SECURITIES
      AND EXCHANGE COMMISSION


Washington
      D.C. 20549





FORM
      10-QSB








[X]
      Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For
      the
      Quarter Ended: June 30, 2007





[ 
]
      Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
      of
      1934





For
      the
      Transition Period from ___________ to ____________





Commission
      File Number 333-141482







Princeton
      Security Technologies, Inc.


(Name
      of
      Small Business Issuer in its charter)








Nevada
            20-5506885(State
                or other jurisdictionof
            (I.R.S.
                Employer I.D. No.)incorporation
                or organization)





303C
      College Road, Princeton, New Jersey 08540


(Address
      of principal executive offices and 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
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





(1) 
      Yes [X]   No [  ] (2)   Yes
      [X]   No [  ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).   Yes [X]   No [ 
]





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





11,500,000
      shares of Common Stock, $0.001 par value as of June 30, 2007










**PART
      I FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**





**Princeton
      Security Technologies, Inc.**


**FINANCIAL
      STATEMENTS**


**(UNAUDITED)**








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.


1





**PRINCETON
                SECURITY TECHNOLOGIES, INC.**(UNAUDITED)
                CONSOLIDATED BALANCE SHEET**June
                30, 2007****ASSETS**CurrentCash
            
            $
            258,105Accounts
                receivable (net of allowance for doubtful accounts of $26,533
                )
            
            
            572,016Inventory(net
                of reserves of $183,127)
            
            
            634,114Prepaid
                Expenses
            
            
            84,533Total
                Current Assets
            
            
            1,548,768Total
                OtherProperty,
                plant & equipment (net of accumulated depreciation of
                $1,310,792)
            
            
            79,314Total
                Assets
            
            $
            1,628,082**LIABILITIES**CurrentAccounts
                payable and accrued liabilities
            
            $
            713,041Accrued
                other liabilities
            
            
            20,409Accrued
                payroll expenses
            
            
            14,864Accrued
                vacation expenses
            
            
            73,713Deferred
                service contract revenue
            
            
            4,083Deferred
                sales revenue
            
            
            37,548Accrued
                warranty expenses
            
            
            20,315Total
                Current Liabilities
            
            
            883,973**STOCKHOLDERS’
                EQUITY**Preferred
                stock; $.001 par value, 10,000,000 shares authorized; no shares issued
                and
                outstanding
            
            
            -Common
                stock; $.001 par value, 90,000,000 shares authorized; 11,500,000
                shares
                issued and outstanding
            
            
            11,500Additional
                paid-in capital
            
            
            1,281,112Retained
                earnings (deficit)
            
            
            (548,503
            )Total
                Stockholders’ Equity
            
            
            744,109Total
                Liabilities and Stockholders’ Equity
            
            $
            1,628,082The
                accompanying notes are an integral part of these consolidated Financial
                Statements.


2





**PRINCETON
                SECURITY TECHNOLOGIES, INC.**(UNAUDITED)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
                LOSS**For
                the Quarter Ended June 30th**
            
            **For
                the Six Months ended June 30th**2007
            
            2006
            
            2007
            
            2006RevenuesSales
                (net of returns)
            
            $
            648,104
            
            $
            517,307
            
            $
            1,503,159
            
            $
            1,044,881Costs
                of goods sold
            
            
            470,318
            
            
            335,738
            
            
            1,047,080
            
            
            641,421Gross
                Profit
            
            
            177,786
            
            
            181,569
            
            
            456,079
            
            
            403,460ExpensesDepreciation
                and amortization
            
            
            5,365
            
            
            3,024
            
            
            10,980
            
            
            6,156Selling
                and marketing
            
            
            93,160
            
            
            8,566
            
            
            181,418
            
            
            71,558General
                and administrative
            
            
            197,215
            
            
            177,095
            
            
            393,451
            
            
            313,108Research
                and development
            
            
            106,910
            
            
            207,126
            
            
            198,816
            
            
            348,300402,650
            
            
            395,811
            
            
            784,665
            
            
            739,122(Loss)
                from operations
            
            
            (224,864
            )
            
            (214,242
            )
            
            (328,586
            )
            
            (335,662
            )Other
                income/(expenses)
            
            
            (6,265
            )
            
            373
            
            
            (7,270
            )
            
            1,818Provision
                for income taxes
            
            
            
            
            
            (3,100
            )
            
            
            
            
            (3,100
            )**Net
                loss**
            
            **$**
            **(231,129**
            **)**
            **$**
            **(216,969**
            **)**
            **$**
            **(335,856**
            **)**
            **$**
            **(336,944**
            **)**Foreign
                currency translation adjustment
            
            
            -
            
            
            
            
            
            -
            
            
            19,432**Other
                comprehensive loss**
            
            **$**
            **(231,129**
            **)**
            **$**
            **(216,969**
            **)**
            **$**
            **(335,856**
            **)**
            **$**
            **(317,512**
            **)****Net
                loss per share of common stock**
            
            **$**
            **(0.02**
            **)**
            **$**
            **(0.03**
            **)**
            **$**
            **(0.03**
            **)**
            **$**
            **(0.04**
            **)****Weighted
                average number of common shares**
            
            
            **11,500,000**
            
            
            **8,000,000**
            
            
            **11,500,000**
            
            
            **8,000,000**The
                accompanying notes are an integral part of these consolidated Financial
                Statements.


