        14,191,468                                    14,254,424

Common stock issued in purchase
  acquisitions..........................    7,010,500        70,105        26,650,515                               -    26,720,620

Warrants issued in purchase
  acquisitions..........................                                    5,176,400                                     5,176,400

Effect of variable options vesting
  on change of control..................                                      587,000                                       587,000

Options issued for consulting
  services..............................                                       26,875                                        26,875

Common stock issued for consulting
  services..............................        4,444            44            26,620                               -        26,664

Stock issued to satisfy debt
  obligation............................       25,807           258           251,358                               -       251,616
Income tax benefit from exercise of
  non-qualified stock options...........                                      674,424                                       674,424

Transactions of pooled companies........                                                       (76,732)                     (76,732)

Dividends paid to former
  stockholders of pooled companies......            -             -                 -       (1,278,232)             -    (1,278,232)

Net loss................................            -             -                 -       (1,260,115)             -    (1,260,115)
                                           ----------     ---------       -----------      -----------       --------   -----------
Balance at December 31, 1999............   22,821,675       228,216        63,992,607       (7,600,607)       (52,388)    56,567,828

Sale of common stock less
  commissions and issuance
  expenses of $158,220..................    1,626,159        16,262         1,531,053                                     1,547,315

Exercise of common stock options
  and warrants..........................       43,750           438            80,779                                        81,217

Common stock issued in purchase
  acquisitions..........................    1,277,300        12,773         4,667,775                                     4,680,548

Common stock issued for services........       40,000           400           199,600                                       200,000

Common stock issued to satisfy debt
  obligation............................      106,985         1,070           385,787                                       386,857

Common stock issued for debt
  guarantee.............................       19,521           195            68,129                                        68,324

Cancellation of shares received from
  sale of ICS...........................     (450,000)       (4,500)       (1,008,000)                                   (1,012,500)

Shares purchased and retired............       (4,800)          (48)           (5,445)                                       (5,493)

Treasury shares retired.................                                      (52,388)                         52,388             -

Income tax benefit from exercise of
  non-qualified stock options...........                                       45,165                                        45,165

Net income..............................                                                       318,059                      318,059
                                           ----------     ---------       -----------      -----------       --------   -----------
Balance at December 31, 2000............   25,480,590      $254,806       $69,905,062      $(7,282,548)             -   $62,877,320
                                           ==========     =========       ===========      ===========       ========   ===========
</TABLE>

                            See accompanying notes.

                                      F-6
<PAGE>

              Mace Security International, Inc. and Subsidiaries
                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                           -------------------------------------
                                                                                 2000                 1999
                                                                           ----------------       --------------
<S>                                                                        <C>                    <C>
                                                                                                    (Restated)
Operating activities

Loss from continuing operations                                              $     (140,921)       $   (1,351,494)

Discontinued operations, net of income tax                                          458,980                91,379
                                                                           ----------------       ---------------
Net income (loss)                                                                   318,059            (1,260,115)

Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:


        Depreciation and amortization                                             2,467,217             1,095,517

        Provision for losses on receivables                                          24,772               154,465

        Write-down of assets                                                        137,904                     -

        Loss (gain) on disposal of property and equipment                            16,241                (5,655)

        Deferred income taxes                                                      (248,857)             (716,172)

        Non-cash portion of restructuring and change  in control
        charges                                                                           -             1,178,000


        Net gain on sale of ICS, including cash surrendered                        (975,199)                    -

        Non-cash expenses of discontinued operations                                 24,206                48,122

        Changes in operating assets and liabilities:


          Accounts receivable                                                       957,768              (425,706)

          Inventory                                                                  89,667              (407,962)

          Accounts payable                                                         (278,566)            1,020,923

          Deferred revenue                                                         (104,313)                5,571

          Accrued expenses                                                         (609,832)             (900,799)

          Income taxes                                                              (69,598)              118,837

          Prepaid expenses and other assets                                        (409,399)           (1,235,058)

          Discontinued operations                                                         -               326,835

          Other                                                                           -               (76,732)
                                                                           ----------------       ---------------
Net cash provided by (used in) operating activities                               1,340,070            (1,079,929)

Investing activities


Acquisition of businesses, net of cash acquired                                     (25,000)          (11,239,410)

Purchase of property and equipment                                               (1,344,060)           (2,301,204)

Proceeds from sale of property and equipment                                         15,468                14,850

Payments for intangibles                                                           (567,215)             (143,789)

Payments received on notes receivable from shareholder                                    -               903,547

Deposits and other prepaid costs on future acquisitions                             233,073            (1,098,560)
                                                                           ----------------       ---------------
Net cash used in investing activities                                            (1,687,734)          (13,864,566)

Financing activities

Proceeds from revolving line of credit, long term debt and
   capital lease obligations                                                      9,947,119               112,681
Payments on revolving line of credit, long-term debt
   and capital lease obligations                                                 (8,705,275)           (1,979,894)

Proceeds from issuance of common stock, net of offering costs                     1,628,532            15,743,185

Payments to purchase stock                                                           (5,493)                    -

Net payments on note payable to shareholder                                               -                (5,136)

Dividends paid to former stockholders of pooled companies                                 -            (1,278,232)
                                                                           ----------------       ---------------
Net cash provided by financing activities                                         2,864,883            12,592,604
                                                                           ----------------       ---------------
Net increase (decrease) in cash and cash equivalents                              2,517,219            (2,351,891)

Cash and cash equivalents at beginning of year                                    2,320,804             4,672,695
                                                                           ----------------       ---------------
Cash and cash equivalents at end of year                                     $    4,838,023        $    2,320,804
                                                                           ================       ===============
</TABLE>

                            See accompanying notes.

                                      F-7
<PAGE>

              Mace Security International, Inc. and Subsidiaries
                  Notes to Consolidated Financial Statements

1.       Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Mace
Security International, Inc. (the parent company) and its wholly owned
subsidiaries (the "Company"). All significant intercompany transactions have
been eliminated in consolidation.

The accompanying consolidated financial statements include the financial
position and results of operations of: (i) Mace Security International, Inc.
(prior to combination), (ii) 50's Classic Car Wash and CRCD, Inc. (collectively,
"Classic") which was acquired on August 25, 1999, and (iii) Eager Beaver Car
Wash, Inc. ("Eager Beaver") which was acquired on September 9, 1999. These
transactions were accounted for as poolings of interests.


                                                Year Ended December 31, 1999
                                              ---------------------------------
                                                   Revenue         Percentage

         Mace (prior to combination for
         pooling of interest acquisitions)         $20,558,041             80%
         Classic                                       892,158              3%
         Eager Beaver                                4,305,593             17%
                                              ---------------------------------
                                                   $25,755,792            100%
                                              =================================

2.       Summary of Significant Accounting Policies

Description of Business

The Company currently operates in one business segment: the Car Care segment,
supplying complete car care and truck wash services (including wash, detailing,
lube, and minor repairs). The Company's car care operations are principally
located in Texas, Arizona, Florida, Pennsylvania, New Jersey, Delaware, Indiana
and Ohio. During 1999 the Company also operated in two additional business
segments: security product sales and computer products and services. The
Company's security products and computer products and services provided products
and services to various locations throughout the United States.

Revenue Recognition

Revenue from the Company's Car Care segment is recognized when services are
rendered.

During 1999, revenue from the Company's Security Products sales segment was
recognized when shipments were made, or for export sales when title had passed.
The Company was paid $20,000 per month, beginning in February 2000, under an
agreement which allowed Mark Sport, Inc., an entity controlled by Jon E.
Goodrich, a director of the Company, to operate the Company's Security Products
Division. This amount is included under income from operating agreements.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid short-term
investments with original maturities of three months or less, and credit card
deposits which are converted into cash within two to three business weeks.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using
the first-in first-out (FIFO) method for security and car care products.
Inventories at the Company's Car Care locations consist of various chemical
cleaning supplies used in operations and merchandise and fuel for resale to
consumers.

