SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
------------

FORM 10-K/A
(AMENDMENT NO. 1)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO ___________

COMMISSION FILE NUMBER: 1-12727
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SENTRY TECHNOLOGY CORPORATION

(EXACT NAME OF THE REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 96-11-3349733
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

350 WIRELESS BOULEVARD, HAUPPAUGE, NEW YORK 11788
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (516) 232-2100

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of Each Class: On Which Registered:

Common Stock, $.001 par value American Stock Exchange

Class A Preferred Stock, $.001 par value American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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. Yes /x/ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes /x/ No ___

At April 27, 1999, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $2,936,308 based upon the
closing price of such securities on the American Stock Exchange on that date. At
April 27, 1999, the Registrant had outstanding 9,750,760 shares of Common Stock
and 5,333,334 shares of Class A Preferred Stock.

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

Because definitive proxy soliciting material relating to the Annual Meeting
of Stockholders of Sentry Technology Corporation (the "Company" or "Sentry")
will be filed later than April 30, 1999, the information called for by Items 10,
11, 12 and 13 of Part III of the Company's Form 10-K for the year ended December
31, 1998 is included in this Amendment No. 1 on Form 10-K/A to such Form 10-K.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

DIRECTORS

The following sets forth information regarding the persons serving as
Directors of the Company:

PAUL D. MELLIN, age 35, has been a Director since August 1997, when he was
appointed to fill a vacancy on the Board of Directors. Mr. Mellin joined the BT
Alex Brown Incorporated mergers and acquisitions group in 1996. Prior to Mr.
Mellin's joining BT Alex Brown, he was a member of the mergers and acquisitions
group at Smith Barney. Mr. Mellin's term as a Director expires at the 1999
Annual Meeting of Stockholders.

WILLIAM A. PERLMUTH, age 69, has been Chairman of the Board of Directors of
the Company since January 1997. Prior thereto, Mr. Perlmuth served as a Director
of several predecessors of the Company from 1979 to February 1997. Mr. Perlmuth
has been a partner in the law firm of Stroock & Stroock & Lavan LLP in New York,
New York for more than five years and is presently of counsel to such firm. Such
firm and Mr. Perlmuth have performed legal services for the Company. The
aggregate amount of fees paid by the Company to Stroock & Stroock & Lavan LLP
was less than 5% of the law firm's gross revenues for the last fiscal year. The
Company believes that the billing rates for the foregoing legal services were no
less favorable to the Company than could have been obtained from unaffiliated
parties for comparable services. Mr. Perlmuth's term as a Director expires at
the 1999 Annual Meeting of Stockholders.

ROBERT L. BARBANELL, age 68, has been Director since February 1997. He has
been President of Robert L. Barbanell Associates, Inc., a financial consultancy
firm, since July 1994. Prior thereto, Mr. Barbanell served in various capacities
at Bankers Trust New York Corporation, where he was Managing Director of the
European Merchant Bank of Bankers Trust International PLC from 1991 to 1994;
Managing Director of BT Securities Corporation from 1989 to 1991; Managing
Director of Bankers Trust Company from 1986 to 1989; Senior Vice President of
Bankers Trust Company from 1981 to 1986. Prior to his service with Bankers
Trust, Mr. Barbanell served in various executive capacities at Amcon Group, Inc.
and GI Export Corporation. Mr. Barbanell currently serves on the Boards of
Directors of Marine Drilling Companies, Inc., Kaye Group, Inc. and Cantel
Industries, Inc. Mr. Barbanell's term as a Director expires at the 2001 Annual
Meeting of Stockholders.

ROBERT D. FURST, JR., age 46, has been a Director of the Company since its
inception. Prior thereto he was a Director of Video Sentry Corporation ("Video
Sentry"), a predecessor of the Company, from January 1993 until February 1997.
He was Chairman of the Board of Video Sentry from July 1996 and Chief Executive
Officer from August 1996 until February 1997. Mr. Furst was one of the original
shareholders of Video Sentry. He is also the founder and owner of Furst Capital
Management, a firm specializing in trading government and equity securities as
well as commodity futures. Mr. Furst is a member of the Chicago Board of Trade
and has been a securities and commodities trader since 1980. Mr. Furst currently
serves on the Boards of Directors of NOW Technologies, Inc., a privately-held
manufacturer of chemical packaging and dispensing systems serving the
semi-conductor industry; Lucht, Inc., a privately-held manufacturer of high
volume photographic printers and other equipment; and Neighborhood Marketing
Corporation, a privately-held consumer promotion and database marketing company
utilizing proprietary patented technologies. Mr. Furst's term as a Director
expires at the 2000 Annual Meeting of Stockholders.

