United
        States Securities and Exchange Commission
 Washington,
        D.C. 20549
 
 FORM
        10-QSB
 (Mark
        One)
 
 X   QUARTERLY
        REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT
        OF
        1934
  For
        the
        quarterly period ended September 30, 2007
 
 ___  TRANSITION
        REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT
 
 Commission
        File Number 0-31927
  LASERLOCK
                  TECHNOLOGIES, INC.(Exact
                  name of registrant as sepcified in its charter)NEVADA
              
              23-3023677(State
                  or other jurisdiction of
                  Incorporation)
              
              (IRS
                  Employeror
                  Organization
              
              Identification
                  No.)837
                  Lindy Lane, Bala Cynwyd, PA      
                  19004(Address
                  of Principal Executive Offices)    (Zip
                  Code)610-668-1952(Issuer's
                  Telephone Number, Including Area Code)
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding twelve months (or for such shorter period that the registrant was
        required to file such reports), and (2) has been subject to such filing
        requirements for the past 90 days.  Yes  x  No
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).  No x
 
 As
        of
        October 31, 2007, there were 73,440,506 shares of common stock, par value
        $0.001
        per share, outstanding.
 
 Transitional
        Small Business Issuer Format  Yes
o   No  x
 
 
 
 PART
        I -
        FINANCIAL INFORMATION
 
 Item
        1.  Financial
        Statements
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 
 Consolidated
          Financial Statements
 
 September
          30, 2007 and 2006
  
  LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 
  
 CONTENTS
 
 
 PAGECONSOLIDATED
                      BALANCE SHEETS
                  1CONSOLIDATED
                      STATEMENTS OF OPERATIONS
                  2CONSOLIDATED
                      STATEMENTS OF STOCKHOLDERS' DEFICIT
                  3-5CONSOLIDATED
                      STATEMENTS OF CASH FLOWS
                  6-7NOTES
                      TO CONSOLIDATED FINANCIAL STATEMENTS
                  8-12
 
 
  LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Consolidated
          Balance Sheets
 September
          30, 2007 and December 31, 2006
 September
                      30,
                  
                  December
                      31,2007
                  
                  2006(Unaudited)
                  
                  (Audited)**Assets**CURRENT
                      ASSETSCash
                      and cash equivalents
                  
                  $
                  20,060
                  
                  $
                  2,058Accounts
                      receivable, net of allowance of $12,900 atSeptember
                      30, 2007 and $0 at December 31, 2006
                  
                  
                  1,033
                  
                  
                  6,540Inventory
                  
                  
                  29,862
                  
                  
                  43,225Deferred
                      finance charges
                  
                  
                  -
                  
                  
                  140,407TOTAL
                      CURRENT ASSETS
                  
                  
                  50,955
                  
                  
                  192,230PROPERTY
                      AND EQUIPMENT, NetCapital
                      equipment
                  
                  
                  32,604
                  
                  
                  32,604Less
                      accumulated depreciation
                  
                  
                  21,554
                  
                  
                  18,58811,050
                  
                  
                  14,016Patent
                      costs, net of accumulated amoritization of$33,613
                      and $23,416 as of September 30, 2007 andand
                      December 31, 2006
                  
                  
                  150,305
                  
                  
                  140,148TOTAL
                      ASSETS
                  
                  $
                  212,310
                  
                  $
                  346,394LIABILITIES
                    AND STOCKHOLDERS' DEFICITCURRENT
                      LIABILITIESAccounts
                      payable and accrued expenses
                  
                  
                  573,852
                  
                  
                  389,058Notes
                      payable
                  
                  
                  50,000
                  
                  
                  -Loan
                      payable, officer
                  
                  
                  -
                  
                  
                  5,000Convertible
                      notes payable
                  
                  
                  1,100,000
                  
                  
                  800,000TOTAL
                      CURRENT LIABILITIES
                  
                  
                  1,723,852
                  
                  
                  1,194,058STOCKHOLDERS'
                      DEFICITPreferred
                      Stock, $ .001 par value; 75,000,000 shares authorized;no
                      shares issued and outstanding
                  
                  
                  -
                  
                  
                  -Common
                      stock, $ .001 par value; 175,000,000 shares authorized;73,440,506
                      shares issued and oustanding at September 30, 2007and
                      December 31, 2006
                  
                  
                  73,440
                  
                  
                  73,440Additional
                      paid in capital
                  
                  
                  7,232,226
                  
                  
                  7,136,344Deficit
                      accumulated during the development stage
                  
                  
                  (8,817,208
                  )
                  
                  (8,057,448
                  )STOCKHOLDERS'
                      DEFICIT
                  
                  
                  (1,511,542
                  )
                  
                  (847,664
                  )TOTAL
                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                  
                  $
                  212,310
                  
                  $
                  346,394
 
 See
          accompanying notes to the consolidated financial statements.
 
 -1-
  LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Consolidated
          Statements of Operations
 For
          the
          Three and Nine Months Ended September 30, 2007 and 2006
 And
          for
          the Period November 10, 1999 (Date of Inception) to September 30,
          2007
 (UNAUDITED)
 Three
                      Months
                  
                  Three
                      Months
                  
                  Nine
                      Months
                  
                  Nine
                      MonthsCumulative
                  
                  Ended
                  
                  Ended
                  
                  Ended
                  
                  EndedSince
                  
                  September
                      30,
                  
                  September
                      30,
                  
                  September
                      30,
                  
                  September
                      30,Inception
                  
                  2007
                  
                  2006
                  
                  2007
                  
                  2006REVENUESSales
                  
                  $
                  429,586
                  
                  $
                  36,784
                  
                  $
                  11,917
                  
                  $
                  227,183
                  
                  $
                  16,966Royalties
                  
                  
                  518,592
                  
                  
                  26,180
                  
                  
                  36,652
                  
                  
                  80,323
                  
                  
                  78,492TOTAL
                      REVENUE
                  
                  
                  948,178
                  
                  
                  62,964
                  
                  
                  48,569
                  
                  
                  307,506
                  
                  
                  95,458COSTS
                      AND EXPENSESResearch
                      and development
                  
                  
                  1,200,298
                  
                  
                  43,806
                  
                  
                  15,147
                  
                  
                  216,957
                  
                  
                  52,738Patent
                      costs
                  
                  
                  57,876
                  
                  
                  -
                  
                  
                  -
                  
                  
                  900
                  
                  
                  611Legal
                      and Accounting
                  
                  
                  1,003,391
                  
                  
                  21,464
                  
                  
                  33,609
                  
                  
                  107,315
                  
                  
                  157,651Sales
                      and Marketing
                  
                  
                  4,453,368
                  
                  
                  103,474
                  
                  
                  170,967
                  
                  
                  310,640
                  
                  
                  629,844General
                      and administrative
                  
                  
                  2,721,508
                  
                  
                  68,569
                  
                  
                  93,668
                  
                  
                  207,860
                  
                  
                  258,343Total
                      costs and expenses
                  
                  
                  9,436,441
                  
                  
                  237,313
                  
                  
                  313,391
                  
                  
                  843,672
                  
                  
                  1,099,187LOSS
                      BEFORE OTHER INCOME
                  
                  
                  (8,488,263
                  )
                  
                  (174,349
                  )
                  
                  (264,822
                  )
                  
                  (536,166
                  )
                  
                  (1,003,729
                  )OTHER
                      INCOME (EXPENSE)Interest
                      income
                  
                  
                  63,569
                  
                  
                  138
                  
                  
                  1,259
                  
                  
                  1,012
                  
                  
                  3,412Interest
                      expense
                  
                  
                  (562,236
                  )
                  
                  (45,665
                  )
                  
                  (120,352
                  )
                  
                  (224,606
                  )
                  
                  (190,064
                  )Gain
                      on disposition of assets
                  
                  
                  4,722
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -(493,945
                  )
                  
                  (45,527
                  )
                  
                  (119,093
                  )
                  
                  (223,594
                  )
                  
                  (186,652
                  )LOSS
                      BEFORE INCOME TAX BENEFIT
                  
                  
                  (8,982,208
                  )
                  
                  (219,876
                  )
                  
                  (383,915
                  )
                  
                  (759,760
                  )
                  
                  (1,190,381
                  )INCOME
                      TAX BENEFIT
                  
                  
                  (165,000
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -NET
                      LOSS
                  
                  $
                  (8,817,208
                  )
                  $
                  (219,876
                  )
                  $
                  (383,915
                  )
                  $
                  (759,760
                  )
                  $
                  (1,190,381
                  )BASIC
                      AND DILUTED NET LOSS PERCOMMON
                      SHARE
                  
                  
                  
                  
                  $
                  (0.00
                  )
                  $
                  (0.01
                  )
                  $
                  (0.01
                  )
                  $
                  (0.02
                  )BASIC
                      AND DILUTED WEIGHTED AVERAGECOMMON
                      SHARES OUTSTANDING
                  
                  
                  
                  
                  
                  73,440,506
                  
                  
                  71,040,506
                  
                  
                  73,440,506
                  
                  
                  67,279,395
 
 See
          accompanying notes to the consolidated financial statements.
 