                                      F-8
<PAGE>

Property and Equipment

Property and equipment are stated at cost. Depreciation is recorded using the
straight-line method over the estimated useful lives of the assets, which are
generally as follows: buildings and leasehold improvements - 15 to 40 years;
machinery and equipment - 2 to 20 years; and furniture and fixtures - 5 to 10
years. Significant additions or improvements extending assets' useful lives are
capitalized; normal maintenance and repair costs are expensed as incurred.
Depreciation and amortization expense was $1,540,722 and $715,484 for the years
ended December 31, 2000 and 1999, respectively. Maintenance and repairs are
charged to expense as incurred and amounted to approximately $1.4 million in
2000 and $505,000 in 1999.

Excess Cost over Fair Market Value of Net Assets Acquired

The excess cost over fair market value of net assets acquired is amortized on a
straight-line basis over 25 years commencing on the dates of the respective
acquisitions. Amortization expense of excess cost over fair value of net assets
acquired was $866,634 in 2000 and $276,605 in 1999.

The Company continually evaluates the value and future benefits of its
intangibles. The Company assesses recoverability from future operations using
income from operations of the related acquired business as a measure. Under this
approach, the carrying value would be reduced if it becomes probable that the
Company's best estimate for expected future cash flows of the related business
would be less than the carrying amount of the intangible over the remaining
amortization period. For the two year period ended December 31, 2000, there were
no adjustments to the carrying amounts of intangibles resulting from these
evaluations.

Other Intangible Assets

Other intangible assets consist primarily of deferred financing costs,
trademarks, and establishing a registered national brand name. Trademarks are
stated at cost and amortized on a straight-line basis over 15 years. Deferred
financing costs are amortized on a straight-line basis over the terms of the
respective debt. The registered brand name is being amortized on a straight-line
basis over 15 years.

Deferred Acquisition Costs

The Company capitalizes legal, accounting, engineering and other direct costs
paid to outside parties that are incurred in connection with potential
acquisitions. The Company, however, routinely evaluates such capitalized costs
and charges to expense those relating to abandoned acquisition candidates.
Indirect acquisition costs, such as executive salaries, general corporate
overhead, and other corporate services are expensed as incurred. Deferred
acquisition costs, included in other assets, were approximately $47,000 and
$183,000 at December 31, 2000 and 1999, respectively.

Costs of Terminated Acquisitions

The Company's policy is to charge as an expense any previously capitalized
expenditures relating to proposed acquisitions that in management's current
opinion will not be consummated. During the quarter ending June 30, 2000,
management decided to terminate certain pending acquisitions the Company
believed would not be consummated as a result of due diligence findings or the
inability of the seller to meet certain terms and conditions precedent to
closing. Costs of previously capitalized expenditures principally relate to the
termination of the Planet Truck Wash acquisition and acquisition related
expenses associated with the proposed Wash Depot Holdings, Inc. ("Wash Depot")
merger. The Company terminated the Wash Depot Merger Agreement on September 30,
2000 as a result of certain conditions precedent to closing not being satisfied
by Wash Depot. Of the $580,000 in costs of terminated acquisitions,
approximately $209,000 represented unrecoverable cash and stock deposits and
approximately $371,000 represented external incremental transaction costs
including legal, accounting, consulting and due diligence costs.

Income Taxes

Deferred income taxes are determined based on the difference between the
financial accounting and tax bases of assets and liabilities. Deferred income
tax expense (benefit) represents the change during the period in the deferred
income tax assets and deferred income tax liabilities. Deferred tax assets
include tax loss and credit carryforwards and are reduced by a valuation
allowance if, based on available evidence, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.

                                      F-9
<PAGE>

Supplementary Cash Flow Information

Interest paid on all indebtedness was approximately $3.1 million and $927,000
for the years ended December 31, 2000 and 1999, respectively.

Noncash investing and financing activities of the Company excluded from the
statement of cash flows include debt paid with common stock of the Company of
$386,857 and $251,616 in 2000 and 1999, respectively, and property additions
financed by debt of $3.1 million in 1999.

Deferred Revenue

The Company records a liability for outstanding gift certificates and ticket
books at its car care locations sold but not yet redeemed. The Company estimates
these redeemed amounts based on gift certificates and ticket book sales and
redemptions throughout the year as well as utilizing historical sales and
redemptions rates.

Advertising

The Company expenses the production costs of first time advertising when the
advertising takes place. Advertising expense was approximately $863,000 and
$538,000 in 2000 and 1999, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash and cash
equivalents, trade receivables, trade payables and debt instruments. The book
value of cash and cash equivalents, trade receivables, and trade payables are
considered to be representative of their respective fair values. The carrying
value of the Company's long-term debt approximates fair value based on current
rates and terms.

Impairment of Long-lived Assets

In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", the Company evaluates the
recoverability of its long-lived assets which include trademarks, other
intangibles, and other assets whenever changes in circumstances indicate that
the carrying amount may not be recoverable. If indications are that the carrying
amount of the asset is not recoverable, the Company will estimate the future
cash flows expected to result from use of the asset and its eventual
disposition. If the sum of the expected future cash flows is less than the
carrying amount of the asset, the Company recognizes an impairment loss. The
impairment loss recognized is measured as the amount by which the carrying
amount of the asset exceeds its fair value. Management currently believes the
carrying amount of the Company's assets is equal to or exceeds their fair value.

Business Combinations

The Company assesses each business combination to determine whether the pooling
of interests or the purchase method of accounting is appropriate. For those
business combinations accounted for under the pooling of interests method, the
financial statements are combined with those of the Company at their historical
amounts, and if material, all periods presented are restated as if the
combination occurred on the first day of the earliest year presented. For those
acquisitions accounted for using the purchase method of accounting, the Company
allocates the cost of the acquired business to the assets acquired and the
liabilities assumed based on estimates of fair values thereof. These estimates
are revised during the allocation period as necessary when, and if, information
regarding contingencies becomes available to define and quantify assets acquired
and liabilities assumed. The allocation period varies but does not exceed one
year. To the extent contingencies such as preacquisition environmental matters,
litigation and related legal fees are resolved or settled during the allocation
period, such items are included in the revised allocation

                                      F-10
<PAGE>

of the purchase price. After the allocation period, the effect of changes in
such contingencies is included in results of operations in the periods in which
the adjustments are determined.

New Accounting Standards

In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities" was issued. Subsequent to this statement, SFAS No. 137 was issued,
which amended the effective date of SFAS No. 133 to be all fiscal quarters of
all fiscal years beginning after June 15, 2000. In June 2000, SFAS 138 was
issued, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of SFAS 133". SFAS 133, as amended by SFAS 138,
requires that all derivative instruments be recorded on the balance sheet at
their respective fair values. Changes in the fair value of derivatives are
recorded each period in current earnings or other comprehensive income,
depending on the designation of the hedge transaction. The Company adopted SFAS
133, as amended by SFAS 138, in the first quarter of fiscal year 2001. Based on
the Company's minimal use of derivatives at the current time, the adoption of
this standard did not have a significant impact on earnings or financial
position of the Company as of December 31, 2000.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101), which
addresses certain criteria for revenue recognition. SAB 101 outlines the
criteria that must be met to recognize revenue and provides guidance for
disclosures related to revenue recognition policies. The Company implemented the
applicable provisions of SAB 101 in the first quarter of fiscal year 2001.
Management believes the Company's revenue recognition policies comply with the
guidance contained in the SAB, and therefore, the Company's results of
operations were not materially affected.

In May 2000, The Emerging Issues Task Force reached consensus opinions on Issue
00-14, "Accounting for Certain Sales Incentives (Issue 00-14)". Issue 00-14
pertains to the recognition, measurement, and income statement classification of
certain sales incentives, including discounts, coupons, rebates, and free
products or services received by the customer. The issue requires certain
incentives to be classified as a reduction of revenue. Management believes the
Company's revenue recording policies comply with the guidance contained in the
EITF, and therefore, the Company's results of operations were not materially
affected.

