0


UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended June 30, 2008








[   ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the
transition period from __________ to __________





Commission
File Number 333-141482





Princeton Security
Technologies, Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            
            20-5506885(State
      or jurisdiction of incorporation or organization)
            
            (IRS
      Employer Identification No.)





303C College Road,
Princeton, New
Jersey                                                                           08540


(Address
of principal executive
offices)                                                                           (Zip
Code)





609-924-7310


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
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
past 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 definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.





Large Accelerated filer  ̈                                                                                                           Accelerated
filer  ̈


Non-accelerated filer   ̈ (Do not check if a
smaller reporting
company)                           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
[  ]   No [X]





Indicate
the number of shares outstanding of each of the issuer’s classes of common
equity, as of the latest practicable date.


11,781,375 shares of $0.001
par value common stock on Aug 11, 2008





Transitional
Small Business Disclosure Format (Check One): Yes
[  ]    No [X]





1


Part
I - FINANCIAL INFORMATION





Item
1. Financial Statements


Princeton
Security Technologies, Inc.


FINANCIAL
STATEMENTS


(UNAUDITED)


June 30,
2008





The
financial statements included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission.  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.  However, in the
opinion of management, all adjustments (which include only normal recurring
accruals) necessary to present fairly the financial position and results of
operations for the periods presented have been made.  These financial
statements should be read in conjunction with the accompanying notes, and with
the historical financial information of the Company.





2





PRINCETON
      SECURITY TECHNOLOGIES, INC.CONSOLIDATED
      BALANCE SHEETSJune
      30, 2008
            December
      31, 2007(Unaudited)ASSETSCurrent
      assetsCash
            $               12,731
            $               81,179Accounts
      receivable (net of allowance for doubtful accounts of $24,302 and $26,533,
      respectively )
            405,699
            297,779Other
      receivables
            88,167
            -Inventory
            622,521
            724,731Prepaid
      expenses
            68,174
            33,633Total
      current assets
            1,197,292
            1,137,322Property,
      plant & equipment (net of accumulated depreciation of $1,340,839 and
      1,328,878 respectively)
            62,872
            74,833Total
      assets
            $      1,260,164
            $         1,212,155LIABILITIESCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            $             602,495
            $             506,790Lines
      of credit
            54,771
            -Accrued
      other liabilities
            45,236
            15,775Accrued
      vacation expenses
            47,939
            44,481Deferred
      sales and service contract revenue
            78,100
            81,674Total
      current liabilities
            828,541
            648,720STOCKHOLDERS’ EQUITYPreferred
      stock; $.001 par value, 10,000,000 shares authorized; no shares issued and
      outstanding
            -
            -Common
      stock; $.001 par value, 90,000,000 shares authorized; 11,781,375
      shares  issued and outstanding
            11,781
            11,781Additional
      paid-in capital
            1,406,959
            1,406,959Retained
      earnings (deficit)
            (987,117)
            (855,305)Total
      stockholders’ equity
            431,623
            563,435Total
      liabilities and stockholders’ equity
            $          1,260,164
            $          1,212,155The
      accompanying notes are an integral part of these consolidated Financial
      Statements.





3








PRINCETON
      SECURITY TECHNOLOGIES, INC.(UNAUDITED)
      CONSOLIDATED STATEMENTS OF OPERATIONSFor
      the Three Months Ended
              June
      30,
            For
      the Six Months ended
              June
      30,2008
            2007
            2008
            2007RevenuesSales
      (net of returns)
            $           707,785
            $               648,104
            $        1,412,693
            $       1,503,159Costs
      of goods sold
            470,566
            470,318
            870,854
            1,047,080Gross
      Profit
            237,219
            177,786
            541,839
            456,079ExpensesDepreciation
      and amortization
            6,198
            5,365
            11,961
            10,980Selling
      and marketing
            64,740
            93,160
            126,678
            181,418General
      and administrative
            138,083
            197,215
            312,153
            393,451Research
      and development
            125,830
            106,910
            220,781
            198,816334,851
            402,650
            671,573
            784,665(Loss)
      from operations
            (97,632)
            (224,864)
            (129,734)
            (328,586)Other
      income/(expenses)
            (2,250)
            (6,265)
            (2,078)
            (7,270)Provision
      for income taxes
            -
            -
            -
            -Net
      loss
            $          (99,882)
            $            (231,129)
            $        (131,812)
            $       (335,856)Foreign
      currency translation adjustment
            -
            -
            -
            -Other
      comprehensive loss
            $          (99,882)
            $            (231,129)
            $        (131,812)
            $       (335,856)Net
      loss per share of common stock
            $            (0.008)
            $                (0.020)
            $            (0.011)
            $           (0.029)Weighted
      average number of common shares
            11,781,375
            11,500,000
            11,781,375
            11,500,000The
      accompanying notes are an integral part of these consolidated Financial
      Statements.





