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

                                   FORM 10-QSB

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002


[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT

                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)

                FLORIDA                                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 Securities Exchange Act of 1934, as amended (the
"Exchange Act") during the past 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

         As of November 13, 2002, Guardian International, Inc. had 8,096,441
shares of Class A Voting Common Stock, par value $.001 per share, and 634,035
shares of Class B Non-Voting Common Stock, par value $.001 per share, issued and
outstanding.

           TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):

                               YES       NO  X
                                   ---      ---

<PAGE>




                          GUARDIAN INTERNATIONAL, INC.

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                  Page No.
                                                                                                  --------
<S>             <C>                                                                                   <C>
PART I          FINANCIAL INFORMATION

Item 1.         Financial  Statements

                Consolidated Balance Sheets as of September 30, 2002 and
                     December 31, 2001                                                                 1

                Consolidated Statements of Operations for the Three and Nine
                     Months Ended September 30, 2002 and 2001                                          2

                Consolidated  Statement of Changes in  Shareholders'  Deficit for the
                Nine Months Ended September 30, 2002                                                   3

                Consolidated Statements of Cash Flows for the Nine Months
                     Ended September 30, 2002 and 2001                                                 4

                Notes to Consolidated Financial Statements                                             5

Item 2.         Management's Discussion and Analysis                                                  10

Item 4.         Controls and Procedures                                                               19

PART II         OTHER INFORMATION

Item 6.         Exhibits and Reports on Form 8-K                                                      20

Signatures                                                                                            21

Certifications                                                                                        22

Index to Exhibits                                                                                     24
</TABLE>

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

                                                                                SEPTEMBER 30, 2002   DECEMBER 31, 2001
                                                                                ------------------   -----------------
ASSETS                                                                             (UNAUDITED)
<S>                                                                                  <C>               <C>
Current assets:
      Cash and cash equivalents                                                      $    552,999      $    713,204
      Accounts receivable, net of allowance for doubtful accounts
             of  $304,434 and $250,186, respectively                                    2,311,317         1,986,094
      Current portion of notes receivable                                                  81,619            96,619
      Inventories                                                                       1,136,030           931,501
      Prepaid expense and other                                                           400,486           219,758
                                                                                     ------------      ------------
             Total current assets                                                       4,482,451         3,947,176

Property and equipment, net                                                            10,692,755         9,769,146
Customer accounts, net                                                                 16,089,692        18,485,550
Goodwill and other intangible assets, net                                               1,514,750         1,531,883
Notes receivable, less current portion                                                     59,005            57,467
Deposits and other assets                                                               1,776,659         1,375,791
                                                                                     ------------      ------------
             Total assets                                                            $ 34,615,312      $ 35,167,013
                                                                                     ============      ============

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
      Accounts payable and accrued expenses                                          $  3,577,971      $  3,902,562
      Current portion of unearned revenue                                               2,529,238         2,380,013
      Current portion of long-term obligations                                            167,642           178,065
                                                                                     ------------      ------------
             Total current liabilities                                                  6,274,851         6,460,640
Unearned revenue, less current portion                                                  9,791,805         8,073,978
Long-term obligations, less current portion                                            13,632,251        13,065,091
                                                                                     ------------      ------------
             Total liabilities                                                         29,698,907        27,599,709
                                                                                     ------------      ------------

Commitments and contingencies (Note 7)
Redeemable cumulative preferred stock, $.001 par value
      Series C 7% preferred stock, 8,397 shares issued and outstanding, $8.4
      million liquidation preference, at September 30, 2002 and
      December 31, 2001, respectively                                                   8,397,000         8,397,000
                                                                                     ------------      ------------

Shareholders' deficit:
      Preferred stock, $.001 par value, 30 million shares authorized Series D 6%
             preferred stock, 12,051 and 11,369 shares issued and outstanding,
             $12.1 million and $11.4 million liquidation preference, at
             September 30, 2002 and December 31, 2001,
             respectively                                                                      12                11
             Series E 7% preferred stock, 8,000 shares issued and
             outstanding, $8.0 million liquidation preference, at
             September 30, 2002 and December 31, 2001, respectively                             8                 8
      Class A voting common stock, $.001 par value, 100,000,000 shares
             authorized, 8,096,441 issued and outstanding                                   8,097             8,097
      Class B non-voting common stock, $.001 par value, 1,000,000 shares
             authorized, 634,035 shares issued and outstanding                                634               634
      Additional paid-in capital                                                       27,291,064        26,748,771
      Accumulated deficit                                                             (30,780,410)      (27,587,217)
                                                                                     ------------      ------------
             Total shareholders' deficit                                               (3,480,595)         (829,696)
                                                                                     ------------      ------------
             Total liabilities and shareholders' deficit                             $ 34,615,312      $ 35,167,013
                                                                                     ============      ============
</TABLE>

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


                                       1
<PAGE>
                          GUARDIAN INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                  FOR THE THREE MONTHS ENDED         FOR THE NINE MONTHS ENDED
                                                         SEPTEMBER 30,                    SEPTEMBER 30,
                                               ------------------------------      ------------------------------
                                                    2002             2001              2002              2001
                                               ------------      ------------      ------------      ------------
<S>                                            <C>               <C>               <C>               <C>
Revenues:
     Monitoring                                $  3,545,386      $  3,302,964      $ 10,495,709      $  9,875,951
     Installation and service                     2,061,668         2,078,193         6,010,946         5,705,625
     Other revenues                                  66,442            44,382           195,623           144,742
                                               ------------      ------------      ------------      ------------
        Total revenues                            5,673,496         5,425,539        16,702,278        15,726,318
                                               ------------      ------------      ------------      ------------

Operating expenses:
     Monitoring                                     572,826           491,027         1,624,723         1,517,737
     Installation and service                     1,558,076         1,723,956         4,443,420         4,815,123
     Selling, general and administrative          2,103,553         2,027,354         6,365,289         6,071,796
     Amortization of customer accounts            1,108,661         1,188,832         3,341,738         3,475,070
     Depreciation and amortization                  700,166           685,007         2,100,617         1,969,049
                                               ------------      ------------      ------------      ------------
        Total operating expenses                  6,043,282         6,116,176        17,875,787        17,848,775
                                               ------------      ------------      ------------      ------------

        Operating loss                             (369,786)         (690,637)       (1,173,509)       (2,122,457)

Interest and other expense, net                    (248,330)         (228,116)         (616,546)         (848,617)
                                               ------------      ------------      ------------      ------------

       Net loss                                    (618,116)         (918,753)       (1,790,055)       (2,971,074)

Preferred stock dividends                          (467,707)         (457,483)       (1,403,135)       (1,372,450)
Gain on exchange of preferred stock                      --                --                --         2,594,070
                                               ------------      ------------      ------------      ------------