3.       Acquisitions

Acquisitions Accounted For Under the Pooling of Interests Method

On August 25, 1999, the Company completed its merger with 50's Classic Car Wash
and CRCD, Inc. (collectively "Classic") and issued 91,677 unregistered shares of
the Company's common stock, par value $.01, in exchange for all outstanding
shares of Classic. Classic owns and operates a car wash in Lubbock, Texas. The
car wash provides a range of services which include full service car wash,
gasoline sales and a custom detail shop. The transaction has been accounted for
using the pooling of interests method; and accordingly, the accompanying
consolidated financial statements include accounts of Classic for all periods
presented.

On September 9, 1999, the Company completed its merger with Eager Beaver Car
Wash, Inc. ("Eager Beaver") and issued 659,222 unregistered shares of the
Company's common stock, par value $.01, in exchange for all of the outstanding
shares of Eager Beaver. Eager Beaver operates car wash facilities and a
lubrication center from locations throughout west central and south central
Florida. Eager Beaver operations provide a full line of car cleaning services
including washing, waxing and detailing services . The transaction has been
accounted for using the pooling of interests method; and accordingly, the
accompanying consolidated financial statements include the accounts of Eager
Beaver for all periods presented.

Additionally, on July 9, 1999, the Company acquired all of the outstanding
shares of Innovative Control Systems, Inc. ("ICS"). Approximately 604,000
unregistered shares of common stock of the Company were issued in exchange for
all of the outstanding shares of ICS. Additionally, the Company assumed
approximately $750,000 of ICS's debt. On June 2, 2000, the Company sold ICS in
exchange for the return of 450,000 shares of common stock of the Company and
$295,500 of future goods and services from ICS. Accordingly, ICS's results of
operations, as well as the gain on the ICS sale, have been accounted for as
discontinued operations.

Classic and Eager Beaver were Subchapter S Corporations prior to the mergers,
whereby, the taxable income or loss flowed through to the individual
shareholders. The effects of pro forma taxes as a C Corporation would result in
additional income tax expense of approximately $0 and $214,000 for the years
ended December 31, 2000 and 1999, respectively.

                                      F-11
<PAGE>

In 1999, the Company incurred approximately $225,000, $120,000, and $1,530,000
in merger-related costs associated with the ICS, Classic, and Eager Beaver
mergers, respectively. Merger costs consisted of transaction-related expenses of
$680,000 which includes deal costs, legal, accounting and other professional and
consulting fees, filing fees, external due diligence costs, contractual costs,
and finder fees as well as employee severance and termination costs which
totaled $1,195,000. Additionally, tax provisions of $96,000 and $50,000 were
recorded at the date of the mergers relating to net deferred tax liabilities
with respect to the termination of the previous S Corporation elections of
Classic and Eager Beaver, respectively. This total tax provision of $146,000 is
included within income tax expense for 1999.

Acquisitions Accounted for Under the Purchase Method

On May 17, 1999, the Company acquired all of the outstanding stock of Colonial
Full Service Car Wash, Inc. ("Colonial") in exchange for 1,250,991 unregistered
shares of the Company's common stock and the assumption of debt and negative
working capital of approximately $6,579,000. This transaction has been accounted
for using the purchase method of accounting.

On May 18, 1999, the Company acquired certain assets of Genie Car Wash of
Austin, Inc., Genie Car Care Center, Inc., and Genie Car Service Center, Inc.
(collectively, "Genie"). Consideration under the Agreement consisted of 533,333
unregistered shares of common stock of the Company, $1,000,000 of cash, and the
issuance of promissory notes in the amount of $4,750,000 and $180,000. The
assets acquired consist of substantially all of the real estate, equipment, and
inventories utilized in the car wash businesses. This transaction has been
accounted for using the purchase method of accounting.

On June 1, 1999, the Company acquired substantially all of the assets of Gabe's
Plaza Car Wash, Inc. ("Gabe's") in exchange for $210,000 in cash and delivery of
a promissory note for $717,000. The transaction has been accounted for using the
purchase method of accounting.

On June 22, 1999, the Company acquired substantially all of the assets of the
Moorestown Car Wash in exchange for $225,000 and the issuance of 20,930
unregistered shares of common stock of the Company. This transaction has been
accounted for using the purchase method of accounting.

On July 1, 1999, the Company completed, pursuant to a Merger Agreement dated
March 26, 1999, its merger with American Wash Services, Inc. ("AWS"), a car wash
company controlled by Mr. Paolino, pursuant to which AWS was merged with and
into a wholly-owned subsidiary of the Company. Mr. Paolino and Red Mountain
Holdings, Ltd., AWS's other shareholder, received in exchange for all of the
shares of AWS, $4.8 million in cash, and 628,362 unregistered shares of Common
Stock, of which Mr. Paolino received 470,000 shares and Red Mountain received
158,362 shares. Mr. Paolino and Mr. Robert M. Kramer, the current Executive Vice
President and General Counsel of the Company, received additional consideration
in connection with this merger:

     .    Mr. Paolino received a warrant to purchase 1,500,000 shares of Common
          Stock at a purchase price of $1.375 per share;
     .    Mr. Paolino received a warrant to purchase 250,000 shares of Common
          Stock at a purchase price of $2.50 per share; and
     .    Mr. Kramer received a warrant to purchase 75,000 shares of Common
          Stock at a purchase price of $1.375 per share.

The transaction has been accounted for as a purchase.

On July 1, 1999, the Company acquired substantially all the assets of Stephen
Bulboff and Stephen B. Properties, Inc. (collectively, "Shammy Shine" or
"Stephen Bulboff") in exchange for 860,000 unregistered shares of common stock
of the Company and cash consideration of $1,900,000. Stephen Bulboff owns and
operates a total of ten exterior only car washes in Pennsylvania, New Jersey and
Delaware. This transaction has been accounted for as a purchase.

On August 24, 1999, the Company acquired, through a wholly owned subsidiary,
substantially all of the assets of Shammy Man Car Wash ("Shammy Man") in
exchange for 62,649 unregistered shares of common stock cash consideration of
$475,000 and the assumption of approximately $400,000 of debt. This transaction
has been accounted for using the purchase method of accounting.

On September 9, 1999, the Company acquired all of the assets of Quaker Car Wash,
Inc. ("Quaker") in exchange for 224,072 unregistered shares of common stock and
approximately $1,055,000 of cash consideration. This transaction has been
accounted for using the purchase method of accounting.

On October 18, 1999, the Company, through a wholly owned subsidiary, acquired
all of the car wash related assets of White Glove Car Wash ("White Glove")
located in Tempe, Arizona. Consideration consisted of 38,095 unregistered shares
of common stock

                                      F-12
<PAGE>

of the Company, $130,000 of cash, and the issuance of a $345,000 promissory
note. The transaction has been accounted for using the purchase method of
accounting.

On October 29, 1999, the Company consummated the acquisition of Millennia Car
Wash, LLC ("Millennia") which the Company has operated under an operating
agreement since March 31, 1999. Millennia consists of 11 full service car washes
in the Phoenix, Arizona market and six full service car washes in the San
Antonio, Texas market as well as a total of five lube and repair centers, eight
fuel sales operations, and 17 convenience stores. Consideration under the
agreement, as amended, consisted of 3,500,000 unregistered shares of common
stock of the Company and the assumption of approximately $15.0 million of
long-term debt. The transaction has been accounted for using the purchase method
of accounting.

On December 29, 1999, the Company, through a wholly owned subsidiary, acquired
all of the assets of Cherry Hill Car Wash, Inc. and 1505 Associates General
Partnership ("Cherry Hill Car Wash") located in Cherry Hill, New Jersey.
Consideration consisted of 63,309 unregistered shares of common stock of the
Company and $1,900,000 of cash. The transaction has been accounted for using the
purchase method of accounting.

On March 24, 2000, the Company, through a wholly owned subsidiary, acquired all
of the truck wash related assets of Red Baron Truck Washes, Inc. ("Red Baron")
with a total of five operating locations in Arizona, Indiana, Ohio and Texas.
Consideration consisted of 568,421 registered shares of common stock of the
Company and the issuance of a secured $1 million promissory note to the seller.
The transaction has been accounted for using the purchase method of accounting.

