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**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-KSB/A

ý ANNUAL REPORT UNDER
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the fiscal year ended February 28, 2005

o TRANSITION REPORT
  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the transition period from _________________to ____________________

000-29990(Commission file number)

SENSE TECHNOLOGIES INC.
(Name of small business issuer in its charter)

|Yukon Territory                                 | 90010141           
|----------------------------------------------- | -------------------
|(State or other jurisdiction of                 | (I.R.S. Employer   
|incorporation or organization)                  | Identification No.)
|                                                |                    
|2535 N. Carleton Avenue, Grand Island, Nebraska | 68803              
|(Address of principal executive offices)        | (Zip Code)         

(308) 381-1355


Securities
  registered pursuant to Section 12(b) of the Act: None Securities registered pursuant
  to Section 12(g) of the Act: Common Stock

Check whether the issuer (1) filed all reports required to
  be filed by Section 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  ̈

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained, and will not be contained, to the best of the registrant’s
knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  ̈

State issuer’s revenues for its most recent fiscal year: US$47,177

As of May 23, 2005, the aggregate market value of the voting common equity held by non-affiliates of the registrant was US$3,933,448, based on the closing trade reported on the NASD Over-the-Counter Bulletin Board quotation system. Shares of
Common Stock held by each officer and director and by each person known to the issuer who owns 5% or more of the outstanding Common Stock have been excluded from this calculation as such persons may be considered to be affiliated with the
Company.

As of May 23, 2005, the Registrant’s outstanding common
  stock consisted of 27,849,523 shares. Transitional Small Business Disclosure
  Format: Yes  ̈  No x

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement for the 2005 annual meeting of stockholders are incorporated by reference into Part III of this Form 10-KSB, which definitive proxy statement is to be filed within 120 days after the end of the
registrant's fiscal year ended February 28, 2005. If the definitive proxy statement is not filed within the 120 day period, the issuer will instead file an amendment to this Form 10-KSB disclosing the omitted items under Part III.

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SENSE TECHNOLOGIES INC.

Form 10-KSB

Table of Contents

|Part | Item No. |                                                                                            |   
|---- | -------- | ------------------------------------------------------------------------------------------ | --
|     |          |                                                                                            |   
|I    | 1        | Description of Business                                                                    | 2 
|     | 2        | Description of Property                                                                    | 9 
|     | 3        | Legal Proceedings                                                                          | 9 
|     | 4        | Submission of Matters to a Vote of Security
      Holders                                  | 9 
|II   | 5        | Market for Common Equity
      and Related Stockholder Matters                             | 9 
|     | 6        | Management’s Discussion and Analysis
      or Plan of Operation                            | 12
|     | 7        | Financial Statements                                                                       | 14
|     | 8        | Changes in and Disagreements with Accountants
      on Accounting and Financial Disclosure | 14
|     | 8A       | Controls and Procedures                                                                    | 14
|III  | 13       | Exhibits and Reports on Form 8-K                                                           | 15

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SENSE TECHNOLOGIES INC.
  FORM 10-KSB

Note Regarding Forward Looking Statements

This Form 10-KSB contains forward-looking statements, which
  may be identified as statements containing, including without limitation, the
  words believes, anticipates, intends, expects or similar words. These statements
  are based on our belief as well as assumptions we made using information currently
  available to us. Because these statements reflect our current views concerning
  future events, these statements involve risks, uncertainties and assumptions.
  Actual future results may differ significantly from the results discussed in
  the forwards-looking statements. Some, but not all, of the factors that may
  cause these differences include: risks related to political and economic uncertainties;
  risks related to the implementation of our new business strategy; our ability
  to obtain financing on acceptable terms; competition in the automotive sensing
  device industry; our ability to obtain widespread acceptance of our sensing
  devices in the automotive industry; our ability to manage growth; our ability
  to protect our intellectual property rights; government regulation of the automotive
  industry as it relates to use of sensing devices; and other uncertainties described
  elsewhere herein. You should not place undue reliance on these forward-looking
  statements.

