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


                                   FORM 1O-Q/A



[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>


Items 1 and 2 of the  Company's  Quarterly  Report on Form 10-Q for the  Quarter
ended June 30, 1998 are amended to reflect an imputed  non-cash  dividend on the
convertible  preferred  stock as discussed in Note 10. The non-cash  dividend is
reflected in the accompanying  condensed consolidated balance sheet at March 31,
1998 as a charge against  accumulated  deficit with a corresponding  increase in
additional  paid in  capital.  The  non-cash  dividend  is also  included in the
dividend requirement on preferred stock in the condensed  consolidated statement
of operations for the six months ended June 30, 1998.

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


                          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
                                          ==================  ==================

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>


ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Balance Sheets (continued)
(In thousands)

                                                      June 30,     December 31,
                                                        1998           1997
                                                 --------------   --------------
                                                  (unaudited)
 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                          44,045          35,286
   Accumulated deficit                                (56,631)        (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.

                                       3
<PAGE>


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

<S>                                                      <C>                 <C>             <C>                <C>    

                                                              Three Months                        Six Months
                                                             Ended June 30,                       Ended June 30,
                                                   ----------------------------------- -----------------------------------
                                                           1998              1997              1998               1997
                                                   ----------------   ----------------    --------------   ---------------

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,  
   including imputed non-cash dividend of
   $9,024 recorded in February 1998
   (See Note 10)                                            (555)               (29)          (9,925)              (200)
                                                   ----------------   ----------------    ---------------  ---------------
Loss applicable to common shares                         $(4,990)           $(4,275)        $(18,147)           $(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)           (1.77)             (0.05)
                                                   ----------------   ----------------    ---------------  ---------------
    Net loss per common share                             $(0.89)            $(0.89)          $(3.24)            $(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.

                                       4
<PAGE>


ALARMGUARD HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
                                                     Six Months Ended June 30,
                                                    ----------------------------
                                                      1998               1997
                                                  ------------     -------------
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
                                                  ============     =============

  See accompanying notes to condensed consolidated financial statements.

                                       5

<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


                                       6
<PAGE>

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):

                                                   For The Six Months Ended 
                                                           June 30,
                                                 -----------------------------
                                                    1998             1997
                                                 ------------   --------------
 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
                                                 ============   ==============

         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.

                                       7

<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

                                       8

<PAGE>

an interest rate swap agreement.  At June 30, 1998, outstanding borrowings under
the Credit Facility were $64.7 million.

         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


                                       9
<PAGE>

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.  In  connection  with the sale of the  Preferred  Stock,  the  Company
imputed a one-time  non-cash  dividend of approximately  $9.0 million ($1.61 per
common  share)  as a  result  of the  conversion  prices  of the two  series  of
Preferred Stock being less than the quoted market price of the Company's  Common
Stock at the date of  issuance,  as  required by EITF D-60:  Accounting  for the
Issuance  of   Convertible   Preferred   Stock  and  Debt   Securities   with  a
Non-detachable  Conversion Feature.  Such amount was recognized upon issuance of
the  Preferred  Stock  as  a  charge  against   accumulated   deficit,   with  a
corresponding  offsetting  increase in additional  paid in capital.  The imputed
non-cash  dividend is also  included in the  dividend  requirement  on Preferred
Stock in the condensed  consolidated  statement of operations for the six months
ended June 30, 1998.

 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.


                                       10

<PAGE>

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.

         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

                                       11

<PAGE>

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.



                                   For the Three Months      For the Six Months
                                       Ended June 30,            Ended June 30,
                                   --------------------      -------------------
                                      1998       1997          1998      1997
                                   ---------  ---------      ---------  --------
                                         (in thousands)
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
                                   =========  =========      ========   ========

         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 Months
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%
                                       ==================   ====================
                                       12

<PAGE>

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

 (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.

         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.

                                       13

<PAGE>

         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.

         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,  and  amortization  of the costs  incurred for  completing the offering of
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.

                                       14
<PAGE>


         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.

         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, amortization of the costs incurred for completing the offering of
Cumulative  Convertible  Preferred Stock issued in February 1998, and an imputed
one-time  non-cash  dividend of  approximately  $9.0  million as a result of the
conversion  prices of the two  series of  Preferred  Stock  being  less than the
quoted market price of the Company's  Common Stock at the date of issuance.  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.


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


                                       15
<PAGE>

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.

         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

                                       16

<PAGE>

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.

         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.

                                       17

<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.

                                       18

<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:   November 13, 1998                       By: /s/ David Heidecorn
                                                    David Heidecorn
                                                    Principal Financial Officer