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 September 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
other jurisdiction
of                                                                                                           (IRS
Employer Identification No.)


incorporation
or organization)





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 November 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)


September
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 SHEETSSeptember
      30, 2008
                  
                  December
      31, 2007ASSETS
                  
                  (Unaudited)Current
      AssetsCash
                  
                  $
                  14,907
                  
                  $
                  81,179Accounts
      receivable (net of allowance for doubtful accounts
                    of
      $24,301 and $26,533, respectively)
                  
                  
                  255,798
                  
                  
                  297,779Other
      Receivables
                  
                  
                  87,781
                  
                  
                  -Inventory
                  
                  
                  615,195
                  
                  
                  724,731Prepaid
      Expenses
                  
                  
                  68,659
                  
                  
                  33,633Total
      Current Assets
                  
                  
                  1,042,340
                  
                  
                  1,137,322Property,
      plant & equipment (net of accumulated
                    depreciation
      of $1,347,035 and $1,328,878 respectively)
                  
                  
                  56,676
                  
                  
                  74,833Total
      Assets
                  
                  $
                  1,099,016
                  
                  $
                  1,212,155LIABILITIESCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
                  
                  $
                  527,774
                  
                  $
                  506,790Lines
      of Credit
                  
                  
                  210,607
                  
                  
                  -Accrued
      other liabilities
                  
                  
                  337
                  
                  
                  15,775Accrued
      vacation expenses
                  
                  
                  35,211
                  
                  
                  44,481Deferred
      sales revenue
                  
                  
                  49,835
                  
                  
                  81,674Total
      Current Liabilities
                  
                  
                  823,764
                  
                  
                  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 for
                    both
      September 30, 2008 and December 31, 2007
                  
                  
                  11,781
                  
                  
                  11,781Additional
      paid-in capital
                  
                  
                  1,406,959
                  
                  
                  1,406,959Retained
      earnings (deficit)
                  
                  
                  (1,143,488)
                  
                  
                  (855,305)Total
      Stockholders’ Equity
                  
                  
                  275,252
                  
                  
                  563,435Total
      Liabilities and Stockholders’ Equity
                  
                  $
                  1,099,016
                  
                  $
                  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 September 30,
                        
                        For
      the Nine Months ended September 30,2008
                        
                        2007
                        
                        2008
                        
                        2007RevenuesSales
      (net of returns)
                        
                        $
                        594,654
                        
                        $
                        535,344
                        
                        $
                        2,007,347
                        
                        $
                        2,038,503Costs
      of goods sold
                        
                        
                        441,474
                        
                        
                        289,677
                        
                        
                        1,312,328
                        
                        
                        1,322,928Gross
      Profit
                        
                        
                        153,180
                        
                        
                        245,667
                        
                        
                        695,019
                        
                        
                        715,575ExpensesDepreciation
      and amortization
                        
                        
                        6,195
                        
                        
                        5,155
                        
                        
                        18,153
                        
                        
                        16,133Selling
      and marketing
                        
                        
                        71,159
                        
                        
                        81,347
                        
                        
                        197,840
                        
                        
                        268,844General
      and administrative
                        
                        
                        130,946
                        
                        
                        221,500
                        
                        
                        443,099
                        
                        
                        621,184Research
      and development
                        
                        
                        97,571
                        
                        
                        114,528
                        
                        
                        318,352
                        
                        
                        314,863305,871
                        
                        
                        422,530
                        
                        
                        977,444
                        
                        
                        1,221,024(Loss)
      from operations
                        
                        
                        (152,691)
                        
                        
                        (176,863)
                        
                        
                        (282,425)
                        
                        
                        (505,449)Other
      income/(expenses)
                        
                        
                        (3,680)
                        
                        
                        (299)
                        
                        
                        (5,758)
                        
                        
                        (7,569)Provision
      for income taxes
                        
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        -Net
      loss
                        
                        $
                        (156,371)
                        
                        $
                        (177,162)
                        
