FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   (Mark One)
   [ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
                            EXCHANGE     ACT OF 1934

                       For the quarter ended June 30, 2005

                                       OR

[    ]     TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
                            EXCHANGE     ACT OF 1934

             For the transition period from __________ to __________


                 Commission File Number                  1-12727
                                                      ----------


                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)


          Delaware                                        96-11-3231714
          --------                                        -------------
     (State or other jurisdiction of                   (I.R.S.  Employer
  incorporation or organization)                      Identification  No.)

  1881 Lakeland Avenue, Ronkonkoma, NY                      11779
  ------------------------------------                      -----
(Address of principal executive offices)                 (Zip Code)

                                  631-739-2000
                                  ------------
              (Registrant's telephone number, including area code)


    (Former name, former address and former fiscal year, if changed since last
                                     report)


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 12 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
                                      -


       As of August 12, 2005, there were 120,628,804 shares of Common Stock
                                  outstanding.


<PAGE>



                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
                                      INDEX
                                      -----




                                                        Page No.
                                                        --------

PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.     Financial Statements (Unaudited)

     Consolidated Balance Sheets --
     June 30, 2005 and December 31, 2004                    3

     Consolidated Statements of Operations --
     Three Months Ended June 30, 2005 and 2004
     And Six Months Ended June 30, 2005 and 2004            4

     Consolidated Statements of Cash Flows --
     Six Months Ended June 30, 2005 and 2004                5

     Notes to Consolidated Financial
     Statements - June 30, 2005                           6 - 9


Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations   9 - 12


Item 3.   Controls and Procedures                           13



PART II.   OTHER INFORMATION
----------------------------

Item 6.   Exhibits and Reports on Form 8-K                  13


Signatures                                                  14




<PAGE>



PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.     Financial Statements (Unaudited)

<TABLE>
<CAPTION>

SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)


                                                                June 30,    December 31,
                                                                  2005          2004
                                                               ----------  --------------
(Unaudited)                                                    (Audited)
ASSETS
-------------------------------------------------------------
CURRENT ASSETS
<S>                                                            <C>         <C>
  Cash and cash equivalents                                    $     771   $       1,965
  Accounts receivable, less allowance for doubtful
     accounts of $151 and $338, respectively                       2,954           3,500
  Inventories                                                      3,156           3,314
  Prepaid expenses and other current assets                          474             525
                                                               ----------  --------------
    Total current assets                                           7,355           9,304

PROPERTY, PLANT AND EQUIPMENT, net                                   625             689
GOODWILL                                                           1,564           1,564
OTHER ASSETS                                                         624             690
                                                               ----------  --------------

                                                               $  10,168   $      12,247
                                                               ==========  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------------
CURRENT LIABILITIES
  Revolving line of credit and term loan                       $   1,492   $       2,640
  Accounts payable                                                   908             799
  Accrued liabilities                                              1,194           1,146
  Obligations under capital leases - current portion                   6               5
  Deferred income                                                     66             169
                                                               ----------  --------------
    Total current liabilities                                      3,666           4,759

NOTES PAYABLE                                                         24             189
OBLIGATIONS UNDER CAPITAL LEASES -
  non-current portion                                                  4               8
DEFFERED TAX LIABILITY                                                42              39
CONVERTIBLE DEBENTURES                                             1,883           1,862
MINORITY INTEREST                                                  1,040           1,045
                                                               ----------  --------------
    Total liabilities                                              6,659           7,902

SHAREHOLDERS' EQUITY
  Common stock, $0.001 par value; authorized 160,000 shares,         121             121
     issued and outstanding  120,628 and 120,549 shares
  Additional paid-in capital                                      48,783          48,779
  Accumulated deficit                                            (45,508)        (44,718)
  Other accumulated comprehensive income                             113             163
                                                               ----------  --------------
  Total shareholders' equity                                       3,509           4,345
                                                               ----------  --------------
                                                               $  10,168   $      12,247
                                                               ==========  ==============
See notes to the consolidated financial statements.
</TABLE>




<PAGE>

<TABLE>
<CAPTION>


SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

(Unaudited)
<S>

                                                       Three Months Ended          Six Months Ended
                                                             June 30,                   June 30,
                                                      ----------------------------------------------
                                                       2005        2004            2005       2004
                                                          (Unaudited)                (Unaudited)
<S>                                                   <C>       <C>              <C>        <C>
REVENUES
  Sales                                               $ 3,462   $  3,188         $  5,375   $ 5,034
  Service, installation and other                         805      1,091            1,385     2,219
                                                      -------   --------         --------   --------
                                                        4,267      4,279            6,760     7,253