PART I

Item 1. Description of Business

Overview

We develop and market automotive safety devices that increase
  driver awareness of people or obstacles located in vehicle blind spots. Our
  two product lines consist of Guardian Alert® and ScopeOut®.

Our Guardian Alert® product uses Doppler radar technology
  to warn vehicle drivers of the presence of people or obstacles in blind spots
  that exist behind their vehicles when backing up. Marketing of the product has
  been primarily to automobile and truck dealers, fleet operators, and other after-market
  automotive industry participants. The Company began manufacturing the Guardian
  Alert® Doppler Awareness System for the passenger car market during the
  first quarter of fiscal 2003. Marketing of the product began concurrently with
  production and has resulted in sales to several large car dealership groups,
  individual dealerships and aftermarket products distributors. We are presently
  expanding our marketing efforts to increase our presence in the fleet vehicle
  market, passenger car aftermarket and additional new channels. Recent changes
  in our management, business plan and the need for additional financing has delayed
  our marketing and sales plans for the product. In addition, we require additional
  funding to continue with development of the product.

In 2004, we acquired 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. ScopeOut® is being marketed to department
  stores and other retailers as an after-market automotive safety product, and
  is also available on-line at www.sensetech.com.

Corporate History

Sense was incorporated under the laws of the Province of British
  Columbia, Canada, on May 25, 1988 under the name Wizard Resources Ltd. Our corporate
  name was changed to Graham Gold Mining Corporation on October 11, 1988 and subsequently
  to Sense Technologies Inc. on October 27, 1997 in connection with the acquisition
  of our current business. On December 14, 2001, we changed our jurisdiction of
  organization from British Columbia to the Yukon Territories.

Our shares are currently quoted on the Over-the-Counter Bulletin
  Board (OTCBB) under the trading symbol SNSG.OB. We were previously listed on
  the both the Canadian Venture Exchange (now called the TSX Venture Exchange)
  and the Nasdaq SmallCap Market. We voluntarily delisted our shares from the
  Canadian Venture Exchange on October 3, 2001. On April 25, 2002 our stock was
  delisted from the Nasdaq Small Cap Market as we were unable to meet quantitative
  listing requirements.

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Our administrative office is located at 2535 N. Carleton Avenue,
  Grand Island, Nebraska and our sales office is located at 725 N Hwy A-1-A, Suite
  C-106, Jupiter, Florida. We have vacated the office at 800 Clanton Road, Suite
  U, Charlotte, North Carolina, and are attempting to sublease it.

Industry Overview

We compete in the automotive backing awareness and safety
  industry. Our products are designed to protect people from death or injury and
  property from damage that can result from a collision with a vehicle that is
  backing up or changing lanes. In those circumstances, vehicles have blind spots
  that limit the ability of the operator to see obstacles or people that are towards
  the rear or behind the vehicle. This has repeatedly resulted in death, injury
  and property damage, which has in turn prompted several companies to develop
  and manufacture backing awareness sensing products. The National Highway Traffic
  Safety Administration reported that approximately 400 people die in the United
  States annually from accidents involving vehicles backing up. In addition, property
  damage and personal injury claims resulting from back-up accidents all suggest
  a market need for backing awareness safety devices.

While there are no known products that are similar to our
  ScopeOut® product, there are a number of backing awareness products available
  that compete with our Guardian Alert® product.

Various backing awareness products are currently
  being installed by automobile manufacturers and dealers as optional equipment
  on consumer and commercial vehicles. However, backing awareness products can
  range in sophistication and effectiveness. Such products include loud beeping
  alerts that sound when a vehicle is placed in reverse gear. A beeping alert
  is limited in effectiveness as it does not notify the driver of obstacles behind
  the vehicle. Young children up to four years old typically do not have the capacity
  to understand what the beeping noise means or to understand the possibility
  of injury from remaining behind a reversing vehicle. Other awareness products
  include large round convex mirrors placed at the rear of a vehicle which provide
  the driver with a line of vision across the rear area of their vehicle. These
  devices can be effective for a small class of vehicles such as delivery vans,
  however are not practical for most consumer or commercial vehicles due to their
  size and need for training.

