---

**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,
2006**

[   ] 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) 381-1355Issuers telephone number

Check whether the issuer (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 [   ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). YES [   ] NO [X]

The number of outstanding shares of the issuers common stock at
October 18, 2006 was 43,575,551 shares.

Transitional Small Business Disclosure Format: YES [  
] NO [X]

---

SENSE TECHNOLOGIES INC.

INDEX TO FORM 10-QSB

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

---

PART I.      FINANCIAL
INFORMATION

Item 1.      Financial Statements

---











SENSE TECHNOLOGIES INC.

INTERIM FINANCIAL STATEMENTS

August 31, 2006

(Stated in U.S. Dollars)

(Unaudited)

---

SENSE TECHNOLOGIES INC.INTERIM BALANCE SHEET
August 31, 2006 and February 28, 2006 (Stated in U.S. Dollars)
(Unaudited)

|                                                                                    |   | August 31,  |   |   | February 28 |  
|----------------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                                    |   | 2006        |   |   | 2006        |  
|                                                                                    |   |             |   |   |             |  
|**ASSETS**                                                                          |  
|                                                                                    |   |             |   |   |             |  
|Current                                                                             |   |             |   |   |             |  
|Cash                                                                                | $ | -           |   | $ | 9,220       |  
|Accounts receivable                                                                 |   | 46,216      |   |   | 7,449       |  
|Inventory                                                                           |   | 139,070     |   |   | 130,687     |  
|Deferred financing costs                                                            |   | 3,542       |   |   | -           |  
|Prepaids                                                                            |   | 41,429      |   |   | 17,526      |  
|                                                                                    |   |             |   |   |             |  
|                                                                                    |   | 230,257     |   |   | 164,882     |  
|Deposit                                                                             |   | 15,699      |   |   | 15,699      |  
|Equipment                                                                           |   | 49,526      |   |   | 54,899      |  
|Intangible assets                                                                   |   | 195,636     |   |   | 163,636     |  
|                                                                                    |   |             |   |   |             |  
|                                                                                    | $ | 491,118     |   | $ | 399,116     |  
|                                                                                    |   |             |   |   |             |  
|LIABILITIES                                                                         |  
|                                                                                    |   |             |   |   |             |  
|Current                                                                             |   |             |   |   |             |  
|Bank indebtedness                                                                   | $ | 24,436      |   | $ | -           |  
|Accounts payable and accrued
      liabilities  Note 3                             |   | 893,228     |   |   | 810,610     |  
|Advances payable                                                                    |   | 73,050      |   |   | 30,875      |  
|Promissory note payable                                                             |   | 75,000      |   |   | -           |  
|Dividends payable  Note 8                                                          |   | 132,143     |   |   | 114,991     |  
|Convertible promissory
      notes payable                                          |   | 584,447     |   |   | 584,447     |  
|                                                                                    |   |             |   |   |             |  
|                                                                                    |   | 1,782,304   |   |   | 1,540,923   |  
|                                                                                    |   |             |   |   |             |  
|STOCKHOLDERS' DEFICIENCY                                                            |  
|                                                                                    |   |             |   |   |             |  
|Class A preferred shares, without par value,
      redeemable at the option of the  |   |             |   |   |             |  
|Company at $1 per share, convertible into common stock at $0.29
      for each      |   |             |   |   |             |  
|preferred share, cumulative dividends payable
      at the annual rate of $0.10 per |   |             |   |   |             |  
|share, 20,000,000 shares authorized, 343,050 shares issued
      at August 31, 2006 |   |             |   |   |             |  
|(February 28, 2006: 343,050)  Note 8                                               |   | 343,048     |   |   | 343,048     |  
|Common stock, without par value, 100,000,000 shares authorized,
      42,525,811    |   |             |   |   |             |  
|issued at August 31, 2006 (February 28, 2006:
      42,225,811) - Note 2            |   | 11,748,164  |   |   | 11,580,664  |  
|Common stock subscribed                                                             |   | 106,000     |   |   | 76,000      |  
|Promissory note receivable                                                          |   | (585,000    | ) |   | (585,000    | )
|Subscriptions receivable                                                            |   | (764,832    | ) |   | (772,332    | )
|Additional paid-in capital                                                          |   | 62,529      |   |   | 62,529      |  
|Deficit                                                                             |   | (12,201,095 | ) |   | (11,846,716 | )
|                                                                                    |   |             |   |   |             |  
|                                                                                    |   | (1,291,186  | ) |   | (1,141,807  | )
|                                                                                    |   |             |   |   |             |  
|                                                                                    | $ | 491,118     |   | $ | 399,116     |  
|                                                                                    |   |             |   |   |             |  
|Commitment  Note 6                                                                 |   |             |   |   |             |  
|Subsequent Event  Note 8                                                           |   |             |   |   |             |  

