UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
   Washington,
D.C. 20549
   FORM 10-Q
  XQUARTERLY REPORT UNDER TO
SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
  FOR
THE QUARTERLY PERIOD ENDED AUGUST 31,
2009
  Commission file number
333-145730
   PRINCIPLE
SECURITY INTERNATIONAL, INC.
 (Exact name of
registrant as specified in its charter)
   NEVADA
 (State or other
jurisdiction of incorporation or organization)
   Unit
B – 2015 Burrard Street
 Vancouver,
British Columbia
 Canada
V6J 3H4
 (Address of
principal executive offices, including zip code.)
   (778)
233-3562
 (telephone number,
including area code)
   Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 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 last 90 days.YES
[ X ] NO [   ]
   Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated
filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer
              [  
    ]
              Accelerated
      filer
              [ 
       ]Non-accelerated
      filer
              [  
      ]
              Smaller reporting
      company
              [X]
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).YES [
X ]   NO [   ]
  At August
31, 2009, there were 8,518,000 shares of our common stock issued and
outstanding.






1







TABLE
OF CONTENTS








PART
      I - FINANCIAL INFORMATION
              
              3Item
      1. Consolidated Financial Statements
              
              3Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
              
              20Item
      3. Quantitative and Qualitative Disclosures of Market Risk
              
              22Item
      4. Controls and Procedures
              
              22PART
      II - OTHER INFORMATION
              
              23Item
      1. Legal Proceedings
              
              23Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              23Item
      3. Defaults Upon Senior Securities
              
              23Item
      4. Submission of Matters to a Vote of Security Holders
              
              23Item
      5. Other Information and Subsequent Events
              
              23.Item
      6. Exhibits
              
              23SIGNATURES
              
              23


2




PART
I – FINANCIAL INFORMATION






ITEM
1. CONSOLIDATED FINANCIAL STATEMENTS




The
accompanying unaudited interim consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange Commission
("SEC") and should be read in conjunction with the audited financial statements
and notes thereto contained in our Annual Report filed with the SEC on Form 10-K
on August 27, 2009. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full
year.
  Forward-Looking
StatementsThe statements contained in this Form 10-Q that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These include statements about our
expectations, beliefs, intentions or strategies for the future, which are
indicated by words or phrases such as anticipate, expect, intend, plan, will,
the Company believes, management believes and similar words or phrases. The
forward-looking statements are based on our current expectations and are subject
to certain risks, uncertainties and assumptions. Our actual results could differ
materially from results anticipated in these forward-looking statements. All
forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements.
          3









Principle
Security International, Inc.
 (A
Development Stage Company)
 
 Consolidated
Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




























4





Principle
Security International, Inc.


(A
Development Stage Company)


Consolidated
Balance Sheets


(Expressed
in U.S. Dollars)


(Unaudited)





As
      at
              31
      August
              2009
            
            As
      at
              31
      May
              2009
              (Audited)$
            
            $AssetsCurrentCash
      and cash equivalents (Note 2)
            
            9,361
            
            1,496Goods
      and Services Tax recoverable
            
            621
            
            2349,982
            
            1,730Equipment (Note
      3)
            
            958
            
            1,05710,940
            
            2,787LiabilitiesCurrentAccounts
      payable and accrued liabilities (Note 4)
            
            7,228
            
            13,508Convertible
      debentures (Note 5)
            
            14,683
            
            14,323Demand
      loan (Note 6)
            
            20,081
            
            -Due
      to related party (Note 7)
            
            5,021
            
            -47,013
            
            27,831Stockholders’
      deficiencyCapital stock (Note
      8)Authorized100,000,000
      of common shares, par value $0.00001100,000,000
      of preferred shares, par value $0.00001Issued
      and outstanding31
      May 2009 – 8,518,000 common shares, par value $0.0000131
      August 2009 – 8,518,000 common shares, par value $0.00001
            
            85
            
            85Additional
      paid in capital
            
            124,544
            
            124,544Deficit,
      accumulated during the development stage
            
            (160,702)
            
            (149,673)(36,073)
            
            (25,044)10,940
            
            2,787





Nature and Continuance of Operations(Note 1), Contingency (Note 11) and
Subsequent Event(Note
12)





On
behalf of the Board:


Director







The
accompanying notes are an integral part of the consolidated financial
statements.
 5





Principle
Security International, Inc.


(A
Development Stage Company)


Consolidated
Statements of Operations


(Expressed
in U.S. Dollars)
 (Unaudited)





For
      the period from the date
              of
      inception on 27 November 2006 to
              31
      August
              2009
            
            For
      the three month period ended 31 August 2009
            
            For
      the three month period ended 31 August 2008$
            
            $
            
            $ExpensesAmortization
      (Note 3)
            
            1,128
            
            99
            
            97Bank
      charges
            
            987
            
            75
            
            76Consulting
      fees (Note 7)
            
            48,779
            
            1,349
            
            2,431Interest
      (Notes 5, 6, 7 and 10)
            