COSTS AND EXPENSES:
  Cost of sales                                         1,915      1,682            2,895     2,623
  Customer service expenses                               747      1,105            1,496     2,120
  Selling, general and administrative expenses          1,272      1,192            2,493     2,117
  Research and development                                214        180              447       340
                                                      -------   --------         --------    -------

                                                        4,148      4,159            7,331     7,200
                                                      -------   --------         --------    -------

OPERATING INCOME (LOSS)                                   119        120             (571)       53
INTEREST AND FINANCING EXPENSES                            78         79              169       204
                                                      -------   --------         --------    -------

INCOME (LOSS) BEFORE INCOME TAXES
  AND MINORITY INTEREST                                    41         41             (740)     (151)
INCOME TAX EXPENSE                                         37         15               20        15
                                                      -------   --------         --------    -------
INCOME (LOSS) BEFORE MINORITY INTEREST                      4         26             (760)     (166)
MINORITY INTEREST                                         (34)       (14)             (30)      (14)
                                                      -------   --------         --------    -------
NET INCOME (LOSS)                                     $   (30)  $     12         $   (790)   $ (180)
                                                      =======   ========         ========    =======

NET INCOME (LOSS) PER SHARE
  Basic and diluted                                   $ (0.00)  $   0.00         $  (0.01)   $(0.00)
                                                      =======   ========         ========    =======

WEIGHTED AVERAGE SHARES
  Basic and diluted                                   120,566    105,862          120,559    95,809
                                                      =======   ========         ========    =======


See notes to the consolidated financial statements.

</TABLE>





<PAGE>


<TABLE>
<CAPTION>

SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                                         Six Months Ended
                                                                              June 30,
                                                                        ------------------
                                                                         2005           2004
                                                                      -----------    ----------
                                                                             (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
-----------------------------------------------------------
<S>                                                               <C>                 <C>

  Net loss                                                        $            (790)  $  (180)
  Adjustments to reconcile net loss
     to net cash provided by (used in) operating activities:
     Depreciation and amortization                                              163        89
     Provision for bad debts                                                    (20)       20
     Non-cash consideration                                                      17        53
     Minority interest in net income of consolidated subsidiary                  (5)       14
  Changes in operating assets and liabilities:
     Accounts receivable                                                        566      (524)
     Inventories                                                                158       (31)
     Accounts payable and other current assets and liabilities                  (44)     (515)
                                                                  ------------------  --------

    Net cash provided by (used in) operating activities                          45    (1,074)
                                                                  ------------------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment                                     (26)       (9)
  Intangibles                                                                   (16)     (185)
  Net cash provided by the acquisition of ID Systems                            ---        82
                                                                  ------------------  --------

    Net cash used in investing activities                                       (42)     (112)
                                                                  ------------------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings (payments) under the revolving line
     of credit and term loan                                                 (1,148)      318
  Proceeds from bridge loan                                                     ---       100
  Repayment of bridge loan                                                      ---      (100)
  Proceeds from convertible debentures and warrants                             ---     2,000
  Repayment of obligations under capital leases                                  (3)       (3)
  Proceeds from sale of stock, net                                                4       ---
                                                                  ------------------  --------

    Net cash (used in) provided by financing activities                      (1,147)    2,315
                                                                  ------------------  --------

EFFECTS OF EXCHANGE RATES ON CASH                                               (50)      ---
                                                                  ------------------  --------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                             (1,194)    1,129

CASH AND CASH EQUIVALENTS, at beginning of period                             1,965       210
                                                                  ------------------  --------
CASH AND CASH EQUIVALENTS, at end of period                       $             771   $ 1,339
                                                                  ==================  ========


See notes to the consolidated financial statements.

</TABLE>





<PAGE>
SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2005



NOTE 1 -- Basis of Presentation
-------------------------------
The  consolidated financial statements include the accounts of Sentry Technology
Corporation  ("the  Company")  and  its  majority-owned  subsidiaries.  All
intercompany  accounts  and  transactions have been eliminated in consolidation.

