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


                                    FORM 1O-Q



     [X]  Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities
Exchange  Act of 1934 for the  quarter  ended  June 30,  1998 or 

     [ ]  Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
Exchange Act of 1934


                          Commission File Number 1-8138


                            Alarmguard Holdings, Inc.

           Incorporated In Delaware IRS Identification No: 33-0318116

Principal Executive Offices:            Telephone (203) 795-9000
         125 Frontage Road
         Orange, CT 06477


     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 __

     The number of shares of Alarmguard  Holdings,  Inc.'s common stock,  $.0001
par value, outstanding as of August 10, 1998 was 5,593,948.

<PAGE>


                                            PART I. FINANCIAL INFORMATION


Item 1.           Financial Statements
 
ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands)

                                             June 30              December 31
                                               1998                   1997
                                        -----------------  ---------------------
                                           (unaudited)
  ASSETS:
  Current assets:
    Cash and cash equivalents                 $8,844                   $698
    Restricted cash                            2,608                  1,931
    Accounts receivable, net                   6,839                  5,558
    Inventories                                4,273                  3,065
    Other current assets                         351                    343
                                        -----------------  ---------------------
  Total current assets                        22,915                 11,595

  Property and equipment, net                  3,578                  2,133
  Customer installation costs, net            10,115                  8,868
  Customer contracts and intangibles, net     79,406                 43,027
  Other investments                            2,097                  2,245
  Other assets                                 1,730                  1,982
                                        -----------------  ---------------------
  Total assets                              $119,841                $69,850
                                        =================  =====================
<PAGE>


ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Balance Sheets (continued)
(In thousands)
<TABLE>
<CAPTION>

                                                                          June 30              December 31
                                                                            1998                   1997
                                                                 ---------------------  ---------------------
                                                                       (unaudited)
 <S>                                                                      <C>                    <C>   
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
 Current liabilities:
   Accounts payable                                                        $2,457                 $2,659
   Accrued expenses                                                         7,173                  5,675
   Current portion of notes payable                                           505                  2,462
   Deferred revenue                                                         8,901                  6,231
   Other current liabilities                                                5,496                  4,061
                                                                 ---------------------  ---------------------

 Total current liabilities                                                 24,532                 21,088

 Notes payable, less current portion                                          380                    549
 Credit facility                                                           64,700                 46,700
 Subordinated debt                                                          3,900                  4,389
 Other liabilities                                                            231                    321

 Cumulative Convertible Preferred Stock,
       $1,000 par value:
   Series A, 5% dividends, 35,700 shares issued and outstanding
       at June 30, 1998                                                    33,931                      -
   Series B, 5,000 shares issued and outstanding at June 30,
       1998                                                                 4,752                      -

 Stockholders' deficiency:
   Common Stock, $.0001 par value, 25,000,000 shares
       authorized, 5,593,948 and 5,593,396 shares issued and
       outstanding at June 30, 1998 and December 31, 1997,
       respectively                                                             1                      1
   Additional paid in capital                                              35,021                 35,286
   Accumulated deficit                                                    (47,607)               (38,484)
                                                                 ---------------------  ---------------------
        Total stockholders' deficiency                                    (12,585)                (3,197)
                                                                 ---------------------  ---------------------
        Total liabilities and stockholders' deficiency                    119,841                $69,850
                                                                 =====================  =====================
 
         See accompanying notes to condensed consolidated financial statements.
</TABLE>

<PAGE>

ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)

<TABLE>
<CAPTION>

                                                              Three Months                        Six Months
                                                             Ended June 30                       Ended June 30
                                                   ----------------------------------- -----------------------------------
                                                           1998               1997              1998               1997
                                                   ----------------   ---------------- ------------------  ---------------
<S>                                                      <C>                 <C>             <C>                <C>    
Revenue                                                  $13,125             $8,387          $24,038            $14,984
Cost of revenue                                            5,764              3,568           10,772              6,241
                                                   ----------------   ---------------- ------------------  ---------------
Gross profit                                               7,361              4,819           13,266              8,743

  Sales and marketing expense                              1,511              1,179            2,779              2,195
  General and administrative expense                       3,824              2,817            6,996              5,004
  Acquisition integration expense                            379                  -              707                  -
  Amortization and depreciation expense                    4,533              3,093            8,057              5,464
                                                   ----------------   ---------------- ------------------  ---------------
 Total operating expense                                   10,247              7,089           18,539             12,663
                                                   ----------------   ---------------- ------------------  ---------------
Operating loss                                            (2,886)            (2,270)          (5,273)            (3,920)

Other income (expense):
  Interest expense, net                                   (1,665)            (1,151)          (3,100)            (1,995)
  Other, net                                                 116                (12)             151                (12)
                                                   ----------------   ---------------- ------------------  ---------------
Net loss before extraordinary item                        (4,435)            (3,433)          (8,222)            (5,927)

Extraordinary loss from early extinguishment of
   debt                                                        -               (813)               -               (813)
                                                   ----------------   ---------------- ------------------  ---------------
Net loss                                                  (4,435)            (4,246)          (8,222)            (6,740)

Dividend requirement on preferred stock                     (555)               (29)            (901)              (200)
                                                   ----------------   ---------------- ------------------  ---------------
Loss applicable to common shares                         $(4,990)           $(4,275)         $(9,123)           $(6,940)
                                                   ================   ================ ==================  ===============
                                                   
