<PAGE>




                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

(x) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934
                For the quarterly period ended FEBRUARY 28, 2003

                                       OR

( ) 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 0-19095

                             SOMANETICS CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
                            MICHIGAN                                             38-2394784
<S>                                                                <C>
 (State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification No.)
</TABLE>

                              1653 EAST MAPLE ROAD,
                                 TROY, MICHIGAN
                                   48083-4208
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (248) 689-3050
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
         required to be filed by Section 13 or 15(d) of the Securities Exchange
         Act of 1934 during the preceding 12 months (or for such shorter period
         that the registrant was required to file such reports), and (2) has
         been subject to such filing requirements for the past 90 days.
                          Yes       X          No
                               -----------         -----------

         Indicate by check mark whether the registrant is an accelerated filer
         (as defined in Rule 12b-2 of the Exchange Act).
                           Yes                 No       X
                               -----------         -----------

         Number of common shares outstanding at April 4, 2003: 9,080,363


<PAGE>




                          PART I FINANCIAL INFORMATION

                             SOMANETICS CORPORATION




                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 February 28,            November 30,
ASSETS                                                                               2003                    2002
                                                                                 ------------            ------------
CURRENT ASSETS:                                                                    (Unaudited)              (Audited)
<S>                                                                              <C>                     <C>

    Cash and cash equivalents ...........................................        $  2,264,613            $  2,381,808
    Accounts receivable .................................................           1,073,683               1,227,785
    Inventory ...........................................................           1,090,098               1,004,305
    Prepaid expenses ....................................................             173,815                  96,308
                                                                                 ------------            ------------
       Total current assets .............................................           4,602,209               4,710,206
                                                                                 ------------            ------------
PROPERTY AND EQUIPMENT (at cost):
    Machinery and equipment .............................................           1,918,732               1,861,679
    Furniture and fixtures ..............................................             247,815                 241,295
    Leasehold improvements ..............................................             171,882                 171,882
                                                                                 ------------            ------------
       Total ............................................................           2,338,429               2,274,856
    Less accumulated depreciation and amortization ......................          (1,816,694)             (1,757,781)
                                                                                 ------------            ------------
       Net property and equipment .......................................             521,735                 517,075
                                                                                 ------------            ------------
OTHER ASSETS:
    Intangible assets, net ..............................................             920,229                 921,957
    Other ...............................................................              15,000                  15,000
                                                                                 ------------            ------------
       Total other assets ...............................................             935,229                 936,957
                                                                                 ------------            ------------
TOTAL ASSETS ............................................................        $  6,059,173            $  6,164,238
                                                                                 ============            ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable ....................................................        $    474,516            $    470,880
    Accrued liabilities .................................................             273,944                 192,766
                                                                                 ------------            ------------
       Total current liabilities ........................................             748,460                 663,646
                                                                                 ------------            ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
    Preferred shares; authorized, 1,000,000 shares of $.01 par value;
       no shares issued or outstanding ..................................                 -                       -
    Common shares; authorized, 20,000,000 shares of $.01 par value;
       issued and outstanding, 9,080,363 shares at February 28, 2003,
       and 9,077,863 shares at November 30, 2002 ........................              90,804                  90,779
    Additional paid-in capital ..........................................          59,076,668              59,071,122
    Accumulated deficit .................................................         (53,856,758)            (53,661,309)
                                                                                 ------------            ------------
       Total shareholders' equity .......................................           5,310,713               5,500,592
                                                                                 ------------            ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..............................        $  6,059,173            $  6,164,238
                                                                                 ============            ============
</TABLE>


                        See notes to financial statements





                                       2
<PAGE>




                             SOMANETICS CORPORATION

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          For the Three-Month
                                                                              Periods Ended
                                                                ----------------------------------------
                                                                 February 28,                February 28,
                                                                    2003                         2002
                                                                -----------                  -----------
<S>                                                             <C>                          <C>
NET REVENUES ............................................       $ 1,950,946                  $ 1,591,820
COST OF SALES ...........................................           450,197                      493,390
                                                                -----------                  -----------
GROSS MARGIN ............................................         1,500,749                    1,098,430
                                                                -----------                  -----------

