United
      States


Securities
      and Exchange Commission


Washington,
      D.C. 20549


FORM
      10-Q


(Mark
      One)





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





For
      the
      quarterly period ended September 30, 2008





 ̈  TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934





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





(Registrant’s
      Telephone Number, Including Area Code)





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





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non- accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act (check one).





Large
                accelerated filer ̈
            Accelerated
                filer ̈Non-accelerated filer ̈(Do not check if a smaller reporting company)
            Smaller reporting companyx




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





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.





As
      of
      October 31, 2008, there were 73,440,506 shares of common stock, par value $0.001
      per share, outstanding.









PART
      I –
FINANCIAL INFORMATION





Item
      1.
      Financial Statements





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)





Consolidated
      Financial Statements





September
      30, 2008 and 2007










LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)





CONTENTS





PAGECONSOLIDATED
                BALANCE SHEETS
            
            
            2CONSOLIDATED
                STATEMENTS OF OPERATIONS
            
            
            3CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS’ DEFICIT
            
            
            4-7CONSOLIDATED
                STATEMENTS OF CASH FLOWS
            
            
            8-9NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS
            
            
            10-16





-1-


LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Consolidated
      Balance Sheets


September
      30, 2008 and December 31, 2007





September 30, 2008
            
            December 31, 2007(Unaudited)
            
            (Audited)ASSETSCURRENT
                ASSETSCash
                and cash equivalents
            
            $
            14,705
            
            $
            348Accounts
                receivable, net of allowance of $0 at September 30, 2008 and December
                31,
                2007
            
            
            30
            
            
            1,994Inventory
            
            
            23,613
            
            
            28,726TOTAL
                CURRENT ASSETS
            
            
            38,348
            
            
            31,068PROPERTY
                AND EQUIPMENTCapital
                equipment
            
            
            32,604
            
            
            32,604Less
                accumulated depreciation
            
            
            25,348
            
            
            22,5437,256
            
            
            10,061Patent
                costs, net of accumulated amoritization of $44,456 and $36,318 as
                of
                September 30, 2008 and December 31, 2007
            
            
            141,863
            
            
            147,601TOTAL
                ASSETS
            
            $
            187,467
            
            $
            188,730LIABILITIES
                AND STOCKHOLDERS' DEFICITCURRENT
                LIABILITIESAccounts
                payable and accrued expenses
            
            
            868,115
            
            
            641,213Senior
                secured convertible notes payable
            
            
            800,000
            
            
            800,000Convertible
                notes payable
            
            
            400,000
            
            
            375,000Notes
                payable
            
            
            354,000
            
            
            70,000TOTAL
                CURRENT LIABILITIES
            
            
            2,422,115
            
            
            1,886,213STOCKHOLDERS'
                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 September 30, 2008 and December 31,
                2007
            
            
            73,440
            
            
            73,440Additional
                paid in capital
            
            
            7,259,331
            
            
            7,251,687Deficit
                accumulated during the development stage
            
            
            (9,567,419
            )
            
            (9,022,610
            )STOCKHOLDERS'
                DEFICIT
            
            
            (2,234,648
            )
            
            (1,697,483
            )TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT
            
            $
            187,467
            
            $
            188,730





See
      the
      accompanying notes to the consolidated financial statements.




-2-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Consolidated
      Statements of Operations


For
      the
      Three and Nine Months Ended September 30, 2008 and 2007


And
      for
      the Period November 10, 1999 (Date of Inception) to September 30, 2008


(UNAUDITED)





Three Months
            
            Three Months
            
            Nine Months
            
            Nine MonthsCumulative
            
            Ended
            
            Ended
            
            Ended
            
            EndedSince
            
            September 30,
            
            September 30,
            
            September 30,
            
            September 30,Inception
            
            2008
            
            2007
            
            2008
            
            2007NET
                REVENUESSales
            
            $
            440,551
            
            $
            5,377
            
            $
            36,784
            
            $
            11,229
            
            $
            227,183Royalties
            
            
            540,517
            
            
            1,758
            
            
            26,180
            
            
            26,979
            
            
            80,323TOTAL
                NET REVENUE
            
            
            981,068
            
            
            7,135
            
            
            62,964
            
            
            38,208
            
            
            307,506COST
                OF SALES
            
            
            408,124
            
            
            547
            
            
            36,439
            
            
            6,804
            
            
            201,498GROSS
                PROFIT
            
            
            572,944
            
            
            6,588
            
            
            26,525
            
            
            31,404
            
            
            106,008OPERATING
                EXPENSESResearch
                and development
            
            
            822,920
            
            
            4,298
            
            
            7,367
            
            
            15,190
            
            
            15,459Patent
                costs
            
            
            61,187
            
            
            -
            
            
            -
            
            
            1,311
            
            
            900Legal
                and Accounting
            
            
            1,085,517
            
            
            13,053
            
            
            21,464
            
            
            71,400
            
            
            107,315Sales
                and Marketing
            
            
            4,735,365
            
            
            69,195
            
            
            103,474
            
            
            190,071
            
            
            310,640General
                and administrative
            
            
            2,953,992
            
            
            59,993
            
            
            68,569
            
            
            180,109
            
            
            207,860Total
                operating expenses
            
            
            9,658,981
            
            
            146,539
            
            
            200,874
            
            
            458,081
            
            
            642,174LOSS
                BEFORE OTHER INCOME
            
            
            (9,086,037
            )
            