THOMAS A. NICOLETTE, age 48, has been President, Chief Executive Officer
and a Director of the Company since January 1997. Prior thereto, Mr. Nicolette
served in various capacities at several predecessors of the Company, including
Knogo North America Inc., where he was President, Chief Executive Officer and a
Director from December 1994 to February 1997, and Knogo Corporation, where he
was a Director from 1987 until December 1994, Chief Executive Officer from May
1994 to December 1994 and President and Chief Operating Officer from 1990 to May
1994. Prior thereto he served in other positions as an officer at Knogo
Corporation. Mr. Nicolette serves on the Board of Directors of SenTech EAS
Corporation and is Vice Chairman of the Board of Trustees of WLIW, the Long
Island-based affiliate of the Public Broadcasting System. Mr. Nicolette's term
as a Director expires at the 2000 Annual Meeting of Stockholders.

EXECUTIVE OFFICERS

The following sets forth information regarding the persons serving as
executive officers of the Company:

NAME AGE OFFICE

Thomas A. Nicolette....... 48 President, Chief Executive Officer and a
Director of Sentry since January 1997. Prior
thereto, Mr. Nicolette served in various
capacities at several predecessors of Sentry,
including Knogo North America Inc., where he
was President, Chief Executive Officer and a
Director from December 1994 to February 1997,
and Knogo Corporation, where he was a
Director from 1987 until December 1994, Chief
Executive Officer from May 1994 to December
1994 and President and Chief Operating
Officer from 1990 to May 1994. Prior thereto
he served in other positions as an officer at
Knogo Corporation. Mr. Nicolette serves on
the Board of Directors of SenTech EAS
Corporation and is Vice Chairman of the Board
of Trustees of WLIW, the Long Island-based
affiliate of the Public Broadcasting System.

Peter J. Mundy............ 42 Vice President-Finance and Chief Financial
Officer of Sentry. Mr. Mundy also serves as
Secretary and Treasurer of the Company. Mr.
Mundy was Vice President - Finance, Chief
Financial Officer, Secretary and Treasurer of
Knogo North America Inc. from December 1994.
Prior thereto, Mr. Mundy served as an officer
of Knogo Corporation where he was Vice
President - Corporate Controller from May
1994 and, prior to such time, Corporate
Controller and Controller since 1982. Mr.
Mundy is a Certified Public Accountant.

Peter Y. Zhou........... 59 Vice President - Technology of Sentry. Dr.
Zhou was Vice President - Technology of Knogo
North America Inc. from December 1994. Prior
thereto, Dr. Zhou served as an officer of
Knogo Corporation where he was Senior Vice
President - Technology from 1992 and Vice
President - Research from 1988.

John F. Whiteman......... 40 Mr. Whiteman became Senior Vice President -
Sales and Marketing of Sentry in January
1998. Prior thereto he was Senior Vice
President - Sales and Marketing of Knogo
North America Inc. since January 1997; Vice
President Sales - West of Knogo North America
Inc. and Knogo Corporation from 1994 to 1996;
and, prior to such time, served in various
sales positions with Knogo Corporation since
1986.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers, Directors and persons who own more than 10% of
a registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the American Stock Exchange. Officers, Directors and greater than
ten-percent Stockholders are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all such reports they file.

