<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, 2007

     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>
<S>                                                          <C>
            MICHIGAN                                              38-2394784
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              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)

                                       N/A
   (Former name, former address and former fiscal year, if changed since last
                                    report)

     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 a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [ ]   Accelerated filer [X]   Non-accelerated filer [ ]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

Yes [ ]   No [X]

     Number of common shares outstanding at April 3, 2007: 13,170,127

<PAGE>

                          PART I FINANCIAL INFORMATION

                             SOMANETICS CORPORATION

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        FEBRUARY 28,   NOVEMBER 30,
                                                                            2007           2006
                                                                        ------------   ------------
                                                                         (Unaudited)     (Audited)
<S>                                                                     <C>            <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents ........................................   $ 29,517,749   $ 28,734,869
   Marketable securities ............................................     29,943,348     20,918,134
   Accounts receivable ..............................................      5,567,039      4,740,043
   Inventory ........................................................      2,608,378      2,172,458
   Prepaid expenses .................................................        374,916        494,822
   Accrued interest receivable ......................................        345,986        351,666
   Deferred tax asset - current .....................................      3,143,495      2,761,217
                                                                        ------------   ------------
      Total current assets ..........................................     71,500,911     60,173,209
                                                                        ------------   ------------
PROPERTY AND EQUIPMENT (at cost):
   Demonstration and no capital cost sales equipment at customers ...      2,830,665      2,650,939
   Machinery and equipment ..........................................      1,294,853      1,263,015
   Furniture and fixtures ...........................................        300,639        300,037
   Leasehold improvements ...........................................        197,575        195,565
                                                                        ------------   ------------
      Total .........................................................      4,623,732      4,409,556
   Less accumulated depreciation and amortization ...................     (2,455,271)    (2,285,279)
                                                                        ------------   ------------
      Net property and equipment ....................................      2,168,461      2,124,277
                                                                        ------------   ------------
OTHER ASSETS:
   Long-term investments ............................................     12,964,923     21,917,764
   Deferred tax asset - non-current .................................      6,955,181      8,182,783
   Intangible assets, net ...........................................          8,281         10,009
   Other ............................................................         15,000         15,000
                                                                        ------------   ------------
      Total other assets ............................................     19,943,385     30,125,556
                                                                        ------------   ------------
TOTAL ASSETS ........................................................   $ 93,612,757   $ 92,423,042
                                                                        ============   ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable .................................................   $    990,439   $  1,045,727
   Accrued liabilities ..............................................        522,642      1,159,770
                                                                        ------------   ------------
      Total current liabilities .....................................      1,513,081      2,205,497
                                                                        ------------   ------------
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, 13,165,127 shares at February 28, 2007,
      and 13,163,627 shares at November 30, 2006 ....................        131,651        131,636
   Additional paid-in capital .......................................    117,015,576    116,817,012
   Accumulated deficit ..............................................    (25,047,551)   (26,731,103)
                                                                        ------------   ------------
      Total shareholders' equity ....................................     92,099,676     90,217,545
                                                                        ------------   ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..........................   $ 93,612,757   $ 92,423,042
                                                                        ============   ============
</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,
                                                       2007           2006
                                                   ------------   ------------
<S>                                                <C>            <C>
NET REVENUES ...................................   $ 8,024,872    $ 5,753,715
COST OF SALES ..................................     1,001,723        710,499
                                                   -----------    -----------
   Gross Margin ................................     7,023,149      5,043,216
                                                   -----------    -----------
OPERATING EXPENSES:
   Research, development and engineering .......       113,366        178,066
   Selling, general and administrative .........     5,319,436      3,507,881
                                                   -----------    -----------
      Total operating expenses .................     5,432,802      3,685,947
                                                   -----------    -----------
OPERATING INCOME ...............................     1,590,347      1,357,269
                                                   -----------    -----------
OTHER INCOME:
   Interest income .............................       960,488        140,136
                                                   -----------    -----------
      Total other income .......................       960,488        140,136
                                                   -----------    -----------
INCOME BEFORE INCOME TAXES .....................     2,550,835      1,497,405
                                                   -----------    -----------
INCOME TAX PROVISION ...........................      (867,284)      (509,118)
                                                   -----------    -----------
NET INCOME .....................................   $ 1,683,551    $   988,287
                                                   ===========    ===========
NET INCOME PER COMMON SHARE - BASIC ............   $       .13    $       .09
                                                   ===========    ===========
NET INCOME PER COMMON SHARE - DILUTED ..........   $       .12    $       .08
                                                   ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC ....    13,164,210     10,715,885
                                                   ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED ..    14,636,974     12,323,704
                                                   ===========    ===========
</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,
                                                                                     2007           2006
                                                                                 ------------   -----------
<S>                                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income ................................................................   $  1,683,551   $   988,287
   Adjustments to reconcile net income to net cash provided by operations:
      Income tax provision ...................................................        867,284       509,118
      Depreciation and amortization ..........................................        183,356       119,749
      Stock compensation expense .............................................        178,255            --
      Accrued income tax expense .............................................        (21,960)           --
      Accrued interest income ................................................          5,680            --
      Changes in assets and liabilities:
         Accounts receivable (increase) decrease .............................       (826,996)      562,821
         Inventory (increase) ................................................       (627,283)     (257,555)
         Prepaid expenses decrease ...........................................        119,906       308,876
         Other assets (increase) .............................................             --      (229,412)
         Accounts payable increase (decrease) ................................        (55,288)      242,999
         Accrued liabilities (decrease) ......................................       (637,128)     (633,921)
                                                                                 ------------   -----------
      Net cash provided by operating activities ..............................        869,377     1,610,962
                                                                                 ------------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of marketable securities and long-term investments ..............    (10,072,373)           --
   Proceeds from maturities of marketable securities and
      long-term investments ..................................................     10,000,000            --
   Acquisition of property and equipment (net) ...............................        (34,449)     (363,975)
                                                                                 ------------   -----------
      Net cash (used in) investing activities ................................       (106,822)     (363,975)
                                                                                 ------------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common shares due to exercise of stock options ..         20,325            --
                                                                                 ------------   -----------
      Net cash provided by financing activities ..............................         20,325            --
                                                                                 ------------   -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS ....................................        782,880     1,246,987
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ...............................     28,734,869    13,148,237
                                                                                 ------------   -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD .....................................   $ 29,517,749   $14,395,224
                                                                                 ============   ===========
Supplemental Disclosure of Non cash investing activities:
   Demonstration and no capital cost sales equipment capitalized
      from inventory (Note 2) ................................................   $    191,363   $   131,612
</TABLE>