            985
            
            462
            
            -Legal
      fees
            
            23,520
            
            468
            
            517Licenses
            
            2,591
            
            -
            
            2,190Marketing
      and advertising
            
            156
            
            -
            
            -Office
      expenses
            
            1,351
            
            -
            
            -Office
      rent
            
            7,824
            
            450
            
            1,459Professional
      fees
            
            48,147
            
            3,445
            
            9,069Security
      supplies, uniforms, general
            
            2,724
            
            -
            
            -Telephone
      and internet fees
            
            2,732
            
            472
            
            -Transfer
      agent and filing fees
            
            11,416
            
            2,293
            
            315Vehicles
      expenses
            
            5,108
            
            -
            
            -Loss
      on foreign exchange
            
            3,254
            
            1,916
            
            193Net
      loss and comprehensive loss for the period
            
            (160,702)
            
            (11,029)
            
            (16,347)Basic
      and diluted loss and comprehensive loss per common
      share
            
            (0.001)
            
            (0.002)Weighted
      average number of common shares
              used
      in per share calculations
            
            8,518,000
            
            8,518,000
















The
accompanying notes are an integral part of the consolidated financial
statements.
 6





Principle
Security International, Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows


(Expressed
in U.S. Dollars)
 (Unaudited)





For
      the period from the date of inception on 27 November 2006 to
              31
      August
              2009
            
            For
      the three
              month
      period ended 31 August
              2009
            
            For
      the three
              month
      period ended 31 August
              2008$
            
            $
            
            $Cash
      flows used in operating activitiesNet
      loss for the period
            
            (160,702)
            
            (11,029)
            
            (16,347)Adjustments
      to reconcile loss to net cash used by operating activitiesAmortization
      (Note 3)
            
            1,128
            
            99
            
            97Interest
      (Notes 5, 6 and 7)
            
            985
            
            462
            
            -Contribution
      to capital by related party
            
            10,909
            
            -
            
            -Changes
      in operating assets and liabilitiesIncrease
      in Goods and Services Tax recoverable
            
            (621)
            
            (387)
            
            (118)Increase
      (decrease) in accounts payable and accrued liabilities
            7,228
            
            (6,280)
            
            9,437Increase
      in due to related party
            20
            
            -
            
            -(141,053)
            
            (17,135)
            
            (6,931)Cash
      flows used in investing activitiesPurchase
      of property, plant and equipment
            
            (2,086)
            
            -
            
            -Cash
      flows from financing activitiesCommon
      shares issued for cash (Note 8)
            
            78,700
            
            -
            
            -Convertible
      debentures (Note 5)
            
            13,800
            
            -
            
            -Demand
      loan (Note 6)
            
            20,000
            
            20,000
            
            -Loans
      from related party (Note 7)
            
            40,000
            
            5,000
            
            1,412152,500
            
            25,000
            
            1,412Increase
      (decrease) in cash and cash equivalents
            
            9,361
            
            7,865
            
            (5,519)Cash
      and cash equivalents, beginning of period
            
            -
            
            1,496
            
            21,067Cash
      and cash equivalents, end of period
            
            9,361
            
            9,361
            
            15,548





Supplemental Disclosures with Respect
to Cash Flows(Note 10)











The
accompanying notes are an integral part of the consolidated financial
statements.
 7





Principle
Security International, Inc.


(A
Development Stage Company)


Consolidated
Statements of Changes in Stockholders’ Deficiency


(Expressed
in U.S. Dollars)
 (Unaudited)





Number
      of shares issued
            Share
      capital
            Additional
      paid in capital
            Deficit,
      accumulated during the development stage
            Stockholders’
      deficiency$
            
            $
            
            $
            
            $Balance
      at 27 November 2006 (inception)
            
            -
            
            -
            
            -
            
            -
            
            -Common
      shares issued – cash ($.001 per share) (Note 8)
            
            2,500,000
            
            25
            
            2,475
            
            -
            
            2,500Common
      shares issued – cash ($.0075 per share) (Note 8)
            
            5,800,000
            
            58
            
            43,442
            
            -
            
            43,500Common
      shares issued – cash ($.15 per share) (Note 8)
            
            218,000
            
            2
            
            32,698
            
            -
            
            32,700Net
      loss for the period
            
            -
            
            -
            
            -
            
            (19,332)
            
            (19,332)Balance
      at 31 May 2007
            
            8,518,000
            
            85
            
            78,615
            
            (19,332)
            
            59,368Net
      loss for the year
            
            -
            
            -
            
            -
            
            (72,251)
            
            (72,251)Balance
      at 31 May 2008
            
            8,518,000
            
            85
            
            78,615
            
            (91,583)
            
            (12,883)Contributions
      to capital by related party (Note 8)
            
            -
            
            -
            
            45,929
            
            -
            
            45,929Net
      loss for the year
            
            -
            
            -
            
            -
            
            (58,090)
            
            (58,090)Balance
      at 31 May 2009
            
            8,518,000
            
            85
            
            124,544
            
            (149,673)
            
            (25,044)Net
      loss for the period
            
            -
            
            -
            
            -
            
            (11,029)
            
            (11,029)Balance
      at 31 August 2009
            
            8,518,000
            
            85
            
            124,544
            
            (160,702)
            
            (36,073)

















The
accompanying notes are an integral part of the consolidated financial
statements.
 8




Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009








1.
            Nature and Continuance of
  Operations





Principle
Security International, Inc. (the “Company”) was incorporated under the laws of
the State of Nevada on 27 November 2006.  The Company intends to
conduct its business through its wholly owned subsidiary, Principle Security
International Incorporated, a company incorporated in Canada.





