UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

[ ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE TRANSITION PERIOD FROM ______ TO _______

                         COMMISSION FILE NUMBER 0-28490

                          GUARDIAN INTERNATIONAL, INC.
        (Exact name of small business issuer as specified in its charter)

         NEVADA                                         58-1799634
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

          3880 N. 28 TERRACE                               (954) 926-5200
       HOLLYWOOD, FLORIDA 33020                      (Issuer's telephone number)
(Address of principal executive offices)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days.

                                 YES X    NO
                                    ---     ---
         As of August 14, 1998, there are 11,280,223 shares of Class A Voting
Common Stock, par value $.001 per share, and 634,035 shares of Class B Nonvoting
Common Stock, par value $.001 per share, immediately convertible into shares of
Class A Common Stock on a one for one basis, of the issuer outstanding.

           TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):

                                YES      NO  X
                                   ----    ----


<PAGE>


                          GUARDIAN INTERNATIONAL, INC.

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------
PART I   FINANCIAL INFORMATION

Item 1.  Financial  Statements

          Consolidated Balance Sheets
            As of June 30, 1998 and December 31, 1997                     1

          Consolidated Statements of Operations
            For the Three and Six Month Periods Ended
            June 30, 1998 and 1997                                        2

          Consolidated Statements of Cash Flows
            For the Six Month Periods Ended
            June 30, 1998 and 1997                                        3

          Consolidated Statement of Changes in Shareholders' Equity
             For the Six Month Period Ended June 30, 1998                  4

          Notes to Consolidated Financial Statements                       5

Item 2.           Management's Discussion and Analysis                     9

PART II          OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds                18

Item 4.           Submission of Matters to a Vote of Shareholders          18

Item 6.           Exhibits and Reports on Form 8-K                         19


<PAGE>

PART I -  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                          GUARDIAN INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                     JUNE 30,      DECEMBER 31,
                                                                                       1998            1997
                                                                                       ----            ----
                                                                                    (Unaudited)
<S>                                                                                  <C>             <C>        
ASSETS
Current assets:
     Cash and cash equivalents                                                       $   333,322     $    94,313
     Accounts receivable, net of allowance for doubtful accounts of
       $252,482 and $198,848, respectively                                             2,025,574         539,512
     Other                                                                               752,690         121,223
                                                                                     -----------     -----------
          Total current assets                                                         3,111,586         755,048
                                                                                     -----------     -----------
Property and equipment, net                                                            1,508,508         729,058
Customer accounts, net                                                                28,319,710       8,048,495
Goodwill and other intangible assets, net                                              3,048,883       1,514,951
Deposits and other assets                                                                142,772          27,506
                                                                                     -----------     -----------
           Total Assets                                                              $36,131,459     $11,075,058
                                                                                     ===========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable and accrued expenses                                            $ 2,125,002    $    781,879
    Unearned revenue                                                                   2,877,738         242,168
    Current portion of long term obligations                                              76,529          73,201
                                                                                     -----------     -----------
          Total current liabilities                                                    5,079,269       1,097,248
                                                                                     -----------     -----------

Unearned revenue                                                                       1,407,934               -
Long term obligations, less current portion                                           12,366,080         961,584
Shareholders' equity:
Preferred stock, $.001 par value, 30,000,000 shares authorized:
   Series  A  preferred   stock,   1,987,752  and  1,894,033  shares  issued  and
   outstanding,   respectively                                                             1,988           1,894
   Series B  preferred  stock,  1,659,826  and 0 shares  issued and  outstanding,
   respectively                                                                            1,660               -
Class A voting  common stock,  $.001 par value,  100,000,000  shares  authorized,
   11,280,223 and 9,003,804 shares issued and outstanding, respectively                   11,280           9,004
Class B non voting  common stock,  $.001 par value,  634,035  shares  authorized,
   issued and outstanding, respectively                                                      634             634
Additional paid-in capital                                                            21,629,964      12,091,050
Accumulated deficit                                                                   (4,360,912)     (3,079,918)
Treasury shares, at cost                                                                  (6,438)         (6,438)
                                                                                     -----------     -----------
                                                                                      17,278,176       9,016,226
                                                                                     -----------     -----------
           Total Liabilities and Shareholders' Equity                                $36,131,459     $11,075,058
                                                                                     ===========     ===========

</TABLE>

       The accompanying notes to consolidated financial statements are an
integral part of these statements.


<PAGE>


                                           GUARDIAN INTERNATIONAL, INC.
                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                                    (Unaudited)
<TABLE>
<CAPTION>

                                                              FOR THE THREE MONTHS            FOR THE SIX MONTHS
                                                                 ENDED JUNE 30,                 ENDED JUNE 30,
                                                              --------------------            -------------------
<S>                                                           <C>           <C>              <C>            <C>       
                                                                1998            1997            1998           1997
                                                                ----            ----            ----           ----
Revenues:
     Monitoring                                               $2,267,675    $ 1,006,509      $3,994,578     $1,819,355
     Installation and service                                  1,354,332        346,039       2,237,319        777,712
                                                              ----------    -----------      ----------     ----------
          Total revenues                                       3,622,007      1,352,548       6,231,897      2,597,067
                                                              ----------    -----------      ----------     ----------
Operating expenses:
     Monitoring                                                  520,629        201,870         878,343        353,429
     Installation and service                                    805,962        481,475       1,487,882        884,973
     General and administrative                                1,408,401        406,026       2,261,463        828,412
     Amortization of customer contracts                        1,101,639        224,011       1,702,703        417,827
     Depreciation and amortization                               140,372         79,199         263,344        157,564
                                                              ----------    -----------      ----------     ----------
          Total operating expenses                             3,977,003      1,392,581       6,593,735      2,642,205
                                                              ----------    -----------      ----------     ----------
          Loss from operations                                  (354,996)       (40,033)       (361,838)       (45,138)
Interest expense                                                 346,884        243,181         582,154        440,120
                                                              ----------    -----------      ----------     ----------
          Loss before income taxes                              (701,880)      (283,214)       (943,992)      (485,258)

Provision for income taxes
                                                                       -              -               -              -
                                                              ----------    -----------      ----------     ----------
          Net loss                                              (701,880)      (283,214)       (943,992)      (485,258)

Preferred stock dividends                                       (202,346)             -        (337,002)             -
                                                              ----------    -----------      ----------     ----------
          Net loss applicable to common stock                  $(904,226)     $(283,214)    $(1,280,994)     $(485,258)
                                                              ===========   ===========      ==========     ==========
Loss per common share                                          $   (0.08)     $   (0.04)    $     (0.11)     $   (0.07)
                                                              ===========   ===========      ==========     ==========
Weighted average shares outstanding                            11,849,753     6,961,762      11,207,383      6,949,867
                                                              ===========   ===========      ==========     ==========
</TABLE>


       The accompanying notes to consolidated financial statements are an
integral part of these statements.