Based solely on a review of the copies of such reports furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the fiscal year ended December 31, 1998, all Section 16(a)
filing requirements applicable to its officers, Directors and greater than
ten-percent beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation for the Company's fiscal
year ended December 31, 1998 of the Company's Chief Executive Officer and each
of three other executive officers of the Company:

LONG-TERM ALL OTHER
ANNUAL COMPENSATION(1) COMPENSATION(1) COMPENSATION(1)(2)
----------------------- --------------- -------------------
SECURITIES
NAME AND UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#)

Thomas A. Nicolette, 1998 $198,380 - 50,000 $4,800
President and CEO 1997 194,167 - 100,000 4,390
1996 150,000 - 83,181 4,391

Peter J. Mundy, 1998 119,028 - 20,000 3,571
Vice President-Finance 1997 118,110 - 40,000 3,543
Secretary and Treasurer 1996 103,800 - 33,272 3,114

John F. Whiteman 1998 145,476 - 30,000 4,364
Sr. Vice President 1997 149,120 $30,943 40,000 3,586
Sales and Marketing 1996 103,057 32,760 16,636 3,573

Peter Y. Zhou, 1998 128,947 - 12,500 3,868
Vice President - 1997 128,833 - 40,000 3,865
Technology 1996 120,000 - 33,272 3,600

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(1) Compensation information for 1996 reflects compensation paid to the named
executive officers by Knogo, the predecessor of the Company. Share
information is provided on a converted basis, giving effect to the exchange
of shares of such predecessors for shares of the Company pursuant to the
terms of the merger of Knogo and Video Sentry into subsidiaries of the
Company on February 12, 1997.

(2) Amounts shown consist of the Company's matching contributions under the
Retirement Savings 401(k) Plan.

As to various items of personal benefits, the Company has concluded that
the aggregate amount of such benefits with respect to each individual does not
exceed the lesser of $50,000 or 10% of the annual salary and bonus reported in
the table for such individual.

OPTIONS GRANTED IN LAST FISCAL YEAR

The following table sets forth certain information concerning options
granted during 1998 to each person named in the Summary Compensation Table:

NUMBER OF
SECURITIES % OF TOTAL POTENTIAL REALIZABLE VALUE AT ASSUMED
UNDERLYING GRANTED TO ANNUAL RATE OF STOCK PRICE
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION APPRECIATION FOR OPTION TERM
NAME GRANTED 1998 PRICE(1) DATE 5% 10%

Thomas A. Nicolette 50,000 18.5% $2.37 1/6/08 $60,934 $154,419
Peter J. Mundy 20,000 7.4% 2.37 1/6/08 24,374 61,768
John F. Whiteman 30,000 11.1% 2.37 1/6/08 36,561 92,651
Peter Y. Zhou 12,500 4.6% 2.37 1/6/08 15,234 38,605

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(1) These options were granted with an exercise price greater than the
market value of the Common Stock on the date of the grant. The closing
price of the Common Stock on such date was $1 15/16.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

The following table sets forth for each of the persons named in the Summary
Compensation Table the number of options exercised during 1998 and the amount
realized by each such officer. In addition, the table shows the number of
options that the named executive officer held as of December 31, 1998, both
exercisable (E) and unexercisable (U), and the value of such options as of that
date.

NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN THE
OPTIONS AT YEAR-END(#) MONEY OPTIONS AT YEAR END($)
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE

Thomas A. Nicolette - - E 217,139 E -
U 130,000 U -
Peter J. Mundy - - E 81,614 E -
U 52,000 U -
John F. Whiteman - - E 26,716 E -
U 62,000 U -
Peter Y. Zhou - - E 78,703 E -
U 44,500 U -

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COMPENSATION OF DIRECTORS

Directors who are also full-time employees of Sentry receive no additional
compensation for their services as Directors. Each non-employee Director
receives $12,000 annually for services on the Board and $1,000 per Board meeting
(other than telephonic meetings) attended. In addition, each non-employee
Director who is a member of any committee of the Board receives $500 for
attendance at any meeting of such committee which is held neither immediately
before nor immediately after a Sentry Board meeting; PROVIDED, HOWEVER, that the
chairman of the Audit Committee of the Board receives $1,000 for attendance at
any such separately held meeting of the Audit Committee and $500 for attendance
at any meeting of such committee held either immediately before or immediately
after a Board meeting.

In addition, each non-employee Director is eligible to participate in the
1997 Stock Incentive Plan of Sentry. Options for 15,000 shares of Common Stock
at an exercise price of $3.00, vesting in equal portions over a five-year
period, were granted by the Board to each non-employee Director on February 13,
1997, and to Mr. Mellin on August 11, 1997 when he became a Director. On
February 13, 1998, each non-employee Director also received a grant of options
to purchase 3,000 shares of Common Stock at an exercise price of $2.37, vesting
in equal portions over a five year period.