OPERATING EXPENSES:
      Research, development and engineering .............           109,173                      179,604
      Selling, general and administrative ...............         1,594,930                    1,278,321
                                                                -----------                  -----------
                Total operating expenses ................         1,704,103                    1,457,925
                                                                -----------                  -----------
OPERATING LOSS ..........................................          (203,354)                    (359,495)
                                                                -----------                  -----------

OTHER INCOME (EXPENSE):
      Interest expense ..................................              --                           (794)
      Interest income ...................................             7,904                        5,781
                                                                -----------                  -----------
          Total other income ............................             7,904                        4,987
                                                                -----------                  -----------
NET LOSS ................................................       $  (195,450)                 $  (354,508)
                                                                -----------                  -----------


NET LOSS PER COMMON SHARE-
  BASIC AND DILUTED .....................................       $      (.02)                 $      (.04)
                                                                -----------                  -----------

WEIGHTED AVERAGE SHARES
  OUTSTANDING--BASIC AND DILUTED ........................         9,077,891                    8,564,443
                                                                ===========                  ===========
</TABLE>


                        See notes to financial statements




                                       3


<PAGE>




                             SOMANETICS CORPORATION

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                     For the Three Month
                                                                                       Periods Ended
                                                                           --------------------------------------
                                                                             February 28,            February 28,
                                                                                2003                    2002
                                                                           --------------           -------------
<S>                                                                        <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ...........................................................     $  (195,450)             $  (354,508)
  Adjustments to reconcile net loss to net cash used in
    operations:
      Depreciation and amortization ..................................          60,641                   54,521
      Compensation expense for non-employee stock options ............           1,971                    1,858
      Changes in assets and liabilities:
          Accounts receivable decrease ...............................         154,102                  321,515
          Inventory (increase) .......................................         (85,793)                (172,213)
          Prepaid expenses (increase) ................................         (77,507)                (119,096)
          Other assets decrease ......................................            --                     12,078
          Accounts payable increase ..................................           3,636                   26,774
          Accrued liabilities increase ...............................          81,178                   72,731
                                                                           -----------              -----------
            Net cash (used in) operations ............................         (57,222)                (156,340)
                                                                           -----------              -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property and equipment (net) ........................         (63,573)                 (49,468)
                                                                           -----------              -----------
            Net cash (used in) investing activities ..................         (63,573)                 (49,468)
                                                                           -----------              -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common shares ............................           3,600                3,689,101
                                                                           -----------              -----------
            Net cash provided by financing activities ................           3,600                3,689,101
                                                                           -----------              -----------

NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS ........................................................        (117,195)               3,483,293

CASH AND CASH EQUIVALENTS, BEGINNING
  OF PERIOD ..........................................................       2,381,808                  167,873
                                                                           -----------              -----------

CASH AND CASH EQUIVALENTS, END
  OF PERIOD ..........................................................     $ 2,264,613              $ 3,651,166
                                                                           ===========              ===========
</TABLE>



                        See notes to financial statements



                                       4


<PAGE>




                             SOMANETICS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                FEBRUARY 28, 2003



1.       FINANCIAL STATEMENT PRESENTATION

         We prepared our unaudited interim financial statements pursuant to the
Securities and Exchange Commission's rules. Accordingly, they do not include all
of the information and footnotes normally included in our annual financial
statements prepared in accordance with generally accepted accounting principles.
We believe, however, that the disclosures are adequate to make the information
presented not misleading.