3





**PRINCETON
                SECURITY TECHNOLOGIES, INC.**(UNAUDITED)
                CONSOLIDATED STATEMENTS OF CASH FLOWS**For
                the Six Months Ending June 30**2007
            
            2006**Cash
                flow from operating activities**Net
                income/(loss)
            
            $
            (335,856
            )
            $
            (336,944
            )Depreciation
                and amortization
            
            
            10,980
            
            
            6,161**Change
                in non-cash working capital items:**Inventory
            
            
            (84,732
            )
            
            (12,287
            )Accounts
                receivable
            
            
            (59,076
            )
            
            733,383Prepaid
                expenses
            
            
            (33,719
            )
            
            59,918Accrued
                expenses
            
            
            5,100
            
            
            (40,484
            )Other
                current assets
            
            
            -
            
            
            15,126Accounts
                payable
            
            
            43,304
            
            
            (99,421
            )Accrued
                payroll
            
            
            (27,179
            )
            
            (99,928
            )Deferred
                services contracts
            
            
            4,083
            
            
            (83,676
            )Deferred
                sales
            
            
            (3,373
            )
            
            (112,511
            )Accrued
                warranty expenses
            
            
            -
            
            
            (19,168
            )**Cash
                flow used in operating activities**
            
            
            **(480,468**
            **)**
            
            **10,169****Cash
                flow from investing activities**Purchase
                of property and equipment
            
            
            -
            
            
            (75,112
            )**Cash
                flow used in investing activities**
            
            
            **-**
            
            
            **(75,112**
            **)****Effect
                of rate change on cash**
            
            
            **-**
            
            
            **(25,094**
            **)****Decrease
                in cash position**
            
            
            **(480,468**
            **)**
            
            **(90,037**
            **)****Cash
                position at beginning of period**
            
            
            **738,573**
            
            
            **328,033****Cash
                position at end of period**
            
            **$**
            **258,105**
            
            **$**
            **237,996****Supplemental
                disclosure of cash flow information:**Cash
                paid for:Interest
            
            $
            5,877
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            3,100The
                accompanying notes are an integral part of these consolidated Financial
                Statements.


4





**PRINCETON
      SECURITY TECHNOLOGIES, INC.**


NOTES
      TO
      (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS


**For
      the Six months ending June 30, 2007 and 2006.**








***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 31 st .








***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 increased by $20,109 by the end of
      the 2nd quarter ending June 30, 2007 to $258,105 compared to $237,996 the 2nd
      quarter ending June 30, 2006.  Our working capital as of June 30, 2007
      increased $491,643 to $664,795, as compared to $173,152 as of June 30, 2006
      mainly due to higher Accounts Receivables and inventory balances in
      2007.








***Note
      5   Sales***





Sales
      are
      up 25.3% in the 2nd quarter ending June 30, 2007 versus the 2nd quarter ending
      June 30, 2006 primarily due to an increase in nuclear sales ($42,000 relates
      to
      revenue realized on large long term projects). We are expecting the nuclear
      sales to remain strong for 3rd & 4th Quarter of 2007. Sales year-to-date are
      up 43.9% as of June 30, 2007 compared to June 30, 2006 due to the launch of
      the
      new SAM 940 as well as an increase in nuclear sales.


5


***Note
      6   Risks Relating 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 this
      offering it is likely we will need additional capital to remain in business.
      Investors in this 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.








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





Even
      on
      the completion of this offering, we are likely to look for new funding to assist
      in the expansion of our business. It is uncertain whether such funding will
      be
      available. 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, including investors in the
      SB-2 offering, may incur substantial and immediate dilution.








***Note
      8   Gross Margin***





The
      Gross
      margin is lower for the quarter and for 2007 year-to-date vs. 2006 due to the
      change in product mix. The margin on nuclear and SAM sales is lower than the
      margin on X-ray sales.








***Note
      9   Fixed Costs***





Selling
      expenses have increased in 2007 as we have hired an outside consultant to help
      promote new sales. There has also been an increase in travel to shows and
      customers. The 2006 selling expenses were reduced in the 2nd Quarter of 2006
      by
      $42,000 due to a reversal of a prior period charge.