These
consolidated financial statements represent the presentation on a consolidated
basis of the accounts of the Company and its wholly owned subsidiary, Principle
Security International Incorporated, a company incorporated under the laws of
British Columbia, Canada on 29 November 2006.





The
Company is a development stage enterprise, as defined in Statements of Financial
Accounting Standards (“SFAS”) No. 7.  The Company is devoting all of
its present efforts to securing and establishing a new business and its planned
principle operations have not commenced.  Accordingly, no revenue has
been derived during the organization period.





The
consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”) applicable to development stage enterprises, and are expressed
in U.S. dollars.  The Company’s fiscal year end is 31
May.





The
Company’s consolidated financial statements as at 31 August 2009 and for the
three month period then ended have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business.  The Company has a loss
of $11,029 for the three month period ended 31 August 2009 (31 August 2008 –
$16,347, cumulative – $160,702) and has a working capital deficit of $37,031 at
31 August 2009 (31 May 2009 – $26,101).





Management
cannot provide assurance that the Company will ultimately achieve profitable
operations or become cash flow positive, or raise additional debt and/or equity
capital.  Management believes that the Company’s capital resources
should be adequate to continue operating and maintaining its business strategy
during the fiscal year ending 31 May 2010.  However, if the Company is
unable to raise additional capital in the near future, due to the Company’s
liquidity problems, management expects that the Company will need to curtail
operations, liquidate assets, seek additional capital on less favorable terms
and/or pursue other remedial measures.  These consolidated financial
statements do not include any adjustments related to the recoverability and
classification of assets or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.





At 31
August 2009, the Company was not engaged in a business and had suffered losses
from development stage activities to date.  Although management is
currently attempting to implement its business plan, and is seeking additional
sources of equity or debt financing, there is no assurance these activities will
be successful.  Accordingly, the Company must rely on its president to
perform essential functions without compensation until a business operation can
be commenced.  These factors raise substantial doubt about the ability
of the Company to continue as a going concern.  The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





9





Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009







2.
            Significant
      Accounting Policies





The
following is a summary of significant accounting policies used in the
preparation of these consolidated financial statements.





Basis
of presentation





The
consolidated financial statements of the Company have been prepared in
accordance with GAAP and are expressed in U.S. dollars.  The Company’s
fiscal year end is 31 May.





Cash
and cash equivalents





Cash and
cash equivalents include highly liquid investments with original maturities of
three months or less. As at 31 August 2009, the Company has cash and cash
equivalents in the amount of $9,361 (31 May 2009 – $1,496).





Equipment





Equipment
is recorded at cost and depreciation is provided over its estimated economic
life at 30%.





Long-lived
assets





In
accordance with SFAS No. 144, “Accounting for Impairment or
Disposal of Long-Lived Assets”, the carrying value of long-lived assets
is reviewed on a regular basis for the existence of facts or circumstance that
may suggest impairment.  The Company recognizes an impairment when the
sum of the expected undiscounted future cash flows is less than the carrying
amount of the asset.  Impairment losses, if any, are measured as the
excess of the carrying amount of the asset over its estimated fair
value.





Financial
instruments





The
carrying value of cash and cash equivalents, Goods and Services Tax recoverable,
accounts payable and accrued liabilities, convertible debentures, demand loans
and due to related party approximates their fair value because of the short
maturity of these instruments.  The Company’s operations are in Canada
and virtually all of its assets and liabilities are giving rise to significant
exposure to market risks from changes in foreign currency rates.  The
Company’s financial risk is the risk that arises from fluctuations in foreign
exchange rates and the degree of volatility of these
rates.  Currently, the Company does not use derivative instruments to
reduce its exposure to foreign currency risk.





Derivative
financial instruments





The
Company has not, to the date of these consolidated financial statements, entered
into derivative instruments to offset the impact of foreign currency
fluctuations.







10






Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009





Income
taxes





Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with SFAS No. 109, “Accounting for Income Taxes”,
which requires the use of the asset/liability method of accounting for income
taxes.  Deferred income taxes and tax benefits are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and for tax loss and credit
carry-forwards.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.  The Company provides for deferred taxes for the estimated
future tax effects attributable to temporary differences and carry-forwards when
realization is more likely than not.





Basic
and diluted net loss per share





The
Company computes net loss per share in accordance with SFAS No. 128, “Earnings per
Share.”  SFAS No. 128 requires presentation of both basic and
diluted earnings per share (“EPS”) on the face of the income
statement.  Basic EPS is computed by dividing net loss available to
common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period.  Diluted EPS gives effect
to all potentially dilutive common shares outstanding during the period using
the treasury stock method and convertible preferred stock using the if-converted
method.  In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants.  Diluted EPS excludes all
potentially dilutive shares if their effect is anti-dilutive.





Comprehensive
loss





SFAS No.
130, “Reporting Comprehensive
Income”, establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements.  As
at 31 August 2009, the Company has no items that represent a comprehensive loss
and, therefore, has not included a schedule of comprehensive loss in the
consolidated financial statements.





Segments
of an enterprise and related information





SFAS No.
131, “Disclosures about
Segments of an Enterprise and Related Information,” supersedes SFAS No.
14, “Financial Reporting for
Segments of a Business Enterprise.”  SFAS No.131 establishes
standards for the way that public companies report information about operating
segments in annual financial statements andrequires reporting of
selected information about operating segments in interim financial statements
issued to the public.  It also establishes standards for disclosures
regarding products and services, geographic areas and major
customers.  SFAS No.131 defines operating segments as components of a
company about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.  The Company has
evaluated this SFAS and does not believe it is applicable at this
time.