       Net loss applicable to
               common stock                    $ (1,085,823)     $ (1,376,236)     $ (3,193,190)     $ (1,749,454)
                                               ============      ============      ============      ============

Basic and diluted loss per common share:

Net loss                                              (0.12)            (0.16)            (0.37)            (0.20)
                                               ============      ============      ============      ============

Weighted average common shares outstanding        8,730,476         8,730,476         8,730,476         8,730,476
                                               ============      ============      ============      ============
</TABLE>

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

                                       2
<PAGE>




                          GUARDIAN INTERNATIONAL, INC.
           CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>

                                               Preferred Stock              Preferred Stock               Common Stock
                                                  Series D                     Series E                      Class A
                                           Shares         Amount         Shares         Amount         Shares         Amount
                                        ------------   ------------   ------------   ------------   ------------   ------------
<S>                                           <C>      <C>                   <C>     <C>               <C>         <C>
Balance at December 31, 2001                  11,369   $         11          8,000   $          8      8,096,441   $      8,097

   Series C preferred dividends                   --             --             --             --             --             --
   Issuance and accrual of additional
      Series D preferred shares as
      dividends                                  682              1             --             --             --             --
   Series E preferred dividends                   --             --             --             --             --             --
   Net loss                                       --             --             --             --             --             --
                                        ------------   ------------   ------------   ------------   ------------   ------------
Balance at  September 30, 2002                12,051   $         12          8,000   $          8      8,096,441   $      8,097
                                        ============   ============   ============   ============   ============   ============
[RESTUBBED]
<CAPTION>

                                                Common Stock            Additional
                                                   Class B               Paid-in       Accumulated
                                           Shares           Amount        Capital        Deficit          Total
                                         ------------   ------------   ------------   ------------    ------------
<S>                                           <C>       <C>              <C>          <C>             <C>
Balance at December 31, 2001                  634,035   $        634     26,748,771   $(27,587,217)   $   (829,696)

   Series C preferred dividends                    --             --             --       (440,845)       (440,845)
   Issuance and accrual of additional
      Series D preferred shares as
      dividends                                    --             --        542,293       (542,293)              1
   Series E preferred dividends                    --             --             --       (420,000)       (420,000)
   Net loss                                        --             --             --     (1,790,055)     (1,790,055)
                                         ------------   ------------   ------------   ------------    ------------
Balance at  September 30, 2002                634,035   $        634   $ 27,291,064   $(30,780,410)   $ (3,480,595)
                                         ============   ============   ============   ============    ============
</TABLE>

The accompanying notes are an integral part of this consolidated
financial statement.

                                       3
<PAGE>

                          GUARDIAN INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                         FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                         ---------------------------------------
                                                                   2002          2001
                                                               -----------    -----------
<S>                                                            <C>            <C>
Cash Flows from Operating Activities:
     Net loss                                                  $(1,790,055)   $(2,971,074)
     Adjustments to reconcile net loss to net cash
     provided by operating activities:
            Gain on sale of property and equipment                  (3,079)            --
            Depreciation and amortization                        2,100,617      1,969,049
            Amortization of customer accounts                    3,341,738      3,475,070
            Amortization of deferred financing costs               173,802        118,333
            Provision for doubtful accounts                        440,362        423,708
            Provision for inventory losses                              --         39,000
     Changes in assets and liabilities:
            Accounts receivable                                   (767,123)      (700,520)
            Inventory                                             (204,529)         1,747
            Prepaid expenses and other                            (180,728)      (146,158)
            Notes receivable                                        15,000             --
            Deposits and other assets                             (203,998)       (67,491)
            Accounts payable and accrued expenses                 (474,930)      (213,107)
            Unearned revenue                                     1,844,848      1,295,610
                                                               -----------    -----------
            Net cash provided by operating activities            4,291,925      3,224,167
                                                               -----------    -----------

Cash Flows from Investing Activities:
     Purchase of property and equipment                           (162,481)      (385,169)
     Purchase of customer accounts                                (773,339)       (49,777)
     Sale of property and equipment                                 16,500             --
     Capitalized installation costs                             (2,875,164)    (2,595,456)
     Other                                                         (66,332)      (288,389)
                                                               -----------    -----------
            Net cash used in investing activities               (3,860,816)    (3,318,791)
                                                               -----------    -----------

Cash Flows from Financing Activities:
     Debt financing costs                                         (287,207)      (138,880)
     Payments on debt obligations                               (1,537,521)    (2,119,559)
     Borrowings under line of credit                             2,094,258      2,938,484
     Equity issuance costs                                              --        (69,930)
     Payment of cash dividends                                    (860,844)      (860,844)
                                                               -----------    -----------
            Net cash used in financing activities                 (591,314)      (250,729)
                                                               -----------    -----------

            Net decrease in cash and cash equivalents             (160,205)      (345,353)

Cash and cash equivalents, beginning of period                     713,204        722,525
                                                               -----------    -----------
Cash and cash equivalents, end of period                       $   552,999    $   377,222
                                                               ===========    ===========

Supplemental disclosure:
     Interest paid                                             $   671,233    $   911,207
                                                               ===========    ===========
                                                               $        --    $        --
                                                               ===========    ===========
Non-cash investing and financing activities:

     Retirement of Series C Preferred Stock                    $        --    $ 8,000,000
                                                               ===========    ===========
     Issuance of Series E Preferred Stock                      $        --    $ 5,336,000
                                                               ===========    ===========
     Preferred stock dividends                                 $   542,293    $ 1,155,130
                                                               ===========    ===========
     Contract holdbacks for purchased accounts                 $   172,493    $     7,348
                                                               ===========    ===========
     Contract holdbacks applied against accounts written off   $    20,914    $    67,963
                                                               ===========    ===========
</TABLE>


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


                                       4
<PAGE>


                          GUARDIAN INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   ACCOUNTING POLICIES

     Basis of Presentation
     ---------------------
     The accompanying unaudited consolidated financial statements of Guardian
     International, Inc. (the "Company") have been prepared pursuant to the
     rules and regulations of the Securities and Exchange Commission (the
     "SEC"). In the opinion of management, the accompanying unaudited
     consolidated financial statements contain all adjustments (consisting only
     of normal and recurring adjustments) necessary to present fairly the
     Company's financial position and the results of its 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 consolidated financial statements should be read
     in conjunction with the Company's audited consolidated financial statements
     and notes thereto for the year ended December 31, 2001, included in the
     Company's Annual Report on Form 10-KSB.

     Revenue Recognition
     -------------------
     Monitoring Revenue. Customers are billed for monitoring services primarily
     on a monthly or quarterly basis in advance of the period in which such
     services are provided. Unearned revenues result from billings in advance of
     performance of monitoring services. Contracts for monitoring services are
     generally for an initial non-cancelable term of three to 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.

