United
      States Securities and Exchange Commission


Washington,
      D.C. 20549





FORM
      10-QSB








(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
                OF 1934




For
      the
      quarterly period ended March 31, 2007





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE
                ACT





Commission
      File Number 0-31927




LASERLOCK
        TECHNOLOGIES, INC.


(Exact
        name of registrant as specified in its charter)
  NEVADA
              23-3023677(State
                  or other jurisdiction of Incorporation
              (IRS
                  Employeror
                  Organization)
              Identification
                  No.)
  837
        Lindy
        Lane, Bala Cynwyd, PA 19004


(Address
        of Principal Executive offices) (Zip Code)


610-668-1952





(Issuer’s
      Telephone Number, Including Area Code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding twelve 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
o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  No x





As
      of
      April 30, 2007, there were 73,440,506 shares of common stock, par value $0.001
      per share, outstanding.





Transitional
      Small Business Issuer Format  Yes
o  No  x










PART
      I -
      FINANCIAL INFORMATION





Item
      1.  Financial
      Statements




LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 
 Consolidated
        Financial Statements
 
 March
        31,
        2007 and 2006
  
  
 
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
    CONTENTS
 PAGECONSOLIDATED
                  BALANCE SHEETS
                
                
                1CONSOLIDATED
                  STATEMENTS OF OPERATIONS
                
                
                2CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS' DEFICIT
                
                
                3-5CONSOLIDATED
                  STATEMENTS OF CASH FLOWS
                
                
                6-7NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
                
                
                8-11
 
   LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Balance Sheets
 March
        31,
        2007 and December 31, 2006
  March
                    31,
                
                December
                    31,2007
                
                2006(Unaudited)
                
                (Audited)ASSETSCURRENT
                  ASSETSCash
                    and cash equivalents
                
                $
                52,134
                
                $
                2,058Accounts
                    receivable, net of allowance of $4,300 atMarch
                    31, 2007 and $0 at December 31, 2006
                
                
                133,350
                
                
                6,540Inventory
                
                
                32,401
                
                
                43,225Deferred
                    finance charges
                
                
                64,625
                
                
                140,407TOTAL
                  CURRENT ASSETS
                
                
                282,510
                
                
                192,230PROPERTY
                  AND EQUIPMENT, NetCapital
                    equipment
                
                
                32,604
                
                
                32,604Less
                    accumulated depreciation
                
                
                19,577
                
                
                18,58813,027
                
                
                14,016Patent
                  costs, net of accumulated amoritization of$28,303
                    and $23,416 as of March 31, 2007 andand
                    December 31, 2006
                
                
                146,360
                
                
                140,148TOTAL
                  ASSETS
                
                $
                441,897
                
                $
                346,394LIABILITIES
                    AND STOCKHOLDERS' DEFICITCURRENT
                  LIABILITIESAccounts
                    payable and accrued expenses
                
                
                538,382
                
                
                389,058Loan
                    payable, officer
                
                
                5,000
                
                
                5,000Notes
                    payable
                
                
                150,000
                
                
                -Convertible
                    notes payable
                
                
                -
                
                
                800,000TOTAL
                  CURRENT LIABILITIES
                
                
                693,382
                
                
                1,194,058CONVERTIBLE
                  NOTES PAYABLE
                
                
                800,000
                
                
                -TOTAL
                  LIABILITIES
                
                
                1,493,382
                
                
                1,194,058STOCKHOLDERS'
                  DEFICITPreferred
                    Stock, $ .001 par value; 75,000,000 shares authorized;no
                    shares issued and outstanding
                
                
                -
                
                
                -Common
                    stock, $ .001 par value; 175,000,000 shares authorized;73,440,506
                    shares issued and oustanding at March 31, 2007and
                    December 31, 2006
                
                
                73,440
                
                
                73,440Additional
                    paid in capital
                
                
                7,178,305
                
                
                7,136,344Deficit
                    accumulated during the development stage
                
                
                (8,303,230
                )
                
                (8,057,448
                )STOCKHOLDERS'
                  DEFICIT
                
                
                (1,051,485
                )
                
                (847,664
                )TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                441,897
                
                $
                346,394
 See
        accompanying notes to the consolidated financial statements.
 1
  LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Operations
 For
        the
        Three Months Ended March 31, 2007 and 2006
 And
        for
        the Period November 10, 1999 (Date of Inception) to March 31, 2007
 (UNAUDITED)
 
 Three
                    Months
                
                Three
                    MonthsCumulative
                
                Ended
                
                EndedSince
                
                March
                    31,
                
                March
                    31,Inception
                
                2007
                
                2006REVENUESSales
                
                $
                386,984
                
                $
                184,581
                
                $
                3,694Royalties
                
                
                477,718
                
                
                39,449
                
                
                23,940TOTAL
                  REVENUE
                
                
                864,702
                
                
                224,030
                
                
                27,634COSTS
                  AND EXPENSESResearch
                    and development
                
                
                1,148,921
                
                
                165,580
                
                
                18,166Patent
                    costs
                
                
                56,976
                
                
                -
                
                
                546Legal
                    and Accounting
                
                
                943,280
                
                
                47,204
                
                
                27,478Sales
                    and Marketing
                
                
                4,245,005
                
                
                102,277
                
                
                231,403General
                    and administrative
                
                
                2,571,604
                
                
                57,956
                
                
                70,721Total
                    costs and expenses
                
                
                8,965,786
                
                
                373,017
                
                
                348,314LOSS
                  BEFORE OTHER INCOME
                
                
                (8,101,084
                )
                
                (148,987
                )
                
                (320,680
                )OTHER
                  INCOME (EXPENSE)Interest
                    income
                
                
                62,706
                
                
                149
                
                
                1,169Interest
                    expense
                
                
                (434,574
                )
                
                (96,944
                )
                
                (26,512
                )Gain
                    on disposition of assets
                
                
                4,722
                
                
                -
                
                
                -(367,146
                )
                
                (96,795
                )
                
                (25,343
                )LOSS
                  BEFORE INCOME TAX BENEFIT
                
                
                (8,468,230
                )
                
                (245,782
                )
                
                (346,023
                )INCOME
                  TAX BENEFIT
                
                
                (165,000
                )
                
                -
                
                
                -NET
                  LOSS
                
                $
                (8,303,230
                )
                $
                (245,782
                )
                $
                (346,023
                )BASIC
                  AND DILUTED NET LOSS PERCOMMON
                    SHARE
                
                
                
                
                $
                (0.00
                )
                $
                (0.01
                )BASIC
                  AND DILUTED WEIGHTED AVERAGECOMMON
                    SHARES OUTSTANDING
                
                
                
                
                
                73,440,506
                
                
                64,040,506
 See
        accompanying notes to the consolidated financial statements.
 2
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Changes in Stockholders’ Equity (Deficit)
 For
        the
        Period November 10, 1999 (Date of Inception) to March 31, 2007
 DeficitCommon
                
                
                
                
                
                AccumulatedStock
                
                
                
                Additional
                
                During
                    theNumber
                    of
                
                
                
                Consulting
                
                Paid-In
                
                DevelopmentShares
                
                Amount
                
                Fees
                
                Capital
                
                Stage
                
                TotalIssuance
                    of initial 4,278,000 shares on November 10, 1999
                
                
                4,278,000
                
                $
                4,278
                
                $
                -
                
                $
                16,595
                
                $
                -
                
                $
                20,873Issuance
                    of shares of common stock in exchange for services
                
                
                1,232,000
                
                
                1,232
                
                
                -
                
                
                35,728
                
                
                -
                
                
                36,960Issuance
                    of shares of common stock
                
                
                2,090,000
                
                
                2,090
                
                
                -
                
                
                60,610
                
                
                -
                
                
                62,700Stock
                    issuance costs
                
                
                -
                
                
                -
                
                
                -
                
                
                (13,690
                )
                
                -
                
                
                (13,690
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (54,113
                )
                
