U.
      S.
      Securities and Exchange Commission




Washington,
      D.C. 20549




**FORM
      10-QSB**




**(** **Mark
      One** **)**




x
      Quarterly Report
      Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


For
      the
      quarterly periods ended December 31, 2007


or


o
      Transition Report
      Pursuant to Section 13 of 15(d) of the Securities Exchange Act of
      1934


For
      the
      Transition Period From ____________ to ______________





Commission
      File number 000-23025







NOTIFY
      TECHNOLOGY CORPORATION


(Exact
      name of small business issuer as specified in its charter)




CALIFORNIA
              (State
                or other jurisdiction of incorporation or organization)
            77-0382248
              (IRS
                Employer Identification No.)




1054
      South De Anza Blvd.


San
      Jose,
      CA 95129





(Address
      of principal executive offices)




(408)
      777-7920


(Issuer’s
      telephone number)









Check
                whether the issuer (1) filed all reports required to be filed by
                Section
                13 of 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
                  No  X




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




Yes
                    No  X




As
      of
      December 31, 2007 there were 14,075,662 shares of Common Stock
      outstanding.




Transitional
      Small Business Disclosure Format




Yes
                      No  X







INDEX


PART
        I.
        FINANCIAL INFORMATION (unaudited)


Item
                  1.
              Condensed
                  Financial Statements: (unaudited)Condensed
                  Balance Sheets as of December 31, 2007 and
                September
                  30, 2007
              3Condensed
                  Statements of Operations for the three month periods ended
                December
                  31, 2007 and 2006
              4Condensed
                  Statements of Cash Flows for the three month periods ended
                December
                  31, 2007 and 2006
              5Notes
                  to the Condensed Financial Statements
              6Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition
                and
                  Results of Operations
              9Item
                  3.
              Controls
                  and Procedures
              16
  PART
          II.
          OTHER INFORMATION
 Item
                  5.
              Other
                  Information
              16Item
                  6.
              Exhibits
              16SIGNATURES
              
              17




2




**PART
      I. FINANCIAL INFORMATION (unaudited)**





**Item
      1.**  **Financial
      Statements**





**NOTIFY
      TECHNOLOGY CORPORATION**


**CONDENSED
      BALANCE SHEETS**




**December
                31****,**
              **2007**
            
            
            **September
                30,**
              **2007**(unaudited)
            
            
            (1)**Assets**Current
                assets:Cash
                and cash equivalents
            
            $
            855,771
            
            $
            839,775Accounts
                receivable, net
            
            
            637,441
            
            
            588,295Other
                current assets
            
            
            69,264
            
            
            51,692Total
                current assets
            
            
            1,562,476
            
            
            1,479,762Non-current
                assetsProperty
                and equipment, net
            
            
            99,335
            
            
            98,983Deposit
                on property and equipment
            
            
            31,850
            
            
            --Total
                non-current assets
            
            
            131,185
            
            
            98,983Total
                assets
            
            $
            1,693,661
            
            $
            1,578,745**Liabilities
                and shareholders' deficit**Current
                liabilities:Current
                portion of capital lease obligations
            
            $
            3,846
            
            $
            7,243Accounts
                payable
            
            
            45,957
            
            
            31,915Accrued
                payroll and related liabilities
            
            
            220,478
            
            
            260,216Deferred
                revenue
            
            
            2,312,549
            
            
            2,126,518Other
                accrued liabilities
            
            
            162,209
            
            
            143,189Total
                current liabilities
            
            
            2,745,039
            
            
            2,569,081Long
                term portion of capital lease obligations
            
            
            14,434
            
            
            15,519Total
                liabilities
            
            
            2,759,473
            
            
            2,584,600Shareholders'
                deficit:Preferred
                stock, $0.001 par value, 5,000,000 shares authorized
            
            
            --
            
            
            --Common
                stock, $0.001 par value, 30,000,000 shares authorized, 14,075,662
                shares
                issuedand
                outstanding
            
            
            14,076
            
            
            13,969Additional
                paid-in capital
            
            
            23,387,395
            
            
            23,354,759Accumulated
                deficit
            
            
            (24,467,283
            )
            
            (24,374,583
            )Total
                shareholders’ deficit
            
            
            (1,065,812
            )
            
            (1,005,855
            )Totalliabilities
                and shareholders' deficit
            
            $
            1,693,661
            
            $
            1,578,745





(1)
      The
      information in this column was derived from our audited financial statements
      for
      the year ended September 30, 2007




See
      accompanying notes to unaudited condensed financial statements




3




**NOTIFY
      TECHNOLOGY CORPORATION**


**CONDENSED
      UNAUDITED STATEMENTS OF OPERATIONS**




**Three-Month
                Periods**
              **Ended
                December 31,****2007**
            
            
            **2006**Revenue:Product
                revenue
            
            $
            1,074,854
            
            $
            882,515Service
                revenue
            
            
            --
            
            
            148,931Total
                revenue
            
            
            1,074,854
            
            
            1,031,446Cost
                of revenue:Product
                cost
            
            
            5,080
            
            
            2,350Royalty
                payments
            
            
            29,070
            
            
            23,950Total
                cost of revenue
            
            
            34,150
            
            
            26,300Gross
                profit
            
            
            1,040,704
            
            
            1,005,146Operating
                expenses:Research
                and development
            
            
            395,683
            
            
            304,068Sales
                and marketing
            
            
            414,206
            
            
            447,323General
                and administrative
            
            
            323,356
            
            
            304,319Total
                operating expenses
            
            
            1,133,245
            
            
            1,055,710Loss
                from operations
            
            
            (92,541
            )
            