         The unaudited interim financial statements in this report reflect all
adjustments which are, in our opinion, necessary to a fair statement of the
results for the interim periods presented. All of these adjustments that are
material are of a normal recurring nature. Our operating results for the
three-month period ended February 28, 2003 do not necessarily indicate the
results that you should expect for the year ending November 30, 2003. You should
read the unaudited interim financial statements together with the financial
statements and related footnotes for the year ended November 30, 2002 included
in our Annual Report on Form 10-K for the fiscal year ended November 30, 2002.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Inventory is stated at the lower of cost or market on a first-in,
first-out (FIFO) basis. Inventory consists of:

<TABLE>
<CAPTION>
                                                 February 28, 2003          November 30, 2002
                                                 -----------------          -----------------
<S>                                             <C>                         <C>
           Finished goods...................         $ 357,178                  $  410,133
           Work in process..................           199,408                     154,816
           Purchased components.............           533,512                     439,356
                                                   -----------                  ----------
                Total.......................        $1,090,098                  $ 1,004,305
                                                   ===========                  ===========
</TABLE>

         Intangible Assets consist of patents and trademarks, and license
acquisition costs. Patents and trademarks are recorded at cost and are being
amortized on the straight-line method over 17 years. The carrying amount and
accumulated amortization of these patents and trademarks is as follows:


<TABLE>
<CAPTION>
                                                    February 28, 2003                     November 30, 2002
                                                    -----------------                     -----------------
<S>                                                  <C>                                   <C>
           Patents and trademarks...........               111,733                               111,733
             Less accumulated amortization..               (75,804)                              (74,076)
                                                     -------------                         -------------
                Total.......................         $      35,929                         $      37,657
                                                     =============                         =============
</TABLE>

         Amortization expense for the three months ended February 28, 2003 and
February 28, 2002 was approximately $1,700. Amortization expense for each of the
next five fiscal years is expected to be approximately $6,900 per year.

         License acquisition costs are related to our acquisition of exclusive,
worldwide, royalty-bearing licenses to specified rights relating to the
CorRestore(TM) System, and related products and accessories. The total carrying
amount of these license acquisition costs is as follows:




                                       5


<PAGE>




                             SOMANETICS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                FEBRUARY 28, 2003



<TABLE>
<CAPTION>
                                                    February 28, 2003                   November 30, 2002
                                                    -----------------                   -----------------

<S>                                                 <C>                                 <C>
           License acquisition costs........             $ 884,300                           $ 884,300
</TABLE>


         License acquisition costs are intangible assets with indefinite lives
that are reviewed annually for impairment and whenever events or changes in
circumstances indicate that the carrying value of the asset may not be
recovered.

         Stock Options In October 1995, Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," was issued by the
Financial Accounting Standards Board. In addition, in December 2002, Statement
of Financial Accounting Standards No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure," was issued by the Financial
Accounting Standards Board, and amends Statement No. 123. Statement No. 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based compensation. In addition,
Statement No. 148 amends the disclosure requirements of Statement No. 123
regardless of the accounting method used to account for stock-based
compensation. We have chosen to continue to account for stock-based compensation
of employees using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. We have also adopted the enhanced disclosure provisions
as defined by Statement No. 148 beginning with our fiscal quarter ended February
28, 2003.

         During the first quarter of fiscal 2003, we granted 11,500 stock
options to our employees, and one of our employees exercised stock options to
purchase 2,500 newly-issued common shares. During the first quarter of fiscal
2002 we had no employee stock option grants, and one of our former employees
exercised stock options to purchase 2,833 newly-issued common shares.


<TABLE>
<CAPTION>
                                                    FOR THE QUARTER ENDED FEBRUARY 28,
                                                          2003           2002
                                                          ----           ----
<S>                                                    <C>            <C>
Net loss .........................................     $ 195,450      $ 354,508
Pro-forma net loss, had fair value method been
applied ..........................................     $ 338,319      $ 458,425
Net loss per common share-basic and
diluted ..........................................          (.02)          (.04)
Pro-forma net loss per common share-basic
and diluted, had fair value method been
applied ..........................................          (.04)          (.05)
Stock-based employee compensation ................
included in actual net loss ......................     $   1,971      $   1,858
Pro-forma stock-based employee compensation,
had fair value method been applied ...............     $ 142,869      $ 103,917
</TABLE>



         Loss Per Common Share - basic and diluted is computed using the
weighted average number of common shares outstanding during each period. Common
shares issuable under stock options and warrants have not been included in the
computation of the net loss per common share - diluted, because such inclusion
would be antidilutive. As of February 28, 2003 and February 28, 2002, we had
outstanding warrants and options to purchase common shares of 5,164,000 and
4,876,217, respectively.