 -2-
  LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Consolidated
          Statements of Changes in Stockholders’ Equity (Deficit)
 For
          the
          Period November 10, 1999 (Date of Inception) to September 30, 2007
 DeficitCommon
                    
                    
                    
                    
                    
                    AccumulatedStock
                    
                    
                    
                    Additional
                    
                    During
                        theNumber
                        of
                    
                    
                    
                    Consulting
                    
                    Paid-In
                    
                    DevelopmentShares
                    
                    Amount
                    
                    Fees
                    
                    Capital
                    
                    Stage
                    
                    TotalIssuance
                        of initial 4,278,000 shares on November 10, 1999
                    
                    
                    4,278,000
                    
                    $
                    4,278
                    
                    $
                    -
                    
                    $
                    16,595
                    
                    $
                    -
                    
                    $
                    20,873Issuance
                        of shares of common stock in exchange for services
                    
                    
                    1,232,000
                    
                    
                    1,232
                    
                    
                    -
                    
                    
                    35,728
                    
                    
                    -
                    
                    
                    36,960Issuance
                        of shares of common stock
                    
                    
                    2,090,000
                    
                    
                    2,090
                    
                    
                    -
                    
                    
                    60,610
                    
                    
                    -
                    
                    
                    62,700Stock
                        issuance costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (13,690
                    )
                    
                    -
                    
                    
                    (13,690
                    )Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (54,113
                    )
                    
                    (54,113
                    )Balance,
                        December 31, 1999
                    
                    
                    7,600,000
                    
                    
                    7,600
                    
                    
                    -
                    
                    
                    99,243
                    
                    
                    (54,113
                    )
                    
                    52,730Issuance
                        of shares of common stock
                    
                    
                    5,449,999
                    
                    
                    5,450
                    
                    
                    -
                    
                    
                    921,050
                    
                    
                    -
                    
                    
                    926,500Issuance
                        of shares of common stock in exchange for services
                    
                    
                    240,000
                    
                    
                    240
                    
                    
                    (40,800
                    )
                    
                    40,560
                    
                    
                    -
                    
                    
                    -Stock
                        issuance costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (16,335
                    )
                    
                    -
                    
                    
                    (16,335
                    )Fair
                        value of non-employee stock options grants
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    50,350
                    
                    
                    -
                    
                    
                    50,350Amortization
                        of deferred consulting fees
                    
                    
                    -
                    
                    
                    -
                    
                    
                    20,117
                    
                    
                    -
                    
                    
                    -
                    
                    
                    20,117Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (367,829
                    )
                    
                    (367,829
                    )Balance,
                        December 31, 2000
                    
                    
                    13,289,999
                    
                    
                    13,290
                    
                    
                    (20,683
                    )
                    
                    1,094,868
                    
                    
                    (421,942
                    )
                    
                    665,533Issuance
                        of shares of common stock
                    
                    
                    217,500
                    
                    
                    218
                    
                    
                    -
                    
                    
                    77,723
                    
                    
                    -
                    
                    
                    77,941Issuance
                        of shares of common stock and stock options foracquisition
                        of subsidiary
                    
                    
                    2,000,000
                    
                    
                    2,000
                    
                    
                    -
                    
                    
                    736,000
                    
                    
                    -
                    
                    
                    738,000Issuance
                        of stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    15,000
                    
                    
                    -
                    
                    
                    15,000Exercise
                        of options
                    
                    
                    1,450,368
                    
                    
                    1,450
                    
                    
                    -
                    
                    
                    230,609
                    
                    
                    .
                    
                    
                    232,059Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    323,250
                    
                    
                    -
                    
                    
                    323,250Amortization
                        of deferred consulting fees
                    
                    
                    -
                    
                    
                    -
                    
                    
                    20,683
                    
                    
                    -
                    
                    
                    -
                    
                    
                    20,683Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,052,299
                    )
                    
                    (1,052,299
                    )Balance,
                        December 31, 2001
                    
                    
                    16,957,867
                    
                    
                    16,958
                    
                    
                    -
                    
                    
                    2,477,450
                    
                    
                    (1,474,241
                    )
                    
                    1,020,167
  See
              accompanying notes to the consolidated financial
              statements.
  -3-
 LaserLock
                Technologies, Inc. and Subsidiaries
 (A
                Development Stage Company)
 Consolidated
                Statements of Changes in Stockholders’ Equity (Deficit) (Continued)
 For
                the
                Period November 10, 1999 (Date of Inception) to September 30, 2007
 DeficitCommon
                    
                    
                    
                    
                    
                    AccumulatedStock
                    
                    
                    
                    Additional
                    
                    During
                        theNumber
                        of
                    
                    
                    
                    Consulting
                    
                    Paid-In
                    
                    DevelopmentShares
                    
                    Amount
                    
                    Fees
                    
                    Capital
                    
                    Stage
                    
                    TotalIssuance
                        of shares of common stock
                    
                    
                    3,376,875
                    
                    
                    3,377
                    
                    
                    -
                    
                    
                    687,223
                    
                    
                    -
                    
                    
                    690,600Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    94,000
                    
                    
                    -
                    
                    
                    94,000Salary
                        due to shareholder contributed capital
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    15,000
                    
                    
                    -
                    
                    
                    15,000Return
                        of shares of common stock related to purchase priceadjustment
                    
                    
                    (1,000,000
                    )
                    
                    (1,000
                    )
                    
                    -
                    
                    
                    (353,000
                    )
                    
                    -
                    
                    
                    (354,000
                    )Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    (1,195,753
                    )
                    
                    (1,195,753
                    )Balance,
                        December 31, 2002
                    
                    
                    19,334,742
                    
                    
                    19,335
                    
                    
                    -
                    
                    
                    2,920,673
                    
                    
                    (2,669,994
                    )
                    
                    270,014Issuance
                        of shares of common stock
                    
                    
                    22,512,764
                    
                    
                    22,512
                    
                    
                    -
                    
                    
                    1,387,109
                    
                    
                    -
                    
                    
                    1,409,621Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    213,300
                    
                    
                    
                    
                    
                    213,300Issuance
                        of shares of common stock in exchange for services
                    
                    
                    143,000
                    
                    
                    143
                    
                    
                    -
                    
                    
                    23,857
                    
                    
                    
                    
                    
                    24,000Stock
                        issuance costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (49,735
                    )
                    
                    
                    
                    
                    (49,735
                    )Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,107,120
                    )
                    
                    (1,107,120
                    )Balance,
                        December 31, 2003
                    
                    
                    41,990,506
                    
                    
                    41,990
                    
                    
                    -
                    
                    
                    4,495,204
                    
                    
                    (3,777,114
                    )
                    
                    760,080Stock
                        issuance costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (25,000
                    )
                    
                    -
                    
                    
                    (25,000
                    )Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    493,600
                    
                    
                    -
                    
                    
                    493,600Issuance
                        of shares of common stock
                    
                    
                    18,600,000
                    
                    
                    18,600
                    
                    
                    -
                    
                    
                    939,881
                    
                    
                    -
                    
                    
                    958,481Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,406,506
                    )
                    
                    (1,406,506
                    )Balance,
                        December 31, 2004
                    
                    
                    60,590,506
                    
                    
                    60,590
                    
                    
                    -
                    
                    
                    5,903,685
                    
                    
                    (5,183,620
                    )
                    
                    780,655
 
 See
              accompanying notes to the consolidated financial
              statements.
  -4-
 LaserLock
                Technologies, Inc. and Subsidiaries
 (A
                Development Stage Company)
 Consolidated
                Statements of Changes in Stockholders’ Equity (Deficit) (Continued)
 For
                the
                Period November 10, 1999 (Date of Inception) to September 30,
                2007
  DeficitCommon
                    
                    
                    
                    
                    
                    AccumulatedStock
                    
                    
                    
                    Additional
                    
                    During
                        theNumber
                        of
                    
                    
                    
                    Consulting
                    
                    Paid-In
                    
                    DevelopmentShares
                    
                    Amount
                    
                    Fees
                    
                    Capital
                    
                    Stage
                    
                    TotalFair
                      value of
                      non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    286,762
                    
                    
                    -
                    
                    
                    286,762Issuance
                        of shares of common stock
                    
                    
                    3,000,000
                    
                    
                    3,000
                    
                    
                    -
                    
                    
                    102,000
                    
                    
                    -
                    
                    
                    105,000Net
                        loss for the year ended December 31, 2005
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,266,811
                    )
                    
                    (1,266,811
                    )Balance
                        at December 31, 2005
                    
                    
                    63,590,506
                    
                    
                    63,590
                    
                    
                    -
                    
                    
                    6,292,447
                    
                    
                    (6,450,431
                    )
                    
                    (94,394
                    )Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    215,463
                    
                    
                    -
                    
                    
                    215,463Fair
                        value of employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    135,098
                    
                    
                    -
                    
                    
                    135,098Fair
                        value of warrants issued for deferred finance charges
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    392,376
                    
                    
                    -
                    
                    
                    392,376Exercise
                        of warrants
                    
                    
                    5,550,000
                    
                    
                    5,550
                    
                    
                    -
                    
                    
                    49,950
                    
                    
                    -
                    
                    
                    55,500Exercise
                        of options
                    
                    
                    4,300,000
                    
                    
                    4,300
                    
                    
                    -
                    
                    
                    (3,870
                    )
                    