                        See notes to financial statements


                                        4

<PAGE>

                             SOMANETICS CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                FEBRUARY 28, 2007

1.   FINANCIAL STATEMENT PRESENTATION

     We prepared our unaudited interim financial statements pursuant to the
Securities and Exchange Commission's rules. These interim financial statements
do not include all of the information and notes 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 for 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, 2007 do not necessarily indicate the
results that you should expect for the year ending November 30, 2007. You should
read the unaudited interim financial statements together with the financial
statements and related notes for the year ended November 30, 2006 included in
our Annual Report on Form 10-K for the fiscal year ended November 30, 2006.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Marketable Securities and Long-Term Investments consist of Aaa-rated United
States government agency bonds, classified as held to maturity, maturing
approximately ten months to three years from the date of acquisition, are stated
at an amortized cost of $42,908,271, and have a market value of $42,961,850 at
February 28, 2007.

     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,   NOVEMBER 30,
                              2007           2006
                          ------------   ------------
<S>                       <C>            <C>
Purchased components ..    $1,798,761     $1,456,059
Finished goods ........       683,555        610,016
Work in process .......       126,062        106,383
                           ----------     ----------
   Total ..............    $2,608,378     $2,172,458
                           ==========     ==========
</TABLE>

     Property and Equipment are stated at cost. Depreciation and amortization
are computed using the straight-line method over the estimated useful lives of
the assets, which range from two to five years. Depreciation expense was
$181,628 and $118,021 for the quarters ended February 28, 2007 and February 28,
2006, respectively. We offer to our United States customers a no capital cost
sales program whereby we ship the INVOS System monitor to the customer at no
charge. The INVOS System monitors that are shipped to our customers are
classified as no capital cost sales equipment and are depreciated over five
years to cost of goods sold. All other depreciation expense is recorded as a
selling, general and administrative expense. As of February 28, 2007, we have
capitalized $2,830,665 in costs for INVOS System monitors being used as
demonstration and no capital cost sales equipment, and these assets had a net
book value of $1,597,149. As of November 30, 2006, we have capitalized
$2,650,939 in costs for INVOS System monitors being used as demonstration and no
capital cost sales equipment, and these assets had a net book value of
$1,529,946. Property and equipment are reviewed for impairment whenever events
or changes in circumstances indicate that the net book value of the asset may
not be recovered.

