---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

**x******QUARTERLY
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the quarterly period ended **August 31, 2004**

** ̈******TRANSITION
  REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT 
  For the transition period from _________ to _________

Commission File Number: **000-29990**

SENSE TECHNOLOGIES INC.
  (Name of Small Business Issuer in its charter)

|Yukon Territory                 | 90010141                  
|------------------------------- | --------------------------
|(state or other jurisdiction of | (I.R.S. Employer I.D. No.)
|incorporation or organization)  |                           

2535 N Carleton Avenue, Grand Island, Nebraska 68803
  (Address of principal executive offices)

(308) 381-1355 
  Issuer's telephone number

800 Clanton Road, Suite U, Charlotte, North Carolina, 28217
  Former name, former address, and former fiscal year, if changed since last report

Check whether the registrant (1) filed all reports required
  to be filed by sections 13 or 15(d) of the Exchange Act during the past 12 months
  (or for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. Yes**x******No** ̈******

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Check whether the registrant filed all documents and reports
  required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
  distribution of securities under a plan confirmed by a court. 
  YES** ̈******NO** ̈******

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date:

As of October 15, 2004, the registrant's outstanding common
  stock consisted of 13,340,522 shares.

Transitional Small Business Disclosure Format (Check one):
  YES** ̈******NO**x******

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SENSE TECHNOLOGIES INC.

INDEX TO FORM 10QSB

|PART I  FINANCIAL INFORMATION
|------------------------------
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|PART II  OTHER INFORMATION   
|                              
|                              
|                              
|                              
|                              
|SIGNATURES                    

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PART I. FINANCIAL INFORMATION

Item 1.         Financial Statements

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SENSE TECHNOLOGIES INC.

INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2004

(Stated in US Dollars)

(Unaudited)

---

SENSE TECHNOLOGIES INC.
  INTERIM BALANCE SHEETS 
  August 31, 2004 and February 29, 2004
  (Stated in US Dollars)
  (Unaudited)

|                                                                      |   | August 31, |   |   | February 29, |  
|--------------------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                                      |   | 2004       |   |   | 2004         |  
|                                                                      |   |            |   |   |              |  
|ASSETS                                                                |  
|                                                                      |   |            |   |   |              |  
|Current                                                               |   |            |   |   |              |  
|Cash                                                                  | $ | -          |   | $ | 1,800        |  
|Accounts
      receivable                                             |   | 13,629     |   |   | 8,733        |  
|Inventory                                                             |   | 741,883    |   |   | 747,506      |  
|Prepaids                                                              |   | 37,427     |   |   | 17,253       |  
|                                                                      |   |            |   |   |              |  
|                                                                      |   | 792,939    |   |   | 775,292      |  
|Capital assets                                                        |   | 16,250     |   |   | 30,420       |  
|Intangible assets                                                     |   | 8,300      |   |   | 8,300        |  
|                                                                      |   |            |   |   |              |  
|                                                                      | $ | 817,489    |   | $ | 814,012      |  
|                                                                      |   |            |   |   |              |  
|LIABILITIES                                                           |  
|                                                                      |   |            |   |   |              |  
|Current                                                               |   |            |   |   |              |  
|Bank indebtedness                                                     | $ | 383        |   | $ | -            |  
|Accounts
      payable  Note 3                                       |   | 940,556    |   |   | 885,925      |  
|Advances
      payable                                                |   | 73,400     |   |   | 76,200       |  
|Dividends
      payable                                               |   | 149,919    |   |   | 70,268       |  
|Current
      portion of convertible promissory notes payable- Note 3 |   | 50,000     |   |   | 50,000       |  
|                                                                      |   |            |   |   |              |  
|                                                                      |   | 1,214,258  |   |   | 1,082,393    |  
|Convertible promissory notes payable  Note 3                         |   | 668,954    |   |   | 668,974      |  
|                                                                      |   |            |   |   |              |  
|                                                                      |   | 1,883,212  |   |   | 1,751,367    |  
|                                                                      |   |            |   |   |              |  
|STOCKHOLDERS' DEFICIENCY                                              |  
|                                                                      |   |            |   |   |              |  
|Common stock  Note 2                                                 |   | 7,599,828  |   |   | 7,599,828    |  
|Additional paid-in capital                                            |   | 62,529     |   |   | 62,529       |  
|Promissory note receivable                                            |   | (585,000   | ) |   | (585,000     | )
|Common stock subscribed  Note 2                                      |   | 135,000    |   |   | 51,000       |  
|Preferred stock subscribed                                            |   | 1,593,025  |   |   | 1,593,025    |  
|Deficit                                                               |   | (9,871,105 | ) |   | (9,658,737   | )
|                                                                      |   |            |   |   |              |  
|                                                                      |   | (1,065,723 | ) |   | (937,355     | )
|                                                                      |   |            |   |   |              |  
|                                                                      | $ | 817,489    |   | $ | 814,012      |  