                    -
                    
                    
                    430Shares
                        retired upon cancellation of consulting agreements
                    
                    
                    (1,200,000
                    )
                    
                    (1,200
                    )
                    
                    -
                    
                    
                    1,080
                    
                    
                    -
                    
                    
                    (120
                    )Issuance
                        of shares for services
                    
                    
                    1,200,000
                    
                    
                    1,200
                    
                    
                    
                    
                    
                    53,800
                    
                    
                    
                    
                    
                    55,000Net
                        loss for the year ended December 31, 2006
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,607,017
                    )
                    
                    (1,607,017
                    )Balance
                        at December 31, 2006 (Audited)
                    
                    
                    73,440,506
                    
                    $
                    73,440
                    
                    $
                    -
                    
                    $
                    7,136,344
                    
                    $
                    (8,057,448
                    )
                    $
                    (847,664
                    )Fair
                        value of non-employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    45,144
                    
                    
                    -
                    
                    
                    45,144Fair
                        value of employee stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    50,738
                    
                    
                    -
                    
                    
                    50,738Net
                        loss for the nine months ended September 30, 2007
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    
                    
                    
                    (759,760
                    )
                    
                    (759,760
                    )Balance
                        at September 30, 2007 (Unaudited)
                    
                    
                    73,440,506
                    
                    
                    73,440
                    
                    
                    -
                    
                    
                    7,232,226
                    
                    
                    (8,817,208
                    )
                    
                    (1,511,542
                    )
 See
          accompanying notes to the consolidated financial statements.
  -5-
 
 LaserLock
            Technologies, Inc. and Subsidiaries
 (A
            Development Stage Company)
 Consolidated
            Statements of Cash Flows
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 And
            for
            the Period November 10, 1999 (Date of Inception) to September 30,
            2007
 (UNAUDITED)
 Nine
                      Months
                  
                  Nine
                      MonthsCumulative
                  
                  Ended
                  
                  EndedSince
                  
                  September
                      30,
                  
                  September
                      30,Inception
                  
                  2007
                  
                  2006CASH
                      FLOWS FROM OPERATING ACTIVITIESNet
                      loss
                  
                  $
                  (8,817,208
                  )
                  $
                  (759,760
                  )
                  $
                  (1,190,381
                  )Adjustments
                      to reconcile net loss to net cashused
                      in operating activitiesFair
                      value of options issued in exchange for services
                  
                  
                  1,907,705
                  
                  
                  95,882
                  
                  
                  282,129Amortization
                      of deferred finance charges
                  
                  
                  392,375
                  
                  
                  140,407
                  
                  
                  153,875Salary
                      due to stockholder contributed to capital
                  
                  
                  15,000
                  
                  
                  -
                  
                  
                  -Provision
                      for bad debts
                  
                  
                  12,900
                  
                  
                  12,900
                  
                  
                  15,000Amortization
                      and depreciation
                  
                  
                  460,297
                  
                  
                  13,163
                  
                  
                  10,939Gain
                      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
                  
                  
                  (13,933
                  )
                  
                  (7,393
                  )
                  
                  (10,520
                  )Inventory
                  
                  
                  (29,862
                  )
                  
                  13,363
                  
                  
                  15,145Increase
                      (decrease) in liabilitiesAccounts
                      payable and accrued expenses
                  
                  
                  573,852
                  
                  
                  184,794
                  
                  
                  (27,121
                  )Net
                      cash used in operating activities
                  
                  
                  (5,236,566
                  )
                  
                  (306,644
                  )
                  
                  (750,934
                  )CASH
                      FLOWS FROM INVESTING ACTIVITIESPurchase
                      of property and equipment
                  
                  
                  (35,749
                  )
                  
                  -
                  
                  
                  -Purchase
                      of intangibles
                  
                  
                  (20,000
                  )
                  
                  -
                  
                  
                  -Purchase
                      of patent costs
                  
                  
                  (183,919
                  )
                  
                  (20,354
                  )
                  
                  (8,750
                  )Loan
                      payable, officer
                  
                  
                  -
                  
                  
                  (5,000
                  )
                  
                  -Proceeds
                      from sale of assets
                  
                  
                  6,738
                  
                  
                  -
                  
                  
                  -Net
                      cash used in investing activities
                  
                  
                  (232,930
                  )
                  
                  (25,354
                  )
                  
                  (8,750
                  )CASH
                      FLOWS FROM FINANCING ACTIVITIESProceeds
                      from issuance of common stock
                  
                  
                  4,091,447
                  
                  
                  -
                  
                  
                  -Proceeds
                      from exercise of stock options
                  
                  
                  232,369
                  
                  
                  -
                  
                  
                  210Proceeds
                      from issuance of stock options
                  
                  
                  15,000
                  
                  
                  -
                  
                  
                  -Proceeds
                      from exercise of warrants
                  
                  
                  55,500
                  
                  
                  -
                  
                  
                  55,500Proceeds
                      from issuance of notes
                  
                  
                  1,300,000
                  
                  
                  450,000
                  
                  
                  800,000Repayments
                      of notes
                  
                  
                  (100,000
                  )
                  
                  (100,000
                  )
                  
                  -Stock
                      issuance costs
                  
                  
                  (104,760
                  )
                  
                  -
                  
                  
                  -Net
                      cash provided by financing activities
                  
                  
                  5,489,556
                  
                  
                  350,000
                  
                  
                  855,710NET
                      DECREASE IN CASH ANDCASH
                      EQUIVALENTS
                  
                  
                  20,060
                  
                  
                  18,002
                  
                  
                  96,026CASH
                      AND CASH EQUIVALENTS - BEGINNING OF PERIOD
                  
                  
                  -
                  
                  
                  2,058
                  
                  
                  6,705CASH
                      AND CASH EQUIVALENTS - END OF PERIOD
                  
                  $
                  20,060
                  
                  $
                  20,060
                  
                  $
                  102,731
 See
          accompanying notes to the consolidated financial statements.
  -6-
  LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Consolidated
          Statements of Cash Flows (Continued)
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 And
          for
          the Period November 10, 1999 (Date of Inception) to September 30,
          2007
 (UNAUDITED)
 Nine
                      Months
                  
                  Nine
                      MonthsCumulative
                  
                  Ended
                  
                  EndedSince
                  
                  September
                      30,
                  
                  September
                      30,Inception
                  
                  2007
                  
                  2006SUPPLEMENTAL
                      DISCLOSURE OF NON-CASHINVESTING
                      AND FINANCING ACTIVITIES:Cash
                      paid during the year for:Interest
                  
                  $
                  29,540
                  
                  $
                  270
                  
                  $
                  -Income
                      taxes
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Return
                      of shares of common stock related topurchase
                      price adjustmentCommon
                      stock
                  
                  
                  (1,000
                  )
                  
                  -
                  
                  
                  -Additional
                      paid-in capital
                  
                  
                  (353,000
                  )
                  
                  -
                  
                  
                  -Intangible
                      assets
                  
                  $
                  (354,000
                  )
                  $
                  -
                  
                  $
                  -Issuance
                      of common stock and stock optionsfor
                      acquisition of subsidiary
                  
                  $
                  738,000
                  
                  $
                  -
                  
                  $
                  -Common
                      stock sales proceeds appliedto
                      debt and financing expenses repayment
                  
                  $
                  55,270
                  
                  $
                  -
                  
                  $
                  -Fair
                      value of warrants issued for deferred finance charges
                  
                  $
                  392,376
                  
                  $
                  -
                  
                  $
                  392,376
 See
            accompanying notes to the consolidated
            financial statements.
  -7-
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Notes
          to
          Consolidated Financial Statements
 
 
 
 **NOTE
          1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 ***Basis
          of Presentations***
 The
          accompanying unaudited financial statements have been prepared in accordance
          with U.S. generally accepted accounting principles for interim financial
          information and with the instructions for Form 10-QSB and item 310(b) of
          Regulation S-B. Accordingly, they do not include all of the information
          and
          footnotes required by generally accepted accounting principles for complete
          financial statements. In the opinion of management, all adjustments (consisting
          of normal recurring accruals) considered necessary for a fair presentation
          have
          been included. Operating results for the nine months ended September 30,
          2007
          are not necessarily indicative of the results that may be expected for
          the year
          ended December 31, 2007. The unaudited financial statements should be read
          in
          conjunction with the financial statements and footnotes thereto included
          in the
          Company’s annual report on Form 10-KSB for the year ended December 31, 2006.
 