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.INTERIM STATEMENTS OF LOSS
for the three and six months ended August 31, 2006 and 2005 (Stated in
U.S. Dollars) (Unaudited)

|                                                |   | Three months ended |   |   | Six months ended |  
|----------------------------------------------- | - | ------------------ | - | - | ---------------- | -
|                                                |   | August 31,         |   |   | August 31,       |  
|                                                |   | 2006               |   |   | 2005             |  
|                                                |   |                    |   |   |                  |  
|Sales                                           | $ | 17,992             |   | $ | 10,225           |  
|Direct costs                                    |   | 7,559              |   |   | 5,623            |  
|                                                |   |                    |   |   |                  |  
|Gross margin                                    |   | 10,433             |   |   | 4,602            |  
|                                                |   |                    |   |   |                  |  
|Expenses                                        |   |                    |   |   |                  |  
|Advertising and
      marketing                 |   | 42,725             |   |   | 17,144           |  
|Amortization                                    |   | 2,687              |   |   | 2,499            |  
|Bad debts                                       |   | 896                |   |   | 833              |  
|Consulting fees                                 |   | 53,803             |   |   | 1,675            |  
|Contract labour                                 |   | 7,656              |   |   | -                |  
|Filing fees                                     |   | 420                |   |   | (1,320           | )
|Financing fees 
      Note 3                   |   | 6,717              |   |   | 4,000            |  
|Insurance                                       |   | 13,134             |   |   | 12,871           |  
|Interest and
      bank charges                 |   | 2,735              |   |   | 3,901            |  
|Interest on convertible
      promissory notes  |   |                    |   |   |                  |  
| Note 3                                        |   | 16,786             |   |   | 16,106           |  
|Legal and accounting  Note 3                   |   | 26,467             |   |   | 36,156           |  
|Office and
      miscellaneous                  |   | 8,123              |   |   | 5,403            |  
|Rent                                            |   | 15,827             |   |   | 454              |  
|Shareholder
      information and printing      |   | 1,215              |   |   | 13,326           |  
|Telephone and utilities                         |   | 1,346              |   |   | 119              |  
|Transfer agent
      fees                       |   | 7,346              |   |   | 4,722            |  
|Travel and automobile                           |   | 3,195              |   |   | 1,265            |  
|                                                |   |                    |   |   |                  |  
|                                                |   | 211,078            |   |   | 119,154          |  
|                                                |   |                    |   |   |                  |  
|Loss before other items                         |   | (200,645           | ) |   | (114,552         | )
|                                                |   |                    |   |   |                  |  
|Other items:                                    |   |                    |   |   |                  |  
|Interest income                                 |   | 13,163             |   |   | 13,163           |  
|Provision for accrued interest
      receivable |   | (13,163            | ) |   | (13,163          | )
|                                                |   |                    |   |   |                  |  
|Net loss for the period                         | $ | (200,465           | ) | $ | (114,552         | )
|                                                |   |                    |   |   |                  |  
|Basic and diluted loss per share                | $ | (0.01              | ) | $ | (0.00            | )
|                                                |   |                    |   |   |                  |  
|Weighted average number of shares               |   |                    |   |   |                  |  
|outstanding                                     |   | 36,586,056         |   |   | 28,046,212       |  