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.
  INTERIM STATEMENTS OF LOSS 
  for the six months ended August 31, 2004 and 2003
  (Stated in US Dollars)
  (Unaudited)

|                                          |   | Three months ended |   |   | Six months ended |  
|----------------------------------------- | - | ------------------ | - | - | ---------------- | -
|                                          |   | August 31,         |   |   | August 31,       |  
|                                          |   | 2004               |   |   | 2003             |  
|                                          |   |                    |   |   |                  |  
|Sales  Note 3                            | $ | 12,197             |   |   | 160,150          |  
|Direct costs  Schedule                   |   | 7,175              |   |   | 108,137          |  
|                                          |   |                    |   |   |                  |  
|Gross margin                              |   | 5,022              |   |   | 52,013           |  
|                                          |   |                    |   |   |                  |  
|Expenses                                  |   |                    |   |   |                  |  
|Advertising and marketing                 |   | 30                 |   |   | 5,943            |  
|Amortization                              |   | 1,433              |   |   | 4,411            |  
|Bad debts  Note 3                        |   | -                  |   |   | -                |  
|Consulting fees                           |   | 525                |   |   | 9,938            |  
|Filing fees                               |   | 1,475              |   |   | 2,044            |  
|Insurance                                 |   | 42,728             |   |   | 30,833           |  
|Interest and bank charges                 |   | 374                |   |   | 1,374            |  
|Interest on convertible promissory notes  |   |                    |   |   |                  |  
| Note 3                                  |   | 16,106             |   |   | 53,755           |  
|Legal and accounting                      |   | 40,257             |   |   | 37,292           |  
|Office and miscellaneous                  |   | 3,498              |   |   | 8,423            |  
|Rent                                      |   | -                  |   |   | 7,063            |  
|Shareholder information and printing      |   | 2,173              |   |   | 10,052           |  
|Telephone and utilities                   |   | 842                |   |   | 2,675            |  
|Transfer agent fees                       |   |                    |   |   | 1,386            |  
|Travel                                    |   | 303                |   |   | 5,227            |  
|Wages and benefits (recovered)  Note 3   |   | (819               | ) |   | 105,574          |  
|                                          |   |                    |   |   |                  |  
|                                          |   | 108,925            |   |   | 285,990          |  
|                                          |   |                    |   |   |                  |  
|Loss before other items                   |   | (103,903           | ) |   | (233,977         | )
|                                          |   |                    |   |   |                  |  
|Other items:                              |   |                    |   |   |                  |  
|Non-cash compensation charge              |   | -                  |   |   | -                |  
|Loss on disposition of capital assets     |   | (3,455             | ) |   | -                |  
|Interest income  Note 3                  |   | 13,163             |   |   | 13,163           |  
|Provision for accrued interest receivable |   |                    |   |   |                  |  
|- Note 3                                  |   | (13,163            | ) |   | (13,163          | )
|Foreign exchange loss                     |   | -                  |   |   | (4,479           | )
|                                          |   |                    |   |   |                  |  
|Net loss for the period                   | $ | (107,358           | ) | $ | (238,456         | )
|                                          |   |                    |   |   |                  |  
|Basic and diluted loss per share          |   | (0.01              | ) |   | (0.03            | )