            (50,564
            )Other
                income (expense), net
            
            
            4,650
            )
            
            (256
            )SFAS
                123(R) (expense)
            
            
            (4,810
            )
            
            (10,207
            )Net
                loss
            
            $
            (92,701
            )
            $
            (61,027
            )Basic
                and diluted loss per share
            
            $
            (0.01
            )
            $
            (0.00
            )Basic
                weighted average shares outstanding
            
            
            14,017,328
            
            
            13,968,995





See
      accompanying notes to unaudited condensed financial statements





4


**NOTIFY
      TECHNOLOGY CORPORATION**


**CONDENSED
      STATEMENTS OF CASH FLOWS**




**Three-Month
                Periods**
              **Ended
                December 31,****2007**
            
            
            **2006**(Unaudited)**Cash
                flows provided by (used in) operating activities:**Net
                loss
            
            $
            (92,701
            )
            $
            (61,027
            )Adjustments
                to reconcile net loss to cash provided by(used
                in) operating activities:Depreciation
                and amortization
            
            
            15,635
            
            
            10,951Gain
                from the sale of property and equipment
            
            
            --
            
            
            --FSAS
                123(R) Expense
            
            
            4,810
            
            
            10,207Changes
                in operating assets and activities:Accounts
                receivable
            
            
            (49,146
            )
            
            (260,815
            )Other
                current assets
            
            
            (17,572
            )
            
            588Accounts
                payable
            
            
            13,747
            
            
            28,929Deferred
                revenue
            
            
            186,031
            
            
            166,875Other
                accrued liabilities
            
            
            (20,423
            )
            
            (27,767
            )Net
                cash provided by (used in) operating activities
            
            
            40,381
            
            
            (132,059
            )**Cash
                flows provided by (used in) investing activities:**Purchase
                of property and equipment
            
            
            (15,897
            )
            
            (8,327
            )Deposit
                on property and equipment
            
            
            (31,850
            )
            
            --Net
                cash used in investing activities
            
            
            (47,837
            )
            
            (8327
            )**Cash
                flows provided by (used in) financing activities:**Proceeds
                from exercise of options
            
            
            27,933
            
            
            ---Principal
                payments on capital lease obligations
            
            
            (4,481
            )
            
            (4,436
            )Net
                cash provided by (used in) financing activities
            
            
            23,452
            
            
            (4,436
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            15,996
            
            
            (144,822
            )Cash
                and cash equivalents at beginning of period
            
            
            839,775
            
            
            829,406Cash
                and cash equivalents at end of period
            
            $
            855,771
            
            $
            684,584Supplemental
                disclosure of cash information
            
            $
            510
            
            $
            490Cash
                paid for interestCash
                paid for taxes
            
            $
            --
            
            $
            --





See
      accompanying notes to unaudited condensed financial statements





5




**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


1.  BASIS
      OF
      PRESENTATION





The
      accompanying unaudited condensed financial statements of Notify Technology
      Corporation (referred to as “the Company”, “we”, “us” and “our” unless the
      context otherwise requires) have been prepared in accordance with accounting
      principles generally accepted in the United States of America for interim
      financial information and the instructions of Regulation S-B Item 310(b) and
      Article 10 of Regulation S-X. The condensed financial statements included herein
      are unaudited but include all adjustments (consisting only of normal recurring
      adjustments), which we consider necessary for a fair presentation of the
      financial position at such date and the operating results and cash flows for
      those periods. Although we believe that the disclosures in these condensed
      financial statements are adequate to make the information presented not
      misleading, certain information normally included in financial statements and
      related footnotes prepared in accordance with accounting principles generally
      accepted in the United States of America have been condensed or omitted pursuant
      to the rules and regulations of the Securities and Exchange Commission (SEC).
      The accompanying condensed financial statements should be read in conjunction
      with the financial statements and notes thereto included in our Annual Report
      on
      Form 10-KSB for the year ended September 30, 2007.





Results
      for any interim period are not necessarily indicative of results for any other
      interim period or for the entire year.




2. LIQUIDITY
        AND CAPITAL RESOURCES




During
      fiscal 2007 and the three-month period ended December 31, 2007, we funded our
      operations through a combination of our gross profit earned from revenue and
      existing cash balances. Our ability to fund our recurring losses from operations
      depends upon success of our NotifyLink wireless e-mail notification market
      solutions. We continue to evaluate our opportunities to obtain further financing
      but it is not a critical element in our plans.




A
      significant characteristic of our business is the sale of our products
      customarily in the form of annual contracts paid for upon signing but the
      revenue amortized over the twelve month service period. As our installed base
      grows, this practice increases the deferred revenue liability on the balance
      sheet as we add new contracts faster than old contracts expire. The major cost
      of operations is comprised of (1) the engineering design of our product offered
      for sale and (2) the physical sale of a contract that requires both direct
      sales
      effort and customer service hours to facilitate a trial period of our software
      prior to purchase. The change in the NotifyLink deferred revenue to $2,312,548
      as of December 31, 2007 from $1,790,481 as of December 31, 2006 combined with
      the revenue improvement on the income statement is an indicator of product
      sales
      improvement during the period. Deferred revenue also represents the obligation
      to service the contracts underlying the revenue. However, the cash flow required
      to service the contracts is significantly less than the amortized revenue
      recognized each month.




Our
      continued operations depend on the cash flow from the NotifyLink sales. In
      the
      event our revenue is interrupted, we would have to reduce our operations to
      service our existing contract obligations unless we secured additional
      financing. If we were unable to achieve NotifyLink revenue improvements or
      secure financing, we would have to restructure our business to reduce costs.