                                       2
<PAGE>
<TABLE>
<CAPTION>

                          GUARDIAN INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                           For the Six Months
                                                                                             Ended June 30,
                                                                                             --------------
                                                                                           1998           1997
                                                                                           ----           ----
Cash flows from operating activities:
<S>                                                                                      <C>           <C>       
     Net loss                                                                            $(943,992)    $(485,258)
       Adjustments  to  reconcile  net loss to net  cash  provided  by
         (used  in) operating activities:
          Depreciation and amortization                                                    263,344       157,564
          Amortization of customer accounts                                              1,702,703       417,827
          Amortization of deferred financing costs                                         130,850        70,460
          Provision for doubtful accounts                                                  295,831        62,870
     Changes in assets and liabilities:
          Accounts receivable                                                             (704,072)     (199,754)
          Intangible assets, deposits and other assets                                    (596,118)     (175,710)
          Accounts payable and accrued liabilities                                         179,193        16,693
          Unearned revenue                                                                 994,512       127,908
                                                                                         ---------     --------- 
               Net cash provided by (used in) operating activities                       1,322,251        (7,400)
                                                                                         ---------     --------- 
Cash flows used in investing activities:
     Purchase of fixed assets                                                             (662,614)      (80,989)
     Business acquisitions, net of cash acquired                                       (14,340,822)            -
     Purchase and placement of customer accounts                                        (1,414,420)   (3,055,666)
                                                                                         ---------     --------- 
               Net cash used in investing activities                                   (16,417,856)   (3,136,655)
                                                                                        ----------     --------- 
Cash flows from financing activities:
     Payments of long term obligations                                                  (1,346,068)   (1,351,372)
     Proceeds from line of credit                                                       12,693,681     3,845,149
     Issuance of preferred stock, net of issuance costs                                  3,987,001        (6,438)
                                                                                         ---------     --------- 
               Net cash provided by financing activities                                15,334,614     2,487,339
                                                                                         ---------     --------- 
               Net increase (decrease) in cash and cash equivalents                        239,009      (656,716)
Cash and cash equivalents, beginning of period                                              94,313     1,037,861
                                                                                         ---------     --------- 
Cash and cash equivalents, end of period                                              $    333,322    $  381,145
                                                                                      ============    ==========
Supplemental disclosures:

     Interest paid                                                                    $    334,338    $  364,770
                                                                                      ============    ==========
Non cash investing and financing activities:
    Financed acquisition of property and equipment                                    $          -       166,168
    Recognition of Class B common stock to be issued                                             -       130,500
    Accrue commitment fee to senior lender                                                       -       112,500
    Issuance of common stock to purchase customer contracts                                      -        39,000
    Write off of note receivable from sale of stock                                              -       201,358
    Issuance of Class A common stock and options in consideration
        for business acquisitions                                                        5,205,157             -
    Stock dividends on Series A and Series B preferred stock                               337,002             -

</TABLE>

       The accompanying notes to consolidated financial statements are an
integral part of these statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                          GUARDIAN INTERNATIONAL, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                  FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998
                                   (Unaudited)

                                    PREFERRED STOCK        PREFERRED STOCK         COMMON STOCK           COMMON STOCK       
                                      SERIES A                SERIES B               CLASS A                 CLASS B         
                                      --------                --------               -------                 -------
                                   SHARES     AMOUNT      SHARES     AMOUNT      SHARES      AMOUNT      SHARES     AMOUNT   
                                   ------     ------      ------     ------      ------      ------      ------     ------   
<S>                              <C>         <C>       <C>         <C>          <C>         <C>         <C>         <C>
  Balance, December 31, 1997     1,894,033   $  1,894           -   $      -    9,003,804   $  9,004    634,035     $  634   

  Stock dividend on Series A
  preferred stock                   93,719         94           -          -            -          -          -          -   
  Stock dividend on Series B
  preferred stock                        -          -      59,826         60            -          -          -          -   
  Issuance of Series B
  preferred stock, net of
  issuance costs of $12,999              -          -   1,600,000      1,600            -          -          -          -   
  Issuance of Class A common
  stock                                  -          -           -          -    2,276,419      2,276          -          -   
  Issuance of options                    -          -           -          -            -          -          -          -   
  Net loss                               -          -           -          -            -          -          -          -   
                                 ---------    -------   ---------    -------   ----------   --------    -------     ------   
  Balance June 30, 1998          1,987,752    $ 1,988   1,659,826    $ 1,660   11,280,223   $ 11,280    634,035     $  634   
                                 =========    =======   =========    =======   ==========   ========    =======     ======   

                               ADDITIONAL 
                                PAID-IN       ACCUMULATED     TREASURY
                                CAPITAL         DEFICIT        SHARES        TOTAL
                              -----------     -----------     --------     ----------
  Balance, December 31, 1997  $12,091,050     $(3,079,918)  $  (6,438)    $9,016,226

  Stock dividend on Series A
  preferred stock                 187,343        (187,437)          -              -
  Stock dividend on Series B
  preferred stock                 149,505        (149,565)          -              -
  Issuance of Series B
  preferred stock, net of
  issuance costs of $12,999     3,985,401               -           -      3,987,001
  Issuance of Class A common
  stock                         4,584,665               -           -      4,586,941
  Issuance of options             632,000               -           -        632,000
  Net loss                              -        (943,992)          -       (943,992)
                              -----------     -----------    --------     -----------
  Balance June 30, 1998       $21,629,964     $(4,360,912)   $ (6,438)    $17,278,176
                              ===========     ===========    ========     ===========

</TABLE>

                     The accompanying notes to consolidated
         financial statements are an integral part of these statements.

                                       4

<PAGE>


                          GUARDIAN INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    ACCOUNTING POLICIES

      The accompanying unaudited financial statements have been prepared by the
      Company pursuant to the rules and regulations of the Securities and
      Exchange Commission.

      BASIS OF CONSOLIDATION
      The consolidated financial statements include the accounts of Guardian
      International, Inc. ("Guardian") and its wholly owned subsidiaries,
      (collectively "the Company"). All significant intercompany accounts and
      transactions have been eliminated in consolidation.

      DESCRIPTION OF BUSINESS
      The Company operates a central monitoring alarm station and sells and
      installs alarm systems for residential and commercial customers in the
      United States (its primary market).

