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**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 May 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 July 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 | 3      
|------------------------------ | -------
|                               |        
|                               | Item 1.
|                               |        
|                               | Item 2.
|                               |        
|PART II  OTHER INFORMATION    | 15     
|                               |        
|                               | Item 1.
|                               |        
|                               | Item 2.
|                               |        
|                               | Item 3.
|                               |        
|                               | Item 4.
|                               |        
|                               | Item 5.
|                               |        
|                               | Item 6.
|                               |        
|SIGNATURES                     | 16     

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements





3

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SENSE TECHNOLOGIES INC.

INTERIM FINANCIAL STATEMENTS

May 31, 2004

(Stated in US Dollars)

(Unaudited)



4

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

|                                                              |   | May 31,    |   |   | February 29, |  
|------------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                              |   | 2004       |   |   | 2004         |  
|ASSETS                                                        |  
|Current                                                       |   |            |   |   |              |  
|Cash                                                          | $ | 1,088      |   | $ | 1,800        |  
|Accounts receivable                                           |   | 16,829     |   |   | 8,733        |  
|Inventory                                                     |   | 737,873    |   |   | 747,506      |  
|Prepaids                                                      |   | 31,771     |   |   | 17,253       |  
|                                                              |   |            |   |   |              |  
|                                                              |   | 787,561    |   |   | 775,292      |  
|Capital assets                                                |   | 28,138     |   |   | 30,420       |  
|Intangible assets                                             |   | 8,300      |   |   | 8,300        |  
|                                                              |   |            |   |   |              |  
|                                                              | $ | 823,999    |   | $ | 814,012      |  
|                                                              |   |            |   |   |              |  
|**LIABILITIES**                                               |  
|Current                                                       |   |            |   |   |              |  
|Accounts payable                                              | $ | 871,790    |   | $ | 885,925      |  
|Advances payable                                              |   | 77,681     |   |   | 76,200       |  
|Dividends payable                                             |   | 110,093    |   |   | 70,268       |  
|Current portion of
      convertible promissory notes payable |   | 50,000     |   |   | 50,000       |  
|                                                              |   |            |   |   |              |  
|                                                              |   | 1,109,564  |   |   | 1,082,393    |  
|Convertible promissory notes payable                          |   | 668,974    |   |   | 668,974      |  
|                                                              |   |            |   |   |              |  
|                                                              |   | 1,778,538  |   |   | 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                              |   | 99,000     |   |   | 51,000       |  
|Preferred stock subscribed                                    |   | 1,593,025  |   |   | 1,593,025    |  
|Deficit                                                       |   | (9,723,921 | ) |   | (9,658,737   | )
|                                                              |   |            |   |   |              |  
|                                                              |   | (954,539   | ) |   | (937,355     | )
|                                                              |   |            |   |   |              |  
|                                                              | $ | 823,999    |   | $ | 814,012      |  
|                                                              |   |            |   |   |              |  

