HOLMES PROTECTION GROUP INC, S-3/A, 1997-12-29

HOLMES PROTECTION GROUP INC
S-3/A, 1997-12-29
MISCELLANEOUS BUSINESS SERVICES

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As filed with the Securities and Exchange Commission on December 29, 1997

Registration No. 333-33799
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------

Amendment No. 1
to

FORM S-3
Registration Statement
Under
The Securities Act of 1933
------------------
HOLMES PROTECTION GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware 06-1070719
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

440 Ninth Avenue
New York, New York 10001-1695
(212) 760-0633
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
------------------
GEORGE V. FLAGG
President and Chief Executive Officer
Holmes Protection Group, Inc.
440 Ninth Avenue
New York, New York 10001-1695
(212) 760-0633
(Name, address, including zip code, and telephone number, including area
code, of agent for service)

Copies to:

JEFFREY W. RUBIN, ESQ.
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
(212) 661-6500

Approximate date of proposed sale to the public: From time to time after the
effective date of this Registration Statement.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration Statement number of the earlier effective registration statement
for the same offering. [ ].

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

<PAGE>

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

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
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PROSPECTUS

4,428,091 Shares

HOLMES PROTECTION GROUP, INC.

Common Stock

This Prospectus relates to the public offering that may be made from time
to time of up to 4,428,091 shares (the "Shares") of common stock, par value $.01
per share (the "Common Stock"), of Holmes Protection Group, Inc., a Delaware
corporation (the "Company" or "Holmes") by, or for the accounts of, the holders
thereof (the "Selling Security Holders"). This Prospectus relates only to
resales of the shares by the Selling Security Holders. The Shares include
1,053,912 shares of Common Stock which the Company may issue to certain Selling
Security Holders upon the exercise of certain warrants (the "Warrants") and
24,562 shares of Common Stock which the Company may issue to certain Selling
Security Holders upon the conversion of certain subordinated convertible
debentures (the "Notes"). See "Selling Security Holders."

The Shares, the Warrants and the Notes were issued by the Company in
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws. Of the
Shares, (i) 1,498,105 were issued by the Company in 1992 to seven U.S. insurance
companies and other institutions (the "Institutions"); (ii) 203,033 are issuable
upon exercise of Warrants held by the Institutions (the "Institution Warrants")
at an exercise price of $10.16 per share; (iii) 1,515,886 were issued by the
Company in 1994 to HP Partners L.P., a Delaware limited partnership (the
"Investor"); (iv) 685,714 are issuable upon exercise of Warrants held by the
Investor (the "Investor Warrants") at an exercise price of $4.58 per share;
(v)166,666 are issuable upon exercise of Warrants held by Merita Bank Ltd. and
Bank of Boston Connecticut (the "New Bank Warrants") at an exercise price of
$9.75 per share; (vi) 80,184 were issued in connection with the acquisition of
an alarm monitoring company based in Stanton, California; (vii) 46,346 were
issued in 1997 in connection with the acquisition of alarm operations facilities
based in Tampa, Florida; (viii) 51,298 were issued in 1997 in connection with
the acquisition of the assets of an alarm sales, installation and servicing
company in Nashville, Tenessee; (ix) 156,297 were issued in 1997 in connection
with the acquisition of an alarm sales, installation and servicing company in
San Ramon, California; and (x) 24,562 are issuable upon the conversion of the
Notes issued in August 1997 in conjunction with the acquisition of an alarm
sales, installation and servicing company in April 1997.

The Common Stock is quoted on the Nasdaq National Market(R) (the "Nasdaq
National Market") under the symbol "HLMS." The closing sales price for the
Common Stock on December 26, 1997 was $18.00 per share. There is no active
public market for the Warrants.

THE COMMON STOCK OFFERED HEREBY INVOLVES A SUBSTANTIAL DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The Shares may be sold from time to time by the Selling Security Holders
or their transferees. No underwriting arrangements have been entered into by the
Selling Security Holders as of the date hereof. The distribution of the Shares
by the Selling Security Holders may be effected in one or more transactions that
may take place in the over-the-counter market, including ordinary broker's
transactions, privately negotiated transactions, or through sales to one or more
dealers for resale of such Shares as principals, at prevailing market prices at
the time of sale, prices related to such prevailing market prices, or negotiated
prices. Underwriting discounts and usual and customary or specifically
negotiated brokerage fees or commissions will be paid by the Selling Security
Holders in connection with sales of the Shares. See "Plan of Distribution."

The Company will not receive any proceeds from the sale of the Shares. By
agreement with the Selling Security Holders, the Company will pay all of the
expenses incident to the registration of the Shares under the Securities Act
(other than agent's or underwriter's commissions and discounts), estimated to be
approximately $127,475.92.

The Selling Security Holders, and any broker-dealers, agents, or
underwriters through whom the Shares are sold, may be deemed "underwriters"
within the meaning of the Securities Act with respect to securities offered by
them, and any profits realized or commissions received by them may be deemed
underwriting compensation.