4





PRINCETON
      SECURITY TECHNOLOGIES, INC.(UNAUDITED)
      CONSOLIDATED STATEMENTS OF CASH FLOWSFor
      the Six Months ended June 30,2008
            2007Cash
      flow from operating activitiesNet
      income/(loss)
            $           (131,812)
            $               (335,856)Depreciation
      and amortization
            11,961
            10,980Provision
      for allowance on accounts receivable
            (2,231)
            -Change
      in non-cash working capital items:Accounts
      receivable
            (105,689)
            (59,076)Other
      receivables
            (88,167)
            -Inventory
            102,210
            (84,732)Prepaid
      expenses
            (34,541)
            (33,719)Accounts
      payable
            95,705
            43,304Accrued
      expenses
            32,919
            5,100Accrued
      payroll
            -
            (27,179)Line
      of Credit
            54,771
            -Deferred
      services contracts
            (583)
            4,083Deferred
      sales
            (2,991)
            (3,373)Cash
      flow used in operating activities
            (68,448)
            (480,468)(Increase)
      decrease in cash position
            (68,448)
            (480,468)Cash
      position at beginning of period
            81,179
            738,573Cash
      position at end of period
            12,731
            258,105Supplemental
      disclosure of cash flow information:Cash
      paid for:Interest
            $                      -
            $                     5,877Income
      taxes
            $                      -
            $                          -The
      accompanying notes are an integral part of these consolidated Financial
      Statements.





5


PRINCETON
SECURITY TECHNOLOGIES, INC.


NOTES TO
(UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS


For the
Second Quarter ending June 30, 2008 and 2007








Note
1     Organization





Princeton
Security Technologies, Inc. (the Company) was incorporated on September 8, 2006
in the State of Nevada.  The Company is the holding company of
Princeton Gamma-Tech Instruments, Inc. (PGTI). PGTI was incorporated on February
16, 2005 in the State of New Jersey. On February 19, 2005, PGTI purchased the
assets of Princeton Gamma-Tech, Inc.  This acquisition included the
assets, liabilities, operations, clients and intellectual property of Princeton
Gamma-Tech, Inc., including its wholly-owned subsidiary in the United Kingdom,
Princeton Gamma-Tech (UK) Limited.  On December 28, 2006, Princeton
Gamma-Tech (UK) Limited was sold.  The Company has elected a fiscal
year end of December 31st.





Note
2   Business Activity





Princeton
Gamma-Tech Instruments, Inc. is a leading supplier of X-ray and Gamma-ray
Detectors and Spectroscopy systems, portable Radioisotope Identifiers, and
portable Chemical Analyzers. The Company serves a broad customer base in
scientific research, industrial materials analysis, and Homeland Security. The
Company operates a full customer service and support program, backed by a modern
manufacturing and service facility.





Note
3   Use of Estimates in the preparation of the financial
statements





The
preparation of the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in these financial statements and
accompanying notes. Actual results could differ from those estimates. The
interim financial information is unaudited.  Interim results are not
necessarily indicative of results of operations for the full
year.  The condensed consolidated financial statements include the
accounts of Princeton Security Technologies, Inc.  and subsidiary
after elimination of inter-company transactions and accounts.





Note
4    Liquidity and Capital Resources





We have
been able to finance our operations, capital expenditures and other liquidity
needs through our cash flows generated from operations along with cash generated
from sale of company stock.  Total cash decreased by $23,704 at June 30,
2008 to $12,731 compared to $36,435 at March 31, 2008.  The decrease is due
to the operating loss in the quarter ended June 30, 2008.





Note
5   Sales





Sales
were up 9% in the three months ending June 30, 2008 versus the three months
ending June 30, 2007.  The Nuclear products had the biggest sales
volume of all product categories, 42.5% of the sales; the second biggest was the
Portable Isotope Identifiers product category (SAM products) with the sales
volume of 32.7%  in this quarter ending June 30, 2008. X-ray products
were the third biggest category, 19.8% of the sales volume in the same time
period.