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.INTERIM STATEMENTS OF CASH
FLOWS for the six months ended August 31, 2006 and 2005 (Stated in U.S.
Dollars) (Unaudited)

|                                                   |   | 2006     |   |   | 2005     |  
|-------------------------------------------------- | - | -------- | - | - | -------- | -
|                                                   |   |          |   |   |          |  
|Operating Activities                               |   |          |   |   |          |  
|Net loss for the period                            | $ | (337,227 | ) | $ | (247,457 | )
|Add items not involving
      cash:                |   |          |   |   |          |  
|Common shares
      issued for advertising and     |   |          |   |   |          |  
|consulting services                                |   | -        |   |   | 5,000    |  
|Common shares
      issued for a loan fee          |   | -        |   |   | 4,000    |  
|Amortization                                       |   | 5,373    |   |   | 4,997    |  
|Changes in non-cash working capital
      balances |   |          |   |   |          |  
|related to
      operations:                       |   |          |   |   |          |  
|Accounts
      receivable                          |   | (38,767  | ) |   | 9,098    |  
|Inventory                                          |   | (8,383   | ) |   | (101,397 | )
|Deferred financing
      costs                     |   | (3,542   | ) |   | -        |  
|Prepaids                                           |   | (23,903  | ) |   | (23,932  | )
|Accounts payable                                   |   | 82,618   |   |   | 26,187   |  
|Advances payable                                   |   | 42,175   |   |   | 67,800   |  
|Promissory note
      payable                      |   | 75,000   |   |   | (22,854  | )
|License fee payable                                |   | -        |   |   | (37,500  | )
|                                                   |   |          |   |   |          |  
|Net cash used in operations                        |   | (206,656 | ) |   | (316,058 | )
|                                                   |   |          |   |   |          |  
|Investing Activities                               |   |          |   |   |          |  
|Patent cost                                        |   | (32,000  | ) |   | (3,999   | )
|                                                   |   |          |   |   |          |  
|Net cash used in investing activities              |   | (32,000  | ) |   | (3,999   | )
|                                                   |   |          |   |   |          |  
|Financing Activities                               |   |          |   |   |          |  
|Subscriptions
      receivable                     |   | -        |   |   | (53,000  | )
|Dividends                                          |   | -        |   |   | 22,289   |  
|Bank indebtedness                                  |   | 24,436   |   |   | 55,856   |  
|Common shares issued for cash                      |   | 120,000  |   |   | 85,888   |  
|Common shares
      subscribed                     |   | 85,000   |   |   | 100,000  |  
|                                                   |   |          |   |   |          |  
|Net cash provided by financing activities          |   | 229,436  |   |   | 211,033  |  
|                                                   |   |          |   |   |          |  
|Decrease in cash during the period                 |   | (9,220   | ) |   | (131,313 | )
|                                                   |   |          |   |   |          |  
|Cash, beginning of period                          |   | 9,220    |   |   | 131,313  |  
|                                                   |   |          |   |   |          |  
|Cash, end of period                                | $ | -        |   | $ | -        |  
|                                                   |   |          |   |   |          |  
|Non-cash Transactions  Note 4                     |   |          |   |   |          |  

SEE ACCOMPANYING NOTES

---

SENSETECHNOLOGIESINC.STATEMENT OF STOCKHOLDERS DEFICIENCY for the period ended August
31, 2006 (Stated in U.S. Dollars) (Unaudited )

Common
        Stock
      
      
      Preferred
        Stock
      
      
      
      
      
      Promissory
      
      
      CommonIssued
      
      
      
      
      
      Issued
      
      
      
      
      
      Paid-in
      
      
      Note
      
      
      Stock
      
      
      Subscriptions
      
      
      AccumulatedShares
      
      
      Amount
      
      
      Shares
      
      
      Amount
      
      
      Capital
      
      
      Receivable
      
      
      Subscribed
      
      
      Receivable
      
      
      Deficit
      
      
      TotalBalance, February 28, 2005
      
      22,875,158
      
      
      8,228,246
      
      
      1,593,027
      
      
      1,593,025
      
      
      62,529
      
      
      (585,000
      )
      
      232,200
      
      
      -
      
      
      (10,317,455
      )
      
      (786,455
      )Pursuant to agreements to convertpreferred shares into commonshares                                     
        - at $0.29
      
      4,310,085
      
      
      1,249,977
      
      
      (1,249,977
      )
      
      (1,249,977
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Pursuant to the conversion ofpreferred share dividends  - at $0.13
      
      1,184,767
      
      
      154,021
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      154,021Pursuant to the exercise of warrants-
        at $0.15
      
      3,710,000
      
      
      556,500
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (7,500
      )
      
      -
      
      
      549,000Pursuant to an agreement to issueshares for a loan fee      
               - at $0.05
      