11




Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009


Start-up
expenses





The
Company has adopted Statement of Position No. 98-5, “Reporting the Costs of Start-up
Activities,” which requires that costs associated with start-up
activities be expensed as incurred.  Accordingly, start-up costs associated
with the Company's formation have been included in the Company's general and
administrative expenses for the period from the date of inception on 27 November
2006 to 31 August 2009.





Foreign
currency translation





The
Company’s functional and reporting currency is in U.S. dollars.  The
consolidated financial statements of the Company are translated to U.S. dollars
in accordance with SFAS No. 52, “Foreign Currency
Translation.”  Monetary assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at the
balance sheet date.  Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income.  The Company has not, to the date of
these consolidated financial statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.





Use
of estimates





The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenditures
during the reporting period.  Actual results could differ from these
estimates.




Changes
in Accounting Policies





In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No.
165 is intended to establish general standards of accounting for and disclosure
of events that occur after the balance sheet date, but before financial
statements are issued or are available to be issued.  It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date–that is, whether that date represents the date the
financial statements were issued or were available to be issued. This disclosure
should alert all users of financial statements that an entity has not evaluated
subsequent events after that date in the set of financial statements being
presented.  SFAS No. 165 is effective for financial statements issued
for fiscal years and interim periods ending after 15 June 2009. The adoption of
this statement did not have a material impact on the Company’s consolidated
financial statements.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”.  SFAS No. 161 is intended to improve financial standards
for derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity's financial position, financial performance, and cash flows. Entities are
required to provide enhanced disclosures about: (a) how and why an entity uses
derivative instruments; (b) how derivative instruments and related hedged items
are accounted for under Statement 133 and its related interpretations; and (c)
how derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows.  It is effective for
financial statements issued for fiscal years beginning after 15 November 2008,
with early adoption encouraged.  The adoption of this statement did
not have a material impact on the Company’s consolidated financial
statements.






12
 
  Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to
establish accounting and reporting standards for the non-controlling (minority)
interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a non-controlling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the
consolidated financial statements. SFAS No. 160 is effective for fiscal years
beginning after 15 December 2008. The adoption of this statement did not have a
material impact on the Company’s consolidated financial statements.




In
December 2007, the FASB issued SFAS No.141(R), “Business Combinations.” SFAS
No. 141(R) replaces SFAS No. 141. The statement retains the purchase method of
accounting for acquisitions, but requires a number of changes, including changes
in the way assets and liabilities are recognized in the purchase accounting. It
changes the recognition of assets acquired and liabilities assumed arising from
contingencies, requires the capitalization of in-process research and
development at fair value, and requires the expensing of acquisition-related
costs as incurred. SFAS No. 141 (R) is effective for financial statements issued
for fiscal years beginning after 15 December 2008. The adoption of this
statement did not have a material impact on the Company’s consolidated financial
statements.





Recent
Accounting Pronouncements





In June
2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168,
“The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principle – a
replacement of FASB statement No. 162”.  SFAS No. 168 replaces
the sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles as stated with FASB Accounting Standards Codification becoming the
source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. SFAS No. 168 is effective for financial statements issued for
fiscal years and interim periods beginning after 15 September
2009.  The Company does not expect this adoption will have a material
impact on the Company’s consolidated financial statements.




In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”.  SFAS No. 167 is
intended to establish general standards of financial reporting for companies
with variable interest entities.  It requires timely and useful
disclosure of information related to the Company’s involvement with variable
interest entities.  This disclosure should alert all users to the
effects on specific provisions of FASB Interpretation No. 46 (revised December
2003), “Consolidation of
Variable Interest Entities”, related to the changes to the
special-purpose entity proposal in FASB Statement No. 166, “Accounting for Transfers of
Financial Assets”, and the treatment of specific provisions of
Interpretation 46(R).  SFAS No. 167 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
November 2009.  The Company has determined that the adoption of SFAS
No. 167 will have no impact will have on its consolidated financial
statements.












13
 
   Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets—an amendment of FASB Statement” (“SFAS
166”).  SFAS No. 166 is intended to establish standards of financial
reporting for the transfer of assets and transferred assets to improve the
relevance, representational faithfulness, and comparability.  SFAS 166 was
established to clarify derecognition of assets under FASB Statement No. 140,
Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities.SFAS No. 166 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
November 2009.  The Company has determined that the adoption of SFAS
No. 166 will have no impact will have on its consolidated financial
statements.





International
Financial Reporting Standards





In
November 2008, the Securities and Exchange Commission (“SEC”) issued for comment
a proposed roadmap regarding potential use of financial statements prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board.  Under the proposed
roadmap, the Company would be required to prepare consolidated financial
statements in accordance with IFRS in fiscal year 2014, including comparative
information also prepared under IFRS for fiscal 2013 and 2012.  The
Company is currently assessing the potential impact of IFRS on its consolidated
financial statements and will continue to follow the proposed roadmap for future
developments.







3.
            Equipment





Accumulated
      amortization
            
            Net
      Book ValueCost
            
            31
      August
              2009
            
            31
      May 2009
              (Audited)$
            
            $
            
            $
            
            $Computer equipment
            
            2,086
            
            1,128
            
            958
            
            1,057





During
the three month period ended 31 August 2009, the total additions of the Company
to equipment were $Nil (31 August 2008 – $Nil).