                (54,113
                )Balance,
                    December 31, 1999
                
                
                7,600,000
                
                
                7,600
                
                
                -
                
                
                99,243
                
                
                (54,113
                )
                
                52,730Issuance
                    of shares of common stock
                
                
                5,449,999
                
                
                5,450
                
                
                -
                
                
                921,050
                
                
                -
                
                
                926,500Issuance
                    of shares of common stock in exchange for services
                
                
                240,000
                
                
                240
                
                
                (40,800
                )
                
                40,560
                
                
                -
                
                
                -Stock
                    issuance costs
                
                
                -
                
                
                -
                
                
                -
                
                
                (16,335
                )
                
                -
                
                
                (16,335
                )Fair
                    value of non-employee stock options grants
                
                
                -
                
                
                -
                
                
                -
                
                
                50,350
                
                
                -
                
                
                50,350Amortization
                    of deferred consulting fees
                
                
                -
                
                
                -
                
                
                20,117
                
                
                -
                
                
                -
                
                
                20,117Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (367,829
                )
                
                (367,829
                )Balance,
                    December 31, 2000
                
                
                13,289,999
                
                
                13,290
                
                
                (20,683
                )
                
                1,094,868
                
                
                (421,942
                )
                
                665,533Issuance
                    of shares of common stock
                
                
                217,500
                
                
                218
                
                
                -
                
                
                77,723
                
                
                -
                
                
                77,941Issuance
                    of shares of common stock and stock options foracquisition
                    of subsidiary
                
                
                2,000,000
                
                
                2,000
                
                
                -
                
                
                736,000
                
                
                -
                
                
                738,000Issuance
                    of stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                15,000
                
                
                -
                
                
                15,000Exercise
                    of options
                
                
                1,450,368
                
                
                1,450
                
                
                -
                
                
                230,609
                
                
                .
                
                
                232,059Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                323,250
                
                
                -
                
                
                323,250Amortization
                    of deferred consulting fees
                
                
                -
                
                
                -
                
                
                20,683
                
                
                -
                
                
                -
                
                
                20,683Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,052,299
                )
                
                (1,052,299
                )Balance,
                    December 31, 2001
                
                
                16,957,867
                
                
                16,958
                
                
                -
                
                
                2,477,450
                
                
                (1,474,241
                )
                
                1,020,167
 
 See
        accompanying notes to the consolidated financial statements.
 
 3
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Changes in Stockholders’ Equity (Deficit) (Continued)
 For
        the
        Period November 10, 1999 (Date of Inception) to March 31, 2007
  DeficitCommon
                
                
                
                
                
                AccumulatedStock
                
                
                
                Additional
                
                During
                    theNumber
                    of
                
                
                
                Consulting
                
                Paid-In
                
                DevelopmentShares
                
                Amount
                
                Fees
                
                Capital
                
                Stage
                
                TotalIssuance
                    of shares of common stock
                
                
                3,376,875
                
                
                3,377
                
                
                -
                
                
                687,223
                
                
                -
                
                
                690,600Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                94,000
                
                
                -
                
                
                94,000Salary
                    due to shareholder contributed capital
                
                
                -
                
                
                -
                
                
                -
                
                
                15,000
                
                
                -
                
                
                15,000Return
                    of shares of common stock related to purchase price
                    adjustment
                
                
                (1,000,000
                )
                
                (1,000
                )
                
                -
                
                
                (353,000
                )
                
                -
                
                
                (354,000
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                
                
                
                -
                
                
                (1,195,753
                )
                
                (1,195,753
                )Balance,
                    December 31, 2002
                
                
                19,334,742
                
                
                19,335
                
                
                -
                
                
                2,920,673
                
                
                (2,669,994
                )
                
                270,014Issuance
                    of shares of common stock
                
                
                22,512,764
                
                
                22,512
                
                
                -
                
                
                1,387,109
                
                
                -
                
                
                1,409,621Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                213,300
                
                
                
                
                
                213,300Issuance
                    of shares of common stock in exchange for services
                
                
                143,000
                
                
                143
                
                
                -
                
                
                23,857
                
                
                
                
                
                24,000Stock
                    issuance costs
                
                
                -
                
                
                -
                
                
                -
                
                
                (49,735
                )
                
                
                
                
                (49,735
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,107,120
                )
                
                (1,107,120
                )Balance,
                    December 31, 2003
                
                
                41,990,506
                
                
                41,990
                
                
                -
                
                
                4,495,204
                
                
                (3,777,114
                )
                
                760,080Stock
                    issuance costs
                
                
                -
                
                
                -
                
                
                -
                
                
                (25,000
                )
                
                -
                
                
                (25,000
                )Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                493,600
                
                
                -
                
                
                493,600Issuance
                    of shares of common stock
                
                
                18,600,000
                
                
                18,600
                
                
                -
                
                
                939,881
                
                
                -
                
                
                958,481Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,406,506
                )
                
                (1,406,506
                )Balance,
                    December 31, 2004
                
                
                60,590,506
                
                
                60,590
                
                
                -
                
                
                5,903,685
                
                
                (5,183,620
                )
                
                780,655
 
 See
        accompanying notes to the consolidated financial statements.
  4
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Changes in Stockholders’ Equity (Deficit) (Continued)
 For
        the
        Period November 10, 1999 (Date of Inception) to March 31, 2007
 DeficitCommon
                
                
                
                
                
                AccumulatedStock
                
                
                
                Additional
                
                During
                    theNumber
                    of
                
                
                
                Consulting
                
                Paid-In
                
                DevelopmentShares
                
                Amount
                
                Fees
                
                Capital
                
                Stage
                
                TotalFair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                286,762
                
                
                -
                
                
                286,762Issuance
                    of shares of common stock
                
                
                3,000,000
                
                
                3,000
                
                
                -
                
                
                102,000
                
                
                -
                
                
                105,000Net
                    loss for the year ended December 31, 2005
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,266,811
                )
                
                (1,266,811
                )Balance
                    at December 31, 2005
                
                
                63,590,506
                
                
                63,590
                
                
                -
                
                
                6,292,447
                
                
                (6,450,431
                )
                
                (94,394
                )Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                215,463
                
                
                -
                
                
                215,463Fair
                    value of employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                135,098
                
                
                -
                
                
                135,098Fair
                    value of warrants issued for deferred finance charges
                
                
                -
                
                
                -
                
                
                -
                
                
                392,376
                
                
                -
                
                
                392,376Exercise
                    of warrants
                
                
                5,550,000
                
                
                5,550
                
                
                -
                
                
                49,950
                
                
                -
                
                
                55,500Exercise
                    of options
                
                
                4,300,000
                
                
                4,300
                
                
                -
                
                
                (3,870
                )
                
                -
                
                
                430Shares
                    retired upon cancellation of consulting agreements
                
                
                (1,200,000
                )
                
                (1,200
                )
                
                -
                
                
                1,080
                
                
                -
                
                
                (120
                )Issuance
                    of shares for services
                
                
                1,200,000
                
                
                1,200
                
                
                
                
                
                53,800
                
                
                
                
                
                55,000Net
                    loss for the year ended December 31, 2006
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,607,017
                )
                
                (1,607,017
                )Balance
                    at December 31, 2006 (Audited)
                
                
                73,440,506
                
                $
                73,440
                
                $
                -
                
                $
                7,136,344
                
                $
                (8,057,448
                )
                $
                (847,664
                )Fair
                    value of non-employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                25,048
                
                
                -
                
                
                25,048Fair
                    value of employee stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                16,913
                
                
                -
                
                
                16,913Net
                    loss for the three months ended March 31, 2007
                
                
                -
                
                
                -
                
                
                -
                
                
                
                
                
                (245,782
                )
                
                (245,782
                )Balance
                    at March 31, 2007 (Unaudited)
                
                
                73,440,506
                
                
                73,440
                
                
                -
                
                
                7,178,305
                
                
                (8,303,230
                )
                