     Intangible Assets consist of patents and trademarks. 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 are as follows:


                                       5

<PAGE>

                             SOMANETICS CORPORATION

                    NOTES TO FINANCIAL STATEMENTS- CONTINUED
                                   (UNAUDITED)

                                FEBRUARY 28, 2007

<TABLE>
<CAPTION>
                                    FEBRUARY 28,   NOVEMBER 30,
                                        2007           2006
                                    ------------   ------------
<S>                                 <C>            <C>
Patents and trademarks ..........    $ 111,733      $ 111,733
Less: accumulated amortization ..     (103,452)      (101,724)
                                     ---------      ---------
   Total ........................    $   8,281      $  10,009
                                     =========      =========
</TABLE>

     Amortization expense for the three months ended February 28, 2007 and
February 28, 2006 was approximately $1,700. Amortization expense is expected to
be approximately $6,900 in fiscal 2007 and approximately $3,100 in fiscal 2008.

     Stock Compensation For the first quarter of fiscal 2007, we have recorded
stock compensation expense of $178,255 as a result of stock options and
restricted common shares granted to our officers, employees, directors and one
of our consultants during fiscal 2006. No stock options or restricted common
shares were granted during the first quarter of 2007 or during the first quarter
of fiscal 2006, and no stock options or restricted common shares vested during
the first quarter of fiscal 2007 or during the first quarter of fiscal 2006.
During the three months ended February 28, 2007, 1,500 stock options were
exercised by one of our employees for gross proceeds to us of $20,325. The
intrinsic value of these exercised stock options was $8,940. There were no stock
option exercises during the three months ended February 28, 2006.

     As of February 28, 2007, there was $3,082,600 of total unrecognized
compensation cost related to nonvested share-based compensation awards granted
under the 2005 Plan. This cost is expected to be recognized over a weighted
average period of 4.25 years. In addition, as of February 28, 2007, the
aggregate intrinsic value of stock options outstanding was $30,022,105, and the
aggregate intrinsic value of stock options exercisable was $29,248,895.

     No modifications were made to any share awards that required an accounting
charge, and no cash was paid for share-based liabilities during the first
quarter of fiscal 2007 or during the first quarter of fiscal 2006.

     Net Income Per Common Share - basic and diluted is computed using the
weighted average number of common shares outstanding during each period.
Weighted average shares outstanding - diluted includes the potential dilution
that could occur for common shares issuable under stock options or warrants. The
difference between weighted average shares - diluted and weighted average shares
- basic is calculated as follows:

<TABLE>
<CAPTION>
                                    February 28, 2007   February 28, 2006
                                    -----------------   -----------------
<S>                                 <C>                 <C>
Weighted average shares - basic         13,164,210          10,715,885
Add: effect of dilutive common
   shares and warrants                   1,472,764           1,607,819
                                        ----------          ----------
Weighted average shares - diluted       14,636,974          12,323,704
</TABLE>

     For the three months ended February 28, 2007 there were no stock options
outstanding that were excluded from the computation of net income per common
share - diluted, and for the three months ended February 28, 2006 there were 500
stock options outstanding that were excluded from the computation of net income
per common share - diluted, as the exercise price of these options exceeded the
average price per share of our common shares. In addition, at February 28, 2006,
there were 2,100,000 warrants outstanding that were excluded from the
computation, as the warrants were contingent on achieving specified future sales
targets that we did not expect to achieve. These warrants expired unexercised in
November 2006. As of February 28, 2007 we had outstanding 2,070,490 warrants and
options to purchase common shares, and as of February 28, 2006 we had
outstanding 4,014,232 warrants and options to purchase common shares.


                                       6

<PAGE>

                             SOMANETICS CORPORATION

                    NOTES TO FINANCIAL STATEMENTS- CONTINUED
                                   (UNAUDITED)

                                FEBRUARY 28, 2007

3.   ACCRUED LIABILITIES

     Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                            FEBRUARY 28,   NOVEMBER 30,
                                2007           2006
                            ------------   ------------
<S>                         <C>            <C>
Incentive Compensation ..     $187,500      $  495,014
Sales Commissions .......      148,677         277,521
Professional Fees .......      116,980          22,053
Taxes ...................       45,000         228,085
Warranty ................       21,250          19,900
Royalty .................        3,235          11,473
Clinical Research .......           --          60,005
401(k) Match ............           --          45,719
                              --------      ----------
   Total ................     $522,642      $1,159,770
                              ========      ==========
</TABLE>

4.   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.

5.   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 100 percent of our net
revenues in the first quarter of fiscal 2007 were derived from our INVOS System
product line, compared to 98 percent of our net revenues in the first quarter of
fiscal 2006.