SEE ACCOMPANYING NOTES

5

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

|                                                         |   | 2004    |   |   | 2003     |  
|-------------------------------------------------------- | - | ------- | - | - | -------- | -
|                                                         |   |         |   |   |          |  
|Sales  Note 3                                           | $ | 21,506  |   | $ | 123,130  |  
|Direct costs  Schedule 1                                |   | 10,419  |   |   | 82,678   |  
|                                                         |   |         |   |   |          |  
|Gross margin                                             |   | 11,087  |   |   | 40,452   |  
|                                                         |   |         |   |   |          |  
|Expenses                                                 |   |         |   |   |          |  
|Advertising and marketing                                |   | -       |   |   | 1,714    |  
|Amortization                                             |   | 2,282   |   |   | 4,163    |  
|Bad debts  Note
      3                                 |   | 6,062   |   |   | 18,007   |  
|Consulting fees                                          |   | 240     |   |   | -        |  
|Filing fees                                              |   | 288     |   |   | -        |  
|Insurance                                                |   | 5,320   |   |   | 20,941   |  
|Interest and bank charges                                |   | 502     |   |   | 964      |  
|Interest on convertible
      promissory notes  Note 3  |   | 15,887  |   |   | 53,755   |  
|Legal and accounting
       Note 3                      |   | 2,000   |   |   | 21,121   |  
|Office and miscellaneous                                 |   | 1,259   |   |   | 5,058    |  
|Rent                                                     |   | -       |   |   | 6,937    |  
|Shareholder information
      and printing               |   | -       |   |   | 543      |  
|Telephone and internet                                   |   | 1,751   |   |   | 4,429    |  
|Transfer agent fees                                      |   | 17      |   |   | -        |  
|Travel                                                   |   | 838     |   |   | 5,057    |  
|Wages and benefits
       Note 3                        |   | -       |   |   | 70,020   |  
|                                                         |   |         |   |   |          |  
|                                                         |   | 36,446  |   |   | 212,709  |  
|                                                         |   |         |   |   |          |  
|Loss before other items                                  |   | (25,359 | ) |   | (172,257 | )
|Other items:                                             |   |         |   |   |          |  
|Non-cash compensation
      charge                       |   | -       |   |   | (5,250   | )
|Interest income 
      Note 3                           |   | 13,163  |   |   | (13,163  |  
|Provision for accrued
      interest receivable  Note 3 |   | (13,163 | ) |   | (13,163  | )
|Foreign exchange loss                                    |   | -       |   |   | -        |  
|                                                         |   |         |   |   |          |  
|Net loss for the period                                  | $ | (25,359 | ) | $ | (177,507 | )
|                                                         |   |         |   |   |          |  
|Basic and diluted loss per share                         | $ | (0.00   | ) | $ | (0.03    | )

SEE ACCOMPANYING NOTES

6

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

|                             |   | 2004       |   |   | 2003       |  
|---------------------------- | - | ---------- | - | - | ---------- | -
|                             |   |            |   |   |            |  
|Deficit, beginning of period | $ | (9,658,737 | ) | $ | (8,461,992 | )
|Dividends                    |   | (39,825    | ) |   | -          |  
|                             |   |            |   |   |            |  
|Net loss for the period      |   | (25,359    | ) |   | (177,507   | )
|                             |   |            |   |   |            |  
|Deficit, end of period       | $ | (9,723,921 | ) | $ | (8,639,499 | )

SEE ACCOMPANYING NOTES

7

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

|                                                     |   | 2004    |   |   | 2003     |  
|---------------------------------------------------- | - | ------- | - | - | -------- | -
|Operating Activities                                 |   |         |   |   |          |  
|Net loss for the period                              | $ | (25,359 | ) | $ | (177,507 | )
|Add items not involving cash:                        |   |         |   |   |          |  
|Non-cash compensation charge                         |   | -       |   |   | 5,250    |  
|Amortization                                         |   | 2,282   |   |   | 4,163    |  
|                                                     |   |         |   |   |          |  
|                                                     |   | (23,077 | ) |   | (168,094 | )
|Changes in non-cash working capital balances related |   |         |   |   |          |  
|to operations:                                       |   |         |   |   |          |  
|Accounts
      receivable                            |   | (8,096  | ) |   | 29,377   |  
|Inventory                                            |   | 9,633   |   |   | 68,711   |  
|Prepaids                                             |   | (14,518 | ) |   | (941     | )
|Accounts
      payable                               |   | (14,135 | ) |   | 44,496   |  
|Advances
      payable                               |   | 1,481   |   |   | 5,000    |  
|Dividends
      payable                              |   | 39,825  |   |   | -        |  
|                                                     |   |         |   |   |          |  
|Net cash used in operations                          |   | (8,887  | ) |   | (21,451  | )
|                                                     |   |         |   |   |          |  
|Financing Activities:                                |   |         |   |   |          |  
|Dividends                                            |   | (39,825 | ) |   | -        |  
|Common shares subscribed                             |   | 48,000  |   |   | 20,000   |  
|                                                     |   |         |   |   |          |  
|Net cash provided by financing activity              |   | 8,175   |   |   | 20,000   |  
|                                                     |   |         |   |   |          |  
|Decrease in cash during the period                   |   | (712    | ) |   | (1,451   | )
|                                                     |   |         |   |   |          |  
|Cash, beginning of period                            |   | 1,800   |   |   | 4,976    |  
|                                                     |   |         |   |   |          |  
|Cash, end of period                                  | $ | 1,088   |   | $ | 3,525    |  