Note
6    RISKS RELATED TO OUR BUSINESS





We are
currently losing money and may need additional capital to execute on our
business plan.





Currently
our operations are losing money and we have had to rely on equity investments to
fund shortfalls.  As we begin to expand our operations and commence
marketing campaigns for our recently developed products, our capital
requirements are likely to expand.  Even with the proceeds from our
recent public stock offering it is likely we will need additional capital to
remain in business.  Investors in that offering will likely suffer
further dilution if we raise additional capital and if we are unable to raise
additional capital, it is likely we would have to terminate our operations
resulting in the loss of the investors’ investments.





6


PRINCETON
SECURITY TECHNOLOGIES, INC.


NOTES TO
(UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS (continued)


For the
Second Quarter ending June 30, 2008 and 2007








Note
7   We have limited funds upon which to rely for adjusting to
business variations and for growing new business.





We are
likely to look for new funding to assist in the expansion of our business. If we
are to grow and expand our operations, we will need to raise significant amounts
of additional capital.  There can be no assurance we will be able to
raise additional capital and even if we are successful in raising additional
capital that we will be able to raise capital on reasonable terms. If we do
raise capital, our existing shareholders may incur substantial
dilution.





Note
8    Gross Margin





The
Company's Gross Profit Margin is higher than the previous year 33.5% for the
three months ending June 30, 2008, compared to 27.4% for the three months ending
June 30, 2007, due to the internal cost structure improvement.





Note
9    Fixed Costs





Fixed
expenses decreased $67,799 or 16.8% in the three months period ending June 30,
2008 compared to the same period in 2007.





Note
10   Gross Profit/Loss





The net
profit improved 56.8% for the quarter ending June 30, 2008 compared to the same
period in 2007. The net loss for the quarter was $99,882 compared to the net
loss of $231,129 for the three months ending June 30, 2007.








7


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





Special
Note Regarding Forward-Looking Statements





This
periodic report contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 with respect to the Plan
of Operations provided below, including information regarding the Company’s
financial condition, results of operations, business strategies, operating
efficiencies or synergies, competitive positions, growth opportunities, and the
plans and objectives of management. The statements made as part of the Plan of
Operations that are not historical facts are hereby identified as
"forward-looking statements."





Business of the
Company





Corporate
Information





Princeton
Security Technologies, Inc. (“Princeton” or the “Company”) a Nevada corporation
is the parent company of Princeton Gamma Tech Instruments, Inc. (“PGTI”) which
develops and manufactures detection equipment used in the homeland security and
industrial marketplaces.  When used herein Princeton or the Company
includes PGTI.   PGTI is a Princeton, New Jersey based
corporation founded in February 2005. PGTI acquired all the business assets for
its Detector and Microanalysis systems from a subsidiary of a global stainless
steel company, Outokumpu Oyj, in February 2005. Since then, PGTI has
restructured its operation, sold its undesired Microanalysis business to a
subsidiary of Bruker Biosciences Corp., and focused its efforts towards the
detector business and its existing homeland security and industrial
marketplaces.





Products





Our
current product line includes x-ray and gamma-ray detectors with custom made
electronics and software and portable stand alone radiation and chemical
equipment. Our x-ray and gamma-ray detectors are being sold to research and
industrial concerns for a variety of usages including quality control and
laboratory equipment.  Additionally, these products can be used as
components in scientific research instrumentation.  Our portable stand
alone radiation and chemical equipment allows radioactive isotopes or chemicals
to be identified by Law Enforcement, First Responders, Federal Authorities,
Hospitals and Environmental Authorities.





For
marketing purposes, we have divided our products into three
categories.  The first two categories involve instrumentation that
detects and analyzes radioactive material from any source, including legitimate
uses such as the nuclear power and weapons programs and medical diagnoses and
treatment, as well as the detection of the illicit transportation of radioactive
materials.  The third category is concerned with the detection and
analysis of X-rays for non-destructive testing and scientific
research.





Category 1: Portable
Gamma-ray detector and radioactive isotope identifier.


The
current product is termed the SAM Defender.  This hand-held instrument
is a self-contained radiation detector, low-noise signal processor, and user
interface.  Our proprietary analysis software provides an intuitive
color display suitable for both First Responders as well as more technically
trained Health Physicists.  This product and product versions are
mainly used for large homeland security market applications, as well as for
environmental, industrial and medical purposes.  This product detects
neutron and gamma radiation from over 80 isotopes.