     Installation Revenue. On installations for which the Company retains title
     to the electronic security systems or provides monitoring services
     subsequent to the installation, the installation revenue is deferred,
     classified as unearned revenue on the Company's consolidated balance sheet,
     and then recognized over the longer of the term of the service agreement or
     the estimated eight-year life of the customer relationship. All other
     installation revenues are recognized in the period in which the
     installation is completed. When a customer to whom we are providing
     monitored services cancels the service, any unearned revenue balance is
     recognized in the period in which the cancellation occurs.

     Service Revenue. Customers are billed for maintenance service, often in
     conjunction with monitoring services, primarily on a monthly or quarterly
     basis in advance of the period in which such services are provided.
     Unearned revenues result from billings in advance of performance of
     maintenance services. Contracts for maintenance services are generally for
     an initial non-cancelable term of three to 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.
     Additional revenue is generated from services rendered by the Company to
     customers without such contracts who request maintenance and repair
     services. This service revenue is recognized when the service is completed.

     Cost Accounting
     ---------------
     All direct installation costs, which include materials, direct labor and
     commissions, related to installations that result in deferred installation
     revenue, are capitalized on an agreement-by-agreement basis to the extent
     such costs do not exceed the total of deferred installation revenue and
     expected margin from monitoring services during the initial service
     contract term. To the extent such costs exceed the total of deferred
     installation revenue and expected margin from monitoring services during



                                       5
<PAGE>

     the initial service contract term, the excess is expensed as installation
     and operating expense in the period in which the installation is completed.
     Capitalized installation costs, to the extent of deferred installation
     revenue, are expensed over the longer of the term of the service agreement
     or the estimated eight-year life of the customer relationship. Capitalized
     installation costs in excess of deferred installation revenues, but which
     are less than the expected margin from monitoring services during the
     initial service contract term, are expensed over the initial term of the
     service agreement. Capitalized materials and direct labor costs, which are
     included in property and equipment, net totaling approximately $9.4 million
     at September 30, 2002, are expensed as depreciation; capitalized
     commissions, which are included in deposits and other assets totaling
     approximately $1.4 million at September 30, 2002, are expensed as
     installation and service operating expense. When a customer to whom we are
     providing monitored services cancels the service, any capitalized cost
     balance is recognized in the period in which the cancellation occurs.

     Comprehensive Loss
     ------------------
     The Company has no comprehensive loss components for the three and nine
     months ended September 30, 2002 and 2001, therefore, comprehensive loss is
     the same as net loss for all periods.

     Reclassifications
     -----------------
     Certain 2001 amounts in the consolidated financial statements have been
     reclassified to conform to the 2002 presentation.

2.   CUSTOMER ACCOUNTS, NET

     The following is an analysis of the changes in customer accounts, net:
<TABLE>
<CAPTION>
                                                          Nine Months          Nine Months
                                                             Ended                Ended
                                                      September 30, 2002    September 30, 2001
                                                      ------------------    -------------------
<S>                                                     <C>                   <C>
     Balance, beginning of period                       $ 18,485,550          $ 22,381,795
           Purchase of customer accounts from dealers        966,794                57,538
           Charges against contract holdbacks                (20,914)              (67,963)
           Amortization of customer accounts              (3,341,738)           (3,475,070)
                                                        ------------          ------------
     Balance, end of period                             $ 16,089,692          $ 18,896,300
                                                        ============          ============
</TABLE>

     In conjunction with certain purchases of customer accounts, the Company
     withholds a portion of the price as a credit to offset qualifying attrition
     of these purchased customer accounts and for purchase price settlements of
     assets acquired and liabilities assumed. The Company had a total balance
     withheld of approximately $342,000 and $44,000 at September 30, 2002 and
     September 30, 2001, respectively, as contract holdbacks in connection with
     the purchase of customer accounts which are included in accounts payable
     and accrued expenses in the accompanying consolidated balance sheets.

3.   GOODWILL AND OTHER INTANGIBLE ASSETS, NET

     Goodwill and other intangible assets, net, consist of the following:
<TABLE>
<CAPTION>
                                   Amortization         September 30,        December 31,
                                 Period in years            2002                 2001
                                 -----------------      ------------        --------------
<S>                              <C>                    <C>                  <C>
     Goodwill                                           $ 2,278,902          $ 2,409,443
     Deferred financing costs           2                   287,207              275,000
                                                        -----------          -----------
                                                          2,566,109            2,684,443
     Accumulated amortization                            (1,051,359)          (1,152,560)
                                                        -----------          -----------
                                                        $ 1,514,750          $ 1,531,883
                                                        ===========          ===========
</TABLE>

                                       6
<PAGE>

     In July 2001, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 142 "Goodwill and Other Intangible
     Assets" ("SFAS 142"). SFAS 142 addresses financial accounting and reporting
     for intangible assets acquired individually or with a group of other assets
     (but not those acquired in a business combination) at acquisition. SFAS 142
     also addresses financial accounting and reporting for goodwill and other
     intangible assets subsequent to their acquisition. With the adoption of
     SFAS 142, goodwill is no longer subject to amortization. Rather, goodwill
     will be subject to at least an annual assessment for impairment by applying
     a fair-value based test. The impairment loss is the amount, if any, by
     which the implied fair value of goodwill and other intangible assets is
     less than the carrying or book value. SFAS 142 is effective for fiscal
     years beginning after December 15, 2001. Impairment loss for goodwill and
     other intangible assets arising from the initial application of SFAS 142 is
     to be reported as resulting from a cumulative effect of a change in
     accounting principle. The Company adopted SFAS 142 as of January 1, 2002,
     and performed the required goodwill impairment review. Based on that
     impairment review, the Company has determined that no impairment loss from
     initial application is required.

     The following table reflects the Company's results for the three and nine
     months ended September 30, 2001, calculated using the new accounting
     treatment discussed above, compared to the Company's results for the three
     and nine months ended September 30, 2002.
<TABLE>
<CAPTION>
                                             Three months ended September 30,         Nine months ended September 30,
                                            ----------------------------------      ----------------------------------
                                                 2002               2001                2002                2001
                                            -------------       -------------       -------------       -------------
<S>                                         <C>                 <C>                 <C>                 <C>
     Reported net loss applicable to
     common stock                           $  (1,085,823)      $  (1,376,236)      $  (3,193,190)      $  (1,749,454)
     Add back:  Goodwill amortization                  --              46,850                  --             140,549
                                            -------------       -------------       -------------       -------------
     Adjusted net loss                      $  (1,085,823)      $  (1,329,386)      $  (3,193,190)      $  (1,608,905)
                                            =============       =============       =============       =============

     Basic and diluted loss per share:
     Reported net loss                              (0.12)              (0.16)              (0.37)              (0.20)
     Add back:  Goodwill amortization                  --                0.01                  --                0.02
                                            -------------       -------------       -------------       -------------
     Adjusted net loss                              (0.12)              (0.15)              (0.37)              (0.18)
                                            =============       =============       =============       =============
</TABLE>