EMPLOYMENT AGREEMENTS AND COMPENSATION OF EXECUTIVE OFFICERS;
CHANGE OF CONTROL ARRANGEMENTS

The employment agreement between the Company and Mr. Nicolette is for a
term ending February 11, 2001. In addition to establishing Mr. Nicolette's
annual compensation of $200,000 per year, together with an opportunity to
receive up to an additional 50% of such amount, based upon certain
performance-based criteria, the use of an automobile and the receipt of life
insurance in the amount of $1,000,000, the agreement requires that the Company
grant to Mr. Nicolette options to acquire 100,000 shares of Common Stock, with
such options vesting at 20% per annum during the five year period commencing on
the date of the grant thereof. These options were granted in February 1997. The
employment agreements of Mr. Mundy and Dr. Zhou provide for an initial term of
two years, with subsequent automatic one year renewals, at annual salaries of
$120,000 and $130,000, respectively. In addition to their annual salaries, Mr.
Mundy and Dr. Zhou received options to purchase 40,000 shares of Common Stock,
vesting at 20% per annum during the five year period commencing on February 10,
1997. The employment agreement of Mr. Whiteman is for a term ending December 31,
1999 at an annual salary of $150,000. The employment agreements of Messrs.
Nicolette, Mundy, Whiteman and Dr. Zhou provide for a cost of living adjustment
to the base annual salary of each such executive calculated based upon the
percentage increase of the Consumer Price Index (as defined in such agreements).

The employment agreements of Messrs. Nicolette, Mundy, Whiteman and Dr.
Zhou provide that in the event of a change in control of the Company, the term
of each of their employment will be automatically extended for the period ending
two years in the case of Mr. Nicolette's agreement and one year in the case of
each of the other agreements, following the date of such change in control.
Following such change in control, each of such persons will have the right to
terminate his employment for good reason while continuing to receive the salary
and bonus otherwise payable thereunder for the remainder of the employment term.
Additionally, the employment agreements provide that in the event of a change in
control all options held by the employee, whether or not then vested, would
fully vest. If the change in control was not approved by a majority of the
Existing Directors (as defined in the Company's Certificate of Incorporation),
each such officer would be entitled to receive cash in cancellation of such
options in an amount equal to the difference between the exercise price of such
options and the market price of the Common Stock at the time of cancellation.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth the beneficial ownership of Sentry Common
Stock and Class A Preferred Stock at April 27, 1999, as to each (i) beneficial
owner of five percent or more of the Common Stock, (ii) Sentry Director, (iii)
executive officer of Sentry and (iv) all Directors and executive officers as a
group. On April 27, 1999, 9,750,760 shares of Common Stock and 5,333,334 shares
of Preferred Stock were outstanding. The Class A Preferred Stock is non-voting.

NAME AND ADDRESS OF SHARES OF PERCENT OF
BENEFICIAL OWNERS COMMON STOCK CLASS(1)

Walter & Edwin Schloss
Associates L.P.
52 Vanderbilt Avenue
New York, NY 10017 674,892 (2) 6.9%

Shares of Percent Shares of Class a Percent
Directors and Executive Officers Common Stock of Class(1) Preferred Stock of Class(3)

Thomas A. Nicolette 400,878(4) 4.0% 323,396(5) 5.9%

Peter J. Mundy 120,222(6) 1.2% 95,200(7) 1.8%

John F. Whiteman 56,309(8) * 41,771(9) *

Peter Y. Zhou 106,968(10) 1.1% 87,234(11) 1.6%

Paul D. Mellin 3,600(12) * - -

Robert L. Barbanell 11,600(13) * 16,537 *

William A. Perlmuth
c/o Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038 908,968(14) 9.3% 962,361(15) 18.6%

Robert D. Furst, Jr.
3900 Walden Road
Deephaven, MN 55391 824,522(16) 8.5% 35,910 *

All Sentry Directors and
executive officers as a
group (8 persons) 2,432,976(17) 23.7% 1,593,030(18) 27.9%

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* Less than one percent

(1) Based on 9,750,760 shares of Common Stock outstanding as of April 27, 1999.
Each figure showing the percentage of outstanding shares beneficially owned
has been calculated by treating as outstanding and owned the shares of
Common Stock which could be purchased by the indicated person within 60
days upon exercise of stock options.