      REVENUE RECOGNITION
      INSTALLATION REVENUE Customers are billed for installation services when
      the installation is completed or on a percentage of completion basis. The
      Company defers the excess of installation revenue over estimated selling
      costs and amortizes such difference over the initial term of the
      non-cancelable customer monitoring/service contract (generally over five
      years). Costs attributed to providing the installations, which include
      direct labor, direct materials and direct overhead, are capitalized and
      amortized over a five year period. All other costs associated with the
      installation are charged to income in the period when the installation
      occurs.

      MONITORING/SERVICE REVENUE Customers are billed for monitoring and
      maintenance services primarily on a monthly or quarterly basis in advance
      of the period in which such services are provided. Deferred revenues
      result from billings in advance of performance of services. Contracts for
      monitoring services are generally for an initial non-cancelable term of
      five years with automatic renewal on an annual basis thereafter, unless
      terminated by either party. A substantial number of contracts are on an
      automatic renewal basis.

      CASH AND CASH EQUIVALENTS
      All highly liquid investments purchased with a remaining maturity of three
      months or less at the date acquired are considered cash equivalents.

      CUSTOMER ACCOUNTS AND INTANGIBLE ASSETS Customer accounts acquired from
      alarm dealers are reflected at cost. The cost of acquired accounts is
      based on the estimated fair value at the date of acquisition and included
      in "Customer Accounts, net" in the accompanying consolidated balance
      sheets. Acquired customer accounts are capitalized and amortized on a
      straight-line basis over a 10-year period. Costs applicable to providing
      installation of internally generated customer accounts are capitalized and
      amortized over the life of the monitoring/service contract (generally five
      years). It is the Company's policy to perform monthly evaluations of
      acquired customer account attrition and, if necessary, adjust the
      remaining useful lives. The Company periodically estimates future cash
      flows from customer accounts. Because expected cash flows have exceeded
      the unamortized cost of customer accounts, the Company has not recorded an
      impairment loss.

                                       5
<PAGE>



      Intangible assets are recorded at cost and amortized over their estimated
      useful lives. The carrying value of intangible assets is periodically
      reviewed and impairments are recognized when expected operating cash flows
      derived from such intangibles is less than their carrying value.

      PROPERTY AND EQUIPMENT Property and equipment are stated at cost.
      Depreciation of property and equipment is provided on the straight-line
      method. The estimated useful lives for property and equipment range from
      five to seven years and the estimated useful lives for leasehold
      improvements is approximately thirty years.

      FAIR VALUE OF FINANCIAL INSTRUMENTS Carrying amounts of certain of the
      Company's financial instruments including cash and cash equivalents,
      accrued payroll and other accrued liabilities approximate fair value
      because of their short term maturities.

      INCOME TAXES The Company has established deferred tax assets and
      liabilities for temporary differences between financial statement and tax
      bases of assets and liabilities, using enacted tax rates in effect in the
      years in which the differences are expected to reverse. Net deferred tax
      assets have been fully reserved as their net realizability is not assured
      at the current time.

      USE OF ESTIMATES The preparation of financial statements, in conformity
      with generally accepted accounting principles, requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates.

      RECLASSIFICATION Certain 1997 amounts in the consolidated statements of
      operations have been reclassified to conform to the 1998 presentation.
      Such reclassifications have no impact on the net loss reported for 1997.

      In the opinion of management, the accompanying unaudited consolidated
      financial statements contain adjustments (consisting only of normal and
      recurring adjustments) necessary to present fairly the Company's financial
      position and the results of operations for the periods presented and the
      disclosures herein are adequate to make the information presented not
      misleading. Operating results for interim periods are not necessarily
      indicative of the results that can be expected for a full year. These
      interim financial statements should be read in conjunction with the
      Company's audited consolidated financial statements and notes thereto.

2.   ACQUISITIONS

      In April 1998, the Company acquired Precision Security Systems, Inc.
      ("Precision"), one of the largest independent security alarm installation
      companies in South Florida, for $3,000,000 in cash consideration and
      194,269 shares of Class A Common Stock. The Company funded the cash
      portion of the acquisition using borrowings under its facility with its
      senior lender (see Note 6). The transaction was accounted for under the
      purchase method of accounting. The acquisition increased the Company's
      customer base by approximately 3,100 subscribers.

                                       6

<PAGE>

      In addition to Precision, the Company made two other acquisitions in the
      six months ended June 30, 1998. Following is a summary of the Company's
      acquisitions, all of which were accounted for under the purchase method of
      accounting:
<TABLE>
<CAPTION>

                                                                           PURCHASE PRICE
                                                                   -------------------------------
                                                                                      CLASS A        NUMBER OF
                                                                                      -------
       COMPANY ACQUIRED                                             CASH            COMMON STOCK    SUBSCRIBERS
       ----------------                                             ----            -------------   ------------
<S>                                                                <C>             <C>                   <C>  
       Mutual Central Alarm Services, Inc.  ("Mutual")             $10,522,713     1,981,700 shares      2,583
       Gator Telecom, Inc. ("Gator")                                 1,478,000        94,937 shares      1,865
       Precision                                                     3,000,000       194,269 shares      3,100
                                                                   -----------     ----------------
                                                                   $15,000,713     2,270,906 shares
                                                                   ===========     ================
</TABLE>

     In conjunction with these acquisitions, net cash consideration paid was as
follows:

        Assets acquired                      $24,479,006
        Liabilities assumed                  (4,273,136)
        Equity issued                        (5,205,157)
                                             -----------
        Cash paid                             15,000,713
        Less - cash acquired                   (659,891)
                                             -----------
        Net cash paid                        $14,340,822
                                             ===========

3.    CUSTOMER ACCOUNTS

     The following is an analysis of the changes in acquired customer accounts
for the six months ended June 30, 1998:

     Balance, December 31, 1997                                 $  8,048,495
        Purchase of customer accounts from dealers                   183,694
        Customer accounts acquired in acquisitions                20,559,498
        Internally generated accounts                              1,329,059
        Charges against contract holdbacks                           (98,333)
        Amortization of customer accounts                         (1,702,703)
                                                                 -----------
     Balance, June 30, 1998                                      $28,319,710
                                                                 ===========

     In conjunction with certain purchases of customer contracts and accounts,
     the Company withholds a portion of the price as a credit to offset
     qualifying attrition of the acquired customer accounts and for purchase
     price settlements of assets acquired and liabilities assumed. The Company
     had a total balance withheld of $94,972 and $292,297 at June 30, 1998 and
     December 31, 1997, respectively, as contract holdbacks in connection with
     the acquisition of customer accounts which are included in "Accounts
     payable and accrued expenses" in the accompanying consolidated balance
     sheets.