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.
  INTERIM STATEMENTS OF DEFICIT
  for the six months ended August 31, 2004 and 2003
  (Stated in US Dollars) 
  (Unaudited)

|                             |   | 2004       |   |   | 2003       |  
|---------------------------- | - | ---------- | - | - | ---------- | -
|Deficit, beginning of period | $ | (9,658,737 | ) | $ | (8,461,992 | )
|Dividends                    |   | (79,651    | ) |   | -          |  
|                             |   |            |   |   |            |  
|Net loss for the period      |   | (132,717   | ) |   | (415,963   | )
|                             |   |            |   |   |            |  
|Deficit, end of period       | $ | (9,871,105 | ) | $ | (8,877,955 | )

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.
  INTERIM STATEMENTS OF CASH FLOWS 
  for the six months ended August 31, 2004 and 2003
  (Stated in US Dollars)
  (Unaudited)

|                                                                   |   | 2004     |   |   | 2003     |  
|------------------------------------------------------------------ | - | -------- | - | - | -------- | -
|Operating Activities:                                              |   |          |   |   |          |  
|Net loss
      for the period                                      | $ | (132,717 | ) | $ | (415,963 | )
|Add items
      not involving cash:                                |   |          |   |   |          |  
|Loss on disposition of capital
      assets                        |   | 3,455    |   |   | -        |  
|Non-cash compensation charge                                       |   | -        |   |   | 5,250    |  
|Common shares issued for advertising
      and consulting services |   | -        |   |   | 6,250    |  
|Amortization                                                       |   | 3,715    |   |   | 8,574    |  
|                                                                   |   |          |   |   |          |  
|                                                                   |   | (125,547 | ) |   | (395,889 | )
|Changes in non-cash working capital balances related to            |   |          |   |   |          |  
|operations:                                                        |   |          |   |   |          |  
|Accounts receivable                                                |   | (4,896   | ) |   | 51,401   |  
|Inventory                                                          |   | 5,623    |   |   | 67,483   |  
|Prepaids                                                           |   | (20,174  | ) |   | (1,275   | )
|Accounts payable                                                   |   | 54,631   |   |   | 10,370   |  
|Advances payable                                                   |   | (2,800   | ) |   | 60,000   |  
|Dividends payable                                                  |   | 79,651   |   |   | -        |  
|Deferred revenue                                                   |   | -        |   |   | 165,000  |  
|                                                                   |   |          |   |   |          |  
|Net cash used in operations                                        |   | (13,512  | ) |   | (40,360  | )
|                                                                   |   |          |   |   |          |  
|Investing Activity                                                 |   |          |   |   |          |  
|Proceeds
      from disposition of capital assets                  |   | 7,000    |   |   | -        |  
|                                                                   |   |          |   |   |          |  
|Net cash provided by investing activity                            |   | 7,000    |   |   | -        |  
|                                                                   |   |          |   |   |          |  
|Financing Activities:                                              |   |          |   |   |          |  
|Convertible
      promissory notes payable                         |   | (20      | ) |   | -        |  
|Dividends                                                          |   | (79,651  | ) |   | -        |  
|Common
      shares issued for cash                                |   | -        |   |   | 40,000   |  
|Common
      shares subscribed                                     |   | 84,000   |   |   | 20,000   |  
|                                                                   |   |          |   |   |          |  
|Net cash provided by financing activity                            |   | 4,329    |   |   | 60,000   |  
|                                                                   |   |          |   |   |          |  
|Decrease in cash during the period                                 |   | (2,183   | ) |   | (19,640  | )
|Cash, beginning of period                                          |   | 1,800    |   |   | 4,976    |  
|                                                                   |   |          |   |   |          |  
|Cash, (bank indebtedness) end of period                            | $ | 383      |   | $ | 24,616   |  