                                       7
<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

FORWARD-LOOKING STATEMENTS

     You should read the following discussion and analysis of our financial
condition and results of operations together with our financial statements and
the related notes and other financial data included elsewhere in this report.
Some of the information contained in this discussion and analysis or set forth
elsewhere in this report, including information with respect to our plans and
strategy for our business, includes forward-looking statements that involve
risks and uncertainties. You should review the "Risk Factors" section of our
Annual Report on Form 10-K for a discussion of important factors that could
cause actual results to differ materially from the results described in or
implied by the forward-looking statements contained in the following discussion
and analysis. See also "Forward-Looking Statements" in Item 1A of our Annual
Repot on Form 10-K.

     OVERVIEW

     We develop, manufacture and market the INVOS System, a non-invasive patient
monitoring system that continuously measures changes in the blood oxygen levels
in the brain. We plan to launch the INVOS System into the neonatal ICU in 2007,
after completing development and market research of a smaller SomaSensor. We are
currently sponsoring a clinical trial evaluating the use of the INVOS System on
diabetic patients over age 50. If results of this trial are positive, we intend
to target more actively the sale of the INVOS System for use in diabetic
patients undergoing major general surgeries, consistent with FDA requirements.
We expect to begin this marketing in 2009.

     In November 2005, we received 510(k) clearance from the FDA to market our
INVOS System to monitor changes in somatic tissue blood oxygen saturation in
regions of the body other than the brain in patients with or at risk for
restricted blood flow. Our four-channel cerebral and somatic INVOS System
monitor, which we launched in the second quarter of 2006, can display
information from four SomaSensors, which allows for the simultaneous monitoring
of changes in blood oxygen saturation in the brain and, in patients with or at
risk for restricted blood flow, in somatic tissue.

     We also develop and market the CorRestore System for use in cardiac repair
and reconstruction. In September 2004, the European Economic Community changed
its regulations, limiting approval authority for animal tissue implant products
sold in Europe to some independent registration agencies that do not include our
registrar. Sales of CorRestore Systems represented less than one percent of our
net revenues for the first quarter of fiscal 2007.

     NET REVENUES AND COST OF SALES

     We derive our revenues from sales of INVOS Systems and CorRestore Systems
to hospitals in the United States through our direct sales team and independent
sales representative firms. Outside the United States, we have distribution
agreements with independent distributors for the INVOS System, including Tyco
Healthcare in Europe, Canada, the Middle East and Africa, and Edwards
Lifesciences Ltd. in Japan. Our cost of sales represent the cost of producing
monitors and disposable SomaSensors. Revenues from outside the United States
contributed 17 percent to our first quarter fiscal 2007 net revenues. As a
percentage of net revenues, the gross margin from our international sales is
typically lower than the gross margin from our U.S. sales, reflecting the
difference between the prices we receive from distributors and from direct
customers.

     We offer to our customers in the United States a no capital cost sales
program whereby we ship the INVOS System monitor to the customer at no charge.
Under this program, we do not recognize any revenue upon the shipment of the
monitor. We recognize SomaSensor revenue when we receive purchase orders and
ship the product to the customer. At the time of shipment of the monitor, we
capitalize the monitor as an asset and depreciate this asset over five years,
and this depreciation is included in cost of goods sold.


                                       8

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

     OPERATING EXPENSES

     Selling, general and administrative expenses generally consist of:

     -    salaries, wages and related expenses of our employees and consultants;

     -    sales and marketing expenses, such as employee sales commissions,
          commissions to independent sales representatives, travel,
          entertainment, advertising, education and training expenses,
          depreciation of demonstration monitors and attendance at selected
          medical conferences;

     -    clinical research expenses, such as costs of supporting clinical
          trials; and

     -    general and administrative expenses, such as the cost of corporate
          operations, professional services, stock compensation, insurance,
          warranty and royalty expenses, investor relations, depreciation and
          amortization, facilities expenses and other general operating
          expenses.

     We have increased the size of our direct sales team and expect to increase
the size of our direct sales team in fiscal 2007. In addition we are evaluating
placing direct salespersons and clinical specialists in Europe to support Tyco
Healthcare. We also expect our clinical research expenses to increase in fiscal
2007 as a result of sponsoring a clinical trial evaluating the use of the INVOS
System on diabetic patients over age 50. As a result, we expect selling, general
and administrative expenses to increase in fiscal 2007.