4.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following:

                                           September 30,       December 31,
                                              2002                 2001
                                           ----------           ----------

     Trade accounts payable                $1,098,735           $  908,579
     Contract holdbacks                       342,029              198,862
     Preferred dividends payable              286,944              286,944
     Customer deposits                        661,126              962,450
     Accrued expenses                       1,189,137            1,545,727
                                           ----------           ----------
                                           $3,577,971           $3,902,562
                                           ==========           ==========

                                       7
<PAGE>



5.   LONG-TERM OBLIGATIONS

     Long-term obligations consist of the following:
<TABLE>
<CAPTION>

                                                  September 30, 2002    December 31, 2001
                                                  ------------------    ------------------
<S>                                                  <C>                    <C>
     Credit facility with financial institution      $ 13,344,486           $ 12,672,515
     Capital lease obligations                            234,290                265,465
     Equipment notes payable and other                    221,117                305,176
                                                     ------------           ------------
                                                       13,799,893             13,243,156
     Less : current portion                              (167,642)              (178,065)
                                                     ------------           ------------
                                                     $ 13,632,251           $ 13,065,091
                                                     ============           ============
</TABLE>

     On June 28, 2002, the Company entered into a new $20.0 million senior
     credit facility ("Credit Facility"), replacing its previously existing
     $20.0 million senior credit facility. The Credit Facility has an
     initial expiration date of July 2004, and the Company may extend the
     facility for up to two additional years, subject to the occurrence of
     certain events. Under the Credit Facility, borrowings bear interest at
     floating rates, either at a certain index rate plus 1 3/4% (6.50% at
     September 30, 2002) or, at the Company's election, LIBOR plus 3 1/4%.
     Under the terms of the Credit Facility, the Company is required to meet
     certain financial performance covenants. The Company was in compliance
     with all such covenants as of September 30, 2002. At September 30, 2002,
     $6.7 million was available under the Credit Facility.

6.   EQUITY TRANSACTIONS

     On April 16, 2001, Richard Ginsburg, then president and chief executive
     officer of the Company, was named chief executive officer and a member of
     the Board of Directors of Protection One, Inc. ("Protection One"), an
     87.9%-owned subsidiary of Westar Energy, Inc. ("Westar Energy").

     In connection with Richard Ginsburg's resignation, the Company exchanged $8
     million principal amount of Series C 7% Redeemable Preferred Stock of the
     Company held by Westar Investments, Inc. ("Westar"), a subsidiary of Westar
     Energy, for $8 million principal amount of a newly issued Series E 7%
     Cumulative Preferred Stock, which is redeemable after October 21, 2001 at
     the Company's option, and is classified as equity in the Company's
     consolidated balance sheet. This transaction has undergone a third party
     appraisal, and as a result of this appraisal, the Company recorded a gain
     during the three months ended June 30, 2001 of approximately $2.6 million
     which is reflected in shareholders' deficit and is allocated to common
     shareholders in the loss per share calculation.

     Protection One also granted the Company a warrant to purchase 250,000
     shares of Protection One's common stock at an exercise price of $1.31 per
     share. The warrant vests one-third annually over three years and has a
     ten-year term. This warrant and the related gain are being recorded ratably
     over the vesting period as non-operating other income based on the variable
     valuation of the warrant using the Black Scholes model at each quarter-end.
     As a result of this transaction, other income of approximately $150,000 and
     approximately $67,000 was recorded in the nine months ended September 30,
     2002 and 2001, respectively.

     In October 1998, the Company issued its Series D 6% Convertible Cumulative
     Preferred Stock ("Series D Preferred Stock"). This series of preferred
     stock allows for the annual dividend obligation, payable on January 1st of
     each year, to be satisfied in either cash or additional Series D Preferred
     Stock, at the option of the Company. To date, the Company has elected to
     issue additional Series D Preferred Stock to satisfy the dividend.

                                       8
<PAGE>

7.   COMMITMENTS AND CONTINGENCIES

     The Company experiences routine litigation in the normal conduct of its
     business. The Company believes that any such pending litigation will not
     have, individually or in the aggregate, a material adverse effect on its
     business, financial condition or results of operations.


                                       9
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD-LOOKING STATEMENTS

         Certain statements contained in this Quarterly Report on Form 10-QSB
are forward-looking statements, which generally express, or involve discussions
as to, expectations, beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, including words or phrases such as
"believes," "expects," "anticipates," "hopes," or other words of similar
import).

         These forward-looking statements are based largely on expectations and
are subject to a number of risks and uncertainties. Such risks and 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, through internal sales efforts and through strategic alliances; (ii)
the level of customer 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 Securities
and Exchange Commission from time to time. Many of these risks and uncertainties
are beyond the Company's control. Actual results could differ materially from
the forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking
information contained in this report will, in fact, occur.

         Any forward-looking statement speaks only as of the date on which such
statement is made. New factors emerge from time to time and it is not possible
for management to predict all of such factors, nor can it 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 AND DISCUSSION OF CRITICAL ACCOUNTING POLICIES

         Guardian is a provider of monitoring (retail and wholesale),
maintenance services, sales and installation for high-grade electronic security
and fire alarm systems to commercial and residential customers primarily in the
states of Florida and New York.

         The Company's objective is to provide commercial and residential
security services to an increasing number of customers. The Company's growth
strategy is to enhance its position in the security alarm monitoring industry in
Florida and in the Metropolitan New York City area by increasing the number and
density of customers for whom it provides services. The Company is pursuing this
strategy through a balanced growth plan to generate monitoring and maintenance
contracts with its own sales and installation efforts through referrals and
traditional local marketing as well as incorporating purchases of portfolios of
customer accounts in existing and contiguous markets. The Company believes that
increasing the number and density of its customers will help it to achieve
economies of scale and enhance its results of operations. The Company also
regularly reviews opportunities for expanding its operations into other large
metropolitan markets.

         In order to finance this strategy, the Company has chosen to issue
yield-bearing instruments (such as senior debt or preferred stock), which
results in related interest and dividend expense. The Company believes that this
strategy, which emphasize creating long-term value over short-term net income,
will result in the Company's recording of net losses until such time as: (i) the
Company's cash flow from its increased customer base allows it to reduce
significantly its indebtedness and related interest costs; and (ii) the
Company's amortization expense related to acquired alarm contracts, through the


                                       10
<PAGE>

passage of time and recognition of account cancellations, is reduced. The
Company has never had net income and has a history of consistent and sometimes
significant net losses.