      80,000
      
      
      4,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      4,000Pursuant to consulting services- at $0.20
      
      25,000
      
      
      5,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      5,000-
        at $0.33
      
      500,000
      
      
      165,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      165,000Pursuant to legal services - at $0.20
      
      50,000
      
      
      10,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      10,000Pursuant to a private placement-
        at $0.05
      
      5,304,000
      
      
      265,200
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (211,200
      )
      
      (30,000
      )
      
      -
      
      
      24,000Less: issue costs
      
      -
      
      
      (7,112
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (7,112
      )- at $0.15
      
      200,001
      
      
      30,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      30,000- at $0.20
      
      925,000
      
      
      185,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      185,000-at
        $0.24
      
      3,061,800
      
      
      734,832
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (734,832
      )
      
      -
      
      
      -Dividends
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (39,442
      )
      
      (39,442
      )Common share subscriptions
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      55,000
      
      
      -
      
      
      -
      
      
      55,000Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,489,819
      )
      
      (1,489,819
      )Balance, February 28, 2006
      
      42,225,811
      
      
      11,580,664
      
      
      343,050
      
      
      343,048
      
      
      62,529
      
      
      (585,000
      )
      
      76,000
      
      
      (772,332
      )
      
      (11,846,716
      )
      
      (1,141,807
      )


/contd

SEE ACCOMPANYING NOTES

---

|Continued                            
|-------------------------------------
|SENSE TECHNOLOGIES INC.              
|STATEMENT OF STOCKHOLDERS DEFICIENCY
|for the period ended August 31, 2006 
|(Stated in US Dollars)               
|(Unaudited)                          

Common
        Stock
      
      
      Preferred
        Stock
      
      
      
      
      
      Promissory
      
      
      CommonIssued
      
      
      
      
      
      Issued
      
      
      
      
      
      Paid-in
      
      
      Note
      
      
      Stock
      
      
      Subscriptions
      
      
      AccumulatedShares
      
      
      Amount
      
      
      Shares
      
      
      Amount
      
      
      Capital
      
      
      Receivable
      
      
      Subscribed
      
      
      Receivable
      
      
      Deficit
      
      
      TotalBalance, February 28, 2006
      
      42,225,811
      
      
      11,580,664
      
      
      343,050
      
      
      343,048
      
      
      62,529
      
      
      (585,000
      )
      
      76,000
      
      
      (772,332
      )
      
      (11,846,716
      )
      
      (1,141,807
      )Pursuant to a private placement-
        at $0.10
      
      600,000
      
      
      60,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      60,000- at $0.20
      
      250,000
      
      
      50,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (40,000
      )
      
      -
      
      
      -
      
      
      10,000Pursuant to the exercise of warrants- at $0.15
      
      383,333
      
      
      57,500
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (7,500
      )
      
      -
      
      
      -
      
      
      50,000Common share subscriptions
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      77,500
      
      
      7,500
      
      
      -
      
      
      85,000Dividends
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (17,152
      )
      
      (17,152
      )Net loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (337,227
      )
      
      (337,227
      )Balance, August 31, 2006
      
      42,525,811
      
      $
      11,638,164
      
      
      343,050
      
      $
      343,048
      
      $
      62,529
      
      $
      (585,000
      )
      $
      106,000
      
      $
      (764,832
      )
      $
      (12,201,095
      )
      $
      (1,291,186
      )


SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.NOTES TO THE INTERIM
FINANCIAL STATEMENTS August 31, 2006 (Stated in U.S. Dollars)
(Unaudited)

|Note 1 | Interim Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | While the information presented in the accompanying six
      months to August 31, 2006 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, 2006.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | Operating results for the six months ended August 31,
      2006 are not necessarily indicative of the results that can be expected
      for the year ending February 28, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 2 | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | a) | Escrow:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | At August 31, 2006, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | 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.                                                                                                                                                                                                                                                                                                                                                