On June 5, 2000, the Company, through a wholly owned subsidiary, acquired
certain assets of Sparsupco, Inc. (the "Beneva Car Wash"). Consideration
consisted of 130,712 shares of common stock of the Company and $20,000 of cash.
The Beneva Car Wash is located in Sarasota, Florida. The transaction has been
accounted for using the purchase method of accounting.

On July 10, 2000, the Company, through a wholly owned subsidiary, completed the
acquisition of substantially all the assets of Superstar Kyrene, a full service
car wash in the Phoenix, Arizona area, in exchange for 56,521 unregistered
shares of common stock of the Company, cash consideration of approximately
$824,000 and the assumption of approximately $926,000 of debt. The transaction
has been accounted for using the purchase method of accounting.

Additionally, on July 26, 2000, the Company acquired, through a wholly owned
subsidiary, substantially all of the assets of Blue Planet Car Wash ("Blue
Planet"), a full service car wash in the Dallas, Texas area, in exchange for
250,008 unregistered shares of common stock, and the assumption of approximately
$1,554,000 of debt. This transaction has been accounted for using the purchase
method of accounting.

4.     Discontinued Operations

On July 14, 1998, the Company sold substantially all of the assets of its Law
Enforcement division within its security products segment. Accordingly, the
operating results of its Law Enforcement division have been segregated from
continuing operations and reported, on a comprehensive basis, as a separate line
item on the consolidated statement of operations entitled "Discontinued
Operations." In conjunction with the sale of assets, the Company licensed to the
purchaser the use of Mace(R) and related trademarks and a patent for use by the
purchaser in the Law Enforcement market and received a one-time license fee of
$650,000. A portion of the sales price, $600,000, was retained by the purchaser
in escrow to secure, among other things, the Company's obligations under the
representations and warranties in the purchase agreement. During 1999, this
amount was returned to the Company. Notwithstanding the sale of the Law
Enforcement division, the Company fulfilled its obligation under a nonassignable
Department of Defense contract which was completed in September of 1999.
Accordingly, this contract is included in discontinued operations in the
accompanying consolidated statement of operations for the year ended December
31, 1999.

On May 4, 2000, the Board of Directors of the Company approved a plan to sell
its computer products and services subsidiary, ICS. Accordingly, the operating
results of ICS have been segregated from continuing operations and reported on a
comprehensive basis as a separate line item on the consolidated statement of
operations entitled "Discontinued Operations". On June 2, 2000, the Company sold
ICS in exchange for the return of 450,000 shares of common stock of the Company
and $295,500 of future goods and services from ICS.

                                      F-13
<PAGE>

<TABLE>
<CAPTION>
                                                                                           Law Enforcement
                                                                          ICS                 Division
                                                                    -------------          ---------------
                <S>                                                 <C>                    <C>
                Year ended December 31, 2000

                Revenues                                            $     518,753          $             -
                Loss from discontinued operations                   $    (264,601)         $             -
                Gain on disposal                                    $     723,581    (1)   $             -

                Year ended December 31, 1999

                Revenues                                            $   2,925,217          $     1,135,051
                Income from discontinued operations                 $      67,347          $        24,032
</TABLE>
                           (1) Includes a net loss of $77,308 from operations of
ICS from the measurement date to the disposal date.

5.       Accounts Receivable

The Company performs ongoing credit evaluations of its customers and generally
does not require collateral. Risk of losses from international sales within the
security products segment are minimized by requiring the majority of customers
to provide irrevocable confirmed letters of credit and/or cash advances. The
Company maintains an allowance for doubtful accounts at a level that management
believes is sufficient to cover potential credit losses.

The changes in the allowance for doubtful accounts are summarized as follows:

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                          -------------------------------------
                                                                                 2000               1999
                                                                          -----------------    ----------------
         <S>                                                              <C>                  <C>
         Balance at beginning of year                                     $         102,393    $         90,904
         Additions (charged to expense)                                              24,772             154,465
         Adjustments                                                                133,660                   -
         Deductions                                                                       -            (142,976)
                                                                          -----------------    ----------------
         Balance at end of year                                           $         260,825    $        102,393
                                                                          =================    ================
</TABLE>

6.       Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                                    As of December 31,
                                                                          --------------------------------------
          <S>                                                             <C>                  <C>
                                                                                 2000                 1999
                                                                          -----------------    -----------------
         Finished goods                                                   $         370,676    $         548,615
         Work in process                                                            114,501               93,561
         Raw materials and supplies                                                 763,202            1,091,026
         Fuel, merchandise inventory and car wash supplies                        1,008,098            1,067,651
                                                                          -----------------    -----------------
                                                                          $       2,256,477    $       2,800,853
                                                                          =================    =================
</TABLE>


                                      F-14
<PAGE>

7.     Other Intangibles

The components of other intangibles are summarized below:

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                        --------------------------------------
                                                                              2000                  1999
                                                                        ----------------     -----------------
       <S>                                                              <C>                  <C>
       Trademarks                                                       $      1,748,578     $       1,743,154
       Trademark protection costs                                                154,208               154,208
       Deferred financing fees                                                   349,758                     -
       Registered brand name                                                     113,643                     -
       Capitalized development costs                                                   -               276,413
                                                                        ----------------     -----------------
              Total intangibles                                                2,366,187             2,173,775

       Less: Accumulated amortization of other                                 1,223,702             1,144,428
                                                                        ----------------     -----------------
       Other intangibles, net                                           $      1,142,485     $       1,029,347
                                                                        ================     =================
</TABLE>

Amortization of other intangible assets was $59,861 and $103,428 for the year
ended December 31, 2000 and 1999, respectively.

8.     Long-Term Debt and Notes Payable

Long-term debt and notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                                                     December 31,
                                                                                        --------------------------------------
                                                                                             2000                   1999
                                                                                        ---------------       ----------------
       <S>                                                                              <C>                   <C>
       Notes payable to Franchise Mortgage Acceptance Corporation ("FMAC"),
            interest rate of 8.52%, due in monthly installments totaling
            $145,936 including interest, through September 2013, collateralized
            by real property, equipment and inventory of certain of the
            Millennia Car Wash locations                                                $    13,626,777       $     14,190,326

       Notes payable to Bank One, Texas, NA, interest rate of prime
            plus .25% (9.75% at December 31, 2000), is due in monthly
            installments of $71,554 including interest, through
            November 2003, collateralized by real property and
            equipment of Eager Beaver Car Wash, Inc.                                          6,734,067                      -

       Notes payable to Bank One, Texas, NA, interest rates ranging
            from 8.9% to 9.75%, due in monthly installments totaling
            $57,735 per month including interest, through various
            dates ranging from June 2001 to January 2004,
            collateralized by real property and equipment of certain
            of Colonial Car Wash locations                                                    4,837,222              4,691,905

       Notes  payable to Bank One, Texas, NA which refinanced a note payable to
            Cornett Ltd. Partnership on February 17, 2000. The Bank One note,
            which provides for an interest rate of prime plus .25% (9.75% at
            December 31, 2000), is due in monthly installments of $49,699
            including interest, through February 2003,  collateralized  by real
            property and equipment of Genie                                                   4,793,714              4,750,000

       Notes payable to Western National Bank, interest rate of 8.75%, due in
            monthly installments of $20,988 including interest, through October
            2014, collateralized by real property and equipment in Lubbock, Texas             2,018,103              2,087,064

       Note payable to Transamerica Small Business Capital, Inc.,
            interest rate of prime plus 2.5% (12% at December 31, 2000), is
            due in monthly installments of $16,120 including interest, through
            December 2022, collateralized  by real property and equipment
            of the Blue Planet Car Wash.                                                      1,497,640                      -
</TABLE>