The  accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of  America  for interim financial information and with the instructions to Form
10-QSB.  Accordingly,  they  do not include all of the information and footnotes
required  by  accounting  principles  generally accepted in the United States of
America  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.  Interim  results  are not necessarily
indicative of the results that may be expected for a full year.  These financial
statements should be read in conjunction with the audited consolidated financial
statements  and notes thereto included in Sentry's Annual Report to Stockholders
on  Form  10-KSB  for the fiscal year ended December 31, 2004, as filed with the
Securities  and  Exchange  Commission.

Certain prior period amounts have been reclassified to conform to current period
presentation.

Note 2 -- Recent Accounting Pronouncements
------------------------------------------
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment." SFAS No.
123R revises SFAS No. 123 and supersedes Accounting Principles Based Opinion No.
25, "Accounting for Stock Issued to Employees." In April 2005, the SEC announced
SFAS  123R  would  be  effective no later than the beginning of the first fiscal
year  beginning  after  June  15, 2005. We will adopt the provisions of SFAS No.
123R  effective January 1, 2006. SFAS No. 123R requires all share-based payments
to  employees  to be recognized in the financial statements based on fair value.
We  currently  account  for share-based payments to employees using APB No. 25's
intrinsic value method. Under SFAS No. 123R we will be required to follow a fair
value approach, such as the Black-Scholes or lattice option valuation models, at
the  date of a stock-based award grant. SFAS No. 123R permits one of two methods
of  adoption:  (1)  modified  prospective  method  or (2) modified retrospective
method.  We  plan  to adopt SFAS No. 123R using the modified prospective method.
This  method requires that we recognize compensation expense for all share-based
payments  granted  on  or  after  January  1, 2006 and for all awards granted to
employees  prior to January 1, 2006 that remain unvested on January 1, 2006. The
adoption  of  SFAS  No.  123R  is  not expected to have a material impact on the
Company's  financial  position  or  results  of  operations.

NOTE 3 -- ID Systems Acquisition
--------------------------------
On  April  30, 2004, Sentry purchased from Saburah Investments, Inc., an Ontario
corporation,  all  of  the  outstanding  common shares and Series "A" preference
shares  of  ID  Security Systems Canada Inc., an Ontario corporation, and all of
the  outstanding  capital  stock  of  ID  Systems  USA,  Inc.,  a  Pennsylvania
corporation  (collectively,  "ID  Systems").  Mr.  Peter Murdoch, President, CEO
and Director of Sentry, is the owner of Saburah.  Effective January 1, 2005, the
names of the acquired subsidiaries were changed to Sentry Technology Canada Inc.
and  Sentry  Technology  USA  Inc.

The  Company's  consolidated  statements  of operations include the revenues and
expenses  of  ID  Systems  from  May  1,  2004.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June  30,  2005


The  following supplemental pro forma information is presented to illustrate the
effects of the acquisition on the historical operating results for the three and
six  month  periods ended June 30, 2004 as if the acquisition had occurred as of
January  1,  2004:


<TABLE>
<CAPTION>

                                         Three Months Ended           Six Months Ended
                                           June 30, 2004                June 30, 2004
                                          --------------------------------------------
                                             (in thousands, except per share data)
<S>                                       <C>                             <C>
Revenues                                  $     4,918                     $9,132
Income (loss) before extraordinary item   $        14                     $ (103)
Net income (loss)                         $        14                     $ (103)
Net income (loss) per share               $     (0.00)                    $(0.00)
</TABLE>


<TABLE>
<CAPTION>

NOTE 4 -- Inventories
---------------------


Inventories consist of the following             June 30, 2005          December 31, 2004
-----------------------------------------------------------------------------------------
                                                            (in thousands)
<S>                                              <C>                      <C>
Raw materials                                    $1,040                   $1,206
Work-in-process                                     298                      292
Finished goods                                    1,818                    1,816
                                                 ------                   ------
                                                 $3,156                   $3,314
                                                 ======                   ======

</TABLE>


Reserves  for excess and obsolete inventory totaled $1,471,000 and $1,528,000 as
of June 30, 2005 and December 31, 2004, respectively and have been included as a
component  of  the  above  amounts.


