8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                      December 19, 2006 (December 15, 2006)


                         SENTRY  TECHNOLOGY CORPORATION
                         ------------------------------

               (Exact Name of Registrant as specified in charter)

          Delaware                   1-12727               96-11-3349733
      -----------------            ------------         -------------------
 (State or other jurisdiction      (Commission            (IRS Employer
      of incorporation)             File Number)          Identification No.)




        1881 Lakeland Avenue, Ronkonkoma, New York              11779
    --------------------------------------------------        ---------
        (Address of principal executive offices)              (Zip Code)



                                  631/ 739-2100
                            ------------------------
               Registrant's telephone number, including area code


                                       N/A


                                [GRAPHIC OMITED]

         (Former name or former address, if changed since last report.)


                                [GRAPHIC OMITED]






INFORMATION TO BE INCLUDED IN THIS REPORT

Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.


     On  December 15, 2006 Sentry Technology Corporation (the "Company") entered
into  a  new  secured  revolving  credit agreement (the "Credit Agreement") with
Tradition  Capital  Bank for $550,000 dollars (the "Loan").  The Loan is secured
by  the  Company's assets, in a second position to Royal Bank of Canada, as well
as  by pledges of assets from Peter L. Murdoch, the Company's President and CEO,
and  Robert D. Furst, a director of the Company.  Mr. Murdoch and Mr. Furst have
also  provided  personal  guarantees  for  the  Loan.

     Interest  under  the  Loan is payable at prime plus 1.00%.  The Loan is due
and  payable  on  June  15,  2007,  or  upon  demand  of the Lender, or upon the
occurrence  of events of default as more fully set forth in the Credit Agreement
included  with  this  report  as  Exhibit  10.1.  The  Company  made  customary
representations,  warranties and covenants to Tradition Capital Bank, and agreed
to  indemnify  Tradition  Capital  Bank  against  potential  losses  incurred in
connection with the Loan.  The Credit Agreement has been attached to this report
to  provide  investors with information regarding its terms.  It is not intended
to  provide  any  other  factual  information  about  the  Company.


Item 8.01   Other Events

     On  December  18, 2006, we issued a press release announcing our entry into
the  transactions  contemplated  by the Loan.  The press release is furnished as
Exhibit  99.1  to  this  report  and  is  incorporated  herein  by  reference.


Item 9.01 - Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number     Description
- ------     -----------
10.1     Revolving Credit Agreement between Tradition Capital Bank and Sentry
         Technology Corporation, dated December 15, 2006.

99.1     Press Release, dated December 18, 2006, issued by Sentry Technology
         Corporation.






                          [GRAPHIC OMITED]


                             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 hereunto duly authorized.

Sentry Technology Corporation


By:  /s/ Peter J. Mundy                               Date:  December 19, 2006
    -------------------------------------------
     Peter J. Mundy
     Vice President and Chief Financial Officer




EXHIBIT INDEX


Exhibit
Number     Description
- ------     -----------
10.1     Revolving Credit Agreement between Tradition Capital Bank and Sentry
         Technology Corporation, dated December 15, 2006.

99.1     Press Release, dated December 18, 2006, issued by Sentry Technology
         Corporation.

EX-99.1

SENTRY TECHNOLOGY CORPORATION
                                                  News Release

FOR IMMEDIATE RELEASE                             CONTACT: Peter J. Mundy
                                                           Vice President  CFO
                                                           (631) 739-2000


        SENTRY TECHNOLOGY CORPORATION ANNOUNCES NEW CREDIT FACILITY

     RONKONKOMA, New York, December 18, 2006, -- Sentry Technology Corporation
(OTC Bulletin Board: SKVY) today announced it has entered into a new $550,000
secured revolving credit facility with Tradition Capital Bank. This facility
will be in addition to Sentrys lending facility with Royal Bank of Canada. The
loan will be secured by Sentrys assets, in a second position to Royal Bank of
Canada, and guaranteed by Mr. Murdoch, Sentrys President and CEO and Mr. Furst,
a Sentry director. Interest is payable at a rate of prime plus 1.00%. The
Company may draw funds under the facility through June 15, 2007.

     Sentry Technology Corporation designs, manufactures, sells and installs a
complete line of Closed Circuit Television (CCTV) solutions, Electro-Magnetic
(EM) and RFID based Library Management systems as well as Radio Frequency (RF)
and Electro-Magnetic (EM) EAS systems. The CCTV product line features
SentryVision?, SmartTrack, a proprietary, patented traveling Surveillance
System. The Companys products are used by libraries to secure inventory and
improve operating efficiency, by retailers to deter shoplifting and internal
theft and by industrial and institutional customers to protect assets and
people. For further information, please visit our website at
www.sentrytechnology.com.

                                   ###


     This  press  release  may  include  information  that  could  constitute
forward-looking  statements  made  pursuant  to the safe harbor provision of the
Private  Securities  Litigation  Reform  Act  of  1995. Any such forward-looking
statements may involve risk and uncertainties that could cause actual results to
differ materially from any future results encompassed within the forward-looking
statements.  Factors  that could cause or contribute to such differences include
those  matters  disclosed  in  the  Company's Securities and Exchange Commission
filings.