            (139,951
            )
            
            (174,349
            )
            
            (426,677
            )
            
            (536,166
            )OTHER
                INCOME (EXPENSE)Interest
                income
            
            
            63,587
            
            
            -
            
            
            138
            
            
            3
            
            
            1,012Interest
                expense
            
            
            (714,691
            )
            
            (43,222
            )
            
            (45,665
            )
            
            (118,135
            )
            
            (224,606
            )Gain
                on disposition of assets
            
            
            4,722
            
            
            -
            
            
            -
            
            
            -
            
            
            -(646,382
            )
            
            (43,222
            )
            
            (45,527
            )
            
            (118,132
            )
            
            (223,594
            )LOSS
                BEFORE INCOME TAX BENEFIT
            
            
            (9,732,419
            )
            
            (183,173
            )
            
            (219,876
            )
            
            (544,809
            )
            
            (759,760
            )INCOME
                TAX BENEFIT
            
            
            (165,000
            )
            
            -
            
            
            -
            
            
            -
            
            
            -NET
                LOSS
            
            $
            (9,567,419
            )
            $
            (183,173
            )
            $
            (219,876
            )
            $
            (544,809
            )
            $
            (759,760
            )BASIC
                  AND DILUTED NET LOSS PER COMMON
                  SHARE
            
            
            
            
            $
            (0.00
            )
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )BASIC
                AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
            
            
            
            
            
            73,440,506
            
            
            73,440,506
            
            
            73,440,506
            
            
            73,440,506





See
      the
      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)


For
      the
      Period November 10, 1999 (Date of Inception) to September 30, 2008





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 for acquisition 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
      the
      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 September 30, 2008





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
      the
      accompanying notes to the consolidated financial statements.




-5-





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 September 30, 2008





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
            
            
            73,440,506
            
            
            73,440
            
            
            -
            
            
            7,136,344
            
            
            (8,057,448
            )
            
            (847,664
            )Fair
                value of non-employee stock options
            
            
            -
            
            
            -
            
            
            -
            
            
            47,692
            
            
            -
            
            
            47,692Fair
                value of employee stock options
            
            
            -
            
            
            -
            
            
            -
            
            
            67,651
            
            
            -
            
            
            67,651Net
                loss for the year ended December 31, 2007
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            (965,162
            )
            
            (965,162
            )Balance
                at December 31, 2007
            
            
            73,440,506
            
            
            73,440
            
            
            -
            
            
            7,251,687
            
            
            (9,022,610
            )
            
            (1,697,483
            )





See
      the
      accompanying notes to the consolidated financial statements.




-6-





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 September 30, 2008





DeficitCommon
            
            
            
            
            
            AccumulatedStock
            
            
            
            Additional
            
            During theNumber of
            
            
            
            Consulting
            
            Paid-In
            
            DevelopmentShares
            
            Amount
            
            Fees
            
            Capital
            
            Stage
            
            TotalFair
                value of non-employee stock options
            
            
            -
            
            
            -
            
            
            -
            
            
            7,644
            
            
            -
            
            
            7,644Net
                loss for the nine months ended September 30, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            (544,809
            )
            
            (544,809
            )Balance
                at September 30, 2008 (Unaudited)
            
            
            73,440,506
            
            $
            73,440
            
            $
            -
            
            $
            7,259,331
            
            $
            (9,567,419
            )
            $
            (2,234,648
            )





See
      the
      accompanying notes to the consolidated financial statements.




-7-




LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Consolidated
      Statements of Cash Flows


For
      the
      Nine Months Ended September 30, 2008 and 2007


And
      for
      the Period November 10, 1999 (Date of Inception) to September 30,
      2008


(UNAUDITED)





Nine Months
            
            Nine MonthsCumulative
            
            Ended
            
            EndedSince
            
            September
                30,
            
            September
                30,Inception
            
            2008
            
            2007CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (9,567,419
            )
            $
            (544,809
            )
            $
            (759,760
            )Adjustments
                to reconcile net loss to net cash used in operating
                activitiesFair
                value of options issued in exchange for services
            
            
            1,934,810
            
            
            7,644
            
            
            95,882Amortization
                of deferred finance charges
            
            
            392,375
            
            
            -
            
            
            140,407Salary
                due to stockholder contributed to capital
            
            
            15,000
            
            
            -
            
            
            -Provision
                for bad debts
            
            
            -
            
            
            -
            
            
            12,900Amortization
                and depreciation
            
            
            474,933
            
            
            10,943
            
            
            13,163Gain
                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
            
            
            (30
            )
            
            1,964
            
            
            (7,393
            )Inventory
            
            
            (23,613
            )
            