(2) Includes 10,070 shares of Common Stock beneficially owned solely by Mr.
Walter J. Schloss, and 8,022 shares of Common Stock beneficially owned
solely by Mr. Edwin W. Schloss.

(3) Based on 5,333,334 shares of Class A Preferred Stock outstanding as of
April 27, 1999. Each figure showing the percentage of outstanding shares
beneficially owned has been calculated by treating as outstanding and owned
the shares of Class A Preferred Stock which could be purchased by the
indicated person within 60 days upon exercise of stock options.

(4) Excludes 41,590 shares of Common Stock held by a trust for the benefit of
Mr. Nicolette's wife, as to which shares Mr. Nicolette disclaims beneficial
ownership. Includes 74,862 shares of Common Stock held by Mr. Nicolette as
co-trustee under trusts for the benefit of his minor children and as to
which shares Mr. Nicolette disclaims beneficial ownership. Also includes
247,139 shares of Common Stock issuable upon the exercise of stock options
exercisable within 60 days from the date hereof.

(5) Excludes 45,852 shares of Class A Preferred Stock held by a trust for the
benefit of Mr. Nicolette's wife, as to which shares Mr. Nicolette disclaims
beneficial ownership. Includes 82,536 shares of Common Stock held by Mr.
Nicolette as co-trustee under trusts for the benefit of his minor children
and as to which shares Mr. Nicolette disclaims beneficial ownership. Also
includes 197,138 shares of Class A Preferred Stock issuable upon the
exercise of stock options exercisable within 60 days from the date hereof.

(6) Includes 93,614 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof.

(7) Includes 73,614 shares of Class A Preferred Stock issuable upon the
exercise of stock options exercisable within 60 days from the date hereof.

(8) Includes 40,716 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of the date hereof.

(9) Includes 18,716 shares of Class A Preferred Stock issuable upon the
exercise of stock options exercisable within 60 days of the date hereof.

(10) Includes 89,203 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof.

(11) Includes 70,703 shares of Class A Preferred Stock issuable upon the
exercise of stock options exercisable within 60 days from the date hereof.

(12) Includes 3,600 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof.

(13) Includes 6,600 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days from the date hereof.

(14) Consists of (a) 750,729 shares of Common Stock held by Mr. Perlmuth as
Executor of the Estate of Arthur J. Minasy, (b) 130,010 shares of Common
Stock held by Mr. Perlmuth as trustee under trusts for the benefit of Mr.
Minasy's adult children, and (c) 3,327 shares of Common Stock beneficially
owned by Mr. Perlmuth. Also includes 24,900 shares of Common Stock issuable
upon the exercise of stock options exercisable within 60 days from the date
hereof. Under the policies of the law firm of which he is of counsel, Mr.
Perlmuth will share any economic benefits of the options with the other
members of such firm.

(15) Consists of (a) 827,678 shares of Class A Preferred Stock held by Mr.
Perlmuth as Executor of the Estate of Arthur J. Minasy, (b) 143,337 shares
of Class A Preferred Stock held by Mr. Perlmuth as trustee under trusts for
the benefit of Mr. Minasy's adult children, and (c) 3,667 shares of Class A
Preferred Stock beneficially owned by Mr. Perlmuth. Also includes 18,300
shares of Class A Preferred Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof. Under the policies
of the law firm of which he is of counsel, Mr. Perlmuth will share any
economic benefits of the options with the other members of such firm.

(16) Includes 6,600 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof.

(17) Includes 512,372 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days from the date hereof.

(18) Includes 378,471 shares of Class A Preferred Stock issuable upon the
exercise of stock options and warrants exercisable within 60 days from the
date hereof.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

SENTRY TECHNOLOGY CORPORATION

By: /s/ Peter J. Mundy
------------------------
Peter J. Mundy
Vice President-Finance,
Chief Financial Officer,
Secretary and Treasurer

Dated: April 27, 1999