                                       7
<PAGE>

4.    GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill and other intangible assets, net, consist of the following:
<TABLE>

                                                                   AMORTIZATION
                                                                      PERIOD     JUNE 30, 1998     DECEMBER 31, 1997
                                                                   ------------  -------------     -----------------
<S>                                                                  <C>           <C>                <C>       
       At cost:
          Goodwill                                                   10 years      $2,729,970         $1,223,000
          Deferred financing costs                                   3 years          787,397            695,686
          Covenant not to compete, organization costs and
              other                                                5 - 10 years       381,065            203,187
                                                                                   ----------         ----------
                                                                                    3,898,432          2,121,873
       Accumulated amortization                                                      (849,549)          (606,922)
                                                                                   ----------         ----------
                                                                                   $3,048,883         $1,514,951
                                                                                   ==========         ==========
</TABLE>

5.    ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following:
<TABLE>

                                                                    JUNE 30,       DECEMBER 31,
                                                                      1998              1997
                                                                      ----              ----
<S>                                                                <C>               <C>     
       Trade accounts payable                                      $  458,655        $192,900
       Contract holdbacks                                              94,972         292,297
       Accrued commitment fee                                               -          85,266
       Other                                                        1,571,375         211,416
                                                                   ----------        --------
                                                                   $2,125,002        $781,879
                                                                   ==========        ========
</TABLE>

6.    LONG TERM OBLIGATIONS

     Long term obligations consist of the following:
<TABLE>

                                                                    JUNE 30,       DECEMBER 31,
                                                                      1998              1997
                                                                      ----              ----
<S>                                                               <C>                <C>     
       Credit facility with financial institution                 $12,160,795        $752,898
       Obligation for assets under capital lease                      123,809         136,267
       Equipment notes payable and other                              158,005         145,620
                                                                  -----------       ---------
                                                                   12,442,609       1,034,785

       Less current portion                                           (20,000)        (73,201)
                                                                  -----------       ---------
                                                                  $12,422,609       $ 961,584
                                                                  ===========       =========
</TABLE>

     In connection with the acquisition of Mutual (see Note 2), the Company
     amended its credit facility (the "Renewed Credit Facility") with Heller
     Financial, Inc., the Company's senior lender. Under the Renewed Credit
     Facility, borrowings will bear interest at floating rates, either at Prime
     plus 1 3/4% or, at the Company's election, LIBOR plus 3 1/2%. At June 30,
     1998, the debt was bearing interest at floating rates. The Renewed Credit
     Facility expires in May 2001 and shall automatically renew from year to
     year thereafter, unless terminated by either party. Availability under the
     Renewed Credit Facility is subject to certain "Borrowing Base" limitations
     (as defined). The Renewed Credit Facility includes customary covenants,
     including, but not limited to, restrictions related to the incurring of
     other debt, the encumbrance or sale of the Company's assets and the payment
     of dividends or making of other distributions to the Company's
     shareholders. The Company believes it was in compliance with all such
     covenants as of June 30, 1998.

                                       8

<PAGE>

                          GUARDIAN INTERNATIONAL, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

INTRODUCTORY NOTE

FORWARD-LOOKING STATEMENTS. In connection with the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company
is hereby providing cautionary statements identifying important factors that
could cause the Company's actual results to differ materially from those
projected in forward-looking statements (as such term is defined in the Reform
Act) made by or on behalf of the Company herein or orally, whether in
presentations, in response to questions or otherwise. Any statements that
express, or involve discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, identified
through the use of words or phrases such as the Company or management
"believes," "expects," "anticipates," "hopes," words or phrases such as "will
result," "are expected to," "will continue," "is anticipated," "estimated,"
"projection" and "outlook," and words of similar import) are not historical
facts and may be forward-looking. Such forward-looking statements involve
estimates, assumptions, and uncertainties, and, accordingly, actual results
could differ materially from those expressed in the forward-looking statements.
Such uncertainties include, among others, the following: (i) the ability of the
Company to add additional customer accounts to its account base through
acquisitions from third parties, internally generated new accounts and strategic
alliances which lend to the Company's appeal as an acquirer; (ii) the level of
subscriber attrition, (iii) the availability of capital to the Company relative
to certain larger companies in the security alarm industry which have
significantly greater capital and resources, (iv) increased false alarm fines
and/or the possibility of reduced public response to alarm signals, (v) changes
in local, state and federal regulations, (vi) availability of qualified
personnel, (vii) competitive factors in the industry, including additional
competition from existing competitors or future entrants to the industry, (viii)
social and economic conditions (ix) natural disasters and (x) other risk factors
described in the Company's reports filed with the Commission from time to time.

         The Company cautions that the factors described above could cause
actual results or outcomes to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company. Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors. Further, management cannot assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

OVERVIEW

         The majority of the Company's revenues is derived from recurring
payments for the monitoring and maintenance of security systems, pursuant to
contracts with initial terms typically ranging from one to five years. The
remainder of the Company's revenues is derived from the sale and installation of
security systems and the servicing and upgrades of such installed systems.
Monitoring and service revenues are recognized as the service is provided. The
excess of installation revenue over estimated selling costs is amortized over
the initial term of the related service/monitoring contract (generally five
years). All direct installation costs, which include equipment, labor and
installation overhead are capitalized and amortized over a five year period. In
most cases, since the Company maintains

                                       9

<PAGE>

ownership of the equipment, the costs of such equipment is capitalized to
property and equipment and amortized over seven to ten years.

         Alarm monitoring revenues generate significant gross margins, whereas
installation and service activity may result in direct costs exceeding revenues.
Management believes, however, that such installation and service activity is
necessary for the generation and retention of alarm monitoring subscribers.

         All direct external costs associated with purchases of subscriber
accounts (primarily through the acquisition of alarm companies, the Independent
Alarm Acquisition Program and the Dealer Program described in Part I, Item 1.
"Description of Business" in the Company's Form 10-KSB for the fiscal year ended
December 31, 1997) are capitalized and amortized over ten years on a
straight-line basis. In contrast, costs attributed to providing the
installations, which include direct labor, direct materials and direct overhead,
are capitalized and amortized over a five-year period. All other costs
associated with the sales and installation are charged to income in the period
when the installation occurs.