SEE ACCOMPANYING NOTES

8

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SENSE TECHNOLOGIES INC.
  STATEMENT OF STOCKHOLDERS' DEFICIENCY
  for the year ended February 29, 2004, and the three month period ending May
  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 |  | $ | 57,279     |  | $ | (585,000   | ) | $ | 51,500     |   | $ | -          |  | $ | (8,340,435  | )
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Issue of shares for cash pursuant to an     | 10,000       |  |   | 2,500     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | -           |  
|agreement to settle deb  at $0.25          |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|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 |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|consulting services provided  at $0.25     | 15,000       |  |   | 3,750     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Issue of shares pursuant to capital assets  |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|contributed  at $1.00                      | 4,950        |  |   | 4,950     |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Common stock subscribed                     | -            |  |   | -         |  |   | -          |  |   | -          |   |   | 51,000     |   |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Common stock subscriptions utilized         | -            |  |   | -         |  |   | -          |  |   | -          |   |   | (51,500    | ) |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Non-cash compensation charge                | -            |  |   | -         |  |   | 5,250      |  |   | -          |   |   | -          |   |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Preferred stock subscribed                  | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | 1,593,025  |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|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                     | -            |  |   | -         |  |   | -          |  |   | -          |   |   | 48,000     |   |   | -          |  |   | -           |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Net loss for the three months ended         | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (25,359     | )
|May 31, 2004                                |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Dividends                                   | -            |  |   | -         |  |   | -          |  |   | -          |   |   | -          |   |   | -          |  |   | (39,825     | )
|                                            |              |  |   |           |  |   |            |  |   |            |   |   |            |   |   |            |  |   |             |  
|Balance, May 31, 2004                       | 13,340,522   |  | $ | 7,599,828 |  | $ | 62,529     |  | $ | (585,000   | ) | $ | 99,000     |   | $ | 1,593,025  |  | $ | (9,723,921  | )

SEE ACCOMPANYING NOTES

9

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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)                                      |           



|                         |   | 2004   |  |   | 2003   | 
|------------------------ | - | ------ |  | - | ------ | 
|Direct costs             |   |        |  |   |        | 
|Cost of sales            | $ | 9,633  |  | $ | 68,711 | 
|Manufacturing expenses   |   | -      |  |   | 8,951  | 
|Royalties  Note
      3 |   | 786    |  |   | 5,016  | 
|                         |   |        |  |   |        | 
|                         | $ | 10,419 |  | $ | 82,678 | 

SEE ACCOMPANYING NOTES

10

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

|Note 1 | Interim ReportingWhile the information presented in the accompanying three months to May
        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.
      Operating results for the quarter ended May 31, 2004
        are not necessarily indicative of the results that can be expected for
        the year ending February 28, 2004.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Note 2 | Share Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | a) | Authorized:                                                                                                                                                                                                                         
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | 99,250,000 common shares without par value                                                                                                                                                                                          
|
| | b) | Escrow:                                                                                                                                                                                                                             
|
| |    | At May 31, 2004, there are 5,970,190 shares held
        in escrow by the Company's transfer agent. The release of these shares
        is subject to the direction or determination of the relevant regulatory
        authorities.
|
| | c) | Commitments:                                                                                                                                                                                                                        
|
| |    | Stock-based Compensation Plan                                                                                                                                                                                                       
|
| |    | The Company has granted employees and directors
        common share purchase options. These options were granted with an exercise
        price equal to the market price of the Company's stock on the date of
        the grant. 

11

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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) | Commitments:  (cont'd)                 
| | -- | ----------------------------------------
|
| |    | Stock-based Compensation Plan  (cont'd)