<TABLE>
<CAPTION>

NOTE 5 -- Credit Facilities
-----------------------------------------------------------
Balances under credit facilities consist of the following:
-----------------------------------------------------------
                                                              June 30, 2005          December 31, 2004
                                                             ------------------------------------------
                                                                           (in thousands)
<S>                                                          <C>                        <C>
Royal Bank of Canada                                         $    1,492                 $  ---
The CIT Group/Business Credit Inc. revolving credit                 ---                  1,769
Bank of Montreal overdraft lending                                  ---                    734
Bank of Montreal non-revolving demand                               ---                    137
                                                             ----------                 ------
                                                             $    1,492                 $2,640
                                                             ==========                 ======
</TABLE>



On  May 13, 2005, the Company and certain of its subsidiaries entered into a new
secured  credit  facility with Royal Bank of Canada for maximum borrowings of up
to  Canadian  $4.5  million  (U.S.  $3.6  million), which are subject to certain
limitations  based  on  a  percentage  of  eligible  accounts  receivable  and
inventories as defined in the agreement.  Interest is payable at a rate of Royal
Bank  of  Canada  prime  rate  (4.25%  at  June 30, 2005), plus 1.25% per annum.
Borrowings under this facility are secured by substantially all of the Company's
assets.  This  new  facility  replaced  the  Company's  former  revolving credit
agreement in the United States and its overdraft lending and term loan agreement
in  Canada.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2005

<TABLE>
<CAPTION>

NOTE 6 - Comprehensive Income (Loss)
-------------------------------------------
Comprehensive income (loss) is as follows:
-------------------------------------------

                                              Three Months Ended           Six Months Ended
                                                   June 30,                     June 30,
<S>                                          <C>            <C>            <C>       <C>
                                               2005         2004            2005      2004
                                               ----         ----            ----      ----
                                                               (in thousands)
Net income (loss):                           $(30)          $ 12           $(790)    $(180)
Other comprehensive income (loss):
Foreign currency translation adjustments      (36)            38             (50)       38
                                             ----           ----           -----     -----
Comprehensive income (loss)                  $(66)          $ 50           $(840)    $(142)
                                             ====           ====           =====     =====
</TABLE>




NOTE 7 -- Related Party Transactions
------------------------------------
On  January 22, 2004, Robert Furst, a Sentry Director, made a bridge loan to the
Company  in  the  amount of $100,000.  The interest rate on the loan was 15% per
annum  and  the  loan  was  due  on  or  before  April  30, 2004.  As additional
consideration  for  the  loan,  Mr. Furst received a warrant to purchase 300,000
shares  of  Sentry  common  stock  at  a price of $0.17 per share, which was the
market  price on the date of the grant (valued at $3,000 and charged to interest
and financing expenses).  The warrant expires on January 21, 2009.  The note was
repaid  in  full  on  April  30,  2004.


NOTE 8 -- Earnings Per Share
----------------------------
The  earnings  per  share  calculations (basic and diluted) at June 30, 2005 and
2004  are  based  upon  the weighted average number of common shares outstanding
during  each  period.  There  are  no  reconciling  items  in  the  numerator or
denominator  of  the  earnings  per  share calculations in either of the periods
presented.  Options  to  purchase 1,229,512 and 1,499,948 shares of common stock
with  a  weighted  average exercise price of $0.61 and $0.59 were outstanding at
June  30,  2005 and 2004, respectively, but were not included in the computation
of  diluted  net  loss  per  share because their effect would be antidilutive or
immaterial.

The  Company  accounts  for  stock-based awards to employees using the intrinsic
value  method  in  accordance  with  Accounting Principles Board Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees."  SFAS  No.  123, Accounting for
Stock-Based  Compensation,  requires  the disclosure of pro forma net income and
earnings  per  share  had  the  Company  adopted the fair value method as of the
beginning  of  fiscal  1995.  Under  SFAS No. 123, the fair value of stock-based
awards to employees is calculated through the use of option pricing models, even
though such models were developed to estimate the fair value of freely tradable,
fully  transferable  options  without  vesting restrictions, which significantly
differ  from  the  Company's  stock  options  awards.  These models also require
subjective  assumptions,  including  future  stock price volatility and expected
time to exercise, which greatly affect the calculated values.  The fair value of
each  option  granted  is estimated on the date of grant using the Black-Scholes
option-pricing  model.  In 2005, 150,000 options were granted at market price on
of  the  date  of  the  grant.  The  weighted  average fair value of the options
granted  in  2005  is estimated at $0.08, using the Black-Scholes option pricing
model  with  the  following  weighted average assumptions:  expected life of two
years;  stock  volatility,  94% in 2005; risk free interest rates, 4.0% in 2005,
and no dividends during the expected term.  The Company's calculations are based
on  a  multiple option valuation approach and forfeitures are recognized as they
occur.  No  options  were  granted  in the six month period ended June 30, 2004.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2005


