SENSE TECHNOLOGIES INC. INTERIM FINANCIAL STATEMENTS August 31, 2008 (Stated in US Dollars) ( Unaudited)               Page
2      SENSE TECHNOLOGIES INC.BALANCE SHEETSAs ofAugust 31, 2008 and February 29, 2008(Stated in US Dollars) (Unaudited) August 31,


February 292008


2008ASSETSCurrentCash
$
1,217

$
988Accounts
Receivable

68,270


-Inventory

123,872


41,235Prepaids

33,589


30,466Total Current Assets

226,948


72,689Deposit

15,699


15,699Equipment  Net of accumulated depreciation
of $74,592 and $66,802 at August
31, 2008
and February 29, 2008,
respectively

68,115


75,904Intangible assets

2


2Total Assets
$
310,764

$
164,294LIABILITIESCurrentBank indebtedness
$
23,535

$
9,575Accounts payable and
accrued liabilities  Note 3

1,662,505


1,518,123Notes payable  Note
3
Advances payable 
unrelated parties

541,540
230,000


445,852
5,000Advances payable 
Note 3

-


40,050Dividends payable

187,348


171,550Convertible
promissory notes payable

584,447


584,447Total Current Liabilities

3,229,375


2,774,597STOCKHOLDERS' DEFICIENCYClass A preferred shares, without par value,
redeemable at $1 per share20,000,000
shares authorized, 315,914 shares issued at August 31, 2008 (February 29,
2008: 315,914)

315,914


315,914Common stock, without par value100,000,000
shares authorized, 50,904,651 shares issued at August 31, 2008 (February
29, 2008: 45,575,551)

12,637,726


12,362,142Common stock subscribed  Note 2

57,500


650,500Subscriptions receivable

(524,016
)

(891,432
)Common stock to be issued

288,889


288,889Additional paid-in capital

137,329


137,329Deficit

(15,831,953
)

(15,473,645
)Total Stockholders Deficiency

(2,918,611
)

(2,610,303
)Total Liabilities and Stockholders
Deficiency
$
310,764

$
164,294   SEE ACCOMPANYING NOTES         Page 3     SENSE TECHNOLOGIES INC.INTERIM STATEMENTS OF LOSS for the three and six
months ended August 31, 2008 and 2007 (Stated in US Dollars) (Unaudited) Three months ended


Six
months endedAugust 31,


August 31,2008


2007


2008


2007Restated

Note
7





Restated-
Note
7Sales
$
96,992

$
21,048

$
113,667

$
30,172Direct costsCost
of sales

30,985


4,764


30,985


7,091Manufacturing
expenses

279


2,327


3,572


2,327Research
and development

3,300


8,161


3,300


15,301Commissions

5,100


-


10,200


-Royalties

30,000


30,000


60,000


60,000Write-off
of inventory

-


76,891


-


76,89169,664


122,143


108,057


161,61027,328


(101,095
)

5,610


(131,438
)Advertising
and marketing

70,221
6,600
2,000


63,817
800
2,603


120,369
24,900
5,000


121,788
7,060
7,274Consulting
feesContract
laborDepreciation

3,895


2,687


7,790


5,373Filing
fees

1,750


293


1,750


1,248Financing
fees  Note 3

36,354


6,203


36,354


6,203Insurance

8,637


10,423


17,275


20,181Interest
and bank charges  Note 3

37,080


21,734


69,956


41,022Legal
and accounting  Note 3

357


31,222


51


31,222Office
and miscellaneous

10,475


7,530


12,565


8,596Rent

16,434


16,419


32,869


32,839Shareholder
information and printing

-


82


-


82Telephone
and utilities

1,239


1,576


2,340


3,103Transfer
agent fees

4,664


2,172


5,573


2,172Travel
and automotive

8,540


2,474


11,328


8,075208,246


170,035


348,120


296,238Net loss for the
period
$
(180,918
)
$
(271,130
)
$
(342,510
)
$
(427,676
)Basic and
diluted loss per share
$
(0.01
)
$
(0.01
)
$
(0.01
)
$
(0.01
)Weighted average
number of shares outstanding

50,378,408


39,605,361


50,326,203


39,605,361  SEE ACCOMPANYING NOTES           Page
4     SENSE TECHNOLOGIES INC.INTERIM STATEMENTS OF CASH FLOWS for the six months
ended August 31, 2008 and 2007 (Stated in US Dollars) (Unaudited) 2008


2007
Restated 
Note 7Operating ActivitiesNet loss for the period
$
(342,510
)
$
(427,676
)Adjustments to reconcile net
loss to net cash used in
Operating activities:Depreciation

7,790


5,373Impairment of inventory

-


76,891Changes in non-cash working
capital balances related to operations:Accounts receivable

(68,270
)

-Inventory

(82,637
)

(23,725
)Prepaids

(3,123
)

(14,832Accounts payable

154,384


110,867Advances payable

(40,050
)

(7,350
)Net cash used in operating activities

(384,416
)

