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, 2006

                                       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)


Check  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
            ---

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule 12b-2  of  the  Exchange  Act).

     Yes               No      X
                              ---


As  of  August  14,  2006,  there  were  120,743,804  shares  of  Common  Stock
outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one)

     Yes               No      X
                              ---





<PAGE>



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

                                      INDEX
                                      -----




                                                        Page No.
                                                        --------

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

Item 1.     Financial Statements (Unaudited)

     Consolidated Balance Sheets --
     June 30, 2006 and December 31, 2005                        3

     Consolidated Statements of Operations --
     Three Months Ended June 30, 2006 and 2005
     And Six Months Ended June 30, 2006 and 2005                4

     Consolidated Statements of Cash Flows --
     Six Months Ended June 30, 2006 and 2005                    5

     Notes to Consolidated Financial
     Statements - June 30, 2006                               6 - 11


Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations    11 - 14


Item 3.     Controls and Procedures                          14 - 15



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

Item 6.     Exhibits                                           15


Signatures                                                     15



<PAGE>




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

Item 1.     Financial Statements (Unaudited)

SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)

<TABLE>
<CAPTION>

                                                                   June 30,                December 31,
                                                                     2006                     2005
                                                                     ----                     ----
                                                                 (Unaudited)               (Audited)

<S>                                                               <C>                        <C>
ASSETS
------------------------------------
CURRENT ASSETS
   Cash and cash equivalents                                   $    672                      $    842
   Accounts receivable, less allowance for doubtful
     accounts of $86 and $141, respectively                       1,813                         2,762
   Inventories                                                    3,053                         2,709
   Prepaid expenses and other current assets                        543                           318
                                                               ---------                     ---------
                        Total current assets                      6,081                         6,631


PROPERTY, PLANT AND EQUIPMENT, net                                  646                           637
GOODWILL                                                          1,564                         1,564
OTHER ASSETS                                                        458                           563
                                                               ---------                     ---------

                                                               $  8,749                      $  9,395
                                                               =========                     =========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
   Revolving line of credit and term loan                      $  2,020                      $  2,039
   Accounts payable                                                 593                           489
   Accrued liabilities                                            1,320                           925
   Obligations under capital leases - current portion                 4                             6
   Deferred income                                                   98                            99
                                                               ---------                     ---------
                        Total current liabilities                 4,035                         3,558


OBLIGATIONS UNDER CAPITAL LEASES -
   non-current portion                                               --                             1
DEFFERED TAX LIABILITY                                               60                            58
CONVERTIBLE DEBENTURES                                            1,924                         1,904
MINORITY INTEREST                                                 1,228                         1,140
OTHER LIABILITIES                                                    55                            36
                                                               ---------                     ---------
                                                                  7,302                         6,697

SHAREHOLDERS' EQUITY
   Common stock, $0.001 par value; authorized 160,000
     shares, issued and outstanding 120,744 and
     120,629 shares                                                 121                           121
   Additional paid-in capital                                    48,811                        48,783
   Accumulated deficit                                          (47,736)                      (46,408)
   Other accumulated comprehensive income                           251                           202
                                                               ---------                     ---------
   Total shareholders' equity                                     1,447                         2,698
                                                               ---------                     ---------

                                                               $  8,749                      $  9,395
                                                               =========                     =========

</TABLE>


See notes to the consolidated financial statements.



<PAGE>



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

<TABLE>
<CAPTION>

<S>                                                   <C>             <C>                        <C>            <C>
                                                         Three Months Ended                        Six Months Ended
                                                              June 30,                                   June 30,
                                                      ------------------------                   ------------------------
                                                      2006               2005                    2006              2005
                                                            (Unaudited)                                (Unaudited)
REVENUES
  Sales                                               $ 2,526         $  3,462                   $ 4,811        $  5,375
  Service, installation and other                         406              805                       829           1,385
                                                      -------         --------                   -------        --------
                                                        2,932            4,267                     5,640           6,760

COSTS AND EXPENSES:
  Cost of sales                                         1,302            1,915                     2,558           2,895
  Customer service expenses                               558              747                     1,081           1,496
  Selling, general and administrative expenses          1,324            1,272                     2,677           2,493
  Research and development                                204              214                       404             447
                                                      -------         --------                   -------        --------