         Although no single subscriber represents more than two (2) percent of
the Company's recurring revenue base, the Company is vulnerable to subscribers
canceling their contracts. The Company experiences customer cancellations, i.e.,
attrition, of monitoring and related services as a result of subscriber
relocation, the cancellation of acquired accounts during the process of
integrating such accounts into the Company's operations, unfavorable economic
conditions and other reasons. This attrition is offset to a certain extent by
revenues from the sale of additional services to existing subscribers, the
reconnection of premises previously occupied by subscribers, the conversion of
accounts previously monitored by other alarm companies and guarantees provided
by the sellers of such accounts. The Company defines attrition numerically for a
particular period as a quotient, the numerator of which is equal to the
difference of gross MRR lost as the result of canceled subscriber accounts less
MRR lost that was replaced pursuant to guarantees from sellers of accounts
purchased by the Company, and the denominator of which is the month-end MRR at
the end of such period. Net MRR attrition of the Company's customers during the
six months ended June 30, 1998 and 1997 was less than 10%, on an annualized
basis.

         Amounts paid to independent alarm companies and Dealers are capitalized
and amortized over ten years. If a customer signed on by an independent alarm
company or Dealer is lost and not replaced, the unamortized contract amount is
written off. Such write offs are included in amortization of customer contracts
in the accompanying Statements of Operations.

         MRR represents the monthly recurring revenue the Company is entitled to
receive under subscriber contracts in effect at the end of the period. Included
in MRR and the number of subscribers are amounts associated with subscribers
with past due balances. The Company maintains the policy and practice of taking
every economically feasible action to preserve the revenue stream associated
with these contractual obligations. To this end, the Company actively works both
towards the collection of amounts owed and the retention of subscribers. In
certain instances, this collection and evaluation period may exceed six months.
When, in the judgment of the Company's collection personnel, all reasonable
efforts have been made to collect balances due and certain legal steps are taken
to ensure proper cancellation of the relevant monitoring contract, nonpaying
subscribers are disconnected from the Company's monitoring center and are
included in the calculation of net subscriber and MRR attrition.

                                       10

<PAGE>

RESULTS OF OPERATIONS

         The following table sets forth certain operating data as a percentage
of total revenues for the periods indicated.

CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>

                                                                    THREE MONTHS ENDED       SIX MONTHS ENDED
                                                                         JUNE 30,                JUNE 30,
                                                                    ------------------        ---------------
                                                                    1998          1997        1998       1997
                                                                    ----          ----        ----       ----
<S>                                                                 <C>           <C>       <C>         <C> 
Revenues:
   Monitoring                                                       62.6          74.4      64.1        70.1
   Installation and service                                         37.4          25.6      35.9        29.9
                                                                   -----         -----     -----       -----
Total revenues                                                     100.0         100.0     100.0       100.0

Operating expenses
   Monitoring                                                       14.4          14.9      14.1        13.6
   Installation and service                                         22.2          35.6      23.9        34.1
   General and administrative                                       38.9          30.0      36.3        31.9
                                                                   -----         -----     -----       -----
                                                                    75.5          80.5      74.3        79.6
                                                                   -----         -----     -----       -----
Income before interest expense, amortization and
   Depreciation                                                     24.5          19.5      25.7        20.4
                                                                   -----         -----     -----       -----

Interest expense                                                     9.6          18.0       9.3        16.9
Amortization of customer contracts                                  30.4          16.6      27.3        16.1
Depreciation and amortization                                        3.9           5.9       4.2         6.1
                                                                   -----         -----     -----       -----
                                                                    43.9          40.5      40.8        39.1
                                                                   -----         -----     -----       -----
Net loss                                                           (19.4)        (21.0)    (15.1)      (18.7)
                                                                   =====         =====     =====       =====
</TABLE>

         The Company has never had any net income and has a history of
consistent and sometimes significant net losses. Although no assurance can be
given by the Company as to when or if the Company will realize net earnings, the
Company anticipates that, based on its strategy of continued growth and customer
account expansion, and barring any unforeseen significant changes in the nature
of its business or operations (including its method of financing customer
account acquisitions through its existing and/or any Renewed Credit Facility
with Heller and the accounting for such acquisitions), it will continue to
record such net losses until such time as it has significantly reduced its
indebtedness and has substantially increased its customer base.

         Earnings before interest, taxes, depreciation and amortization
("EBITDA") is another important factor in considering profitability. EBITDA does
not represent cash flow from operations as defined by generally accepted
accounting principles, should not be construed as an alternative to net earnings
nor is it indicative of the Company's operating performance or of cash flows
available to fund all the Company's cash needs. Items excluded from EBITDA are
significant components in understanding and assessing the Company's financial
performance. Management believes presentation of EBITDA enhances an
understanding of the Company's financial condition, results of operations and
cash flows because EBITDA is used by the Company to satisfy its debt service
obligations and its capital expenditure and other operational needs as well as
to provide funds for growth. In addition, EBITDA has been used by the investment
community to determine the current borrowing capacity and to estimate the
long-term value of companies with recurring cash flows from operations and net
losses. The

                                       11

<PAGE>

following table provides a calculation of EBITDA for the three month and six
month periods ended June 30, 1998 and 1997:
<TABLE>

                                                    FOR THE THREE MONTHS            FOR THE SIX MONTHS
                                                       ENDED JUNE 30,                 ENDED JUNE 30,
                                                    --------------------           -------------------
                                                     1998          1997            1998           1997
                                                     ----          ----            ----           ----
                                                         (UNAUDITED)                   (UNAUDITED)
<S>                                                 <C>            <C>             <C>            <C>       
    Net loss                                        $(701,880)     $(283,214)      $(943,992)     $(485,258)

    Plus:
         Amortization of customer contracts         1,101,639        224,011       1,702,703        417,827
         Depreciation and amortization                140,372         79,199         263,344        157,564
         Interest expense                             346,884        243,181         582,154        440,120
                                                    ---------      ---------       ---------      ---------

              EBITDA                                $ 887,015      $ 263,177      $1,604,209      $ 530,253
                                                    =========      =========      ==========      =========
</TABLE>

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

         Total revenues for the six months ended June 30, 1998 increased 140% to
approximately $6.2 million from approximately $2.6 million during the
corresponding period in the prior year. Monitoring revenues for the six months
ended June 30, 1998 increased to approximately $4.0 million, or 120%, from
approximately $1.8 million during the corresponding period of the prior fiscal
year. Installation and service revenues for the six months ended June 30, 1998
increased by 197% to approximately $2.2 million, compared to approximately
$778,000 during the corresponding period of the prior fiscal year. Total retail
subscribers approximated 19,800 at June 30, 1998, compared to 10,900 at June 30,
1997, a net increase of 82%. The increase in revenues and number of subscribers
in 1998 from 1997 is primarily attributable to the Company's 1998 acquisitions
of Mutual, Gator and Precision (see Note 2 to the Consolidated Financial
Statements).