(280,452
)Investing ActivitiesPatent cost

-


(500
)Purchase of equipment

-


(42,225
)Net cash used in investing activities

-


(42,725
)Financing ActivitiesNotes payable
Advances payable  unrelated
parties

95,688
225,000


280,000
-Borrowings from bank
indebtedness

13,957


5,677Proceeds from issuance of common
stock

-


-Proceeds from common share
subscriptions

50,000


37,500Net cash provided by financing activities

384,645


323,177Decrease in cash during the period

229


-Cash, beginning of period

988


-Cash, end of period
$
1,217

$
-   SEE ACCOMPANYING NOTES           Page
5      SENSE TECHNOLOGIES INC.STATEMENT OF STOCKHOLDERS DEFICIENCY for the period
ended August 31, 2008 (Stated in US Dollars) (Unaudited )  Common Stock


Preferred Stock





Promissory


Common



CommonIssued





Issued





Paid-in


Note


Stock


Subscriptions
Stock to


AccumulatedShares


Amount


Shares


Amount


Capital


Receivable


Subscribed


Receivable
Be
Issued


Deficit


TotalBalance,
February 28, 2007
45,575,551

$
12,362,142


315,914

$
315,914

$
62,529

$
(585,000
)
$
440,500

$
(891,432
)

$
(13,400,353
)
$
(1,695,700
)Common share
subscriptions



-





-


-


-


210,000


-



-


210,000Write-off of
promissory note  receivable



-


-


-


-


585,000


-


-



-


585,000Consulting
fees



-


-


-


-


-


-


-
88,889


-


88,889Management
Fees




-


-


-

74,800
-


-

-


-
200,000


-


200,000Dividends
-


-


-


-


-


-


-


-
-


(31,588
)

(31,588
)Net Loss for the
year




-


-


-


-


-


-


-
-

(2,041,704
)

(2,041,704
)Balance,
February 29, 2008
45,575,551


12,362,142


315,914


315,914


137,329



-

650,500


(891,432)
288,889


(15,473,645
)

(2,610,303
)Common share
subscriptions




-


-


-


-


-

50,000



-
-


-

50,000Common Stock
issued
5,329,100


275,584














(643,000
)

367,416






-Dividends
-


-


-


-


-


-


-


-
-


(15,798
)

(15,798
)Net loss for the
period




-


-


-


-


-


-


-

-
(342,510)


(342,510
)Balance, August
31, 2008
50,904,651

$
12,637,726


315,914

$
315,914

$
137,329



-
$
57,500

$
(524,016)
$288,889

$
(15,831,953)

$
(2,918,611)  SEE ACCOMPANYING
NOTES              Page
6      SENSE TECHNOLOGIES INC.NOTES TO THE INTERIM FINANCIAL STATEMENTS August 31,
2008 (Stated in US Dollars) (Unaudited) Note 1
Interim Reporting and Ability to Continue as a
Going ConcernThese
financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America on a going
concern basis, which assumes that the Company will continue to realize its
assets and discharge its obligations and commitments in the normal course
of operations. Realization values may be substantially different from
carrying values as shown and these financial statements do not give effect
to adjustments that would be necessary to the carrying values and
classification of assets and liabilities should the Company be unable to
continue as a going concern.
While the information
presented in the accompanying six months to August 31, 2008 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, 2009.
The Company operates in one industry segment being
the production, marketing and distribution of safety awareness products in
the automotive industry. Substantially, all of the Companys operations,
and assets are located in the United States. During the six months ended
August 31, 2008, there were three customers that accounted for $101,757
(90%) of sales revenue.  During the six months ended August 31, 2007,
there were no significant customers that accounted for greater than 10% of
the sales revenue.  During the year ended February 29, 2008, there
were two customers that accounted for $32,485 (43%) of sales
revenue.Operating results for the
six months ended August 31, 2008, are not necessarily indicative of the
results that can be expected for the year ending February 28, 2009.Note 2
Common Stocka)
Escrow:At August 31, 2008, there
are 5,970,190 performance shares held in escrow by the Companys transfer
agent. Included in this amount are 3,250,000 escrow shares to be earned
out on the basis of one share for each $0.50 of cash flow generated by the
Company. Once these shares are earned out, the remaining 2,720,190 escrow
shares are to be earned out for each $5.00 of cash flow generated by the
Company. The release of these shares is subject to the direction or
determination of the relevant regulatory authorities.b)
Commitments:Stock-based Compensation
Plan      Page
7      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.August 31,


August 31,2008


2007Weighted





WeightedAverage





AverageExercise





ExerciseShares


Price


Shares


PriceOutstanding and
exercisable atbeginning of
period

1,025,000


$0.07


275,000


$0.91Expired

(25,000
)

(1.00
)