| |  |                                                                                                                                                                                                                                       | May 31, 2004 |  |          |  | May 31, 2003 |   |         
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ |  | -------- |  | ------------ | - | --------
| |  |                                                                                                                                                                                                                                       |              |  | Weighted |  |              |   | Weighted
| |  |                                                                                                                                                                                                                                       |              |  | Average  |  |              |   | Average 
| |  |                                                                                                                                                                                                                                       |              |  | Exercise |  |              |   | Exercise
| |  |                                                                                                                                                                                                                                       | Shares       |  | Price    |  | Shares       |   | Price   
| |  | Outstanding and exercisable at                                                                                                                                                                                                        |              |  |          |  |              |   |         
| |  | beginning of period                                                                                                                                                                                                                   | 1,215,000    |  | $1.52    |  | 2,230,000    |   | $1.22   
| |  | Previously granted options vesting                                                                                                                                                                                                    |              |  |          |  |              |   |         
| |  | during the period                                                                                                                                                                                                                     | -            |  | -        |  | 100,000      |   | $1.00   
| |  | Granted                                                                                                                                                                                                                               | -            |  | -        |  | 50,000       |   | $1.00   
| |  | Less: Share purchase options not                                                                                                                                                                                                      |              |  |          |  |              |   |         
| |  | vested                                                                                                                                                                                                                                | -            |  | -        |  | (25,000      | ) | $1.00   
| |  |                                                                                                                                                                                                                                       |              |  |          |  |              |   |         
| |  | Outstanding and exercisable at end of                                                                                                                                                                                                 |              |  |          |  |              |   |         
| |  | the period                                                                                                                                                                                                                            | 1,215,000    |  | $1.52    |  | 2,355,000    |   | $1.10   
| |  |                                                                                                                                                                                                                                      
| |  | At May 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              
|15,000    |  | $1.03    |  | June 25, 2004     
|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    
|          |  |          |  |                   
|1,215,000 |  |          |  |                   

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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:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2004    |   |   | 2003    |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------- | - | - | ------- | -
| | Bad debts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $ | -       |   | $ | 18,007  |  
| | Interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $ | 2,057   |   | $ | 2,550   |  
| | Interest income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $ | (13,163 | ) | $ | (13,163 | )
| | Legal and accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $ | -       |   | $ | 1,500   |  
| | Provision for accrued interest receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $ | 13,163  |   | $ | 13,163  |  
| | Royalty expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $ | 786     |   | $ | 5,016   |  
| | Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $ | -       |   | $ | (39,900 | )
| | Wages and benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $ | -       |   | $ | 36,486  |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         |   |   |         |  
| | The above noted items were measured
        by the exchange amount which is the amount agreed upon by transacting
        parties.
      As at May 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 $480,786 (February 29, 2003:
        $480,000) owing to shareholders in respect of royalties payable.
      As at May 31, 2004, included in convertible promissory
        notes payable is $112,732 (February 29, 2004: $112,732) due to directors.

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Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
  OF OPERATION

The following discussion and analysis should be read in conjunction
  with our audited Financial Statements and Notes thereto for the period ended
  May 31, 2004 and May 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. The Company manufactures the product in Charlotte,
  NC through an outsourced vendor with extensive experience producing products
  for auto dealerships and OEMs. The Company has established relationships with
  multiple large dealership groups and aftermarket product distributors.

The Company plans to complete development of its next-generation
  product and continue to increase sales through continued development of new
  marketing relationships.

Results of Operations


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

Sales for the period ended May 31, 2004 were $21,506, an 83
  percent decrease over the period ended May 31, 2003. This difference is due
  to timing of customer's purchases and the company's attention currently being
  focused on the administrative transition necessary after Jim Cotter's resignation
  rather than on sales.

Direct costs were $10,419, an 87 percent decrease over the
  period ended May 31, 2003, which is primarily in-line with the change in sales.
  The Company realized a positive gross margin contribution of $11,087.

General and administrative expenses were $36,446 for the period
  ended May 31, 2004 as compared to $212,709 for the period ended May 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 May 31, 2004, the Company had cash and cash equivalents
  on hand of $1,088 compared with $3,525 at May 31, 2003. During the period ended
  May 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 May 31, 2004, we had a working capital deficit of $322,003
  compared to a working capital deficit of $1,768,533 at May 31, 2003. The reduction
  of the working capital deficit is largely due to restructuring certain unsecured
  promissory notes into preferred stock.

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

PART II  OTHER INFORMATION Item 1  Legal Proceedings


We have not received notice of any current legal proceedings
  involving our Company. We have evaluated one product manufacturer that we believe
  is infringing our patents, but concluded the sales volume of that company was
  inadequate to economically justify litigation. We intend to further evaluate
  another company we believe may be infringing our patent rights to determine
  if that is the case.

Item 2 -Change in Securities None. Item 3  Defaults Upon Senior Securities None.


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

None. Item 5  Other Information None. 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.

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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:   July 20, 2004 | SENSE TECHNOLOGIES INC.
|--------------------- | -----------------------
|                      |                        
|                      |                        
|                      |                        
|                      | By:                    
|                      |                        

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