Basic and diluted loss per common share:
  Net loss before extraordinary item                     $(0.79)            $(0.71)          $(1.47)            $(1.55)
  Extraordinary loss                                       -                 (0.17)            -                 (0.21)
                                                   ----------------   ---------------- ------------------  ---------------
  Net loss                                                (0.79)             (0.88)           (1.47)             (1.76)
  Loss from dividend requirement                          (0.10)             (0.01)           (0.16)             (0.05)
                                                   ----------------   ---------------- ------------------  ---------------
    Net loss per common share                            $(0.89)            $(0.89)          $(1.63)            $(1.81)
                                                   ================   ================ ==================  ===============
                                                  

Weighted average number of basic and diluted
   common shares                                           5,594              4,802            5,594              3,840
                                                   ================   ================ ==================  ===============
</TABLE>
 
         See accompanying notes to condensed consolidated financial statements.

<PAGE>

ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
<TABLE>
<CAPTION>

                                                                         Six Months Ended June 30
                                                                  -------------------------------------
                                                                         1998                1997
                                                                  -------------------------------------
<S>                                                                    <C>                <C>          
 Operating activities:

 Net loss                                                              $(8,222)           $(6,740)
 Adjustments to reconcile net loss to net cash used in
     operating activities:
     Amortization and depreciation                                       8,057              5,464
     Amortization of sub debt warrants                                     211
     Customer installation costs incurred                               (2,965)            (2,209)
     Changes in operating assets and liabilities, net of
       effects of acquisitions                                             724                863
                                                                 -----------------  ------------------
 Net cash used in operating activities                                  (2,195)            (2,622)

 Investing activities:
   Acquisition of businesses, net of cash acquired                     (39,647)            (4,645)
   Increase in restricted cash                                            (677)            (1,931)
   Purchases of property and equipment                                  (1,105)              (149)
                                                                 -----------------  ------------------
 Net cash used in investing activities                                 (41,429)            (6,725)

 Financing activities:
   Net proceeds from issuance of preferred stock                        37,800                  -
   Proceeds from term loan                                              18,800             44,200
   Proceeds from issuance of subordinated debt                               -              4,300
   Payments of term loan                                                  (800)           (31,836)
   Payments of subordinated debt                                             -             (4,951)
   Payment of cash dividend on preferred stock                            (718)                 -
   Financing fees paid                                                    (439)            (1,040)
   Payments of other notes payable and capital leases                   (2,873)            (1,139)
                                                                 -----------------  ------------------
 Net cash provided by financing activities                              51,770              9,534

 Increase in cash and cash equivalents                                   8,146                187
 Cash and cash equivalents at beginning of period                          698                230
                                                                 -----------------  ------------------
 Cash and cash equivalents at end of period                             $8,844               $417
                                                                 =================  ==================

 Cash paid for interest                                                 $3,049             $1,952
                                                                 =================  ==================
</TABLE>

   See accompanying notes to condensed consolidated financial statements.

<PAGE>

ALARMGUARD HOLDINGS, INC.
Notes To Condensed Consolidated Financial Statements
(Unaudited)

 1.       Basis of Presentation 

    Alarmguard   Holdings,   Inc.   ("Alarmguard"  or  the  "Company")  is  the
successor-in-interest  to Security  Systems  Holdings,  Inc.  ("SSH") and Triton
Group Ltd.  ("Triton"),  following  the merger  ("Merger")  of SSH and Triton on
April 15, 1997.  Alarmguard,  through its wholly-owned  subsidiaries,  sells and
installs  burglar and fire alarm  systems and provides  monitoring  and security
system repair and maintenance services to homeowners and businesses, principally
in the Northeast and Mid-Atlantic regions of the United States.

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information and Article 10 of Regulation S-X.  Accordingly,  they do not include
all of the  information  and notes  required by  generally  accepted  accounting
principles for complete financial statements. In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have been included.  Operating results for the three and six
month periods ended June 30, 1998 are not necessarily  indicative of the results
that may be expected  for the year  ending  December  31,  1998.  The  condensed
consolidated  balance  sheet as of December  31, 1997 has been  derived from the
audited  consolidated  balance  sheet as of that  date.  The  unaudited  interim
financial  information  of  Alarmguard  should be read in  conjunction  with the
audited  consolidated  financial statements of Alarmguard as of and for the year
ended  December 31, 1997 included in the  Company's  Form 10-K for the year then
ended.

2.       Acquisitions

     On February 2, 1998, Alarmguard purchased all of the issued and outstanding
shares of capital  stock of Detect,  Inc.  ("Pelletier"),  a company  located in
Danbury, Connecticut, with approximately 7,200 subscribers and Monthly Recurring
Revenue  ("MRR") of  approximately  $0.2 million,  for a total purchase price of
approximately $10.4 million.  The total purchase price consisted of $9.5 million
paid at  closing,  the  assumption  of $0.5  million of notes  payable  and $0.4
million  representing an amount due to the sellers of Pelletier based on certain
post closing  adjustments.  The acquisition was accounted for under the purchase
method of accounting  and,  accordingly,  the purchase  price was  preliminarily
allocated  to the  assets  acquired  and  liabilities  assumed  based  on  their
estimated  fair  values  at the date of  acquisition.  In  connection  with this
acquisition,  the Company received current assets of $0.6 million,  property and
equipment  of $0.2  million,  customer  contracts  of $10.8  million  and  other
intangibles of $0.4 million and assumed current liabilities of $1.6 million.

