| Large      accelerated filer | [      ]        | Accelerated      filer         | [        ] |
|------------------------------|----------------------|--------------------------------|----------------------|
| Non-accelerated      filer   | [        ] | Smaller reporting      company | [X]                  |

----

|                                                                        |   |   |
|-----------------------------------------------------------------------------|--------|--------|
| PART      I - FINANCIAL INFORMATION                                         |   |   |
|                                                                        |   |   |
| Item      1. Financial Statements                                           |   | 3      |
|                                                                        |   |   |
| Item      2. Management's Discussion and Analysis or Plan of    Operation   |   | 15     |
|                                                                        |   |   |
| Item      3. Quantitative and Qualitative Disclosures of Market Risk        |   | 17     |
|                                                                        |   |   |
| Item      4. Controls and Procedures                                        |   | 17     |
|                                                                        |   |   |
| PART      II - OTHER INFORMATION                                       |   |   |
|                                                                        |   |   |
| Item      1. Legal Proceedings                                              |   | 18     |
|                                                                        |   |   |
| Item      2. Unregistered Sales of Equity Securities and Use of    Proceeds |   | 18     |
|                                                                        |   |   |
| Item      3. Defaults Upon Senior Securities                                |   | 18     |
|                                                                        |   |   |
| Item      4. Submission of Matters to a Vote of Security Holders            |   | 18     |
|                                                                        |   |   |
| Item      5. Other Information                                              |   | 18     |
| .                                                                           |   |   |
| Item      6. Exhibits                                                       |   | 19     |
|                                                                        |   |   |
| SIGNATURES                                                                  |   | 19     |
|                                                                        |   |   |

----

----

|   | Consolidated      Balance Sheets                           |   | F-2 |
|--------|------------------------------------------------------------|--------|-----|
|   | Consolidated      Statements of Operations                 |   | F-3 |
|   | Consolidated      Statements of Stockholder’s Equity |   | F-4 |
|   | Consolidated      Statements of Cash Flows                 |   | F-5 |
|   | Notes      to Consolidated Financial Statements            |   | F-6 |

----

| As      at                                                                                                                | November      30, | May      31, |
|---------------------------------------------------------------------------------------------------------------------------|-------------------|--------------|
|                                                                                                                      | 2008              | 2008         |
|                                                                                                                      | $                 | $            |
| ASSETS                                                                                                                    |              |         |
|                                                                                                                      |              |         |
| Current                                                                                                                   |              |         |
|     Cash      and cash equivalents                                                                    | 972               | 21,067       |
|     Goods      and services tax recoverable                                                           | 777               | 86           |
|                                                                                                                      | 1,749             | 21,153       |
|                                                                                                                      |              |         |
| Equipment      – net of  $860depreciation                                                                 | 1,226             | 1,420        |
| Total      Assets                                                                                                         | 2,975             | 22,573       |
|                                                                                                                      |              |         |
| LIABILITIES                                                                                                               |              |         |
|                                                                                                                      |              |         |
| Current                                                                                                                   |              |         |
|      Accounts      payable and accrued liabilities                                               | 3,563             | 436          |
|      Advances      from a related party (Note 4)                                                 | -                 | 35,020       |
| Total      Liabilities                                                                                                    | 3,563             | 35,456       |
|                                                                                                                      |              |         |
| STOCKHOLDERS’      DEFICIT                                                                                          |              |         |
|                                                                                                                      |              |         |
| Preferred      Stock: $0.00001 par value; authorized 100,000,000 preferred shares; none      issued                       |              |
|                                                                                                                      |              |         |
| Common      Stock: $0.00001 par value; authorized 100,000,000 common shares; 8,518,000      shares issued and outstanding |
| (Note      5)                                                                                                             | 85                | 85           |
|                                                                                                                      |              |         |
| Additional      Paid-In Capital                                                                                           | 125,341           | 78,615       |
|                                                                                                                      |              |         |
| Deficit      Accumulated During the Development Stage                                                                     | (126,014)         | (91,583)     |
|                                                                                                                      |              |         |
| Total      Stockholders’ Deficit                                                                                    | (588)             | (12,883)     |
|                                                                                                                      |              |         |
| Total      Liabilities and Stockholders’ Deficit                                                                    | 2,975             | 22,573       |
|                                                                                                                      |              |         |