     Research, development and engineering expenses consist of:

     -    salaries, wages and related expenses of our research and development
          personnel and consultants;

     -    costs of various development projects; and

     -    costs of preparing and processing applications for FDA clearance of
          new products.

RESULTS OF OPERATIONS

     THREE MONTHS ENDED FEBRUARY 28, 2007 COMPARED TO THREE MONTHS ENDED
FEBRUARY 28, 2006

     NET REVENUES. Our net revenues increased $2,271,157, or 39 percent, from
$5,753,715 in the three-month period ended February 28, 2006 to $8,024,872 in
the three-month period ended February 28, 2007. The increase in net revenues is
primarily attributable to:

     -    an increase in U.S. sales of $1,806,689, or 37 percent, from
          $4,835,631 in the first quarter of fiscal 2006 to $6,642,320 in the
          first quarter of fiscal 2007. The increase in U.S. sales was primarily
          due to an increase in sales of the disposable SomaSensor of
          $1,052,510, or 26 percent, primarily as a result of a 19 percent
          increase in SomaSensor unit sales. In addition, sales of the INVOS
          System monitor in the United States increased $827,325, or 134
          percent, primarily as a result of increased purchases by pediatric
          hospitals; and

     -    an increase in international sales of $464,468, or 51 percent, from
          $918,084 in the first quarter of fiscal 2006 to $1,382,552 in the
          first quarter of fiscal 2007. The increase in international sales was
          primarily due to increased purchases of the INVOS System monitor and
          disposable SomaSensor by Tyco Healthcare in Europe. In the first
          quarter of fiscal 2007, international sales represented 17 percent of
          our net revenues, compared to 16 percent of our net revenues in the
          first quarter of fiscal 2006. Purchases by Tyco Healthcare accounted
          for 14 percent of net revenues in the first quarter of fiscal 2007,
          compared to 11 percent in the first quarter of fiscal 2006.

     In the United States, we sold 52,680 SomaSensors in the first quarter of
fiscal 2007, and internationally, we sold 29,270 SomaSensors in the first
quarter of fiscal 2007. We placed 127 INVOS System monitors in the United States
and 67 internationally in the first quarter of fiscal 2007, and our installed
base of INVOS System monitors in the United States was 1,624, in 610 hospitals,
as of February 28, 2007.


                                       9

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

     Sales of our products as a percentage of net revenues were as follows:

<TABLE>
<CAPTION>
                           THREE MONTHS ENDED FEBRUARY 28,
                           -------------------------------
PRODUCT                              2007   2006
-------                              ----   ----
<S>                        <C>              <C>
SomaSensors ............              74%    79%
INVOS System Monitors ..              26%    19%
                                     ---    ---
   Total INVOS System ..             100%    98%
CorRestore Systems .....              --      2%
                                     ---    ---
   Total ...............             100%   100%
                                     ===    ===
</TABLE>

     GROSS MARGIN. Gross margin as a percentage of net revenues was 88 percent
for the three months ended February 28, 2007 and for the three months ended
February 28, 2006. We realized a five percent increase in the average selling
price of SomaSensors in the United States and increased sales of the INVOS
System monitors to pediatric hospitals in the United States. The increase in our
average selling prices in the United States is attributable to increased sales
of our pediatric SomaSensor, which sells for a higher price than the adult
SomaSensor. These increases in gross margin described above were offset by
increased international sales due to the lower margin we receive on sales to our
distributors.

     RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES. Our research, development
and engineering expenses decreased $64,700, or 36 percent, from $178,066 in the
first quarter of fiscal 2006 to $113,366 in the first quarter of fiscal 2007.
The decrease is primarily attributable to a decrease in development costs
associated with our four-channel cerebral and somatic INVOS System monitor,
which was launched in the second quarter of fiscal 2006. We expect our research,
development and engineering expenses to increase in fiscal 2007, primarily as a
result of development costs associated with advances to the design and
performance features of the INVOS System, including the disposable SomaSensor,
and the hiring of additional research and development personnel.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $1,811,555, or 52 percent, from $3,507,881 for
the three months ended February 28, 2006 to $5,319,436 for the three months
ended February 28, 2007, primarily due to:

     -    a $802,873 increase in salaries, wages and related expenses, primarily
          as a result of an increase in the number of employees, principally in
          sales and marketing (from an average of 51 employees for the three
          months ended February 28, 2006 to an average of 82 employees for the
          three months ended February 28, 2007);

     -    a $390,858 increase in travel, marketing and selling-related expenses
          as a result of our increased sales personnel and increased sales and
          marketing activities, primarily sales training and advertising;

     -    a $359,532 increase in employee sales commissions as a result of
          increased sales and hiring additional sales employees;

     -    a $178,255 increase in stock compensation expense due to stock
          compensation issued to directors, officers, employees and a consultant
          in the third quarter of 2006; and

     -    a $145,179 increase in professional service fees, primarily due to
          increased legal and audit fees.