         Total operating expenses for the six months ended June 30, 1998
increased 150% to approximately $6.6 million compared to approximately $2.6
million during the corresponding period in the prior year. Monitoring expenses
increased 148% to approximately $878,000, compared to approximately $353,000
during the corresponding period in the prior year. As a percentage of monitoring
revenues during the six months ended June 30, 1998, monitoring expenses were
22%, compared to 19% during the corresponding period in the prior year. The
increase in monitoring costs, in absolute as well as on a percentage basis, from
1997 to 1998 was a result of the significant increase in monitoring revenues and
number of subscriber accounts, as well as the acquisition of Mutual, which
operates its own central monitoring station. Installation and service costs
during the six months ended June 30, 1998 increased by 68% to approximately $1.5
million, compared to approximately $885,000 during the corresponding period in
the prior year. The increase in total installation and service costs in 1998
from 1997 was partly the result of increases in related revenues in 1998 from
1997. As a percentage of installation and service revenue, installation and
service costs were 67% during the six months ended June 30, 1998, compared to
114%, during the corresponding period in the prior fiscal year, due to the
larger gross margins Mutual derives from its large commercial security system
sales.

         Total gross profit, defined as total revenues less monitoring and
installation and service costs, increased by 184% to approximately $3.9 million
during the six months ended June 30, 1998, compared to approximately $1.3
million during the corresponding period in the prior year. Gross profit from
monitoring revenues increased by 113% to approximately $3.1 million during the
six months ended June 30, 1998, compared to approximately $1.5 million during
the corresponding period in the prior year. The

                                       12

<PAGE>

increase in gross profit from monitoring revenues is primarily attributable to
the Company's recent acquisitions of Mutual, Gator and Precision and the May
1997 purchase of 2,200 retail customers from Alarm Controls, Inc. Gross profit
from installation and service activities increased by 799% to approximately
$749,000 during the six months ended June 30, 1998, compared to a loss of
approximately $107,000 during the corresponding period in the prior year, due to
the profitability Mutual derives from its large commercial security system
sales.

         General and administrative costs ("G&A") increased by 173% to
approximately $2.3 million during the six months ended June 30, 1998, compared
to approximately $828,000 during the corresponding period in the prior year. The
increase in G&A costs in 1998 from 1997 is related primarily to the Company's
acquisitions of Mutual (a comparably sized company), Gator and Precision and its
growth in revenue, resulting in an increase in the Company's overhead cost
structure. As a percentage of total revenues, G&A increased to 36% during the
six months ended June 30, 1998, as compared to 32% in the corresponding period
in the prior year.

         Amortization of customer contracts increased by 308% to approximately
$1.7 million during the six months ended June 30, 1998, compared to
approximately $418,000 during the corresponding period in the prior year. The
increase in such costs resulted from the increase in the amount of capitalized
customer contracts, which increased to a net balance of $28,319,710 at June 30,
1998 from $7,801,288 at June 30, 1997.

         Depreciation and amortization increased by 67% to approximately
$263,000 during the six months ended June 30, 1998, compared to approximately
$158,000 during the corresponding period in the prior year. Such costs include
depreciation of property and equipment (the gross balance of which increased to
approximately $2.5 million at June 30, 1998 from approximately $1.0 million at
June 30, 1997 as a result of (i) the Company's continued expansion activities
and (ii) the acquisitions of Mutual, Gator and Precision (which resulted in
additional property and equipment being acquired), goodwill amortization (a
gross balance of approximately $1.5 million in goodwill was recorded in
connection with the acquisitions, which is being amortized over 10 years), and
amortization of certain other intangible assets.

         Interest expense increased 32% to approximately $582,000 during the six
months ended June 30, 1998, compared to approximately $440,000 during the
corresponding period in the prior year. The increase in interest expense
resulted from additional debt incurred primarily in connection with acquiring
subscriber accounts. The majority of such subscriber acquisition costs were
financed by Heller. Total borrowings under the Renewed Credit Facility increased
to approximately $12.2 million at June 30, 1998 from approximately $7.4 million
at June 30, 1997.

         Net loss applicable to common stock for the six months ended June 30,
1998 was approximately $1.3 million, or $(0.11) per share, compared to a net
loss of approximately $485,000, or $(0.07) per share, during the corresponding
period of the prior fiscal year.

                                       13

<PAGE>

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

         Total revenues for the three months ended June 30, 1998 increased 168%
to approximately $3.6 million from approximately $1.4 million during the
corresponding period in the prior year. Monitoring revenues for the three months
ended June 30, 1998 increased to approximately $2.3 million, or 125% from
approximately $1.0 million during the corresponding period of the prior fiscal
year. Installation and service revenues for the three months ended June 30, 1998
increased by 291% to approximately $1.4 million, compared to approximately
$346,000 during the corresponding period of the prior fiscal year. Total retail
subscribers approximated 19,800 at June 30, 1998, compared to 10,900 at June 30,
1997, a net increase of 82%. The increase in revenues and number of subscribers
in 1998 from 1997 is primarily attributable to the Company's recent acquisitions
of Mutual, Gator and Precision (see Note 2 to the Consolidated Financial
Statements).

         Total operating expenses for the three months ended June 30, 1998
increased 186% to approximately $4.0 million compared to approximately $1.4
milion during the corresponding period in the prior year. Monitoring expenses
increased 158% to approximately $521,000, compared to approximately $202,000
during the corresponding period in the prior fiscal year. As a percentage of
monitoring revenues during the three months ended June 30, 1998, monitoring
expenses were 23%, compared to 20% during the corresponding period in the prior
year. The increase in monitoring costs, in absolute as well as on a percentage
basis, from 1997 to 1998 was a result of the significant increase in monitoring
revenues and number of subscriber accounts, as well as the acquisition of
Mutual, which operates its own central monitoring station. Installation and
service costs during the three months ended June 30, 1998 increased by 67% to
approximately $806,000, compared to approximately $481,000 during the
corresponding period in the prior year. The increase in total installation and
service costs in 1998 from 1997 was partly the result of increases in related
revenues in 1998 from 1997. As a percentage of installation and service revenue,
installation and service costs were 60% during the three months ended June 30,
1998, compared to 139%, during the corresponding period in the prior fiscal
year, due to the larger gross margins Mutual derives from its large commercial
security system sales.