 ***Recently
          Issued Accounting Pronouncements***
 In
          June
          2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
          No. 48 (“FIN 48”), *Accounting
          for Uncertainty in Income Taxes* .
          FIN 48
          prescribes detailed guidance for the financial statement recognition,
          measurement and disclosure of uncertain tax positions recognized in an
          enterprise’s financial statements in accordance with FASB Statement
          No. 109, *Accounting
          for Income Taxes* .
          Tax
          positions must meet a more-likely-than-not recognition threshold at the
          effective date to be recognized upon the adoption of FIN 48 and in subsequent
          periods. FIN 48 will be effective for fiscal years beginning after
          December 15, 2006, and became effective for us beginning with the first
          quarter of 2007. The provisions of FIN 48 were applied to all tax positions
          under Statement No. 109 upon initial adoption. The cumulative effect of
          applying the provisions of this interpretation was to be reported as an
          adjustment to the opening balance of retained earnings for that fiscal
          year. The
          Company adopted FIN 48 effective January 1, 2007. The adoption of FIN 48
          did not
          require an adjustment to the opening balance of retained earnings as of
          January
          1, 2007.
 
 In
          September 2006, the FASB issued Statement of Financial Accounting Standards
          No.
          157, Fair Value Measurements, (“SFAS No. 157”).  SFAS No. 157 establishes a
          framework for measuring fair value and expands disclosures about fair value
          measurements.  The changes to current practice resulting from the
          application of SFAS No. 157 relate to the definition of fair value, the
          methods
          used to measure value, and the expanded disclosures about fair value
          measurements.  SFAS No. 157 is effective for fiscal years beginning after
          November 15, 2007 and interim periods within those fiscal years.  The
          Company is currently evaluating the impact on the consolidated financial
          statements, and footnote disclosures.
 
 In
          February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
          Financial
          Assets and Financial Liabilities. This Statement permits entities to choose
          to
          measure many financial instruments and certain other times at fair value
          that
          are not currently required to be measured at fair value. The objective
          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. This statement also establishes presentation and disclosure
          requirements designed to facilitate comparisons between entities that choose
          different measurement attributes for similar types of assets and liabilities.
          This Statement is effective for financial statements issued for fiscal
          years
          beginning after November 15, 2007 and will become effective for us beginning
          with the first quarter of 2008. The Company has not yet determined the
          impact of
          the adoption of SFAS No. 159 on its financial statements and footnote
          disclosures.
 -8-
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Notes
          to
          Consolidated Financial Statements
 
 
 **NOTE
          2 - GOING CONCERN**
 
 The
          accompanying consolidated financial statements have been prepared assuming
          that
          the Company will continue as a going concern. The Company has incurred
          significant losses and experienced negative cash flow during the development
          stage. These conditions raise substantial doubt about the Company’s ability to
          continue as a going concern. The consolidated financial statements do not
          include any adjustments that might result from this uncertainty.
 
 The
          Company is in the development stage at September 30, 2007. Successful completion
          of the Company’s development program and, ultimately the attainment of
          profitable operations is dependant upon future events, including obtaining
          adequate financing to fulfill its development activities and achieving
          a level
          of sales adequate to support the Company’s cost structure. However, there can be
          no assurances that the Company will be able to secure additional equity
          investment or achieve an adequate sales level.
 
 
 **NOTE
          3 - PATENTS**
 
 The
          Company continues to apply for patents. Accordingly costs associated with
          the
          registration of these patents have been capitalized and are amortized on
          a
          straight-line basis over the estimated lives of the patents (17 years).
          During
          the nine months ended September 30, 2007, additional capitalized patent
          costs
          incurred amounted to $20,354. Amortization expense for patents was $2,714
          and
          $10,197 for the three and nine months ended September 30, 2007 and $2,438
          and
          $6,900 for the three and nine months ended September 30, 2006.
 
 
 **NOTE
          4 - INCOME TAXES**
 
 There
          is
          no income tax benefit for the losses for the nine months ended September
          30,
          2007 and 2006, since management has determined that the realization of
          the net
          deferred tax asset is not assured and has created a valuation allowance
          for the
          entire amount of such benefits.
 
  **NOTE
          5 - NOTES PAYABLE**
 
 In
          the
          first quarter of 2007, the Company issued two notes totaling $150,000.
          The notes
          are payable on demand and bear interest at 10%. The $100,000 demand note
          was
          repaid in the second quarter of 2007, however, the accrued interest has
          not been
          paid.
 
 
 **NOTE
          6 - CONVERTIBLE NOTES PAYABLE**
 
 In
          February 2006, the Company commenced a private placement of up to $800,000
          principal amount of 10% senior secured convertible promissory notes due
          twelve
          months from the date of issue to certain of our shareholders and other
          accredited investors. Purchasers of the notes were issued 10-year warrants
          exercisable into the Company’s shares at an exercise price of $0.01 per share.
          In addition, if an equity financing with total proceeds of more than $5,000,000
          occurs while any notes are outstanding, holders of notes will have the
          right, at
          their option, to convert the outstanding principal and interest of the
          notes
          into shares at a discount of 30% of the price per share in the qualified
          financing. In accordance with Emerging Issue Task Force No. 98-5, *Accounting
          for Convertible Securities with Beneficial Conversion Features or Contingently
          Adjustable Conversion Ratios,* the
          contingent beneficial conversion feature is not recognized unless the triggering
          event occurs and the contingency is resolved. The notes are secured by
          a first
          priority lien on all of the tangible and intangible personal property of
          the
          Company.
 -9-
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Notes
          to
          Consolidated Financial Statements
 
 
 **NOTE
          6 - CONVERTIBLE NOTES PAYABLE (Continued)**
 
 As
          of
          December 31, 2006, the Company sold $800,000 principal amount of the notes
          and
          issued 8,000,000 warrants. In accordance with FAS 123(R), warrants were
          valued
          at $392,376 and recorded as deferred finance charges. The Company used
          the
          Black-Scholes option pricing model to calculate the grant-date fair value
          of the
          warrants, with the following assumptions: no dividend yield, expected volatility
          of 169% and 284%, risk-free interest rate between 3.6% and 4.5% and expected
          warrant life of ten years. The deferred finance charges are being amortized
          over
          one year, which is the term of the convertible notes. As of December 31,
          2006
          the Company received $55,500 for the exercise of 5,550,000 of the
          warrants.
 
 The
          term
          of the convertible notes has been extended to August 31, 2008. In consideration
          for the extension of maturity of the notes, the Company increased the interest
          rate on these notes to 12%.
 
 The
          Company commenced a private placement of up to $400,000 principal amount
          of 10%
          Convertible Promissory Notes due August 31, 2008. Holders of these 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. In
          May
          2007, the Company issued convertible notes in the principal amount of $250,000.
          During the three months ended September 30, 2007, the Company issued convertible
          notes in the principal amount of $50,000.
 
 
 **NOTE
          7 - STOCK OPTIONS AND WARRANTS**
 
 During
          1999, the Board of Directors (“Board”) of the Company adopted, with the approval
          of the stockholders, a Stock Option Plan. In 2000, the Board superseded
          that
          plan and created a new Stock Option Plan, pursuant to which it is authorized
          to
          grant options to purchase up to 1.5 million shares of common stock. On
          December
          17, 2003, the Board, with approval of the stockholders, superseded this
          plan and
          created the 2003 Stock Option Plan (the “Plan”). Under the Plan the Company is
          authorized to grant options to purchase up to 18,000,000 shares of common
          stock
          to the Company’s employees, officers, directors, consultants, and other agents
          and advisors. The Plan is intended to permit stock options granted to employees
          under the Plan to qualify as incentive stock options under Section 422
          of the
          Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All
          options granted under the Plan, which are not intended to qualify as Incentive
          Stock Options, are deemed to be non-qualified options (“Non-Statutory Stock
          Options”). As of September 30, 2007, there are 3,100,000 options that have been
          issued and exercised, 14,006,662 options that have been issued and are
          unexercised, and 893,338 options that are available to be issued under
          the
          Plan.
 
 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.
 -10-
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Notes
          to
          Consolidated Financial Statements
 
 
 **NOTE
          7 - STOCK OPTIONS AND WARRANTS (Continued)**
 
 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, 2007, the company expensed approximately $2,000 and $45,000
          and
          for the three and nine months ended September 30, 2006, the company expensed
          approximately $39,000 and $160,000 relative to non-employee options granted.
          As
          of September 30, 2007, there was approximately $14,000 of unrecognized
          compensation expense related to non-vested market-based share awards that
          is
          expected to be recognized through November 2008.
 
 The
          following tables summarize all non-employee stock option/warrant activity
          of the
          Company since December 31, 2006:
 Weighted
                      AverageOption/Warrant
                  
                  Exercise
                  
                  ExerciseShares
                  
                  Price
                  
                  PriceOutstanding,
                      December 31, 2006
                  
                  
                  13,251,662
                  
                  $
                  .01
                      to $.40
                  
                  $
                  0.09Granted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Expired
                  
                  
                  (395,000
                  )
                  
                  .40
                  
                  
                  .40Outstanding,
                      September 30, 2007
                  
                  
                  12,856,662
                  
                  $
                  .01
                      to $.28
                  
                  $
                  0.06Exercisable,
                      September 30, 2007
                  
                  
                  12,439,996
                  
                  $
                  .01
                      to $.28
                  
                  $
                  0.08Weighted
                      Average Remaining Life,Exercisable,
                      September 30, 2007 (years)
                  
                  
                  5.4
  **NOTE
          8 - STOCK BASED COMPENSATION**
 
 On
          January 1, 2006, the Company adopted SFAS 123(R) using the modified prospective
          method as permitted under SFAS 123(R). Under this transition method,
          compensation cost recognized in the first quarter of 2006 includes compensation
          cost for all share-based payments granted prior to but not yet vested as
          of
          December 31, 2005, based on the grant-date fair value estimated in accordance
          with the provisions of SFAS 123. In accordance with the modified prospective
          method of adoption, the Company’s results of operations and financial position
          for prior periods have not been restated.
 