                                                        3,388            4,148                     6,720           7,331
                                                      -------         --------                   -------        --------

OPERATING INCOME (LOSS)                                  (456)             119                    (1,080)           (571)
INTEREST AND FINANCING EXPENSES                            86               78                       168             169
                                                      -------         --------                   --------       --------

INCOME (LOSS) BEFORE INCOME TAXES
     AND MINORITY INTEREST                               (542)              41                    (1,248)           (740)
INCOME TAX EXPENSE                                         30               37                        40              20
                                                      -------         --------                   --------       --------
INCOME (LOSS) BEFORE MINORITY INTEREST                   (572)               4                    (1,288)           (760)
MINORITY INTEREST                                         (26)             (34)                      (40)            (30)
                                                      --------        --------                   --------       --------
NET LOSS                                              $  (598)        $    (30)                  $(1,328)       $   (790)
                                                      ========        ========                   ========       ========

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

WEIGHTED AVERAGE SHARES
   Basic and diluted                                  120,729          120,566                   120,689         120,559
                                                      =======          =======                   =======         =======


See notes to the consolidated financial statements.


</TABLE>


<PAGE>

SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


<TABLE>
<CAPTION>

<S>                                                               <C>                    <C>
                                                                       Six Months Ended
                                                                           June 30,
                                                                  ---------------------------
                                                                   2006                 2005
                                                                  ------               ------
                                                                           (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                       $(1,328)           $  (790)
   Adjustments to reconcile net loss
     to net cash (used in) provided by operating activities:
     Depreciation and amortization                                    139                163
     Provision for bad debts                                            4                (20)
     Deferred income taxes                                              2                (44)
     Non cash consideration                                            89                 17
     Minority interest in net loss of consolidated subsidiary          88                 (5)
   Changes in operating assets and liabilities:
     Accounts receivable                                              945                566
     Inventories                                                     (344)               158
     Prepaid expenses and other assets                               (225)                64
     Accounts payable and accrued liabilities                         497                204
     Deferred income                                                   (1)              (103)
     Other liabilities                                                 19                ---
                                                                 --------            -------

        Net cash (used in) provided by operating activities          (115)               210
                                                                 --------            -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                 (87)               (26)
   Intangibles                                                        (19)               (16)
                                                                 --------            -------

        Net cash used in investing activities                        (106)               (42)
                                                                 --------            --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net payments under the revolving line of credit                    (19)            (1,148)
   Repayment of term loan                                             ---                ---
   Repayment of notes payable                                         ---               (165)
   Repayment of obligations under capital leases                       (1)                (3)
   Proceeds from exercise of stock options                             22                  4
                                                                 --------            --------

        Net cash provided by (used in) financing activities             2             (1,312)
                                                                 --------            --------

EFFECTS OF EXCHANGE RATES ON CASH                                      49                (50)
                                                                 --------            --------

DECREASE IN CASH AND CASH EQUIVALENTS                                (170)            (1,194)

CASH AND CASH EQUIVALENTS, at beginning of period                     842              1,965
                                                                 --------            --------
CASH AND CASH EQUIVALENTS, at end of period                      $    672            $   771
                                                                 ========            ========


See notes to the consolidated financial statements.

</TABLE>


<PAGE>



SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2006


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  and  their  basis of application is consistent with that of the previous
year.  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, 2005, 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 July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in  Income  Taxes" (FIN 48), effective for fiscal years beginning after December
15, 2006.  FIN 48 requires a two-step approach to determine how to recognize tax
benefits  in the financial statements where recognition and measurement of a tax
benefit  must be evaluated separately.  A tax benefit will be recognized only if
it meets a "more-likely-than-not" recognition threshold.  For tax positions that
meet  this  threshold, the tax benefit recognized is based on the largest amount
of  tax  benefit  that  is greater than 50 percent likely of being realized upon
ultimate  settlement  with  the  taxing  authority.  The  Company  is  currently
evaluating  the  impact  of  adopting  FIN  48,  and  has not yet determined the
significance  of  this new rule to our overall results of operations, cash flows
or  financial  position.