     During  the first six  months of 1998,  Alarmguard  also  acquired  certain
operating assets of Security Systems, Inc. ("Sentry"), of Malden,  Massachusetts
and four additional  companies in the security alarm installation and monitoring
business for an aggregate of $25.8 million in cash and $3.3 million representing
an amount due to the sellers  based on certain  post  closing  adjustments.  The
acquisitions added  approximately  $0.6 million of MRR and approximately  22,000
customers.  The  acquisitions  were  accounted for under the purchase  method of
accounting and, accordingly, the purchase price has been preliminarily allocated
to the assets  acquired and  liabilities  assumed based on their  estimated fair
values  at  the  respective  dates  of  acquisition.   In  connection  with  the
acquisitions,  Alarmguard  received  current  assets of $1.3  million,  customer
contracts of $28.8 million,  other intangibles of $0.5 million, and property and
equipment of $0.6 million and assumed current liabilities of $2.1 million.
 
     The  following  unaudited  pro forma  information  shows the results of the
Company's operations as though the acquisitions consummated during the first six
months of 1998 had been made as of January 1, l998 and January 1, 1997,  and the
acquisitions  consummated  during  the  fiscal  year of 1997 had been made as of
January 1, 1997 (in thousands, except per share data):

<PAGE>

<TABLE>
<CAPTION>

                                                                    For The Six Months Ended June 30,
                                                                  ---------------------------------------
                                                                        1998                  1997
                                                                  ------------------     ----------------
 <S>                                                                     <C>                 <C>          
        Pro forma revenue                                                $26,168             $24,739
                                                                  ==================     ================
 
        Pro forma loss before extraordinary item                        $(10,448)           $(14,747)
                                                                  ==================     ================
        Pro forma net loss                                              $(10,448)           $(15,560)
                                                                  ==================     ================
        Pro forma basic and diluted net loss per share before
            extraordinary item                                           $(1.87)             $(2.64)
                                                                  ==================     ================
        Pro forma basic and diluted net loss per share                   $(1.87)             $(2.78)
                                                                  ==================     ================
        Shares used in computations                                        5,594               5,594
                                                                  ==================     ================
</TABLE>
  
   The pro forma results are not necessarily  indicative of the actual results
of operations that would have been obtained had the acquisitions  taken place at
the  beginning  of the  respective  periods or the results that may occur in the
future and do not give effect to cost  savings  which are expected to occur as a
result of the consolidation of the acquired companies.

3.       Inventories

     Inventories  consist principally of alarm components and supplies which are
carried at the lower of cost or market value.

4.       Customer Installation Costs

     During the six months  ended June 30,  1998 and 1997,  Alarmguard  incurred
approximately  $3.0  million  and  $2.2  million,   respectively,   of  customer
installation  costs  primarily  attributable to the operations of its dealer and
direct  marketing  programs.  Alarmguard  added  approximately  5,500  and 3,200
customers, respectively, through its dealer and direct marketing programs during
these periods.

<PAGE>

5.       Customer Contracts and Intangibles

     Customer  contracts and  intangibles (at cost) consist of the following (in
thousands): 

                                 June 30, 1998             December 31, 1997

                              --------------------    -------------------------
 Acquired customer contracts       $91,071                       $49,807
 Covenants not to compete           13,754                        12,944
 Goodwill                            2,493                         2,493
                              --------------------    -------------------------
                                   107,318                        65,244
 Less accumulated amortization     (27,912)                      (22,217)
                              --------------------    -------------------------
                                   $79,406                       $43,027
                              ====================    =========================

6.       Other Investments
     Other  investments  are  comprised of certain  assets held by Triton at the
time of the Merger in April 1997,  which are in the process of being  liquidated
(in thousands).


                                      June 30, 1998         December 31, 1997
                                  -------------------     ---------------------
 Ridgewood Hotels, Inc. Series A 
    Preferred Stock                    $2,009                      $2,009
 Other                                     88                         236
                                  -------------------     ----------------------
                                       $2,097                      $2,245
                                  ===================     ======================
 
     Alarmguard  owns  450,000  shares of Series A Preferred  Stock of Ridgewood
Hotels,  Inc.  ("Ridgewood")  with a face  value  of  $3.6  million.  Alarmguard
currently  receives a 10% quarterly  dividend of $90,000 on this  investment and
the  preferred  stock is  redeemable  at any time by Ridgewood at its face value
plus accrued dividends.  The preferred stock is convertible by Alarmguard at any
time into 1,350,000 Ridgewood common shares, which would represent approximately
47% of the  Ridgewood  common  shares then  outstanding,  or 40% fully  diluted.
Alarmguard  accounts  for the  Ridgewood  investment  using  the cost  method of
accounting.

