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SECURITY ASSOCIATES INTERNATIONAL, INC.
[SECURITY ASSOCIATES INTERNATIONAL, INC. LOGO]
______________________
SUPPLEMENT NO. 2 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 May 28, 1999, 202,628 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. 2 expands upon, amends,
modifies and supersedes 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amended on May 18, 1999, which amendment superceded Supplement No. 1, and must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" is supplemented as follows:
PROBABLE SALE OF SAI OWNED ACCOUNTS
On May 19, 1999, SAI and Security Alarm Financing Enterprises, Inc.
(SAFE), a leading finance company serving independent alarm dealers, entered
into a binding letter of intent whereby SAI will sell its portfolio of
approximately 27,000 owned (retail) subscriber accounts to SAFE, an unaffiliated
third party. The transaction and purchase price is subject to further due
diligence and negotiation. SAI will continue to monitor these accounts and will
become SAFE's preferred provider of alarm monitoring services.
This transaction will allow 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 will form a strategic
alliance to provide financing to, and better serve the needs of, independent
alarm dealers.
SAFE, founded in 1988, is one of the largest acquisition and financial
services companies serving independent security alarm dealers in the United
States. SAFE has customers in 38 states and provides full financial servicing
and customer service from its headquarters in San Ramon, California.
SAI provides wholesale alarm monitoring services to more than 325,000
residences and businesses through recurring revenue contracts with over 2,300
independent security alarm installing and servicing dealers. We operate eight
regional UL-listed central monitoring stations strategically located throughout
the United States.
Execution of a definitive agreement is subject to, among other things,
due diligence and negotiation of definitive acquisition documents. There can be
no assurance that this transaction will be consummated.
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"THESE ARE SPECULATIVE SECURITIES.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS."