 During
          the three and nine months ended September 30, 2007, no options were granted,
          however, as a result of previously issued options the Company’s net income was
          reduced by approximately $17,000 and $51,000 and for the three and nine
          months
          ended September 30, 2006, net income was reduced by approximately $18,000
          and
          $121,000 as a result of stock-based compensation from previously issued
          options.
          As of September 30, 2007, there was approximately $17,000 of unrecognized
          compensation expense related to non-vested market-based share awards that
          is
          expected to be recognized through December 2007.
 -11-
 
 LaserLock
          Technologies, Inc. and Subsidiaries
 (A
          Development Stage Company)
 Notes
          to
          Consolidated Financial Statements
 
 
 **NOTE
          8 - STOCK BASED COMPENSATION (Continued)**
 
 The
          following tables summarize all employee stock option activity of the Company
          since December 31, 2006:
 Weighted
                        AverageOption/Warrant
                    
                    Exercise
                    
                    ExerciseShares
                    
                    Price
                    
                    PriceOutstanding,
                        December 31, 2006
                    
                    
                    6,570,000
                    
                    $
                    .03
                        to $.28
                    
                    $
                    0.11Granted
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Expired
                    
                    
                    (20,000
                    )
                    $
                    0.17
                    
                    $
                    0.17Outstanding,
                        September 30, 2007
                    
                    
                    6,550,000
                    
                    $
                    .03
                        to $.28
                    
                    $
                    0.12Exercisable,
                        September 30, 2007
                    
                    
                    5,970,833
                    
                    $
                    .03
                        to $.28
                    
                    $
                    0.12Weighted
                        Average Remaining Life,Exercisable,
                        September 30, 2007
                    
                    
                    4.8
                        years
 
 **NOTE
          9 - RELATED PARTY TRANSACTIONS**
 
 Five
          shareholders of the Company also hold $720,000 of the convertible notes
          as of
          September 30, 2007.
 
 One
          shareholder of the Company holds the one demand note totaling
          $50,000.
 
 The
          Company maintains its office at the home of its President. No formal lease
          agreement exists and no direct rent expense has been incurred. However,
          related
          occupancy costs of $1,080 and $3,275 were incurred during the three and
          nine
          months ended September 30, 2007 and $1,080 and 4,732 were incurred during
          the
          three and nine months ended September 30, 2006.
 
 **NOTE
          10 - MAJOR CUSTOMERS**
 
 During
          the three and nine months ended September 30, 2007, the Company earned
          a
          substantial portion of its revenue from one customer and during the three
          and
          nine months ended September 30, 2006, the Company earned a substantial
          portion
          of its revenue from two customers. During the three and nine months ended
          September 30, 2007, revenue from those customers aggregated $61,604 and
          $291,420
          and during the three and nine months ended September 30, 2006, revenue
          from
          those customers aggregated $41,947 and $82,159. At September 30, 2007 and
          2006,
          amounts due from those customers included in trade accounts receivable
          were
          $13,933 and $19,002.
  -12-
 Item
        2.  Management’s
        Discussion and Analysis
 
 **Forward-Looking
        Information**
 
 The
        following Management’s Discussion and Analysis should be read in conjunction
        with our unaudited financial statements and notes thereto for the nine month
        period ended September 30, 2007 included herein and our audited financial
        statements and notes thereto for the year ended December 31, 2006 included
        in
        our Annual Report on Form 10-KSB filed with the Securities and Exchange
        Commission.
 
 This
        discussion, analysis and other sections of this report contain, in addition
        to
        historical information, forward-looking statements within the meaning of
        the
        Private Securities Litigation Reform Act of 1995. Forward-looking statements
        involve known and unknown risks, uncertainties and other factors, which may
        cause our actual results, performance or achievements expressed or implied
        by
        these forward-looking statements to differ materially from such forward-looking
        statements. The forward-looking statements included in this report may prove
        to
        be inaccurate. These statements are based on a number of assumptions concerning
        future events, and are subject to a number of uncertainties and other factors,
        many of which are outside our control. Actual results may differ materially
        from
        such statements for a number of reasons, including the effects of regulation
        and
        changes in capital requirements and funding. In light of the significant
        uncertainties inherent in these forward-looking statements, you should not
        consider this information to be a guarantee by us or any other person that
        our
        objectives and plans will be achieved. We do not undertake to publicly update
        or
        revise its forward-looking statements even if experience or future changes
        make
        it clear that any projected results (expressed or implied) will not be
        realized.
  **Overview**
  We
        are a
        technology licensing company which licenses our technology to both third
        parties
        who incorporate it into their products for resale to their customers, and
        to end
        users who incorporate the technology into their products at their manufacturing
        facilities. We receive royalties on volume usage of our technology from third
        parties who sell products incorporating such technologies. We intend to require,
        whenever possible, minimum annual royalties to enter into these licensing
        agreements.
  Our
        focus
        involves offering security solutions to the gaming industry through third
        parties that supply various products and services to the gaming industry.
        We
        license our technology to these third-party product and service suppliers
        who,
        in turn, incorporate our technology into the products they sell. We receive
        a
        royalty on each license. As part of these security solutions, we sell inks
        and
        pigments used to detect counterfeit products and documents to these same
        third-party product and service suppliers. We have an agreement to provide
        technology for the protection of playing cards, dice, and casino chips from
        fraud with Gaming Partners International.
  We
        also
        supply fraud protection technology for slot tickets, and made a commitment
        to
        sell advertising on the back of slot tickets in the cashless ticket-in
        ticket-out slot machines such as those using the EZ Pay system developed
        by
        International Gaming Technology.
  In
        January 2005, we entered into an agreement with Enigma Importacao e Exportacco
        Ltdn. (“Enigma”), in which we granted Enigma four three-month options to develop
        uses for our pending patent in Brazil. During each option period Enigma pays
        us
        a fee and purchase product to be used in testing and development of the
        products. At the end of the option period Enigma has the right to enter into
        a
        license agreement with us based on a minimum license fee and purchase price
        of
        product that includes a built in royalty. Enigma did not exercise the last
        three-month option. Several tests have been conducted by Enigma, potential
        customers and/or their agents that indicate use of our technology might be
        commercially feasible. One potential customer advised Enigma that our technology
        is acceptable for its use. LaserLock and Enigma continue to work together
        in
        anticipation of developing commercial applications in Brazil. However, no
        contracts have been entered into for the commercial use of this technology
        to
        date.
  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.
 
 -3-
  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). 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.
  We
        continue to develop new anti-counterfeiting technologies and to apply for
        patent
        protection for these technologies wherever possible. Our current patent
        portfolio consists of four granted patents (one granted in 2002, two granted
        in
        2004 and one granted in 2005) and one patent pending. Management believes
        that
        some of the patents that have been granted may have commercial application
        in
        the future but will require additional capital and/or a strategic partner
        in
        order to reach the potential markets.
  We
        are
        currently exploring the uses of our technologies in general industry and
        government. Whenever possible, we will license our technology to strategic
        partners that currently service those industries and charge them royalty
        fees
        and/or a share of the revenues/profits from their use of our
        technology.
  In
        February 2006 we commenced a private placement of up to $800,000 principal
        amount of 10% senior secured convertible promissory notes due twelve months
        from
        the date of issue to certain of our shareholders and other accredited investors.
        Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
        equity securities at an exercise price of $0.01 per share. Additionally,
        if an
        equity financing with total proceeds of more than $5,000,000 occurs while
        any
        notes are outstanding, holders of notes will have the right, at their option,
        to
        convert the outstanding principal and interest of the notes into shares at
        a
        discount of 30% of the price per share in the qualified financing. The notes
        are
        secured by a first priority lien on all of the tangible and intangible personal
        property of LaserLock. The private placement relied upon applicable exemptions
        from registration under Section 4(2) of the Securities Exchange Act of 1934,
        as
        amended, and Section 506 of Regulation D promulgated thereunder.  We
        completed the private placement on August 10, 2006. In total, we sold $800,000
        of notes and issued warrants for the purchase of 8,000,000 shares of our
        common
        stock in the private placement. On May 7, 2007, we entered into an agreement
        with the holders of the notes whereby the parties extended the due date of
        the
        notes to August 31, 2008. Interest under the notes was increased to 12% during
        the extended period.
 
 In
        October 2006 we entered into an agreement with UTEK Corporation (“UTEK”) a
        publicly traded company located in Tampa, Florida to conduct a study of our
        intellectual property portfolio. The study focused on potential uses of our
        intellectual property portfolio for non-security applications. The approximate
        cost of the study was $55,000. We issued 1,200,000 restricted Common Shares
        to
        UTEK to pay the costs of the study. The shares had a market price of $.045.
        UTEK
        completed its initial study in December 2006 and provided a report, which
        indicated that there was significant opportunity for licensing our intellectual
        property for non-security applications.
 