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC. 
  STATEMENT OF STOCKHOLDERS' DEFICIENCY 
  for the year ended February 29, 2004, and the six month period ending August
  31, 2004 
  (Stated in U.S. Dollars)
  (Unaudited)

|                                                                     | Common Stock |  |   |           |  |   | Promissory |  |   | Common     |   |   | Preferred  |   |   |            |  |   |             |  
|-------------------------------------------------------------------- | ------------ |  | - | --------- |  | - | ---------- |  | - | ---------- | - | - | ---------- | - | - | ---------- |  | - | ----------- | -
|                                                                     | Issued       |  |   |           |  |   | Paid-in    |  |   | Note       |   |   | Stock      |   |   | Stock      |  |   | Accumulated |  
|                                                                     | Shares       |  |   | Amount    |  |   | Capital    |  |   | Receivable |   |   | Subscribed |   |   | Subscribed |  |   | Deficit     |  
|                                                                     |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Balance, February 28, 2003                                           | 12,993,908   |  | $ | 7,497,128 |  | $ | 57,27      |  | $ | (585,000   | ) | $ | 51,500     |   | $ |            |  | $ | (8,340,435  | )
|Issue of shares for cash pursuant to an                              |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|agreement to settle debt                     
      at $0.25        | 10,000       |  |   | 2,500     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|Issue of shares pursuant to private                                  |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|placements                                         
      at $1.03  | 50,000       |  |   | 51,500    |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|
      at $0.15                                                     | 266,664      |  |   | 40,000    |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|Issue of shares pursuant to advertising and                          | 15,000       |  |   | 3,750     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|consulting services provided              
      at $0.25           |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Issue of shares pursuant to capital assets                           | 4,950        |  |   | 4,950     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|contributed                                         
      at $1.00 |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Common stock subscribed                                              | -            |  |   | -         |  |   | -          |  |   | -          |   |   | 51,500     |   |   | -          |  |   |             |  
|Common stock subscriptions utilized                                  | -            |  |   | -         |  |   | -          |  |   | -          |   |   | (51,500    | ) |   | -          |  |   |             |  
|Non-cash compensation charge                                         | -            |  |   | -         |  |   | 5,250      |  |   | -          |   |   | -          |   |   | -          |  |   |             |  
|Preferred stock subscribed                                           | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   |            |  |   |             |  
|Dividends                                                            | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (70,268     | )
|Net loss for the year ended                                          |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|February 29, 2004                                                    | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (1,248,034  | )
|                                                                     |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Balance, February 29, 2004                                           | 13,340,522   |  |   | 7,599,828 |  |   | 62,529     |  |   | (585,000   | ) |   | 51,000     |   |   | 1,593,025  |  |   | (9,658,737  | )
|                                                                     |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Common stock subscribed                                              | -            |  |   | -         |  |   | -          |  |   | -          |   |   | 84,000     |   |   | -          |  |   |             |  
|Dividends                                                            | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (79,651     | )
|Net loss for the six months ended                                    |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|August 31, 2004                                                      | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (132,717    | )
|                                                                     |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Balance, May 31, 2004                                                | 13,340,522   |  | $ | 7,599,828 |  | $ | 62,529     |  | $ | (585,000   | ) | $ | 135,000    |   | $ | 1,593,025  |  | $ | (9,871,105  | )

SEE ACCOMPANYING NOTES

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SENSE
  TECHNOLOGIES INC.                                 Schedule
  1
  SCHEDULE OF DIRECT COSTS  
  for the three months ended May 31, 2004 and 2003  
  (Stated in U.S. Dollars)  
  (Unaudited)

|                             |   | Three months ended |  |   | Six months ended | 
|---------------------------- | - | ------------------ |  | - | ---------------- | 
|                             |   | August 31,         |  |   | August 31,       | 
|                             |   | 2004               |  |   | 2003             | 
|                             |   |                    |  |   |                  | 
|Direct costs:                |   |                    |  |   |                  | 
|Cost of
      sales          | $ | 6,629              |  | $ | 86,052           | 
|Manufacturing
      expenses |   | -                  |  |   | 15,803           | 
|Royalties
       Note 3     |   | 546                |  |   | 6,282            | 
|                             |   |                    |  |   |                  | 
|                             | $ | 7,175              |  | $ | 108,137          | 