In  March  2006,  the  FASB  issued  Statement 156, "Accounting for Servicing of
Financial  Assets,"  which  amends  SFAS  140,  "Accounting  for  Transfers  and
Servicing  of  Financial  Assets  and  Extinguishments  of  Liabilities."  In  a
significant change to current guidance, SFAS No. 156 permits an entity to choose
either  of  the  following  subsequent  measurement  methods  for  each class of
separately  recognized  servicing  assets  and  servicing  liabilities:  (1)
Amortization  Method  or  (2)  Fair  Value  Measurement Method.  SFAS No. 156 is
effective as of the beginning of an entity's first fiscal year that begins after
September  15, 2006.  The Company is currently reviewing the effect, if any, the
proposed  guidance  will  have  on  its  financial  statements.

In  February  2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial  Instruments-an  amendment  of FASB Statements No. 133 and 140."  This
Statement  permits  fair  value  of  remeasurement  for  any  hybrid  financial
instrument  that  contains  an  embedded derivative that otherwise would require
bifurcation;  clarifies which interest-only strips and principal-only strips are
not  subject  to  the  requirements  of SFAS No. 133, "Accounting for Derivative
Instruments  and  Hedging  Activities";  establishes  a  requirement to evaluate
interests  in  securitized  financial  assets  to  identify  interests  that are
freestanding  derivatives  or that are hybrid financial instruments that contain
an

<PAGE>


SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June  30,  2006


embedded  derivative  requiring  bifurcation;  clarifies  that concentrations of
credit  risk  in  the  form  of  subordination are not embedded derivatives; and
amended  SFAS  No.  140,  "Accounting  for  Transfers and Servicing of Financial
Assets  and  Extinguishments  of Liabilities", to eliminate the prohibition on a
qualifying special-purpose entity from holding a derivative financial instrument
that  pertains  to a beneficial interest other than another derivative financial
instrument.  SFAS  No.  155 is effective for all financial instruments acquired,
issued,  or  subject  to  a  remeasurement (new basis) event occurring after the
beginning of an entity's first fiscal year that begins after September 15, 2006.
The  Company  is  currently  reviewing the effect, if any, the proposed guidance
will  have  on  its  financial  statements.

In  December  2004,  the  Financial  Accounting  Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards ("SFAS") No. 123 (revised 2004),
"Share  Based  Payment" ("SFAS No. 123R"). SFAS No. 123R requires the Company to
measure  the  cost  of  employee  services  received in exchange for an award of
equity  instruments based on the grant date fair value of the award. The cost of
the employee services is recognized as compensation cost over the period that an
employee  provides service in exchange for the award. SFAS No. 123R is effective
January  1,  2006  for  the Company and was adopted using a modified prospective
method  during  the quarter ended March 31, 2006.  Note 8 provides disclosure on
the  effect  of  the  adoption  of  SFAS No. 123R on net income and earnings per
share.


NOTE 3 -- Inventories
---------------------
Inventories consist of the following:
                                          June 30, 2006       December 31, 2005
                                          -------------       -----------------
                                                   (in thousands)
Raw materials                             $     1,043           $     1,101
Work-in-process                                   225                   279
Finished goods                                  1,785                 1,329
                                          -----------           -----------
                                          $     3,053           $     2,709
                                          ===========           ===========

Reserves  for excess and obsolete inventory totaled $1,098,000 and $1,261,000 as
of June 30, 2006 and December 31, 2005, respectively and have been included as a
component  of  the  above  amounts.


NOTE 4 -- Credit Facilities
---------------------------
In  May  2006,  the  Company and certain of its subsidiaries amended its secured
credit  facility  with Royal Bank of Canada ("RBC") by extending the term of the
agreement  through  May  2007  and  modifying  certain  financial covenants.  In
addition,  the  maximum  borrowings  under the facility were reduced to Canadian
$3.6  million  (U.S.  $3.2  million).  However, RBC increased the borrowing base
formula  Company  by  Canadian  $1.0  million  (U.S.  $896,000)  in exchange for
additional  security  provided  by  two  of the Company's directors.  Borrowings
under  the  facility 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 (6.0% at June
30,  2006), plus 1.75% per annum.  Borrowings under this facility are secured by
substantially all of the Company's assets.  As of June 30, 2006, the Company had
borrowings of $2.0 million under this facility and had excess borrowing capacity
of  approximately  $0.5  million.