         Total gross profit, defined as total revenues less monitoring and
installation and service costs, increased by 243% to approximately $2.3 million
during the three months ended June 30, 1998, compared to approximately $669,000
during the corresponding periods in the prior year. Gross profit from monitoring
revenues increased by 117% to approximately $1.7 million during the three months
ended June 30, 1998, compared to approximately $805,000 during the corresponding
period in the prior year. The increase in gross profit from monitoring revenues
is primarily attributable to the Company's recent acquisitions of Mutual, Gator
and Precision. Gross profit from installation and service activities increased
by 437% to approximately $525,000 during the three months ended June 30, 1998,
compared to a loss of approximately $156,000 during the corresponding period in
the prior year. This increase is due to the profitability Mutual derives from
its large commercial security system sales.

         General and administrative costs ("G&A") increased by 247% to
approximately $1.4 million during the three months ended June 30, 1998, compared
to approximately $406,000 during the corresponding period in the prior year. The
increase in G&A costs in 1998 from 1997 is related primarily to the Company's
acquisition of Mutual (a comparably sized company), Gator and Precision and its
growth in revenue, resulting in an increase in the Company's overhead cost
structure. As a percentage of total revenues, G&A increased to 39% during the
three months ended June 30, 1998, as compared to 30% during the corresponding
period in the prior year.

         Amortization of customer contracts increased by 392% to approximately
$1.1 million during the three months ended June 30, 1998, compared to
approximately $224,000 during the corresponding period

                                       14

<PAGE>

in the prior year. The increase in such costs resulted from the increase in the
amount of capitalized customer contracts, which increased to a net balance of
$28,319,710 at June 30, 1998 from $7,801,288 at June 30, 1997.

         Depreciation and amortization increased by 77% to approximately
$140,000 during the three months ended June 30, 1998, compared to approximately
$79,000 during the corresponding period in the prior year. Such costs include
depreciation of property and equipment (the gross balance of which increased to
approximately $2.5 million at June 30, 1998 from approximately $1.0 million at
June 30, 1997 as a result of (i) the Company's continued expansion activities
and (ii) the acquisitions of Mutual, Gator and Precision (which resulted in
additional property and equipment being acquired), goodwill amortization (a
gross balance of approximately $1.5 million in goodwill was recorded in
connection with the acquisitions, which is being amortized over 10 years), and
amortization of certain other intangible assets.

         Interest expense increased 43% to approximately $347,000 during the
three months ended June 30, 1998, compared to approximately $243,000 during the
corresponding period in the prior year. The increase in interest expense
resulted from additional debt incurred primarily in connection with acquiring
subscriber accounts. The majority of such subscriber acquisition costs were
financed by Heller. Total borrowings under the Renewed Credit Facility increased
to approximately $12.2 million at June 30, 1998 from approximately $7.4 million
at June 30, 1997.

         Net loss applicable to common stock for the three months ended June 30,
1998 was approximately $(904,000), or $(0.08) per share, compared to a net loss
of approximately $(283,000), or $(0.04) per share, during the corresponding
period of the prior fiscal year.


LIQUIDITY AND CAPITAL RESOURCES

         In May 1997, the Company refinanced its existing credit facility with
Heller. Under the Renewed Credit Facility, the maximum credit facility available
to the Company was increased from an existing $7,000,000 to $15,000,000. In
connection with the acquisition of Mutual (see Note 2), the Renewed Credit
Facility was further amended to increase the maximum available to $20,000,000.
The Renewed Credit Facility expires in May 2001 and shall automatically renew
from year to year thereafter, unless terminated by either party. Availability
under the Renewed Credit Facility is subject to certain "Borrowing Base"
limitations (as defined). The Renewed Credit Facility includes customary
covenants, including, but not limited to, restrictions related to the incurring
of other debt, the encumbrance or sale of the Company's assets, and the payment
of dividends or making of other distributions to the Company's shareholders and
other financial performance covenants. The Company believes it was in compliance
with all such covenants as of June 30, 1998.

         The Renewed Credit Facility will be used primarily for acquisitions of
subscriber accounts. The Company's continued plan of growth through acquisitions
of subscriber accounts is contingent upon its ability to borrow under the
Renewed Credit Facility.

                                       15

<PAGE>

         Net cash provided by operating activities during the six months ended
June 30, 1998 was approximately $1.3 million. The Company incurred a net loss of
approximately $944,000 during such period; however, included in such loss was
depreciation and amortization expense, amortization of customer contracts
expense and amortization of deferred financing costs totaling approximately $2.1
million, bad debt provision of approximately $296,000, cash outflows of
approximately $1.3 million related to increases in accounts receivable and other
assets and cash inflows of approximately $1.2 million related to net increases
in liabilities.

         Net cash used in investing activities was approximately $16.4 million
during the six months ended June 30, 1998 and was comprised of approximately
$14.3 million used in the acquisitions of Mutual, Gator and Precision, the
purchase and placement of customer accounts of approximately $1.4 million and
the purchases of fixed assets of approximately $663,000.

         Net cash provided by financing activities was approximately $15.3
million during the six months ended June 30, 1998, consisting of net proceeds
from issuance of preferred stock of approximately $4.0 million, proceeds under
borrowings from Heller of approximately $12.7 million reduced by repayments to
Heller and other long-term debt of approximately $1.3 million. The Company's
cash balance was $333,322 at June 30, 1998.

         Total shareholders' equity was $17,278,176 at June 30, 1998, increasing
by a net amount of $8,261,950 during the six months ended June 30, 1998. The net
increase resulted from the investment in the Company by Westar Security, Inc.
("Westar") and the issuance of Class A Stock in connection with the acquisitions
of Mutual, Gator and Precision less the net loss of approximately $944,000.

         As discussed in the Company's 1997 Form 10-KSB, in Part I, Item I
"Recent Developments", Westar is a wholly-owned subsidiary of Protection One,
Inc. which is a majority-owned subsidiary of Western Resources, Inc. The Company
believes that its strategic alliance with affiliates of Western Resources, Inc.
will help the Company's competitive position by (i) improving the Company's
financial strength by increasing the Company's equity; (ii) lowering its cost of
capital; (iii) improving its appeal to potential sellers of alarm accounts or
alarm companies and (iv) improving and expanding acquisition and investment
opportunities made available to the Company.

         The Company does not currently have any significant commitments for
capital outlays.

YEAR 2000 COMPLIANCE

         The Company had previously received assurance from Monitoring
Automation Systems (MAS), the supplier of the Company's monitoring and financial
software, that all applications in its software are Year 2000 compliant. In a
recent technical bulletin received from MAS, the Company was informed that all
of the MAS monitoring, database and billing systems are Year 2000 compliant,
however, its general ledger and accounts payable programs are not. The Company
is in the final stages of selecting Year 2000 compliant general ledger and
accounts payable software, which it intends to install by early 1999.

         The Year 2000 compliance status of no other supplier will materially
affect the Company's business.