These increases were partially offset by a $154,927 decrease in commissions paid
to our independent sales representative firms as a result of fewer independent
sales representative firms in the first quarter of 2007.

We expect our selling, general and administrative expenses to increase in fiscal
2007, primarily as a result of our hiring additional direct sales personnel in
fiscal 2007, increased employee sales commissions payable as a result of
increased sales, increased clinical research expense, increased stock
compensation expenses, and increased sales and marketing expenses.


                                       10

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

     OTHER INCOME. During the first quarter of fiscal 2007, interest income
increased to $960,488, from $140,136 in the first quarter of 2006, primarily due
to our increased cash, cash equivalents, marketable securities and long-term
investment balances as a result of the proceeds from our public offering of
common shares that closed in the second quarter of fiscal 2006, and increased
interest rates.

     INCOME TAX PROVISION. During the first quarter of fiscal 2007 and 2006, we
recognized income tax expense at an estimated effective tax rate of 34 percent
on our statement of operations, and we expect this to continue for future
periods.

LIQUIDITY AND CAPITAL RESOURCES

     GENERAL

     Our principal sources of operating funds have been the proceeds from sales
of our common shares and cash provided by operating activities.

     As of February 28, 2007, we did not have any outstanding or available debt
financing arrangements, we had working capital of $70.0 million and our primary
sources of liquidity were $29.5 million of cash and cash equivalents, $29.9
million of marketable securities and $13.0 million of long-term investments.
Marketable securities and long-term investments consist of Aaa-rated United
States Government agency bonds, and cash and cash equivalents are currently
invested in bank savings accounts and money market accounts, pending their
ultimate use.

     We believe that cash, cash equivalents, marketable securities and long-term
investments on hand at February 28, 2007 will be adequate to satisfy our
operating and capital requirements for more than the next twelve months.

     CASH FLOWS FROM OPERATING ACTIVITIES

     Net cash provided by operations during the first quarter of fiscal 2007 and
2006 was $869,377 and $1,610,962, respectively. In the first quarter of fiscal
2007, cash was provided primarily by:

     -    $2,912,446 of net income before income taxes and non-cash
          depreciation, amortization and stock compensation expense; and

     -    a $119,906 decrease in prepaid expenses, primarily due to the
          amortization of prepaid insurance payments made in fiscal 2006;

Cash provided by operations in the first quarter of fiscal 2007 was partially
offset by:

     -    a $826,996 increase in accounts receivable, primarily as a result of
          higher first quarter sales in fiscal 2007 than in the fourth quarter
          of fiscal 2006 and the timing of more of the sales in fiscal 2007
          towards the end of the first quarter;

     -    a $637,128 decrease in accrued liabilities, primarily as a result of
          the payment of year-end 2006 accruals, including incentive
          compensation, sales commissions, income taxes, clinical research
          expenses, and 401(k) matching contributions, partially offset by
          increased accrued professional fees, primarily legal and auditing
          fees; and

     -    a $627,283 increase in inventories, primarily due to the acquisition
          of components associated with our SomaSensors and our INVOS System
          monitor due to anticipated sales; inventories on our balance sheet


                                       11

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

          increased less because we capitalized INVOS System monitors to
          property and equipment that are being used as demonstration units and
          no capital cost sales equipment, as described below.

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

     The increase in inventories described above is greater than shown on our
balance sheet because it includes INVOS System monitors that we capitalized
because they are being used as demonstration units and no capital cost sales
equipment. We capitalized $191,363 of costs from inventory for INVOS System
monitors being used as demonstration units and no capital cost sales equipment
at customers during the first quarter of fiscal 2007, compared to $131,612 in
the first quarter of fiscal 2006. As of February 28, 2007, we have capitalized
$2,830,665 in costs for INVOS System monitors being used as demonstration and no
capital cost sales equipment, and these assets have a net book value of
$1,597,149. We depreciate these assets over five years.

     CASH FLOWS FROM INVESTING ACTIVITIES

     Net cash used in investing activities in the first quarter of fiscal 2007
and 2006 was $106,822 and $363,975, respectively. In the first quarter of fiscal
2007, these expenditures were primarily for investments in marketable securities
and long-term investments of $10,072,373, partially offset by maturities of
marketable securities and long-term investments of $10,000,000.