If  the  computed  fair  values  of  the  post 1995 awards had been amortized to
expense  over  the vesting period of the awards, pro forma net income attributed
to  common  shareholders  would  have  been  as  follows:

<TABLE>
<CAPTION>
                                                  Three Months Ended    Six Months Ended
                                                       June 30,             June 30,
                                                 2005           2004    2005        2004
                                                 ----           ----    ----        ----
(in thousands, except per share data)
<S>                                              <C>           <C>     <C>         <C>
Net loss:
  As reported                                    $ (30)       $  12    $ (790)     $ (180)
  Less stock based compensation expense
     determined under the fair value method
     of all awards, net of related tax effects      (6)          (3)      (11)         (9)
                                                 -----         ----    ------      ------
  Pro forma                                      $ (36)       $   9    $ (801)     $ (189)
                                                 =====         ====    ======      ======


Net loss per share:
  As reported                                    $(0.00)      $0.00    $(0.01)     $(0.00)
                                                 ======       =====    ======      ======
  Pro forma                                      $(0.00)      $0.00    $(0.01)     $(0.00)
                                                 ======       =====    ======      ======
</TABLE>




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

Certain Factors That May Affect Future Results
----------------------------------------------

Information  contained  or  incorporated by reference in this periodic report on
Form  10-QSB  and  in  other  SEC  filings  by  Sentry contains "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995  which can be identified by the use of forward-looking terminology such
as  "believes,"  "expects,"  "may,"  "will,"  "should"  or  "anticipates" or the
negative  thereof,  other  variations  thereon  or comparable terminology, or by
discussions  of  strategy.  These  forward-looking  statements  involve  certain
significant  risks  and  uncertainties, and actual results may differ materially
from the forward-looking statements. For further details and discussion of these
risks  and  uncertainties  see  Sentry  Technology  Corporation's  SEC  filings
including,  but  not  limited to, its annual report on Form 10-KSB. No assurance
can  be given that future results covered by the forward-looking statements will
be  achieved,  and  other  factors  could  also  cause  actual  results  to vary
materially  from  the future results covered in such forward-looking statements.
We  do  not  undertake  to  publicly update or revise any of our forward-looking
statements  even if experience or future changes show that the indicated results
or  events  will  not  be  realized.

Results of Operations:
----------------------

On April 30, 2004, Sentry purchased from Saburah Investments, Inc. all
of  the  outstanding  common  shares and Series "A" preference shares of ID
Security  Systems  Canada Inc., and all of the outstanding capital stock of
ID  Systems USA, Inc. (collectively, "ID Systems"). ID Systems is a Toronto
based  company  engaged  in anti-shoplifting technology, security labeling,
radio frequency identification (RFID), access control and library security.
Our  condensed  consolidated  statements of operations include the revenues
and  expenses of ID Systems from May 1, 2004. Effective January 1, 2005, ID
Systems  changed the name of ID Security Systems Canada Inc. and ID Systems
USA  Inc.  to Sentry Technology Canada Inc. and Sentry Technology USA Inc.,
(collectively "Sentry Canada").


Consolidated  revenues were substantially the same in the quarter ended June 30,
2005  as  compared to the quarter ended June 30, 2004.  For the six month period
ended  June 30, 2005 consolidated revenues were 7% lower than in the same period
of  last  year.  Sentry  Canada's revenues represented $1.7 million of the total
revenues  in  the  second quarter and $2.6 million in the first six months ended
June  30,  2005  as compared to $0.9 million in the second quarter and first six
months  of  2004.  Our  backlog of orders, which we expect to deliver within the
next  twelve  months,  was  $2.8  million  at  June 30, 2005 as compared to $2.2
million  at  December  31, 2004.  The backlog was $3.6 million at June 30, 2004.
Total  revenues  for  the  periods  presented  are  broken  out  as  follows:

<TABLE>
<CAPTION>

<S>                               <C>       <C>      <C>          <C>      <C>     <C>
                                    Q-2      Q-2       %           6 Mos.  6 Mos.    %
                                    2005     2004    Change         2005    2004   Change
                                  --------  -------  -------      -------  ------  -------
                                    (in thousands)                 (in thousands)

EAS                               $  2,142  $ 1,132      89       $ 3,192  $1,626      96
CCTV                                   455      984     (54)          768   1,591     (52)
SentryVision                           865    1,072     (19)        1,415   1,817     (22)
                                  --------  -------  -------      -------  ------  -------
Total sales                          3,462    3,188       9         5,375   5,034       7
Service, installation and other        805    1,091     (26)        1,385   2,219     (38)
                                  --------  -------  -------      -------  ------  -------
Total revenues                    $  4,267  $ 4,279      (0)      $ 6,760  $7,253      (7)
                                  ========  =======  =======      =======  ======  =======
</TABLE>




The  increase  in  EAS sales is primarily attributable to Sentry Canada's sales,
which  represented  $1.7  million  of  EAS  sales in the second quarter and $2.6
million  in  the  first  six months of 2005 compared to $0.9 million in both the
second  quarter and first six months of 2004.  In January 2005, we were notified
by  Lowe's  Home  Center,  our largest customer, that they would not be renewing
their  maintenance contract for 2005.  While the annual value of the maintenance
contract was approximately $0.9 million, it contributed towards the selection of
vendors  for  replacement  and  add-on  CCTV business in new and existing Lowe's
locations.  As a result, revenues from Lowe's decreased from $1.4 million in the
second  quarter  of  2004 to $0.1 million in the second quarter of 2005 and from
$2.5  million  in  the first six months of 2004 to $0.8 million in the first six
months  of 2005.  This reduction had an impact on our reported sales of CCTV and
SentryVision products.  We anticipate that this decision will continue to result
in  a substantial decrease in future revenues from Lowe's on a comparative basis
for  the remainder of the year.  We have added new sales representatives and new
customers  that  offset  the loss of Lowe's revenue in the second quarter.  As a
result,  our  business  is  more balanced and no longer relies on a single large
customer  for  success.

Both  domestic  and  international sales of our SentryVision  Smart Track system
weakened in the second quarter and first six months of 2005 when compared to the
same  periods  of 2004.  Our sales of SentryVision products to our international
dealers  and  distributors  are  denominated  in  U.S.  dollars,  therefore  the
strengthening  of  the Euro and other foreign currencies against the U.S. dollar
had  no  significant  impact  on  revenues.  While  service  revenues  were
approximately  the  same in both periods in 2005 and 2004, installation revenues
were  significantly lower in the 2005 periods as compared to the same periods of
2004, due to lower domestic sales of CCTV and SentryVision systems.  Even though
EAS sales increased substantially, the installation revenues associated with EAS
systems  are  lower  than for CCTV and SentryVision sales.  Maintenance revenues
were  lower  primarily  as  a  result  of cancellation of the Lowe's maintenance
contract.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


We are encouraged by the recent order rates as well as a backlog of $2.8 million
at  the  end  of June 2005.  Sales reps and international distributors have been
added  to  the  sales  group  plus  new print ads and trade show attendance will
assist  in  improving our sales results.  In particular, our flagship SmartTrack
traveling camera system and proprietary library security and information systems
are  operating  trouble  free, which has helped both to reduce service costs and
allow  our  sales  reps to develop new business as a result of strong references
from  many  satisfied  national  and  international  customers.

Cost of sales were 55% and 54% of total sales in the three and six month periods
ended  June  30, 2005 compared to 53% and 52% in the three and six month periods
ended  June,  30,  2004.  We  continue  to  see  margin  improvements in 2005 on
Sentry's  historical  costs  as  a  result of the outsourcing of all significant
manufacturing  operations.  However,  as  a percentage of sales, Sentry Canada's
cost  of sales were higher than Sentry's historical costs as a higher portion of
its  sales  are  made  through dealers and distributors that carry lower margins
than sales made direct to end users.  In addition, lower sales volume at our 51%
owned  labeling  subsidiary  resulted  in  underabsorbed overhead resulting in a
higher  than  normal  cost  of  sales  percentage.