         The majority of the Company's revenue is derived from recurring
payments received for the monitoring and maintenance of security and fire alarm
systems, pursuant to contracts with initial terms typically ranging from three
to five years. Additional revenue is generated from services rendered by the
Company to customers without such contracts who request maintenance and repair
services. Historically, monitoring revenues have generated higher gross profit
margins than revenues derived from maintenance and service activities. Both
monitoring, maintenance and service revenues are recognized as the service is
provided. Unearned revenues result from billings in advance of performance of
monitoring and maintenance services. Contracts for monitoring services are
generally for an initial non-cancelable term of three to 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.

         Installation revenues produce lower gross profit margins than those
generated by monitoring revenues, but they are an integral component of the
Company's ability to retain and establish new monitoring and maintenance
customers. On installations for which the Company retains title to the
electronic security systems or provides monitoring services subsequent to the
installation, the installation revenue is deferred, classified as unearned
revenue on the Company's consolidated balance sheet, and then recognized over
the longer of the term of the service agreement or the estimated eight-year life
of the customer relationship. All other installation revenues are recognized in
the period in which the installation is completed. All direct installation
costs, which include materials, direct labor and commissions, related to
installations that result in deferred installation revenue, are capitalized on
an agreement-by-agreement basis to the extent such costs do not exceed the total
of deferred installation revenue and expected margin from monitoring services
during the initial service contract term. To the extent such costs exceed the
total of deferred installation revenue and expected margin from monitoring
services during the initial service contract term, the excess is expensed as
installation and operating expense in the period the installation is completed.
Capitalized installation costs, to the extent of deferred installation revenues,
are expensed over the longer of the term of the service agreement or the
estimated eight-year life of the customer relationship. Capitalized costs in
excess of deferred revenues, but which are less than the expected margin from
monitoring services during the initial service contract term, are expensed over
the initial term of the service agreement. Capitalized materials and direct
labor costs, which are included in property and equipment, net totaling
approximately $9.4 million at September 30, 2002, are expensed as depreciation;
capitalized commissions, which are included in deposits and other assets
totaling approximately $1.4 million at September 30, 2002, are expensed as
installation and service operating expense. When a customer to whom we are
providing monitored services cancels the service, any unearned revenue balance
and the associated capitalized cost balance are recognized in the period in
which the cancellation occurs.

           Purchased contracts, which are identified as customer accounts, net
on the consolidated balance sheet, are reflected at cost. The cost of purchased
accounts is based on the estimated fair value at the date of purchase. The cost
of customer accounts is capitalized and amortized on a straight-line basis over
an estimated useful life of ten years. For those accounts which cancel during
the amortization period, an estimate of the remaining carrying value of the
accounts is expensed in the period in which the accounts cancel. It is the
Company's policy to perform periodic evaluations of purchased customer account
attrition and, if necessary, to adjust the remaining useful lives. The Company
periodically estimates future cash flows from customer accounts to determine
whether any impairment has occurred. If the estimated future cash flows are less
than their unamortized cost, an impairment charge is recorded for the amount
that the unamortized cost of customer accounts exceeds their estimated fair
value. Based on the current balance in customer accounts, net, and our historic
rate of amortization expense, the majority of this asset will be fully amortized
within the next four years.


                                       11
<PAGE>


KEY OPERATING MEASURES

         The Company believes that EBITDA, RMR and RMR attrition are key
measurements of performance in the security monitoring industry.

         EBITDA. The Company manages its business based on earnings before
interest, taxes, depreciation and amortization ("EBITDA") which we derive by
adjusting net loss by adding: (i) amortization of customer accounts, (ii)
depreciation and amortization, and (iii) interest and other expense, net as set
forth in the table below.

         EBITDA does not represent cash flow from operations as defined by
accounting principles generally accepted in the United States, should not be
construed as an alternative to operating income and is indicative neither of
operating performance nor of cash flows available to fund the cash needs of the
Company. Items excluded from EBITDA are significant components in understanding
and assessing the financial performance of the Company. The Company believes
presentation of EBITDA enhances an understanding of 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 is used by
senior lenders and the investment community to determine the current borrowing
capacity and to estimate the long-term value of companies with recurring cash
flows from operations. The Company's computation of EBITDA may not be comparable
to other similarly titled measures of other companies.

         The following table provides a calculation of EBITDA for the three and
nine months ended September 30, 2002 and 2001:
<TABLE>
<CAPTION>
                                                        Three Months Ended                Nine Months Ended
                                                           September 30,                     September 30,
                                                   -----------------------------       -----------------------------
                                                       2002              2001              2002              2001
                                                   -----------       -----------       -----------       -----------
<S>                                                <C>               <C>               <C>               <C>
     Net loss                                      $  (618,116)      $  (918,753)      $(1,790,055)      $(2,971,074)
     Plus :
            Amortization of customer accounts        1,108,661         1,188,832         3,341,738         3,475,070
            Depreciation and amortization              700,166           685,007         2,100,617         1,969,049
            Interest and other expense, net            248,330           228,116           616,546           848,617
                                                   -----------       -----------       -----------       -----------
                   EBITDA                          $ 1,439,041       $ 1,183,202       $ 4,268,846       $ 3,321,662
                                                   ===========       ===========       ===========       ===========
</TABLE>

         Recurring Monthly Revenue ("RMR"). RMR is revenue that the Company is
entitled to receive under monitoring and maintenance service contracts in effect
at the end of the period. Because the Company has grown rapidly, often by
acquiring security alarm companies and portfolios of customer accounts which are
included in revenues only from the date of purchase, the Company's revenues are
not proportional to the level of its investment of capital reported to the end
of the period upon which a return must be earned. Management believes RMR
enhances an investor's understanding of the Company's financial condition,
results of operations and cash flows because it provides a measure of the
Company's revenue that can be used to derive estimated annual revenues acquired
in purchases for a full year of operations. As a result, RMR can be compared to
the level of investment in the statement of financial condition at the end of
the period. By comparing RMR to cash, debt and equity balances at the end of a
period, an investor can assess the Company's investment track record. Further,
management believes an investor's consideration of RMR relative to the Company's
customer base helps identify trends in RMR per customer. RMR does not measure
profitability or performance, and does not include any allowance for future
losses of customers or allowance for doubtful accounts. The Company does not


                                       12
<PAGE>

have sufficient information as to the losses of purchased customers accounts to
predict with absolute certainty the amount of acquired RMR that will be realized
in future periods or the impact of the loss of acquired accounts on our overall
rate of customer loss. Our computation of RMR may not be comparable to other
similarly titled measures of other companies and RMR should not be viewed by
investors as an alternative to actual monthly revenue as determined in
accordance with accounting principles generally accepted in the United States.
RMR at September 30, 2002 and 2001 was approximately $1,220,000 and $1,135,000,
respectively.