            5,113
            
            
            13,363Increase
                in liabilitiesAccounts
                payable and accrued expenses
            
            
            868,115
            
            
            226,902
            
            
            184,794Net
                cash used in operating activities
            
            
            (5,643,521
            )
            
            (292,243
            )
            
            (306,644
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property and equipment
            
            
            (35,749
            )
            
            -
            
            
            -Purchase
                of intangibles
            
            
            (20,000
            )
            
            
            
            
            -Purchase
                of patent costs
            
            
            (186,319
            )
            
            (2,400
            )
            
            (20,354
            )Loan
                payable, officer
            
            
            -
            
            
            -
            
            
            (5,000
            )Proceeds
                from sale of assets
            
            
            6,738
            
            
            -
            
            
            -Net
                cash used in investing activities
            
            
            (235,330
            )
            
            (2,400
            )
            
            (25,354
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from issuance of common stock
            
            
            4,091,447
            
            
            -
            
            
            -Proceeds
                from exercise of stock options
            
            
            232,369
            
            
            -
            
            
            -Proceeds
                from issuance of stock options
            
            
            15,000
            
            
            -
            
            
            -Proceeds
                from exercise of warrants
            
            
            55,500
            
            
            -
            
            
            -Proceeds
                from issuance of notes
            
            
            1,704,000
            
            
            309,000
            
            
            450,000Repayments
                of notes
            
            
            (100,000
            )
            
            -
            
            
            (100,000
            )Stock
                issuance costs
            
            
            (104,760
            )
            
            -
            
            
            -Net
                cash provided by financing activities
            
            
            5,893,556
            
            
            309,000
            
            
            350,000NET
                DECREASE IN CASH AND CASH EQUIVALENTS
            
            
            14,705
            
            
            14,357
            
            
            18,002CASH
                AND CASH EQUIVALENTS - BEGINNING OF PERIOD
            
            
            -
            
            
            348
            
            
            2,058CASH
                AND CASH EQUIVALENTS - END OF PERIOD
            
            $
            14,705
            
            $
            14,705
            
            $
            20,060





See
      the
      accompanying notes to the consolidated financial statements.




-8-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Consolidated
      Statements of Cash Flows (Continued)


For
      the
      Nine Months Ended September 30, 2008 and 2007


And
      for
      the Period November 10, 1999 (Date of Inception) to September 30,
      2008


(UNAUDITED)





Nine Months
            
            Nine MonthsCumulative
            
            Ended
            
            EndedSince
            
            September 30,
            
            September 30,Inception
            
            2008
            
            2007SUPPLEMENTAL
                  DISCLOSURE OF NON-CASH INVESTING
                  AND FINANCING ACTIVITIES:Cash
                paid during the year for:Interest
            
            $
            29,745
            
            $
            135
            
            $
            270Income
                taxes
            
            $
            -
            
            $
            -
            
            $
            -Return
                of shares of common stock related to purchase price
                adjustmentCommon
                stock
            
            
            (1,000
            )
            
            -
            
            
            -Additional
                paid-in capital
            
            
            (353,000
            )
            
            -
            
            
            -Intangible
                assets
            
            $
            (354,000
            )
            $
            -
            
            $
            -Issuance
                of common stock and stock options for acquisition of
                subsidiary
            
            $
            738,000
            
            $
            -
            
            $
            -Proceeds
                from common stock sales applied directly to debt and financing expenses
                repayment
            
            $
            55,270
            
            $
            -
            
            $
            -Fair
                value of warrants issued for deferred finance charges
            
            $
            392,376
            
            $
            -
            
            $
            -





See
      the
      accompanying notes to the consolidated financial statements.




-9-





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-Q and Rule 8-03 of Regulation
      S-X. 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 nine months ended September 30, 2008 are
      not
      necessarily indicative of the results that may be expected for the year ended
      December 31, 2008. 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, 2007.





The
      financial statements are presented in accordance with Statement of Financial
      Accounting Standard (“SFAS”) No. 7, *Accounting
      and Reporting by Development Stage Enterprises.*





***Recently
      Issued Pronouncements***





During
      September 2006, the Financial Accounting Standards Board (“FASB”)
      issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS
      157”), which is effective for fiscal years beginning after November 15,
      2007 with earlier adoption encouraged. SFAS 157 defines fair value, establishes
      a framework for measuring fair value in generally accepted accounting
      principles, and expands disclosures about fair value measurements. In February
      2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of FASB
      Statement No. 157, which delayed the effective date of SFAS 157 for all
      non-financial assets and liabilities, except those that are recognized or
      disclosed at fair value in the financial statements on a recurring basis, until
      January 1, 2009.   The Company adopted SFAS 157 on January 1,
      2008 for all financial assets and liabilities, but the implementation did not
      require additional disclosures or have a significant impact on the Company's
      financial statements.  The Company has not yet determined the impact
      the implementation of SFAS 157 will have on the Company’s non-financial assets
      and liabilities which are not recognized or disclosed on a recurring
      basis.  However, the Company does not anticipate that the full
      adoption of SFAS 157 will significantly impact their financial
      statements.