                (1,051,485
                )
  See
        accompanying noes to the consolidated financial statements.
 5
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Cash Flows
 For
        the
        Three Months Ended March 31, 2007 and 2006
 And
        for
        the Period November 10, 1999 (Date of Inception) to March 31, 2007
 (UNAUDITED)
 Three
                    Months
                
                Three
                    MonthsCumulative
                
                Ended
                
                EndedSince
                
                March
                    31,
                
                March
                    31,Inception
                
                2007
                
                2006CASH
                    FLOWS FROM OPERATING ACTIVITIESNet
                    loss
                
                $
                (8,303,230
                )
                $
                (245,782
                )
                $
                (346,023
                )Adjustments
                    to reconcile net loss to net cashused
                    in operating activitiesFair
                    value of options issued in exchange for services
                
                
                1,853,784
                
                
                41,961
                
                
                119,748Amortization
                    of deferred finance charges
                
                
                327,750
                
                
                75,782
                
                
                20,500Salary
                    due to stockholder contributed to capital
                
                
                15,000
                
                
                -
                
                
                -Provision
                    for bad debts
                
                
                4,300
                
                
                4,300Amortization
                    and depreciation
                
                
                453,086
                
                
                5,952
                
                
                3,528Gain
                    on disposition of assets
                
                
                (4,722
                )
                
                -
                
                
                -Stock
                    issued in exchange for services
                
                
                220,960
                
                
                -
                
                
                -Financing
                    expenses paid directly from stock proceeds
                
                
                5,270
                
                
                -
                
                
                -Amortization
                    of deferred consulting fees
                
                
                40,800
                
                
                -
                
                
                -(Increase)
                    decrease in assetsReceivables
                
                
                (137,650
                )
                
                (131,110
                )
                
                14,029Inventory
                
                
                (32,401
                )
                
                10,824
                
                
                4,693Prepaid
                    expenses
                
                
                -
                
                
                -
                
                
                -Increase
                    (decrease) in liabilitiesAccounts
                    payable and accrued expenses
                
                
                538,382
                
                
                149,324
                
                
                (90,297
                )Net
                    cash used in operating activities
                
                
                (5,018,671
                )
                
                (88,749
                )
                
                (273,822
                )CASH
                    FLOWS FROM INVESTING ACTIVITIESPurchase
                    of property and equipment
                
                
                (35,749
                )
                
                -
                
                
                -Purchase
                    of intangibles
                
                
                (20,000
                )
                
                -
                
                
                -Purchase
                    of patent costs
                
                
                (174,740
                )
                
                (11,175
                )
                
                (1,400
                )Loan
                    payable, officer
                
                
                5,000
                
                
                -
                
                
                -Proceeds
                    from sale of assets
                
                
                6,738
                
                
                -
                
                
                -Net
                    cash used in investing activities
                
                
                (218,751
                )
                
                (11,175
                )
                
                (1,400
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESProceeds
                    from issuance of common stock
                
                
                4,091,447
                
                
                -
                
                
                -Proceeds
                    from exercise of stock options
                
                
                232,369
                
                
                -
                
                
                13,500Proceeds
                    from issuance of stock options
                
                
                15,000
                
                
                -
                
                
                -Proceeds
                    from exercise of warrants
                
                
                55,500
                
                
                -
                
                
                -Proceeds
                    from short-term borrowings
                
                
                1,000,000
                
                
                150,000
                
                
                480,000Stock
                    issuance costs
                
                
                (104,760
                )
                
                -
                
                
                -Net
                    cash provided by financing activities
                
                
                5,289,556
                
                
                150,000
                
                
                493,500NET
                    DECREASE IN CASH ANDCASH
                    EQUIVALENTS
                
                
                52,134
                
                
                50,076
                
                
                218,278CASH
                    AND CASH EQUIVALENTS - BEGINNING OF PERIOD
                
                
                -
                
                
                2,058
                
                
                6,705CASH
                    AND CASH EQUIVALENTS - END OF PERIOD
                
                $
                52,134
                
                $
                52,134
                
                $
                224,983
  See
        accompanying notes to the consolidated financial statements.
 6
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Consolidated
        Statements of Cash Flows (Continued)
 For
        the
        Three Months Ended March 31, 2007 and 2006
 And
        for
        the Period November 10, 1999 (Date of Inception) to March 31, 2007
 (UNAUDITED)
 Three
                    Months
                
                Three
                    MonthsCumulative
                
                Ended
                
                EndedSince
                
                March
                    31,
                
                March
                    31,Inception
                
                2007
                
                2006SUPPLEMENTAL
                    DISCLOSURE OF NON-CASHINVESTING
                    AND FINANCING ACTIVITIES:Cash
                    paid during the year for:Interest
                
                $
                29,270
                
                $
                58
                
                $
                -Income
                    taxes
                
                $
                -
                
                $
                -
                
                $
                -Return
                    of shares of common stock related topurchase
                    price adjustmentCommon
                    stock
                
                
                (1,000
                )
                
                -
                
                
                -Additional
                    paid-in capital
                
                
                (353,000
                )
                
                -
                
                
                -Intangible
                    assets
                
                $
                (354,000
                )
                $
                -
                
                $
                -Issuance
                    of common stock and stock optionsfor
                    acquisition of subsidiary
                
                $
                738,000
                
                $
                -
                
                $
                -Common
                    stock sales proceeds appliedto
                    debt and financing expenses repayment
                
                $
                55,270
                
                $
                -
                
                $
                -Fair
                    value of warrants issued for deferred finance charges
                
                $
                392,376
                
                $
                -
                
                $
                163,640
 See
        accompanying notes to the consolidated financial statements.
 7
  LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Notes
        to
        Consolidated Financial Statements
 
 **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 ***Basis
        of Presentations***
 The
        accompanying unaudited financial statements have been prepared in accordance
        with U.S. generally accepted accounting principles for interim financial
        information and with the instructions for Form 10-QSB and item 310(b) of
        Regulation S-B. Accordingly, they do not include all of the information and
        footnotes required by generally accepted accounting principles for complete
        financial statements. In the opinion of management, all adjustments (consisting
        of normal recurring accruals) considered necessary for a fair presentation
        have
        been included. Operating results for the three months ended March 31, 2007
        are
        not necessarily indicative of the results that may be expected for the year
        ended December 31, 2007. The unaudited financial statements should be read
        in
        conjunction with the financial statements and footnotes thereto included
        in the
        Company’s annual report on Form 10-KSB for the year ended December 31, 2006.
 
 ***Recently
        Issued Accounting Pronouncements***
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
        No. 48 (“FIN 48”), *Accounting
        for Uncertainty in Income Taxes* .
        FIN 48
        prescribes detailed guidance for the financial statement recognition,
        measurement and disclosure of uncertain tax positions recognized in an
        enterprise’s financial statements in accordance with FASB Statement
        No. 109, *Accounting
        for Income Taxes* .
        Tax
        positions must meet a more-likely-than-not recognition threshold at the
        effective date to be recognized upon the adoption of FIN 48 and in subsequent
        periods. FIN 48 will be effective for fiscal years beginning after
        December 15, 2006, and will become effective for us beginning with the
        first quarter of 2007, and the provisions of FIN 48 will be applied to all
        tax
        positions under Statement No. 109 upon initial adoption. The cumulative
        effect of applying the provisions of this interpretation will be reported
        as an
        adjustment to the opening balance of retained earnings for that fiscal year.
        The
        Company adopted FIN 48 effective January 1, 2007. The adoption of FIN 48
        did not
        require an adjustment to the opening balance of retained earnings as of January
        1, 2007.
 
 **NOTE
        2 - GOING CONCERN**
 
 The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. The Company has incurred
        significant losses and experienced negative cash flow during the development
        stage. These conditions raise substantial doubt about the Company’s ability to
        continue as a going concern. The consolidated financial statements do not
        include any adjustments that might result from this uncertainty.
 