                        $
                        (288,183)
                        
                        $
                        (513,018)Net
      loss per share of common stock
                        
                        $
                        (0.01)
                        
                        $
                        (0.02)
                        
                        $
                        (0.02)
                        
                        $
                        (0.04)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 Nine Months ending September 30, 2008 and 20072008
                  
                  2007Cash
      flow from operating activitiesNet
      income/(loss)
                  
                  $
                  (288,183)
                  
                  $
                  (513,018)Depreciation
      and amortization
                  
                  
                  18,157
                  
                  
                  16,133Provision
      for allowance on accounts receivable
                  
                  
                  (2,232)
                  
                  
                  30Stock
      options issued for services
                  
                  
                  -
                  
                  
                  13,578Change
      in non-cash working capital items:Accounts
      receivable
                  
                  
                  44,213
                  
                  
                  (11,002)Other
      Receivables
                  
                  
                  (87,781)
                  
                  
                  -Inventory
                  
                  
                  109,536
                  
                  
                  (179,228)Prepaid
      expenses
                  
                  
                  (35,026)
                  
                  
                  (31,763)Accounts
      payable
                  
                  
                  20,984
                  
                  
                  35,897Accrued
      expenses
                  
                  
                  (24,708)
                  
                  
                  (18,530)Accrued
      payroll
                  
                  
                  -
                  
                  
                  (26,911)Deferred
      services contracts
                  
                  
                  (4,708)
                  
                  
                  2,333Deferred
      sales
                  
                  
                  (27,131)
                  
                  
                  75,464Cash
      flow used in operating activities
                  
                  
                  (276,879)
                  
                  
                  (637,017)Cash
      flow from investing activitiesPurchase of
      property and equipment
                  
                  
                  -
                  
                  
                  (8,240)Cash
      flow used in investing activities
                  
                  
                  -
                  
                  
                  (8,240)Cash
      flow from financing activitiesProceeds
      from lines of credit
                  
                  
                  210,607
                  
                  
                  -Cash
      flow provided by financing activities
                  
                  
                  210,607
                  
                  
                  -(Increase)
      decrease in cash position
                  
                  
                  (66,272)
                  
                  
                  (645,257)Cash
      position at beginning of period
                  
                  
                  81,179
                  
                  
                  738,573Cash
      position at end of period
                  
                  $
                  14,907
                  
                  $
                  93,316Supplemental
      disclosure of cash flow information:Cash
      paid for:Interest
                  
                  $
                  -
                  
                  $
                  7,569Income
      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
Nine Months ending September 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 and Portable Radioisotope Identifiers. 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 $66,272 at September
30, 2008 to $14,907 compared to a decrease of $645,257 at September 30, 2007 to
$93,316.





Note
5                      Sales





Sales
were up 11.08% in the three months ending September 30, 2008 versus same period
in 2007.   The biggest increase was in the SAM Defender product
line where we saw about a 200% increase in sales volume.  The Company
has been expanding its distribution network both on domestic as well as
international market and therefore we were able to increase the sales
significantly.





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 as
well as credit lines 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
see a  dilution if we raise additional capital and if we are unable to
raise additional capital, it is likely we would have to divest some part of the
business or the whole operations resulting in the loss of the investors’
investments.





Note
7                      Limited
Funds





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.





6


PRINCETON
SECURITY TECHNOLOGIES, INC.


NOTES TO
(UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS (continued)


For the
Nine Months ending September 30, 2008 and 2007








Note
8                      Gross
Margin





The gross
margin was lower - 25.8% for the three months ending September 30, 2008 compared
to 45.9% in the same period ending September 30, 2007 due to the change in
product mix. However, the year to date gross margin was 34.6% in the period
ending September 30, 2008 compared to 35.1% in the period ending September 30,
2007.





Note
9                      Fixed
Costs





Fixed
expenses decreased $116,659 or 27.6% in the three months ending September 30,
2008 compared to the same period in 2007. Year to date, the reduction was
$243,580 or 20.0% compared to last year. Continuous efforts have been made to
reduce the fixed expenses and we should be seeing more reductions in the next
quarter.