There are also backing awareness products, including our Guardian
  Alert(® Doppler Awareness System product, that use ultrasound
  and radar technologies to sense obstacles and people behind a reversing vehicle.
  These electronic sensing and alert systems will warn a driver to the existence
  of obstacles behind a vehicle. Ultrasound backing awareness products are currently
  being used by some automobile manufacturers as a factory-installed option on
  certain new vehicle lines. These products are designed primarily to protect
  the vehicle from damage in parallel parking situations. They are designed to
  detect the bumper of another vehicle when parking and accordingly will typically
  not detect obstacles below ten inches from the ground. These sensors must be
  kept clear of dirt and dust in order to ensure proper functioning. The system
  requires that four ultrasonic sensors be placed at various locations on the
  rear bumper. The sensors extend through the skin of the bumper, thereby changing
  the appearance of the exterior of the vehicle. Backing awareness systems also
  exist that use pulse radar to detect obstacles. These systems are installed
  on the exterior of a vehicle thereby affecting aesthetics of the vehicle, and
  are typically used for commercial vehicles.

Our Guardian Alert Product

Guardian Alert®
  
  Our Guardian Alert® Doppler Awareness System backing awareness products
  use a patented process based on Doppler radar technology. Our Doppler radar
  sensing products offer several advantages over ultrasonic and pulse radar sensors.
  The Guardian Alert® Doppler Awareness System creates a three-dimensional
  awareness zone behind a vehicle that extends from the rear of the vehicle outward
  for the width of the vehicle. Vertically, the awareness zone begins at ground
  level and rises up to approximately five feet. The operator of the vehicle is
  alerted should any person or obstacle come within the awareness zone as the
  vehicle is reversing. The Guardian Alert® Doppler Awareness System consists
  of a single sensor that can be placed under the skin of a plastic bumper thereby
  not altering the appearance of the vehicle. We also have a number of other product
  shapes and installation options to accommodate a wide range of consumer and
  commercial vehicles. Our products are designed to be robust and to operate in
  almost all weather and road conditions. In contrast to ultrasound and some other
  backing awareness products, our sensor using the Doppler radar technology is
  not affected by dust, dirt, snow or other environmental materials that can cover
  a sensor.

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Our Guardian Alert® Doppler Awareness System products
  are based on a patented system using Doppler radar technology. We acquired and
  hold worldwide rights to manufacture and sell the system.

The Guardian Alert® Doppler Awareness System consists
  of a radar transceiver, a flat antenna, a signal processor, and an audio-visual
  display unit. The transceiver and antenna are enclosed in an environmentally
  sealed, high impact resistant, resin housing and mounted on the rear of the
  vehicle. When activated by placing the vehicle in reverse, the transceiver continuously
  projects signals and the antenna receives return signals reflected off of objects
  within the predefined awareness zone. Doppler Shift technology is based on the
  principle that signals return on a slightly different frequency than they are
  projected. The relationship between the phase of the projected signals and the
  returning signals is used by the product to determine the distance between the
  rear of the vehicle and the object. The signal processor then sends a signal
  to the audio-visual display unit typically located on the dashboard of the vehicle
  thereby alerting the vehicle operator to the presence of a person or object.
  The display unit informs the operator about the presence of an obstacle via
  a sequence of green, yellow, and red lights set to illuminate at preset distances
  such as twelve feet, five feet and three feet. In conjunction with the visual
  alarm, the audio alarm alerts the driver at corresponding distances with a pulsating
  tone changing to a constant tone. The visual display is approximately the size
  of a small box of matches.