 The
        Company is in the development stage at March 31, 2007. Successful completion
        of
        the Company’s development program and, ultimately the attainment of profitable
        operations is dependant upon future events, including obtaining adequate
        financing to fulfill its development activities and achieving a level of
        sales
        adequate to support the Company’s cost structure. However, there can be no
        assurances that the Company will be able to secure additional equity investment
        or achieve an adequate sales level.
  **NOTE
        3 - PATENTS**
 
 The
        Company continues to apply for patents. Accordingly costs associated with
        the
        registration of these patents have been capitalized and are amortized on
        a
        straight-line basis over the estimated lives of the patents (17 years). During
        the three months ended March 31, 2007, additional capitalized patent costs
        incurred amounted to $11,175. Amortization expense for patents was $4,964
        and
        $2,303 for the three months ended March 31, 2007 and 2006.
 
 8
  LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Notes
        to
        Consolidated Financial Statements
 
 
 **NOTE
        4 - INCOME TAXES**
 
 There
        is
        no income tax benefit for the losses for the three months ended March 31,
        2007
        and 2006, since management has determined that the realization of the net
        deferred tax asset is not assured and has created a valuation allowance for
        the
        entire amount of such benefits.
 
  **NOTE
        5 - NOTES PAYABLE**
 
 In
        the
        first quarter of 2007, the Company issued two notes totaling $150,000. The
        notes
        are payable on demand and bear interest at 10%.
 
 
 **NOTE
        6 - CONVERTIBLE NOTES PAYABLE**
 
 In
        February 2006, the Company commenced a private placement of up to $800,000
        principal amount of 10% senior secured convertible promissory notes due twelve
        months from the date of issue to certain of our shareholders and other
        accredited investors. Purchasers of the notes were issued 10-year warrants
        exercisable into the Company’s shares at an exercise price of $0.01 per share.
        In addition, if an equity financing with total proceeds of more than $5,000,000
        occurs while any notes are outstanding, holders of notes will have the right,
        at
        their option, to convert the outstanding principal and interest of the notes
        into shares at a discount of 30% of the price per share in the qualified
        financing. In accordance with Emerging Issue Task Force No. 98-5, *Accounting
        for Convertible Securities with Beneficial Conversion Features or Contingently
        Adjustable Conversion Ratios,* the
        contingent beneficial conversion feature is not recognized unless the triggering
        event occurs and the contingency is resolved. The notes are secured by a
        first
        priority lien on all of the tangible and intangible personal property of
        the
        Company.
 
 As
        of
        December 31, 2006, the Company sold $800,000 principal amount of the notes
        and
        issued 8,000,000 warrants. In accordance with FAS 123(R), warrants were valued
        at $392,376 and recorded as deferred finance charges. The Company used the
        Black-Scholes option pricing model to calculate the grant-date fair value
        of the
        warrants, with the following assumptions: no dividend yield, expected volatility
        of 169% and 284%, risk-free interest rate between 3.6% and 4.5% and expected
        warrant life of ten years. The deferred finance charges are being amortized
        over
        one year, which is the term of the convertible notes. As of December 31,
        2006
        the Company received $55,500 for the exercise of 5,550,000 of the
        warrants.
 
 The
        term
        of the convertible notes has been extended to August 31, 2008. In consideration
        for the extension of maturity of the notes, the Company increased the interest
        rate on these notes to 12%.
 
 
 **NOTE
        7 - STOCK OPTIONS AND WARRANTS**
 
 During
        1999, the Board of Directors (“Board”) of the Company adopted, with the approval
        of the stockholders, a Stock Option Plan. In 2000, the Board superseded that
        plan and created a new Stock Option Plan, pursuant to which it is authorized
        to
        grant options to purchase up to 1.5 million shares of common stock. On December
        17, 2003, the Board, with approval of the stockholders, superseded this plan
        and
        created the 2003 Stock Option Plan (the “Plan”). Under the Plan the Company is
        authorized to grant options to purchase up to 18,000,000 shares of common
        stock
        to the Company’s employees, officers, directors, consultants, and other agents
        and advisors. The Plan is intended to permit stock options granted to employees
        under the Plan to qualify as incentive stock options under Section 422 of
        the
        Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All
        options granted under the Plan, which are not intended to qualify as Incentive
        Stock Options, are deemed to be non-qualified options (“Non-Statutory Stock
        Options”). As of March 31, 2007, there are 3,100,000 options that have been
        issued and exercised, 14,006,662 options that have been issued and are
        unexercised, and 893,338 options that are available to be issued under the
        Plan.
 
 
 9
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Notes
        to
        Consolidated Financial Statements
 
 
 **NOTE
        7 - STOCK OPTIONS AND WARRANTS (Continued)**
 
 The
        Plan
        is administered by a committee of the Board of Directors (“Stock Option
        Committee”) which determines the persons to whom awards will be granted, the
        number of awards to be granted and the specific terms of each grant, including
        the vesting thereof, subject to the provisions of the plan.
 
 In
        connection with Incentive Stock Options, the exercise price of each option
        may
        not be less than 100% of the fair market value of the common stock on the
        date
        of the grant (or 110% of the fair market value in the case of a grantee holding
        more than 10% of the outstanding stock of the Company). The aggregate fair
        market value (determined at the time of the grant) of stock for which an
        employee may exercise Incentive Stock Options under all plans of the company
        shall not exceed $1,000,000 per calendar year. If any employee shall have
        the
        right to exercise any options in excess of $100,000 during any calendar year,
        the options in excess of $100,000 shall be deemed to be Non-Statutory Stock
        Options, including prices, duration, transferability and limitations on
        exercise.
 
 The
        Company issued non-statutory stock options pursuant to contractual agreements
        to
        non-employees. Options granted under the agreements are expensed when the
        related service or product is provided. For the three months ended March
        31,
        2007 and 2006, the company expensed $25,048 and $67,748 relative to non-employee
        options granted. As of March 31, 2007, there was approximately $58,000 of
        unrecognized compensation expense related to non-vested market-based share
        awards that is expected to be recognized through November 2007.
 
 The
        following tables summarize all non-employee stock option/warrant activity
        of the
        Company since December 31, 2006:
  Weighted
                    AverageOption/Warrant
                
                Exercise
                
                ExerciseShares
                
                Price
                
                PriceOutstanding,
                    December 31, 2006
                
                
                13,251,662
                
                $
                .01
                    to $.28
                
                $
                0.09Granted
                
                
                -
                
                
                -
                
                
                -Exercised
                
                
                -
                
                
                -
                
                
                -Expired
                
                
                (395,000
                )
                
                .40
                
                
                .40Outstanding,
                    March 31, 2007
                
                
                12,856,662
                
                $
                .01
                    to $.28
                
                $
                0.06Exercisable,
                    March 31, 2007
                
                
                12,273,329
                
                $
                .01
                    to $.28
                
                $
                0.08Weighted
                    Average Remaining Life,Exercisable,
                    March 31, 2007
                
                
                5.8
                    years
  **NOTE
        8 - STOCK BASED COMPENSATION**
 
 On
        January 1, 2006, the Company adopted SFAS 123(R) using the modified prospective
        method as permitted under SFAS 123(R). Under this transition method,
        compensation cost recognized in the first quarter of 2006 includes compensation
        cost for all share-based payments granted prior to but not yet vested as
        of
        December 31, 2005, based on the grant-date fair value estimated in accordance
        with the provisions of SFAS 123. In accordance with the modified prospective
        method of adoption, the Company’s results of operations and financial position
        for prior periods have not been restated.
 
 10
 LaserLock
        Technologies, Inc. and Subsidiaries
 (A
        Development Stage Company)
 Notes
        to
        Consolidated Financial Statements
  **NOTE
        8 - STOCK BASED COMPENSATION (Continued)**
 
 
 During
        the three months ended March 31, 2007, no options were granted, however,
        the
        Company’s net income was reduced by $16,913 as a result of stock-based
        compensation from previously issued options. As of March 31, 2007, there
        was
        approximately $51,000 of unrecognized compensation expense related to non-vested
        market-based share awards that is expected to be recognized through December
        2007.
 