----

|                                                         |  Three      MonthPeriod      EndedNovember      30, 2008 |  Three      MonthPeriod      EndedNovember      30, 2007 |   Six      MonthPeriod      EndedNovember      30, 2008 |   Six      MonthPeriod      EndedNovember      30, 2007 | Cumulative      From November 27, 2006 (Date of Inception) toNovember      30, 2008 |
|--------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------------------------|
|   Revenue                                          |   -                                                 | $ -                                                      | $ -                                                          | $ -                                                          | $ -                                                                            |
|                                                         |                                                          |                                                          |                                                              |                                                              |                                                                                |
| General      and Administrative Expenses                     |                                                          |                                                          |                                                              |                                                              |                                                                                |
|                                                         | Accounting      and administration                            | 3,414                                                         | 600                                                               | 4,923                                                             | 1,500                                                                               | 7,773 |
|                                                         | Audit      fees                                               | 175                                                           | 2,107                                                             | 7,735                                                             | 8,691                                                                               | 19,810 |
|                                                         | Bank      charges                                             | 37                                                            | 58                                                                | 113                                                               | 147                                                                                 | 817 |
|                                                         | Consulting      fees                                          | 9,709                                                         | 6,133                                                             | 12,140                                                            | 11,805                                                                              | 47,476 |
|                                                         | Depreciation                                                  | 97                                                            | 174                                                               | 194                                                               | 337                                                                                 | 860 |
|                                                         | Legal      fees                                               | 875                                                           | 114                                                               | 1,392                                                             | 316                                                                                 | 23,053 |
|                                                         | Licenses                                                      | 87                                                            | -                                                                 | 2,277                                                             | -                                                                                   | 2,277 |
|                                                         | Marketing      and advertising                                | -                                                             | -                                                                 | -                                                                 | -                                                                                   | 156 |
|                                                         | Office      expenses                                          | -                                                             | 262                                                               | -                                                                 | 294                                                                                 | 1,287 |
|                                                         | Office      rent                                              | 1,142                                                         | 1,514                                                             | 2,601                                                             | 2,459                                                                               | 7,383 |
|                                                         | Security      supplies, uniforms, general                     | -                                                             | 27                                                                | -                                                                 | 707                                                                                 | 2,724 |
|                                                         | Telephone      and internet fees                              | -                                                             | 449                                                               | -                                                                 | 849                                                                                 | 1,076 |
|                                                         | Transfer      agent and filing fees                           | 982                                                           | 675                                                               | 1,297                                                             | 1,630                                                                               | 4,323 |
|                                                         | Vehicle      expenses                                         | -                                                             | 1,239                                                             | -                                                                 | 3,102                                                                               | 5,108 |
|                                                         | Loss      (gain) on foreign exchange                          | 1,566                                                         | (359)                                                             | 1,759                                                             | (473)                                                                               | 1,891 |
|                                                         |                                                          |                                                          |                                                              |                                                              |                                                                                |
|  Net      Loss for the Period                           |  (18,084)                                                |  (12,993)                                                |  (34,431)                                                    |  (31,364)                                                    |  (126,014)                                                                     |
|  Basic      and Diluted Gain/(Loss) Per Share           |   ($0.002)                                          |   ($0.002)                                          |   ($0.004)                                              |   ($0.004)                                              |                                                                                |
|  Weighted      Average Number ofShares      Outstanding |   8,518,000                                         |   8,518,000                                         |   8,518,000                                             |   8,518,000                                             |                                                                                |