The  decrease  in  customer service expenses in the second quarter and first six
months of 2005 as compared to the second quarter and first six months of 2004 is
primarily a result of a decrease in the number of customer service employees and
increased use of outside service contractors in order to better manage our total
net  customer  service costs during fluctuations in activity levels from quarter
to quarter.  As a result, our service department has remained profitable despite
the  loss  of  the  Lowe's  maintenance  agreement.

Selling, general and administrative expenses were 7% and 18% higher in the three
and  six  month periods ended June 30, 2005 when compared to the same periods of
the  previous year.  Sentry Canada's expenses represent $0.4 and $0.8 million of
the  total  expenses  in  the  second  quarter  and  first six months of 2005 as
compared to $0.3 million in the second quarter and first six months of 2004.  We
have  made  certain administrative expense reductions to help compensate for the
expected  reduction  in  Lowe's  business.  At  the same time, we have increased
funding  of  sales  and  marketing  programs,  which  we expect will continue to
increase  our  business with new and existing customers.  New programs include a
marketing campaign to promote SentryVision  to Homeland Security consultants and
the  appointment  of  a  new  distributor  for  the Brazilian market to sell EAS
products  to  the  library  market  and  SentryVision  systems to all customers.

The  increase  in  research  and development in the second quarter and first six
months  of 2005 when compared to the second quarter and first six months of 2004
includes  the  research  efforts  of Sentry Canada and increased prototype costs
associated  with the development of our new WAM EAS antenna.  The WAM system has
been  successfully  introduced  to  the  market.

Total  interest  and  financing  costs were approximately the same in the second
quarter of 2005 and 2004.  Interest in the second quarter of 2005 included three
months  interest  related  to the Brascan convertible debenture compared to only
two  months in the second quarter of 2004.  This was offset by lower interest on
bank  debt  as  a  result  of  lower average borrowings.  The reduction in total
interest and financing costs in the first six months of 2005 was a result of the
elimination  of  costly  financing  associated  with  purchase  order  financing
included  in  the  first  half  of  2004.

The  income  tax  expense  in all the periods presented principally results from
taxable  income  of  our  Sentry  Canada subsidiaries, which cannot be offset by
Sentry's  net  operating  loss  carryforwards.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


As  a  result of the foregoing, Sentry had losses of $30,000 and $790,000 in the
quarter  and  six  months  ended  June  30,  2005 as compared to a net income of
$12,000  and a net loss of $180,000 in the quarter and six months ended June 30,
2004.

Liquidity  and  Capital  Resources  as  of  June  30,  2005

At  June 30, 2005, we had cash of $0.8 million, working capital of $3.7 million,
total  assets  of $10.2 million and shareholders' equity of $3.5 million.  While
we had a loss of $0.8 million in the first six months of 2005, we generated cash
from  operating  activities  of  $45,000.  This was a result of lower amounts of
accounts  receivable partially as a result of better collections efforts as well
as  lower  sales.  We  have  also eliminated the use of expensive purchase order
financing  to  fund  inventory  purchases  and  we are continuing to reestablish
credit  with  new  and  existing  vendors.

We  utilized $1.1 million in financing activities through a pay down of balances
under  our previous credit facilities.  Availability under the credit facilities
is  principally  based  on  the  level  of  our receivables and inventory, which
declined  in  the  first  half of 2005.  Net reductions in our credit facilities
were  funded  through  the  use  of  existing  cash.

On  May 13, 2005, the Company and certain of its subsidiaries entered into a new
secured credit facility with Royal Bank of Canada ("RBC") for maximum borrowings
of up to Canadian $4.5 million (U.S. $3.6 million), which are subject to certain
limitations  based  on  a  percentage  of  eligible  accounts  receivable  and
inventories  as  defined in the agreement.  Interest is payable at a rate of RBC
prime  rate  (4.25%  at  June 30, 2005), plus 1.25% per annum.  Borrowings under
this  facility  are  secured by substantially all of the Company's assets.  This
new  facility  replaced  the  Company's former revolving credit agreement in the
United  States and its overdraft lending and term loan agreement in Canada.  The
consolidation of our credit facilities is another step in our efforts to improve
operating  efficiencies  and  to further reduce our costs of financing.  The new
facility  also  provides  for  limited financing of certain foreign receivables,
which  may  provide additional future availability over the previous facilities.
As  of  June 30, 2005, we had borrowings of approximately $1.5 million with RBC.