4.
            Accounts Payable and Accrued
      Liabilities





Accounts payable and accrued liabilities are non-interest bearing, unsecured and
have settlement dates within one year.






14




Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




5.
            Convertible
Debentures





31
      August
              2009
            31
      May
              2009
              (Audited)$
            
            $Issued
      on 24 December 2008, the convertible debenture bears interest at 10% per
      annum on any unpaid principal and interest balance and is secured by
      a general charge on the assets of the Company.  The principal
      amount is repayable at any time in whole or in part and accrued interest
      shall be due at the end of each calendar quarter, with the first payment
      due on the last day of the first calendar quarter after 24 December 2008.
      The holder of the convertible debenture has the right to convert any
      portion of the unpaid principal and/or accrued interest into common shares
      of the Company at any time up to 24 December 2011 at $0.0125 per Unit
      where a Unit consists of one common share for an equivalent amount of
      principal and interest due and payable. During the three month period
      ended 31 August 2009, the Company accrued interest expense of $131 (31
      August 2008 – $Nil). The balance as at 31 August 2009 consists of
      principal and accrued interest of $5,000 (31 May 2009 – $5,000) and $347
      (31 May 2009 – $216), respectively (Note 10).
            5,347
            
            5,216Issued
      on 24 December 2008, the convertible debenture bears interest at 10% per
      annum on any unpaid principal and interest balance and is secured by a
      general charge on the assets of the Company.  The principal
      amount is repayable at any time in whole or in part and accrued interest
      shall be due at the end of each calendar quarter, with the first payment
      due on the last day of the first calendar quarter after 24 December 2008.
      The holder of the convertible debenture has the right to convert any
      portion of the unpaid principal and/or accrued interest into common shares
      of the Company at any time up to 24 December 2011 at $0.0125 per Unit
      where a Unit consists of one common share for an equivalent amount of
      principal and interest due and payable. During the three month period
      ended 31 August 2009, the Company accrued interest expense of $131 (31
      August 2008 – $Nil). The balance as at 31 August 2009 consists of
      principal and accrued interest of $5,000 (31 May 2009 – $5,000) and $347
      (31 May 2009 – $216), respectively (Note 10).
            5,347
            
            5,216Issued
      on 5 March 2009, the convertible debenture bears interest at 10% per annum
      on any unpaid principal and interest balance and is secured by a general
      charge on the assets of the Company.  The principal amount is
      repayable at any time in whole or in part and accrued interest shall be
      due at the end of each calendar quarter, with the first payment due on the
      last day of the first calendar quarter after 5 March 2009. The holder of
      the convertible debenture has the right to convert any portion of the
      unpaid principal and/or accrued interest into common shares of the Company
      at any time up to 5 March 2012 at $0.0125 per Unit where a Unit consists
      of one common share for an equivalent amount of principal and interest due
      and payable. During the three month period ended 31 August 2009, the
      Company accrued interest expense of $98 (31 August 2008 – $Nil). The
      balance as at 31 August 2009 consists of principal and accrued interest of
      $3,800 (31 May 2009 – $3,800) and $189 (31 May 2009 – $91), respectively
      (Note 10).
            3,989
            
            3,89114,683
            
            14,323








15






Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009





6.
            Demand
      Loan





31
      August
              2009
            31
      May
              2009
              (Audited)$
            
            $Issued
      on 30 June 2009, the demand loan bears interest at 2% per annum on any
      unpaid principal and interest balance and is secured by a general charge
      on the assets of the Company. The principal amount is repayable at any
      time in whole or in part and accrued interest shall be due at the end of
      each calendar quarter, with the first payment due on the last day of the
      first calendar quarter after 30 June 2009. During the three month period
      ended 31 August 2009, the Company accrued interest expense of $81 (31
      August 2008 – $Nil). The balance as at 31 August 2009 consists of
      principal and accrued interest of $20,000 (31 May 2009 – $Nil) and $81 (31
      May 2009 – $Nil), respectively (Note 10).
            20,081
            
            -20,081
            
            -





7.
            Due
      to Related Party and Related Party
Transaction





As at 31
August 2009, the amount due to related party consists of a demand loan of $5,021
(31 May 2009 – $Nil) payable to a director and officer of the
Company.  The current amount was issued on 16 June 2009, the demand
loan bears interest at 2% per annum on any unpaid principal and interest balance
and is secured by a general charge on the assets of the Company.  The
principal amount is repayable at any time in whole or in part and accrued
interest shall be due at the end of each calendar quarter, with the first
payment due on the last day of the first calendar quarter after 30 June
2009.  During the three month period ended 31 August 2009, the Company
accrued interest expense of $21 (31 August 2008 – $Nil). The balance as at 31
August 2009 consists of principal and accrued interest of $5,000 (31 May 2009 –
$Nil) and $21 (31 May 2009 – $Nil), respectively (Note 10).





During
the three month period ended 31 August 2009, a director and shareholder of the
Company was paid consulting fees in the amount of $1,349 (31 August 2008 –
$2,431).




8.
            Capital
      Stock




Authorized
  The total
authorized capital is 100,000,000 common shares with a par value of $0.00001 per
common share and 100,000,000 preferred shares with a par value of
$0.00001.