SEE ACCOMPANYING NOTES

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SENSE TECHNOLOGIES INC.
  NOTES TO THE INTERIM FINANCIAL STATEMENTS 
  August 31, 2004
  (Stated in US Dollars)
  (Unaudited)

|Note 1 | Interim Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | While the
        information presented in the accompanying six months to August 31, 2004
        financial statements is unaudited, it includes all adjustments which are,
        in the opinion of management, necessary to present fairly the financial
        position, results of operations and cash flows for the interim period
        presented in accordance with accounting principles generally accepted
        in the United States of America. In the opinion of management, all adjustments
        considered necessary for a fair presentation of the results of operations
        and financial position have been included and all such adjustments are
        of a normal recurring nature. It is suggested that these interim unaudited
        financial statements be read in conjunction with the Company's audited
        financial statements for the year ended February 28, 2004.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | Operating
        results for the quarter ended August 31, 2004 are not necessarily indicative
        of the results that can be expected for the year ending February 28, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 2 | Share Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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Sense Technologies Inc. 
  Notes to the Interim Financial Statements 
  May 31, 2004 
  (Stated in US Dollars) 
  (Unaudited)  Page 2

|Note 2 | Share Capital (cont'd)
|------ | -----------------------
|       |                        
|       | c)                     
|       |                        
|       |                        

| |  |                                               | August 31, 2004 |   | August 31, 2003
| |  | --------------------------------------------- | --------------- | - | ---------------
| |  |                                               |                 |   | Weighted       
| |  |                                               |                 |   | Average        
| |  |                                               |                 |   | Exercise       
| |  |                                               | Shares          |   | Price          
| |  | Outstanding and exercisable at                |                 |   |                
| |  | beginning of period                           | 1,215,000       |   | $1.52          
| |  | Previously granted options vesting            |                 |   |                
| |  | during the period                             | -               |   | -              
| |  | Granted                                       | -               |   | -              
| |  | Expired                                       | ( 15,000        | ) | $1.03          
| |  | Less:        Share
      purchase options not |                 |   |                
| |  | vested                                        | -               |   | -              
| |  |                                               |                 |   |                
| |  | Outstanding and exercisable at end of         |                 |   |                
| |  | the period                                    | 1,200,000       |   | $1.53          

| |  | At August 31, 2004, the following employee and director
        common share purchase options were outstanding entitling the holders thereof
        the right to purchase one common share for each share purchase option
        held:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |           |  | Exercise |  | Expiry             | 
| |  | --------- |  | -------- |  | ------------------ | 
| |  | Number    |  | Price    |  | Date               | 
| |  | 25,000    |  | $1.03    |  | June 8, 2005       | 
| |  | 300,000   |  | $1.03    |  | August 4, 2005     | 
| |  | 25,000    |  | $1.03    |  | January 8, 2006    | 
| |  | 25,000    |  | $1.03    |  | March 22, 2006     | 
| |  | 450,000   |  | $2.30    |  | December 18, 2006  | 
| |  | 50,000    |  | $2.30    |  | January 10, 2007   | 
| |  | 100,000   |  | $0.75    |  | September 26, 2007 | 
| |  | 200,000   |  | $1.00    |  | February 1, 2008   | 
| |  | 25,000    |  | $1.00    |  | March 14, 2008     | 
| |  |           |  |          |  |                    | 
| |  | 1,200,000 |  |          |  |                    | 