Administrative
      expenses have increased in 2007 as we incurred additional legal, audit, and
      general administrative fees for going public.





In
      2006
      we had high R&D expenses for the new product design and casing. This design
      work was fundamentally complete in 2006 so our 2007 R&D expenses are much
      lower.








***Note
      10   Gross Profit/Loss***





Despite
      the increased expenses due to the public listing and increased sales &
marketing, the overall loss improved by 9.9% from a loss by June 30,2007 of
      (22.3%) of net sales compared to a loss of (32.2%) of net sales as of June
      30,
      2006.


6


**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
      financial condition, results of operations, business strategies, operating
      efficiencies or synergies, competitive positions, growth opportunities for
      existing products, plans and objectives of management. Statements in this
      periodic report 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 four 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. The final category is
      instrumentation for the detection and identification of low levels of
      potentially toxic chemicals.





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 manufactures 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.


7


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).





Category
      4: Chemical Analyzers.


The
      two
      portable chemical analyzer products offered by PGTI utilize Gas Chromatography
      (GC) and Ion Mobility Spectrometry (IMS), respectively. The former is a highly
      sensitive instrument that can analyze a large range of gases at very low
      concentrations and is well suited to monitoring toxicity levels in industrial
      applications as well as for First Responders to emergencies involving toxic
      materials. The IMS unit is a small hand-held device designed for the rapid
      detection of a limited number of chemicals and offers the advantage of speed
      and
      simplicity but with less sensitivity and flexibility than the GC unit. Chemical
      Analyzers are being offered to the homeland security market, as well as for
      environmental and industrial purposes.





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,
      2006.





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, 2007, every
      additional one percent of our accounts receivable that becomes uncollectible
      would reduce our operating income by approximately $5,985.





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.


8




Our
      Business Growth




For
      the
      quarter ended June 30, 2007 our sales increased $130,797 or 25.3% compared
      to
      the same quarter of 2006. Year to date as of June 30, 2007 our sales have
      increased $458,278 or 43.9% compared to June 30, 2006. Our nuclear sales have
      had the biggest sales volume of all product categories, and the balance of
      our
      sales are evenly split between X-ray sales, portable units and our service
      function. The largest growth in the quarter ended June 30, 2007, was in portable
      units, due to a new product introduction of the SAM Defender, which is being
      sold to the Homeland Security market. We have also seen an increase of demand
      in
      our Multi Element Array systems. We anticipate growth across our product line
      in
      2007, as our existing and new products reach the growing market segments of
      homeland security and material research.




Results
      of Operations




Total
      sales increased from 2006 to 2007 as we started the sales of several new
      products. For the three and six months ended June 30, 2007, our sales were
      $648,104 and $1,503,159, respectively. With increased sales, our cost of goods
      sold also increased to $470,318 and $1,047,080 for the three and six months
      ended June 30, 2007, respectively. Overall, our cost of sales as a percentage
      of
      sales increased approximately 10% over the same period in 2006. This was the
      result of higher general manufacturing costs in our operations. We intend to
      continue to try and reduce cost of goods sold as we produce a larger volume
      of
      products and are able to obtain better pricing on the manufacturing components.
      This will take some time as we have to increase our sales volume in order to
      have better buying power.




Although
      sales increased, the increase was not sufficient to offset additional expenses
      as we expanded our operations. We were able, however, to control expenses
      somewhat so that overall expenses increased only slightly over 2006. Expense
      increased from $395,811 for the three and $739,122 for the six months ended
      June
      30, 2006 compared to $402,650 and 784,665 for the three and six months ended
      June 30, 2007, respectively. Expenses increased as we expanded operations in
      an
      effort to staff anticipated product development and product launches. As some
      products moved from the research and development stage to production, we were
      able to offset expense increases with a reduction in our research and
      development expenses. For the three and six months ended June 30, 2007, research
      and development expense decreased by $100,216 and $149,484, respectively. We
      anticipate research and development expenses to continue at the present level
      or
      higher in the upcoming year. As a company that focuses on producing complex
      detection products and components, we will continue to have to advance the
      products to meet new customer and industry requirements which will require
      continued efforts in research and development.




We
      also
      anticipate general and administrative expenses to remain at present levels
      or
      higher in the future. General and administrative expenses increased from
      $177,095 for the quarter ended June 30, 2006 to $197,215 for the quarter ended
      June 30, 2007, as we moved into a larger facility and retained additional
      support staff to prepare for manufacturing and launch of our new products.
      We do
      expect some additional increases in general and administrative expenses as
      we
      now will be required to make quarterly and annual filings with the Securities
      and Exchange Commission.