16






Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




Issued
and outstanding
 The total
issued and outstanding capital stock is 8,518,000 common shares with a par value
of $0.00001 per common share.
  The common stock is not subject to warrants, agreements or options at
31 August 2009.
  During
the year ended 31 May 2007, the Company issued 8,518,000 common shares for cash
proceeds of $78,700.
  During
the year ended 31 May 2009, a director and shareholder of the Company made
contributions to capital for consulting fees in the amount of
$10,909.
  During
year ended 31 May 2009, a director and shareholder of the Company forgave loans
to the Company totaling $35,020.  This loan forgiveness was recorded as
contributions to capital of the Company.


9.
            Income
      Taxes




The
Company has losses carried forward for income tax purposes to 31 August 2009.
There are no current or deferred tax expenses for the three months ended 31
August 2009 due to the Company’s loss position. The Company has fully reserved
for any benefits of these losses. The deferred tax consequences of temporary
differences in reporting items for financial statement and income tax purposes
are recognized, as appropriate. Realization of the future tax benefits related
to the deferred tax assets is dependent on many factors, including the Company’s
ability to generate taxable income within the net operating loss carryforward
period. Management has considered these factors in reaching its conclusion as to
the valuation allowance for financial reporting purposes.
  The
provision for refundable federal income tax consists of the
following:




For
      the three month period ended 31 August 2009
            
            For
      the three month period ended 31 August 2008$
            
            $Deferred
      tax asset attributable to:Current
      operations
            
            2,899
            
            3,487Amortization
            
            (30)
            
            (30)Less:
      Change in valuation allowance
            
            (2,869)
            
            (3,457)Net
      refundable amount
            
            -
            
            -









17






Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




The
composition of the Company’s deferred tax assets as at 31 August 2009 and 31 May
2009 are as follows:





31
      August
              2009
            
            31
      May
              2009
              (Audited)$
            
            $Net
      income tax operating loss carryforward
            
            124,554
            
            113,624Statutory
      federal income tax rate
            
            15%-30.67%
            
            15%-30.67%Deferred
      tax asset
            
            35,956
            
            33,087Less:
      Valuation allowance
            
            (35,956)
            
            (33,087)Net
      deferred tax asset
            
            -
            
            -





The
potential income tax benefit of these losses has been offset by a full valuation
allowance.





As at 31
August 2009, the Company has an unused net operating loss carry-forward balance
of approximately $124,554 that is available to offset future taxable
income.  This unused net operating loss carry-forward balance expires
in 2030.




10.
            Supplemental
      Disclosures with Respect to Cash
Flows





For
      the period from the date of inception on 27 November 2006 to
              31
      August
              2009
            
            For
      the three month period ended 31 August 2009
            
            For
      the three month period ended 31 August 2008$
            
            $
            
            $Cash
      paid during the year for interest
            
            -
            
            -
            
            -Cash
      paid during the year for income taxes
            -
            
            -
            
            -Foreign
      exchange gain
            
            3,254
            
            1,916
            
            193




During
the three month period ended 31 August 2009, the Company accrued total interest
expense of $462 related to various convertible debentures, demand loan and
balance due to related party (Notes 5, 6 and 7).





11.
            Contingency





The
Company is in default of certain terms related to the convertible debentures,
demand loan and due to related party (Notes 5, 6 and 7).









18






Principle
Security International, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
August 2009




12.
            Subsequent
      Event





The
following event occurred from the date of the three month period ended 31 August
2009 to the date the consolidated financial statements were available to be
issued on 13 October 2009:





On 14
September 2009, the Company issued a demand loan for $10,000 that bears interest
at 2% per annum on any unpaid principal and interest balance and is secured by a
general charge on the assets of the Company. The principal amount is repayable
at any time in whole or in part and accrued interest shall be due at the end of
each calendar quarter, with the first payment due on the last day of the first
calendar quarter after 14 September 2009.







































19







ITEM
      2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




Our
consolidated financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. In this quarterly report, unless otherwise specified, all dollar
amounts are expressed in United States dollars. All references to “common
shares” refer to our common stock.




As used
in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “PSI”
means Principle Security International, Inc., unless otherwise
indicated.





General




We were
incorporated in the State of Nevada on November 27, 2006.  On November 29,
2006 we incorporated our wholly-owned subsidiary in Canada to conduct our
business operations in the Greater Vancouver area.







Since
inception, we have been implementing the early phases of our business plans,
including the establishment of our office, making application for our security
business license, making application and scouting locations for our accredited
security training facility, making application for our surety bond, registering
the URL address necessary to create our website, building a database of
potential clients, commencing interviews to hire a salesperson, designing our
corporate logos/badges and ordering uniforms.


On
December 15, 2006, we obtained our surety bond in the amount of  $5,000
Cdn., as required by the Private Investigators and Security Agencies
Act.  This bond enabled us to make application for a security business
license.  On January 3, 2007, we were granted our security business
license.  This license has been renewed and is now valid until
February 3, 2010.  The license enables us to carry on a business in
the categories of “private investigator” and “security patrol”.  We
have established our office and continue to lease office space on a
month-to-month basis at a cost of $500 Cdn. per month from a non-related
third party. To manage
operating costs until the Company can raise additional funds or start generating
revenues the lessee has agreed to release the Company from amounts owed for
unpaid rent for the month of November and to suspend monthly lease charges until
further notice.We have initiated work on our basic web page under
the URL address www.principlesecurity.ca.
  On
September 8, 2008 we received a two-year approval to operate a security training
school under the name “Principle Security Training Academy”.
 We have
made application to our suppliers and completed the design of our corporate logo
and uniforms.  We underwent a standard inspection by the Ministry of
the Attorney General of Canada working under Security Programs and we passed the
inspection.
 