In
      the
      event we require additional capital, we cannot predict whether we will be able
      to obtain financing on commercially reasonable terms, if at all. Any future
      financings may take the form of debt or equity securities or a combination
      of
      debt and equity, including convertible notes or warrants. In the event we are
      required to obtain additional financing, we cannot predict whether we could
      successfully conclude a financing with any new investors. Minimally, we expect
      that any additional financing could result in a substantial dilution of the
      equity and voting interests of our current shareholders.




6


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
  3.  NET
        INCOME (LOSS) PER SHARE


The
      net
      loss per share for the three month period ended December 31, 2007 was a loss
      of
      $(0.01) compared to a loss of $(0.00) for the same period in the prior year.
      Options to purchase 2,778,000 and 3,225,000 shares of common stock and warrants
      to purchase 1,871,651 and 1,871,651 shares of common stock were outstanding
      at
      December 31, 2007 and 2006, respectively. The outstanding options and warrants
      were not included in the computation of diluted net loss per share for the
      three-month periods ended December 31, 2007and 2006, respectively as the effect
      would be anti-dilutive




4. FINANCING
        ACTIVITIES





On
      May
      29, 2007, Commonwealth, along with a number of other investors, sold their
      securities, including Unit Purchase Options, to 21X Investments, LLC. 21X
      Investments LLC is beneficially owned by David Brewer, a director of Notify
      Technology Corporation since February 2000. Re: Risk Factor - *One
      of our directors holds a large percentage of our stock and is able to exert
      substantial control over us*




In
      October 2007, we entered into a line-of-credit agreement with Smith Barney
      that
      provides borrowing privileges up to amounts secured by eligible cash balances.
      On December 31, 2007 we had $300,000 in eligible funds. The loan balances carry
      a variable interest rate of 3⁄4% below prime. In November 2007 we borrowed $22,172
      on this line-of-credit to finance the purchase of accounting software currently
      under installation.





5.
            ACCOUNTING
                FOR STOCK BASED COMPENSATION




Statement
      of Financial Accounting Standards No. 148 (SFAS 148), "Accounting for
      Stock-Based Compensation—Transition and Disclosure, an Amendment of FASB
      Statement No.123," amends the disclosure requirements of Statement of Financial
      Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
      Compensation," to require more prominent disclosures in both annual and interim
      financial statements regarding the method of accounting for stock-based employee
      compensation and the effect of the method used on reported results.




The
      Company accounts for stock-based employee compensation arrangements in
      accordance with provisions of Accounting Principles Board Opinion No. 25
      (APB 25), "Accounting for Stock Issued to Employees" and related
      interpretations. Under APB 25, compensation expense is based on the difference,
      if any, on the date of the grant, between the fair value of the Company's stock
      and the exercise price.




The
      Company recognized stock based employee compensation of $4,810 and $10,207
      in
      the three-month periods ended December 31, 2007 and 2006, respectively. The
      Company’s option plan expired in January 2007 and the Company did not approve a
      replacement stock-based plan in fiscal 2007.




The
      Company recognized no compensation expense in fiscal 2008 or in fiscal 2007
      related to the grant of options to non-employees.





6.
            PRODUCT
                WARRANTY




The
      Company warrants its products to current paid-up customers and makes available
      for download service update releases that contain the most up-to-date version
      of
      the Company’s products. These software updates are continually maintained and
      released when available. As such, the Company does not maintain a separate
      warranty reserve but expenses the cost to create and post any maintenance
      release as a part of normal operations.




7.
            RECENT
                ACCOUNTING PRONOUNCEMENTS




In
      June
      2006, the FASB issued Interpretation No. 48 (“FIN 48”), *“Accounting
      for Uncertainty in Income Taxes,”* which
      clarifies the accounting for uncertainty in income taxes recognized in the
      financial statements in accordance with FASB Statement No. 109, *“
      Accounting for Income Taxes”* .
       FIN 48 provides guidance on the financial statement recognition and
      measurement of a tax position taken or expected to be taken in a tax
      return.  FIN 48 also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosures, and transition.  FIN 48 is effective for fiscal years
      beginning after December 15, 2006.  The Company is currently
      evaluating the impact of this standard on the consolidated financial
      statements.




7


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (SFAS) No. 157, *“Fair
      Value Measurements”* .  SFAS
      No. 157 defines fair value, establishes a framework for measuring fair value
      and
      expands disclosures about fair value.  SFAS No. 157 is effective for
      fiscal years beginning after November 15, 2007.  The Company is
      currently evaluating the impact of this standard on the consolidated financial
      statements.




In
      February 2007, the FASB issued Statement of Financial Accounting Standards
      (SFAS) No. 159, *“The
      Fair Value Option for Financial Assets and Financial
      Liabilities”* ,  SFAS
      No. 159 provides an option to report selected financial assets and financial
      liabilities using fair value.  The standard establishes required
      presentation and disclosures to facilitate comparisons with companies that
      use
      different measurements for similar assets and liabilities.  SFAS No.
      159 is effective for fiscal years beginning after November 15, 2007, with early
      adoption allowed only if SFAS No. 157 is also adopted.  The Company is
      currently evaluating the impact of this standard on the consolidated financial
      statements.