                                      F-15
<PAGE>

<TABLE>
<S>                                                                                       <C>
       Affiliate convertible notes payable to Bullseye Properties,
            interest at an interest rate of 7%, principal balance due on demand                        -              1,351,306

       Notes payable to Merriman Park J.V., interest rate of 9.5%, due in
            monthly installments of $11,605 including interest,
            through November 2011, collateralized by real property
            and equipment of certain of Colonial Car Wash locations                              943,732                995,842

       Note payable to Bank One Texas, NA, interest rate of prime plus .25%
            (9.75% at December 31, 2000), is due in monthly installments of
            $9,125 including interest, through July 2003, collateralized by real
            property and equipment of the Superstar Kyrene Car Wash                              843,810                      -

       Note payable to Southwest Bank, interest rate of 11.25%, due in monthly
            principal payments of $5,565 including interest, through October
            2001, collateralized by real property and equipment of certain of
            Colonial Car Wash locations                                                          391,754                441,571

       Note payable to Gabe and Alice Kirikian, interest rate of 7%
            due in quarterly payments of $25,850 plus interest, due in
            July 2004, collateralized by real property of Gabe's
            Plaza Car Wash                                                                       387,750                491,150

       Capitalized lease payable to Columbia Credit Company, interest rate of
            14.35%, due in monthly installments of $8,314 including interest,
            through May 2005, collateralized by certain equipment of Shammy Man                  326,089                373,460

       Note payable to Mitra II, interest payable at 8%, principal balance due
            April 2001, collateralized by certain real property in Arizona                       164,122                359,405

       Notes payable to various creditors, interest rates ranging from 5% to
            14.6%, payable in monthly installments totaling $5,252, through
            June 2003 collateralized by equipment of the Company                                  70,238                125,314

       Notes payable to individuals for consulting services, interest rates from
            8% to 12%, due on demand                                                              50,000                100,000

       Note payable - SouthTrust Bank, interest rate equal to the one, three or
            five year United States Treasury (as defined) plus 225 basis points;
            payable in equal monthly payments of principal and interest of
            $18,370 collateralized by car wash facilities of Eager Beaver                              -              2,155,637

       Notes payable to White Glove Partnership, interest rate of 8%, due in January 2000              -                345,000

       Note payable to Sovereign Bank, interest rate of prime plus one percent
            (9.5% at December 31, 1999), due on demand, secured by accounts
            receivable, inventory and fixed assets of ICS                                              -                150,000

       Note payable to related party, interest rate of 6%, due on demand                               -                122,500

       Notes payable to various financial institutions, interest rates ranging
            from 3.9% to 8.9%, payable in monthly installments totaling $2,159                         -                 33,797

       Interest only demand note payable to related party, interest rate of 7%                         -                 20,000
                                                                                         ---------------       ----------------
                                                                                              36,685,018             32,784,277

       Less: current portion                                                                   6,322,263              4,662,180
                                                                                         ---------------       ----------------
                                                                                         $    30,362,755       $     28,122,097
                                                                                         ===============       ================
</TABLE>

On November 28, 2000, the Company entered into a $6.7 million three year term
note (15 year amortization basis) with Bank One, Texas N.A. ("Bank One") to
refinance certain maturing debt including the $1.3 million convertible
promissory note to Bullseye Properties, the $2.1 million SouthTrust Bank note
maturing in May 2001, and the $1.0 million promissory note related to the Red
Baron Truck Wash acquisition. The term note also provided approximately $800,000
for the purchase of the leased Beneva Car Wash property and provided
approximately $1.4 million of additional funding, net of loan closing costs, for
capital improvements and working capital.

                                      F-16
<PAGE>

In August 1999, the Company assumed a 7% Convertible Promissory Note in the
amount of $1,348,379 in connection with an acquisition accounted for as a
pooling of interests. The note was payable in monthly installments of $12,276,
including interest, commencing in March 2000. The principal amount of the note,
including unpaid interest, was convertible into the Company's common stock at
the rate of $3.62 per share until August 2000 and at $3.875 per share
thereafter. The note contained a call provision which provided the holder the
right to call the note with a 90 day notice any time after April 15, 2000. The
promissory note was called by the holder and was due on November 28, 2000. The
promissory note was satisfied on March 7, 2001 with proceeds from the $6.7
million Bank One, Texas N.A. term note which were escrowed at December 31, 2000.

Additionally, in February 2000, the Company financed the remaining $4.35 million
balance of the promissory note related to the acquisition of Genie through a
$4.8 million three year term note (15 year amortization basis) with Bank One,
Texas N.A. The term note also provided approximately $400,000 of additional
funding, net of loan closing costs, for capital improvements and working
capital.

Several of the Company's debt agreements contain certain affirmative and
negative covenants and require the maintenance of certain levels of tangible net
worth and the maintenance of certain debt coverage ratios on an individual
subsidiary and consolidated level. All of these covenants were met as of
December 31, 2000, except for a debt coverage ratio related to the Bank One,
Texas N.A. term notes. The Company has entered into amendments to the term loan
agreements with Bank One and the Company is currently in compliance with the
covenants as amended.

Certain machinery and equipment notes payable discussed above have been
classified as capital lease obligations in the balance sheet.

Maturities of long-term debt are as follows: 2001 - $6,322,263; 2002 -
$1,507,845; 2003 - $13,008,858; 2004 - $1,201,180; 2005 - $1,101,099; and 2006
and thereafter - $13,543,773.

9.   Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                     ---------------------------------------
                                                           2000                   1999
                                                     ----------------       ----------------
<S>                                                  <C>                    <C>
           Accrued compensation                      $        540,642       $        539,315

           Accrued acquisition and merger
            transaction costs                                 125,262                378,519

           Property and other non-income taxes                643,972                654,371

           Other                                              693,494                770,094
                                                     ----------------       ----------------
                                                     $      2,003,370       $      2,342,299
                                                     ================       ================
</TABLE>

10.   Liabilities

In connection with certain acquisitions made by the Company during 1999, the
Company has accrued liabilities totaling $965,625 payable to sellers upon
satisfactory resolution of certain contingencies. These amounts have been
included in the purchase price allocations of the respective acquisitions.

11.    Stock Option Plans

During September 1993, the Company adopted the 1993 Stock Option Plan (the
Plan). The Plan provides for the issuance of up to 630,000 shares of common
stock upon exercise of the options. The Company has reserved 630,000 shares of
common stock to satisfy the requirements of the Plan. The options are
non-qualified stock options and are not transferable by the recipient. The Plan
is administered by the Compensation Committee of the Board of Directors, which
may grant options to employees, directors and consultants to the Company. The
term of each option may not exceed fifteen years from the date of grant. Options
are exercisable over either a 10 or 15 year period and exercise prices are not
less than the market value of the shares on the date of grant.

In December 1999, the Company's stockholders approved the 1999 Stock Option Plan
providing for the granting of incentive stock options or nonqualified stock
options to directors, officers, or employees of the Company. Under this plan,
15,000,000 shares are

                                      F-17
<PAGE>

reserved for issuance. Incentive stock options and nonqualified options have
terms which are determined by the Company's Compensation Committee ("the
Committee") with exercise prices not less than the market value of the shares on
the date of grant. The options generally expire ten years from the date of grant
and are exercisable based upon graduated vesting schedules as determined by the
Committee. As of December 31, 2000, 2,489,184 options have been granted under
the 1993 and 1999 Plan including 1,577,928 nonqualified stock options.

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation," requires use of option valuation
models that are not developed for use in valuing employee stock options. Under
APB 25, if the exercise price of the Company's employee stock options equals the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.

Pro forma information regarding net income and earnings per share is required by
Statement 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted average assumptions for grants
in 2000 and 1999; risk-free interest rate ranges of 5.11% to 6.64% in 2000 and
from 5.03% to 6.32% in 1999; dividend yield of 0%; expected volatility of the
market price of the Company's common stock of 91% in 2000 and 86% in 1999; and a
weighted-average expected life of the option of ten years.