During
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* —including
      an amendment of FASB Statement No. 115 (“SFAS 159”), which permits entities to
      choose to measure many financial instruments and certain other items at fair
      value. The objective of SFAS 159 is to improve financial reporting by providing
      entities with the opportunity to mitigate volatility in reported earnings caused
      by measuring related assets and liabilities differently without having to apply
      complex hedge accounting provisions. The Company adopted SFAS 159 on January
      1,
      and has elected not to measure any additional financial assets, liabilities
      or
      other items at fair value.





In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), *Business
      Combinations* (“SFAS 141R”). SFAS 141R establishes principles and requirements for
      how an acquirer recognizes and measures in its financial statements the
      identifiable assets acquired, the liabilities assumed, any noncontrolling
      interest in the acquiree and the goodwill acquired. SFAS 141R also
      establishes disclosure requirements to enable the evaluation of the nature
      and
      financial effects of the business combination. This statement is effective
      for
      the Company beginning January 1, 2009 and will change the accounting for
      business combinations on a prospective basis.




-10-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





***Recently
      Issued Pronouncements (Continued)***


In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements* —an
      amendment of Accounting Research Bulletin No. 51 (“SFAS 160”).
      SFAS 160 establishes accounting and reporting standards for ownership
      interests in subsidiaries held by parties other than the parent, the amount
      of
      consolidated net income attributable to the parent and to the noncontrolling
      interest, changes in a parent’s ownership interest, and the valuation of
      retained noncontrolling equity investments when a subsidiary is deconsolidated.
      SFAS 160 also establishes disclosure requirements that clearly identify and
      distinguish between the interests of the parent and the interests of the
      noncontrolling owners. This statement is effective for the Company beginning
      January 1, 2009. SFAS 160 is not currently applicable to the Company since
      the Company’s subsidiary is wholly owned.





In
      March
      2008, the FASB issued SFAS No. 161, *Disclosures
      about Derivative Instruments and Hedging Activities* (“SFAS
      161”), which is effective January 1, 2009. SFAS 161 requires enhanced
      disclosures about derivative instruments and hedging activities to allow for
      a
      better understanding of their effects on an entity’s financial position,
      financial performance, and cash flows. Among other things, SFAS 161 requires
      disclosures of the fair values of derivative instruments and associated gains
      and losses in a tabular formant. SFAS 161 is not currently applicable to the
      Company since the Company does not have derivative instruments or hedging
      activity.





In
      May
      2008, the FASB issued SFAS No. 162, *The
      Hierarchy* of *Generally
      Accepted Accounting Principles* (“SFAS
      162"). SFAS 162 identifies the sources of accounting principles and the
      framework for selecting the principles to be used in the preparation of
      financial statements of nongovernmental entities that are presented in
      conformity with generally accepted accounting principles. SFAS 162 directs
      the ** hierarchy
      to the entity, rather than the independent auditors, as the entity is
      responsible for selecting accounting principles for financial statements that
      are presented in conformity with generally accepted accounting principles.
      SFAS
      162 is effective 60 days following SEC approval of the Public Company Accounting
      Oversight Board amendments to remove the hierarchy of generally accepted
      accounting principles from the auditing standards. SFAS 162 is not expected
      to
      have an impact on the Company’s financial statements.





In
      April
      2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, *Determination
      of the Useful Life of Intangible Assets* ,
      which
      amends the factors that should be considered in developing renewal or extension
      assumptions used to determine the useful life of a recognized intangible asset
      under FASB Statement No. 142, *Goodwill
      and Other Intangible Assets.* This
      Staff Position is effective for financial statements issued for fiscal years
      beginning after December 15, 2008, and interim periods within those fiscal
      years. Early adoption is prohibited. This FSP is not currently applicable to
      the
      Company.





In
      June
      2008, the FASB issued FSP EITF 03-6-1, *Determining
      Whether Instruments Granted in Share-Based Payment Transactions are
      Participating Securities* .
      This
      FSP provides that unvested share-based payment awards that contain
      nonforfeitable rights to dividends or dividend equivalents (whether paid or
      unpaid) are participating securities and shall be included in the computation
      of
      earnings per share pursuant to the two-class method. The Company does not
      currently have any share-based awards that would qualify as participating
      securities. Therefore, application of this FSP is not expected to have an effect
      on the Company's financial reporting.





-11-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





***Recently
      Issued Pronouncements (Continued)***


In
        May
        2008, the FASB issued FASB Staff Position (FSP) APB 14-1, *Accounting
        for Convertible Debt That May Be Settled in Cash upon Conversion (Including
        Partial Cash Settlement)* ("FSP
        14-1"). FSP 14-1 will be effective for financial statements issued for fiscal
        years beginning after December 15, 2008. The FSP includes guidance that
        convertible debt instruments that may be settled in cash upon conversion
        should
        be separated between the liability and equity components, with each component
        being accounted for in a manner that will reflect the entity's nonconvertible
        debt borrowing rate when interest costs are recognized
        in subsequent periods. The Company has not determined the effect that the
        implementation of FSP 14-1 will have on its financial
        statements.