         RMR Attrition. The Company experiences customer cancellations, which
are commonly referred to as attrition, for monitoring and maintenance services
as a result of customer relocation, unfavorable economic conditions and other
reasons. This attrition is offset by revenues from the sale of services to new
customers, the sale of additional services to existing customers, periodic price
increases, the reconnection of premises previously occupied by customers, the
conversion of accounts previously monitored by other alarm companies and the
replacement of lost accounts by the sellers of accounts covered under
guarantees. The Company defines RMR attrition numerically for a particular
period as a quotient. The numerator of this quotient is equal to the difference
between gross RMR lost as the result of canceled customer accounts and RMR lost
that was replaced pursuant to guarantees from sellers of accounts purchased by
the Company, replaced by periodic price increases, and replaced by the
reconnection of premises previously occupied by customers. The denominator of
this quotient is the average RMR for such period. RMR attrition for the Company
was under 10% for the twelve months ended September 30, 2002 and 2001.

CONSOLIDATED STATEMENT OF OPERATIONS

             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

         The following table sets forth certain operating data as a percentage
of total revenues for the periods indicated:
<TABLE>
<CAPTION>

                                               FOR THE THREE MONTHS ENDED   FOR THE NINE MONTHS
                                                      SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                                   -----------------         ------------------
                                                    2002        2001          2002         2001
                                                   -----        -----        -----        -----
<S>                                                 <C>          <C>          <C>          <C>
Revenues:
        Monitoring                                  62.5%        60.9%        62.8%        62.8%
        Installation and service                    36.3         38.3         36.0         36.3
        Other revenues                               1.2          0.8          1.2          0.9
                                                   -----        -----        -----        -----
                 Total revenues                    100.0        100.0        100.0        100.0

Operating expenses:
        Monitoring                                  10.1          9.1          9.7          9.7
        Installation and service                    27.5         31.8         26.6         30.6
        Selling, general and administrative         37.1         37.4         38.1         38.6
        Amortization of customer accounts           19.5         21.9         20.0         22.1
        Depreciation and amortization               12.3         12.6         12.6         12.5
                                                   -----        -----        -----        -----
                 Total operating expenses          106.5        112.8        107.0        113.5

Interest and other expense, net                      4.4          4.2          3.7          5.4
                                                   -----        -----        -----        -----

Net loss                                           (10.9)%      (17.0)%      (10.7)%      (18.9)%
                                                   =====        =====        =====        =====
</TABLE>


                                       13
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2001

         Revenue. Total revenues were approximately $5.7 million for the three
months ended September 30, 2002 and approximately $5.4 million for the three
months ended September 30, 2001, which represents an increase of 5%. Monitoring
revenues increased by 7% to approximately $3.5 million during the three months
ended September 30, 2002, from approximately $3.3 million during the three
months ended September 30, 2001. The increase in monitoring revenues compared to
the prior year's period is attributable to monitoring agreements that are
continuously purchased from independent alarm dealers as well as monitoring
agreements that are signed in conjunction with the Company's installation
activities. Installation and service revenues were approximately $2.1 million
during both the three months ended September 30, 2002 and 2001. The Company
experienced increases in installation activity in the Company's Florida and New
York installation business units but these increases were offset with larger
amounts of installation revenue deferred from current installation activities
during the three months ended September 30, 2002 compared to the prior period.

         Monitoring, Installation and Service. Monitoring, installation and
service expenses for the three months ended September 30, 2002 decreased 4% to
approximately $2.1 million, compared to approximately $2.2 million during the
corresponding period in the prior year. Monitoring expenses increased 17% to
approximately $573,000 compared to approximately $491,000 during the
corresponding period in the prior year. Monitoring expenses as a percentage of
monitoring revenues were 16% for the three months ended September 30, 2002
compared to 15% for the three months ended September 30, 2001. Installation and
service costs during the three months ended September 30, 2002 decreased by 10%
to approximately $1.6 million, compared to approximately $1.7 million during the
corresponding period in the prior year. The decrease is due to the completion of
projects with higher levels of gross profit, a reduction in the use of
subcontractors for installation activity, the Company's overall efforts to
reduce costs, as well as larger amounts of installation costs deferred from
current installation activities during the three months ended September 30, 2002
compared to the prior period.

         Gross profit, defined as total monitoring, installation, and service
revenues less monitoring, installation and service costs, increased by 10% to
approximately $3.5 million during the three months ended September 30, 2002,
compared to approximately $3.2 million during the corresponding period in the
prior year. Gross profit from monitoring revenues increased by 6% to
approximately $3.0 million during the three months ended September 30, 2002,
compared to approximately $2.8 million during the corresponding period in the
prior year. The increase in gross profit from monitoring activities is
attributable to the increase of monitored accounts from internal installation
activities and the purchase of monitored accounts for which the incremental
costs to monitor are minimal. Gross profit from monitoring activities as a
percentage of monitoring revenue was 84% during the three months ended September
30, 2002 compared to 85% for the three months ended September 30, 2001. Gross
profit from installation and service activities increased to approximately
$504,000 during the three months ended September 30, 2002, from approximately
$354,000 during the corresponding period in the prior year, which is primarily
the result of better materials pricing, a lower volume of projects requiring
subcontracted labor, and fewer jobs with cost overruns.

         Selling, General and Administrative ("SG&A"). SG&A increased by 4% to
approximately $2.1 million during the three months ended September 30, 2002,
compared to approximately $2.0 million during the corresponding period in the
prior year. The increase in SG&A costs in the three months ended September 30,
2002 from the corresponding period in the prior year is related primarily to
additional personnel required to support our increased sales activities as well
as additional personnel allocated to care for our existing customers. The
success of the Company is dependent on its ability to attract and retain highly
qualified management, sales and service personnel. As the Company continues to
expand its operations, it expects to be faced with increasing personnel
requirements, and may be unable to generate sufficient revenues to offset the
increasing costs associated with fulfilling these requirements.

                                       14
<PAGE>

         Amortization of Customer Accounts. Amortization of customer accounts
was approximately $1.1 million during the three months ended September 30, 2002
compared to approximately $1.2 million during the three months ended September
30, 2001, a decrease of 7%. This decrease is due primarily to a decrease in the
level of cancellations for the period offset in part by the additional
amortization expense of customer accounts purchased within the past twelve
months. Such costs are amortized over ten years, unless accounts are cancelled
and not replaced by the independent alarm company from which the account was
purchased, or otherwise, in which case an estimate of the remaining unamortized
balance is written off as a charge to amortization expense.

         Depreciation and Amortization. Depreciation and amortization increased
by 2% to approximately $700,000 during the three months ended September 30,
2002, compared to approximately $685,000 during the corresponding period in the
prior year. The increase in depreciation and amortization is primarily due to
growth in the depreciation expense related to capitalized installation costs
(the gross balance of which increased to approximately $15.4 million at
September 30, 2002 from approximately $11.6 million at September 30, 2001). The
Company expects that the depreciation of capitalized installation costs will
continue to increase in the future as installation services which meet the
capitalization criteria are rendered to new customers. Based on our required
goodwill impairment review, no amortization expense was recorded in the three
months ended September 30, 2002, in accordance with the adoption of SFAS 142.
Amortization expense related to goodwill in the prior year was approximately
$47,000.