----

|   | Common      Stock |    AdditionalPaid-In | DeficitAccumulatedDuring      theDevelopment |    TotalStockholders’ |
|--------|-------------------|-------------------------------------|----------------------------------------------|--------------------------------------------|
|   | Shares            | Amount                              | Capital                                      | Stage                                      | Equity |
|   |              | $                                   | $                                            | $                                          | $ |

|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|-------------------------------------------------|-------------------------------------------------------------|-----------------------------------------------|-------------------------------------------------------------|
| Common      stock issued for cash, November 28, 2007, to an officer and director at      $0.001 per share Common      stock issued for cash, February 23, 2007, at $0.0075 pershare Common      stock issued for cash, May 8, 2007 at $0.15 per share | 2,500,000    5,800,000   218,000 | 25    58   2 | 2,475    43,442   32,698 | -    -   - | 2,500    43,500   32,700 |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Net      loss for the year endedMay      31, 2007                                                                                                                                                                                                               |  -                                                             |  -                                         |  -                                                     |  (19,332)                                |  (19,332)                                              |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Balance,      May 31, 2007                                                                                                                                                                                                                                      | 8,518,000                                                           | 85                                              | 78,615                                                      |     (19,332)              |       59,368                  |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Net      loss for the year endedMay      31, 2008                                                                                                                                                                                                               |  -                                                             |  -                                         |  -                                                     |  (72,251)                                |  (72,251)                                              |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Balance,      May 31, 2008                                                                                                                                                                                                                                      | 8,518,000                                                           | 85                                              | 78,615                                                      | (91,583)                                      | (12,883)                                                    |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Contributions      to capital by related parties – loan forgiveness (Note 4)                                                                                                                                                                              |                                                                |                                            |   46,726                                          |                                          |   46,726                                          |
| Net      loss for the period ended November 30, 2008                                                                                                                                                                                                            |  -                                                             |  -                                         |  -                                                     |   (34,431)                          |  (34,431)                                              |
|                                                                                                                                                                                                                                                            |                                                                |                                            |                                                        |                                          |                                                        |
| Balance,      November 30, 2008                                                                                                                                                                                                                                 | 8,518,000                                                           | 85                                              | 125,341                                                     | (126,014)                                     | (588)                                                       |

----

|                                                                              | Six      MonthPeriod      EndedNovember      30,      2008 | Six      MonthPeriod      EndedNovember      30,      2007 | Cumulative      From November      27, 2006 (Date      of Inception) to      November      30, 2008                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                              | $                                                          | $                                                          |                                                                       $ |
| Cash      provided by (used in):                                                  |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Operating      Activities                                                         |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Net      (Loss) from operations                                                   | (34,431)                                                   | (31,364)                                                   | (126,014)                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Items      not requiring cash outlay                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
|      Depreciation                                        | 194                                                        | 128                                                        | 860                                                                                                                                                                                                                                                                                                                                                                                                     |
|  Contributed      consulting services by a related party                | 10,095                                                     |                                                       | 10,095                                                                                                                                                                                                                                                                                                                                                                                                  |
| Cash      provided by (used in) operating  assets      and liabilities: |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
|           Goods and services tax recoverable                  | (691)                                                 | (111)                                                 |  (777)                                                                                                                                                                                                                                                                                                                                                                         |
|      Accounts      payable and accrued liabilities       | 3,127                                                      | (1,800)                                                    | 3,563                                                                                                                                                                                                                                                                                                                                                                                                   |
|  Net      cash used in operating activities                                  |  (21,706)                                             |  (33,147)                                             |  (112,273)                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Investing      Activities                                                         |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Purchase      of computer equipment                                               | -                                                          | -                                                          | (2,086)                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Net      cash used in investing activities                                        | -                                                          | -                                                          | (2,086)                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Financing      Activities                                                         |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Advances      from a related party                                                | 1,611                                                      | 445                                                        | 36,631                                                                                                                                                                                                                                                                                                                                                                                                  |
| Common      stock issued for cash                                                 | -                                                          | -                                                          | 78,700                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Net      cash provided by financing activities                                    | 1,611                                                      | 445                                                        | 115,331                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Net      cash provided (used) during the period                                   | (20,095)                                                   | (32,257)                                                   | 972                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Cash      and cash equivalents at beginning of period                             | 21,067                                                     | 59,309                                                     | -                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                              |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Cash      and cash equivalents at end of period                                   | 972                                                        | 26,607                                                     | 972                                                                                                                                                                                                                                                                                                                                                                                                     |
| Supplementary      Disclosure of Statements of Cash Flows      Information        |                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                    |
| Interest      Paid                                                                | -                                                          | -                                                          | -                                                                                                                                                                                                                                                                                                                                                                                                       |
| Foreign      Exchange Gain/(Loss)                                                 | 1,759                                                      | 473                                                        | 1,891                                                                                                                                                                                                                                                                                                                                                                                                   |
| Income      Taxes (Note 6)                                                        | -                                                          |                                                       | -                                                                                                                                                                                                                                                                                                                                                                                                       |