***Comprehensive
      Income***


The
      Company follows SFAS No. 130, *Reporting
      Comprehensive Income* .
      Comprehensive income is a more inclusive financial reporting methodology that
      includes disclosure of certain financial information that historically has
      not
      been recognized in the calculation of net income. Since the Company has no
      items
      of other comprehensive income, comprehensive income (loss) is equal to net
      income (loss).





***Reclassifications***


Certain
      amounts in the 2007 financial statements have been reclassified in order for
      them to be in conformity with the 2008 presentation.





**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 the outcome of this
      uncertainty.





The
      Company is in the development stage at September 30, 2008. Successful completion
      of the Company’s development program and, ultimately the attainment of
      profitable operations is dependent 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 nine months ended September 30, 2008, there were additional capitalized
      patent costs of $2,400 incurred. Amortization expense for patents was $2,729
      and
      $8,138 for the three and nine months ended September 30, 2008 and $2,714 and
      $10,197 for the three and nine months ended September 30, 2007.





**NOTE
      4 – INCOME TAXES**





As
      of
      January 1, 2008, we had no unrecognized tax benefits, and accordingly, we have
      not recognized any interest or penalties during 2008 related to unrecognized
      tax
      benefits. There has been no change in unrecognized tax benefits during the
      nine
      months ended September 30, 2008, and there was no accrual for uncertain tax
      positions as of September 30, 2008.





There
      is
      no income tax benefit for the losses for the nine months ended September 30,
      2008 and 2007, 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.





-12-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      5 - SENIOR SECURED 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. On May 7, 2007, the due date of these notes was extended
      to August 31, 2008 and the interest rate increased to 12% during the extension
      period. As of September 30, 2008, these notes are unpaid. 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 uses 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 were amortized over
      one
      year, which was the original term of the convertible notes. The Company received
      $55,500 for the exercise of 5,550,000 of the warrants during 2006. Accrued
      interest at September 30, 2008 and December 31, 2007 amounted to $217,700 and
      $145,700.





**NOTE
      6 - CONVERTIBLE NOTES PAYABLE**





During
      2007, the Company commenced a private placement of up to $400,000 principal
      amount of **** 10%
      Convertible Promissory Notes due August 31, 2008 (the “Notes”). Holders of Notes
      will have the right, at their option, to convert the outstanding principal
      and
      interest of the Notes into shares of the Company’s Series A Preferred Stock at
      any time and from time to time at the option of the holder at the initial
      conversion price of $0.005333 per share. The Notes are unsecured. In accordance
      with Emerging Issue Task Force No. 00-27, *Application
      of Issue No. 98-5 to Certain Convertible Instruments,* there is
      no intrinsic value to the embedded conversion option since the conversion price
      is higher than the fair value as determined by management. During 2007 the
      Company issued Notes payable under the private placement totaling $375,000.
      During 2008 the Company issued an additional $25,000 of the Notes payable to
      complete the private placement. The Notes are due on August 31, 2008 and bear
      interest at 10%. As of September 30, 2008, these Notes are unpaid. Accrued
      interest at September 30, 2008 and December 31, 2007 amounted to $48,542 and
      $18,542.





**NOTE
      7 – NOTES PAYABLE**





During
      2007, the Company issued $70,000 of unsecured notes payable, which are payable
      on demand and bear interest at the rate of 10%. During 2008, the Company issued
      an additional $284,000 of these unsecured notes payable. Accrued interest at
      September 30, 2008 and December 31, 2007 amounted to $26,250 and $10,250.





-13-





LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      8 – 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 September 30, 2008, 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.





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 and nine months ended
      September 30, 2008, the Company expensed approximately $2,500 and $7,600 and
      for
      the three and nine months ended September 30, 2007, the Company expensed
      approximately $2,000 and $45,000 relative to non-employee options granted.
      As of
      September 30, 2008, there was approximately $4,000 of unrecognized compensation
      expense related to non-vested market-based share awards that is expected to
      be
      recognized through January 2009.





-14-


LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      8 – STOCK OPTIONS AND WARRANTS (Continued)**





The
      following tables summarize non-employee stock option/warrant activity of the
      Company since December 31, 2007:





Weighted AverageOption/Warrant
            
            Exercise
            
            ExerciseShares
            
            Price
            
            PriceOutstanding,
                December 31, 2007
            
            
            12,856,662
            
            $
            .01
                to $.28
            
            $
            0.06Granted
            
            
            -
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -
            
            
            -Expired
            
            
            -
            
            
            -
            
            
            -Outstanding,
                September 30, 2008
            
            
            12,856,662
            
            $
            .01
                to $.28
            
            $
            0.06Exercisable,
                September 30, 2008
            
            
            12,773,329
            
            $
            .01
                to $.28
            
            $
            0.08Weighted
                Average Remaining Life, Exercisable, September 30, 2008
                (years)
            