         Interest and Other Expense, Net. Interest and other expense, net
increased 9% to approximately $248,000 during the three months ended September
30, 2002, compared to approximately $228,000 during the corresponding period in
the prior year. The increase is due to the Company recording income taxes
related to the state of New York for approximately $53,000 in the three months
ended September 30, 2002. Although the Company increased borrowings under its
senior credit facility, interest expense on our senior credit facility was lower
from period to period due to significantly lower average interest rates. The
average interest rate in the three months ended September 30, 2002 was 5.4%
compared to 7.5% in the three months ended September 30, 2001. Total borrowings
under our senior credit facility increased to approximately $13.3 million at
September 30, 2002 from approximately $12.4 million at September 30, 2001.

         Net Loss. The Company has never had net income and has a history of
consistent and sometimes significant net losses. Net loss applicable to common
stock for the three months ended September 30, 2002 was approximately $1.1
million or $(0.12) per share, basic and diluted, compared to a net loss of
approximately $1.4 million, or $(0.16) per share, basic and diluted, during the
corresponding period in the prior year. Preferred stock dividends of
approximately $467,000 were recorded in the three months ended September 30,
2002 compared to approximately $457,000 in the three months ended September 30,
2001.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2001

         Revenue. Total revenues were approximately $16.7 million for the nine
months ended September 30, 2002 and approximately $15.7 million for the nine
months ended September 30, 2001, which represents an increase of 6%. Monitoring
revenues increased by 6% to approximately $10.5 million during the nine months
ended September 30, 2002, from approximately $9.9 million during the nine months
ended September 30, 2001. The increase in monitoring revenues compared to the
prior year's period is attributable to monitoring agreements that are
continuously purchased from independent alarm dealers as well as monitoring
agreements that are signed in conjunction with the Company's installation
activities. Installation and service revenues were approximately $6.0 million
during the nine months ended September 30, 2002, compared to approximately $5.7
million during the nine months ended September 30, 2001, which represents an


                                       15
<PAGE>

increase of 5%. The increase in our installation and service revenues is a
result of increased installation activity in the Company's Florida and New York
installation business units offset with larger amounts of installation revenue
deferred from current installation activities during the nine months ended
September 30, 2002 compared to the prior period.

         Monitoring, Installation and Service. Monitoring, installation and
service expenses for the nine months ended September 30, 2002 decreased 4% to
approximately $6.1 million, compared to approximately $6.3 million during the
corresponding period in the prior year. Monitoring expenses increased 7% to
approximately $1.6 million compared to approximately $1.5 million during the
corresponding period in the prior year. Monitoring expenses as a percentage of
monitoring revenues were 15% for both the nine months ended September 30, 2002
and 2001. Installation and service costs during the nine months ended September
30, 2002 decreased by 8% to approximately $4.4 million, compared to
approximately $4.8 million during the corresponding period in the prior year.
The decrease is due to the completion of projects with higher levels of gross
profit, a reduction in the use of subcontractors for installation activity, the
Company's overall efforts to reduce costs, as well as larger amounts of
installation costs deferred from current installation activities during the nine
months ended September 30, 2002 compared to the prior period.

         Gross profit, defined as total monitoring, installation and service
revenues less monitoring, installation and service costs, increased by 13% to
approximately $10.4 million during the nine months ended September 30, 2002,
compared to approximately $9.2 million during the corresponding period in the
prior year. Gross profit from monitoring revenues increased by 6% to
approximately $8.9 million during the nine months ended September 30, 2002,
compared to approximately $8.4 million during the corresponding period in the
prior year. The increase in gross profit from monitoring activities is
attributable to the increase of monitored accounts from internal installation
activities and the purchase of monitored accounts for which the incremental
costs to monitor are minimal. Gross profit from monitoring activities as a
percentage of monitoring revenue was 85% during both the nine months ended
September 30, 2002 and 2001, respectively. Gross profit from installation and
service activities increased to approximately $1.6 million during the nine
months ended September 30, 2002, from approximately $891,000 during the
corresponding period in the prior year, which is primarily the result of better
materials pricing, a lower volume of projects requiring subcontracted labor, and
fewer jobs with cost overruns.

         Selling, General and Administrative ("SG&A"). SG&A increased by 5% to
approximately $6.4 million during the nine months ended September 30, 2002,
compared to approximately $6.1 million during the corresponding period in the
prior year. The increase in SG&A costs in the nine months ended September 30,
2002 from the corresponding period in the prior year is related primarily to
additional personnel required to support our increased sales activities as well
as additional personnel allocated to care for our existing customers. The
success of the Company is dependent on its ability to attract and retain highly
qualified management, sales and service personnel. As the Company continues to
expand its operations, it expects to be faced with increasing personnel
requirements, and may be unable to generate sufficient revenues to offset the
increasing costs associated with fulfilling these requirements.

         Amortization of Customer Accounts. Amortization of customer accounts
was approximately $3.3 million during the nine months ended September 30, 2002
compared to approximately $3.5 million during the nine months ended September
30, 2001, a decrease of 4%. This decrease is due primarily to a decrease in the
level of cancellations for the period offset in part by the additional
amortization expense of customer accounts purchased during the previous 12
months. Such costs are amortized over ten years, unless accounts are cancelled
and not replaced by the independent alarm company from which the account was
purchased, or otherwise, in which case an estimate of the remaining unamortized
balance is written off as a charge to amortization expense.

                                       16
<PAGE>

         Depreciation and Amortization. Depreciation and amortization increased
by 7% to approximately $2.1 million during the nine months ended September 30,
2002, compared to approximately $2.0 million during the corresponding period in
the prior year. The increase in depreciation and amortization is primarily due
to growth in the depreciation expense related to capitalized installation costs
(the gross balance of which increased to approximately $15.4 million at
September 30, 2002 from approximately $14.5 million at September 30, 2001). The
Company expects that depreciation of capitalized installation costs will
continue to increase in the future as installation services which meet the
capitalization criteria are rendered to new customers. Based on our required
goodwill impairment review, no amortization expense was recorded in the nine
months ended September 30, 2002, in accordance with the adoption of SFAS 142.
Amortization expense related to goodwill in the prior year was approximately
$141,000.

         Interest and Other Expense, Net. Interest and other expense, net
decreased 27% to approximately $617,000 during the nine months ended September
30, 2002, compared to approximately $849,000 during the corresponding period in
the prior year. Approximately $150,000 of other income was recorded due to the
accretion of a warrant during the nine months ended September 30, 2002 compared
to $67,000 during the corresponding period in the prior year. Interest expense
on our senior credit facility was lower from period to period due to
significantly lower average interest rates offset by increased borrowings. The
average interest rate in the nine months ended September 30, 2002 was 5.5%
compared to 8.4% in the nine months ended September 30, 2001. Total borrowings
under our senior credit facility increased to approximately $13.3 million at
September 30, 2002 from approximately $12.4 million at September 30, 2001.