<PAGE>


SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2006


NOTE 5 - Comprehensive Income (Loss)
------------------------------------
Comprehensive  income  (loss)  is  as  follows:


                                     Three Months Ended       Six Months Ended
                                         June 30,                  June 30,
                                      2006       2005          2006       2005
                                      ----       ----          ----       ----
                                                   (in thousands)
Net loss:                           $ (598)     $ (30)      $ (1,328)   $ (790)
Other comprehensive income (loss):
Foreign currency translation
       adjustments                      51        (36)            49       (50)
                                    -------     ------      ---------   -------
Comprehensive loss                  $ (547)     $ (66)      $ (1,279)   $ (840)
                                    =======     ======      =========   =======


NOTE 6 -- Related Party Transactions
------------------------------------
At the end of the second quarter of 2006, Mr. Murdoch, Sentry's CEO and Director
and  Mr.  Furst,  a  Sentry  Director,  provided personal guarantees to RBC, the
Company's  lender,  in  the  amount  of  Canadian  $1 million (U.S. $896,000) in
exchange for the bank providing increased availability under its credit facility
to  the  Company  by the same amount.  In consideration of these guarantees, Mr.
Murdoch  and Mr. Furst will receive a fee of $43,000, to be shared between them,
paid  in  12  equal  monthly  installments.  As  additional  consideration, they
received  fully  vested, two year warrants to purchase approximately 2.9 million
shares  of  the Company's common stock, at an exercise price of $0.10 per share.
The  fair  value of these warrants of $120,000 was determined in accordance with
SFAS  No. 123R "Share-Based Payment" and beginning in June 2006 is being written
off  over  the  period  of  the  guarantee,  which  is  one  year.


NOTE 7 -- Earnings Per Share
----------------------------
The  earnings  per  share  calculations (basic and diluted) at June 30, 2006 and
2005  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 2,555,000 and 1,229,512 shares of common stock
with  a  weighted  average exercise price of $0.21 and $0.61 were outstanding at
June  30,  2006 and 2005, respectively, but were not included in the computation
of  diluted  net  loss  per  share  because  their effect would be antidilutive.


NOTE 8 -- Stock Based Compensation
----------------------------------
The  Company's  1997  Plan,  which is shareholder approved, permits the grant of
share  options  and shares to its employees for up to 6,369,365 shares of common
stock  as stock compensation and 3,102,738 shares were available for grant as of
June  30,  2006.  All  stock options under the 1997 Plan are granted at the fair
market  value of the common stock at the grant date. Employee stock options vest
ratably  usually  over a three or five-year period and generally expire 10 years
from  the  grant  date.  Stock options granted to non-employee directors usually
vest  immediately.

Accounting  for  Employee  Awards:
----------------------------------
Effective  January  1,  2006,  the Company's Plan is accounted for in accordance
with the recognition and measurement provisions of SFAS No. 123R, which replaces
SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting
Principles  Board  Opinion  ("APB")  No.  25,  Accounting  for  Stock  Issued to
Employees,  and  related  interpretations. SFAS 123R requires compensation costs
related  to  share-based payment transactions, including employee stock options,
to  be  recognized  in  the  financial

<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June  30,  2006


statements.  In  addition,  the Company adheres to the guidance set forth within
Securities and Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No.
107, which provides the Staff's views regarding the interaction between SFAS No.
123R  and  certain  SEC  rules and regulations and provides interpretations with
respect  to  the  valuation  of  share-based  payments  for  public  companies.

Prior  to  January  1,  2006,  the Company accounted for similar transactions in
accordance  with  APB  No.  25  which  employed  the  intrinsic  value method of
measuring  compensation  cost.  Accordingly,  compensation  expense  was  not
recognized  for  fixed stock options if the exercise price of the option equaled
or  exceeded  the  fair  value  of  the  underlying  stock  at  the  grant date.