**Item
      2.**  **Management’s
      Discussion and Analysis of Financial Condition and Results of Operations**




**FORWARD
      LOOKING STATEMENTS**




This
      Quarterly Report on Form 10-QSB contains forward-looking statements, within
      the
      meaning of Section 27A of the Securities Act of 1933 and Section 21E
      of the Securities Exchange Act of 1934, which involve risks and
      uncertainties. Forward-looking statements generally include words such as “may,”
“will,” “plans,” “seeks,” ”expects,” “anticipates,” “outlook,” “intends,”
“believes” and words of similar import as well as the negative of those terms.
      In addition, any statements that refer to expectations, projections or other
      characterizations of future events or circumstances, including any underlying
      assumptions, are forward-looking statements. All forward-looking statements
      included in this Quarterly Report on Form 10-QSB, including, but not limited
      to,
      statements regarding the future growth of our wireless product line; statements
      regarding future revenue from our products; statements regarding our future
      success; statements regarding future costs; statements regarding future research
      and development efforts; statements regarding competition in the market for
      wireless products; statements regarding future patent applications; statements
      regarding future financial results; statements regarding future plans to extend
      our product line; statements regarding the sufficiency of our existing cash
      balances to fund our operations; and statements regarding the effect of future
      financings on our existing shareholders are based on current expectations and
      are subject to important factors that could cause actual results to differ
      materially from those projected in the forward-looking statements. Such
      important factors include, but are not limited to, those discussed below under
      “Risk Factors” and elsewhere in this Quarterly Report and in other documents we
      file with the U.S. Securities and Exchange Commission. When reading the sections
      titled "Results of Operations" and "Financial Condition," you should also read
      our unaudited condensed financial statements and related notes included
      elsewhere herein, our Annual Report on Form 10-KSB for the fiscal year ended
      September 30, 2007, and the section below entitled "Risk Factors." We disclaim
      any obligation to update any forward-looking statements as a result of
      developments occurring after the date of this Quarterly Report.





**RESULTS
      OF OPERATIONS**




***Three-Month
      Periods Ended December 31, 2007 and 2006***




*Revenue*




Revenue
      consists of net revenue from the sale of NotifyLink software licenses, software
      installation fees and the sale of third party software. Software revenue is
      recognized on a straight-line basis over the term of each contract. Installation
      revenue is recognized upon completion of trial activity and finalizing the
      software agreement. Third party software revenue is recognized upon delivery.




8


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Revenue
      for the three month period ended December 31, 2007 increased to $1,074,854
      from
      $1,031,446 for the three month period ended December 31, 2006. Although the
      gross revenues were relatively unchanged, the three-month period ended December
      31, 2006 contained $148,931 of revenue from a product line that has since been
      discontinued. Our NotifyLink product line revenue increased 22% to $1,074,854
      in
      the three-month period ended December 31, 2007 from $882,515 in the three-month
      period ended December 31, 2006.





Our
      NotifyLink product line is our primary focus and is an email and Personal
      Information Management (PIM) system designed for business users. We are a
      provider of secure real time wireless synchronization of email, calendar,
      contacts and tasks, supporting any BlackBerry, Palm and Windows Mobile Wireless
      device on all major cellular voice and data networks worldwide. The NotifyLink
      solution provides users with bi-directional mobile “automatic” synchronization
      of emails sent to end users’ email mailbox and all emails originated forwarded
      and replied to from the mobile device will be synchronized with the user’s
      desktop. The transmitted information keeps personal calendars continually up
      to
      date at both the server level and the mobile device level.





We
      sell
      our products primarily in the United States directly to business users and
      resellers. NotifyLink revenue accounted for 100% of total revenue in the
      three-month period ended December 31, 2007 whereas in the three-month period
      ended December 31, 2006, the revenue was split between NotifyLink and the Visual
      Got Mail Solution at 86% and 14%, respectively. The Visual Got Mail revenue
      was
      concentrated in one customer that discontinued the product line our Visual
      Got
      Mail product supported in February 2007. There was no other market for the
      Visual Got Mail Solution and the product line was retired.




*Cost
      of Revenue*




Cost
      of
      revenue consists of the hosting center costs to support the service portion
      of
      our NotifyLink product, the cost of re-sale software related to NotifyLink
      and
      royalty expense to NCR for certain technology utilized in our NotifyLink
      product. Cost of revenue increased to $34,151 in the three-month period ended
      December 31, 2007 from $26,300 for the three-month period ended December 31,
      2006. The increase in the cost of revenue was due to a fixed royalty percentage
      applied to increased software sales.




Our
      gross
      margin increased to 96.8% in the three month period ended December 31, 2007
      compared to a gross margin of 97.5% in the three-month period ended December
      31,
      2006. The high gross margins in both periods are because the major costs of
      the
      business consist of product design and sales/support, both of which fall below
      the line in operating expenses.




*Research
      and development*





Research
      and development expenses consist primarily of personnel costs and support
      expenses. Research and development expenses increased to $395,683 for the
      three-month period ended December 31, 2007 from $304,068 for the three-month
      period ended December 31, 2006. The increase was primarily due to personnel
      additions to meet the demand of new devices being released into the market
      by
      device manufacturers and assuring backwards compatibility of updated software
      with older devices. Our development efforts were devoted to improving our
      software product in the area of device management, porting our solution to
      new
      devices and creating new products within the NotifyLink family. We believe
      that
      our future success, if any, depends significantly on our ability to continue
      to
      enhance our existing wireless products and to develop new products and,
      therefore, we intend to continue to incur research and development costs.




*Sales
      and marketing*




Sales
      and
      marketing expense consists primarily of personnel, travel costs and sales
      commissions related to our sales effort of the NotifyLink product line. Sales
      and marketing costs decreased to $414,206 for the three month period ended
      December 31, 2007 from $447,323 for the three month period ended December 31,
      2006. We use an internal sales force and a customer support staff to facilitate
      the NotifyLink sales process. The decrease in sales expense is due to
      adjustments in our sales staff partially offset by increased commissions on
      improved NotifyLink revenue. The discontinuance of the Visual Got Mail Solution
      product line had minimal effect as it was completely supported at the executive
      staff level.