Category 2: Laboratory
Gamma-ray detectors and spectrometers:


PGTI is
one of only four companies worldwide that manufacturs High Purity Germanium
Detectors and associated electronics and software for the most sensitive and
accurate detection and analysis of radioactive samples in a laboratory
environment.  A typical application is the measurement of very
low-levels of radioisotopes in soil, water or geological samples to determine
the efficacy of radioactive waste cleanup or to conduct geophysics
research.  This type of lab-based instrumentation is also used by the
nuclear power industry for on-line monitoring.  Customers include
Federal and State governmental authorities, research laboratories and large
corporations.





Category 3: X-ray detectors
and spectrometers.


The
non-destructive testing of materials by X-ray analysis utilizes a range of
detector products from small hand-held units to large systems installed on a
Synchrotron and used for the fundamental research of materials.  PGTI
supplies both detector components as an OEM supplier and also complete X-ray
spectrometer systems.  Applications include quality control (e.g., for
Silicon wafer fabrication), fundamental material research (e.g., on a
synchrotron), and industrial control and monitoring, (e.g., engine wear
analysis).


8


Discussion and Analysis of
Financial Condition and Results of Operations





Critical Accounting Policies
and Estimates





The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts
reported in the unaudited Condensed Consolidated Financial Statements and
accompanying notes.  Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results could differ from these estimates
under different assumptions or conditions.  The Company believes
there have been no significant changes during the year ended December 31,
2007.





The
Company’s accounting policies are more fully described in Note 1 of the
consolidated financial statements.  As discussed in Note 1, the
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions about the future events
that affect the amounts reported in the consolidated financial statements and
the accompanying notes. Management bases its estimates on historical experience
and on various other assumptions that are believed to be reasonable under the
circumstances.  Actual differences could differ from these estimates
under different assumptions or conditions.  The Company believes that
the following addresses the Company’s most critical accounting
policies.





We
recognize revenue in accordance with Securities and Exchange Commission Staff
Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”).  Under
SAB 104, revenue is recognized at the point of passage to the customer of title
and risk of loss, when there is persuasive evidence of an arrangement, the sales
price is determinable, and collection of the resulting receivable is reasonably
assured.  We recognize revenue as services are provided with specific
long lead time orders.





Our
allowance for doubtful accounts is maintained to provide for losses arising from
customers’ inability to make required payments.  If there is
deterioration of our customers’ credit worthiness and/or there is an increase in
the length of time that the receivables are past due greater than the historical
assumptions used, additional allowances may be required. For example,
at June 30, 2008, every additional one percent of our accounts receivable
that becomes uncollectible would reduce our operating income by approximately
$4,056.





We
account for income taxes in accordance with Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“SFAS No.
109”).  Under SFAS No. 109, deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which the differences
are expected to reverse.  Deferred tax assets will be reflected on the
balance sheet when it is determined that it is more likely than not that the
asset will be realized.  A valuation allowance has currently been
recorded to reduce our deferred tax asset to $0.




Our Business
Growth






For the
three months ended June 30, 2008 our sales increased to $707,785 from $648,104
for the quarter ended June 30, 2007. Our gross profit increased to $237,219
compared to the same period in 2007 when gross profits were
$177,786.  Our nuclear sales have had the biggest sales volume of all
product categories, and the second biggest category is portable units and the
third biggest X-ray sales category. The largest growth in the quarter ended June
30, 2008, was in portable units, due to a new product variation, as well as new
OEM sales for the SAM defender, which is being sold in the Homeland
Security market. This variation uses a Lanthinum Bromite detector, which
improves the received data significantly. We have also seen an increase in High
Purity Gerrnanium Detector systems.  We anticipate growth across our
product line in 2008, as our existing and new products reach the growing market
segments of homeland security and material research.