-


-Outstanding and
exercisable atend of the
period

1,000,000


$0.05


275,000


$0.91 At August 31,
2008, 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:  Number
Exercise Price
Expiry Date1,000,000
$0.05
December 31, 2012  Common Stock
Subscribed For the
three months ended August 31, 2008, the Company has received $20,000 in respect
of private placements of 400,000 common shares at $0.05 per share. As at August
31, 2008, these shares had not been issued. Additionally, 375,000 common shares
from prior periods have not yet been issued  c) Subscriptions
Receivable:  The Company has
recorded subscriptions receivable form two shareholders.  $367,416 is due
from one shareholder from whom one-half of the shares originally issued have
already been recovered due to non-payment of the subscription.  The Company
is pursuing collecting the balance.   Note 3
Related Party TransactionsThe Company incurred the
following items with directors and companies with common directors and
shareholders:Three months ended


Six months endedAugust 31,


August 31,2008


2007


2008


2007Financing fee
$
36,354

$
-

$
36,354

$
-Interest expense
$
10,281

$
6,791

$
20,106

$
9,749 As of August
31, 2008, included in accounts payable is $45,274 (February 29, 2008: $33,495)
owing to an accounting firm in which a director of the Company is a partner and
a shareholder with respect to unpaid fees and interest on promissory notes,
$11,500 (February 29, 2008: $0) owing to a company in which the director of the
Company is a shareholder with respect to unpaid loan fees, $480,000 (February
29, 2008: $480,000) owing to shareholders of the Company in respect of royalties
payable with no interest accruing and $50,992 (February 29, 2008: $50,992) owing
to the former president of the Company in respect of unpaid wages. As of August 31, 2008, included in
advances payable is $0 (February 29, 2008: $40,050) owed to a company controlled
by a director.      Page
8      As of August 31,
2008, promissory notes payable of $365,000 (February 29, 2008: $345,000) is due
to a profit-sharing and retirement plan administeredby a director of the Company.  Terms
are: Due June,
2009 $
  20,000 May,
2009 150,000 August,
2009 90,000 September,
2009 30,000 October,
2009 75,000 Total $365,000 All bear
interest at 12% per annum.  Note 4 Accounts Payable August 31,
February 28,2008
2008Trade payables
$323,233
$304,372Accrued fees
130,000
130,000Accrued payroll
55,934
55,804Accrued interest payable
250,802
185,348Accrued non resident withholding taxes, including
accrued interest
109,960
109,960Accrued royalties payable
773,500
713,500Accrued taxes payable
19,076
19,139$1,662,505
$1,518,123
  Note 5 Additional Indebtedness  We had additional third party advances of $225,000 which
accrue interest at 12% per annum and are due on demand. We have a new note payable of $20,000 which bears 12%
interest and is due June, 2009. We drew down $95,062 on our $100,000 line of credit which
bears interest of 7.5% and is due April 14, 2009.  We incurred a $13,960 bank overdraft that is being
treated as a loan.  Note 6 Non-Cash Transactions  Investing and financing activities that do not have a
direct impact on current cash flows are excluded from the statements of cash
flows.  The following transactions were excluded from the statements of
cash flows:  During the year ended February 29, 2008, the Company
granted 2,500,000 common shares to a director and an officer of the Company.
 The fair value of the services provided ($200,000) was recorded as
management fees.   In connection with a consulting services agreement,
the Company also granted 1,111,110 common shares with fair value of $88,889,
being $0.08 per share based on quoted market price of the common shares as of
February 29, 2008. As of August 31, 2008 the shares have not been issued.  Note 7 Restatement of the August 31, 2007
Interim Financial Statements  Pursuant to the Scope Out Mirror License agreement, the
Company is obligated to pay a royalty of 10% of the wholesale price for each
Scope Out Mirror sold which, in any event, shall not be less than $2.00 per
unit.  In order to retain the exclusive right to manufacture,
sell, deliver and install the Scope Out Mirror, the Company, in accordance with
the license agreement, is required to pay the royalty due on a certain minimum
quantity of units each year.      Page
9      Prior to March 1, 2008, the Company had been accruing the
minimum royalty payable on an annual basis whereas the Company should have been
accruing the required minimum royalty every quarter. As a result, the Company
has restated its financial statements for the three and six months ended August
31, 2007 to reflect the minimum royalty payable of $30,000 due for the three
months and $60,000 for the six months then ended.  The following represents the Companys net loss as
previously reported and after giving effect to the restatement adjustments for
the three and six months ended August 31, 2007:  Three Months Ended
Six Months EndedAugust 31,
August 31,2007
2007Net Loss for the periodAs previously recorded
$ (241,130)
$       (367,676)Royalties
(
30,000)
(60,000)As restated
$
 (271,130)
$       (427,676)  This restatement had no effect on the Statement of Cash
Flows or on the previously reported basic and diluted loss per share of $(0.00)
for the six months ended August 31, 2007.  Note 8 Subsequent Events  The Company issued 5,700,000 common shares
after the quarter end.  2,500,000 shares were in satisfaction of the
obligation to issue shares as compensation to the Company President recorded
during the year ended February 29, 2008.  3,200,000 shares were issued in
partial satisfaction of the Companys obligation for accrued royalties under the
ScopeOut® license.  $160,000 of such accrued royalties were satisfied.