7.       Long Term Debt

     On  February  3, 1998,  in  connection  with the  offering  of  Convertible
Preferred Stock (see Note 10), Alarmguard, Inc. (the "Borrower"), a wholly owned
subsidiary of the Company,  increased the  availability  under the Third Amended
and Restated Term Loan and Acquisition  Credit Agreement (the "Credit Facility")
from $60 million to $90 million.  The Credit Facility provides for interest only
advances until January 31, 2000 and  amortization  thereafter.  Borrowings under
the Credit  Facility  are secured by  substantially  all of the  properties  and
assets of the  Borrower  including  accounts  receivable,  inventory,  leasehold
interests,  customer  contracts and the capital stock of all of the subsidiaries
of the Company.  Interest on the Credit  Facility  accrues and is payable at the
option  of the  Borrower  at  either  prime  plus  1-1/2%  or LIBOR  plus  2.75%
(approximately  8.66% at June 30, 1998). The Company has fixed the interest rate
on $40.0 million of its outstanding  borrowings at 8.84% for three years through
an interest rate swap agreement.  At June 30, 1998, outstanding borrowings under
the Credit Facility were $64.7 million.

<PAGE>

     On July 31,  1998,  the Company  repaid $3.9 million of  subordinated  debt
through a new $3.9 million  term loan which was provided by certain  banks under
the Credit Facility.  The new term loan has no impact on availability  under the
Credit  Facility.  The term loan  accrues  interest  at 30 day LIBOR  plus 4.10%
(which represented  approximately 9.75% on July 31, 1998) and is due and payable
on January  31,  2005.  The  subordinated  debt was issued in April  1997,  bore
interest at 15% and was due in April 1999.
8.       Stock Options

     On March 10, 1998, the Board of Directors  issued 365,000  additional stock
options to the  senior  management  of  Alarmguard  which vest over a  four-year
period from the date of grant.  The exercise  price for all options  granted was
$10.00 per share,  the quoted  market  value of the common  stock on the date of
grant. On July 1, 1998, the Company issued 70,000 stock options to the Directors
of the Company  pursuant to the Directors Stock Option Plan.  These options vest
over a  three-year  period and have an exercise  price of $9.625 per share,  the
quoted market value of the common stock on the date of grant.

9.       Commitments and Contingencies

     The Company  experiences  routine  litigation  in the normal  course of its
business.  Management does not believe that any pending or threatened litigation
will have a material  adverse  effect on the  financial  condition or results of
operations of the Company.

10.      Sale of Cumulative Convertible Preferred Stock

     On February 3, 1998, the Company  completed an offering of 40,000 shares of
Cumulative  Convertible Preferred Stock (35,000 shares of Series A Preferred and
5,000 shares of Series B  Preferred)  which are  redeemable  at $1,000 per share
five  years from the date of  issuance  yielding  gross  proceeds  totaling  $40
million.  The  Company  issued 700  additional  shares of the Series A Preferred
Stock in exchange  for $0.7  million of the  Company's  subordinated  debt.  Net
proceeds of the offering, after the payment of investment banking fees and legal
expenses,  amounted to  approximately  $37.8  million.  The costs  incurred  for
completing  the  February  1998  offering  are being  amortized  to the dividend
requirement on Preferred  Stock over the five-year life of the security with the
unamortized  balance  reflected as a reduction of the Preferred Stock's carrying
value.  

     The Series A Preferred  Stock pays  quarterly  cash  dividends at 5% per
annum.  Under the terms of the securities,  holders of the Series A and Series B
Preferred  Stock  have the right to  convert  their  shares  at any  time,  into
4,972,434  shares of the Company's common stock at the conversion price of $8.25
per share and $7.75 per share,  respectively,  subject to certain  anti-dilution
provisions.  The holders of the newly  issued  preferred  stock have elected two
additional  members to the Company's  Board of Directors.  The net proceeds from
the offering and the increased credit facility  discussed in Note 7 are intended
to finance  acquisitions  and expand the Company's  Dealer and Direct  Marketing
Programs.

<PAGE>

 11.      Earnings per Share

     The 1997  calculation  of basic and diluted loss per common share  excludes
the dividend requirement on preferred stock as a result of the conversion of the
Preferred  Stock and related accrued  dividends into Alarmguard  Common Stock at
the time of the Merger.

     All dilutive securities (stock options,  warrants and convertible preferred
stock) have been excluded from the diluted loss per common share  calculation as
such instruments are antidilutive.

 12. Recent FASB Pronouncements

     In 1998,  the FASB issued SFAS No. 131,  "Disclosure  about  Segments of an
Enterprise  and  Related  Information."  The  Company  will  adopt  SFAS No. 131
effective  for  year-end  financial  reporting  in 1998 and  expects no material
impact upon adoption.

     In  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities,"  which is required to be adopted in years
beginning  after  June  15,  1999.  Because  of  the  Company's  minimal  use of
derivatives,  management  does  not  anticipate  that  the  adoption  of the new
Statement will have a significant  effect on earnings or the financial  position
of the Company.


     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

     Certain  matters in this  section  constitute  "forward-looking  statements
"within  the meaning of the Private  Securities  Litigation  Reform Act of 1995.
Such forward-looking  statements involve known and unknown risks,  uncertainties
and other  factors which may cause the actual  results of  Alarmguard  Holdings,
Inc. (the "Company" or "Alarmguard") to be materially  different from historical
results  or from any  results  expressed  or  implied  by such  forward  looking
statements.  These factors are discussed  under the caption "Risk  Factors" in a
Registration  Statement  on  Form  S-4  (File  No.  333-23307)  filed  with  the
Securities and Exchange Commission on March 14, 1997.