 The
        following tables summarize all employee stock option activity of the Company
        since December 31, 2006:
  Weighted
                    AverageOption/Warrant
                
                Exercise
                
                ExerciseShares
                
                Price
                
                PriceOutstanding,
                    December 31, 2006
                
                
                6,570,000
                
                $
                .03
                    to $.28
                
                $
                0.11Granted
                
                
                -
                
                
                -
                
                
                -Exercised
                
                
                -
                
                
                -
                
                
                -Expired
                
                
                -
                
                
                -
                
                
                -Outstanding,
                    March 31, 2007
                
                
                6,570,000
                
                $
                .03
                    to $.28
                
                $
                0.12Exercisable,
                    March 31, 2007
                
                
                5,599,166
                
                $
                .01
                    to $.28
                
                $
                0.12Weighted
                    Average Remaining Life,Exercisable,
                    March 31, 2007
                
                
                5.3
                    years
  **NOTE
        9 - RELATED PARTY TRANSACTIONS**
 
 Five
        shareholders of the Company also hold $555,000 of the convertible notes as
        of
        March 31, 2007.
 
 One
        shareholder of the Company holds the two demand notes totaling
        $150,000.
 
 The
        Company maintains its office at the home of its President. No formal lease
        agreement exists and no direct rent expense has been incurred. However, related
        occupancy costs of $935 and $3,468 were incurred during the three months
        ended
        March 31, 2007 and 2006.
 
 In
        December 2006, the President of the Company loaned the Company $5,000. No
        formal
        repayment terms have been established.
  11




Item
      2.  Management’s
      Discussion and Analysis





**Forward-Looking
      Information**





The
      following Management’s Discussion and Analysis should be read in conjunction
      with our unaudited financial statements and notes thereto for the three month
      period ended March 31, 2007 included herein and our audited financial statements
      and notes thereto for the year ended December 31, 2006 included in our Annual
      Report on Form 10-KSB filed with the Securities and Exchange
      Commission.





This
      discussion, analysis and other sections of this report contain, in addition
      to
      historical information, forward-looking statements within the meaning of the
      Private Securities Litigation Reform Act of 1995. Forward-looking statements
      involve known and unknown risks, uncertainties and other factors, which may
      cause our actual results, performance or achievements expressed or implied
      by
      these forward-looking statements to differ materially from such forward-looking
      statements. The forward-looking statements included in this report may prove
      to
      be inaccurate. These statements are based on a number of assumptions concerning
      future events, and are subject to a number of uncertainties and other factors,
      many of which are outside our control. Actual results may differ materially
      from
      such statements for a number of reasons, including the effects of regulation
      and
      changes in capital requirements and funding. In light of the significant
      uncertainties inherent in these forward-looking statements, you should not
      consider this information to be a guarantee by us or any other person that
      our
      objectives and plans will be achieved. We do not undertake to publicly update
      or
      revise its forward-looking statements even if experience or future changes
      make
      it clear that any projected results (expressed or implied) will not be
      realized.




**Overview**




We
      are a
      technology licensing company which licenses our technology to both third parties
      who incorporate it into their products for resale to their customers, and to
      end
      users who incorporate the technology into their products at their manufacturing
      facilities. We receive royalties on volume usage of our technology from third
      parties who sell products incorporating such technologies. We intend to require,
      whenever possible, minimum annual royalties to enter into these licensing
      agreements.




Our
      focus
      involves offering security solutions to the gaming industry through third
      parties that supply various products and services to the gaming industry. We
      license our technology to these third-party product and service suppliers who,
      in turn, incorporate our technology into the products they sell. We receive
      a
      royalty on each license. As part of these security solutions, we sell inks
      and
      pigments used to detect counterfeit products and documents to these same
      third-party product and service suppliers. By the end of fiscal year 2003,
      we
      had signed agreements to provide technology for the protection of playing cards,
      dice, and casino chips from fraud with Gaming Partners International (formerly
      known as Bud Jones, Bourgogne et Grasset and Paul Son) and CoPAG U.S.A. Inc.
      (“CoPAG”). The agreement with Gaming Partners International is still in effect.
      The agreement with CoPAG expired in September 2005 and was not
      renewed.




We
      also
      supply fraud protection technology for slot tickets, and made a commitment
      to
      sell advertising on the back of slot tickets in the cashless ticket-in
      ticket-out slot machines such as those using the EZ Pay system developed by
      IGT.
      We signed an agreement with Ambient Planet, Ltd. (“Ambient”), a media and
      marketing company, in February 2004. The agreement was extended by mutual
      consent in September 2004. The results of the test program indicated that the
      business model did not perform as anticipated and this agreement has been
      terminated.




In
      January 2005, we entered into an agreement with Enigma Importacao e Exportacco
      Ltdn. (“Enigma”), in which we granted Enigma four, three-month options, to
      develop uses for our pending patent in Brazil. During each option period Enigma
      pays us a fee and purchase product to be used in testing and development of
      the
      products. At the end of the option period Enigma has the right to enter into
      a
      license agreement with us based on a minimum license fee and purchase price
      of
      product that includes a built in royalty. Enigma did not exercise the last
      three-month option. Several tests have been conducted by Enigma, potential
      customers and/or their agents that indicate use of our technology might be
      commercially feasible. One potential customer advised Enigma that our technology
      is acceptable for its use. LaserLock and Enigma continue to work together in
      anticipation of developing commercial applications in Brazil. However, no
      contracts have been entered into for the commercial use of this technology
      to
      date.




12


In
      February 2005 we entered into a six-month agreement with the Nicolette
      Consulting Group Limited (“NCG”) utilizing the services of Thomas A. Nicolette,
      its principal. The agreement anticipated that NCG would mainly provide sales
      and
      marketing services to LaserLock. During the initial term these services were
      expanded to include strategic planning and the longer-term objectives. In July
      2005, February 2006 and August 2006, the contract was extended for further
      six
      month periods with the understanding that Mr. Nicolette would, in addition
      to
      his sales and marketing services, provide services similar to those of a senior
      executive, although he would not be an officer of LaserLock. This agreement
      expired on January 31, 2007.





On
      December 13, 2005 we signed a Letter of Intent (“LOI”) to acquire a minimum of
      95% of the outstanding shares of ExaqtWorld S.A.R.L. (“Exaqt”) based in Paris,
      France for 36.6% of the outstanding shares of LaserLock (assuming 100% of the
      shares of Exaqt are tendered). With the acquisition of Exaqt we would own the
      worldwide rights in the security sector of a fundamental patent to manufacturer
      multi-tech Electronic Article Surveillance (“EAS”) systems, which simultaneously
      detect multiple EAS frequencies (RF, EM, AM and RFID). The multi-tech EAS
      systems allow the seamless integration of source tagging of products at the
      manufacturing level of the supply chain of the retail industry. The LOI is
      subject to the signing of a definitive agreement between Exaqt and us. The
      standstill agreement contained in the LOI expired June 13, 2006. In the first
      quarter of 2007 we elected not to pursue the acquisition of Exaqt and Mr.
      Nicolette’s agreement was not extended.




We
      continue to develop new anti-counterfeiting technologies and to apply for patent
      protection for these technologies wherever possible. Our current patent
      portfolio consists of four granted patents (one granted in 2002, two granted
      in
      2004 and one granted in 2005) and one patent pending. Management believes that
      some of the patents that have been granted may have commercial application
      in
      the future but will require additional capital and/or a strategic partner in
      order to reach the potential markets.




We
      are
      currently exploring the uses of our technologies in general industry and
      government. Whenever possible, we will license our technology to strategic
      partners that currently service those industries and charge them royalty fees
      and/or a share of the revenues/profits from their use of our
      technology.