     CASH FLOWS FROM FINANCING ACTIVITIES

     Net cash provided by financing activities in the first quarter of fiscal
2007 and 2006 was $20,325 and $0, respectively. During the first quarter of
fiscal 2007, we issued 1,500 common shares as a result of the exercise of stock
options by an employee, for proceeds of $20,325.

CONTRACTUAL OBLIGATIONS

     As of February 28, 2007, there have been no material changes outside the
ordinary course of business in the contractual obligations disclosed in our
Annual Report on Form 10-K for the fiscal year ended November 30, 2006 under the
caption "Contractual Obligations."

OFF-BALANCE SHEET ARRANGEMENTS

     We do not have any off-balance sheet arrangements or financing activities.

CRITICAL ACCOUNTING POLICIES

     We believe our most significant accounting policies relate to our
accounting treatment of stock compensation of employees, our accounting
treatment for income taxes, and our revenue recognition associated with our no
capital cost sales program.

     STOCK COMPENSATION

     For the first quarter of fiscal 2007, we have recorded stock compensation
expense of $178,255 as a result of stock options and restricted common shares
granted to our officers, employees, directors and one of our consultants during
fiscal 2006. No stock options or restricted common shares were granted during
the first quarter of 2007 or during the first quarter of fiscal 2006.


                                       12

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

     As of February 28, 2007, there was $3,082,600 of total unrecognized
compensation cost related to nonvested share-based compensation awards granted
under the 2005 Plan. This cost is expected to be recognized over a weighted
average period of 4.25 years. No modifications were made to any share awards
that required an accounting charge, and no cash was paid for share-based
liabilities during the first quarter of fiscal 2007 or during the first quarter
of fiscal 2006.

     The fair value of our stock option grants have been estimated on the date
of grant using the Black-Scholes option-pricing model with assumptions regarding
volatility (the measure by which the stock price has fluctuated or is expected
to fluctuate during the period), risk-free rate, expected lives and dividend
yields. The fair value of the restricted common shares was estimated based on
the market value of the common shares on the date of issuance. Different
assumptions could significantly change the calculated grant date fair value,
and, therefore, the amount of stock compensation expense we recognize over the
vesting period of the awards. We believe, however, that our estimates are
appropriate.

     INCOME TAXES

     We have performed the required assessment of positive and negative evidence
regarding realization of our deferred tax assets in accordance with SFAS No.
109, including our past operating results, the existence of cumulative losses
over our history up to the most recent four fiscal years, and our forecast for
future net income. Our assessment of our deferred tax assets, and the reversal
of part of our valuation allowance, included assuming that our net revenues and
pre-tax income will grow in future years consistent with the growth guidance
given for fiscal 2007 and making allowance for the uncertainties surrounding,
among other things, our future rate of growth in net revenues, the rate of
adoption of our products in the marketplace, and the potential for competition
to enter the marketplace. In reversing a portion of our valuation allowance, in
fiscal years 2006, 2005 and 2004, we concluded that it was more likely than not
that approximately $10,944,000 of such assets would be realized as of November
30, 2006. As of February 28, 2007, we have concluded that it is more likely than
not that approximately $10,099,000 of such assets will be realized.

     During fiscal 2004, we adjusted our deferred tax asset valuation allowance
resulting in the recognition of a deferred tax asset of $6,700,000 related to
the expected future benefits of our net operating loss carryforwards, in
accordance with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." During fiscal 2005, we further adjusted our deferred tax
asset valuation allowance resulting in the recognition of an additional net
deferred tax asset of $3,300,000, and during fiscal 2006 we further adjusted our
deferred tax asset valuation allowance resulting in recognition of an additional
net deferred tax asset of $750,000.

     The effect of recognizing this asset on our balance sheet, and associated
tax benefit on our statement of operations, is to increase our net income for
fiscal 2006 to $10,399,957, or $0.75 per diluted common share, to increase our
net income for fiscal 2005 to $7,751,087, or $0.66 per diluted common share, and
to increase our net income for fiscal 2004 to $8,706,576, or $0.77 per diluted
common share. Given the assumptions inherent in our financial plans, it is
possible to calculate a different value for our deferred tax asset by changing
one or more of the variables in our assessment. However, we believe that our
evaluation of our financial plans was reasonable, and that the judgments and
assumptions that we made at the time of developing the plan were appropriate.