The date of this Prospectus is December 29, 1997

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AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, N.W., Washington, D.C. 20549, a Registration
Statement (the "Registration Statement") under the Securities Act with respect
to the offering and sale from time to time of the Shares and Warrants. This
Prospectus does not contain all the information set forth in the Registration
Statement and the exhibits thereto, as permitted by the rules and regulations of
the Commission. For further information, reference is made to the Registration
Statement and to the exhibits filed therewith. Statements contained in this
Prospectus as to the contents of any contract or other document which has been
filed or incorporated by reference as an exhibit to the Registration Statement
are qualified in their entirety by reference to such exhibits for a complete
statement of their terms and conditions. Additionally, the Company is subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy
statements, and other information statements with the Commission. Copies of such
materials may be inspected without charge at the offices of the Commission, and
copies of all or any part thereof may be obtained from the Commission's web site
at "http://www.sec.gov" and at prescribed rates from the Commission's public
reference facilities at 450 Fifth Street, N.W., Washington D.C. 20549 or at the
regional offices of the Commission located at 7 World Trade Center, New York,
New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
upon payment of the fees prescribed by the Commission. In addition, the Common
Stock is quoted on the Nasdaq National Market. Reports and other information
concerning the Company may be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Incorporated herein by reference and made a part of this Prospectus are
the following: (1) the Company's Annual Report on Form 10-K/A, for the fiscal
year ended December 31, 1996 as filed with the Securities and Exchange
Commission on December 29, 1997; (2) the Company's Quarterly Report on Form
10-Q/A for the quarter ended March 31, 1997 as filed with the Securities and
Exchange Commission on December 29, 1997; (3) the Company's Quarterly Report on
Form 10-Q/A for the quarter ended June 30, 1997 as filed with the Securities and
Exchange Commission on December 29, 1997; (4) the Company's Quarterly Report on
Form 10-Q/A for the quarter ended September 30, 1997 as filed with the
Securities and Exchange Commission on December 29, 1997; (5) the Company's
Current Report on Form 8-K dated December 15, 1997; and (6) the description of
the Common Stock, which is registered under Section 12 of the Exchange Act,
contained in the Company's Registration Statement on Form 10, as amended,
originally filed with the Commission on July 12, 1994. All documents
subsequently filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering made hereby will be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in any
document incorporated by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. All information
appearing in this Prospectus is qualified in its entirety by the information and
financial statements (including notes thereto) appearing in the documents
incorporated herein by reference, except to the extent set forth in the
immediately preceding statement. See "Special Note Regarding Forward-Looking
Statements."

The Company has amended its Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 and its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 to restate
its consolidated financial statements resulting from a change in its method of
accounting for installation revenue, and to make certain corresponding and other
changes.

The Company will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of the
information that is incorporated by reference herein (not including exhibits to
the information that is incorporated by reference herein). Requests for such
information should be directed to: Holmes Protection Group, Inc., 440 Ninth
Avenue, New York, New York 10001-1695; Attention: Secretary. The Company's
telephone number is: (212) 760-0630.

<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference into this
Prospectus constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions; cancellation rates of subscribers; competitive factors
in the industry, including additional competition from existing competitors or
future entrants to the industry; social and economic conditions; local, state
and federal regulations; changes in business strategy or development plans; the
Company's indebtedness; availability, terms and deployment of capital;
availability of qualified personnel; and other factors referenced in this
Prospectus and in the Company's filings with the Commission.

<PAGE>
THE COMPANY

The following summary is qualified in its entirety by reference to the
more detailed information and the financial statements and the related notes
appearing elsewhere in this Prospectus or incorporated herein by reference.
Except as otherwise indicated, information in this Prospectus reflects a 14
for 1 reverse split of the outstanding shares of Common Stock effected in March
1995. As used in this Prospectus, the term "Company" means, unless the context
requires otherwise, the Company and its subsidiaries. Each prospective investor
is urged to read this Prospectus in its entirety. Investment in the securities
offered hereby involves a high degree of risk. See "Risk Factors."

Holmes Protection Group, Inc. (the "Company" or "Holmes") provides
security alarm monitoring services and designs, sells, installs and services
electronic security systems for commercial and mid- to high-end residential
subscribers. These systems include event detection devices, surveillance
equipment and access control devices which restrict access to specified areas.
The Company currently provides its services in New York, New Jersey,
Pennsylvania, Texas, Tennessee, California, Massachusetts and Florida, and
conducts its operations primarily through 20 branch offices, ten National
Account sales offices, eight central monitoring stations and 76 independent
alarm service dealers and franchisees. According to the latest available survey,
published in May 1997, the Company was the eleventh largest provider of
electronic security services in the United States in terms of total 1996
revenues.

Following an internal management transition and reorganization in 1995,
the Company, in 1996, engaged the services of several former senior executives
of The National Guardian Corporation, a large national electronic security alarm
services company which was acquired by Ameritech Monitoring Services, Inc., in
October 1995. Among the executives hired by the Company was George V. Flagg, the
Company's President and Chief Executive Officer, who served as the President and
Chief Executive Officer of National Guardian from 1986 to 1995. Under the
direction of the Company's new management team, the Company is implementing a
business strategy involving a combination of strategic acquisitions and internal
growth. In regard to strategic acquisitions, the Company intends to pursue both
(i) fold-in acquisitions, which consist of businesses or portfolios of alarm
monitoring accounts that can be readily combined with the Company's existing
branch offices and management structure and (ii) new market acquisitions, which
consist of companies in the electronic security services industry located
outside the Company's current geographic market. In regard to its internal
growth strategy, the Company intends to capitalize on public recognition of the
historic Holmes brand name (which has been utilized in the security services
industry since 1858) in connection with (i) expanding its security services
product offerings, including the HolmesNet system for wireless data
communications; (ii) strengthening its national accounts program; (iii)
increasing its sales and marketing efforts; and (iv) expanding its dealer
operations.

The Company's revenues consist primarily of recurring payments under
written contracts for security alarm monitoring activities and associated
services, which represented approximately 70% of total revenues in 1996. The
Company monitors digital alarm signals arising from various activities,
including burglaries, fires and other events, through security systems installed
at subscribers' premises. These signals are received and processed at the
Company's relevant central monitoring station. In order to reduce overall
manpower requirements, achieve economies of scale and other cost efficiencies,
and enhance the quality of service being provided, the Company consolidated its
central monitoring stations in the Northeast into one facility located in
Edison, New Jersey, with monitoring capacity of approximately 60,000 accounts.
In addition, the Company has acquired several businesses with central monitoring
stations with the capacity to process approximately 60,000 additional accounts.
An additional 21% of the Company's total revenues in 1996 was comprised of
direct sales and installation of security equipment. The balance of the
Company's revenues in 1996 was derived from (i) jewelry vault rentals, (ii)
insured parcel delivery services for the jewelry trade and (iii) royalty fees
and product sales relating to its franchise and dealer operations.