Note
10                      Gross
Profit/Loss





For the
three months ending September 30, 2008, net loss was $156,371 compared to
$177,162 for the same period in 2007. The year-to-date net loss has decreased
from the same period of 2007 by $224,835 or 43.8%.





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 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.





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  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 results 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 September 30, 2008, every additional one percent of our accounts
receivable that becomes uncollectible would reduce our operating income by
approximately $2,558.





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.




Results of
Operations






For the
three months ended September 30, 2008 our sales increased to $594,654 from
$535,344 for the three months ended September 30, 2007. Our gross profit
decreased to $153,180 compared to the same period in 2007 when gross profits
were $245,667.  Our nuclear sales have had the biggest sales volume of
all product categories, the second biggest category was X-Ray sales and the
third biggest was Portable units sales category. The largest growth in the three
months ended September 30, 2008, was in portable units, due to new
distributors  as well as increased OEM sales for the
SAM defender, which is being sold to the Homeland Security market. We have
also seen a steady sales volume as well as incoming orders in High Purity
Germanium 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.






Total
sales decreased $31,156 for the comparable nine months ending September 30, 2008
from 2007. Our gross profit margins decreased due to the product mix sold.
However, we were able to control expenses better, thereby reducing expenses for
the three months ending September  30, 2008, to $305,871 from $422,530
for the three months ending September 30, 2007.   As a result of
the reduced expenses our net loss narrowed to $156,371 for the three months
ending September 30, 2008 from a net loss of $177,162 for the same period in
2007.  For the nine months ending September 30, 2008 our net loss
decreased by 43.8% from $513,018 in 2007 to $288,183.






The
narrowing of our loss was a reflection of the efforts to control the fixed
expenses, as well as improving our sales efforts to existing and new customers
as well as improving our distribution chain.  We are hopeful, as our
products gain more acceptance and awareness we are able to increase sales and
lower the cost of goods sold as a percentage of sales.  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 $221,500 for the three months ending September 30, 2007 to $130,946 for the
three months ending September 30, 2008.  This reduction reflects the
overall cost cutting which was started in the three months ending September 30,
2008.  We expect general and administrative expenses not to increase
in future periods unless we expand our operations and increase the sales
level.






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 cost.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.











9




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 September
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 the Company 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
September 30, 2008, we had working capital of $218,576.  The biggest
component of our current liabilities as of September 30, 2008, was our accounts
payable of $527,774.  We feel we will be able to service ongoing
payables with current revenue and existing capital.  However, our
current assets consist of only $14,907 in cash and our inventory is $615,195 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.




We
anticipate to narrow losses for the year 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. 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
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 September 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
Quarterly 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 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.





10


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 in
accordance with 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 September
30, 2008.  Based on this evaluation, our management, with the participation
of the President and CFO, concluded that, as of September 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





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 September 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 September 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
September 30, 2008.





11


ITEM
5.  Other Information.





None





ITEM
6.  Exhibits





(a)
Exhibits.





Item
4                           Exhibit
No.                                     Instruments Defining the
Rights of Security
HoldersLocation





4.01                           
        4                   
      Specimen Stock
Certificate                                                                           
Incorporated


by reference*





31.01                                31                           CEO
certification Pursuant


to
18 USC Section 1350, as


adopted
pursuant to Section 302


of
Sarbanes-Oxley Act of
2002                                                          This
Filing





31.02                                31                           CFO
certification Pursuant


to 18 USC Section 1350,
as


adopted
pursuant to Section 302


of
Sarbanes-Oxley Act of
2002                                                          This
Filing





32.01                                32                  
         CEO Certification pursuant
to


section
906                                                                                           
This Filing





32.02                                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:                      November
13,
2008                                 By:  /s/ Juhani
Taskinen


Juhani Taskinen, CEO and
CFO








12