---

Sense Technologies Inc. 
  Notes to the Interim Financial Statements 
  May 31, 2004 
  (Stated in US Dollars) 
  (Unaudited)  Page 3

|Note 2 | Share Capital (cont'd)                                                                                                                    
|------ | -------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                            
|       | c)                                                                                                                                         
|       |                                                                                                                                            
|       |                                                                                                                                            
|       |                                                                                                                                            
|       |                                                                                                                                            
|       |                                                                                                                                            
|Note 3 | Related
        Party Transactions                                                                                                         
|       |                                                                                                                                            
|       | The Company
        incurred the following items with directors, shareholders and companies
        with common directors and shareholders:

| |                       |   | Three months ended |   |   | Six months ended
| | --------------------- | - | ------------------ | - | - | ----------------
| |                       |   | August 31,         |   |   | August 31,      
| |                       |   | 2004               |   |   | 2003            
| | Bad debts             | $ | -                  |   | $ | -               
| | Interest expense      | $ | 2,085              |   | $ | 2,425           
| | Interest income       | $ | (13,163            | ) | $ | (13,163         
| | Legal and accounting  | $ | -                  |   | $ | 1,500           
| | Provision for accrued |   |                    |   |   |                 
| | interest receivable   | $ | 13,163             |   | $ | 13,163          
| | Royalty expense       | $ | 546                |   | $ | 6,282           
| | Sales                 | $ | -                  |   |   | -               
| | Wages and benefits    | $ | -                  |   | $ | 40,384          

| | The above noted items were measured by the exchange
        amount which is the amount agreed upon by transacting parties.
      As at August 31, 2004, included in accounts payable
        is $59,420 (February 29, 2004: $60,900) owing to directors and a shareholder
        with respect to unpaid fees and purchases and $481,332 (February 29, 2004:
        $480,000) owing to shareholders in respect of royalties payable.
      As at August 31, 2004, included in convertible promissory
        notes payable is $112,732 (February 29, 2004: $112,732) due to directors.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Item 2.        
  Management's Discussion and Analysis or Plan of Operation

The following discussion and analysis should be read in conjunction
  with our Financial Statements and Notes thereto for the period ended August
  31, 2004 and August 31, 2003.

Overview of Operations


Sense holds an exclusive license to manufacture, distribute,
  market and sublicense world-wide, a patented technology which is used to produce
  the Guardian Alert backing awareness system for motor vehicles utilizing
  microwave radar technology, as well as a patented technology which is used to
  produce the ScopeOut® adjustable mirrors system for improved backing awareness
  (which license was acquired in September, 2004). The Company manufactures the
  Guardian Alert® product in Charlotte, NC through an outsourced vendor with
  extensive experience producing products for auto dealerships, and OEMs. The
  manufacturer of the ScopeOut® products will be approved soon. The Company
  has established relationships with multiple large dealership groups and after
  market product distributors.

The Company plans to complete development of its next-generation
  microwave product and continue to increase sales through continued development
  of new marketing relationships, as well as develop marketing opportunities for
  the recently-added ScopeOut® product line.

Results of Operations


For the period ended August 31, 2004 as compared to the
  period ended August 31, 2003.

Sales for the period ended August 31, 2004 were $33,703, an
  88 percent decrease over the period ended August 31, 2003. The difference is
  due to timing of customer's purchases and the Company's attention currently
  being focused on the administrative transition necessary after President Jim
  Cotter's resignation rather than on sales, inclusive of the Company's annual
  General Meeting requirements and attention to the ScopeOut® product line
  acquisition.

Direct costs were $17,594, a 91 percent decrease over the
  period ended August 31, 2003, which is primarily in-line with the change in
  sales. The Company realized a positive gross margin contribution of $16,109.

General and administrative expenses were $145,371 for the
  period ended August 31, 2004 as compared to $498,699 for the period ended August
  31, 2003. The decrease was partially attributable to a reduction in wages and
  benefits, interest, professional fees, rent, advertising and travel costs.

Liquidity and Capital Resources

At August 31, 2004, the Company had a cash and cash equivalents
  on hand deficit of $383 compared with a positive $24,616 at August 31, 2003.
  During the period ended August 31, 2004, the Company funded operations using
  existing cash balances, cash flow from operations, and by raising money through
  the issuance of Common Stock.