Approximately 80% of the Company's business is derived from commercial
customers, including financial institutions, jewelry and fine art dealers,
corporate headquarters, manufacturers, distribution facilities and health care
and education facilities. The Company's residential business focuses principally
on mid- to high-end customers.

Electronic security services is a consolidating but still a highly
fragmented industry, consisting of a large number of local and regional
companies and several integrated national companies. The fragmented nature of
the industry can be attributed to the low capital requirements associated with
performing basic installation and maintenance of electronic security systems.
However, the business of a full service, integrated electronic security services
company providing central station monitoring services is capital intensive, and
the Company believes that the high fixed costs of establishing both central
monitoring stations and full service operations contribute to the small number
of national competitors. The low marginal cost of monitoring additional
customers has been one of the principal factors leading full service, integrated
electronic security services companies to seek acquisitions of other electronic
security businesses to consolidate into their existing operations. The principal
focus of the Company's business strategy is to pursue acquisitions in this
environment.

<PAGE>

Recent Developments

The Company is currently not in compliance with certain of the financial
covenants contained in its bank credit agreement, and does not expect that it
will be in compliance with those covenants for November and December 1997.
Accordingly, the Company has obtained waivers from its banks waiving such
non-compliance through and including December 31, 1997.

The Company does not presently have any remaining loan availability
under the above credit agreement, and the Company is continuing its discussions
with the banks with regard to additional financing required to meet its
short-term operating and working capital needs. The Company is also in
discussions with its banks to amend the credit agreement covenants.

The Company's independent public accountants, Arthur Andersen LLP, have
informed the Company that, if the Company is unable to obtain additional
financing and amend its present credit agreement, its report on the financial
statements for the year ending December 31, 1997 may be modified because of
substantial doubt about the Company's ability to continue as a going concern.

Merger Agreement and Tender Offer

On December 29, 1997, the Company entered into a definitive merger
agreement with Tyco International Ltd. ("Tyco") pursuant to which Tyco will
purchase, for cash, all of the outstanding common stock of the Company for
$17.00 per share. Under the agreement, a subsidiary of Tyco will commence a
tender offer to purchase all of the Company's approximately 6.3 million shares
of common stock outstanding for cash of $17.00 per share. The tender offer will
be followed by a merger in which each of the remaining shares of the Company
will be exchanged for $17.00 in cash. The offer will be made pursuant to
definitive offering documents which will be filed with the Securities and
Exchange Commission. The offer is conditioned on the tender of the majority of
the outstanding shares of common stock of the Company on a fully diluted basis,
as well as certain other conditions.

<PAGE>
RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered carefully before purchasing the
Common Stock offered hereby. This Prospectus contains forward-looking statements
within the meaning of the Securities Act and the Exchange Act. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements. See "Special Note Regarding Forward-Looking
Statements." Such factors include, among others, the risk factors set forth
below.

Working Capital Constraints

The Company does not presently have any remaining loan availability
under its bank credit agreement, and the Company is continuing its discussions
with its banks with regard to additional financing required to meet its
short-term operating and working capital needs. However, the Company does not
presently have any commitment from the banks for any such waiver or for
additional financing. The Company is also in discussions with its banks to amend
the credit agreement covenants.

The Company continues to experience significant working capital
contraints resulting in part from its rapid sales growth and capital required to
expand its operations in new geographic markets. Although the Company has
entered into a definitive merger agreement with Tyco International Ltd., unless
and until transaction is consumated for any reason, the Company will continue to
experience significant working capital contraints, and the Company can provide
no assurance that it will be able to obtain the additional financing necessary
to provide for its short-term operating and working capital needs.

The Company's independent public accountants, Arthur Andersen LLP, have
informed the Company that, if the Company is unable to obtain additional
financing and amend its present credit agreement, its report on the financial
statements for the year ending December 31, 1997, may be modified because of
substantial doubt about the Company's ability to continue as a going concern.

Recent Net Losses and Accumulated Deficit

The Company incurred a net loss in 1996 and 1995 of $2,185,000 and
$3,231,000, respectively. The losses reflect non-recurring charges of $700,000
and $2,074,000 in 1996 and 1995, respectively. The 1996 non-recurring charge
represented additional severance associated with the consolidation of the
Company's central station operations and costs associated with the further
restructuring of its operations, as well as settlement of an outstanding errors
and omissions claim by one of its customers. The 1995 non-recurring charge
represented severance associated with the consolidation of the Company's central
station operations and write downs of leasehold improvements and other fixed
assets in connection with the Company entering into the information technology
service agreement with PremiTech Corporation. The Company had net income of
$404,000 in 1994. At December 31, 1996, the Company had an accumulated deficit
of $74,596,000 up from $72,222,000 at December 31, 1995 and a working capital
deficit of $2,870,000 down from $6,054,000 at December 31, 1995. The Company
incurred a net loss for the six months ended June 30, 1997 and 1996 of
$3,771,000 and $633,000 respectively. The loss in 1997 reflects a non-recurring
charge of $1,500,000 related to the termination of its outsourcing agreement
with PremiTech Corporation.

Geographic Concentration

The Company's existing subscriber base is geographically concentrated
predominantly in New York, New Jersey and Pennsylvania. Accordingly, the
performance of the Company may be adversely affected by regional or local
economic conditions.

The Company may from time to time make acquisitions in regions outside of
its current operating area. The acquisition of companies in other regions, or in
metropolitan areas in which the Company does not currently have subscribers,
requires an investment by the Company. In order for the Company to expand
successfully into a new area, the Company must acquire companies with a
sufficient number and density of subscriber accounts in such area to support the
investment. There can be no assurance that the Company will find such
opportunities or that an expansion into new geographic areas will generate
operating profits.