While  SFAS No. 123R encouraged recognition of the fair value of all stock-based
awards  on  the date of grant as expense over the vesting period, companies were
permitted  to  continue  to apply the intrinsic value-based method of accounting
prescribed  by  APB No. 25 and disclose certain pro-forma amounts as if the fair
value  approach  of  SFAS No. 123R had been applied.  In December 2002, SFAS No.
148,  Accounting  for  Stock-Based  Compensation-Transition  and  Disclosure, an
amendment  of  SFAS  No.  123,  was  issued,  which,  in  addition  to providing
alternative  methods  of  transition  for  a  voluntary change to the fair value
method  of  accounting  for  stock-based  employee  compensation,  required more
prominent  pro-forma  disclosures  in  both  the  annual  and  interim financial
statements.  The  Company  complied  with  these disclosure requirements for all
applicable  periods  prior  to  January  1,  2006.

In  adopting SFAS 123R, the Company applied the modified prospective approach to
transition. Under the modified prospective approach, the provisions of SFAS 123R
are  to  be  applied  to  new  awards  and  to  awards modified, repurchased, or
cancelled after the required effective date. Additionally, compensation cost for
the portion of awards for which the requisite service has not been rendered that
are  outstanding  as  of  the required effective date shall be recognized as the
requisite  service  is  rendered  on  or  after the required effective date. The
compensation  cost  for  that portion of awards shall be based on the grant-date
fair  value  of  those  awards as calculated for either recognition or pro-forma
disclosures  under  SFAS  123R.

As  a  result  of the adoption of SFAS 123R, the Company's results for the three
and  six  months  ended  June  30, 2006 include share-based compensation expense
totaling  approximately  $11,000  and  $17,000, respectively.  Such amounts have
been  included  in  the  Consolidated  Statements  of Operations within selling,
general  and administrative expenses.  No income tax benefit has been recognized
in the income statement for share-based compensation arrangements as the Company
has provided for 100% valuation allowance on net deferred tax assets.   No stock
option  compensation  expense was recorded under APB No. 25 in the Statements of
Operations  in  the  six  months  ended  June  30,  2005.

Employee  stock  option compensation expense in 2006 is the estimated fair value
of options granted amortized on a straight-line basis over the requisite service
period for entire portion of the award. The Company has not adjusted the expense
by  estimated  forfeitures, as required by SFAS 123R for employee options, since
the  forfeiture rate based upon historical data was determined to be immaterial.

Accounting  for  Non-employee  Awards:
--------------------------------------
The  Company  previously  accounted  for  options  granted  to  its non-employee
consultants  and  non-employee  registered  representatives using the fair value
cost  in  accordance  with  SFAS  123  and  EITF  No.

<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June  30,  2006


96-18.  The  adoption  of  SFAS  123R  and SAB 107 as of January 1, 2006, had no
material  impact  on  the  accounting  for  non-employee  awards.  The  Company
continues to consider the additional guidance set forth in EITF Issue No. 96-18,
"Accounting  for  Equity  Instruments  That  Are Issued to Other Than Employees"
("EITF  96-18").  There  was  $4,000  of  stock  compensation expense related to
non-employee options in both the three and six month period ended June 30, 2006.
No  stock  compensation  expense was recorded in the three and six month periods
ended  June  30,  2005.

The  weighted  average estimated fair value of stock options was $0.05 and $0.07
for  options  granted  during  the  three  and  six  months ended June 30, 2006,
respectively,  and  $0.08 and $0.08 for options granted during the three and six
months ended June 30, 2005, respectively.  The fair value of options at the date
of  grant  was  estimated  using the Black-Scholes option pricing model.  During
2006,  the  Company took into consideration guidance under SFAS 123R and SAB 107
when  reviewing  and  updating  assumptions.

The  expected  volatility  is  based upon historical volatility of our stock and
other  contributing  factors.  The  expected  term  is based upon observation of
actual  time  elapsed  between  date  of  grant  and exercise of options for all
employees.  Previously  such  assumptions  were  determined  based on historical
data.

The assumptions used for the specified reporting periods and resulting estimates
of weighted average fair value per share of options granted during those periods
were  as  follows:

                                 Three Months Ended        Six Months Ended
                                       June 30,                June 30,
                                  2006        2005         2006         2005
                                  ----        ----         ----         ----
Risk-free interest rate           4.75%        --          4.46%        4.0%
Expected dividend yield              0%        --             0%          0%
Expected lives                  2 years        --        2 - 3 years    2 years
Expected volatility                 87%        --           100%         94%

No  options  were  granted  in  the  second  quarter  ended  June  30,  2005.