                                       6



<PAGE>


                             SOMANETICS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                FEBRUARY 28, 2003

         Accounting Pronouncements During the first quarter of fiscal 2003, we
adopted Financial Accounting Standards Board Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." The adoption of this interpretation
statement had no impact on our financial statements.

3.       ACCRUED LIABILITIES

         Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                     February 28, 2003           November 30, 2002
                                                     -----------------           -----------------

<S>                                                  <C>                         <C>
         Incentive Compensation..................         $  72,000                   $    8,000
         Insurance...............................            63,497                       34,464
         Sales commissions.......................            47,822                       55,381
         Training................................            35,000                       40,000
         Royalty.................................            22,175                       12,071
         Clinical Research.......................            21,450                       21,450
         Professional fees.......................             6,000                       15,000
         Warranty................................             6,000                        6,400
                                                          ---------                   ----------
                Total ...........................         $ 273,944                   $  192,766
                                                          =========                   ==========
</TABLE>

5.       COMMITMENTS AND CONTINGENCIES

         We may become subject to products liability claims by patients or
physicians, and may become a defendant in products liability or malpractice
litigation. We have obtained products liability insurance and an umbrella
policy. We might not be able to maintain such insurance or such insurance might
not be sufficient to protect us against products liability.

6.       COMMON STOCK

         On January 23, 2003, our Board of Directors approved an amendment to
the Somanetics Corporation 1997 Stock Option Plan to increase the number of
common shares reserved for issuance pursuant to the exercise of options granted
under the 1997 plan by 450,000 shares, from 2,110,000 to 2,560,000 shares,
subject to shareholder approval at the 2003 Annual Meeting of Shareholders.

         Effective January 23, 2003, we granted 10-year options under the 1997
Stock Option Plan to purchase 11,500 common shares, to two of our employees at
an exercise price of $1.70 per share (the closing sale price of the common
shares as of the date of grant).

         In February 2003, one of our employees exercised stock options to
purchase 2,500 newly-issued common shares.




                                       7

<PAGE>


                             SOMANETICS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                FEBRUARY 28, 2003


7.       SEGMENT INFORMATION

         We operate our business in one reportable segment, the development,
manufacture and marketing of medical devices. Each of our two product lines have
similar characteristics, customers, distribution and marketing strategies, and
are subject to similar regulatory requirements. In addition, in making operating
and strategic decisions, our management evaluates net revenues based on the
worldwide net revenues of each major product line, and profitability on an
enterprise-wide basis due to shared costs. Approximately 89% of our net revenues
in the first quarter of fiscal 2003 were derived from our INVOS Cerebral
Oximeter product line, compared to 97% of our net revenues in the first quarter
of fiscal 2002.

8.       SUBSEQUENT EVENTS

         Effective March 24, 2003, we granted 10-year options under the 1997
Stock Option Plan to purchase 10,000 common shares, to one of our employees at
an exercise price of $1.76 per share (the closing sale price of the common
shares as of the date of grant).


                                       8


<PAGE>




                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003

         Some of the statements in this report are forward-looking statements.
These forward-looking statements include statements relating to our performance
in this Management's Discussion and Analysis of Financial Condition and Results
of Operations. Forward-looking statements include statements regarding the
intent, belief or current expectations of us or our officers, including
statements preceded by, followed by or including forward-looking terminology
such as "may," "will," "should," "believe," "expect," "anticipate," "estimate,"
"continue," "predict" or similar expressions, with respect to various matters.