----

| (b)   | Year      End |
|-----------------|---------------|

----

----

----

----

| (m)   | Recent      Accounting Pronouncements(continued) |
|-----------------|--------------------------------------------------|

----

|                                                          | November      30, 2008 | May      31, 2008 |
|---------------------------------------------------------------|------------------------|-------------------|
|                                                          | $                      | $            |
| Net      operating loss carry forwards(expiring      in 2027) |  34,431           | 72,251            |
|  Statutory      tax rate                                 |  15%      - 34.5% | 15%      - 34.5%  |
|  Deferred      tax assets                                |  26,311           | 24,435            |
|  Less:      Valuation allowance                          |  (26,311)         | (24,435)          |
|  Net      deferred tax assets                            |  -                | -                 |

----

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

----

----

| ITEM      4. | CONTROLS      AND PROCEDURES. |
|--------------|-------------------------------|

----

```
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 SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION - SUBSEQUENT EVENTS On December 24, 2008, we issued two convertible debentures totaling $10,000 from unrelated third parties. The convertible debentures bear interest at a rate of 10% per annum on any unpaid principle balances, are unsecured, and have no fixed terms of repayment. The holders of the convertible debentures have the right to convert any portion of the unpaid principle and/or accrued interest into restricted common shares of the Company at any time within thirty-six months from the issue date on the basis of $0.0125 common share for each dollar of principle and/or interest due and payable. The funds were delivered to our general operating account on December 24, 2008. In addition, to help manage our operating costs until we can either generate revenues or raise additional cash through loans or sales of our securities, our landlord, an unrelated third party from whom we rent our office space, has agreed to release us from amounts owed for unpaid rent for November 2008 and to suspend rental fees due until further notice. Likewise, Charles Payne, our sole officer and director, has agreed to release us from unpaid consulting fees and expenses owed to him to date and to suspend charging us consulting fees until further notice.     18
```

| ITEM      6. | EXHIBITS. |
|--------------|-----------|

| Exhibit      No. | Document      Description                                                                                                                                                                                    |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |                                                                                                                                                                                                         |
| 31.1             | Certification      of Principal Executive Officer and Principal Financial Officer pursuant to      Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and      Exchange Act of 1934, as amended. |
|             |
| 32.1             | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief      Financial Officer).                 |

|   | PRINCIPLE      SECURITY INTERNATIONAL, INC. |
|--------|---------------------------------------------|
|   | (Registrant)                                |
|   |                                        |   |
|   | /s/                                         | CHARLES      PAYNE |
|   |  By:                                   | Charles      Payne |
|   |                                        | President,      Principal Executive Officer, Principal Accounting Officer, Principal      Financial Officer, Secretary/Treasurer, and member of the Board of      Directors. |

----