At August 31, 2004, we had a working capital deficit of $421,319
  compared to a working capital deficit of $1,981,328 at August 31, 2003. The
  reduction of the working capital deficit is largely due to restructuring certain
  unsecured promissory notes into preferred stock.

---

We have not invested in derivative securities or any other
  financial instruments that involve a high level of complexity or risk.

Item 3.        
  Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, with the participation of the Company's
  Chief Executive Officer, who is also acting in the capacity as principal accounting
  officer, has evaluated the effectiveness of the Company's disclosure controls
  and procedures as of August 31, 2004. Based on this evaluation, the Company's
  Chief Executive Officer concluded that the Company's disclosure controls and
  procedures are effective for gathering, analyzing and disclosing the information
  the Company is required to disclose in the reports it files under the Securities
  Exchange Act of 1934, within the time periods specified in the SEC's rules and
  forms. Such evaluation did not identify any change in the Company's internal
  control over financial reporting that occurred during the quarter ended August
  31, 2004 that has materially affected or is reasonably likely to materially
  affect the Company's internal control over financial reporting.

PART II- OTHER INFORMATION


Item 4.        
  Submission of Matters to a Vote of Security Holders

At the annual general and special meeting of the holders of
  shares of common stock of the Company held on August 31, 2004, the shareholders
  voted on the following matters:

|1. | Election of Directors.The following
        four directors were elected to serve until the subsequent annual general
        meeting of the stockholders: BRUCE E. SCHREINER, JAMES R. IMAN, DAVID
        HANSING, CYNTHIA L. SCHROEDER        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Votes For each director: 665,028 
        Withheld: 3,250 
        Broker non-votes/Abstentions: 0                                                                                                                                              
|  
|2. | Appointment of Independent Accountants.The stockholders ratified the appointment of Amisano Hanson, Chartered
        Accountants as the independent public accounting firm of the Company for
        the fiscal year ending February 28, 2005.
|  
|   | Votes For: 665,028 
        Against or Withheld: 3,250 
        Broker non-votes/Abstentions: 0                                                                                                                                                 
|  
|3. | Share Consolidation:To approve,
        by Special Resolution, the following:                                                                                                                                                                   
|  
|   | (a)                                                                                                                                                                                                                                             
|  
|   | (b)                                                                                                                                                                                                                                             

---

|   |                                                                                                                                                    | less than ten (10) current shares for one (1) new
        share and, in such event, subparagraphs (a) through (c) of this Special
        Resolution will be deemed to specify the consolidation ratio so effected,
        without further shareholder approval.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Votes For: 665,028 
        Against or Withheld: 3,250 
        Broker non-votes/Abstentions: 0                                                   
|  
|4. | Increase in Authorized Capital:Subject
        to the approval of item 3 of this Notice, to approve, by Special Resolution,
        the following:
|  
|   | (a)                                                                                                                                                | the authorized common share capital of the Company
        be increased from 10,000,000 common shares without par value to 100,000,000
        common shares without par value; and                                                                              
|  
|   | (b)                                                                                                                                                | the Articles of Amendment show the new authorized
        common share capital of the Company as 100,000,000 common shares without
        par value.                                                                                                            
|  
|   | Votes For: 666,278 
        Against or Withheld: 2,000 
        Broker non-votes/Abstentions: 0                                                   

Item 6.         Exhibits and Reports
  on Form 8-K

|(a) | Exhibit 31.1  Certification                                               
|--- | ---------------------------------------------------------------------------
|    | Exhibit 32.1  Certification                                               
|    |                                                                            
|(b) | No reports on form 8-K were filed during the period covered by this report.

SIGNATURES

In accordance with the requirements of the Exchange Act, the
  registrant caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.

|Date: October 22, 2004 | SENSE TECHNOLOGIES INC.(Registrant)
|---------------------- | -----------------------------------
|                       |                                    
|                       | By:                                
|                       |                                    

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