9


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


We
      anticipate that sales and marketing expenses will increase in future quarters
      as
      we hire additional sales and customer support personnel and attempt to expand
      our existing and create new distribution channels.





*General
      and administrative*





General
      and administrative expense consists of general management and finance personnel
      costs, insurance expense, occupancy costs, professional fees and other general
      corporate expenses. General and administrative expenses increased to $323,356
      for the three-month period ended December 31, 2007 from $304,319 for the
      three-month period ended December 31, 2006.





We
      expect
      that general and administrative expense may increase in future quarters as
      we
      adhere to the requirements mandated by Sarbanes-Oxley Act.




**LIQUIDITY
      AND CAPITAL RESOURCES**




During
      fiscal 2007 and the three-month period ended December 31, 2007, we funded our
      operations through a combination of our gross profit earned from revenue and
      existing cash balances. Our ability to fund our recurring losses from operations
      depends upon success of our NotifyLink wireless e-mail notification market
      solutions. We continue to evaluate our opportunities to obtain further financing
      but it is not a critical element in our plans.




A
      significant characteristic of our business is the sale of our products
      customarily in the form of annual contracts paid for upon signing but the
      revenue amortized over the twelve month service period. As our installed base
      grows, this practice increases the deferred revenue liability on the balance
      sheet as we add new contracts faster than old contracts expire. The major cost
      of operations is comprised of (1) the engineering design of our product offered
      for sale and (2) the physical sale of a contract that requires both direct
      sales
      effort and customer service hours to facilitate a trial period of our software
      prior to purchase. The change in the NotifyLink deferred revenue to $2,312,548
      as of December 31, 2007 from $1,790,481 as of December 31, 2006 combined with
      the revenue improvement on the income statement is an indicator of product
      sales
      improvement during the period. Deferred revenue also represents the obligation
      to service the contracts underlying the revenue. However, the cash flow required
      to service the contracts is significantly less than the amortized revenue
      recognized each month.




Our
      continued operations depend on the cash flow from the NotifyLink sales. In
      the
      event our revenue is interrupted, we would have to reduce our operations to
      service our existing contract obligations unless we secured additional
      financing. If we were unable to achieve NotifyLink revenue improvements or
      secure financing, we would have to restructure our business to reduce costs.




Our
      plans
      to improve our current situation involve the expansion of our product offering
      into niche markets. We believe that these niche markets are not adequately
      addressed by market competitors at the present time. We also intend to
      capitalize on our ability to offer a single middleware solution for those
      companies deploying a variety of manufacturers’ devices on a single email
      system. The success of our business operations will depend upon a significant
      favorable market acceptance for our new wireless software products. We continue
      to evaluate our opportunities to obtain further financing but it is not a
      critical element in our plans. It is not possible for us to predict with
      assurance the outcome of these matters. ******




In
      the
      event we require additional capital, we cannot predict whether we will be able
      to obtain financing on commercially reasonable terms, if at all. Any future
      financings may take the form of debt or equity securities or a combination
      of
      debt and equity, including convertible notes or warrants. In the event we are
      required to obtain additional financing, we cannot predict whether we could
      successfully conclude a financing with any new investors. Minimally, we expect
      that any additional financing could result in a substantial dilution of the
      equity and voting interests of our current shareholders.




10


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


At
      December 31, 2007, we had cash and cash equivalents of $855,771 compared to
      $684,584 at the same time last year. Over the last several years, we have
      financed our operations primarily through revenue from operations and existing
      cash balances. The net cash generated by operating activities equaled $8,531
      in
      the three-month period ended December 31, 2007 versus net cash used by operating
      activities of $132,059 in the three-month period ended December 31, 2006. The
      cash generated by operations in the three-month period ended December 31, 2007
      was a combination of a net loss of $92,701 and an increase in deferred revenue
      of $186,031 partially offset by an increase in accounts receivable of $49,146,
      an increase in deposits on property and equipment of $31,850 for a software
      system partially installed and a increase in accounts payable of $13,747. The
      net cash used in the three-month period ended December 31, 2006 was attributable
      to a net loss of $61,027 an increase in accounts receivable of $260,815 due
      to
      strong NotifyLink sales and an increase of accounts payable of $28,929. We
      anticipate that we will have negative cash flow from time to time in operating
      activities in future quarters and years.




Net
      cash
      provided by investing activities was an outflow of $15,987 for asset purchases
      during the three-month period ended December 31, 2007. There was a net cash
      outflow of $8,327 from the purchase of fixed assets in the three-month period
      ended December 31, 2006.




Net
      cash
      provided by financing activities was an inflow of $23,452 and an outflow of
      $4,436 for the three-month periods ended December 31, 2007 and 2006,
      respectively. The net cash inflow for the three-month period ended December
      31,
      2006 was due to $27,933 from the exercise of options partially offset by $4,481
      of payments on capital leases and the outflow for the three-month period ended
      December 31, 2006 was due to $4,436 in payments on capital leases.




We
      have
      no off balance sheet arrangements as defined by Item 303(c) of Regulation
      S-B.




**RISK
      FACTORS**




We
      operate in a dynamic and rapidly changing business environment that involves
      numerous risks and uncertainties. The following section lists some, but not
      all,
      of these risks and uncertainties, which may have a material adverse effect
      on
      our business, financial condition or results of operations.