 On
        November 2, 2006, we entered into an agreement with Athanor Capital Partners
        Limited, based in London, United Kingdom ("Athanor"), under which Athanor
        agreed
        to 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 Exaqt, fund the global sales and marketing operations of the
        combined product lines and exchange all outstanding shares of LaserLock for
        shares in Newco. On signing the agreement, we paid Athanor a $10,000
        non-refundable fee and granted them options to purchase 1,000,000 Common
        Shares
        at $.0001 per share. This option was promptly exercised. In the first quarter
        of
        2007 we elected not to pursue the acquisition of Exaqt and the listing on
        AIM.
 
 On
        February 28, 2007, we entered into a commercialization agreement with UTEK
        under
        which it will market on our behalf the non-security applications of our
        intellectual property. Upon execution of the agreement, we paid UTEK an initial
        fee of $5,000, which will be credited against future commissions payable
        to UTEK
        under the commercialization agreement. Commissions payable to UTEK are based
        on
        the net revenues of LaserLock attributable to licenses and/or sales of the
        non-security applications of our intellectual property during the term of
        the
        agreement. The agreement has an initial term of six months, which has been
        extended with respect to contacts made during with certain prospective licensees
        and purchasers of the non-security applications of our intellectual property.
  -4-
 On
        March
        9, 2007, we entered into a non-exclusive sales and marketing agreement with
        RCD
        Technologies Inc. (“RCD”). RCD is a security technology company, which
        specializes in RFID technology. During the initial six-month period of the
        agreement, RCD has agreed to market the LaserLock technologies using its
        in-house sales force and to share the net revenues with LaserLock on a 50-50
        basis. It is the intention of both companies to review this agreement during
        the
        six-month period with the intention of entering into a longer-term distribution
        agreement.
 
 In
        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 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.
 
 As
        of
        October 31, 2007 we have sold $325,000 in notes to Nob Hill Capital Partners
        LP
        and Clydesdale Partners II, LLC. Under the terms of the Note Purchase Agreement,
        additional Notes in the aggregate principal amount of up to $75,000 may be
        issued by us to 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.
 
 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
        addition to the above, in order to implement our strategy, it will be necessary
        for us to raise additional capital and/or enter into strategic alliances
        or
        partnerships. There can be no assurances that such capital or strategic
        alliances or partnerships will be available and, if available, that we will
        be
        able to secure such capital or arrangements on acceptable terms.
 
 **Results
        of Operations**
 
 **Comparison
        of the Three-Month Periods Ended September 30, 2007 and September 30,
        2006.**
 
 Since
        we
        were and currently still are in our startup stages it is difficult for us
        to
        forecast our revenue or earnings accurately. We believe that period-to-period
        comparisons of our operating results may not be meaningful. We believe that
        we
        will start generating larger amounts of revenue in the future due to our
        attempts to cultivate business relationships over the past years.
 
 As
        a
        result of our limited operating history, we do not have meaningful historical
        financial data on which to base planned operating expenses. Thus, annual
        revenue
        and results of operation are difficult to project.
 
 For
        the
        three months ended September 30, 2007, we had sales and royalty revenues
        of
        $62,964 as compared to $48,569 for the three months ending September 30,
        2006.
        During the period, sales were $36,784 as compared to $11,917 for last year.
        Royalty revenues decreased to $26,180 from $36,652.
 
 Our
        research and development costs aggregated $42,806 for the three months ended
        September 30, 2007 as compared to $15,147 for the three months ended September
        30, 2006, an increase of $28,659. The increase results from an increase in
        the
        cost of products sold to $36,439 for the three months ended September 30,
        2007
        as compared to $6,351 in the prior year. In addition there was a reduction
        in
        the cost for research and product development. For the three months ended
        September 30, 2007 we incurred costs of $7,367 for research and product
        development as compared to $8,796 for the 2006 period.
 
 -5-
 There
        were no parent costs during the three month periods ending September 30,
        2007
        and 2006. This expense is the cost for maintaining the patents that have
        been
        issued to the Company.
 
 Our
        legal
        and accounting costs aggregated $21,464 for the three months ended September
        30,
        2007 as compared to $33,609 for the three months ended September 30, 2006,
        a
        decrease of $12,145. Legal fees for the 2007 period decreased to $3,414 from
        $18,309 in the prior year. The decrease principally results from costs for
        legal
        work in the 2006 period in connection with the potential acquisition of Exaqt
        and the issuance of the $800,000 in Notes. In the first quarter of 2007 we
        elected not to pursue the acquisition of Exaqt. In addition, accounting fees
        were $18,050 in the 2007 period as compared to $15,300 for the same period
        last
        year an increase of $2,750.
 
 Our
        sales
        and marketing costs aggregated $103,474 for the three months ended September
        30,
        2007 as compared to $170,967 for the three months ended September 30, 2006,
        a
        decrease of $67,493. The reduction in the costs result primarily from reduced
        charges for the issuance of stock options for marketing consultants of $36,500
        and the substantial portion of the balance reduced fees and costs paid to
        those
        consultants.
 
 Our
        general and administrative costs aggregated $68,569 for the three months
        ended
        September 30, 2007 as compared to $93,668 for the three months ended September
        30, 2006, a decrease of $25,099. The decrease is principally the result of
        reduced charges for bad debts of $19,600, lower costs for D&O insurance of
        $5,400 and shareholder costs. Offsetting these decreases was an increase
        in
        costs for administrative consultants.
 
 Our
        interest expense for the three months ended September 30, 2007 was $45,665
        as
        compared to $120,352 for the three months ended September 30, 2006. Accrued
        interest on the Company’s debt was $33,550 for the three months ended September
        30, 2007 as compared to $18,167 for the 2006 period resulting from an increase
        in the average amount of Notes outstanding during 2007 as compared to 2006
        and
        an increase in the interest rate from 10% to 12% in 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 as compared
        to
        $102,175 for the same period last year. The decrease in the amortization
        expense
        results from the timing of the exercise of the warrants issued in conjunction
        with the Notes and the completion of the amortization of the deferred finance
        charges resulting from issuance of the warrants.
 
 The
        net
        loss for the three months ended September 30, 2007 was $219,876 or $0.00
        per
        share. This compares to a net loss of $383,915 or $0.01 per share for the
        same
        period in 2006, a decrease in the net loss of $164,039. Included in the net
        loss
        for the 2007 period was $30,616 that represents the expense portion of the
        fair
        value of stock options and warrants issued compared to $158,969 in the 2006
        period, a decrease of $128,353.
 
 **Comparison
        of the Nine-Month Periods Ended September 30, 2007 and September 30,
        2006.**
 
 Since
        we
        were and currently still are in our startup stages it is difficult for us
        to
        forecast our revenue or earnings accurately. We believe that period-to-period
        comparisons of our operating results may not be meaningful. We believe that
        we
        will start generating larger amounts of revenue in the future due to our
        attempts to cultivate business relationships over the past years.
 
 As
        a
        result of our limited operating history, we do not have meaningful historical
        financial data on which to base planned operating expenses. Thus, annual
        revenue
        and results of operation are difficult to project.
 
 For
        the
        nine months ended September 30, 2007, we had sales and royalty revenues of
        $307,506 as compared to $95,458 for the nine months ending September 30,
        2006.
        During the period, sales were $227,183 as compared to $16,966 for last year.
        The
        substantial increase results from an order from a casino that changed the
        placement of the inks on the casino chips so that the ability to authenticate
        the chip is enhanced. The change requires the use of more ink than the prior
        application. Royalty revenues increased to $80,323 from $78,492, last year,
        due
        to the use of our security system on an increased number of casino
        chips.
 
 -6-
 Our
        research and development costs aggregated $216,957 for the nine months ended
        September 30, 2007 as compared to $52,738 for the nine months ended September
        30, 2006, an increase of $164,219. The increase results from an increase
        in the
        cost of products sold to $201,498 for the nine months ended September 30, 2007
        as compared to $20,601 in the prior year. Offsetting this increase was a
        reduction in the cost for research and product development. For the nine
        months
        ended September 30, 2007 we incurred costs of $15,459 for research and product
        development as compared to $32,137 for the 2006 period.
 
 Our
        patent costs for the nine months ended September 30, 2007 were $900 as compared
        to $611 for the nine months ended September 30, 2006. This expense is the
        cost
        for maintaining the patents that have been issued to the Company.
 
 Our
        legal
        and accounting costs aggregated $107,315 for the nine months ended September
        30,
        2007 as compared to $157,651 for the nine months ended September 30, 2006,
        a
        decrease of $50,336. Legal fees for the 2007 period decreased to $57,165
        from
        $103,451 in the prior year. The decrease principally results from costs for
        legal work in the 2006 period in connection with the potential listing on
        AIM
        and the related acquisition of Exaqt. In the first quarter of 2007 we elected
        not to pursue both the AIM listing and the acquisition of Exaqt. In addition,
        during 2006 there were legal costs in connection with the issuance of the
        $800,000 in Notes. Also, accounting fees were reduced to $50,150 in the 2007
        period from $54,200 for the same period last year.
 