The external units are produced by us using various suppliers.
  The external units can be manufactured in various shapes to suit a wide variety
  of vehicles. For example, we produce a trailer hitch mount version which fits
  directly into the receiver on a trailer hitch when not towing. We also produce
  a version that is mounted under the skin of a plastic bumper in order that the
  esthetics of a vehicle are not affected. Our distribution partner has developed
  six design options ranging from a license plate mount, to sensors protected
  by steel casings for commercial applications.

The focus of our current business strategy is the commercialization
  of our Guardian Alert® Doppler Awareness Systemproducts. There
  are a number of product extensions and new applications that we may develop
  in the future as we grow. These products include side blind spot awareness and
  docking aids for industrial safety and velocity sensing applications.

Production of our Guardian Alert® Doppler
  Awareness System

We outsource the manufacture of the components of our Guardian
  Alert® Doppler Awareness System using an engineering consulting firm and
  two manufacturing companies. Our objective is to secure high-volume, low-cost
  production capabilities. The entire family of products has the same interior
  components, while the exterior enclosure and mount is available in a variety
  of options appropriate for different types of vehicles.

The display unit and the radar sensor components of our products
  are manufactured by Microwave Solutions Limited of Hertfordshire, England. Our
  cabling is available from a number of local sources. Assembly and packaging
  is done locally. We believe that currently production of our products is more
  cost effectively achieved by outsourcing the manufacturing and assembly of the
  components.

A June, 1998 license agreement with S&S Distributing,
  LLC to market Sense products in the fleet vehicle market is no longer in effect.
  However, S&S Distributing, LLC continues to sell units in that market.

Market and Marketing of our Guardian Alert® Doppler Awareness System

The end user of our Guardian Alert® Doppler Awareness
  System product is the safety conscious vehicle owner or operator
  seeking to minimize the risk of loss associated with backing accidents. Users
  of backing awareness sensing products, may purchase the product as a factory
  installed option from the vehicle manufacturer, purchase the product after-market
  or directly from distributor for installation in commercial or fleet vehicles,
  or purchase as an after-market consumer add-on to their vehicle.

Accordingly, the target market for our Guardian Alert® Doppler Awareness
  Systemproduct can be identified as follows:

- Manufacturers of vehicles, including cars, sport utility
      vehicles, light trucks, heavy vehicles and equipment, and original equipment
      suppliers to these manufacturers.
- Owners of commercial fleet vehicles and government departments
      and agencies using fleet vehicles.
- Consumer outlets of after-market automotive accessories,
      including dealerships, automotive service shops and automotive retailers,
      direct sales via the Internet and infomercials.

North American automotive manufacturers currently produce between 16 million
  and 17 million new cars and trucks

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each year based on actual 2000 and 2001 counts. This market
  consists of approximately 55% mini vans, sport utility vehicles, and light trucks.
  This segment has been growing consistently for the last several years beginning
  with the emergence of the mini van as a force in the market and continuing with
  the more recent trend towards sport utility vehicles. We believe this segment
  and the large luxury sedan segment provide the best markets for the initial
  broad scale commercialization of our products. Our primary efforts will initially
  be focused on the mid to higher end of this market that is expected to be less
  price sensitive and more interested in new technologies. We are actively marketing
  to decision makers in the original equipment market through manufacturers. Our
  marketing emphasis has, however, been to the higher margin market including
  dealerships and consumer outlets. Dealerships provide an opportunity to add
  our product to a vehicle after it leaves the manufacturer, but before it is
  sold.

The 200 million vehicles currently on US roads also provide
  a number of opportunities for marketing our backing awareness products. There
  are also eight million large trucks owned by commercial enterprises and approximately
  4.5 million fleet vehicles on dealership service plans, which provide a significant
  point of sale opportunity. Millions of vehicles each year are repaired at collision
  centers, which could offer the product in conjunction with the repair of a rear
  bumper. Additionally, most new car warranties require regular oil changes, which
  are often performed at dealerships. These visits will provide additional point
  of sale opportunities for dealerships that are already stocked with Guardian
  Alert® Doppler Awareness Systems.