**We
      face significant competition**




We
      believe the market for our wireless products is generally competitive. In
      particular, in the market for wireless email notification and management
      software, for Microsoft Exchange and Novell GroupWise, there is very strong
      competition. We expect that to the extent that the market for our products
      develops, competition will intensify and new competitors will enter the market.
      We may not be able to compete successfully against existing and new competitors
      as the market for our products evolves and the level of competition increases.
      A
      failure to compete successfully against existing and new competitors would
      materially and adversely affect our business, revenue, operating results, and
      financial condition.




**We
      have a history of losses, and there is no assurance of future
      profitability**




We
      commenced operations in August 1994 and through January 1996 were engaged
      primarily in the sale of hardware products to the telephone market. We decision
      in fiscal 2003 to refocus our strategy on developing and selling software
      applications for the 2way wireless data market. Accordingly, our business has
      changed substantially in recent years, making it difficult to make
      period-to-period comparisons of our operations, and we face all of the risks
      and
      uncertainties encountered by early-stage companies. For the fiscal years ended
      September 30, 2007, 2006, 2005 and 2004, we incurred net losses of $426,004,
      $
      314,892, $557,452 and $655,908, respectively. We incurred a net loss of $92,701
      for the three-month period ended December 31, 2007 and as of December 31, 2007,
      we had an accumulated deficit of $24,467,283 and a working capital deficit
      of
      $1,150,714. Although the cash flow from operations was positive in the
      three-month period ended December 31, 2007, we are not assured we can maintain
      a
      positive cash flow from operating activities in future quarters and years.
      We
      may also incur further operating losses in future quarters and years until
      such
      time, if ever, as there is a substantial increase in orders for our products
      and
      product sales generating sufficient revenue to fund our continuing operations.
      There can be no assurance that sales of our products will ever generate
      significant revenue, that we will generate or maintain positive cash flow from
      our operations or that we will attain or thereafter sustain profitability in
      any
      future period.




11


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


**If
      the market for wireless data communications devices does not grow, we may not
      successfully increase or maintain the sale of our NotifyLink
      products**




The
      overall market for wireless data communications devices has experienced
      significant growth in recent years. The success of our NotifyLink Enterprise
      On-Premise and On-Demand products depends upon this growth. There can be no
      assurance that the market for wireless software products will continue to grow.
      We cannot predict that growth of our NotifyLink products will continue or
      maintain itself at the current level. If the various markets in which our
      software products compete fail to grow, or grow more slowly than we currently
      anticipate, or if we were unable to establish product markets for our new
      software products, our business, results of operation and financial condition
      would be materially adversely affected.





**We
      may be unable to generate the capital necessary to support our planned level
      of
      research and development activities or to manufacture and market our
      products**




At
      December 31, 2007, we had an accumulated deficit of $24,467,283 and incurred
      a
      net loss for the three-month period ended December 31, 2007 of $92,701. We
      also
      had a working capital deficit at that date of $1,150,713. Our recently developed
      NotifyLink products will need to attain favorable market acceptance in order
      for
      us to be able to continue our research and development activities and to fund
      operating expenses at current levels. Regardless, because our NotifyLink
      wireless product line has not provided sufficient contributions to our revenues
      to date to operate profitably, the success of our business operations will
      depend upon a significant favorable market acceptance of our wireless software
      products and could require us to obtain further financing. Obtaining additional
      financing will be subject to a number of factors including market conditions,
      investor acceptance of our business plan, and investor sentiment. These factors
      may make the timing, amount, terms and conditions of additional financing
      unattractive or unavailable to us. If we are unable to obtain significant market
      acceptance of our wireless products or raise additional financing, we will
      have
      to significantly reduce our spending, delay or cancel planned activities or
      substantially change our current corporate structure. In such an event, we
      intend to implement expense reduction plans in a timely manner. However, these
      actions would have material adverse effects on our business, results of
      operations, and prospects, resulting in a possible failure of our
      business.




12


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
  **If
          we are unable to develop, market and sell new and improved wireless products
          on
          a timely basis, we could lose existing and potential customers and our
          sales
          could decrease**


We
      continue to invest in our wireless products in order to grow our revenue and
      improve our financial condition. We need to develop ,
      market
      and sell new and improved wireless software products on a timely basis to keep
      pace with technological developments, emerging industry standards, and the
      growing needs of our sophisticated customers. We may experience difficulties
      in
      marketing and selling new products, and our inability to timely and
      cost-effectively introduce new products and future enhancements, or the failure
      of these new products or enhancements to achieve market acceptance, could
      seriously harm our business. Life cycles of wireless software products are
      difficult to predict, because the market for such products is relatively new
      and
      evolving and characterized by rapid technological change, frequent enhancements
      to existing products and new product introductions, changing customer needs
      and
      evolving industry standards. The introduction of competing products that employ
      new technologies and emerging industry standards could render our products
      and
      services obsolete and unmarketable or shorten the life cycles of our products
      and services. The emergence of new industry standards might require us to
      redesign our products. If our products are not in compliance with industry
      standards that become widespread, our customers and potential customers may
      not
      purchase our products.




**Our
      quarterly operating results may vary**




We
      anticipate that we will experience significant fluctuations in our operating
      results in the future. Fluctuations in operating results may cause the price
      of
      our common stock to be volatile. Operating results may vary as a result of
      many
      factors, including the following:




·
            our
                level of research and development;




·
            our
                sales and marketing activities;




·
            announcements
                by us or our competitors;




·
            size
                and timing of orders from
                customers;




·
            new
                product introductions by us or our
                competitors;




·
            future
                market acceptance of our products;
                and




·
            price
                erosion.