In
      February 2006 we commenced a private placement of up to $800,000 principal
      amount of 10% senior secured convertible promissory notes due twelve months
      from
      the date of issue to certain of our shareholders and other accredited investors.
      Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
      equity securities at an exercise price of $0.01 per share. Additionally, if
      an
      equity financing with total proceeds of more than $5,000,000 occurs while any
      notes are outstanding, holders of notes will have the right, at their option,
      to
      convert the outstanding principal and interest of the notes into shares at
      a
      discount of 30% of the price per share in the qualified financing. The notes
      are
      secured by a first priority lien on all of the tangible and intangible personal
      property of LaserLock. The private placement relied upon applicable exemptions
      from registration under Section 4(2) of the Securities Exchange Act of 1934,
      as
      amended, and Section 506 of Regulation D promulgated thereunder.  We
      completed the private placement on August 10, 2006. In total, we sold $800,000
      of notes and issued warrants for the purchase of 8,000,000 shares of our common
      stock in the private placement. On May 7, 2007, we entered into an agreement
      with the holders of the notes whereby the parties extended the due date of
      the
      notes to August 31, 2008. Interest under the notes was increased to 12% during
      the extended period.





In
      October 2006 we entered into an agreement with UTEK Corporation (“UTEK”) a
      publicly traded company located in Tampa, Florida to conduct a study of our
      intellectual property portfolio. The study focused on potential uses of our
      intellectual property portfolio for non-security applications. The approximate
      cost of the study was $55,000. We issued 1,200,000 restricted Common Shares
      to
      UTEK to pay the costs of the study. The shares had a market price of $.045.
      UTEK
      completed its initial study in December 2006 and provided a report, which,
      indicated that there was significant opportunity for licensing our intellectual
      property for non-security applications.





On
      November 2, 2006, we entered into an agreement with Athanor Capital Partners
      Limited, based in London, United Kingdom ("Athanor"), under which Athanor will
      act as a corporate advisor and broker to us. With Athanor's guidance, we
      intended to form a new holding company in the United Kingdom ("Newco") and
      raise
      up to $5,000,000 through the issuance of Newco's shares on the London Stock
      Exchange's AIM market ("AIM"). Under the terms of the agreement, Athanor would
      provide corporate finance advice and capital raising assistance to us in
      connection with a proposed application for the admission of Newco's shares
      to
      trade on the AIM. The proceeds of the offering would be used to complete the
      acquisition of the assets of ExaqtWorld S.A.R.L. (“ExaqtWorld”), including
      ExaqtWorld's patent portfolio, fund the global sales and marketing operations
      of
      the combined product lines, and exchange all outstanding shares of LaserLock
      for
      shares in Newco. On signing the agreement, we paid Athanor a $10,000
      non-refundable fee and granted them options to purchase 1,000,000 Common Shares
      at $.0001 per share. This option was promptly exercised. In the first quarter
      of
      2007 we elected not to pursue the acquisition of Exaqt and the listing on
      AIM.





13


On
      February 28, 2007, we entered into a commercialization agreement with UTEK
      under
      which it will market on our behalf the non-security applications of our
      intellectual property. Upon execution of the agreement, we paid UTEK an initial
      fee of $5,000, which will be credited against future commissions payable to
      UTEK
      under the commercialization agreement. Commissions payable to UTEK are based
      on
      the net revenues of Laserlock attributable to licenses and/or sales of the
      non-security applications of our intellectual property during the term of the
      agreement. The agreement has an initial term of six months, which will be
      automatically extended in the event contact is made during the initial term
      with
      any prospective licensees or purchasers of the non-security applications of
      our
      intellectual property.





On
      March
      9, 2007, we entered into a non-exclusive sales and marketing agreement with
      RCD
      Technologies Inc. (“RCD”). RCD is a security technology company, which
      specializes in RFID technology. During the initial six-month period of the
      agreement, RCD has agreed to market the LaserLock technologies using its
      in-house sales force and to share the net revenues with LaserLock on a 50-50
      basis. It is the intention of both companies to review this agreement during
      the
      six-month period with the intention of entering into a longer-term distribution
      agreement.




In
      addition to the above, in order to implement our strategy, it will be necessary
      for us to raise additional capital and/or enter into strategic alliances or
      partnerships. There can be no assurances that such capital or strategic
      alliances or partnerships will be available and, if available, that we will
      be
      able to secure such capital or arrangements on acceptable terms.





**Results
      of Operations**





**Comparison
      of the Three-Month Periods Ended March 31, 2007 and March 31,
      2006.**





Since
      we
      were and currently still are in our startup stages it is difficult for us to
      forecast our revenue or earnings accurately. We believe that period-to-period
      comparisons of our operating results may not be meaningful. We believe that
      we
      will start generating larger amounts of revenue in the future due to our
      attempts to cultivate business relationships over the past years.





As
      a
      result of our limited operating history, we do not have meaningful historical
      financial data on which to base planned operating expenses. Thus, annual revenue
      and results of operation are difficult to project.





For
      the
      three months ended March 31, 2007, we had sales and royalty revenues of $224,030
      as compared to $27,634 for the three months ending March 31, 2006. During the
      period, sales of inks were $184,581 as compared to $3,694 for last year. The
      substantial increase results from an order from a casino that changed the
      placement of the inks on the casino chips so that the ability to authenticate
      the chip is enhanced. The change requires the use of more ink than the prior
      application. Royalty revenues increased to $39,449 from $23,940, last year,
      due
      to the use of our security system on an increased number of casino
      chips.





Our
      research and development costs aggregated $165,580 for the three months ended
      March 31, 2007 as compared to $18,166 for the three months ended March 31,
      2006,
      an increase of $147,414. The increase results from an increase in the cost
      of
      products sold to $162,199 for the three months ended March 31, 2007 as compared
      to $8,050 in the prior year. Offsetting this increase was a reduction in the
      cost for research and product development. For the three months ended March
      31,
      2007 we incurred costs of $3,000 for research and product development as
      compared to $9,735 for the 2006 period.





We
      did
      not have any patent costs for the three months ended March 31, 2007 as compared
      to $546 for the three months ended March 31, 2006. This expense is the cost
      for
      maintaining the patents that have been issued to the Company.





14


Our
      legal
      and accounting costs aggregated $47,204 for the three months ended March 31,
      2007 as compared to $27,478 for the three months ended March 31, 2006, an
      increase of $19,726. Legal fees for the 2007 period increased to $37,404 from
      $15,878 in the prior year. The increase principally results from costs for
      legal
      work in connection with the potential listing on AIM and the related acquisition
      of Exaqt. During the current period we elected not to pursue both the AIM
      listing and the acquisition of Exaqt. The higher legal fees were partially
      offset by a reduction of accounting fees to $9,800 in the 2007 period from
      $11,600 for the same period last year.





Our
      sales
      and marketing costs aggregated $102,277 for the three months ended March 31,
      2007 as compared to $231,403 for the three months ended March 31, 2006, a
      decrease of $129,126. The reduction in the costs result primarily from reduced
      charges for the issuance of stock options of $28,000 for employees and $32,000
      for consultants, lower salaries of $17,960 and reduced fees and costs paid
      to
      consultants of approximately $56,000. Partially offsetting these reductions
      was
      an increase in travel and miscellaneous sales and marketing costs.





Our
      general and administrative costs aggregated $57,956 for the three months ended
      March 31, 2007 as compared to $70,721 for the three months ended March 31,
      2006,
      a decrease of $12,765. The decrease is principally the result of $22,700 that
      was expensed for the cost of administrative stock options in the 2006 period
      as
      compared to $4,913 during the 2007 period, a reduction of $17,787. Offsetting
      this decrease was a 2007 charge for bad debt expense of $4,300. During the
      2006
      period there was no expense for bad debts.





Our
      interest expense for the three months ended March 31, 2007 was $96,944 as
      compared to $26,512 for the three months ended March 31, 2006. Accrued interest
      on the Company’s debt was $21,250 for the three months ended March 31, 2007 as
      compared to $6,000 for the 2006 period. The amortization of the deferred finance
      charges related to the issuance of warrants related to the Notes was $75,782
      for
      the three months ended March 31, 2007 as compared to $20,500 for the same period
      last year.