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 stock price volatility. Because
the Company's employee 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 its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. Pro forma results are
not likely to be representative of the effects on reported or pro forma results
of operations for future years. The Company's pro forma information is as
follows:

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                                -----------------------------------
                                                      2000              1999
                                                -----------------------------------
<S>                                             <C>                <C>
          Pro forma net loss                    $   (2,342,579)    $   (3,089,856)

          Pro forma diluted loss per share      $        (0.09)    $        (0.23)
</TABLE>

       Activity with respect to these plans is as follows:

<TABLE>
<CAPTION>
                                                                    2000                              1999
                                                       --------------------------------  --------------------------------
                                                                           Weighted                          Weighted
                                                                            Average                           Average
                                                                           Exercise                          Exercise
                                                           Number            Price           Number            Price
                                                       --------------------------------  --------------------------------
<S>                                                    <C>               <C>             <C>               <C>
          Options outstanding beginning of period           2,721,708    $        5.26          501,000    $        1.37

          Options granted                                     330,325    $        2.45        2,840,918    $        5.37

          Options exercised                                   (43,750)   $        1.86         (439,710)   $        1.73

          Options repurchased                                      --               --              --     $          --

          Options canceled                                 (1,002,559)   $        7.73         (180,500)   $        4.69
                                                       --------------                    --------------
          Options outstanding end of period                 2,005,724    $        4.29        2,721,708    $        5.26
                                                       ==============                    ==============
          Options exercisable                                 970,915    $        4.42          398,876    $        4.33
                                                       ==============                    ==============
          Shares available for granting of options         13,140,816                        12,468,582
                                                       ==============                    ==============
</TABLE>

                                      F-18
<PAGE>

       Stock options outstanding at December 31, 2000 under both plans are
summarized as follows:

<TABLE>
<CAPTION>
                                                                Weighted Avg.            Weighted
                      Range of               Number               Remaining            Avg. Exercise
                   Exercise Prices         Outstanding         Contractual Life            Price
                   ---------------         -----------         ----------------        -------------
                   <S>                     <C>                 <C>                    <C>
                    $1.00 - $1.50            358,417                 3,017             $        1.31

                    $1.63 - $2.45              5,000                 2,078             $        1.63

                    $2.69 - $4.03            878,373                 3,009             $        2.96

                    $4.31 - $6.47            154,418                 3,309             $        5.04

                    $5.50 - $8.25            517,016                 3,079             $        7.28

                   $10.00 - $15.00            92,500                 3,060             $       10.68
                                          ----------
                                           2,005,724
                                          ==========
</TABLE>

In connection with the initial public offering of the Company's securities in
November 1993, the Company issued a total of 75,000 common stock purchase
warrants to the underwriters of the securities. These warrants expired in
November 1998.

In August 1994, the Company issued warrants to purchase 60,000 shares of Mace
Security International, Inc. common stock at $4.25 per share in connection with
the purchase of certain assets of a business. The warrants are exercisable over
a ten year period, expiring on August 24, 2004. On July 14, 1998, in connection
with the sale of the Law Enforcement division (Note 4), the Company issued to
the purchaser 300,000 warrants to purchase common stock of the Company at $1.25
per share. These warrants were fully exercised in March 1999.

The Company has a remaining total of 2,150,464 warrants to purchase common stock
outstanding at December 31, 2000, all of which are exercisable. In 1999, the
Company issued warrants to purchase a total of 2,656,500 shares of the Company's
stock at a weighted average exercise price of $2.11 per share in connection with
the purchase of certain businesses and to a director. Warrants exercised in 1999
totaled 866,036 at a weighted average exercise price of $1.64 per share. The
terms of the warrants have been established by the Board of Directors. The
warrants are exercisable at any time through August 2, 2009 and have an exercise
price ranging from $1.375 to $9.25 per share.

During the exercise period, the Company will reserve a sufficient number of
shares of its common stock to provide for the exercise of the rights represented
by option and warrant holders.

12.    Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets at December 31, 2000 and 1999
are as follows:

<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                              ----------------------------------------
                                                                                     2000                  1999
                                                                              ------------------    ------------------
<S>                                                                           <C>                   <C>
Deferred tax liabilities:
     Property, equipment and intangibles..........................            $       (3,232,125)   $       (2,547,637)
     Other, net...................................................                       (60,322)                   --
                                                                              ------------------    ------------------
          Total deferred tax liabilities..........................                    (3,292,447)           (2,547,637)
Deferred tax assets:
     Allowance for doubtful accounts..............................                        36,665                38,695
     Inventories..................................................                        50,981                61,549
     Net operating loss carryforwards.............................                     3,414,955             2,543,447
     Deferred revenue.............................................                       125,371                84,405
     Compensation and related transition costs....................                       202,453               195,478
     Other, net...................................................                       153,475                91,143
                                                                              ------------------    ------------------
          Total deferred tax assets...............................                     3,983,900             3,014,717
Valuation allowance for deferred tax assets.......................                      (845,351)             (915,000)
                                                                              ------------------    ------------------
Deferred tax assets after valuation allowance.....................                     3,138,549             2,099,717
                                                                              ------------------    ------------------
Net deferred tax liabilities......................................            $         (153,898)   $         (447,920)
                                                                              ==================    ==================
</TABLE>

                                      F-19
<PAGE>

At December 31, 2000, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $9.4 million that begin to expire
during the year ended December 31, 2008, if unused. A valuation allowance has
been provided to reduce the deferred tax assets to a level which, more likely
than not, will be realized.

     The components of income tax benefit are:

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                           ---------------------------------
                                                                                2000               1999
                                                                           --------------     --------------
                <S>                                                        <C>                <C>
                Current (principally state taxes)...............           $      159,857     $       97,653
                Deferred........................................                 (225,857)          (716,172)
                                                                           --------------     --------------
                Total income tax benefit........................           $      (66,000)    $     (618,519)
                                                                           ==============     ==============
</TABLE>

     The significant components of deferred income tax benefit attributed to
     loss from continuing operations for the years ended December 31, 2000 and
     1999 are as follows:

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                            --------------------------------
                                                                                2000                1999
                                                                            ------------       -------------
                <S>                                                         <C>                <C>
                Deferred tax expense...........................             $    875,651       $     439,842
                Loss carry forward.............................                 (871,508)           (903,805)
                Valuation allowance for deferred tax assets....                 (230,000)           (252,209)
                                                                            ------------       -------------

                                                                            $   (225,857)      $    (716,172)
                                                                            ============       =============
</TABLE>

     A reconciliation of income tax computed at the U.S. federal statutory tax
     rates to the provision for income taxes is as follows:

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                          -----------------------------------
                                                                               2000                 1999
                                                                          ---------------      --------------
                <S>                                                       <C>                  <C>
                Tax at U.S. federal statutory rate.............           $       (72,422)     $     (677,022)
                S Corporation income prior to pooling date.....                         -            (225,290)
                State taxes, net of federal benefit............                    93,039              30,509
                Nondeductible costs and other acquisition
                     accounting adjustments....................                   151,657             285,220
                S Corporation status termination...............                         -             121,648
                Valuation allowance for deferred tax assets....                  (230,000)           (192,259)
                Other..........................................                    (8,274)             38,675
                                                                          ---------------      --------------
                Provision for income taxes                                $       (66,000)     $     (618,519)
                                                                          ===============      ==============
</TABLE>

                                      F-20
<PAGE>

13.      Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                          ------------------------------------

                                                                               2000                 1999
                                                                          ---------------       --------------
                <S>                                                       <C>                   <C>
                Numerator:
                Loss from continuing operations                           $      (140,921)      $   (1,351,494)
                Income from discontinued operations                               458,980               91,379
                                                                          ---------------       --------------
                Net income (loss)                                         $       318,059       $   (1,260,115)
                                                                          ===============       ==============

                Denominator:
                Denominator for basic income (loss)
                     per share - weighted average shares                       24,476,842           13,159,154
                Dilutive effect of options and warrants                                 -                    -
                                                                          ---------------       --------------
                Denominator for diluted income (loss)
                     per share - weighted average shares                       24,476,842           13,159,154
                                                                          ===============       ==============

                Basic and diluted income (loss) per share:
                     From continuing operations                           $         (0.01)      $        (0.10)
                     From discontinued operations                                    0.02                    -
                                                                          ---------------       --------------
                     Total                                                $          0.01       $        (0.10)
                                                                          ===============       ==============
</TABLE>

The Company's options and warrants outstanding at December 31, 2000 and 1999
have not been included in the calculation of diluted earnings per share because
they are anti-dilutive.