 Our
auditors have issued us a going concern opinion, which means there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills and continue
our operations. This is because we have not generated any revenues and no
revenues are anticipated until we begin to implement our business plan and begin
to provide our security guard services.   Accordingly, we must
raise cash from sources other than the sale of our services.  Our only
other source for cash at this time is investment by others. We intend to
continue to try to raise the additional funds we will need
to fully implement our business plans from public or private placement
offerings of our securities and/or through loans.  At the present
time, we have not made any plans to raise additional monies and there is no
assurance that we will be able to do so in the future.  If financing
is not available on satisfactory terms, we may be unable to continue, develop or
expand our business plans.
   20
  We have
not generated any revenues as we have not yet been able to secure a
contract.  Our officers and directors have been building a database of
potential clients and will be maintaining the database on an ongoing
basis.  They have been actively contacting a number of businesses in
hopes of securing a contract, but have not yet done so to
date.




Since
inception, we have  issued 8,518,000 shares of common stock via
private placement sales of our restricted common stock for cash
proceeds of $78,700, all of which is being used to develop and
grow our business operations.  On November 28, 2006, we issued
2,500,000 shares of common stock through a private placement pursuant to Reg. S
of the Securities Act of 1933 to our sole officer and director, Mr. Charles
Payne, in consideration of $2,500 in cash.  On February 23, 2007, we
completed a private placement of 5,800,000 shares of common stock pursuant to
Reg. S of the Securities Act of 1933 and raised $43,500 in cash.  On
May 8, 2007, we completed an additional private placement of 218,000 shares of
common stock pursuant to Reg. S of the Securities Act of 1933 and raised $32,700
in cash. All of
these transactions closed outside the US and were sold to non-US persons.




Results of Operations





Three months ended August 31, 2009 as
compared to the three months ended August 31, 2008




We
incurred net losses of $11,029, or $0.001 per share, for the three-month period
ended August 31, 2009, as compared to net losses of $16,347, or $0.002 per
share, for the three-month period ended August 31, 2008. The decrease was mainly
attributed to decreases in consulting fees ($1,349 - 2009 compared to
$2,431 - 2008), professional fees ($3,445 - 2009 compared to $9,069 -
2008), licenses ($Nil - 2009 compared to $2,190 - 2008) and office
rent ($450 - 2009 compared to $1,459 - 2008). Our other expenses
for the three months ended August 31, 2009 consisted of the
following: transfer agent and filing fees ($2,293 - 2009 compared to $315 -
2008); telephone and internet expense ($472 - 2009 compared to
$Nil - 2008); amortization ($99 - 2009 compared to $97 - 2008); legal
fees ($468 - 2009 compared to $517 - 2008); interest expense ($462 -
2009 compared to $Nil - 2008); loss on foreign exchange ($1,916 - 2009 compared
to $193 - 2008); and bank service charges ($75 - 2009 compared to $76 -
2008).  Our total net losses since inception on November 27, 2008 to August
31, 2009 are $160,702.








Liquidity and Capital
Resources




At August
31, 2009 and as of the date of this filing, we have not generated any revenues
from our business activities.




At August
31, 2009, we had total assets of $10,940, consisting of $9,361 in cash and
cash equivalents; $621 in goods and services tax recoverable; and $958 in
equipment, net of depreciation.




On
December 24, 2008, we issued a convertible debenture in exchange for $5,000 in
cash. The convertible debenture bears interest at a rate of 10% per annum on any
unpaid principal and interest balance, is secured by the assets of the Company
and accrued interest is due and payable at the end of each calendar quarter,
with the first payment due on the last day of the first calendar quarter after
December 24, 2008. The principal amount is repayable at any time in whole or in
part. The holder of the convertible debenture has the right to convert any
portion of the unpaid principal and/or accrued interest into shares of our
common stock at any time within thirty-six (36) months from December 24, 2008 on
the basis of $0.0125 per Unit, where a Unit consists of one share of common
stock for an equivalent amount of principal and interest due and
payable. During the three month period ended August 31, 2009, we accrued
interest expense on this convertible debenture in the amount of $131. The
balance due at August 31, 2009 consists of principal and accrued interest of
$5,000 and $347, respectively. On December 24, 2008, we issued a
second convertible debenture in exchange for $5,000 in cash. The convertible
debenture bears interest at a rate of 10% per annum on any unpaid principal and
interest balance, is secured by the assets of the Company and all principal and
accrued interest is due and payable at the end of each calendar quarter, with
the first payment due on on the last day of the first calendar quarter after
December 24, 2008. The principal amount is repayable at any time in whole or in
part. The holder of the convertible debenture has the right to convert any
portion of the unpaid principal and/or accrued interest into shares of our
common stock at any time within thirty-six (36) months from December 24, 2008 on
the basis of $0.0125 per Unit, where a Unit consists of one share of common
stock for an equivalent amount of principal and interest due and payable. 
During the three month period ended August 31, 2009, we accrued interest expense
on this convertible debenture in the amount of $131. The balance due at
August 31, 2009 consists of principal and accrued interest of $5,000 and $347,
respectively. On March 5, 2009, we issued a convertible debenture
in exchange for $3,800 in cash. The convertible debenture bears interest at a
rate of 10% per annum on any unpaid principal and interest balance, is secured
by the assets of the Company and all principal and accrued interest is due and
payable at the end of each calendar quarter, with the first payment due on on
the last day of the first calendar quarter after March 5, 2009. The principal
amount is repayable at any time in whole or in part.  The holder of the
convertible debenture has the right to convert any portion of the unpaid
principal and/or accrued interest into shares of our common stock at any time
within thirty-six (36) months from March 5, 2009 on the basis of $0.0125 per
Unit, where a Unit consists of one share of common stock for an equivalent
amount of principal and interest due and payable. During the three month period
ended August 31, 2009, we accrued interest expense on this convertible
debenture in the amount of $98. The balance due at August 31, 2009 consists
of principal and accrued interest of $3,800 and $189, respectively.