General Overview

     Alarmguard  sells and installs  burglar and fire alarm systems and provides
security monitoring services and security system repair and maintenance services
to homeowners  and  businesses,  principally  in the Northeast and  Mid-Atlantic
regions of the United States. Alarmguard provides its security alarm systems and
services  primarily  under  its  trademark  "Alarmguard".  As of June 30,  1998,
Alarmguard had  approximately  $3.0 million of Monthly Recurring Revenue ("MRR")
and approximately 95,000 subscribers.

<PAGE>

     Alarmguard's  objective is to provide  residential and commercial  security
services to an increasing number of subscribers. Alarmguard's growth strategy is
to enhance  its  position  in the  security  alarm  monitoring  industry  in the
Northeastern and Mid-Atlantic United States by increasing the number and density
of  subscribers  for whom it provides  services.  Alarmguard  is  pursuing  this
strategy   through  a  balanced   growth  plan  involving:   (1)   incorporating
acquisitions  of portfolios of  subscriber  accounts in existing and  contiguous
markets;  (2) internal growth through direct marketing to obtain new subscribers
(the "Direct  Marketing  Program");  (3)  acquiring  credit-approved  monitoring
contracts from Alarmguard authorized dealers (the "Dealer Program");  (4) growth
of Alarmguard's core business through referrals and traditional local marketing;
and (5) addition of new  commercial  subscribers  through its National  Accounts
Program.  Alarmguard  believes  that  increasing  the number and  density of its
subscribers  will help it to achieve  economies of scale and enhance  results of
operations.

     During  the six  months  ended  June  30,  1998,  Alarmguard  acquired  six
companies in the security  alarm  installation  and  monitoring  business for an
aggregate  of $39.0  million in cash,  notes  payable and amounts due to sellers
based on certain post closing adjustments.  The acquisitions added approximately
$0.8 million of MRR and approximately 29,000 subscribers.

Key Operating Measures

     The Company  employs three internal  measurements to assess the performance
of its operations: Adjusted EBITDA, MRR and Gross MRR Attrition.

     Adjusted  EBITDA.  Adjusted  EBITDA is derived by adding  Dealer and Direct
Marketing Program costs and acquisition  integration  expenses incurred,  net of
Dealer and Direct Marketing  Program revenues earned, to EBITDA (Earnings Before
Interest,  Taxes,  Depreciation and Amortization).  This calculation  provides a
basis for  comparison of  Alarmguard's  results to those of other security alarm
companies  that grow only through the  acquisition  of subscriber  accounts.  An
amount  similar to  Adjusted  EBITDA is used by lenders in  extending  credit to
Alarmguard.  Adjusted  EBITDA does not represent  cash flows from  operations as
defined by generally accepted accounting  principles and should not be construed
as an alternative to net income. Adjusted EBITDA for the three months ended June
30, 1998  increased to $2.5 million  from $1.4 million for the  comparable  1997
period,  a 74.8%  increase.  For the six months  ended June 30,  1998,  Adjusted
EBITDA was $4.4 million compared to $2.7 million in the prior year.

<TABLE>
<CAPTION>

                                                     For the Three Months        For the Six Months
                                                         Ended June 30              Ended June 30
                                                     --------------------       -------------------
                                                     1998            1997        1998          1997
                                                     --------------------       -------------------
                                                                      (in thousands)
<S>                                                     <C>         <C>         <C>          <C>   
     EBITDA                                             $1,647      $823        $2,784       $1,544
       Less Dealer and Direct Marketing
          Program revenue                                 (431)     (316)         (779)        (669)
       Plus Dealer and Direct Marketing
          Program expense                                  917       930         1,701        1,819
       Plus acquisition integration expense                379         -           707            -
                                                   ---------------------        -------------------
       Adjusted EBITDA                                  $2,512    $1,437        $4,413       $2,694
                                                   =====================        ===================

</TABLE>

<PAGE>

     Monthly  Recurring  Revenue.  MRR represents  revenue that a company in the
security  alarm  industry is entitled to receive  under  contracts  (monitoring,
leasing,  and  maintenance)  in effect at the end of such period.  MRR is a term
commonly  used in the  security  alarm  industry  as a measure  of the size of a
company. It does not measure profitability or performance,  and does not include
any  allowance  for  future  subscriber  attrition  or  uncollectible   accounts
receivable.

     Gross MRR  Attrition.  Gross MRR  attrition  has an  adverse  effect on the
Company's  financial  position and results of  operations,  since it affects the
Company's  recurring  revenues.  Gross MRR attrition,  generally expressed on an
annualized  basis,  can be measured in terms of  decreased  MRR  resulting  from
canceled subscriber accounts.  Gross MRR attrition is defined by the Company for
a particular period as a quotient,  the numerator of which is equal to gross MRR
lost as the result of canceled  subscriber  accounts  during such period and the
denominator  of which is the average  month end MRR during such 12 month period.
The following table sets forth the Company's MRR additions,  cancellations,  and
gross MRR attrition for the periods indicated (in thousands):


                                              Six Months         Twelve Month
  MRR                                       Ended June 30,    Ended December 31,
                                                 1998               1997
                                         ----------------     ------------------
                                         ----------------     ------------------
  Beginning of period                          $2,087             $1,392
  Dealer and Direct Marketing Program
     additions                                    153                193
  Acquisition additions                           817                586
  Other additions (1)                             110                134
  Canceled MRR (2)                               (162)              (218)
                                     -------------------       -----------------
  End of period                                $3,005             $2,087
                                     ===================       =================
  Gross MRR attrition (3)                       11.7%              11.8%
                                     ===================       =================
__________

(1)     MRR  primarily  generated  through  traditional  non-investment  sales
        programs.
(2)     Includes  canceled  MRR of  subscribers  who  have  moved from homes or
        businesses in which an existing alarm system has already been installed.
 (3)    Calculated on a trailing twelve-month basis.