Results of
Operations






Total
sales increased for the comparable quarterly periods in June 30, 2008 from 2007.
We were able to improve our gross profit margins by focusing on products with
higher margins during the quarter.  Additionally, we were able to
control expenses better reducing expenses for the quarter ended June 30, 2008,
to $334,851 from $402,650 for the quarter ended June 30,
2007.   As a result of the reduced expenses and cost of goods
sold our net loss narrowed to $99,882 for the quarter ended June 30, 2008 from a
net loss of $231,129 for the same period in 2007. Although sales were lower for
the six months ended June 30, 2008, overall gross profits increased as a result
of controlling expenses.  Revenues for the six months ended June 30,
2008 were $1,412,693 compared to $1,503,159 for the six months ended June 30,
2007.  Gross profits were $541,839 for the six months ended June 30,
2008, compared to $456,079 for the six months ended June 30,
2007.  Even with a slight decrease in sales over the six months,
management believes the overall direction of sales and profits is improving and
believes the Company will soon be covering its operating expenses as sales
continue and cost are better controlled.




9




The
narrowing of our loss was a reflection of the efforts to move products and
product variations as well as new applications from the research and development
stage and early stage commercialization into ongoing production.  As
we have had a chance to work on our production efforts, we have been able to
reduce cost of goods sold.  We are hopeful, as our products gain more
acceptance and awareness we are able to increase sales, cost of goods sold as a
percentage of sales will continue to decrease.  We still will need
increased sales to reach profitability and cover all of our operating
costs.






We
anticipate general and administrative expenses to remain at present levels or
higher in the future.  General and administrative expenses decreased
from $197,215 for the June 30, 2007 quarter to $138,083 for the quarter ended
June 30, 2008.  This reduction reflects the closing of our offering in
2007 and the related expenses associated with it and the restructuring of our
management staff.  We expect general and administrative expenses to
increase in future quarters as we expand our operations.






Since we are in the
initial phases of product sales for some new products, we are hopeful sales will
increase and be able to cover operating costs.We will be
dependent on sales to increase before we will be able to cover ongoing
cost.  Until we are able to increase sales, we may have to seek
additional financing to fund operations.






Seasonality and
Cyclicality






In our
business, we have experienced lower sales volume during the past years in the
beginning of the first quarter as well as summer months in
general.  We believe this trend may continue in the future, as
well.






Liquidity and Capital
Resources







Historically,
we have financed our working capital requirements through internally generated
funds and sales of equity and debt securities. Since inception through June 30,
2008, we raised approximately $1,418,740 million from the sale of equity
securities.  As we continue to expand our operations, we anticipate
seeking additional capital through the sale of equity securities.  Our
goal is to position Princeton to be able to raise larger amounts of equity
capital through the public markets or through private investments.  At
this time we do not know the extent of the overall financing will need in the
future.  Financing will depend on how well our products are received
in the marketplace.





At June
30, 2008, we had working capital of $368,751.  A component of our
current liabilities as of June 30, 2008, was our accounts payable of
$602,495.  We feel we will be able to service ongoing payables with
current revenue and existing capital.  However, our current assets
consist of only $12,731 in cash and our inventory is $622,521 so we will be
dependent on selling our inventory to cover ongoing payables.  We may
be forced to seek additional debt or equity capital to cover any liquidity
issues that may arise as we try and increase sales and collect on accounts
receivables. Our limited cash reserves and the inability to find long-term
financing will limit our ability to grow until we are able to improve on our
cash position.  We are actively trying to remedy our limited cash
position but have not had success in raising additional capital or obtaining
long-term debt financing.  We have had to rely on management and
principal shareholders to assist in funding capital short falls and until
long-term equity or debt funding is obtained we will have to continue to rely on
management and principal shareholders for funding.  Nether management
or principal shareholders have indicated they will continue to fund
shortfalls




We
anticipate to reduce losses for the year as our sales continue to
expand.  However, it is our goal to increase marketing and sales which
will require additional capital beyond any revenue anticipated. In the future,
we may issue additional debt or equity securities to satisfy our cash
needs.  Any debt incurred or issued may be secured or unsecured, at a
fixed or variable interest rates and may contain other terms and conditions that
our board of directors deems prudent.  Any sales of equity securities
may be at or below existing market prices.  We cannot assure you that
we will be successful in generating sufficient capital to adequately fund our
liquidity needs.







Off-Balance
Sheet Arrangements





We have
no off balance sheet arrangements as of June 30, 2008.