---

Sense Technologies Inc. Notes to the Interim Financial
Statements August 31, 2006 (Stated in U.S. Dollars)  Page 2
(Unaudited)

|Note 2 | Common Stock (contd)
|------ | ----------------------

|b) | Commitments: -
(contd)
|-- | -----------------------

| |                                       |  | August 31, 2006 |   |   | August 31, 2005 | 
| | ------------------------------------- |  | --------------- | - | - | --------------- | 
| |                                       |  |                 |   |   | Weighted        | 
| |                                       |  |                 |   |   | Average         | 
| |                                       |  |                 |   |   | Exercise        | 
| |                                       |  | Shares          |   |   | Price           | 
| |                                       |  |                 |   |   |                 | 
| | Outstanding and exercisable at        |  |                 |   |   |                 | 
| | beginning of period                   |  | 350,000         |   | $ | 1.12            | 
| | Expired                               |  | (25,000         | ) | $ | 1.03            | 
| |                                       |  |                 |   |   |                 | 
| | Outstanding and exercisable at end of |  |                 |   |   |                 | 
| | the period                            |  | 325,000         |   | $ | 1.12            | 

At August 31, 2006, 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 Date50,000
    $2.30
    January 10, 2007100,000
    $0.75
    September 26, 2007150,000
    $1.00
    February 1, 200825,000
    $1.00
    March 14, 2008325,000


Common Share Purchase Warrants

At August 31, 2006, the Company had
3,500,000 share purchase warrants outstanding. Each warrant entitles the holder
the right to purchase one common as follows:

Number
    Exercise Price
    Expiry Date3,500,000
    $0.15
    November 4, 2006


---

Sense Technologies Inc. Notes to the Interim Financial
Statements August 31, 2006 (Stated in U.S. Dollars)  Page
3(Unaudited)

|Note 2 | Common Stock (contd)
|------ | ----------------------

| | b) | Commitments: - (contd)                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                
| |    | Common Stock Subscribed                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                
| |    | As at August 31, 2006, the Company has received $21,000
      in respect of private placements of 140,000 common shares at $0.15 per
      share and $85,000 in respect of private placements of 850,000 common
      shares at $0.10 per share. As at August 31, 2006, these shares had not
      been issued.

|Note 3 | Related Party Transactions                                                                                         
|------ | -------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                    
|       | The Company incurred the following items with directors
      and companies with common directors and shareholders:

| |                 |   | Three Months Ended |  |   | Six Months Ended | 
| | --------------- | - | ------------------ |  | - | ---------------- | 
| |                 |   | August 31,         |  |   | August 31,       | 
| |                 |   | 2006               |  |   | 2005             | 
| |                 |   |                    |  |   |                  | 
| | Accounting fees | $ | 2,670              |  | $ | 4,360            | 
| | Financing fee   | $ | -                  |  | $ | -                | 
| | Interest        | $ | 5,833              |  | $ | -                | 

|       | As at August 31, 2006, included in accounts payable is
      $17,398 (February 28, 2006: $5,413) owing to an accounting firm in which a
      director of the Company is a partner and a director with respect to unpaid
      fees and expenses, $480,000 (February 28, 2006: $480,000) owing to
      shareholders of the Company in respect of royalties payable and $50,992
      (February 28, 2006: $50,992) owing to the former president of the Company
      in respect of unpaid wages.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 4 | Non-cash Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statement of
      cash flows. The following transactions were excluded from the statements
      of cash flows:                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | During the period ended August 31, 2005, the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | i) | issued 5,494,852 common shares pursuant to agreements to
      convert 1,249,977 preferred shares valued at $1,249,977 and preferred
      share dividends payable of $154,021.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Sense Technologies Inc. Notes to the Interim Financial
Statements August 31, 2006 (Stated in U.S. Dollars)  Page
4(Unaudited)

|Note 4 | Non-cash Transactions
      (contd)
|------ | -------------------------------------

| | ii)  | issued 25,000 common shares at $0.20 per share for a
      total of $5,000 in exchange for consulting services.                               
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                               
| | iii) | issued 80,000 common shares at $0.05 per share for a
      total of $4,000 pursuant to an agreement to issue shares as a fee for a
      loan.