Results of Operations

Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997

     Revenue.  Revenues  for the three  months  ended  June 30,  1998 were $13.1
million,  an increase of $4.7 million,  or 56.5%,  over the comparable period in
1997.  This increase was  primarily the result of a 66.1%  increase of recurring
revenue to $8.6 million from $5.2 million and a 39.8%  increase in  installation
revenue to $3.7 million from $2.6 million. A significant  portion of the revenue
growth was related to acquisition activity in 1997 and 1998.

<PAGE>
 
     Gross Profit.  Gross profit  increased to $7.4  million,  or 56.1% of total
revenue,  for the quarter ended June 30, 1998 compared to $4.8 million, or 57.5%
of total revenue, in the comparable 1997 period. The decrease in gross profit as
a  percentage  of total  revenue  was  primarily  the  result  of  lower  margin
installations in the current quarter.

     Sales and Marketing. Sales and marketing expense for the three months ended
June 30, 1998 increased  approximately $0.3 million or 28.2% over the comparable
period in 1997. As a percent of total revenue,  sales and marketing  expense for
the three  months  ended  June 30,  1998  decreased  to 11.5%  from 14.1% in the
comparable 1997 period, reflecting economies of scale resulting from incremental
revenue growth.
     General  and  Administrative.  General and  administrative  expense for the
quarter ended June 30, 1998 increased approximately $1.0 million, or 35.7%, over
the  comparable  period in 1997.  The increase was  primarily  the result of the
acquisitions as well as increased  staffing  requirements at the corporate level
required to facilitate the Company's growth plan. As a percent of total revenue,
general  and  administrative  expense for the three  months  ended June 30, 1998
decreased to 29.1% from 33.6% in the comparable  1997 period,  again  reflecting
economies of scale resulting from incremental revenue growth.

     Acquisition  Integration  Expenses.  During the three months ended June 30,
1998, the Company incurred $0.4 million of costs associated with the integration
of acquired subscriber accounts into the Company's system.  These costs were not
material in the  comparable  period of 1997.  Management  expects to continue to
incur such costs in the  future,  principally  relating to the  acquisition  and
integration of subscriber account portfolios acquired in the first six months of
1998 and future acquisitions.

     Amortization  and  Depreciation.  Amortization  and  depreciation  for  the
quarter ended June 30, 1998 increased by approximately  $1.4 million,  or 46.6%,
compared to the same period in 1997.  This  increase was primarily the result of
the acquisition activity in 1997 and 1998.

     Operating Loss. The operating loss for the three months ended June 30, 1998
increased to $2.9 million from $2.3 million in the comparable 1997 period.  As a
percent of total revenue,  the operating loss for the quarter decreased to 22.0%
in 1998 compared to 27.1% for the same period in 1997,  reflecting  economies of
scale as discussed above.

     Interest Expense. Interest expense, net of interest income, for the quarter
ended June 30, 1998 was $1.7 million, compared to $1.2 million in the comparable
period  in  1997.  This  increase  is  primarily  the  result  of  an  increased
outstanding  balance under the Company's credit facility in 1998 compared to the
comparable period of 1997,  reflecting the Company's growth through acquisitions
combined  with  subscriber  additions  through  the Dealer and Direct  Marketing
Programs.

<PAGE>

     Dividend  Requirement  on  Preferred  Stock.  The dividend  requirement  on
preferred stock during the quarter ended June 30, 1998 reflects the 5% per annum
cash dividend on the Cumulative  Convertible  Preferred Stock issued in February
1998.   The  costs   incurred  for   completing   the  February  1998  offering,
approximately $2.2 million,  are being amortized to the dividend  requirement on
Preferred  Stock over the five-year  life of the security  with the  unamortized
balance reflected as a reduction of the Preferred Stock's carrying value. In the
comparable  period in the prior year, this amount reflects the dividends accrued
on the Redeemable Preferred Stock of the predecessor company that were converted
to Common  Stock of the Company in  connection  with the Triton  Merger in April
1997.

Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997

     Revenue.  Revenues  for the six  months  ended  June 30,  1998  were  $24.0
million,  an increase of $9.1 million,  or 60.4%,  over the comparable period in
1997.  This increase was  primarily the result of a 64.9%  increase of recurring
revenue to $15.4 million from $9.4 million and a 52.5% increase in  installation
revenue to $7.1 million from $4.7 million. A significant  portion of the revenue
growth was related to acquisition activity in 1997 and 1998.

     Gross Profit.  Gross profit  increased to $13.3 million,  or 55.2% of total
revenue,  for the six months ended June 30, 1998  compared to $8.7  million,  or
58.3% of total  revenue,  in the comparable  1997 period.  The decrease in gross
profit as a percentage of total revenue was primarily the result of lower margin
installations in the current period.