The  following  table  illustrates the pro forma effect on net loss and loss per
share  as  if  the  fair  value recognition provisions of SFAS No. 123R had been
applied  to  all  outstanding  and  unvested awards in the prior year comparable
period:



                                    Three Months Ended      Six Months Ended
                                       June 30, 2005           June 30, 2005
                                       -------------           -------------

Net loss, as reported                     $  (30)                $  (790)

Add: Stock based compensation
expense included in reported net loss        ---                     ---


Deduct: Employee stock option
compensation expense determined under
fair value based method for all employee
awards (no tax effect)                        (6)                    (11)
                                          -------                --------
Pro forma net loss                        $  (36)                $  (801)
                                          =======                ========
Net loss per common share:
  As reported-basic and diluted           $(0.00)                $ (0.01)
                                          =======                ========
Pro forma-basic and diluted               $(0.00)                $ (0.01)
                                          ========               ========

<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2006


The following table represents the Company's stock options granted, exercised
and forfeited during the six months ended June 30, 2006:

                                                          Weighted
                                Number of     Weighted      Average    Aggregate
                                 Shares       Average      Remaining   Intrinsic
                                Subject to    Exercise    Contractual    Value
                                 Issuance      Price         Term        ($000)
                                 --------      -----      ----------     ------
Outstanding at Dec. 31, 2005     2,431,524      0.35
Granted                            650,000      0.10
Cancelled                         (411,524)     0.87
Exercised                         (115,000)     0.06                        6
                                  ---------     ----
Outstanding at June 30, 2006     2,555,000      0.21       7.84 years       0
                                 =========      ====       ==========     ====

Exercisable at June 30, 2006       930,000      0.42       5.36 years       0
                                 =========      ====       ==========     ====


The  aggregate  intrinsic  value  of  options  has  been shown as $0 because the
weighted  average exercise price of the price of the outstanding and exercisable
option  shares  exceeded  the  quarter  end market price of the Company's common
stock.

As of June 30, 2006, there was $113,000 of total unrecognized compensation cost,
net  of  estimated  forfeitures, related to all unvested stock options, which is
expected  to  be  recognized over a weighted average period of approximately 3.6
years.


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:
------------------------

Consolidated  revenues  were  31%  lower  in  the quarter ended June 30, 2006 as
compared  to  the  quarter  ended June 30, 2005.  For the six month period ended
June  30,  2006  consolidated revenues were 17% lower than in the same period of
last  year.  Our  backlog  of orders, which we expect to deliver within the next
twelve  months, was $2.0 million at June 30, 2006 as compared to $2.2 million at
December  31,  2005.

<PAGE>


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


Total  revenues  for  the  periods  presented  are  broken  out  as  follows:

                     Q-2       Q-2          %       6 Mos.      6 Mos.      %
                     2006      2005     Change       2006       2005      Change
                     ----      ----     ------       ----       ----      ------
                      (in thousands)                  (in thousands)

EAS                $ 1,865    $ 2,142    (13)       $ 3,376    $ 3,192       6
CCTV                   168        455    (63)           375        768     (51)
SentryVision           493        865    (43)         1,060      1,415     (25)
                     -----    -------    ----       -------    -------     ----
Total sales          2,526      3,462    (27)         4,811      5,375     (10)
Service,
   installation
   and other           406        805    (50)           829      1,385     (40)
                     -----    -------    ----       -------    -------     ----
Total revenues     $ 2,932    $ 4,267    (31)       $ 5,640    $ 6,760     (17)
                   =======    =======    ====       =======    =======     ====


Sales  in  the  second  quarter  of 2006 continued to be soft across all product
lines.  Approximately  $.7  million of the overall decrease in comparative total
revenues  of  $1.1  million  in  the  first six months of 2006 was attributed to
Lowe's  Home  Centers.