We  will  require  liquidity  and  working  capital  to  finance  increases  in
receivables  and inventory associated with sales growth and, to a lesser extent,
for  capital  expenditures.  We  had no material capital expenditure or purchase
commitments as of June 30, 2005.  We believe that our anticipated cash needs for
the  foreseeable  future  can  be funded from cash and cash equivalents on hand,
availability  under  our  credit  facilities  and  cash  generated  from  future
operations.

On  March  28,  2005,  our  Board of Directors and a majority of the outstanding
shareholders  approved  an  increase in the authorized number of Sentry's common
shares  from  140,000,000  to  160,000,000,  principally  in  order  to meet the
requirements  of  the  Brascan  Technology  Fund  investment.


Related  Party  Transactions
----------------------------
Details of related party transactions are included in Note 7 of this Form
10-QSB.



<PAGE>
SENTRY TECHNOLOGY CORPORATION
CONTROLS AND PROCEDURES


Item 3.  Controls and Procedures

As  of  the  end  of  the  period  covered  by  this  report,  Sentry Technology
Corporation  carried  out  an  evaluation,  under  the  supervision and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant  to Rule 13a-15 of the Securities and Exchange Act of 1934.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting  them  to  material  information related to the Company that is
required to be included in Sentry Technology Corporation's periodic SEC filings.

There  has  been  no  change  in  the  Company's internal control over financial
reporting during the period covered by this report that has materially affected,
or  is  reasonable  likely  to materially affect, the Company's internal control
over  financial  reporting.


PART II  - OTHER INFORMATION


Item 6 - Exhibits

(a)     Exhibits:

31.1 - Certification by the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

31.2 - Certification by the Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

32.1 - Certification by the Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

32.2 - Certification by the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

***     In  accordance  with Item 601(b)(32)(ii) of Regulation S-K, this exhibit
shall not be deemed "filed" for the purposes of Section 18 of the Securities and
Exchange  Act of 1934 or otherwise subject to the liability of that section, nor
shall  it be deemed incorporated by reference in any filing under the Securities
Act  of  1933  or  the  Securities  Exchange  Act  of  1934.





<PAGE>
SIGNATURES


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

                            SENTRY TECHNOLOGY CORPORATION
                            -----------------------------


Date:   August 12, 2005     By: /s/PETER J. MUNDY
        ---------------         -------------------------
                                Peter J. Mundy, Vice President- Finance
                                and Chief Financial Officer
                                (Principal Financial and Accounting Officer)

<PAGE>


SECTION 302 CERTIFICATION:


Exhibit 31.1

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification of CEO

I, Peter L. Murdoch, certify that

1.   I  have  reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees  who  have  a  significant role in the  registrant's internal controls
over  financial  reporting.


                              /s/ PETER L. MURDOCH
                              -------------------------------------------------

                              Peter L. Murdoch
                              President and Chief Executive Officer

                              August 12,  2005

<PAGE>


SECTION 302 CERTIFICATION:


Exhibit 31.2

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification of CFO

I, Peter J. Mundy, certify that

1.   I  have  reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees  who  have  a  significant role in the  registrant's internal controls
over  financial  reporting.


                              /s/ PETER J. MUNDY
                              ----------------------------------------------
                              Peter J. Mundy
                              Vice President and Chief Financial Officer

                              August 12, 2005



<PAGE>

SECTION 906 CERTIFICATION:


Exhibit 32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Certification of CEO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on  Form 10-QSB for the period ended June 30, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the Report"), I, Peter L.
Murdoch, Chief Executive Officer of the Company, certify, pursuant to Section 18
U.S.C.  1350,  as  adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
        15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
        respects,  the  financial  condition  and  results of operations of the
        Company.



                           /s/ PETER L. MURDOCH
                          -------------------------------------------------
                               Peter L. Murdoch
                               President and Chief Executive Officer

                              August 12, 2005



A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.






<PAGE>




SECTION 906 CERTIFICATION:


Exhibit 32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Certification of CFO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on  Form 10-QSB for the period ended June 30, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the Report"), I, Peter J.
Mundy,  Chief  Financial Officer of the Company, certify, pursuant to Section 18
U.S.C.  1350,  as  adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
        15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
        respects,  the  financial  condition  and  results of operations of the
        Company.



                              /s/ PETER J. MUNDY
                              -----------------------------------------
                              Peter J. Mundy
                              Vice President and Chief Financial Officer

                              August 12, 2005


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.