Risk Related to Growth Through Acquisitions

One of the Company's primary strategies is to increase its revenues and
the markets it serves through the acquisition of other companies in the
electronic security services industry and portfolios of alarm monitoring
accounts. There can be no assurance that the Company will be able to acquire or
profitably manage suitable acquisition candidates or successfully integrate such
businesses into its operations without substantial costs, delays or other
problems. In addition, there can be no assurance that any businesses acquired
will be profitable at the time of their acquisition or will achieve sales and
profitability that justify the investment therein or that the Company will be
able to realize expected operating and economic efficiencies following such
acquisitions. Acquisitions may involve a number of special risks, including
adverse effects on the Company's reported operating results, diversion of
management's attention, increased burdens on the Company's management resources
and financial controls, dependence on retention and hiring of key personnel,
risks associated with unanticipated problems or legal liabilities, and
amortization of acquired intangible assets, some or all of which could have a
material adverse effect on the Company's operations and financial performance.

5
<PAGE>

Customer Cancellation Rates

The Company is heavily dependent on its recurring monitoring and service
revenues. Given the relatively fixed nature of monitoring and service expenses,
increases and decreases in monitoring and service revenues have a significant
impact on the Company's profitability. Substantially all of the Company's
monitoring and service revenues are derived from recurring charges to
subscribers for the provision of various services. Although no single subscriber
represents more than one-half of one percent of the Company's recurring revenue
base, the Company is vulnerable to subscribers canceling their contracts. In
recent years, lost recurring revenues from such cancellations have exceeded the
new recurring revenues added by the Company's sales efforts. However, the
Company's cancellation rate (as defined in detail below), representing lost
recurring revenues from cancellations as a percentage of gross recurring
revenues, decreased significantly from 15.2% in 1991 to 10.8% in 1996. Although
the Company's rate of subscriber cancellations has been substantially reduced
since 1991, there can be no assurance that this rate may not increase in the
future for a variety of reasons associated with general economic conditions,
market competition and the level of customer satisfaction with the Company's
services.

As described herein, the "cancellation rate" means the gross recurring
revenues lost through cancellation in a given period; less those recurring
revenues derived from subscribers who cancel their service with the Company in
order to move and then contract for the Company's services at their new
premises; and less those recurring revenues derived from new subscribers who
occupy a vacant premises where the Company has an existing company-owned system
and who contract for the Company's services using that equipment; divided by the
gross recurring revenues in force at the beginning of the period, annualized and
expressed as a percentage.

Competition

The electronic security services industry is highly competitive and
fragmented. The Company competes with national and regional companies, as well
as smaller local companies, in all of its operations. Furthermore, new
competitors are continuing to enter the industry and the Company may encounter
additional competition from such future industry entrants. Subject to regulatory
compliance, certain companies engaged in the telephone and cable business are
competing in the electronic security services industry and other such companies
may, in the future, enter the industry. Certain of the Company's current
competitors have, and new competitors may have, substantially greater financial
resources than the Company.

Significant Ownership of Common Stock by Certain Stockholders

The Company believes that at December 26, 1997, the Institutions owned
approximately 23.7% (26.1% including the Institution Warrants) of the Company's
outstanding shares of Common Stock. Pursuant to the Exchange Agreement, dated as
of December 18, 1991, which agreement was amended as of January 31, 1992, May
24, 1992 and June 30, 1992 (the "Exchange Agreement"), between the Institutions
and the Company, the Institutions are currently entitled to nominate two
directors (the "Institution-Nominees") to the Company's Board of Directors (the
"Board") based on their ownership of Common Stock. At December 26, 1997, the
Investor owned approximately 24.0% (31.4% including the Investor Warrants) of
the Company's outstanding shares of Common Stock. Pursuant to the Investment
Agreement, dated as of June 29, 1994, between the Investor and the Company (the
"Investment Agreement"), the number of directors the Investor is currently
entitled to nominate to the Board (the "Investor-Nominees") is three. The size
of the Board is currently fixed at nine members; however, there exists one
vacant seat on the Board. As of a result of these separate agreements with the
Company, the Institution-Nominees and the Investor-Nominees constitute a
majority of the Company's directors and are therefore currently in a position to
control the Company.

<PAGE>

Liability for Employee Acts and Defective Equipment

The nature of the security services provided by the Company potentially
exposes it to greater risk of liability claims for employee acts or omissions or
system failure than may be inherent in many other service businesses. Although
(I) substantially all of the Company's customers have subscriber agreements
which contain provisions for limited liability and predetermined liquidated
damages and (ii) the Company carries insurance which it believes provides
adequate coverage for businesses of the Company's type, there can be no
assurance that such existing arrangements will prevent the Company from being
adversely affected as a result of damages arising from the acts of its
employees, defective equipment or because some jurisdictions prohibit or
restrict limitations on liabilities and liquidated damages. In addition, certain
of the Company's insurance policies and the laws of some states may limit or
prohibit insurance coverage for punitive damages and for certain other kinds of
damages arising from employee misconduct.

Possible Effects of Government Regulations

The Company's operations are subject to a variety of federal, state,
county and municipal laws, regulations and licensing requirements. Many of the
states in which Holmes operates, as well as certain local authorities, require
Holmes to obtain licenses or permits to conduct a security alarm services
business. Certain governmental entities also require persons engaged in the
security alarm services business to be licensed and to meet certain standards in
the selection and training of employees and in the conduct of business. The loss
of such licenses, or the imposition of conditions on the granting or retention
of such licenses, could have a material adverse effect on the Company. The
Company believes that it holds the required licenses and is in substantial
compliance with all licensing and regulatory requirements in each jurisdiction
in which it operates.