            
            4.4





A
      summary
      of incentive stock option transactions for employees since December 31, 2007
      is
      as follows:





Weighted AverageOption
            
            Exercise
            
            ExerciseShares
            
            Price
            
            PriceOutstanding,
                December 31, 2007
            
            
            6,550,000
            
            $
            .03
                to $.28
            
            $
            0.12Granted
            
            
            -
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -
            
            
            -Expired
            
            
            -
            
            
            -
            
            
            -Outstanding,
                September 30, 2008
            
            
            6,550,000
            
            $
            .03
                to $.28
            
            $
            0.12Exercisable,
                September 30, 2008
            
            
            6,520,833
            
            $
            .03
                to $.28
            
            $
            0.12Weighted
                Average Remaining Life, Exercisable, September 30, 2008
            
            
            3.8




-15-




LaserLock
      Technologies, Inc. and Subsidiaries


(A
      Development Stage Company)


Notes
      to
      Consolidated Financial Statements





**NOTE
      9 – RELATED PARTY TRANSACTIONS**





Six
      shareholders of the Company hold $680,000 of the senior secured convertible
      notes payable, one shareholder holds $140,000 of the convertible notes payable
      and one shareholder holds $50,000 of the notes payable as of September 30,
      2008.





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 $2,386 and $5,019 were incurred during the three and nine
      months ended September 30, 2008 and $1,080 and $3,275 were incurred during
      the
      three and nine months ended September 30, 2007.





At
      September 30, 2008 and December 31, 2007, the Company had accrued salary to
      the
      President in the amount of $173,250 and $99,750.





**NOTE
      10 – MAJOR CUSTOMERS AND VENDORS**





During
      the three and nine months ended September 30, 2008, the Company earned a
      substantial portion of its revenue from two customers and during the three
      and
      nine months ended September 30, 2007 the Company earned a substantial portion
      of
      its revenue from one customer. During the three and nine months ended September
      30, 2008, revenue from those customers aggregated $3,645 and $34,069 and during
      the three and nine months ended September 30, 2007, revenue from those customers
      aggregated $61,604 and $291,420. At September 30, 2008 and 2007, amounts due
      from those customers included in trade accounts receivable were $30 and $13,933.





-16-


Item
      2.  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.





**Forward-Looking
      Information**





The
      following Management’s Discussion and Analysis should be read in conjunction
      with our unaudited financial statements and notes thereto included herein and
      our audited financial statements and notes thereto for the year ended December
      31, 2007 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 our 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 that 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
      initial focus involved 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 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.





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 to 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 was
      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.




-17-


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. These notes and interest thereon were not paid on August
      31, 2008 and remain unpaid.





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 Exaqt, including Exaqt’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 Athanor
      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.





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 had an initial term of nine months, which would have
      been automatically extended in the event contact was made during the initial
      term with any prospective licensees or purchasers of the non-security
      applications of our intellectual property.




-18-


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 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.
      This
      agreement was not extended.





As
      of May
      17, 2007, the Company filed a Certificate of Designation of Series A Preferred
      Stock with the Secretary of State of the State of Nevada designating 75,000,000
      shares of the Company’s preferred stock as Series A Preferred Stock. The Series
      A Preferred Stock is non-voting. In the event of any liquidation, dissolution
      or
      winding up of the affairs of the Company, before any payment is made to the
      holders of the Company’s common stock, the holders of Series A Preferred Stock
      will be entitled to receive an amount equal to $0.0213 per share out of the
      assets available for distribution by the Company. This preference amount is
      subject to adjustment for any stock dividends, combinations or splits with
      respect to shares of Series A Preferred Stock. At any time after the earlier
      of
      May 18, 2009 or the date the Company becomes insolvent, each share of Series
      A
      Preferred Stock is convertible at the option of the holder into one share of
      the
      Company’s common stock, in each case as adjusted for any stock dividends,
      combinations or splits with respect to such shares.





In
      May
      2007 we commenced a private placement of up to $400,000 principal amount of
      10%
      convertible promissory notes due August 31, 2008 (the “Notes”). Holders of Notes
      will have the right, at their option, to convert the outstanding principal
      and
      interest of the Notes into shares of our Series A Preferred Stock at any time
      and from time to time at the option of the holder at the initial conversion
      price of $0.005333 per share. The Notes are unsecured.





As
      of
      January 31, 2008 all of the Notes were sold to Nob Hill Capital Partners LP
      and
      Clydesdale Partners II, LLC. The Notes were issued in reliance 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.
      These notes and interest thereon were not paid on August 31, 2008 and remain
      unpaid.





On
      June
      23, 2008, we entered into a worldwide Exclusive Agreement (the “Agreement”) with
      Arthur Blank & Company, Inc. (“AB”), under which AB and its affiliates will
      have exclusive use of specific applications of our color changing proprietary
      pigments known as WHYTELITE® technology. Under the terms of the Agreement, the
      exclusive products are defined as all plastic cards printed with WHYTELITE®
pigments. Exclusions to the exclusivity are the American Express card and all
      applications or products not using plastic as a substrate.