     NO CAPITAL COST SALES REVENUE RECOGNITION

     We offer to our customers in the United States a no capital cost sales
program whereby we ship the INVOS System monitor to the customer at no charge.
Under this program, we do not recognize any revenue upon the shipment of the
INVOS System monitor. We recognize SomaSensor revenue when we receive purchase
orders and ship the product to the customer. At the time of shipment of the
monitor, we capitalize the INVOS System monitor as an asset and depreciate this
asset over five years. We believe this is consistent with our stated revenue


                                       13

<PAGE>

                             SOMANETICS CORPORATION

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

                                FEBRUARY 28, 2007

recognition policy, which is compliant with Staff Accounting Bulletin No. 104
and Emerging Issues Task Force No. 00-21, "Revenue Arrangements with Multiple
Deliverables."


                                       14
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The table below provides information about our financial instruments that
are sensitive to changes in interest rates, consisting of investments in United
States government agency bonds. For these financial instruments, the table
presents principal cash flows and related weighted average interest rates by
expected maturity dates. Weighted average fixed rates are based on the contract
rates. The actual cash flows of all instruments are denominated in U.S. dollars.
We invest our cash on hand not needed in current operations in United States
government agency bonds with varying maturity dates with the intention of
holding them until maturity.

<TABLE>
<CAPTION>
                                                         FEBRUARY 28, 2007
                                               EXPECTED MATURITY DATES BY FISCAL YEAR
                                      -------------------------------------------------------
                                         2007         2008         2009     2010   THEREAFTER      TOTAL     FAIR VALUE
                                      ----------   ----------   ---------   ----   ----------   ----------   ----------
<S>                                   <C>          <C>          <C>         <C>    <C>          <C>          <C>
INVESTMENTS:
Marketable Securities and Long-term
   Investments:
   Fixed Rate ($)                     15,963,426   21,944,845   5,000,000     --        --      42,908,271   42,961,850
      Average interest rate                 5.18%        5.25%       5.39%   N/A       N/A            5.24%
</TABLE>

     During the first quarter of fiscal 2007, one of our bonds matured for
approximately $5,000,000 and one of our bonds that was due to mature in 2009 was
called for approximately $5,000,000. We reinvested the proceeds into new bonds
with maturity dates in fiscal 2008.


                                       15

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

          Our management has evaluated, with the participation of our principal
     executive and principal financial officers, the effectiveness of our
     disclosure controls and procedures as of February 28, 2007 and any change
     in our internal control over financial reporting that occurred during our
     first fiscal quarter ended February 28, 2007 that has materially affected,
     or is reasonably likely to materially affect, our internal control over
     financial reporting. Based on their evaluation, our principal executive and
     principal financial officers have concluded that these controls and
     procedures are effective as of February 28, 2007. There was no change in
     our internal control over financial reporting identified in connection with
     such evaluation that occurred during our first fiscal quarter ended
     February 28, 2007 that has materially affected, or is reasonably likely to
     materially affect, our internal control over financial reporting.

          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 or submit under the Exchange
     Act is accumulated and communicated to our management, including our
     principal executive and principal financial officers, as appropriate to
     allow timely decisions regarding required disclosure.

          Internal control over financial reporting is a process designed by, or
     under the supervision of, our principal executive and principal financial
     officers, and effected by our board of directors, management and other
     personnel, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles and includes those policies and procedures that: (1) pertain to
     the maintenance of records that in reasonable detail accurately and fairly
     reflect our transactions and dispositions of assets, (2) provide reasonable
     assurance that transactions are recorded as necessary to permit preparation
     of financial statements in accordance with generally accepted accounting
     principles, and that our receipts and expenditures are being made only in
     accordance with authorizations of our management and directors, and (3)
     provide reasonable assurance regarding prevention or timely detection of
     unauthorized acquisition, use or disposition of our assets that could have
     a material effect on the financial statements.


                                       16

<PAGE>

                            PART II OTHER INFORMATION

ITEM 6. EXHIBITS

     31.1 Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a),
          as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2 Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a),
          as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1 Certifications of Chief Executive Officer and Chief Financial Officer
          Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.


                                       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 3, 2007                     By: /s/ William M. Iacona
                                            ------------------------------------
                                            William M. Iacona
                                            Vice President and Chief Financial
                                            Officer, Controller and Treasurer
                                            (Duly Authorized and Principal
                                            Financial Officer)


                                       18

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit                                Description
-------                                -----------
<S>       <C>
  31.1    Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a),
          as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  31.2    Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a),
          as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  32.1    Certifications of Chief Executive Officer and Chief Financial Officer
          Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.
</TABLE>


                                       19