Princeton Security Technologies, Inc. - FORM 10-Q/A

Attached files

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EX-32.1 - EXHIBIT 32.1 - Princeton Security Technologies, Inc.	ex32.htm
EX-31.2 - EXHIBIT 31.2 - Princeton Security Technologies, Inc.	ex312.htm
EX-31.1 - EXHIBIT 31.1 - Princeton Security Technologies, Inc.	ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 2

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

For the quarterly period ended June 30, 2010

[ ] 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 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). The registrant is not yet part of the Interactive Data reporting system.

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.

13,788,513 shares of $0.001 par value common stock on August 14, 2010

EXPLANATORY NOTE

This Amendment No. 2 on Form 10-Q/A (the “Amendment”) amends the Quarterly Report on Form 10-Q of Princeton Security Technologies, Inc. for the quarter ended June 30, 2010, originally filed with the Securities and Exchange Commission (“SEC”) on August 16, 2010 (the “Original Filing”). This Form 10-Q/A does not attempt to modify or update any other disclosures set forth in the Original Filing, except as required to reflect the amended information in this Form 10-Q/A. Additionally, this amended Form 10-Q/A, except for the amended information, speaks as of the filing date of the Original Filing and does not update or discuss any other developments affecting us subsequent to the date of the Original Filing.

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Princeton Security Technologies, Inc.

FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2010

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.

PRINCETON SECURITY TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS

	June 30, 2010				December 31, 2009
ASSETS	(Unaudited)
Current Assets
Cash		$	27,342		$	21,333
Accounts receivable (net of allowance for doubtful accounts of $16,426 for both periods)			132,701			265,006
Other receivables			11,847			-
Inventory			238,386			199,949
Prepaid expenses			22,023			32,892

Total Current Assets			432,299			519,180

Property, plant & equipment (net of accumulated depreciation of $1,386,374 and $1,375,337 respectively)			27,687			28,374
Other assets			-			600

Total Assets		$	459,986		$	548,154

LIABILITIES

Accounts payable and accrued liabilities		$	305,655		$	321,701
Accrued other liabilities			132			534
Accrued expenses			5,250			10,500
Accrued vacation expenses			39,656			27,594
Deferred sales revenue			129,986			62,407

Total Current Liabilities			480,679			422,736

Notes payable			39,368			38,878
Total Liabilities			520,047			461,614

STOCKHOLDERS’ EQUITY (DEFICIT)
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; 13,788,513 and 13,703,513 shares issued and outstanding as of June 30, 2010 and December 31, 2009, respectively			13,788			13,703
Additional paid-in capital			1,944,830			1,932,915
Retained earnings (deficit)			(2,018,679	)		(1,860,078	)

Total Stockholders’ Equity (Deficit)			(60,061	)		86,540

Total Liabilities and Stockholders’ Equity (Deficit)		$	459,986		$	548,154

The accompanying notes are an integral part of these unaudited consolidated Financial Statements.

PRINCETON SECURITY TECHNOLOGIES, INC.
(UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2010			2009			2010			2009
Revenues
Sales (net of returns)	$	455,076		$	408,693			940,777			904,881
Costs of goods sold		258,724			238,899			509,624			534,654
Gross Profit		196,352			169,794			431,153			370,227

Expenses
Depreciation and amortization		5,518			5,490			11,037			11,070
Selling and marketing		53,957			14,856			108,122			30,630
General and administrative		152,272			230,440			324,419			366,710
Research and development		78,384			108,858			144,405			188,601
Total Expenses		290,131			359,644			587,983			597,011

(Loss) from operations		(93,779	)		(189,850	)		(156,830	)		(226,784	)

Other income/(expenses)		769			(24,409	)		(1,771	)		(34,959	)

Provision for income taxes		0			0			0			0

Net loss	$	(93,010	)	$	(214,259	)		(158,601	)		(261,743	)

Net loss per share of common stock	$	(0.01	)	$	(0.02	)		(0.01	)		(0.02	)

Weighted average number of common shares		13,729,172			11,811,924			13,727,601			11,796,734

The accompanying notes are an integral part of these unaudited consolidated Financial Statements.