 Our
        sales
        and marketing costs aggregated $310,640 for the nine months ended September
        30,
        2007 as compared to $629,844 for the nine months ended September 30, 2006,
        a
        decrease of $319,204. The reduction in the costs result primarily from reduced
        charges for the issuance of stock options of $147,000, lower salaries of
        approximately $18,000, reduced fees and costs paid to consultants of
        approximately $117,000 and a general reduction of other marketing costs.
        In
        addition, in the 2006 period we incurred a cost of $28,000 for the settlement
        of
        a terminated marketing agreement.
 
 Our
        general and administrative costs aggregated $207,860 for the nine months
        ended
        September 30, 2007 as compared to $258,343 for the nine months ended September
        30, 2006, a decrease of $50,483. The decrease is principally the result of
        reduced salaries, employee stock options and related items of $39,000, costs
        incurred in 2006 related to the raising additional funds of $6,100 and
        non-employee stock options of $21,300. Offsetting these decreases
        was  increased
        costs for consultants of approximately $15,000.
 
 Our
        interest expense for the nine months ended September 30, 2007 was $224,606
        as
        compared to $190,064 for the nine months ended September 30, 2006. Accrued
        interest on the Company’s debt was $83,241 for the nine months ended September
        30, 2007 as compared to $36,167 for the 2006 period. The increase results
        from
        an increase in the average amount of debt outstanding and an increase in
        the
        interest rate from 10% to 12%. The amortization of the deferred finance charges
        related to the issuance of warrants related to the Notes was $140,407 for
        the
        nine months ended September 30, 2007 as compared to $153,875 for the same
        period
        last year.
 
 The
        net
        loss for the nine months ended September 30, 2007 was $759,760 or $0.01 per
        share. This compares to a net loss of $1,190,381 or $0.02 per share for the
        same
        period in 2006, a decrease in the net loss of $430,621. Included in the net
        loss
        for the 2007 period was $236,289 that represents the expense portion of the
        fair
        value of stock options and warrants issued compared to $436,004 in the 2006
        period, a decrease of $199,715.
 
 **Liquidity
        and Capital Resources**
 
 Our
        cash
        balance at September 30, 2007 of $20,060 was $18,002 more than the $2,058
        as of
        December 31, 2006. Working capital at September 30, 2007 was a negative
        $1,672,897 representing a decrease in working capital of $671,069 from the
        negative $1,001,828 at December 31, 2006. This decrease in working capital
        relates principally to the cash portion of our net loss for the nine months
        ended September 30, 2007, $300,000 of short-term borrowings due August 31,
        2008
        and a short-term loan for $50,000.
  Our
        cash
        flow from operations, since inception, has been and continues to be negative.
        We
        continue to attempt to solicit customers and expect to continue to expend
        funds
        in excess of our revenues during the balance of the current year.
  -7-
 Future
        capital requirements and the adequacy of available funds will depend on numerous
        factors, including the successful commercialization of our existing products,
        cost of filing, prosecuting, defending and enforcing any current and future
        patent claims and other intellectual property rights, competing technological
        and marketing of our products. In the event our plans change or our assumptions
        change or prove to be inaccurate or the funds available prove to be insufficient
        to fund operations at the planned level (due to further unanticipated expenses,
        delays, problems or otherwise), we could be required to obtain additional
        funds
        through equity or debt financing, through strategic alliances with corporate
        partners and others, or through other sources in order to bring our products
        through to commercialization. We do not have any committed sources of additional
        financing, and there can be no assurance that additional funding, if necessary,
        will be available on acceptable terms, if at all. If adequate funds are not
        available, we may be required to further delay, scale back, or eliminate
        certain
        aspect of our operations or attempt to obtain funds through arrangements
        with
        collaborative partners or others that may require us to surrender rights
        to
        certain of our technologies, product development projects, certain products
        or
        existing markets. Specifically, if we are unable to consummate sales, we
        may
        have to delay our anticipated marketing and delivery dates, scale back our
        third-party production capabilities or eliminate certain areas of further
        research and development. If adequate funds are not available, our business,
        financial condition, and results of operations will be materially and adversely
        affected.
  In
        February 2006 we commenced a private placement of up to $800,000 principal
        amount of 10% senior secured convertible promissory notes due twelve months
        from
        the date of issue to certain of our shareholders and other accredited investors.
        Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
        equity securities at an exercise price of $0.01 per share. Additionally,
        if an
        equity financing with total proceeds of more than $5,000,000 occurs while
        any
        notes are outstanding, holders of notes will have the right, at their option,
        to
        convert the outstanding principal and interest of the notes into shares at
        a
        discount of 30% of the price per share in the qualified financing. The notes
        are
        secured by a first priority lien on all of the tangible and intangible personal
        property of LaserLock. The private placement relied upon applicable exemptions
        from registration under Section 4(2) of the Securities Exchange Act of 1934,
        as
        amended, and Section 506 of Regulation D promulgated thereunder.  We
        completed the private placement on August 10, 2006. In total, we sold $800,000
        of notes and issued warrants for the purchase of 8,000,000 shares of our
        common
        stock in the private placement. On May 7, 2007, we entered into an agreement
        with the holders of the notes whereby the parties extended the due date of
        the
        notes to August 31, 2008. Interest under the notes was increased to 12% during
        the extended period.
  On
        November 2, 2006, we entered into an agreement with Athanor, under which
        Athanor
        agreed to act as a corporate advisor and broker to us. With Athanor's guidance,
        we intended to form Newco and raise up to $5,000,000 through the issuance
        of
        Newco's shares on AIM. Under the terms of the agreement, Athanor would provide
        corporate finance advice and capital raising assistance to us in connection
        with
        a proposed application for the admission of Newco's shares to trade on the
        AIM.
        The proceeds of the offering would be used to complete the acquisition of
        the
        assets of Exaqt, fund the global sales and marketing operations of the combined
        product lines, and exchange all outstanding shares of LaserLock for shares
        in
        Newco. On signing the agreement, we paid Athanor a $10,000 non-refundable
        fee
        and granted them options to purchase 1,000,000 Common Shares at $.0001 per
        share. This option was promptly exercised. In the first quarter of 2007 we
        elected not to pursue the acquisition of Exaqt and the listing on
        AIM.
 
 In
        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 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.
 
 As
        of
        October 31, 2007 we have sold $325,000 in notes to Nob Hill Capital Partners
        LP
        and Clydesdale Partners II, LLC. Under the terms of the Note Purchase Agreement,
        additional Notes in the aggregate principal amount of up to $75,000 may be
        issued by us to 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.
 
 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.
  -8-
 In
        addition to the above, in order to implement our strategy, it will be necessary
        for us to raise additional capital and/or enter into strategic alliances
        or
        partnerships. There can be no assurances that such capital or strategic
        alliances or partnerships will be available and, if available, that we will
        be
        able to secure such capital or arrangements on acceptable
        terms.
 
 Our
        actual research and development and related activities may vary significantly
        depending on numerous factors, including changes in the costs of such activities
        from current estimates, the results of our research and development programs,
        the results of clinical studies, the timing of regulatory submissions,
        technological advances, determinations as to commercial potential, the status
        of
        competitive products and the availability of sufficient funds to achieve
        our
        goals. At this time we cannot project our cash expenditures on our research
        and
        development program for fiscal year 2007. Our research and development plans
        over the next year are uncertain but may include the application of our product
        to additional materials, as well as improving our existing products in
        conjunction with client feedback and the commercialization of new products.
        The
        focus and direction of our operations also will be dependent upon the
        establishment of collaborative arrangements with other companies.
  Our
        current policy is to invest our cash reserves in bank deposits, certificates
        of
        deposit, commercial paper, corporate notes, U.S. government instruments or
        other
        investment-grade quality instruments.
  There
        can
        be no assurance that we will be able to commercialize our technologies or
        that
        profitability will ever be achieved. We expect that our operating results
        will
        fluctuate significantly from year to year in the future and will depend on
        a
        number of factors, most of which are beyond our control.
  **Off-Balance
        Sheet Arrangements**
 
 We
        do not
        have any off-balance sheet arrangements that have or are reasonably likely
        to
        have a current or future effect on our financial condition, changes in financial
        condition, revenues or expenses, results of operations, liquidity, capital
        expenditures or capital resources that would be material to
        investors.
 -9-
  Item
        3.  Controls
        and Procedures
 
 (a)  Evaluation
        of Disclosure Controls and Procedures
 
 Our
        Chief Executive Officer and principal financial officer evaluated the
        effectiveness of our disclosure controls and procedures as of the end of
        the
        period covered by this report. Based on that evaluation, the Chief Executive
        Officer and principal financial officer concluded that our disclosure controls
        and procedures as of the end of the period covered by this report are
        functioning effectively to provide reasonable assurance that the information
        required to be disclosed by LaserLock in reports filed under the Securities
        Exchange Act of 1934 is recorded, processed, summarized and reported within
        the
        time periods specified in the Securities and Exchange Commission's rules
        and
        forms. A controls system, no matter how well designed and operated, cannot
        provide absolute assurance that the objectives of the controls system are
        met,
        and no evaluation of controls can provide absolute assurance that all control
        issues and instances of fraud, if any, within a company have been detected.
        We
        note that the same person serves as both the Chief Executive Officer and
        principal financial officer.
 