The
      term
      of the Agreement ends on December 31, 2009, but the Agreement has automatically
      renewing one-year terms for each of the following four years if the royalties
      paid to us by AB exceed certain levels during the year immediately preceding
      any
      potential renewal year, or if AB makes additional non-royalty payments that,
      if
      combined with the actual royalty amounts received, would equal such threshold
      levels. The Agreement automatically expires on December 31, 2013.





In
      addition to the above, in order to continue operations and 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 September 30, 2008 and September 30,
      2007.**





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.





-19-


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 September 30, 2008, we had sales and royalty revenues of
      $7,135 as compared to $62,964 for the three months ending September 30, 2007.
      During the period, sales were $5,377 as compared to $36,784 for last year.
      Royalty revenues decreased to $1,758 from $26,180. The number of chips using
      our
      ink in 2008 was less than in the 2007 period resulting in lower sales and
      royalty income.




Our
      cost
      of sales was $547 for the three months ended September 30, 2008 as compared
      to
      $36,439 for the three months ended September 30, 2007. The total sales during
      the current period were not material enough to permit a realistic calculation
      of
      cost of sales.





Our
      research and development costs aggregated $4,298 for the three months ended
      September 30, 2008 as compared to $7,367 for the three months ended September
      30, 2007, a decrease of $3,069. The decrease results principally from reduced
      development efforts in the current period as compared to the prior
      year.





There
      were no patent costs for either the three months ended September 30, 2008 or
      2007. This expense is the cost for maintaining the patents that have been issued
      to the Company.





Our
      legal
      and accounting costs aggregated $13,053 for the three months ended September
      30,
      2008 as compared to $21,464 for the three months ended September 30, 2007,
      a
      decrease of $8,411. Legal fees for the 2008 period were $6,553 as compared
      to
      $3,414 in the prior year. Accounting fees were $6,500 in the 2008 period as
      compared to $18,050 for the same period last year, a decrease of
      $11,550.





Our
      sales
      and marketing costs aggregated $69,195 for the three months ended September
      30,
      2008 as compared to $103,474 for the three months ended September 30, 2007,
      a
      decrease of $34,279. The reduction in the costs result primarily from lower
      costs for salaries and benefits of $12,000, reduced travel related costs of
      approximately $13,800 and lower other sales and marketing costs of approximately
      $8,500.





Our
      general and administrative costs aggregated $59,993 for the three months ended
      September 30, 2008 as compared to $68,569 for the three months ended September
      30, 2007, a decrease of $8,576. The decrease is principally the result of
      reduced costs for salaries and benefits of $15,300 and consulting fees of $3,000
      partially offset by increased costs for insurance of $4,600 and a reduction
      of
      bad debts expense in the 2007 period of $4,600 that did not exist in 2008.





Our
      interest expense for the three months ended September 30, 2008 was $43,222
      as
      compared to $45,665 for the three months ended September 30, 2007. Accrued
      interest expense on the Company’s debt was $43,100 for the three months ended
      September 30, 2008 as compared to $33,550 for the 2007 period resulting from
      an
      increase in the average amount of notes outstanding during 2008 as compared
      to
      2007. The amortization of the deferred finance charges related to the issuance
      of warrants related to the Notes was $11,156 for the three months ended
      September 30, 2007.





The
      net
      loss for the three months ended September 30, 2008 was $183,173 or $0.00 per
      share (rounded to the nearest $0.01). This compares to a net loss of $219,876
      or
      $0.00 per share (rounded to the nearest $0.01) for the same period in 2007,
      a
      decrease in the net loss of $36,703. Included in the net loss for the 2008
      period was $2,548 that represents the expense portion of the fair value of
      stock
      options issued compared to $30,596 in the 2007 period that also includes the
      fair value of warrants issued, a decrease of $28,048.





**Comparison
      of the Nine-Month Periods Ended September 30, 2008 and September 30,
      2007.**





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.





-20-


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
      nine months ended September 30, 2008, we had sales and royalty revenues of
      $38,208 as compared to $307,506 for the nine months ending September 30, 2007.
      During the period, sales were $11,229 as compared to $227,183 for last year.
      Royalty revenues decreased to $26,979 from $80,323. The reduction in sales
      results from the use of our ink in casino chips during the 2007 period in a
      manner that required more ink per chip than in other periods. In addition,
      the
      number of chips using our ink in 2008 was less than in the 2007 period resulting
      in lower sales and royalty income.




Our
      cost
      of sales was $6,804 for the nine months ended September 30, 2008 as compared
      to
      $201,498 for the nine months ended September 30, 2007. For the 2007 period
      the
      costs were 88.7% of sales. The total sales during the current period were not
      material enough to permit a realistic calculation of cost of sales.





Our
      research and development costs aggregated $15,190 for the nine months ended
      September 30, 2008 as compared to $15,459 for the nine months ended September
      30, 2007, a decrease of $269. The change in costs during the two periods was
      not
      meaningful.