         Our actual results might differ materially from those projected in the
forward-looking statements depending on various important factors. These
important factors include our history of losses and ability to continue as a
going concern, our current dependence on the Cerebral Oximeter and SomaSensor,
the challenges associated with developing new products, the uncertainty of
acceptance of our products by the medical community, the lengthy sales cycle for
our products, competition in our markets, our dependence on our distributors,
and the other factors discussed under the caption "Risk Factors" and elsewhere
in our Registration Statement on Form S-1 (file no. 333-74788) effective January
11, 2002 and elsewhere in this report, all of which constitute cautionary
statements identifying important factors with respect to the forward-looking
statements, including risks and uncertainties, that could cause actual results
to differ materially from those in the forward-looking statements.

         All forward-looking statements in this report are based on information
available to us on the date of this report. We do not undertake to update any
forward-looking statements that may be made by us or on our behalf in this
report or otherwise.

RESULTS OF OPERATIONS

OVERVIEW

         We develop, manufacture and market the INVOS Cerebral Oximeter, the
only non-invasive patient monitoring system commercially available in the United
States that continuously measures changes in the blood oxygen level in the
brain. We also develop and market the CorRestore System for use in cardiac
repair and reconstruction, including heart surgeries called surgical ventricular
restoration, or SVR.

         During fiscal 2002 and the first quarter of fiscal 2003, our primary
activities consisted of sales and marketing of the Cerebral Oximeter, the
related disposable SomaSensor, and the CorRestore System.

         We derive our revenues from sales of Cerebral Oximeters and SomaSensors
to our distributors, and from sales of Cerebral Oximeters, SomaSensors and
CorRestore Systems to hospitals in the United States through our direct sales
employees and independent sales representatives. We offer to our customers a
no-cap sales program whereby we ship the Cerebral Oximeter to the customer at no
charge, in exchange for the customer agreeing to purchase at a premium a minimum
monthly quantity of SomaSensors. Payment terms are generally net 30 days for
United States sales and net 60 days or longer for international sales. Our
primary expenses, excluding the cost of our products, are selling, general and
administrative and research, development and engineering.





                                       9

<PAGE>





                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003

THREE MONTHS ENDED FEBRUARY 28, 2003 COMPARED TO THREE MONTHS ENDED
FEBRUARY 28, 2002



         Our net revenues increased approximately $359,000, or 23%, from
$1,591,820 in the three-month period ended February 28, 2002 to $1,950,946 in
the three-month period ended February 28, 2003. The increase in net revenues is
primarily attributable to

         -    an increase in United States sales of approximately $435,000, or
              36%, from approximately $1,217,000 in the first quarter of fiscal
              2002 to approximately $1,652,000 in the first quarter of fiscal
              2003. This increase is primarily due to an increase in sales of
              the disposable SomaSensor of approximately $393,000, or 42%, and
              an increase in CorRestore System revenues of approximately
              $171,000, or 335%. This increase was partially offset by a
              decrease in sales of the Cerebral Oximeter of approximately
              $129,000, or 58%, primarily as a result of a preference by larger
              U.S. hospitals to acquire Cerebral Oximeters using our no-cap
              sales program, and
         -    a 12% increase in the average selling price of SomaSensors in the
              United States primarily due to the increase in the suggested
              retail price of the SomaSensor effective December 1, 2002.

The increase in net revenues was achieved despite a decrease in international
sales of approximately $76,000, or 20%, from approximately $375,000 in the first
quarter of fiscal 2002 to approximately $299,000 in the first quarter of fiscal
2003, primarily attributable to decreased purchases by Tyco Healthcare. For
fiscal 2003, we expect that international revenues will represent a significant
increase over fiscal 2002.