The
      net
      loss for the three months ended March 31, 2007 was $245,782 or $0.00 per share.
      This compares to a net loss of $346,023 or $0.01 per share for the same period
      in 2006, a decrease in the net loss of $100,241. Included in the net loss for
      the 2007 period was $117,743 that represents the expense portion of the fair
      value of stock options and warrants issued compared to $140,248 in the 2006
      period, a decrease of $22,505.





**Liquidity
      and Capital Resources**





Our
      cash
      balance at March 31, 2007 of $52,134 was $50,076 more than the $2,058 as of
      December 31, 2006. Working capital at March 31, 2007 was a negative $ 410,872
      representing an increase in working capital of $590,956 from the negative
      $1,001,828 at December 31, 2006. This increase in cash and working capital
      relates principally to the extension of the due date of the $800,000 of Notes
      to
      August 31, 2008 partially reduced by the cash portion of our net loss for the
      three months ended March 31, 2007 and a loan for $150,000.




Our
      cash
      flow from operations, since inception, has been and continues to be negative.
      We
      continue to attempt to solicit customers and expect to continue to expend funds
      in excess of our revenues during the balance of the current year.




Future
      capital requirements and the adequacy of available funds will depend on numerous
      factors, including the successful commercialization of our existing products,
      cost of filing, prosecuting, defending and enforcing any current and future
      patent claims and other intellectual property rights, competing technological
      and marketing of our products. In the event our plans change or our assumptions
      change or prove to be inaccurate or the funds available prove to be insufficient
      to fund operations at the planned level (due to further unanticipated expenses,
      delays, problems or otherwise), we could be required to obtain additional funds
      through equity or debt financing, through strategic alliances with corporate
      partners and others, or through other sources in order to bring our products
      through to commercialization. We do not have any committed sources of additional
      financing, and there can be no assurance that additional funding, if necessary,
      will be available on acceptable terms, if at all. If adequate funds are not
      available, we may be required to further delay, scale back, or eliminate certain
      aspect of our operations or attempt to obtain funds through arrangements with
      collaborative partners or others that may require us to surrender rights to
      certain of our technologies, product development projects, certain products
      or
      existing markets. Specifically, if we are unable to consummate sales, we may
      have to delay our anticipated marketing and delivery dates, scale back our
      third-party production capabilities or eliminate certain areas of further
      research and development. If adequate funds are not available, our business,
      financial condition, and results of operations will be materially and adversely
      affected.




15


In
      February 2006 we commenced a private placement of up to $800,000 principal
      amount of 10% senior secured convertible promissory notes due twelve months
      from
      the date of issue to certain of our shareholders and other accredited investors.
      Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
      equity securities at an exercise price of $0.01 per share. Additionally, if
      an
      equity financing with total proceeds of more than $5,000,000 occurs while any
      notes are outstanding, holders of notes will have the right, at their option,
      to
      convert the outstanding principal and interest of the notes into shares at
      a
      discount of 30% of the price per share in the qualified financing. The notes
      are
      secured by a first priority lien on all of the tangible and intangible personal
      property of LaserLock. The private placement relied upon applicable exemptions
      from registration under Section 4(2) of the Securities Exchange Act of 1934,
      as
      amended, and Section 506 of Regulation D promulgated thereunder.  We
      completed the private placement on August 10, 2006. In total, we sold $800,000
      of notes and issued warrants for the purchase of 8,000,000 shares of our common
      stock in the private placement. On May 7, 2007, we entered into an agreement
      with the holders of the notes whereby the parties extended the due date of
      the
      notes to August 31, 2008. Interest under the notes was increased to 12% during
      the extended period.




On
      November 2, 2006, we entered into an agreement with Athanor, under which Athanor
      will act as a corporate advisor and broker to us. With Athanor's guidance,
      we
      intended to form Newco and raise up to $5,000,000 through the issuance of
      Newco's shares on AIM. Under the terms of the agreement, Athanor would provide
      corporate finance advice and capital raising assistance to us in connection
      with
      a proposed application for the admission of Newco's shares to trade on the
      AIM.
      The proceeds of the offering would be used to complete the acquisition of the
      assets of ExaqtWorld, including ExaqtWorld's patent portfolio, fund the global
      sales and marketing operations of the combined product lines, and exchange
      all
      outstanding shares of LaserLock for shares in Newco. On signing the agreement,
      we paid Athanor a $10,000 non-refundable fee and granted them options to
      purchase 1,000,000 Common Shares at $.0001 per share. This option was promptly
      exercised. In the first quarter of 2007 we elected not to pursue the acquisition
      of Exaqt and the listing on AIM.


In
      addition to the above, in order to implement our strategy, it will be necessary
      for us to raise additional capital and/or enter into strategic alliances or
      partnerships. There can be no assurances that such capital or strategic
      alliances or partnerships will be available and, if available, that we will
      be
      able to secure such capital or arrangements on acceptable
      terms.





Our
      actual research and development and related activities may vary significantly
      depending on numerous factors, including changes in the costs of such activities
      from current estimates, the results of our research and development programs,
      the results of clinical studies, the timing of regulatory submissions,
      technological advances, determinations as to commercial potential, the status
      of
      competitive products and the availability of sufficient funds to achieve our
      goals. At this time we cannot project our cash expenditures on our research
      and
      development program for fiscal year 2007. Our research and development plans
      over the next year are uncertain but may include the application of our product
      to additional materials, as well as improving our existing products in
      conjunction with client feedback and the commercialization of new products.
      The
      focus and direction of our operations also will be dependent upon the
      establishment of collaborative arrangements with other companies.




Our
      current policy is to invest our cash reserves in bank deposits, certificates
      of
      deposit, commercial paper, corporate notes, U.S. government instruments or
      other
      investment-grade quality instruments.




There
      can
      be no assurance that we will be able to commercialize our technologies or that
      profitability will ever be achieved. We expect that our operating results will
      fluctuate significantly from year to year in the future and will depend on
      a
      number of factors, most of which are beyond our control.




**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that would be material to
      investors.


16




Item
      3.  Controls
      and Procedures





(a)
            Evaluation
                of Disclosure Controls and
                Procedures





Our
      Chief
      Executive Officer and principal financial officer evaluated the effectiveness
      of
      our disclosure controls and procedures as of the end of the period covered
      by
      this report. Based on that evaluation, the Chief Executive Officer and principal
      financial officer concluded that our disclosure controls and procedures as
      of
      the end of the period covered by this report are functioning effectively to
      provide reasonable assurance that the information required to be disclosed
      by
      LaserLock in reports filed under the Securities Exchange Act of 1934 is
      recorded, processed, summarized and reported within the time periods specified
      in the Securities and Exchange Commission's rules and forms. A controls system,
      no matter how well designed and operated, cannot provide absolute assurance
      that
      the objectives of the controls system are met, and no evaluation of controls
      can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within a company have been detected. We note that the same person serves
      as
      both the Chief Executive Officer and principal financial officer.





(b)
            Change
                in Internal Control over Financial
                Reporting





No
      change
      in our internal control over financial reporting occurred during our most recent
      fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, our internal control over financial reporting.








17


PART
      II -
      OTHER INFORMATION





Item
      1.  Legal
      Proceedings





There
      are
      no pending legal proceedings to which LaserLock or any of its subsidiaries
      is a
      party or to which any of their properties is the subject that are expected
      to
      have a material effect on our financial position, results of operations or
      cash
      flows.





Item
      2.  Unregistered
      Sales of Equity Securities and Use of Proceeds





In
      February 2006 we commenced a private placement of up to $800,000 principal
      amount of 10% senior secured convertible promissory notes due twelve months
      from
      the date of issue to certain of our shareholders and other accredited investors.
      Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
      equity securities at an exercise price of $0.01 per share. Additionally, if
      an
      equity financing with total proceeds of more than $5,000,000 occurs while any
      notes are outstanding, holders of notes will have the right, at their option,
      to
      convert the outstanding principal and interest of the notes into shares at
      a
      discount of 30% of the price per share in the qualified financing. The notes
      are
      secured by a first priority lien on all of the tangible and intangible personal
      property of LaserLock. The private placement relied upon applicable exemptions
      from registration under Section 4(2) of the Securities Exchange Act of 1934,
      as
      amended, and Section 506 of Regulation D promulgated thereunder.  We
      completed the private placement on August 10, 2006. In total, we sold $800,000
      of notes and issued warrants for the purchase of 8,000,000 shares of our common
      stock in the private placement. On May 7, 2007, we entered into an agreement
      with the holders of the notes whereby the parties extended the due date of
      the
      notes to August 31, 2008. Interest under the notes was increased to 12% during
      the extended period.