Our
      patent costs for the nine months ended September 30, 2008 were $1,311 as
      compared to $900 during the nine month period ending September 30, 2007. This
      expense is the cost for maintaining the patents that have been issued to the
      Company.





Our
      legal
      and accounting costs aggregated $71,400 for the nine months ended September
      30,
      2008 as compared to $107,315 for the nine months ended September 30, 2007,
      a
      decrease of $35,915. Legal fees for the 2008 period decreased to $48,400 from
      $57,165 in the prior year. The decrease principally results from costs for
      legal
      work in the 2007 period in connection with the potential acquisition of Exaqt
      and listing on the London Stock Exchange’s AIM Market. In the first quarter of
      2007 we elected not to pursue the acquisition of Exaqt and the AIM listing.
      Accounting fees were $23,000 in the 2008 period as compared to $50,150 for
      the
      same period last year, a decrease of $27,150.





Our
      sales
      and marketing costs aggregated $190,071 for the nine months ended September
      30,
      2008 as compared to $310,640 for the nine months ended September 30, 2007,
      a
      decrease of $120,569. The reduction in the costs result primarily from reduced
      charges for the issuance of stock options for marketing consultants of
      approximately $37,500, reduced travel related costs of approximately $41,500,
      lower salaries and related benefits of approximately $18,100, a $5,000 fee
      paid
      in 2007 to UTEK for a commercialization contract and most of the balance,
      reduced fees and costs paid to marketing consultants.





Our
      general and administrative costs aggregated $180,109 for the nine months ended
      September 30, 2008 as compared to $207,860 for the nine months ended September
      30, 2007, a decrease of $27,751. The decrease is principally the result of
      lower
      costs in most expense categories for 2008 and a 2007 charge for bad debts of
      $12,900. Offsetting these reductions was an increase in insurance costs of
      $3,700.





Our
      interest expense for the nine months ended September 30, 2008 was $118,135
      as
      compared to $224,606 for the nine months ended September 30, 2007. Accrued
      interest expense on the Company’s debt was $118,000 for the nine months ended
      September 30, 2008 as compared to $83,241 for the 2007 period resulting from
      an
      increase in the average amount of notes outstanding during 2008 as compared
      to
      2007 and an increase in the interest rate from 10% to 12%. The amortization
      of
      the deferred finance charges for the issuance of warrants related to the Notes
      was $140,407 for the nine months ended September 30, 2007. There was no
      amortization charge in the 2008 period.





The
      net
      loss for the nine months ended September 30, 2008 was $544,809 or $0.01 per
      share (rounded to the nearest $0.01). This compares to a net loss of $759,760
      or
      $0.01 per share (rounded to the nearest $0.01) for the same period in 2007,
      a
      decrease in the net loss of $214,951. Included in the net loss for the 2008
      period was $7,644 that represents the expense portion of the fair value of
      stock
      options issued compared to $236,289 in the 2007 period that also includes the
      fair value of warrants issued, a decrease of $228,645.





-21-


**Liquidity
      and Capital Resources**





Our
      cash
      balance at September 30, 2008 of $14,705 was $14,357 more than the $348 as
      of
      December 31, 2007. Working capital at September 30, 2008 was negative
      $2,383,767, representing a decrease in working capital of $528,622 from the
      negative $1,855,145 at December 31, 2007. This decrease in working capital
      relates principally to the cash portion of our net loss for the nine months
      ended September 30, 2008.




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 in the near future. We have notes that were due August
      31, 2008 that have not been paid, and we currently do not have available funds
      to pay them.




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, 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 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 aspects
      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, unless we are able to obtain additional funding
      and 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.




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 years 2008 or 2009. Our research and development
      plans 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**





As
      of
      September 30, 2008, we did not have any off-balance sheet arrangements as
      defined in Item 303 of Regulation S-K.




-22-


Item
      4(T).  Controls
      and Procedures





(a)  Evaluation
      of Disclosure Controls and Procedures





As
      of
      November 10, 2008, our board of directors carried out an evaluation of the
      effectiveness of the design and operation of our "disclosure controls and
      procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)) under the supervision and
      with the participation of our management, including Norman Gardner, our
      president and chief executive officer. Based upon that evaluation, Mr. Gardner
      concluded that our disclosure controls and procedures are not effective based
      on
      material weaknesses identified by management as described in Management’s Report
      on Internal Control over Financial Reporting set forth in Item 7 of our Annual
      Report on Form 10-KSB for the period ended December 31, 2007.




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act are recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission's rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in our reports filed under the Exchange Act is
      accumulated and communicated to management to allow timely decisions regarding
      required disclosure.





(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.





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PART
      II –
OTHER INFORMATION





Item
      6.  Exhibits





31.1  Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).*





32.1  Certification
      of Principal 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 Principal Executive Officer and Principal
        Financial Officer.





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SIGNATURES





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.





LaserLock
                Technologies, Inc.(Registrant)Date:
                November 14, 2008
            By:
            /s/
                Norman A. GardnerNorman
                A. GardnerPresident
                and CEO




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