Selling
      and marketing costs also increased from 2006 to 2007 as we began more direct
      selling efforts on our products. For the quarter ended June 30, 2007, our
      selling and marketing costs were $93,160 for the three months and $181,418
      for
      the six months. This was an increase from the $8,566 and $71,558 for the three
      and six months ended June 30, 2006. We have started to rely more on outside
      sales agents to sell our products in an effort to manage these expenses but
      as
      sales increase we would expect selling and marketing cost to increase. We are
      hopeful relying on outside sales agents will allow us to not have to incur
      additional upfront and fixed costs to sell our products. By maintaining the
      existing sales staff at present levels and relying more on outside sales agents,
      we hope to maintain a lower fixed cost of selling and marketing and to tie
      the
      outside sale agents to a fixed percent of sales. We hope this sales structure
      will allow us to increase sales and at the same time be able to tie sales and
      marketing to more of a percentage of sales instead of a fixed cost structure
      as
      we now have.


9




Even
      with
      increased sales for the quarter ended June 30, 2007, we still had a net loss
      of
      $231,129 for the three months ended June 30, 2007 and $335,856 for the six
      months ended June 30, 2007, as our expense associated with the launch of the
      new
      product and to position Princeton for future sales and manufacturing increased
      expenses faster than sales. Since we are in the initial phases of product sales
      for some new products, we are hopeful sales will continue to increase and be
      able to cover the increased expenses we incurred in preparation of the launch
      of
      our products. As
      the
      products were in their early stage of production, we had a higher cost of goods
      sold resulting from a higher than
      normal manufacturing costs. We also continued to try and refine our
      manufacturing process on several products, particularly the Sam Defender and
      Gamma-Ray as we experimented with new components to try and reduce our cost
      of
      goods sold. This also resulted in a higher wastage and quality control issues
      than we would anticipate in the future. As we become more efficient in our
      manufacturing process, we are hoping to reduce quality control issues which
      should help reduce our cost of goods sold.




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 December
      31, 2006, we raised approximately $1.3 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, 2007, we had working capital of $664,795. Our working capital was helped
      by
      capital infusion of approximately $765,000 in equity investments since September
      2006. A component of our current liabilities as of June 30, 2007, was our
      accounts payable of $713,041. We feel we will be able to service ongoing
      payables with current revenue and existing capital. This will be dependent
      on
      our ability to continue to increase sales as our inventory has increased to
      $634,114 on June 30, 2007 from $415,077 on June 30, 2006.




Our
      cash
      position has been decreasing as we purchased inventory and used cash to cover
      ongoing expenses. At June 30, 2007, our cash balance was $258,105 with cash
      used
      by operations during the quarter being $480,468. We are hopeful we will complete
      the sale of additional securities during the current period to help our cash
      position.




We
      anticipate losses to continue for the year but to be reduced as our sales begin
      to expand. However, it is our goal to increase marketing and sales which will
      require additional capital beyond any revenue anticipated. We are hopeful
      proceeds of the SB-2 offering will support the 2007 anticipated
      expansion.




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.


10


**ITEM
      3. CONTROLS AND PROCEDURES**





a) Evaluation
      of Disclosure controls and procedures .





The
      Company’s principal executive officers, including principal accounting officers
      have reviewed the disclosure controls and procedures (as defined in section
      240.13a-149c and 240.15d-14c in place to assure the effectiveness of such
      controls and procedures. This review occurred within 90 days of this 10-QSB
      being filed. Based on this review, the principal executive officers and
      accounting officers believe Princeton’s disclosure controls and procedures are
      adequate.





b) Changes
      in Internal Controls .





There
      were no significant changes in Princeton’s internal controls, or other factors,
      that could significantly affect the Company’s controls subsequent to the date of
      the evaluations performed by the executive officers of the Company. No
      deficiencies or material weaknesses were found that would require corrective
      action.








**PART
      II - OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS**


None.





**ITEM
      2. CHANGES IN SECURITIES**


None.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**


None.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**


None.





**ITEM
      5. OTHER INFORMATION**


None.





**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**





(a) Exhibits .





Item
                4
            Exhibit
                No.
            Instruments
                Defining the Rights of Security Holders
            Location4.01
            4
            Specimen
                Stock Certificate
            Incorporated
                by reference*31.01
            31
            CEO
                certification Pursuant to 18 USC Section 1350, as adopted pursuant
                toSection
                302 of Sarbanes-Oxley Act of 2002
            This
                Filing31.02
            31
            CFO
                certification Pursuant to 18 USC Section 1350, as adopted pursuant
                toSection
                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.





(b) Reports
      on Form 8-K .





None.


11





**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]Dated:
                  August 10, 2007
              By:/s/
                  Juhani TaskinenJuhani
                  Taskinen, President(Principal
                  Executive Officer)By:
                  /s/ Susa MillerSusa
                  Miller, Chief Accounting
                  Officer






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