21




On June
30, 2009, we entered into a demand loan  with an unrelated third party. The
demand loan bears interest at the rate of 2% per annum on any unpaid principal
and interest balance and is secured by a general charge on the assets of the
Company. The principal amount is repayable at any time in whole or in part and
accrued interest shall be due at the end of each calendar quarter, with the
first payment due on the last day of the first calendar quarter after June 30,
2009. During the three month period ended August 31, 2009, the Company
accrued interest expense of $81 on the demand loan. The
balance due at August 31, 2009 consists of principal and accrued
interest of $20,000 and $81, respectively.




At August
31, 2009, the amount due to Charles Payne, an officer and director and a related
party, consists of a demand loan in the amount of $5,021.  A demand loan
was entered into for current amount due on June 16, 2009.  The demand loan
bears interest at 2% per annum on any unpaid principal and interest balance
and is secured by a general charge on the assets of the Company.  The
principal amount is repayable at any time in whole or in part and accrued
interest shall be due at the end of each calendar quarter, with the first
payment due on the last day of the first calendar quarter after June 30,
2009.  During the three month period ended August 31, 2009, the
Company accrued interest expense of $21 on the demand loan. The balance due as
at August 31, 2009 consists of principal and accrued interest in the
amount of $5,000 and $21, respectively.




During
the three month period ended August 31, 2009, Charles Payne, an
officer, director and shareholder of the Company was paid consulting fees
in the amount of $1,349 (August  31, 2008 –
$2,431).


At August
31, 2009, our total liabilities were $47,013, consisting of accounts payable and
accrued liabilities in the amount of $7,228, convertible debentures payable in
the amount of $14,683, demand loans payable in the amount of $20,081 and amount
due to related party in the amount of $5,021.








ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK




We are a non-accelerated filer and a smaller
reporting company, as defined in Rule 12b-2 of the of the Securities Exchange
Act of 1934, and as such, are not required to provide the information under this
item.




ITEM
4. CONTROLS AND PROCEDURES




Evaluation of
Disclosure Controls and Procedures




We
maintain “disclosure controls and procedures,” as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that
are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.




We
conducted an evaluation (the “Evaluation”), under the supervision and with the
participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer
(“CFO”), of the effectiveness of the design and operation of our disclosure
controls and procedures (“Disclosure Controls”) as of the end of the period
covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on
this Evaluation, our CEO and CFO concluded that our Disclosure Controls were
effective as of the end of the period covered by this report.




Additionally,
there were no significant changes in our internal controls or in other factors
that  could significantly affect theses controls subsequent to the
evaluation date.  We have not identified any significant deficiencies
or material weaknesses in our internal controls, and therefore there were no
corrective actions taken.






22




PART
II. OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS


We are not currently a party to any pending legal proceeding. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None.ITEM 3. DEFAULT UPON SENIOR SECURITIESNone.ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSNone.ITEM 5. OTHER INFORMATION AND SUBSEQUENT EVENTSOn August 27, 2009, the Company appointed Stan Chapman, an unrelated third party, to its Board of Directors and on September 3, 2009, he was appointed to serve as Secretary of theCompany, until the nextannual election of officers and directors. Mr. Chapman is the chairman and founder of Chapman's Consulting and Rosho Corporation, a privately-held companywhich provides consulting services to start-up companies. He also serves as Chief Financial Officer of Strategic Capitalization Group, a privately-held consulting firm which assistscompanies inreversemerger transactions.On September 14, 2009, the Company issued a demand loan for $10,000 that bears interest at the rate of 2% per annum on any unpaid principal and interest balance and is secured by ageneralcharge on the assets of the Company. The principal amount is repayable at any time in whole or in part and accrued interest shall be due at the end of each calendar quarter, withthefirst payment due on the last day of the first calendar quarter after September 14, 2009.ITEM 6. EXHIBITSThe following exhibits are included herein:


Exhibit
      No.
            Document
      Description31.1
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002








SIGNATURES






In
accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused
this report to be signed on behalf by the undersigned, thereto duly authorized
on this 15th day of October, 2009.





PRINCIPLE
      SECURITY INTERNATIONAL, INC.(Registrant)/s/
            CHARLES
      PAYNEBy:
            Charles
      PaynePresident,
      Principal Executive Officer, Principal Accounting Officer, Principal
      Financial Officer, Treasurer, Chairman of the Board of
      Directors








23