Forward-looking
Statements





The
Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe
harbor for forward-looking statements made by or on behalf of our Company. Our
Company and our representatives may from time to time make written or oral
statements that are “forward-looking,” including statements contained in this
Annual Report and other filings with the Securities and Exchange Commission and
in reports to our Company’s stockholders. Management believes that all
statements that express expectations and projections with respect to future
matters, as well as from developments beyond


10


our
Company’s control including changes in global economic conditions are
forward-looking statements within the meaning of the Act. These statements are
made on the basis of management’s views and assumptions, as of the time the
statements are made, regarding future events and business performance. There can
be no assurance, however, that management’s expectations will necessarily come
to pass. Factors that may affect forward- looking statements include a wide
range of factors that could materially affect future developments and
performance, including the following:: Changes in Company-wide strategies, which
may result in changes in the types or mix of businesses in which our Company is
involved or chooses to invest; changes in U.S., global or regional economic
conditions, changes in U.S. and global financial and equity markets, including
significant interest rate fluctuations, which may impede our Company’s access
to, or increase the cost of, external financing for our operations and
investments; increased competitive pressures, both domestically and
internationally, legal and regulatory developments, such as regulatory actions
affecting environmental activities, the imposition by foreign countries of trade
restrictions and changes in international tax laws or currency controls; adverse
weather conditions or natural disasters, such as hurricanes and earthquakes,
labor disputes, which may lead to increased costs or disruption of
operations.





This list
of factors that may affect future performance and the accuracy of
forward-looking statements is illustrative, but by no means exhaustive.
Accordingly, all forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.





Item
3.  Quantitative and Qualitative Disclosures About Market
Risk.





This item
is not required for Smaller Reporting Companies.





Item
4T.  Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





Our
management, with the participation of our President and CFO, evaluated the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on that evaluation, our President and CFO
concluded that our disclosure controls and procedures as of the end of the
period covered by this report were effective such that the information required
to be disclosed by us in reports filed under the Exchange Act is
(i) recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and (ii) accumulated and
communicated to our management, including our President and CFO, as appropriate
to allow timely decisions regarding disclosure. A controls system cannot provide
absolute assurance, however, that the objectives of the controls system are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been
detected.







Management’s
Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes of
accounting principles generally accepted in the United
States.







Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives.







Our
management, with the participation of the President and CFO, evaluated the
effectiveness of our internal control over financial reporting as of June 30,
2008.  Based on this evaluation, our management, with the participation of
the President and CFO, concluded that, as of June 30, 2008, our internal control
over financial reporting was effective.





Changes
in internal control over financial reporting





There
have been no changes in internal control over financial reporting.





PART
II - OTHER INFORMATION





ITEM
1.  Legal Proceedings





None


11


ITEM
2.  Unregistered Sales of Equity Securities and Use of
Proceeds





Recent Sales of Unregistered
Securities





We have
not sold any restricted securities during the three months ended June 30,
2008.





Use
of Proceeds of Registered Securities





None; not
applicable.





Purchases
of Equity Securities by Us and Affiliated Purchasers





During
the three months ended June 30, 2008, we have not purchased any equity
securities nor have any officers or directors of the Company.





ITEM
3.  Defaults Upon Senior Securities





We are
not aware of any defaults upon senior securities.





ITEM
4.  Submission of Matters to a Vote of Security Holders





No
matters were submitted to a vote of security holders during the quarter ended
June 30, 2008.





ITEM
5.  Other Information.





None





ITEM
6.  Exhibits





(a)
Exhibits.





Item
      4
            
            Exhibit
      No.
            
            Instruments
      Defining the Rights of Security Holders
            
            Location4.01
            
            4
            
            Specimen
      Stock Certificate
            
            Incorporated
      by reference31.01
            
            31
            
            CEO
      certification Pursuant to 18 USC Section 1350, as adopted pursuant to
      Section 302 of Sarbanes---Oxley Act of 2002
            
            This
      Filing31.02
            
            31
            
            CFO
      certification Pursuant to 18 USC Section 1350, as adopted pursuant to
      Section 302 of Sarbanes---Oxley Act of 2002
            
            This
      Filing32.01
            
            32
            
            CEO
      Certification pursuant to Section 906
            
            This
      Filing32.02
            
            32
            
            CFO
      Certification pursuant to Section 906
            
            This
      Filing





*
Incorporated by reference from the Company's registration statement on Form SB-2
filed with the Commission, SEC file no. 333-141482.





SIGNATURES





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





Princeton
      Security Technologies, Inc.(Registrant)Date:
            
            August
      14, 2008
            
            By:
            /s/  Juhani
      TaskinenJuhani
      Taskinen, CEO and CFO





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