 (b)  Change
        in Internal Control over Financial Reporting
 
 No
        change in our internal control over financial reporting occurred during our
        most
        recent fiscal quarter that has materially affected, or is reasonably likely
        to
        materially affect, our internal control over financial reporting.
 
 -10-
  PART
        II -
        OTHER INFORMATION
 
 
 
 Item
        1.  Legal
        Proceedings
 
 There
        are
        no pending legal proceedings to which LaserLock or any of its subsidiaries
        is a
        party or to which any of their properties is the subject that are expected
        to
        have a material effect on our financial position, results of operations or
        cash
        flows.
 
 Item
        2.  Unregistered
        Sales of Equity Securities and Use of Proceeds
 
 In
        February 2006 we commenced a private placement of up to $800,000 principal
        amount of 10% senior secured convertible promissory notes due twelve months
        from
        the date of issue to certain of our shareholders and other accredited investors.
        Purchasers of notes were issued 10-year warrants exercisable into LaserLock’s
        equity securities at an exercise price of $0.01 per share. Additionally,
        if an
        equity financing with total proceeds of more than $5,000,000 occurs while
        any
        notes are outstanding, holders of notes will have the right, at their option,
        to
        convert the outstanding principal and interest of the notes into shares at
        a
        discount of 30% of the price per share in the qualified financing. The notes
        are
        secured by a first priority lien on all of the tangible and intangible personal
        property of LaserLock. The private placement relied upon applicable exemptions
        from registration under Section 4(2) of the Securities Exchange Act of 1934,
        as
        amended, and Section 506 of Regulation D promulgated thereunder.  We
        completed the private placement on August 10, 2006. In total, we sold $800,000
        of notes and issued warrants for the purchase of 8,000,000 shares of our
        common
        stock in the private placement. On May 7, 2007, we entered into an agreement
        with the holders of the notes whereby the parties extended the due date of
        the
        notes to August 31, 2008. Interest under the notes was increased to 12% during
        the extended period.
  On
        November 2, 2006, we entered into an agreement with Athanor, under which
        Athanor
        agreed to act as a corporate advisor and broker to us. With Athanor's guidance,
        we intended to form Newco and raise up to $5,000,000 through the issuance
        of
        Newco's shares on AIM. Under the terms of the agreement, Athanor would provide
        corporate finance advice and capital raising assistance to us in connection
        with
        a proposed application for the admission of Newco's shares to trade on the
        AIM.
        The proceeds of the offering would be used to complete the acquisition of
        Exaqt,
        fund the global sales and marketing operations of the combined product lines,
        and exchange all outstanding shares of LaserLock for shares in Newco. On
        signing
        the agreement, we paid Athanor a $10,000 non-refundable fee and granted them
        options to purchase 1,000,000 Common Shares at $.0001 per share. This option
        was
        promptly exercised. In the first quarter of 2007 we elected not to pursue
        the
        acquisition of Exaqt and the listing on AIM.
 
 In
        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 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.
 
 As
        of
        October 31, 2007 we have sold $325,000 in notes to Nob Hill Capital Partners LP
        and Clydesdale Partners II, LLC. Under the terms of the Note Purchase Agreement,
        additional Notes in the aggregate principal amount of up to $75,000 may be
        issued by us to 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.
 
 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.
  
 
 Item
        3.  Defaults
        Upon Senior Securities
 
 None.
 
 Item
        4.  Submission
        of Matters to a Vote of Security Holders
 
 None.
 
 Item
        5.  Other
        Information
 
 None.
 
 Item
        6.  Exhibits
 
 3.1  Certificate
        of Designation of Series A Preferred Stock of LaserLock Technologies, Inc.
        dated
        May 17, 2007 (filed on Form 8-K on May 23, 2007 and incorporated herein by
        reference).
 
 10.1  Senior
        Secured Convertible Note and Warrant Purchase Agreement, dated February 13,
        2006, among the Company and Nob Hill Capital Partners, L.P. (filed on the
        Company’s Form 8-K on February 17, 2006 and incorporated herein by
        reference).
 
 10.2  Schedule
        of Purchasers who have entered into the Senior Secured Convertible Note and
        Warrant Purchase Agreement filed on Form 8-K on February 17, 2006 and
        incorporated herein by reference (filed on the Company’s Form 10-KSB on March
        31, 2006 and incorporated herein by reference).
 
 10.3  Senior
        Secured Convertible Promissory Note, dated February 17, 2006, by the Company
        in
        favor of Nob Hill Capital Partners, L.P. in the amount of $100,000 (filed
        on
        Form 8-K on February 17, 2006 and incorporated herein by
        reference).
 
 10.4  Schedule
        of Payees who have entered into a senior secured convertible promissory note
        substantially identical to the Senior Secured Convertible Promissory Note
        filed
        on Form 8-K on February 17, 2006 and incorporated herein by reference (filed
        on
        the Company’s Form 10-KSB on March 31, 2006 and incorporated herein by
        reference).
 
 10.5  Warrant,
        issued by the Company in favor of Nob Hill Capital Partners, L.P., dated
        February 13, 2006 (filed on Form 8-K on February 17, 2006 and incorporated
        herein by reference).
 
 10.6  Schedule
        of Holders to whom the Company has issued a warrant substantially identical
        to
        the Warrant filed on Form 8-K on February 17, 2006 and incorporated herein
        by
        reference (filed on the Company’s Form 10-KSB on March 31, 2006 and incorporated
        herein by reference).
 
 10.7  Security
        Agreement, dated February 13, 2006, by and between the Company and Nob Hill
        Capital Partners, L.P. (filed on Form 8-K on February 17, 2006 and incorporated
        herein by reference).
 
 10.8  Schedule
        of Secured Parties who have entered into a security agreement substantially
        identical to the Security Agreement filed on Form 8-K on February 17, 2006
        and
        incorporated herein by reference (filed on the Company’s Form 10-KSB on March
        31, 2006 and incorporated herein by reference).
 
 10.9  Non-binding
        letter of intent, entered into on January 10, 2006, pursuant to which the
        Company will acquire a minimum of 95% of the shares of ExaqtWorld S.A.R.L.
        (filed on Form 8-K on January 11, 2006 and incorporated herein by
        reference).
 
 10.10  Letter
        Agreement re: Proposed Admission through an Introduction of LaserLock
        Technologies, Inc. to trading on the London Stock Exchange plc’s AIM, entered
        into on November 2, 2006 by LaserLock Technologies, Inc. and Athanor Capital
        Partners Limited (filed on Form 8-K on November 8, 2006 and incorporated
        herein
        by reference).
  10.11  First
        Amendment to Senior Secured Promissory Notes dated May 7, 2007 by and among
        LaserLock Technologies, Inc., the Goldberg Family Trust, PFK Acquisition
        Group
        II, LLC, Howard Goldberg, Real Path, Inc., Robert Schachter Trust, Nob Hill
        Capital Partners, LP, Nob Hill Capital Associates, LP, Nicolette Consulting
        Group Limited, Alfred F. Bracher, III and Lawrence Chimerine (filed on Form
        8-K
        on May 8, 2007 and incorporated herein by reference).
  
 
 10.12  Standard
        Agreement for Commercialization of IP dated February 28, 2007 by and between
        LaserLock Technologies, Inc. and UTEK International Capital Consulting (filed
        on
        the Company’s Form 10-KSB on April 2, 2007 and incorporated herein by
        reference).
 
 10.13  Letter
        Agreement dated March 9, 2007 by and between LaserLock Technologies, Inc.
        and
        RCD Technology, Inc. (filed on the Company’s Form 10-KSB on April 2, 2007 and
        incorporated herein by reference).
 
 10.14  Note
        Purchase Agreement, dated May 18, 2007, by and among LaserLock Technologies,
        Inc., Nob Hill Capital Partners, LP and Clydesdale Partners II, LLC (filed
        on
        Form 8-K on May 23, 2007 and incorporated herein by reference).
 
 10.15  Convertible
        Promissory Note dated May 18, 2007 in the principal amount of $140,000 issued
        to
        Nob Hill Capital Partners, LP (filed on Form 8-K on May 23, 2007 and
        incorporated herein by reference).
 
 10.16  Convertible
        Promissory Note dated May 18, 2007 in the principal amount of $110,000 issued
        to
        Clydesdale Partners II, LLC (filed on Form 8-K on May 23, 2007 and incorporated
        herein by reference).
 
 31.1  Certification
        of Chief Executive Officer and principal financial officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 (filed herewith).*
 
 32.1  Certification
        of Chief Executive Officer and principal financial officer pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 (filed herewith).*
 
 ________________________
 *  The
        same
        individual serves as the Company's Chief Executive Officer and principal
        financial officer.
  
 
 SIGNATURES
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 LaserLock
                Technologies, Inc(Registrant)Date: November
                14, 2007
              By:
              /s/ Norman
                GardnerNorman
                GardnerPresident
                and
                CEO