14.      Concentration of Credit Risk

The Company maintains its cash accounts in high quality financial institutions.
At times, these balances may exceed insured amounts.

15.      Commitments and Contingencies

The Company is obligated under various operating leases, primarily for certain
equipment, vehicles, and real estate. Certain of these leases contain purchase
options, renewal provisions, and contingent rentals for proportionate share of
taxes, utilities, insurance, and annual cost of living increases. Future minimum
lease payments under operating leases with initial or remaining noncancellable
lease terms in excess of one year as of December 31, 2000 are as follows: 2001 -
$1,505,284; 2002 - $1,421,463; 2003 - $1,339,953; 2004 - $1,308,248; 2005 -
$852,346; and 2006 and thereafter - $2,856,521. Rental expense under these
leases was $1,599,601 and $768,629 for the years ended December 31, 2000 and
1999, respectively.

In 1999, the Company had entered into month to month and long-term sublease
agreements with tenants of their operating facility in Bennington, Vermont,
including a related party. These agreements were assigned to another party in
1999. Total sublease rental income was $133,842 in 1999.

The Company was a party to a real estate purchase agreement with the Vermont
Economic Development Authority (VEDA) for the purchase of the Center and North
Wings of its security products office and manufacturing operation, after the
satisfaction or waiver of certain contingencies by VEDA. The Company previously
deposited $75,000 of the total cash portion into an escrow account as required
by the agreement. The Company elected not to purchase the building and leased
the premises from VEDA through November 15, 1999 for $4,000 per month, together
with taxes, insurance and utilities. The Company assigned to Vermont Mill
Properties, Inc. ("VMP"), an entity controlled by Jon Goodrich, all of its
rights and obligations under the VEDA Agreement including certain leasehold
improvements abandoned by the Company. Effective November 15, 1999, the Company
entered into a lease with VMP to continue to utilize space for its security
products office and manufacturing operation for $6,667 per month. The lease is
for a term of five years and provides for renewal options. Rent expense under
this lease was $10,000 in 1999.

                                      F-21
<PAGE>

The Company leases a portion of the building space at several of its car wash
facilities either on a month-to-month basis or under cancellable leases. During
fiscal 2000 and 1999 revenues of approximately $92,000 and $61,000, respectively
were recognized under these leasing arrangements. These amounts are classified
as other income in the accompanying statements of income.

The Company is subject to federal and state environmental regulations, including
rules relating to air and water pollution and the storage and disposal of oil,
other chemicals, and waste. The Company believes that it complies with all
applicable laws relating to its business.

Certain of the Company's executive officers have entered into employment
agreements whereby they will be entitled to immediate vesting provisions of
issued options should the officer be terminated upon a change in control of the
Company. Additionally, the employment agreement of the Company's Chief Executive
Officer, Louis D. Paolino, Jr., entitles Mr. Paolino to receive a fee of
$7,000,000 upon termination of employment under certain conditions including
upon termination as a result of a change in control.

The Company is a party to various legal proceedings related to its normal
business activities. In the opinion of the Company's management, none of these
proceedings are material in relation to the Company's results of operations,
liquidity, cash flows or financial condition.

16.      Employee Benefit Plans

Two subsidiaries of the Company maintain voluntary 401(k) plans covering
substantially all of their respective employees. Under one of the plans,
employees may contribute from 1% to 20% of their regular wages, up to the limit
permitted by the Internal Revenue Service. The Company matches 25% of each
dollar contributed by employees up to 4% of their wages. The cost of the plan
amounted to $0 and $15,000 in 2000 and 1999, respectively.

Under the second plan, employees may contribute from 1% to 25%. The Company
match for this plan is discretionary. The cost of the plan amounted to
approximately $3,000 and $2,000 in 2000 and 1999, respectively.

                                      F-22
<PAGE>

17.      Operating Agreements

During the years ended December 31, 2000 and 1999, the Company managed several
car wash locations under operating agreements, under which the Company was
entitled to all profits generated from the operation of those locations.
Operating agreements generally arise from pending acquisitions that will be
closed pending completion of certain conditions. The pretax income earned under
these operating agreements is presented in the accompanying statements of
operations as revenue from operating agreements net of all operating expenses.
Additionally, the Company is currently being paid $20,000 per month under an
agreement which allows Mark Sport, Inc., an entity controlled by Jon E.
Goodrich, a director of the Company, to operate the Company's Security Products
Division.

The results of operations subject to operating agreements were as follows:

<TABLE>
<CAPTION>
                                                                      Year Ended          Year Ended
                                                                     December 31,        December 31,
                                                                         2000                1999
                                                                    --------------       -------------
                <S>                                                 <C>                  <C>
                Revenues
                Car wash and detailing services                     $      803,900       $   8,421,825
                Lube and other automotive services                               -             641,296
                Fuel and merchandise sales                                  53,091           1,038,746
                Security products operating lease payments                 220,000                   -
                                                                    --------------       -------------
                                                                         1,076,991          10,101,867
                Cost of revenues
                Car wash and detailing services                            727,125           5,816,466
                Lube and other automotive services                               -             595,356
                Fuel and merchandise sales                                  37,520             911,139
                                                                    --------------       -------------
                                                                           764,645           7,322,961

                Selling, general, and administrative expenses               52,435             901,883
                Depreciation and amortization                                  102             722,064
                                                                    --------------       -------------
                Operating income                                           259,809           1,154,959

                Interest expense, net                                            -            (790,331)
                Other income                                                   947              97,954
                                                                    --------------       -------------
                Income earned under operating agreements            $      260,756       $     462,582
                                                                    ==============       =============
</TABLE>

18.      Restructuring, Write-downs and Change in Control Charges

In conjunction with the Company's 1999 change in control, the Company
restructured certain of its security products operations, abandoned certain
operations and assets, and incurred certain other change in control related
costs. A restructuring, asset write-down, and change in control charge totaling
$1,519,000 was recorded in the second quarter ending June 30, 1999. Of this
charge, $1,178,000 is non-cash in nature consisting of a $218,000 write-off of
certain assets as a result of management abandoning certain product lines within
the Company's security products segment; a $373,000 write-off of leasehold
improvements related to the Company's plan to abandon a portion of its currently
leased facilities in Vermont; and a $587,000 non-cash compensation charge
relating to the vesting of variable options to certain previous directors of the
Company upon the Company's recent change in control. The remaining charge of
approximately $341,000 includes certain severance costs accrued as well as
legal, accounting and other transaction costs related to the Company's change in
control. Additionally, in 2000, the Company wrote down the value of its Berlin,
New Jersey facility by $137,904 to reflect the sales price of those assets in
January 2001.

19.      Costs of Terminated Acquisitions

The Company's policy is to charge as an expense any previously capitalized
expenditures relating to proposed acquisitions that in management's current
opinion will not be consummated. During the quarter ending June 30, 2000,
management decided to terminate certain pending acquisitions the Company
believed would not be consummated as a result of due diligence findings or the
inability of the seller to meet certain terms and conditions precedent to
closing. Costs of previously capitalized expenditures principally relate to the
termination of the Planet Truck Wash acquisition and acquisition related
expenses associated with the proposed Wash Depot

                                      F-23
<PAGE>

Holdings, Inc. ("Wash Depot") merger. The Company terminated the Wash Depot
Merger Agreement on September 30, 2000 as a result of certain conditions
precedent to closing not being satisfied by Wash Depot. Of the $580,000 in costs
of terminated acquisitions, approximately $209,000 represented unrecoverable
cash and stock deposits and approximately $371,000 represented external
incremental transaction costs including legal, accounting, consulting and due
diligence costs.