         Approximately 15% of our net revenues in the first quarter of fiscal
2003 were from export sales, compared to approximately 24% of our net revenues
in the first quarter of fiscal 2002. Sales of our products as a percentage of
net revenues were as follows:

<TABLE>
<CAPTION>
                                                                     PERCENT OF NET REVENUE
                                                                    FIRST QUARTER OF FISCAL
              PRODUCT                                           2003                       2002
              -------                                     -----------------         -----------------
<S>                                                         <C>                        <C>
              SomaSensors........................                77%                        66%
              CorRestore Systems.................                11%                         3%
              Model 5100 Cerebral Oximeters......                 8%                        15%
              Model 4100 Cerebral Oximeters......                 4%                        16%
                                                          -----------------         -----------------
                  Total..........................               100%                       100%
                                                          =================         =================
</TABLE>

         One international distributor accounted for approximately 18% of net
revenues for the three months ended February 28, 2002.

         Gross margin as a percentage of net revenues was approximately 77% for
the quarter ended February 28, 2003 and approximately 69% for the quarter ended
February 28, 2002. The increase in gross margin as a percentage of net revenues
is primarily attributable to




                                       10

<PAGE>




                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003

     -   the increase in the average selling price of SomaSensors described
         above,
     -   sales of our latest model SomaSensor, which is less costly to
         manufacture than the prior model SomaSensor sold in the first quarter
         of fiscal 2002, and
     -   a change in the sales mix to increased sales of SomaSensors and
         CorRestore Systems, which have higher gross margins than Cerebral
         Oximeters.

         Our research, development and engineering expenses decreased
approximately $70,000, or 39%, from $179,604 for the three months ended February
28, 2002 to $109,173 for the three months ended February 28, 2003. The decrease
is primarily attributable to approximately $92,000 in decreased development
costs associated with the CorRestore System, partially offset by approximately
$20,000 in increased development costs associated with our next generation
Cerebral Oximeter.

         Selling, general and administrative expenses increased approximately
$317,000, or 25%, from $1,278,321 for the three months ended February 28, 2002
to $1,594,930 for the three months ended February 28, 2003. The increase in
selling, general and administrative expense is primarily attributable to

         -    a $99,000 increase in customer education expenses for the
              CorRestore System, primarily as a result of our educational
              programs at the Texas Heart Institute in February 2003 and at
              Carraway Methodist Medical Center in Birmingham, Alabama in
              December 2002,
         -    a $62,000 increase in salaries, wages, commissions and related
              expenses, primarily as a result of an increase in the number of
              employees, principally sales and marketing (from an average of 27
              employees for the first quarter of fiscal 2002 to an average of 29
              employees for the first quarter of fiscal 2003),
         -    a $55,000 increase in accrued incentive compensation expense,
              primarily due to our executive officers participating in the 2003
              Incentive Compensation Plan after not participating in fiscal
              2002,
         -    a $48,000 increase in trade show expenses as a result of our
              increased sales and marketing activities,
         -    a $31,000 increase in commissions paid to our independent sales
              representatives as a result of increased sales,
         -    a $25,000 increase in professional services, primarily
              attributable to increased investor relations and public relations
              expenses, and
         -    a $17,000 increase in royalty expense as a result of increased
              sales of the CorRestore System.



These increases were partially offset by a $29,000 decrease in insurance
expenses, primarily as a result of a policy premium refund for our 2002 products
liability insurance coverage.

         For the three-month period ended February 28, 2003, we realized a 45%
decrease in our net loss over the same period in fiscal 2002. The decrease is
primarily attributable to

         -    a 23% increase in net revenues, and
         -    an 8% increase in gross margin percentage.

The reduction in our net loss was achieved despite a 17% increase in operating
expenses.




                                       11

<PAGE>





                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003

LIQUIDITY AND CAPITAL RESOURCES

         Net cash used in operations during the three-month period ended
February 28, 2003 was approximately $57,000. Cash was used primarily to

         -    fund our net loss, primarily selling, general and administrative
              expenses and research, development and engineering expenses,
              totaling approximately $135,000, before depreciation and
              amortization expense,
         -    increase inventories by approximately $86,000, primarily as a
              result of fourth quarter 2002 sales and the acquisition of
              components associated with the launch of our next generation
              Cerebral Oximeter, and
         -    increase prepaid expenses by approximately $78,000, primarily due
              to the renewal of our products liability insurance coverage in
              December 2002.