|Note 5 | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                     
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                  
|       | For the six months ended August
        31, 2006, one customer accounted for 38% of the Companys sales revenue.                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 6 | Commitment                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                  
|       | By agreement dated August 21,
        2006, the Company granted the right to purchase (Right to Purchase)
        2,000,000 common shares at $0.10 per share for a period of two years in
        exchange for consulting services. Upon full or partial exercise of the
        Right to Purchase, the shares would be released subject to the completion
        of the following milestones:

| | - | 500,000 common shares if the
        Companys products are demonstrated to a Domestic Tier 1 manufacturer;                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                 
| | - | an additional 500,000 common
        shares if the Companys products are demonstrated to a foreign manufacturer;                                                                                                               
| |   |                                                                                                                                                                                                                                 
| | - | an additional 500,000 common
        shares if a meeting with a member or members of the US Congress is convened
        for the purpose of discussing vehicular back-up accidents and potential
        countermeasures;       
| |   |                                                                                                                                                                                                                                 
| | - | an additional 500,000 common
        shares if a meeting is convened with any US Congress Transportation Committee
        member for the purpose of discussing vehicular back- accidents and potential
        countermeasures.

|Note 7 | Comparative Figures                                                                                                                                                                                                                               
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                   
|       | Certain of the comparative figures
        for the six months ended August 31, 2005 have been reclassified to conform
        with the presentation used in the current period.                                                                   
|       |                                                                                                                                                                                                                                                   
|Note 8 | Subsequent Event                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                   
|       | Subsequent to August 31, 2006,
        the Company issued 116,407 common shares at $0.29 per share for a total
        of $33,758 pursuant to the conversion of 27,134 preferred shares valued
        at $27,134 and accrued dividends of $6,624.

---

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, 2006 and August 31, 2005.

Overview of Operations

Sense holds a 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. Sense also holds the worldwide rights to market and sell the
ScopeOut® product. ScopeOut® is a system of specially-designed mirrors which are
placed at specific points on automobiles, trucks, sport utility vehicles or
commercial vehicles to offer drivers a more complete view behind the vehicle.
Drivers using the product are able to have increased visibility when backing out
of parking spaces or garages, and have additional protection from blind spots
during lane changes in traffic. Both products are available on-line at www.sensetech.com.

Manufacturing of both products is outsourced. The Company has
established relationships with multiple large dealership groups and aftermarket
product distributors.

Results of Operations

For the period ended August 31, 2006 as compared to the
period ended August 31, 2005.

Sales for the period ended August 31, 2006 were $77,889, a 398
percent increase over the period ended August 31, 2005. The Company has been
concentrating on the wholesale and retail launch of its ScopeOut® products.

Direct costs were $19,911, a 73 percent increase over the
period ended August 31, 2005. The Company realized a positive gross margin
contribution of $57,978.

General and administrative expenses were $395,205 for the
period ended August 31, 2006 as compared to $251,550 for the period ended August
31, 2005. The increase was partially attributable to extra costs incurred in
preparation of launching the ScopeOut® products into the wholesale and retail
marketplace.

Liquidity and Capital Resources

At August 31, 2006, the Company had a cash and cash equivalents
on hand deficit of $24,436 compared to a deficit of $55,856 at August 31, 2005.
During the period ended August 31, 2006, 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, 2006, we had a working capital deficit of
$1,552,047 compared to a working capital deficit of $969,671 at August 31, 2005.
The increase in working capital deficit is largely due to the write off of
Guardian Alert® inventory products and components as required by the Company's
auditors.

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, 2006. 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, 2006 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 Meeting of the holders of Common Shares
of the Company held on August 18, 2006, the shareholders voted on the following
matters:

|1. | Election of Directors.The following nominees were
      elected as directors to serve until the next annual general meeting of the
      shareholders:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------

Bruce E. Schreiner
          For:
1,999,054          
Withheld: 2,000

James R.
Iman           For:
1,999,054          
Withheld: 2,000

Cynthia L.
Schroeder           For:
1,999,054          
Withheld: 2,000

|2. | Appointment of Auditors.The shareholders approved
      the reappointment of Amisano Hanson, Chartered Accountants, as auditor of
      the Company until the next annual general shareholder
  meeting.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For:
2,000,054          
Withheld: 1,000

---

Item 6. Exhibits

|1. | Exhibit 31.1  Certification
        Pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange
        Act of 1934.                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                             
|2. | Exhibit 32.1  Certification
        Pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) or 15a-14(b) of
        the U.S. Securities Exchange Act of 1934.

---

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 20, 2006 | SENSE TECHNOLOGIES INC.
|---------------------- | -----------------------
|                       |                        
|                       |                        
|                       | By:                    
|                       |                        
|                       |                        

---