         Net Loss. The Company has never had net income and has a history of
consistent and sometimes significant net losses. Net loss applicable to common
stock for the nine months ended September 30, 2002 was approximately $3.2
million, or $(0.37) per share, basic and diluted, compared to a net loss
applicable to common stock of approximately $1.7 million, or $(0.20) per share,
basic and diluted, during the corresponding period in the prior year. The prior
period net loss applicable to common stock includes an approximate $2.6 million
in gain on exchange of preferred stock. Preferred stock dividends of
approximately $1.4 million were recorded in both the nine months ended September
30, 2002 and 2001.

LIQUIDITY AND CAPITAL RESOURCES

         Capital Resources. On June 28, 2002, the Company entered into a new
$20.0 million senior credit facility ("Credit Facility"), replacing its
previously existing $20.0 million senior credit facility. The Credit Facility
has an initial expiration date of July 2004, and the Company may extend the
facility for up to two additional years, subject to the occurrence of certain
events. Under the Credit Facility, borrowings bear interest at floating rates,
either at a certain index rate plus 1 3/4% (6.50% at September 30, 2002) or, at
the Company's election, LIBOR plus 3 1/4%. Under the terms of the Credit
Facility, the Company is required to meet certain financial performance
covenants. The Company was in compliance with all such covenants as of September
30, 2002.

         As of September 30, 2002, the Company believes it will maintain the
ability to generate sufficient cash to fund future operations of the business
over the next twelve months. Generally, cash flow will be generated from a
combination of: (i) recurring revenue from its security monitoring customer
base, and (ii) the Company's $20.0 million Credit Facility. At September 30,
2002, there was $6.7 million of availability under the Credit Facility.

         Liquidity. Net cash provided by operating activities during the nine
months ended September 30, 2002 was approximately $4.3 million. The Company
incurred a net loss of approximately $1.8 million during such period. Included
in such loss, however, were depreciation and amortization expense, amortization
of customer accounts, and amortization of deferred financing costs totaling
approximately $5.6 million, and provisions for doubtful accounts approximately


                                       17
<PAGE>

$440,000. Other operating cash outflows include approximately $1.8 million
related to increases in accounts receivable, inventory, prepaid expenses and
other, deposits and other assets, and accounts payable and other expenses. Other
operating cash inflows include approximately $1.9 million related to net
increases in notes receivable and unearned revenue.

         Net cash used in investing activities was approximately $3.9 million
during the nine months ended September 30, 2002 and was primarily comprised of
the purchase of property and equipment of approximately $162,000, the purchase
of customer accounts of approximately $773,000, capitalized installation costs
of approximately $2.9 million, and other of approximately $66,000 offset in part
by the sale of property and equipment of approximately $17,000.

         Net cash used in financing activities was approximately $591,000 during
the nine months ended September 30, 2002, primarily consisting of borrowings
under line of credit of approximately $2.1 million reduced by repayments on debt
obligations of approximately $1.5 million, debt financing costs of approximately
$287,000, and payment of cash dividends on preferred stock of approximately
$861,000. As of September 30, 2002, the Company's cash balance was approximately
$553,000.

         Total shareholders' deficit was approximately $3.4 million at September
30, 2002, changing by a net amount of approximately $2.7 million during the nine
months ended September 30, 2002. The increase in shareholders' deficit resulted
from the accrual of dividends on the Company's Series C and E Preferred Stock of
approximately $861,000 and the net loss of approximately $1.8 million. The
accrual of dividends on the Companies Series D Preferred Stock has no effect on
the change in shareholder's deficit of the consolidated balance sheet as the
company has chosen to pay this dividend in additional shares of Series D
Preferred Stock which is recorded as additional paid-in capital in the
shareholders' deficit section of the consolidated balance sheet.


                                       18
<PAGE>


ITEM 4. CONTROLS AND PROCEDURES

         Our principal executive and financial officers have concluded, based on
their evaluation as of a date within 90 days before the filing of this Form 10-Q
that our disclosure controls and procedures under Rule 13a-14 of the Securities
and Exchange Act of 1934 are effective to ensure that information we are
required to disclose in the reports we file or submit under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the SEC's rules and forms, and include controls and procedures designed to
ensure that information we are required to disclose in such reports is
accumulated and communicated to management, including our principal executive
and financial officers, as appropriate to allow timely decisions regarding
required disclosure.

         Subsequent to our evaluation, there were no significant changes in
internal controls or other factors that could significantly affect these
internal controls.


                                       19
<PAGE>


                           PART II - OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
--------

99.1*    Certification by Harold Ginsburg, the Company's CEO, pursuant to 18
         U.S.C Section 1350, as adopted pursuant to section 906 of the
         Sarbanes-Oxley Act of 2002.

99.2*    Certification by Kenneth Wiesenfeld, the Company's Vice President of
         Finance, pursuant to 18 U.S.C Section 1350, as adopted pursuant to
         section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated herewith



Reports on Form 8-K
-------------------

During the three months ended September 30, 2002, the Company disclosed the
following information on a current report on Form 8-K:

On July 5, 2002, the Company reported one event under Item 5, the Company
announced a new senior credit facility with General Electric Capital
Corporation.



                                       20
<PAGE>


                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                      GUARDIAN INTERNATIONAL, INC.

Date:  November 13, 2002


                                      By: /s/ KENNETH WIESENFELD
                                          ------------------------------------
                                          Kenneth Wiesenfeld
                                          Vice President of Finance (Principal
                                          Finance Officer and Principal
                                          Accounting Officer)



                                       21
<PAGE>

                                  CERTIFICATION

I, Harold Ginsburg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Guardian International,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002


                                    /s/ HAROLD GINSBURG
                                    -------------------------------------
                                    President and Chief Executive Officer

                                       22

<PAGE>



                                  CERTIFICATION

I, Kenneth Wiesenfeld, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Guardian International,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002
                                            /s/ KENNETH WIESENFELD
                                            ---------------------------------
                                            Vice President of Finance
                                            (Principal Finance Officer and
                                            Principal Accounting Officer)

                                       23
<PAGE>


                                  EXHIBIT INDEX

No.      Exhibit
---      -------

99.1     Certification by Harold Ginsburg, the Company's CEO, pursuant to 18
         U.S.C Section 1350, as adopted pursuant to section 906 of the
         Sarbanes-Oxley Act of 2002.

99.2     Certification by Kenneth Wiesenfeld, the Company's Vice President of
         Finance, pursuant to 18 U.S.C Section 1350, as adopted pursuant to
         section 906 of the Sarbanes-Oxley Act of 2002.



                                       24