These uses of cash were partially offset by

         -    a decrease in accounts receivable of approximately $154,000,
              primarily because of lower first quarter 2003 sales than fourth
              quarter 2002 sales, and more timely collections in the first
              quarter of fiscal 2003, and
         -    an increase in accrued liabilities of approximately $81,000,
              primarily due to increased accrued incentive compensation expense
              as a result of our executive officers participating in the 2003
              Incentive Compensation Plan after not participating in fiscal
              2002.

         We expect our working capital requirements to increase if sales
increase.

         Capital expenditures in the first three months of fiscal 2003 were
approximately $64,000. These expenditures were primarily for Cerebral Oximeter
demonstration units and no-cap sales units.

         We have a Loan and Security Agreement with Crestmark Bank for a working
capital line of credit for up to $750,000, collateralized by all of our assets.
Under the agreement, Crestmark Bank may, but is not obligated to, lend us
amounts we request from time to time, up to $750,000, if no default exists. The
loans are limited by a borrowing base based on qualifying accounts receivable
and lender reserves. The loan is payable on demand, and our collections of our
receivables are directed to Crestmark Bank in payment of any outstanding balance
of the loan. The principal amount outstanding bears interest, payable monthly,
at the prime rate (4.25% as of April 2, 2003) plus 2% plus a 2.4% service fee.
As of April 2, 2003, we had no outstanding principal loan balance and
approximately $707,000 was available for borrowing, at Crestmark's discretion,
under the facility.

         As of February 28, 2003, we had working capital of $3,853,749, cash and
cash equivalents of $2,264,613, total current liabilities of $748,460 and
shareholder's equity of $5,310,713. We had an accumulated deficit of $53,856,758
through February 28, 2003.

         We believe that the cash and cash equivalents on hand at February 28,
2003, together with the estimated net borrowings available under the Crestmark
Bank Loan and Security Agreement, will be adequate to satisfy our operating and
capital requirements for more than the next twelve months.



                                       12

<PAGE>





                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003


         The estimated length of time current cash, cash equivalents and
available borrowings will sustain our operations is based on estimates and
assumptions we have made. These estimates and assumptions are subject to change
as a result of actual experience. Actual capital requirements necessary to
market the Cerebral Oximeter and SomaSensor, to develop and market the
CorRestore System, to undertake other product development activities, and for
working capital might be substantially greater than current estimates.

CRITICAL ACCOUNTING POLICIES

         We believe our most significant accounting policies relate to the
recording of an intangible asset for license acquisition costs related to our
acquisition of exclusive, worldwide, royalty-bearing licenses to specified
rights relating to the CorRestore System and related products and accessories,
and our accounting treatment of stock options issued to employees.

         In fiscal years 2000 and 2001, we recorded an intangible asset related
to our acquisition of exclusive, worldwide, royalty-bearing licenses to
specified rights relating to the CorRestore System and related products and
accessories. License acquisition costs included our estimate of the fair value
of ten-year vested stock options to purchase common shares granted to one of our
directors in connection with negotiating and assisting us in completing the
transaction, and our estimate of the fair value of the vested portion of
five-year warrants to purchase common shares issued in the transaction.

         We estimated the value of the stock options to purchase common shares
and the warrants to purchase common shares using the Black-Scholes valuation
model. The Black-Scholes valuation model requires the following assumptions:
expected life period of the security, expected volatility of our stock price
during the period, risk-free interest rate, and dividend yield. Given the
assumptions inherent in the Black-Scholes valuation model, it would have been
possible to calculate a different value for our intangible asset by changing one
or more of the valuation model variables or by using a different valuation
model. However, we believe that the model is appropriate, that the judgments and
assumptions that we made at the time of valuation were also appropriate, and
that the reported results would not have been materially different had one or
more of the variables been different or had a different valuation model been
used.