         The Company believes that any costs incurred in connection with the
Year 2000 compliance will not have a material adverse effect.

                                       16

<PAGE>

CONCENTRATION OF CREDIT RISK

         Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables from a
large number of customers, including both residential and commercial customers.
The Company extends credit to its customers in the normal course of business,
performs periodic credit evaluations and maintains allowances for potential
credit losses.



                                       17

<PAGE>

                          GUARDIAN INTERNATIONAL, INC.

PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         The following issuances were exempt pursuant to Section 4(2) of the
Securities Act of 1933, as amended:

         On April 27, 1998, the Company issued 194,269 shares of Class A Stock,
pursuant to a Stock Purchase Agreement dated April 27, 1998, as partial
consideration in acquiring all of the outstanding common stock of Precision (see
Note 2 to the Consolidated Financial Statements).

                                        DATE OF             NUMBER OF 
           PURCHASER                   PURCHASE           COMMON SHARES
           ---------                   --------           -------------
           David Weston                 4/27/98              194,269

         On May 4, 1998, the Company issued 5,513 shares of Class A Stock, for
services performed in connection with an acquisition by the Company in December
1997.

                                        DATE OF             NUMBER OF 
           PURCHASER                   PURCHASE           COMMON SHARES
           ---------                   --------           -------------
           Terry E. Akins               5/4/98                5,513

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

         Effective April 15, 1998 a majority of the Class A Voting Common Stock
of the Company executed a Written Consent (the "Consent") in lieu of a meeting.
All directors nominated were elected in the Consent. For the election of
directors, results were as follows:

Harold Ginsburg     For:  6,125,557      Against:  0
Sheilah Ginsburg    For:  6,125,557      Against:  0
Richard Ginsburg    For:  6,125,557      Against:  0
Darius G. Nevin     For:  6,125,557      Against:  0
William Remington   For:  6,125,557      Against:  0


                                       18

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

     EXHIBIT NO.  DESCRIPTION
     -----------  -----------

         3(i)     Articles of Incorporation dated October 30, 1986 incorporated
                  by reference to Exhibit 3(i) of the Company's Form 10-SB filed
                  May 6, 1996
         3(i)(a)  Amendment to the Articles of Incorporation incorporated by
                  reference to Exhibit 3(i)(a) the Company's Form 10-SB filed
                  May 6, 1996
         3(i)(b)  Amendment to the Articles of Incorporation incorporated by
                  reference to Exhibit 3(i)(b) of the Company's Form 10-SB filed
                  May 6, 1996
         3(i)(c)  Amendment to the Articles of Incorporation incorporated by
                  reference to Exhibit 3(i)(c) of the Company's Form 10-SB/A
                  filed January 24, 1997
         3(ii)    Amended and Restated By-Laws of the Company incorporated by
                  reference to Exhibit 3(ii) of the Company's Quarterly Report
                  on Form 10-QSB filed as of November 14, 1997
         4(a)     Specimen Stock Certificate incorporated by reference to
                  Exhibit 4 of the Company's Form 10-SB12G as of June 18, 1996
         4(b)     Certificate of the Designations, Voting Power, Preferences and
                  Relative, Participating, Optional and Other Special Rights and
                  Qualifications, Limitations or Restrictions of Preferred
                  Stock, of Guardian International, Inc., filed in the Office of
                  the Secretary of State of the State of Nevada on February 23,
                  1998 designating the second series of Preferred Stock of the
                  Company as Series B 10 1/2% Convertible Cumulative Preferred
                  Stock, par value $.001 per share, incorporated by reference to
                  Exhibit 4(c) of the Company's Form 10-KSB filed March 31,
                  1998.
         4(c)     Amendment to Certificate of the Designations, Voting Power,
                  Preferences and Relative, Participating, Optional and Other
                  Special Rights and Qualifications, Limitations or Restrictions
                  of the Series A 9 3/4% Convertible Cumulative Preferred Stock,
                  par value $.001 per share, of Guardian International, Inc.,
                  filed in the Office of the Secretary of State of the State of
                  Nevada on March 13, 1998, incorporated by reference to Exhibit
                  4(d) of the Company's Form 10-KSB filed March 31, 1998.
         4(d)     Amendment to Certificate of the Designations, Voting Power,
                  Preferences and Relative, Participating, Optional and Other
                  Special Rights and Qualifications, Limitations or Restrictions
                  of the Series B 10 1/2% Convertible Cumulative Preferred
                  Stock, par value $.001 per share, of Guardian International,
                  Inc., filed in the Office of the Secretary of State of the
                  State of Nevada on March 13, 1998, incorporated by reference
                  to Exhibit 4(e) of the Company's Form 10-KSB filed March 31,
                  1998.
         10(a)    Stock Purchase Agreement dated as of April 27, 1998.
         10(b)    Employment Agreement with David Weston between Precision and
                  the Company dated as of April 27, 1998.
         10(c)    Indemnification Agreement between sellers of Precision and the
                  Company dated April 27, 1998.
         10(d)    Confidentiality, Noncompetition and Nonsolicitation Agreement
                  with Alan Dubow dated April 27, 1998.
         10(e)    Confidentiality, Noncompetition and Nonsolicitation Agreement
                  with Richard Clark dated April 27, 1998.
         10(f)    Confidentiality, Noncompetition and Nonsolicitation Agreement
                  with Jeff Chivers dated April 27, 1998.
         27       Financial Data Schedule (for SEC use only)


                                       19

<PAGE>

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the three months ended June
30, 1998.






                                       20

<PAGE>

                                   SIGNATURES

     In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, as of the 14th day of August, 1998.

                                                    GUARDIAN INTERNATIONAL, INC.

                                                    By: /S/ DARIUS G. NEVIN
                                                        ------------------------
                                                        Darius G. Nevin
                                                        Chief Financial Officer

                                       21

<PAGE>

                                  EXHIBIT INDEX

EXHIBIT  DESCRIPTION
-------  ------------

10(a)    Stock Purchase Agreement dated as of April 27, 1998.

10(b)    Employment Agreement with David Weston between Precision and the
         Company dated as of April 27, 1998.

10(c)    Indemnification Agreement between sellers of Precision and the Company
         dated April 27, 1998.

10(d)    Confidentiality, Noncompetition and Nonsolicitation Agreement with Alan
         Dubow dated April 27, 1998.

10(e)    Confidentiality, Noncompetition and Nonsolicitation Agreement with
         Richard Clark dated April 27, 1998.

10(f)    Confidentiality, Noncompetition and Nonsolicitation Agreement with Jeff
         Chivers dated April 27, 1998.

27       Financial Data Schedule (for SEC use only) E-1