We  had growth in EAS sales in the North American library sector principally due
to  higher sales of our QuickCheck patron self check book-borrowing systems.  In
addition, we increased EAS sales to dealers in South and Central America in both
the second quarter and first six months of 2006.  However, these gains were more
than  offset  by  decreases in EAS sales to retail customers particularly in the
second  quarter  of  2006. The reduction in CCTV sales in the second quarter and
first six months of 2006 as compared to the same periods in 2005 was principally
a  result  of  lower  sales  to  Lowe's  and  Goody's.  Domestic  sales  of  our
SentryVision  SmartTrack  system  were lower in the second quarter and first six
months of 2006 when compared to the same periods of 2005 principally as a result
of  an  unexpected  delay  in  several  installations  with  a  major  retailer.
International  dealer  sales of SentryVision  were lower in both periods of 2006
primarily  due  to  lower  sales  in  the  UK market.  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.  Service and
maintenance revenues were substantially lower as a result of cancellation of the
Lowe's  maintenance  contract.  Installation  revenues were lower in the 2006 as
compared  to  2005  due  to  lower  CCTV  and  SentryVision  sales.

Cost of sales were 52% and 53% of total sales in the three and six month periods
ended  June  30, 2006 compared to 55% and 54% in the three and six month periods
ended  June 30, 2005.  We continue to see strong domestic margins in 2006 on EAS
and  SmartTrack  product  lines as a result of our outsourcing of manufacturing.
Cost  of  sales  at  our  51%  owned labeling subsidiary improved as a result of
higher production volume, which resulted in lower overhead in both the three and
the  six  month  periods  of  2006.

The  decrease  in  customer service expenses in the second quarter and first six
months of 2006 as compared to the second quarter and first six months of 2005 is
primarily a result of a decrease in the number of customer service employees and
lower  outside  service  contractor  costs.

Selling,  general and administrative expenses were 4% and 7% higher in the three
and  six  month periods ended June 30, 2006 when compared to the same periods in
the previous year.  The increases in expenses are principally a result of higher
sales  and  marketing  expenses,  higher  product  warranty  costs  and  $35,000

<PAGE>


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


resulting  from  the  settlement  of  audit  fees with our predecessor auditors.
Also,  in  the first half of 2006, we hired additional sales personnel and a new
VP  of  Sales  and  Marketing, with prior experience with our industry's largest
competitor.  We  have  increased  funding of sales and marketing programs, which
have  allowed  the  sales  team  to  develop opportunities with new and existing
customers,  which  we  anticipate  will result in increased revenue later in the
year.

The  reduction  in  research and development in the second quarter and first six
moths  of 2006 when compared to the same periods in 2005 is principally a result
of  a  reduction  in the number of engineering support staff offset partially by
the  increased  use  of  engineering  consulting  firms.

While  there  was  lower  average  bank  debt during the first half of 2006 when
compared  to  2005, interest and financing costs increased in the second quarter
of  2006  compared  to  2005  as  a  result  of  an  increase in interest rates.

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.

As  a  result of the foregoing, Sentry had net losses of $598,000 and $1,328,000
in  the  quarter and six months ended June 30, 2006 as compared to net losses of
$30,000  and  $790,000  in  the  quarter  and  six  months  ended June 30, 2005.

Liquidity  and  Capital  Resources  as  of  June  30,  2006

At  June 30, 2006, we had cash of $0.7 million, working capital of $2.0 million,
total assets of $8.7 million and shareholders' equity of $1.3 million.  While we
had a loss of $1.4 million in the first six months of 2006, our net cash used in
operating  activities  was only $115,000.  Cash was generated from reductions in
accounts receivable principally due to improved collection efforts as well as an
increase  in  accounts  payable  and  accrued  liabilities.  This  was offset by
increases in inventory levels purchased in anticipation of higher sales activity
levels.

Our  investing  activities used net cash of $106,000 during the first six months
of 2006 principally for the purchase of manufacturing equipment at our 51% owned
labeling  plant.  There  are  no  significant  projected  capital  expenditure
requirements  anticipated  through the remainder of the year, however, the level
of  spending  will  be  dependent  upon various factors, including growth of the
business  and  general  economic  conditions.

We  generated  $2,000 in net cash from financing in the first six months of 2006
activities  through  an increase during the second quarter of 2006 in borrowings
under our credit facility and the exercise of stock options.  Availability under
the  credit  facilities is principally based on the level of our receivables and
inventory,  which  declined  in  the  first  six  months  of  2006.