         We have adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets." This statement establishes accounting
and reporting standards for goodwill and other intangible assets. The effect of
adopting this Statement has been to discontinue amortizing our license
acquisition costs related to our acquisition of exclusive, worldwide,
royalty-bearing licenses to specified rights relating to the CorRestore System
and related products and accessories described above because we believe these
licenses have an indefinite life. Therefore, no amortization expense has been
recorded related to these license acquisition costs since December 1, 2001, the
date we adopted Statement No. 142.




                                       13

<PAGE>




                             SOMANETICS CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                FEBRUARY 28, 2003

         In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," was issued by the Financial
Accounting Standards Board. In addition, in December 2002, Statement of
Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation
-- Transition and Disclosure," was issued by the Financial Accounting Standards
Board, and amends Statement No. 123. We have chosen to continue to account for
stock-based compensation of employees using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. Accordingly, compensation
costs for stock options granted to employees are measured as the excess, if any,
of the market price of our stock at the date of the grant over the amount an
employee must pay to acquire the stock. No compensation expense has been charged
against income for stock option grants to employees because our stock option
grants are priced at the market value as of the date of grant. During the first
quarter of fiscal 2003, we granted 11,500 stock options to our employees.

         Had we recognized compensation expense for stock options granted to
employees in the first quarter of fiscal 2003, using the fair value method of
accounting based on the fair value of the options on the grant date using the
Black-Scholes valuation model, our net loss, on a pro forma basis, would have
increased by approximately $143,000, or $.02 per common share. Had we recognized
compensation expense for our stock options granted to employees in the first
quarter of fiscal 2002, using the fair value method of accounting based on the
fair value of the options on the grant date using the Black-Scholes valuation
model, our net loss, on a pro forma basis, would have increased by approximately
$104,000, or $.01 per common share.


                                       14

<PAGE>




ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.



                                       15

<PAGE>




ITEM 4.  CONTROLS AND PROCEDURES

         The Company, under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer, has evaluated the effectiveness of the design and operation of our
disclosure controls and procedures within 90 days of the filing date of this
quarterly report, and, based on their evaluation, our principal executive
officer and principal financial officer have concluded that these controls and
procedures are effective. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation.

         Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure.




                                       16


<PAGE>




PART II OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

                  99.1     Certification of Chief Executive Officer Pursuant to
                           18 U.S.C. Section 1350, as Adopted Pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

                  99.2     Certification of Chief Financial Officer Pursuant to
                           18 U.S.C. Section 1350, as Adopted Pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

         (b)      Reports on Form 8-K

                  No reports on Form 8-K were filed by us during the quarter for
                  which this report is filed.



                                       17
<PAGE>




                                   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.

                                       Somanetics Corporation
                                       --------------------------
                                       (Registrant)




Date:    April 4, 2003                 By:/s/ William M. Iacona
      ---------------------               --------------------------------------
                                       William M. Iacona
                                       Vice President, Finance, Controller, and
                                       Treasurer (Duly Authorized and Principal
                                       Financial Officer)




                                       18

<PAGE>




                                 CERTIFICATIONS

I, Bruce J. Barrett, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Somanetics Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  April 4, 2003


                                                /s/ Bruce J. Barrett
                                                --------------------------------
                                                Bruce J. Barrett, President and
                                                Chief Executive Officer





                                       19

<PAGE>




                                 CERTIFICATIONS

I, William M. Iacona, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Somanetics Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  April 4, 2003


                                               /s/ William M. Iacona
                                               ---------------------------------
                                               William M. Iacona, Vice
                                               President, Finance, Controller,
                                               and Treasurer



                                       20

<PAGE>




                                  EXHIBIT INDEX

Exhibit                           Description
-------                           -----------

99.1              Certification of Chief Executive Officer Pursuant to 18 U.S.C.
                  Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

99.2              Certification of Chief Financial Officer Pursuant to 18 U.S.C.
                  Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.





                                       21