     Sales and Marketing.  Sales and marketing  expense for the six months ended
June 30, 1998 was $2.8 million  compared to $2.2 million for the comparable 1997
period.  As a percent of total  revenue,  sales and  marketing  expense  for the
six-month  period  decreased  to 11.6% from 14.6% in the prior year,  reflecting
economies of scale from increased revenues.

     General and Administrative.  General and administrative expense for the six
months ended June 30, 1998 increased  approximately $2.0 million, or 39.8%, over
the  comparable  period in 1997.  As a percent  of total  revenue,  general  and
administrative expense for the six-month period decreased to 29.1% from 33.4% in
the  comparable  1997  period,  reflecting  economies  of scale  resulting  from
incremental revenue growth.

     Acquisition  Integration  Expenses.  During the six  months  ended June 30,
1998, the Company incurred $0.7 million of costs associated with the integration
of acquired subscriber accounts into the Company's system.  These costs were not
material in 1997.  

     Amortization  and  Depreciation.  Amortization and depreciation for the six
months ended June 30, 1998 increased by  approximately  $2.6 million,  or 47.5%,
compared to the same period in 1997.  The increase was  primarily  the result of
the acquisition activity in 1997 and 1998.

     Operating  Loss.  The operating loss for the six months ended June 30, 1998
increased to $5.3 million from $3.9 million in the comparable 1997 period.  As a
percent of total revenue,  the operating loss for the quarter decreased to 21.9%
in the  current  year  compared  to 26.2%  for the  same  period  in 1997.  This
improvement again reflects the increased  profitability derived from incremental
revenues.

<PAGE>

     Interest  Expense.  Interest expense,  net of interest income,  for the six
months  ended June 30, 1998 was $3.1  million,  compared to $2.0  million in the
comparable period in 1997. This increase is primarily the result of an increased
outstanding  balance  under the  Company's  credit  facility in 1998 compared to
1997,  reflecting  the  Company's  growth  through  acquisitions  combined  with
subscriber additions through the Dealer and Direct Marketing Programs.

     Dividend  Requirement  on  Preferred  Stock.  The dividend  requirement  on
preferred  stock during the six months  ended June 30, 1998  reflects the 5% per
annum cash  dividend on the  Cumulative  Convertible  Preferred  Stock issued in
February  1998. The costs incurred for completing the February 1998 offering are
being  amortized  to the  dividend  requirement  on  Preferred  Stock  over  the
five-year  life of the  security  with the  unamortized  balance  reflected as a
reduction of the Preferred  Stock's carrying value. In the comparable  period in
the prior year,  this amount  reflects the dividends  accrued on the  Redeemable
Preferred Stock of the  predecessor  company that were converted to Common Stock
of the Company in connection with the Triton Merger in April 1997.

<PAGE>

Liquidity and Capital Resources

     Capital Resources. The Company has financed its operations and growth since
May 1992 with a combination of borrowings under credit  facilities,  issuance of
subordinated  debentures,  sale of common and preferred  stock,  the 1997 Merger
with Triton, and internally  generated cash flows. The Company's  principal uses
of cash have been the acquisition of subscriber accounts,  costs associated with
the Dealer and Direct  Marketing  Programs and interest  payments on  borrowings
under the  Credit  Facility.  A  substantial  portion  of the  Company's  future
operating cash flow will be used to fund the acquisition of subscriber accounts,
the Dealer and Direct  Marketing  Programs and to service  borrowings  under the
Credit  Facility and other  Company  debt.  There can be no  assurance  that the
Company will continue to have the ability to meet its borrowing requirements and
to fund its acquisition strategies and Dealer and Direct Marketing Programs.
       
     In February  1998,  the Company  completed an offering of 40,000  shares of
Cumulative  Convertible  Preferred  Stock  (35,000  shares of Series A and 5,000
shares of Series B) at $1,000 per share  yielding  gross  proceeds  totaling $40
million.  Concurrently, the Company issued 700 additional shares of the Series A
Preferred Stock in exchange for $0.7 million of the company's subordinated debt.
The Series A Preferred Stock pays quarterly dividends at 5% per annum. Under the
terms of the  securities,  holders of the Series A and Series B Preferred  Stock
have the  right to  convert  their  shares,  at any  time,  into  shares  of the
Company's  Common Stock at the conversion price of $8.25 per share and $7.75 per
share,  respectively,  subject to certain anti-dilution  provisions.  Concurrent
with the offering, the Company increased its credit facility from $60 million to
$90 million.  The proceeds  from the offering and  borrowings  from the expanded
Credit Facility are being used to finance  acquisitions and expand the company's
Dealer and Direct Marketing Programs.

     As of June 30,  1998,  the Company had $8.8 million in  unrestricted  cash.
Additionally,  the  Company  had $64.7  million  outstanding  under  its  Credit
Facility  with  approximately  $2.5  million of  availability  at the end of the
quarter. The Company's ability to borrow under the Credit Facility is limited by
certain representations and financial covenants.
<PAGE>

     The  Credit  Facility  is  a  non-amortizing  loan  which  converts  to a 5
five-year  amortizing term loan on April 30, 2000.  Borrowings  under the Credit
Facility are secured by  substantially  all of the  properties and assets of the
Borrower including accounts receivable, inventory, leasehold interests, customer
contracts and the capital stock of all of the subsidiaries of the Company.

