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SECURITY ASSOCIATES INTERNATIONAL, INC.
[SECURITY ASSOCIATES INTERNATIONAL, INC. LOGO]
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SUPPLEMENT NO. 3 DATED JUNE 1, 1999
TO PROSPECTUS DATED APRIL 22, 1998
On October 20, 1997, we commenced our offering of an aggregate of 2,000,000
shares of common stock, $.001 par value per share, warrants to purchase up to
2,000,000 shares of common stock and 778,088 shares of common stock which may be
offered for sale by certain of our stockholders. On April 22, 1998, an
additional 1,000,000 shares of our common stock were registered for sale by
certain other stockholders. As of July 7, 1999, 208,628 shares of common stock
and warrants to purchase 121,104 shares of common stock have been issued by SAI
under this prospectus. This Supplement No. 3 supercedes Supplement No. 2 which
expanded upon, amended, modified and superseded certain information contained in
the prospectus, as amended on May 18, 1999, which amendment superceded
Supplement No. 1, and must be read in conjunction with the prospectus. Unless
otherwise defined, capitalized terms used herein shall have the same meanings as
in the prospectus.
1. The section of the prospectus entitled "Business - Dealer Financing
Programs - Subscriber Accounts Owned by SAI - Probable Sale of SAI Owned
Accounts" is hereby deleted and replaced in its entirety with the following:
SALE OF SAI OwNED ACCOUNTS
On June 30, 1999, SAI sold its portfolio of approximately 27,000 owned
(retail) subscriber accounts to Security Alarm Financing Enterprises, Inc.
(SAFE), an unaffiliated third party. SAFE is a leading finance company serving
independent alarm dealers. SAI will continue to monitor these accounts and will
become SAFE's preferred provider of alarm monitoring services.
The total transaction value was $22,800,000, of which $1,800,000 was a loan
extended by SAFE to SAI. The purchase price, which was paid in cash at closing,
was determined primarily on the recurring monthly revenue of the account
portfolio and was arrived at by arm's length negotiations between the parties.
The loan is due in one year and bears interest at the rate of 8% per annum. The
loan, with interest, will be considered paid in full if during the term of the
loan SAI refers to SAFE $230,000 in recurring monthly revenue from alarm dealers
for purchase or for collateral for loans under SAFE's financing programs, which
SAFE then closes.
This transaction allows us to fully concentrate our resources on our
primary business of providing wholesale monitoring services to independent alarm
dealers. As part of the transaction, SAI and SAFE formed a strategic alliance to
provide financing to, and better serve the needs of, independent alarm dealers.
"THESE ARE SPECULATIVE SECURITIES.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS."