20.      Related Party Transactions

In August 1999, Mace entered into a month-to-month lease arrangement with
Bluepointe, Inc., a corporation controlled by Louis D. Paolino, Jr., Mace's
Chairman, President and Chief Executive Officer, for Mace's executive offices in
Mt. Laurel, New Jersey. The lease arrangement provided for monthly rental
payments of $10,000. This monthly lease payment was considered to be more
favorable than could be obtained on the open market for similar facilities.
Effective August 1, 2000, after a survey of local real estate market pricing and
upon the approval of the Audit Committee, Mace entered into a five-year lease
with Bluepointe which provides for an initial monthly rental payment of $15,962,
which increases by 5% per year in the succeeding years of the lease. Mace
believes that the terms of this lease (based on an annual rate of $19.00 per
square foot ) are competitive when compared to similar facilities in the Mt.
Laurel, New Jersey area.

Robert M. Kramer, Mace's General Counsel, Executive Vice President and
Secretary, is engaged in the practice of law through Robert M. Kramer &
Associates, P.C., a professional corporation owned by Mr. Kramer, which has
rendered legal services to Mace since April 1999. Mace paid such corporation
approximately $163,000 and $145,000 during the fiscal years ended December 31,
1999 and 2000, respectively.

Mace purchased car wash parts, equipment and related services from Sonny's
Enterprises, Inc., a car wash parts and equipment company owned by Paul G.
Fazio, the brother of Michael Fazio, Mace's former Vice President - Operations,
totaling $391,000 in fiscal year 1999 and approximately $558,000 in fiscal year
2000. Mace contracted with Sonny's Enterprises based on the quality of parts,
equipment and services offered by Sonny's Enterprises and the competitive prices
that Sonny's Enterprises offered for such parts, equipment and services.

Mace purchased charter airline services from Air Eastern, Inc., a charter
airline company owned by Louis D. Paolino, Jr., Mace's Chairman of the Board,
Chief Executive Officer and President, totaling approximately $50,000 in fiscal
1999 and $84,000 in fiscal 2000. Mace believes that the rates charged are
competitive when compared with similar services provided by independent airline
charter companies.

In February 2000, Mace entered into a Management Agreement with Mark Sport, Inc.
("Mark Sport"), a Vermont corporation. Mark Sport is controlled by Jon E.
Goodrich, a director of the Company. The Management Agreement entitles Mark
Sport to operate Mace's Security Products Division and receive all profits or
losses for a seven-month term beginning January 1, 2000. The Agreement was
extended for two six-month periods through July 31, 2001, as provided for in the
original Management Agreement. In exchange, the Agreement requires Mark Sport to
pay the Company $20,000 per month beginning February 2000 and continuing through
the term of the Management Agreement as extended. Additionally, Mark Sport must
pay the Company an amount equal to the amortization and depreciation on the
assets of the division at the end of the term of the agreement. During the term
of the Agreement, Mark Sport must operate the division in substantially the same
manner as it has been operated prior to the Management Agreement. Mace's
Security Products Division leases manufacturing and office space under a
five-year lease with Vermont Mill Properties, Inc. ("Vermont Mill"), which
provides for monthly lease payments of $6,667 beginning November 15, 1999.
Vermont Mill is also controlled by Jon E. Goodrich.

The Company believes that each of the transactions described above was entered
into on an arm's-length basis in the ordinary course of the Company's business
and on the terms no less favorable to the Company than could be obtained from
unaffiliated third parties.

21.      Segment Reporting

The Company currently operates in one business segment: the Car Care segment,
supplying complete car and truck care services (including wash, detailing, lube,
and minor repairs, fuel and merchandise sales). During 1999 the Company also
operated in two additional business segments: the Security Products sales
segment, producing and marketing retail consumer safety and security products,
and the Computer Products and Services segment, developing software and
manufacturing products and hardware for management and control of the car care
industry.

On June 2, 2000 the Company sold its computer products and services subsidiary.
Accordingly, the operating results for this segment have been segregated from
continuing operations and are being reported as discontinued operations.

                                      F-24
<PAGE>

The Company evaluates performances and allocates resources based on operating
income of each reportable segment rather than at the operating unit level. The
Company defines operating income as revenues less cost of revenues, selling,
general and administrative expense, and depreciation and amortization expense.
The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies (see Note 2). There
is no intercompany profit or loss on intersegment sales.

The Company's reportable segments are business units that offer different
services and products. The reportable segments are each managed separately
because they provide distinct services or produce and distribute distinct
products through different processes.

     Selected financial information for each reportable segment is as follows:

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                        ---------------------------------------
                                                              2000                  1999
                                                        -----------------      ---------------
<S>                                                     <C>                    <C>
Revenues:
     Car care - external customers                      $      47,783,224      $    22,320,480
     Security products - external customers                             -            3,435,312
     Security products - operating agreement                      220,000                    -
     Security products - intersegment revenues                          -               11,620
     Elimination of intersegment revenues                               -              (11,620)
                                                        -----------------      ---------------
                                                        $      48,003,224      $    25,755,792
                                                        =================      ===============

Operating income:
     Car care                                           $       2,896,051      $     3,194,088
     Security products - operating agreement                      220,000             (942,002)
                                                        -----------------      ---------------
                                                        $       3,116,051      $     2,252,086
                                                        =================      ===============

Assets:
     Car care                                           $     102,615,891      $    93,283,956
     Security products                                          3,515,537            4,353,734
     Computer products and services                                     -              477,666
                                                        -----------------      ---------------
                                                        $     106,131,428      $    98,115,356
                                                        =================      ===============

Capital expenditures:
     Car care                                           $       2,154,247      $     5,266,537
     Security products                                             14,813               88,463
                                                        -----------------      ---------------
                                                        $       2,169,060      $     5,355,000
                                                        =================      ===============

Depreciation and amortization:
     Car care                                           $       2,467,217      $       834,298
     Security products                                                  -              261,219
                                                        -----------------      ---------------
                                                        $       2,467,217      $     1,095,517
                                                        =================      ===============
</TABLE>

A reconciliation of operating income by reportable segment to total reported
operating income (loss) is as follows:

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                        --------------------------------------
                                                                              2000                  1999
                                                                        ----------------      ----------------
                     <S>                                                <C>                   <C>
                     Total operating income for
                         reportable segments                            $      3,116,051      $      2,252,086
                     Costs of terminated acquisitions                            580,000                     -
                     Merger costs                                                      -             1,875,000
                     Restructuring, asset write-downs
                         and change in control charges                           137,904             1,519,000
                                                                        ----------------      ----------------
                     Total consolidated operating income (loss)         $      2,398,147      $     (1,141,914)
                                                                        ================      ================
</TABLE>

                                      F-25
<PAGE>

                                 EXHIBIT INDEX



Exhibit
No.               Description
---               -----------
3.5               Certificate of Amendment of Amended and Restated Certificate
                  of Incorporation of Mace Security International, Inc.

10.130            Loan Agreement and Promissory Note dated November 28, 2000,
                  between the Company, its subsidiary Eager Beaver Car Wash,
                  Inc. and Bank One, Texas, N.A. in the amount of $6,754,400.

10.131            Lease Agreement dated August 1, 2000 among Mace Security
                  International, Inc. and Bluepointe, Inc.

10.132            Amendment dated March 13, 2001, to Business Loan Agreement
                  between the Company, its subsidiary Colonial Full Service Car
                  Wash, Inc., and Bank One, Texas, N.A. (pursuant to instruction
                  2 to Item 601 of Regulation S-B, two additional amendments
                  which are substantially identical in all material respects
                  except as to the borrower being Eager Beaver Car Wash, Inc.
                  and Mace Car Wash- Arizona, Inc. are not being filed).

11                Statement Re: Computation of Per Share Earnings

21                Subsidiaries of the Company

23.1              Consent of Grant Thornton LLP

                                      F-26