     At June 30, 1998,  Alarmguard had  subordinated  debentures of $3.9 million
bearing  interest at 15%,  which were to be due in April 1999. On July 31, 1998,
the Company  repaid this amount  through a new $3.9  million term loan which was
provided by certain  banks under the Credit  Facility.  In  connection  with the
issuance  of the  subordinated  debt in  1997,  Alarmguard  issued  warrants  to
purchase  215,939  shares of  Alarmguard  Common  Stock at an exercise  price of
$11.11  per share,  the value of which was  accounted  for as a discount  to the
subordinated  debt  and  was  being  amortized  over  the two  year  life of the
underlying debt instrument  prior to the repayment of the  subordinated  debt on
July 31,  1998.  The Company  also has a total of $3.8 million due to sellers of
previous acquisitions, a portion of which is secured by various notes. A portion
of the amounts due to sellers  requires the Company to make  periodic  principal
and interest payments.

     The Company  intends to continue to use its cash balances,  the liquidation
of its other investments and borrowings under the credit facility to finance the
addition of subscriber  accounts,  primarily through acquisitions and the Dealer
and Direct Marketing Programs.  Additionally,  the Company,  depending on future
needs and the cost and availability of various financing alternatives,  may from
time to time seek additional  debt or equity  financing in the public or private
markets in order to continue to support the growth of subscriber accounts. There
can be no  assurance  that the Company  will be able to obtain  such  capital on
acceptable  terms  or at all.  If cash  flows  from  operations,  combined  with
borrowings  under the credit facility and other  borrowings are  insufficient to
fund the Company's  growth  strategies,  management would curtail the Dealer and
Direct Marketing  Programs and implement a cost reduction strategy to the extent
necessary to satisfy its obligations.

     Liquidity.  During the first six months of 1998 and 1997, the Company's net
cash used in  operating  activities  was  approximately  $2.2  million  and $2.6
million,  respectively.  Improved  operating margins due to incremental  revenue
growth and  resulting  economies  of scale more than offset  increased  interest
costs and acquisition integration expenses.

     For the first six months of 1998 and 1997,  the  Company's net cash used in
investing   activities  was  approximately   $41.4  million  and  $6.7  million,
respectively.  This significant  increase  reflects the  acquisitions  completed
primarily in the first quarter of 1998.

     Net cash provided by financing  activities was approximately  $51.8 million
in the six  months  ended  June 30,  1998 as  compared  to $9.5  million  in the
comparable  year ago period.  The increase  reflects the cash generated from the
Preferred  Stock  offering and increased  borrowings  under the credit  facility
discussed  above.  The Company  incurred  losses  applicable to common shares of
approximately  $9.1  million and $6.9  million for the six months ended June 30,
1998 and  1997,  respectively.  The  Company  expects  to incur  losses  for the
foreseeable future, the result of its continuing growth strategy.

<PAGE>

     Recent  FASB  Pronouncements.  In 1998,  the  FASB  issued  SFAS  No.  131,
"Disclosure  about  Segments  of an  Enterprise  and Related  Information."  The
Company will adopt SFAS No. 131  effective for year-end  financial  reporting in
1998 and expects no material impact upon adoption.

     In  1998,  the  FASB  issued  SFAS  No.  133, "Accounting  for  Derivative
Instruments  and Hedging  Activities,"  which is required to be adopted in years
beginning  after  June  15,  1999.  Because  of  the  Company's  minimal  use of
derivatives,  management  does  not  anticipate  that  the  adoption  of the new
Statement will have a significant  effect on earnings or the financial  position
of the Company.

     The Company continues to review "Year 2000" issues.  Based on its review to
date, it does not anticipate  incurring any  significant  costs  associated with
this issue.
<PAGE>

                           PART II - OTHER INFORMATION

Item 2.           Changes in Securities.

       On June 25, 1998, all publicly traded warrants of the Registrant  expired
pursuant to the term of the warrant.  Such warrants were formerly  traded on the
American  Stock  exchange  under the  symbol  AGD.WT.  On that date the  Company
cancelled all of the outstanding warrants.

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

(a)      The Registrant's annual shareholder meeting was held on June 30, 1998.

(b)      Management's  nominees for directors as listed in the proxy  statement
         were both elected at the annual  meeting and there was no solicitation
         in opposition thereto. The results are as follows:
         
          David Heidecorn     For:           4,832,520
                              Withhold:        154,079
          Thomas W. Janes     For:           4,832,535
                              Withhold:        154,064

(c)      The  stockholders  of the Company  approved  Management's  proposal to
         ratify the sale of 35,700 shares of Series A Preferred Stock at $1,000
         per share and 5,000  shares of Series B Preferred  Stock at $1,000 per
         share. The results are as follows:

                           For:             3,883,586
                           Against:           202,209
                           Abstain:             2,248

Item 6.           Exhibits and Reports on Form 8-K.

(a)      Exhibits

         The following exhibits are filed with this quarterly report on 
         Form l0-Q:

Exhibits
Number    Exhibit
--------  -------
 27       Financial data schedule

 (b)      Reports on Form 8-K

          The Company filed a current report on Form 8-K/A dated May 29, 1998 
          with respect to its acquisition of certain assets of Security Systems,
          Inc.(dba "Sentry") which included audited financial statements of 
          Sentry and pro forma financial information.
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                               ALARMGUARD HOLDINGS, INC.



DATE:    August 11, 1998                       By: /s/David Heidecorn   
                                                   David Heidecorn
                                                   Principal Financial Officer