In  May  2006,  the  Company and certain of its subsidiaries amended its secured
credit  facility  with Royal Bank of Canada ("RBC") by extending the term of the
agreement  through  May  2007  and  modifying  certain  financial covenants.  In
addition,  the  maximum  borrowings  under the facility were reduced to Canadian
$3.6  million  (U.S.  $3.2  million).  However, RBC increased the borrowing base
formula  Company  by  Canadian  $1.0  million  (U.S.  $896,000)  in exchange for
additional  security  provided  by  two

<PAGE>


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


of  the  Company's  directors.  Borrowings  under  the  facility  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  (6.0%  at  June  30, 2006), plus 1.75% per annum.
Borrowings under this facility are secured by substantially all of the Company's
assets.  As  of  June 30, 2006, the Company had borrowings of $2.0 million under
this  facility  and  had excess borrowing capacity of approximately $0.5 million
principally  as  a  result  of  the  guarantees  indicated  above.

We  will require positive cash flows from operations to meet our working capital
needs  over  the next twelve months.  Sentry's revenues declined and we incurred
an  operating loss in 2005.  This trend continued through the first half of 2006
and  substantially reduced the Company's available cash reserves and limited our
ability  to  secure additional bank financing.  A majority of the Company's cash
is  held  at the 51% owned subsidiary.  The Company has instituted certain plans
to  increase  its  revenue  base  as  well  as preserve its cash, including cost
cutting  measures  and  inventory  reduction initiatives.  We made a substantial
investment in the sales and marketing infrastructure during the first six months
of  2006  and  anticipated  a  substantial increase in sales particularly in the
SentryVision  SmartTrack  product  line  which  has  not yet occurred.  While we
continue  to  believe  that we have developed solid sales leads with some of the
world's  largest  retailers, the delays in receipt of current orders have caused
us  to  operate  in  a  cash  flow deficit for the first six months of the year.

We  anticipate  revenue  growth in new and existing markets.  We are striving to
continue  to  improve our gross margins and control our selling expenses and our
general  and  administrative expenses.  There can be no assurance, however, that
changes in our plans or other events affecting our operations will not result in
accelerated  or  unexpected  cash requirements, or that we will be successful in
achieving  positive  cash  flow  from operations or obtaining adequate financing
through  our  credit  facility.  Our  future  cash  requirements are expected to
depend  on  numerous  factors, including, but not limited to: (i) the ability to
generate  positive  cash  flow  from  operations;  (ii)  the  ability  to  raise
additional  capital  or  obtain  additional  financing;  and  (iii)  economic
conditions.  In  the event that sufficient positive cash flow from operations is
not  generated,  we  will seek additional financing to satisfy current operating
cash  flow  deficiencies.  There  can  be no assurance, however, that additional
financing  will  be  available on terms that are satisfactory to the Company, or
that any such financing will be sufficient to provide the full amount of funding
necessary.


Related  Party  Transactions
----------------------------
Details of related party transactions are included in Note 6 of this Form
10-QSB.


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 14, 2006       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 RULE 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
   1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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-14 and 15d-14) for the Registrant and we have:
     A. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure the 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. Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principals;
     C. 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
     D.  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 materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.

5.   The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, 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 control over
financial reporting.


     DATED:     August 14, 2006


     BY:       /S/ PETER L. MURDOCH
               -------------------------------------
     NAME:     Peter L. Murdoch
     TITLE:    President and Chief Executive Officer


<PAGE>

SECTION 302 CERTIFICATION:
                                                                 EXHIBIT 31.2


CERTIFICATION PURSUANT TO RULE 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
   1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 202

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-14 and 15d-14) for the Registrant and we have:
     A. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure the 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. Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principals;
     C. 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
     D.  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 materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.

5.   The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, 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 control over
financial reporting.


     Dated:     August 14, 2006

     By:       /s/ Peter J. Mundy
               ------------------------------------------
     Name:     Peter J. Mundy
     Title:    Vice President and Chief Financial Officer


<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, 2006 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 14, 2006


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, 2006 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 14, 2006

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.