On
      November 2, 2006, we entered into an agreement with Athanor, under which Athanor
      will act as a corporate advisor and broker to us. With Athanor's guidance,
      we
      intended to form Newco and raise up to $5,000,000 through the issuance of
      Newco's shares on AIM. Under the terms of the agreement, Athanor would provide
      corporate finance advice and capital raising assistance to us in connection
      with
      a proposed application for the admission of Newco's shares to trade on the
      AIM.
      The proceeds of the offering would be used to complete the acquisition of the
      assets of ExaqtWorld, including ExaqtWorld's patent portfolio, fund the global
      sales and marketing operations of the combined product lines, and exchange
      all
      outstanding shares of LaserLock for shares in Newco. On signing the agreement,
      we paid Athanor a $10,000 non-refundable fee and granted them options to
      purchase 1,000,000 Common Shares at $.0001 per share. This option was promptly
      exercised. In the first quarter of 2007 we elected not to pursue the acquisition
      of Exaqt and the listing on AIM.





There
      can
      be no assurances that Athanor will be successful in securing additional capital
      on acceptable terms or that Laserlock will complete any of the transactions
      described above in connection with the proposed offering of Newco
      shares.





Item
      3.  Defaults
      Upon Senior Securities





None.





Item
      4.  Submission
      of Matters to a Vote of Security Holders





None.





Item
      5.  Other
      Information





On
      February 28, 2007, we entered into a commercialization agreement with UTEK
      under
      which it will market on our behalf the non-security applications of our
      intellectual property. Upon execution of the agreement, we paid UTEK an initial
      fee of $5,000, which will be credited against future commissions payable to
      UTEK
      under the commercialization agreement. Commissions payable to UTEK are based
      on
      the net revenues of Laserlock attributable to licenses and/or sales of the
      non-security applications of our intellectual property during the term of the
      agreement. The agreement has an initial term of six months, which will be
      automatically extended in the event contact is made during the initial term
      with
      any prospective licensees or purchasers of the non-security applications of
      our
      intellectual property. This summary of the commercialization agreement does
      not
      purport to be complete and is subject to, and is qualified in its entirety
      by,
      reference to all of the provisions of the commercialization agreement, a copy
      of
      which is attached to this filing on Form 10-QSB as Exhibit 10.13 and
      incorporated by reference herein.





18


On
      March
      9, 2007, we entered into a non-exclusive sales and marketing agreement with
      RCD.
      During the initial six-month period of the agreement, RCD has agreed to market
      the LaserLock technologies using its in-house sales force and to share the
      net
      revenues with LaserLock on a 50-50 basis. It is the intention of both companies
      to review this agreement during the six-month period with the intention of
      entering into a longer-term distribution agreement. This summary of the
      marketing agreement does not purport to be complete and is subject to, and
      is
      qualified in its entirety by, reference to all of the provisions of the
      marketing agreement, a copy of which is attached to this filing on Form 10-QSB
      as Exhibit 10.14 and incorporated by reference herein.





Item
      6.  Exhibits





10.1  License
      Agreement regarding the use of the Company’s technology with plastic playing
      cards between Laserlock Technologies, Inc. and CoPAG U.S.A. Inc. dated November
      1, 2003 (filed with the Company’s Annual Report on Form 10-KSB on March 30, 2004
      and incorporated herein by reference).





10.2  Senior
      Secured Convertible Note and Warrant Purchase Agreement, dated February 13,
      2006, among the Company and Nob Hill Capital Partners, L.P. (filed on the
      Company’s Form 8-K on February 17, 2006 and incorporated herein by
      reference).





10.3  Schedule
      of Purchasers who have entered into the Senior Secured Convertible Note and
      Warrant Purchase Agreement filed on Form 8-K on February 17, 2006 and
      incorporated herein by reference (filed on the Company’s Form 10-KSB on March
      31, 2006 and incorporated herein by reference).





10.4  Senior
      Secured Convertible Promissory Note, dated February 17, 2006, by the Company
      in
      favor of Nob Hill Capital Partners, L.P. in the amount of $100,000 (filed on
      Form 8-K on February 17, 2006 and incorporated herein by
      reference).





10.5  Schedule
      of Payees who have entered into a senior secured convertible promissory note
      substantially identical to the Senior Secured Convertible Promissory Note filed
      on Form 8-K on February 17, 2006 and incorporated herein by reference (filed
      on
      the Company’s Form 10-KSB on March 31, 2006 and incorporated herein by
      reference).





10.6  Warrant,
      issued by the Company in favor of Nob Hill Capital Partners, L.P., dated
      February 13, 2006 (filed on Form 8-K on February 17, 2006 and incorporated
      herein by reference).





10.7  Schedule
      of Holders to whom the Company has issued a warrant substantially identical
      to
      the Warrant filed on Form 8-K on February 17, 2006 and incorporated herein
      by
      reference (filed on the Company’s Form 10-KSB on March 31, 2006 and incorporated
      herein by reference).





10.8  Security
      Agreement, dated February 13, 2006, by and between the Company and Nob Hill
      Capital Partners, L.P. (filed on Form 8-K on February 17, 2006 and incorporated
      herein by reference).





10.9  Schedule
      of Secured Parties who have entered into a security agreement substantially
      identical to the Security Agreement filed on Form 8-K on February 17, 2006
      and
      incorporated herein by reference (filed on the Company’s Form 10-KSB on March
      31, 2006 and incorporated herein by reference).





10.10  Non-binding
      letter of intent, entered into on January 10, 2006, pursuant to which the
      Company will acquire a minimum of 95% of the shares of ExaqtWorld S.A.R.L.
      (filed on Form 8-K on January 11, 2006 and incorporated herein by
      reference).





10.11  Letter
      Agreement re: Proposed Admission through an Introduction of Laserlock
      Technologies, Inc. to trading on the London Stock Exchange plc’s AIM, entered
      into on November 2, 2006 by Laserlock Technologies, Inc. and Athanor Capital
      Partners Limited (filed on Form 8-K on November 8, 2006 and incorporated herein
      by reference).





10.12  First
      Amendment to Senior Secured Promissory Notes dated May 7, 2007 by and among
      Laserlock Technologies, Inc., the Goldberg Family Trust, PFK Acquisition Group
      II, LLC, Howard Goldberg, Real Path, Inc., Robert Schachter Trust, Nob Hill
      Capital Partners, LP, Nob Hill Capital Associates, LP, Nicolette Consulting
      Group Limited, Alfred F. Bracher, III and Lawrence Chimerine (filed on Form
      8-K
      on May 8, 2007 and incorporated herein by reference).





19


10.13  Standard
      Agreement for Commercialization of IP dated February 28, 2007 by and between
      Laserlock Technologies, Inc. and UTEK International Capital Consulting (filed
      herewith).





10.14  Letter
      Agreement dated March 9, 2007 by and between Laserlock Technologies, Inc. and
      RCD Technology, Inc. (filed herewith).





31.1  Certification
      of Chief Executive Officer and principal financial officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002 (filed herewith).*





32.1  Certification
      of Chief Executive Officer and principal financial officer pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 (filed herewith).*







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


*  The
      same
      individual serves as the Company's Chief Executive Officer and principal
      financial officer.





20




SIGNATURES





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








LaserLock
                Technologies, Inc.
              (Registrant)Date:
              May 15, 2007
            By:
            /s/
              Norman GardnerNorman
              GardnerPresident
              and
              CEO








21