Dependence upon Senior Management

The success of the Company's business is dependent upon the active
participation of George V. Flagg, the Company's President and Chief Executive
Officer. The involuntary termination of Mr. Flagg without cause would result in
an event of default under the Company's principal credit facility unless such
termination has previously been disclosed to the lenders thereunder and the
lenders have not objected thereto. Mr. Flagg's employment agreement with the
Company contains a post-employment non-competition restrictive covenant for a
period of six months following termination. In addition, the Company maintains
key-man life insurance on Mr. Flagg in the amount of $2,000,000.

<PAGE>
Possible Anti-takeover Effects of Delaware Law

The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless the
business combination is approved in a prescribed manner or unless the interested
stockholder acquires at least 85% of the corporation's voting stock (excluding
shares held by certain designated stockholders) in the transaction in which it
becomes an interested stockholder. A "business combination" includes mergers,
asset sales, and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
within the previous three years did own, 15% or more of the corporation's voting
stock. This provision of the Delaware law could delay and make more difficult a
business combination even if the business combination could be beneficial, in
the short term, to the interests of the stockholders. This provision of the
Delaware law could also limit the price certain investors might be willing to
pay in the future for shares of Common Stock.

Classified Board of Directors; No Stockholder Action by Written Consent;
Supermajority Voting

Certain provisions of the Restated Certificate of Incorporation could
have an anti-takeover effect by making it more difficult to acquire the Company
by means of (i) a tender offer, a proxy contest or otherwise and (ii) the
removal of incumbent officers and directors. These provisions are expected to
discourage certain types of coercive takeover practices and inadequate takeover
bids and to encourage persons seeking to acquire control of the Company to
negotiate first with the Company. However, these provisions could also delay,
deter or prevent a tender offer or takeover attempt that a stockholder might
consider in its best interest, including those attempts that might result in a
premium over the market price for the shares held by the Company's stockholders.

The Company's Restated Certificate of Incorporation and By-Laws provide
for the division of the Board into three classes of directors serving staggered
three-year terms. The By-Laws provide that the size of the Board shall be nine,
provided that the Board, by vote of three-quarters of the directors then in
office, may increase or decrease the number of directors in any class. The
classified board provision may prevent any party who acquires control of a
majority of the outstanding voting stock of the Company from obtaining control
of the Board until the second annual stockholders meeting following the date the
acquiror obtains the controlling interest.

The Restated Certificate of Incorporation of the Company also provides
that stockholder action can be taken only at an annual or special meeting of
stockholders and cannot be taken by written consent in lieu of meeting.
Additionally, the Restated Certificate of Incorporation requires an affirmative
vote of three-quarters of the Company's voting power (unless three-quarters of
the total number of directors then in office shall have approved the amendment)
to amend the provisions of the Restated Certificate of Incorporation with
respect to the number and classification of the Board, stockholder action
without written consent, director liability, indemnification and amendments to
the Restated Certificate of Incorporation.

Possible Adverse Effect of "False Alarms" Ordinances

According to an article published in American City and Country Magazine
in 1996, police officers respond to more than 13.7 million alarm activations
annually. Approximately 94% to 98% of these activations are false alarms.
Concern has arisen in certain municipalities about this high incidence of false
alarms.

<PAGE>

A number of local governmental authorities have considered or adopted
various measures aimed at reducing the number of false alarms. Such measures
include (i) subjecting alarm monitoring companies to fines or penalties for
transmitting false alarms, (ii) licensing individual alarm systems and the
revocation of such licenses following a specified number of false alarms, (iii)
imposing fines on alarm subscribers for false alarms, (iv) imposing limitations
on the number of times the police will respond to alarms at a particular
location after a specified number of false alarms and (v) requiring further
verification of an alarm signal before the police will respond. Enactment of
such measures could adversely affect the Company's future business and
operations.

Possible Volatility of Stock Price

The stock market has from time to time experienced extreme price and
volume fluctuations that have been unrelated to the operating performance of
particular companies. The market price of the Company's Common Stock may be
significantly affected by quarterly variations in the Company's operating
results, changes in financial estimates by securities analysts or failure by the
Company to meet such estimates, litigation involving the Company, general trends
in the security alarm industry, actions by governmental agencies, national
economic and stock market conditions, industry reports and other factors, many
of which are beyond the control of the Company.

Shares Eligible for Future Sale; Registration Rights

As of November 10, 1997, the Company had 6,310,034 shares of Common Stock
outstanding. In addition, 888,747 shares of Common Stock are reserved for
issuance upon the exercise of outstanding Investor Warrants and Institution
Warrants, 166,666 shares of Common Stock are reserved for issuance upon exercise
of outstanding warrants issued to Merita Bank Ltd. and Bank of Boston
Connecticut (the "New Bank Warrants"), 1,812,527 shares of Common Stock are
reserved for issuance upon exercise of outstanding options, including 17,884
shares of Common Stock which are reserved for issuance upon exercise of options
which have been granted under the Company's 1992 Directors' Option Plan, 6,643
shares of Common Stock which are reserved for issuance upon exercise of options
which have been granted under the Holmes Protection Group, Inc. Amended and
Restated Senior Executives' Option Plan (the "1994 Plan,"), 1,002,750 shares of
Common Stock which are reserved for issuance upon exercise of options which have
been granted under Holmes Protection Group, Inc. 1996 Stock Incentive Plan (the
"1996 Plan"), 785,250 shares of Common Stock which are reserved for issuance
upon exercise of options which may be granted pursuant to the 1996 Plan, and
24,562 shares of Common Stock are reserved for issuance upon the conversion of
the Notes. Currently, substantially all of the shares of Common Stock
outstanding are freely tradeable, except for (i) any such shares held at any
time by an "affiliate" of the Company, as such term is defined under Rule 144
promulgated under the Securities Act ("Rule 144") and (ii) certain shares
subject to the Registration Rights Agreements described below. The possibility
that substantial amounts of Common Stock may be sold in the public market could
have a material adverse effect on prevailing market prices of the Common Stock
and could impair the Company's ability to raise capital or make acquisitions
through the sale of its equity securities.