PRINCETON SECURITY TECHNOLOGIES, INC.
(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months ending June 30, 2010 and 2009

	2010			2009
Cash flow from operating activities
Net income/(loss)	$	(158,601	)	$	(261,743	)
Depreciation and amortization		11,037			11,070
Provision for allowance on accounts receivable					-
Stock issued for services		12,000			79,750
Change in operating assets and liabilities
Accounts receivable		132,305			(70,666	)
Other receivables and deposits		(11,847	)		37,989
Inventory		(38,437	)		62,515
Prepaid expenses		11,469			14,471
Accounts payable		(16,046	)		60,226
Accrued expenses		11,660			(35,628	)
Warranty expenses		(5,250	)		-
Deferred sales		67,579			84,434
Cash flow used in operating activities		15,869			(17,582	)


Cash flow from investing activities
Purchace of property and equipment		(10,350	)
Cash flow from investing activities		(10,350	)		-

Cash flow from financing activities
Lines of credit		490			13,349
Cash flow from financing activities		490			13,349

Increase/(decrease) in cash position		6,009			4,233

Cash position at beginning of period		21,333			40,490

Cash position at end of period	$	27,342		$	36,257
		-
Supplemental disclosure of cash flow information:
Cash paid for:
Interest expense	$	-		$	-
Income taxes	$	-		$	-

The accompanying notes are an integral part of these unaudited consolidated Financial Statements.

PRINCETON SECURITY TECHNOLOGIES, INC.

NOTES TO (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ending June 30, 2010 and 2009

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.

Recently Enacted Accounting Standards

In June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

Statement of Financial Accounting Standards (“SFAS”) No. 165 (ASC Topic 855), “Subsequent Events”, SFAS No. 166 (ASC Topic 810), “Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140”, SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R),” and SFAS No. 168 (ASC Topic 105), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- a replacement of FASB Statement No. 162” were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.

Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2010-21 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

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.

PRINCETON SECURITY TECHNOLOGIES, INC.

NOTES TO (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Three Months ending June 30, 2010 and 2009

Note 4 Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date of this filing, and no other significant events have occurred.

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 was founded in February 2005 to acquire the detector and microanalysis business of Outokumpu Oyj. In February 2005, Princeton completed the acquisition of the detector and microanalysis business from a subsidiary of Outokumpu Oyj. As part of the acquisition of the business, Princeton retained the management and scientific staff of the subsidiary’s detector business unit to continue to operate the detection and microanalysis business. Additionally, Princeton assumed the lease on the premises occupied by Outokumpu Oyj. The facilities were located in Rocky Hill, New Jersey and served as the company’s offices, manufacturing and research facilities. In March 2006, Princeton moved its offices to 303C College Road East, Princeton, New Jersey where its management, manufacturing and research and development are currently located.

As part of the goal in acquiring the detector business, following the acquisition, Princeton divested the Microanalysis business to a subsidiary of Bruker Biosciences Corp. so that management could focus on, what it believed to be, the more profitable detector business within the Homeland Security industry.

In September 2006, Princeton restructured its corporate status by creating a Nevada corporation called Princeton Security Technologies, Inc. to be the holding company of Princeton Gamma Tech Instruments, Inc. Management reincorporated in Nevada and completed a stock exchange making Princeton Gamma Tech Instruments the wholly-owned subsidiary of the Nevada corporation. The creation of a Nevada parent corporation was accomplished as part of Princeton’s ongoing efforts to start seeking equity investments from outside investors. Princeton offices and facilities will continue to be located in Princeton, New Jersey. Princeton’s primary focus will continue to be on the X-ray and Gamma-ray Detectors and Spectroscopy systems, Radioactive Isotope Identifier products. Our products detect radioactive and other nuclear materials in various security and environmental settings.

Products

Through the purchase of the detector business, Princeton acquired X-ray and Gamma-ray Detectors and Spectroscopy systems, and Radioisotope Identifier products. More importantly, we also acquired the management and scientific teams responsible for the development of this technology. Currently we produce both individual detection units as well as component parts for larger units manufactured and sold by other companies.

The uses for our products encompass a variety of industrial, commercial and security concerns ranging from the homeland security need to detect concealed radioactive material, to silicon wafer fabrication companies that use our products and components to analyze silicon wafers for defects.

The nature of our technology allows our products to encompass a variety of uses. Our products typically have three basic technologies that can be combined to create a detection unit or system. Each of our products contains a sensor or a detector, electronic circuitry to process the signal from the sensor and firmware or software to analyze and interpret the processed signal. Princeton has design, development and manufacturing capability in all three technology areas. By focusing on these three core competencies used in detectors and components, we are able to design products for multiple industries and users.

As part of our core technology, we have developed the internal capability to produce a high purity germanium radiation detector, Sodium Iodide and Lanthanum Bromide scintillators, which are the key component in Gamma-ray detection systems. We do also have an internal capability to process x-ray detectors, as well. These capabilities allow us to compete with the limited number of companies who have the ability to work with these types of sensors. These sensors are most frequently used to detect radioactive isotopes.