Each
      of
      the above factors is difficult to control and forecast. Thus, they could have
      a
      material adverse effect on our business, financial condition and results of
      operations.




Notwithstanding
      the difficulty in forecasting future sales, we generally must undertake research
      and development and sales and marketing activities and other commitments months
      or years in advance. Accordingly, any shortfall in product revenue in a given
      quarter may materially adversely affect our financial condition and results
      of
      operations because we are unable to adjust expenses during the quarter to match
      the level of product revenue, if any, for the quarter. Due to these and other
      factors, we believe that quarter to quarter comparisons of our results of
      operations are not necessarily meaningful and should not be relied upon as
      indications of future performance.




**We
      need to continue to develop our marketing channels and build our sales
      force**




We
      use an
      formal referral channel, an international reseller channel and participate
      in
      informal referral arrangements with several wireless carriers, 2way wireless
      device manufacturers and one net ware company for the sale of our NotifyLink
      products and services where our products assist in the sale of their products.
      We have a limited direct sales force to sell our NotifyLink products and
      services to eventual users and we rely upon both formal and informal referral
      arrangements to provide leads for our NotifyLink products. To date, most of
      our
      referral arrangements are formal and we will receive referrals only to the
      extent that our referral partners successfully refer our products and services
      to potential users. There can be no assurance that we will achieve a significant
      volume of sales of our NotifyLink products and services to end users or will
      continue to receive referrals through our formal arrangements. Our Enterprise
      solution product is sold into an emerging market and although we have operated
      on a cash positive basis in the fiscal years ending September 30, 2006 and
      2007,
      we have not yet achieved sufficient growth in our sales to operate profitably
      on
      an income statement basis.




13


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


We
      are
      expanding our distribution channels for our wireless products by participating
      in national and regional trade shows, promotions with strategic partners and
      presenting at Novell GroupWise user meetings across the United States. We cannot
      predict whether these activities will result in increased wireless revenue.
      We
      also have limited international sales due to limited resources to build a
      reseller network. Our management will need to expend time and effort to develop
      these channels. Our customer profile has successfully changed from volume sales
      to a limited number of large telecommunication customers to relatively small
      sales to a large number of business customers thereby reducing our dependence
      on
      any one customer. We have expanded our internal sales force in response. We
      are
      building experience selling into the wireless market but may not be able to
      adapt our traditional marketing and distribution programs to expand our
      distribution channels and any marketing efforts undertaken by or on behalf
      of us
      may not be successful.




**One
      of our directors holds a large percentage of our stock and is able to exert
      substantial control over us**




On
      May
      29, 2007, 21X Investments LLC, an entity of which David A. Brewer, one of our
      directors since February 2000, is the sole member and manager, purchased
      securities of Notify held by Commonwealth Associates, LLC and several other
      investors. Following the purchase of these securities, Mr. Brewer, beneficially
      owned, in the aggregate, approximately 55% of our outstanding common stock
      assuming the conversion of all outstanding warrants, preferred unit options
      and
      options held by 21X Investments LLC that were exercisable within 60 days of
      the
      purchase. As a result of this purchase, Mr. Brewer will have a significant
      influence over all matters requiring approval by stockholders, including the
      election of directors, amendments to our certificate of incorporation and
      significant corporate transactions, such as a merger or other sale of our
      company or its assets. This concentration of ownership will limit other
      shareholders’ ability to influence corporate matters and may have the effect of
      delaying or preventing a third party from acquiring control over us.




**Our
      products may suffer from defects**




Most
      of
      our products consist of software and services related to our wireless NotifyLink
      product line. Our NotifyLink products incorporate a mix of new and proven
      technology that has been tested extensively, but may still contain undetected
      design flaws. A failure by us to detect and prevent a design flaw or a
      widespread product defect could materially adversely affect the sales of the
      affected product and our other products and materially adversely affect our
      business, financial condition and operating results.




**Delisting
      from the Nasdaq SmallCap Market may affect the liquidity of our trading market
      and the market price of our common stock**




Since
      September 4, 2002, our common stock has been quoted on the Over-the-Counter
      Bulletin Board. Our shareholders could find it difficult to dispose of or to
      obtain accurate quotations as to the market value of, our common stock. In
      addition, delisting may make our common stock ineligible for use as, or make
      our
      common stock substantially less attractive as, collateral for margin and purpose
      loans, for investment by financial institutions under their internal policies
      or
      state legal investment laws, as consideration in the financing of future
      acquisitions of businesses or assets by us, and for issuance by us in future
      capital raising transactions any of which could cause the market price of our
      common stock to decrease. Delisting subjects our common stock to the “penny
      stock rules” contained in Section 15(g) of the Securities Exchange Act of
      1934.




**We
      depend on key executives**




Our
      potential for success depends significantly on key management employees,
      including our Chairman, President and Chief Executive Officer, Paul F. DePond,
      our Vice President of Development, Rhonda Chicone-Shick and our Chief Financial
      Officer, Gerald W. Rice. We have entered into employment agreements with these
      three key management employees. The loss of their services or those of any
      of
      our other key employees would materially adversely affect us. We also believe
      that our future success will depend in large part on our ability to attract
      and
      retain additional highly skilled technical, management, sales and marketing
      personnel. If we were unable to hire the necessary personnel, the development
      of
      new products and enhancements to current products would likely be delayed or
      prevented. Competition for these highly-skilled employees is intense. Therefore,
      there can be no assurance that we will be successful in retaining our key
      personnel and in attracting and retaining the personnel we require for
      expansion.