Pursuant to the terms of their respective registration rights agreements,
the Investor and each Institution have been granted certain registration rights
with respect to their shares of Common Stock presently held or shares of Common
Stock issuable upon exercise of their warrants. Similarly, pursuant to the terms
of their respective registration rights agreements, each of Merita Bank Ltd. and
Bank of Boston Connecticut have been granted certain registration rights with
respect to shares of Common Stock issuable upon exercise of the New Bank
Warrants. Finally, in connection with an acquisition that the Company made in
1996, the Company issued restricted shares of Common Stock and entered into
substantially similar registration rights agreements with each of the various
parties that acquired such restricted shares of Common Stock with respect
thereto. The Company may experience added costs and complexity in the event such
registration rights are exercised. In addition, the exercise of such rights
could have an adverse effect on the market price of the Common Stock.

<PAGE>
USE OF PROCEEDS

The net proceeds from the exercise of the Warrants are estimated to be
$6,828,379. The Company is unable to predict the time, if ever, when the
Warrants will be exercised. Accordingly, it is expected that the net proceeds
from the sale of the Common Stock underlying the Warrants will be used by the
Company for general corporate purposes. The Company will not receive any
proceeds from the sale of the Shares or the conversion of the Notes by the
Selling Security Holders.

SELLING SECURITY HOLDERS

The following table sets forth the ownership of the Common Stock by the
Selling Security Holders as of the date such information was provided to the
Company. Since the dates such information was provided to the Company, such
information may have changed. Any or all of the Shares listed below may be
offered for sale by the Selling Security Holders from time to time and,
therefore, no estimate can be given as to the number of Shares that will be held
by the Selling Security Holders upon termination of this offering. To the
knowledge of the Company, the shares of Common Stock being registered hereby
are all of the shares of the Company held by each Selling Security Holder.
Except as otherwise indicated, the Selling Security Holders listed in the table
have sole voting and investment powers with respect to the Shares indicated.

NUMBER OF SHARES
OF COMMON STOCK NUMBER OF
NAME OF SELLING OWNED BEFORE THE SHARES
SECURITY HOLDER OFFERING(1) OFFERED
- --------------- -------------- -------
<S> <C> <C>
HP Partners L.P. (1).............................. 2,201,600 (2) 2,201,600

John Hancock Mutual Life Insurance
Company(14)...................................... 549,282 (3) 549,282

The Mutual Life Insurance Company
of New York(14)................................. 399,905 (3) 348,066(5)

John Hancock Variable Life
Insurance Company(14)........................... 90,312 (3) 90,312

MONY Life Insurance Company
of America(14).................................. 399,905 (4) 51,839

Phoenix Home Life Mutual Insurance
Company......................................... 207,941 (6) 207,941

Allmerica Financial Life Insurance &
Annuity Company................................. 170,149 (7) 170,149

First Allmerica Financial Life Insurance
Company......................................... 41,362 (8) 41,362

Crown Life Insurance Company...................... 111,217 (9) 111,217

MBL Life Assurance Corporation.................... 129,509 (10) 129,509

</TABLE>

NUMBER OF SHARES OF NUMBER OF
NAME OF SELLING COMMON STOCK OWNED SHARES
SECURITY HOLDER BEFORE THE OFFERING (1) OFFERED
=========================================================================================================

<S> <C> <C>
Merita Bank Ltd................................. 100,000(11) 100,000
FSC Corp. ...................................... 66,666(12) 66,666
Stephen R. Crain and Neeta Ambe-Crain.......... 10,522 10,522
Milind K. Ambe.................................. 3,156 3,156
Sheila Gaikar................................... 789 789
Suresh R. Nayak and Rekha S. Nayak.............. 2,631 2,631
Livanios J. Pilitsis............................ 18,462 18,462
Nicholas Thanos................................. 895 895
Kishore S. Ambe and Leela K. Ambe, as
Trustees for Kishore Ambe, M.D., Inc.
Pension Trust................................. 30,346 30,346
Surekha Mishal.................................. 11,837 11,837
Nancy A. Taylor................................. 1,579 1,579
John Eugene..................................... 113 113
Agha M.A. Khan, Sr.............................. 1,315 1,315
Michael Fletcher................................ 46,346 46,346
George A. Brown, Jr. and Leean L. Brown......... 62,519 62,519
Thomas J. Taylor and Sue H. Taylor.............. 62,519 62,519
George M. Keefe and Julianne M. Keefe........... 31,259 31,259
Robert L. Saunders ............................. 12,281(13) 12,281
John L. Carmody................................. 12,281(13) 12,281
The Binkley Company, Inc. f/k/a D & H
Electronics, Inc.............................. 51,298 51,298
</TABLE>

(1) Messrs. Hauser, Mitchell (both of whom are directors of the Company) and
Spier (a former director of the Company) are stockholders and directors of
the general partner of HP Partners L.P. and are also limited partners of HP
Partners L.P. In addition, Messrs. Hauser, Mitchell and Spier are the sole
stockholders of the special limited partner of HP Partners L.P. which is
entitled to various rights relating to 685,714 of the HP Partners L.P.'s
Warrants. Pursuant to HP Partners L.P.'s partnership agreement, Mr. Lyons
(a director of the Company) has an arrangement to participate in any
economic benefit which Mr. Spier obtains as a result of Mr. Spier's
shareholding interest in such general partner. HP Partners L.P. is an
affiliate of the Company, beneficially owning 30.5% of the Company's
outstanding Common Stock, and having the right to designate three directors
of the Company.

<PAGE>

(2) Includes 685,714 shares of Common Stock issuable upon the exercise of
Warrants held by HP Partners L.P. at a current exercise price of $4.58 per
share.