Currently, our product line includes the following component and detectors:

-	Category 1: Radioactive Isotope Identifier Products.

The current product is termed the SAM Radioactive Isotope Identifiers (RIID). 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 100 isotopes. The SAM was designed to meet the latest American National Standards Institute “ANSI” and other government standards for portable radiation detection equipment.

We introduced recently a Fixed Installation unit, called Area Monitor, to our product offering. That product is being offered and used in e.g. building security applications, hospitals , industrial applications and generally in security applications where an identified area or facility needs to be secured. A new application is a vehicle and cargo Portal monitoring for security purposes.

-	Category 2: Nuclear/ Gamma-ray detectors and spectrometers:

Princeton is one of the handful of 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.

These products address the research and industrial analysis need in the Microanalysis or XRF market. The Microanalysis Market is the branch of industry and scientific research that requires the non-destructive analysis of materials on a sub-millimeter dimensional scale.

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. Princeton 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). A typical application is analyzing various metals for quality or research 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 period ended June 30, 2010.

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, 2010, every additional one percent of our accounts receivable that becomes uncollectible would reduce our operating income by approximately $1,327.

We account for income taxes in accordance with ASC Topic 740. 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 quarter ended June 30, 2010 our sales increased to $455,076 from $408,693 for the quarter ended June 30, 2009. Our gross profit increased to $196,352 compared to the same period in 2009 when gross profit was $169,794. Our Nuclear Detector Products sales had the biggest sales volume of all product categories, totaling about 58.7% of the total sales; Radioactive Isotope Identifiers Products produced 20.9% and X-ray Detectors 20.4% of the sales in the period ending June 30, 2010. The largest growth in the quarter ended June 30, 2010, came from Nuclear Detector Products, due to purchases from overseas customers. We anticipate the biggest growth to come from Radioactive Isotope Identifier products, as well as from Nuclear Detectors products and X-ray Detectors due to the sizeable order backlog which is currently over $1 Million for all categories combined . The biggest order backlog is for Radioactive Isotope Identifier Products category where the backlog is over $0.6 million due to domestic orders.

Results of Operations

Total sales increased 11% for the comparable quarterly periods in June 30, 2010 from 2009 due to increased overseas sales in Nuclear Detector Products. Our gross profit increased approx. 16% from the same period in 2009 due to our increased total sales and the increase in gross profit margin to 43% for the quarter ending June 30, 2010. Our expenses decreased to $290,131 for the quarter ended June 30, 2010, from $359,644 for the quarter ended June 30, 2009 due to decrease in our General and Administrative expenses as well as slight decrease in R&D expenses . As a result of higher sales revenue and lower expenses our net loss was $93,010 for the quarter ended June 30, 2010 from a net loss of $214,259 for the same period in 2009.

The quarterly loss was a reflection of the lower sales revenue than estimated which was partially due to long lead times for some of the main components especially in Radioactive Isotope Identifier Products. We continue to invest in our research and development activities which partially affects to our net profit. 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 R&D will generate new products we are able to increase sales as well as improve the profitability, which can be reached with moderately higher sales revenue.

We anticipate general and administrative expenses to remain at present levels in the future. General and administrative expenses decreased from $230,440 for the quarter ended June 30, 2009 to $152,272 for the quarter ended June 30, 2010. We expect general and administrative expenses to remain on this level in future quarters, however if the sales revenue increases we may have to 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 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.

Seasonality and Cyclicality

In our business, we have experienced lower sales volume during the past years in the first two quarters 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, 2010, we raised approximately $1.95 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 we will need in the future. Financing will depend on how well our products are received in the marketplace.

At June 30 31, 2010, we had a negative $48,380 in working capital. The biggest component in current liabilities as of June 30, 2010, was our accounts payable of $305,655. We feel we will be able to service ongoing payables with current revenue and existing capital. However, our current assets consist of only $27,342 in cash, $132,701 in accounts receivable and our inventory was $238,386 so we will be dependent on collecting accounts receivable and 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 losses to decrease for the year because of estimated higher sales volume for the next two quarters compared to this quarter ending June 30, 2010. However, it is our goal to increase R&D expenses for the new products which will require additional capital. 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, 2010.

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.

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 June 30, 2010. Based on this evaluation, our management, with the participation of the President and CFO, concluded that, as of June 30, 2010, 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 June 30, 2010.

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, 2010, 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. Other Information.

None

ITEM 5. Exhibits

(a) Exhibits.

Item 4	Exhibit No.	Instruments Defining the Rights of Security Holders	Location

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: October 15, 2010	By:	/s/ Juhani Taskinen
		Juhani Taskinen, CEO and CFO

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