14


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


**Our
      intellectual property may not be adequately protected and we may infringe the
      rights of others**




We
      regard
      various features and design aspects of our products as proprietary and we rely
      primarily on a combination of patent, copyright, and trademark laws and employee
      and third-party nondisclosure agreements to protect our proprietary rights.
      In
      fiscal 2006, we sold our rights to several patents for legacy products no longer
      in production. Our software products are generally not subject to patent claims
      although we intend to continue to apply for patents, as appropriate, for our
      future technologies and products. There are few barriers to entry into the
      market for our products, and there can be no assurance that any patents we
      apply
      for will be granted, that any issued patents will be enforceable or valid,
      or
      that the scope of our patents or any patents granted in the future will be
      broad
      enough to protect us against the use of similar technologies by our competitors.
      There can be no assurance, therefore, that any of our competitors, some of
      whom
      have far greater resources than we do, will not independently develop
      technologies that are substantially equivalent or superior to our
      technology.




**Our
      stock price may be volatile**




The
      market price for our common stock may be affected by a number of factors,
      including the announcement of new products or product enhancements by us or
      our
      competitors, the loss of services of one or more of our executive officers
      or
      other key employees, quarterly variations in our or our competitors' results
      of
      operations, changes in earnings estimates, developments in our industry, sales
      of substantial numbers of shares of our common stock in the public market,
      general market conditions and other factors, including factors unrelated to
      our
      operating performance or the operating performance of our competitors. In
      addition, stock prices for many companies in the technology sector have
      experienced wide fluctuations that have often been unrelated to the operating
      performances of these companies. These factors and fluctuations, as well as
      general economic, political and market conditions, such as recessions, may
      materially adversely affect the market price of our common stock.




**Our
      charter provisions may discourage acquisition bids**




Our
      Articles of Incorporation gives our board of directors the authority to issue
      an
      aggregate of 5,000,000 shares of preferred stock and to determine the price,
      rights, preferences, privileges and restrictions, including voting rights for
      these shares, without any further vote or action by our shareholders. The rights
      of the holders of our common stock will be subject to, and may be adversely
      affected by, the rights of the holders of any preferred stock that may be issued
      in the future. The issuance of preferred stock, while providing flexibility
      in
      connection with possible acquisition and other corporate purposes, could have
      the effect of making it more difficult for a third party to acquire a majority
      of our outstanding voting stock.




**Our
      articles of incorporation limit the liability of officers and directors and
      we
      have entered into indemnification agreements with them**




Our
      Articles of Incorporation eliminate, in certain circumstances, the liability
      of
      our directors for monetary damages for breach of their fiduciary duties as
      directors. We have also entered into indemnification agreements with each of
      our
      directors and officers. Each of these indemnification agreements provides that
      we will indemnify the indemnitee against expenses, including reasonable
      attorneys' fees, judgments, penalties, fines, and amounts paid in settlement
      actually and reasonably incurred by them in connection with any civil or
      criminal action or administrative proceeding arising out of their performance
      of
      duties as a director or officer, other than an action instituted by the director
      or officer. These indemnification agreements also require that we indemnify
      the
      director or other party thereto in all cases to the fullest extent permitted
      by
      applicable law. Each indemnification agreement permits the director or officer
      that is party thereto to bring suit to seek recovery of amounts due under the
      indemnification agreement and to recover the expenses of such a suit if they
      are
      successful.




15


**NOTIFY
        TECHNOLOGY CORPORATION**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
   **Item
      3.**  **Controls
      and Procedures**




(a)  Evaluation
      of Disclosure Controls and Procedures .





Our
      chief
      executive officer and our chief financial officer, after evaluating our
      disclosure controls and procedures (as defined in the rules and regulation
      of
      the Securities and Exchange Commission under the Securities Exchange Act of
      1934
      (the "Exchange Act") as of the end of the period covered by this Quarterly
      Report on Form 10-QSB, have concluded that as of such date, our disclosure
      controls and procedures were effective to ensure that information we are
      required to disclose in reports that we file or submit under the Exchange Act
      is
      recorded, processed, summarized and reported within the time periods specified
      in Securities and Exchange Commission rules and forms.




(b)  Changes
      in Internal Controls .




During
      the period covered by this Quarterly Report on Form 10-QSB, there were no
      significant changes in our internal controls over financial reporting or in
      other factors that have materially affected, or are reasonably likely to
      materially affect, our internal controls over financial reporting.





**PART
      II.**  **OTHER
      INFORMATION**




**Item
      5. Other Information**




In
      accordance with Section 10A(i)(2) of the Securities Exchange Act of 1934, as
      added by Section 202 of the Sarbanes-Oxley Act of 2002, we are required to
      disclose the non-audit services approved by our audit committee to be performed
      by L.L. Bradford & Company, LLC (“Bradford”), our external auditors.
      Non-audit services are defined as services other than those provided in
      connection with an audit or a review of the financial statements of a company.
      Our audit committee has approved the engagement of Bradford for non-audit
      services in fiscal 2008, including tax related services.




**Item
      6.**  **Exhibits**




(a) Exhibits:




31.1
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002


31.2
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002




32.1
            Certification
                of Chief Executive Officer and Chief Financial Officerunder Section 906 of the Sarbanes-Oxley Act of
                2002




16




**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.






NOTIFY
              TECHNOLOGY
              CORPORATIONDated:
              February 14, 2008By:
            /s/
              Gerald W. RiceChief
              Financial Officer
              (Principal
                Financial and Accounting Officer)****






17