(3) Includes shares of Common Stock issuable upon the exercise of Warrants at a
current exercise price of $10.16 per share, as follows: John Hancock Mutual
Life Insurance Company and affiliates: 61,742 owned by John Hancock Mutual
Life Insurance Company and 10,151 owned by John Hancock Variable Life
Insurance Company

(4) Includes 96,040 shares of Common Stock owned by the Mutual Life Insurance
Company of New York (which includes 39,126 shares of Common Stock issuable
upon the exercise of Warrants at a current exercise price of $10.16 per
share); 252,026 shares owned by GIPEN & Co. and 51,839 owned by MONY Life
Insurance Company of America (which includes 5,827 shares of Common Stock
issuable upon the exercise of Warrants at a current exercise price of
$10.16).

(5) Includes the 96,040 shares owned by the Mutual Life Insurance Company of
New York and 252,026 shares owned by GIPEN & Co.

(6) Includes 23,775 shares of Common Stock issuable upon the exercise of
Warrants at $10.16 per share.

(7) Includes 19,126 shares of Common Stock issuable upon the exercise of
Warrants at $10.16 per share.

(8) Includes 4,649 shares of Common Stock issuable upon the exercise of
Warrants at $10.16 per share.

(9) Includes 22,618 shares of Common Stock issuable upon the exercise of
Warrants at $10.16 per share.

(10) Includes 14,558 shares of Common Stock issuable upon the exercise of
Warrants at $10.16 per share.

(11) Represents 100,000 shares of Common Stock issuable upon exercise of
Warrants held by Merita Bank Ltd. at a current exercise price of $9.75 per
share.

(12) Represents 66,666 shares of Common Stock issuable upon exercise of Warrants
held by Bank of Boston Connecticut at a current exercise price of $9.75 per
share.

(13) Represents 12,281 shares of Common Stock issuable upon conversion of a
Note.

(14) Collectively with the other Institutions, has the right to designate two
directors of the Company.

PLAN OF DISTRIBUTION

The Shares offered by this Prospectus may be sold from time to time by
the Selling Security Holders or by transferees thereof. No underwriting
arrangements have been entered into by the Selling Security Holders. The
distribution of the Shares by the Selling Security Holders may be effected in
one or more transactions that may take place in the over-the-counter market,
including ordinary broker's transactions, privately negotiated transactions, or
through sales to one or more dealers for resale of such shares as principals, at
prevailing market prices at the time of sale, prices related to prevailing
market prices, or negotiated prices. Underwriter's discounts and usual and
customary or specifically negotiated brokerage fees or commissions may be paid
by a Selling Security Holder in connection with sales of the Shares. To the
extent required, the number of Shares to be sold, the name of the Selling
Security Holder, the purchase price, the name of any agent or broker and any
applicable commissions, discounts or other compensation to such agents or
brokers with respect to a particular offering will be set forth in a Prospectus
Supplement.

<PAGE>
In order to comply with certain state securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the Shares or Warrants may not be sold
unless such Shares or Warrants have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.

Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in
market-making activities with respect to such Shares for a period of one or five
business days prior to the commencement of such distribution. In addition to,
and without limiting, the foregoing, each of the Selling Security Holders and
any other person participating in a distribution will be subject to the
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Security Holders or any such other person. All of the foregoing may affect the
marketability of the Shares.

Pursuant to the Warrants and certain Registration Rights Agreements, the
Company will pay all the fees and expenses incident to the registration of the
Shares (other than underwriting discounts and commissions, if any, and the
Selling Security Holders' counsel fees and expenses, if any).

In addition, the Company has agreed to indemnify the Selling Security
Holders against certain liabilities, including liabilities under the Securities
Act. Furthermore, each Selling Security Holder has agreed to indemnify the
Company against certain liabilities, including liabilities under the Securities
Act. Such agreements also provide for rights of contribution if such
indemnification is not available.

LEGAL MATTERS

The validity of the Shares has been passed upon for the Company by
Dennis M. Stern, Esq., general counsel to the Company.

EXPERTS

The financial statements and schedule of the Company as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 included in this Prospectus and elsewhere in the Registration Statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report.

No dealer, salesman, or any other person has been authorized
to give any information or to make any representation not 4,428,091 Shares
contained in this Prospectus in connection with the offering
made hereby, and, if given or made, such information or ------------------
representation must not be relied upon as having been
authorized by the Company. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer HOLMES
to buy, any of the securities offered hereby in any PROTECTION
jurisdiction to any person to whom it is unlawful to make GROUP INC.
such an offer or solicitation in such jurisdiction. Neither
the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances create any implication that
there has been no change in the affairs of the Company since
the date hereof or that the information contained herein is
correct as of any time subsequent to the dates as of which
such information is furnished.

-------------------- Common Stock

TABLE OF CONTENTS

Page

Available Information.................................... 2
Incorporation of Certain Documents by
Reference............................................. 2 -------------------
Special Note Regarding Forward-Looking
Statements............................................ 3 PROSPECTUS
The Company.............................................. 4
Risk Factors............................................. 5 -------------------
Use of Proceeds.......................................... 9
Selling Security Holders................................. 9
Plan of Distribution..................................... 11
Legal Matters............................................ 12
Experts.................................................. 12 DECEMBER 29, 1997

============================================================ =========================================
</TABLE>

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table is an itemization of all expenses (subject
to future contingencies) incurred or expected to be incurred by the Company in
connection with the issuance and distribution of the securities being offered
hereby (items marked with an asterisk (*) represent estimated expenses). The
Company has agreed to pay all the costs and expenses of this offering.

SEC Registration Fee ................................ $ 22,475.92
Legal Fees and Expenses.............................. 100,000.00*
Accounting Fees and Expenses......................... 2,000.00*
Miscellaneous........................................ 3,000.00*
----------
Total................................................ 127,475.92
==========

* Estimate

Item 15. Indemnification of Officers and Directors

Delaware General Corporation Law (the DGCL), Section 102(b)(7), enables a
corporation in its original certificate of incorporation, or an amendment
thereto validly approved by stockholders, to eliminate or limit personal
liability of members of its Board for violations of a directors fiduciary duty
of care. However, the elimination of limitation shall not apply where there has
been a breach of the duty of loyalty, failure to act in good faith, intentional
misconduct or a knowing violation of a law, the payment of a dividend or
approval of a stock repurchase which is deemed illegal or an improper personal
benefit is obtained. The Company's Restated Certificate of Incorporation
eliminates the liability of directors to the extent permitted by Section
102(b)(7) of the DGCL.

Reference is made to Section 145 of the DGCL which provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgement, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation (a "derivative action"));
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provided that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise. The
Restated Certificate of Incorporation of the Company provides for such
indemnification of its directors and officers as permitted by Delaware law.

Reference is made to Article Eleventh of the Restated Certificate of
Incorporation of the Company for certain indemnification rights of officers and
directors of the Company.

II-1

<PAGE>

Item 16. Exhibits

(a) The following exhibits are filed herewith:

4.1 Restated Certificate of Incorporation, as amended.(1)
4.2 Amended and Restated Bylaws of Company.(3)
4.3 Specimen of Common Stock Certificate.(3)
4.4 Investor Warrant.(4)
4.5 Form of Institution Warrant.(2)
4.6 New Bank Warrant.(4)
4.7 Registration Rights Agreement between Investor and the Company, dated
August 1, 1994(2)
4.8 Form of Registration Rights Agreement with Institutions.(2)
4.9 Registration Rights Agreement between New Banks and the Company, dated as
of August 1, 1994.(4)
4.10 Form of Registration Rights Agreement with each of The Binkley Company,
Inc., Michael Fletcher, Mr. and Mrs. Taylor, Mr. and Mrs. Brown and Mr. and
Mrs. Keefe**
4.11 Form of Note**
5.1 Opinion of Dennis M. Stern, Esq., as to the legality of shares being
registered.
23.1 Consent of Arthur Andersen, LLP.*
23.2 Consent of Dennis M. Stern, Esq., (contained in opinion filed as
Exhibit 5.1).**
24.1 Power of Attorney (contained on signature page hereof which has been
previously filed).

- ----------------
* Filed herewith.
** Previously filed.
(1) Incorporated by reference to the Company's Annual Report on Form 10-K/A for
the fiscal year ended December 31,1996.
(2) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form 10/A, dated October 13, 1994.
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
(4) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-1, dated September 25, 1996.

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be treated as a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(3) To file a post-effective amendment to remove from registration any of the
securities being registered which remain unsold at the termination of the
offering.

II-2

<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(d) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in New York, New York on December 29,
1997.

HOLMES PROTECTION GROUP, INC.

By: /s/ George V. Flagg
-------------------------------------
George V. Flagg
President and Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>

Signature Title Date
--------- ----- ----
<S> <C> <C>

/s/ George V. Flagg President, Chief Executive Officer and December 29, 1997
--------------------- Director (Principal Executive Officer)
George V. Flagg

/s/ * (Principal Financial and Accounting December 29, 1997
---------------------- Officer) Vice President/Finance
Lawrence R. Irving

/s/ * Director December 29, 1997
---------------------
Pierre Besuchet

/s/ * Director December 29, 1997
---------------------
Daniel T. Carroll

/s/ * Director December 29, 1997
---------------------
Lawrence R. Glenn

/s/ * Director December 29, 1997
--------------------
Mark S. Hauser

/s/ * Director, Chairman of the Board December 29, 1997
--------------------
William P. Lyons

</TABLE>

II-4

Signature Title Date
--------- ----- ----
<S> <C> <C>

/s/ * Director December 29, 1997
----------------------
David Jan Mitchell

/s/ * Director December 29, 1997
---------------------
Edward L. Palmer

*By: /s/ George V. Flagg
-------------------
as Attorney-in-fact

</TABLE>

II-5

<PAGE>

Index to Exhibits

Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
4.1 Restated Certificate of Incorporation, as amended.(1)
4.2 Amended and Restated Bylaws of Company.(3)
4.3 Specimen of Common Stock Certificate.(3)
4.4 Investor Warrant.(4)
4.5 Form of Institution Warrant.(2)
4.6 New Bank Warrant.(4)
4.7 Registration Rights Agreement between Investor and the Company, dated
August 1, 1994.(2)
4.8 Form of Registration Rights Agreement with Institutions.(2)
4.9 Registration Rights Agreement between New Banks and the Company, dated as
of August 1, 1994.(4)
4.10 Form of Registration Rights Agreement with each of The Binkley Company,
Inc., Michael Fletcher, Mr. and Mrs. Taylor, Mr. and Mrs. Brown and Mr. and
Mrs. Keefe.**
4.11 Form of Note.**
5.1 Opinion of Dennis M. Stern, Esq., as to the legality of shares being
registered.**
23.1 Consent of Arthur Andersen, LLP.*
23.2 Consent of Dennis M. Stern, Esq. (contained in opinion filed as
Exhibit 5.1).
24.1 Power of Attorney (contained on signature page hereof which has been
previously filed).
</TABLE>

- -------------------
* Filed herewith.
** Previously filed.
(1) Incorporated by reference to the Company's Annual Report on Form 10-K/A for
the fiscal year ended December 31,1996.
(2) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form 10/A, dated October 13, 1994.
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
(4) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-1, dated September 25, 1996.

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 28, 1997
(except with respect to the matters discussed in Notes 14 and 15, as to which
the dates are March 12, 1997 and December 18, 1997, respectively, and with
respect to the restatement information in Notes 1b, 1c, 8, 9, and 11 as to which
the date is December 18, 1997) included in Holmes Protection Group Inc.'s Form
10-K/A for the year ended December 31, 1996 and to all references to our Firm
included in this registration statement on Form S-3 (No. 333-33799)

/s/ Arthur Andersen, LLP
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ARTHUR ANDERSEN, LLP
New York, New York
December 29, 1997