Our product can result in economic benefit as well as improved
  vehicle safety to fleet operators and consumers in these markets. Based on our
  research and experience in the fleet market tells us that fleet operators and
  risk managers place a greater emphasis on statistical economic analysis than
  consumers. Equipping fleets of vehicles requires a significant capital expenditure
  that needs to be evaluated relative to the fleet owner's other needs and limited
  capital.

We believe that consumers weigh cost, safety benefit to persons
  and property and aesthetic appeal in making a decision to purchase a backing
  awareness product. We believe that the products ease of demonstration and high
  degree of functionality can provide a consumer with an appreciation of the benefits
  in protection of property and person. We estimate the cost of a system installed
  on a consumer vehicle would generally range between $300 to $700 which
  we believe would appeal to most new-vehicle buyers that are interested in the
  safety and protection aspect of the product. In perspective, the cost of the
  product is less than typical insurance deductibles and therefore avoiding one
  incident would allow the product to pay for itself. In addition to actual repair
  cost, Guardian Alert ® Doppler Awareness Systempurchasers also receive
  the benefit of saving the considerable time and inconvenience of having their
  vehicle repaired and processing insurance claims. Our product can also be installed
  beneath the plastic skin of a bumper, thereby not altering the appearance of
  the vehicle.

Sense has designed distinct pricing strategies for each of
  its three primary markets according to the following principles:

- The product should be priced at a level readily acceptable to SUV and light
    truck purchasers;
- Attractive margin must be made available to OEMs and distribution partners;
- Fleet products must offer attractive ROI to owners; and
- Margins to Sense will increase faster with higher volume than higher pricing.

We believe our price points are superior to competing products
  and additionally provide us with immediate operating margin contribution. Over
  the long-term, as volumes grow to higher levels, there will be sufficient opportunity
  to lower manufacturing costs.

Competition and Our Competitive Advantages

The backing awareness industry includes manufacturers of active
  sensing devices using ultrasonic, infrared and radar technology to detect the
  presence of obstacles or persons behind a reversing vehicle. There are also
  a number of passive systems such as convex rear cross-view mirrors, rearward
  facing television cameras and reversing sound alerts. While we compete with
  all backing awareness devices, we view our primary source of competition as
  being in the active sensing market. Passive devices require driver training
  and are susceptible to driver error as they do not actively warn a driver of
  the presence of obstacles or people behind the vehicle. We have identified seven
  competitors in the active sensor market: Echo Vision, Hindsight 20/20, Bosch,
  Delphi, Valeo, Rostra and Groenveld which is manufactured by Gintec LTD in Israel.

We believe the Guardian Alert® Doppler Awareness System
  is superior to any competing technology in each active sensor category. Our
  system is the only patented Doppler radar device available. Among Doppler radar
  products, our Guardian Alert® Doppler Awareness System is the only product
  that uses a single sensor, which we believe

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results in easier and less expensive installation. Ease of
  installation is a primary concern among vehicle dealers which provides us with
  a competitive advantage over other Doppler radar sensing and ultrasonic products.

Other systems use infrared or ultrasonic sensors. Infrared
  sensors project infrared beams and detect reflected infrared light from objects
  in the scanned zone behind the vehicle, which in turn activates an audio or
  visual alarm. Ultrasonic Systems work on the principle of emitting an ultrasonic
  sound burst and detecting a reflected energy wave returned to the source by
  contact with an object in the detection zone, again activating an alarm. Both
  systems require a clean sensor in order to function properly, and accordingly
  performance can be affected by environmental conditions.

We believe our product has competitive advantages over ultrasonic
  systems. Ultrasonic systems have begun to emerge as a factory installed option
  on some vehicle lines. Due to the four precisely tuned sensors and the in-bumper
  design requirements of these systems it is not practical to install them outside
  of the factory on cars or light trucks. The most important distinguishing characteristic
  between the Guardian Alert® Doppler Awareness System and ultrasonic systems
  is that ultrasonic systems are designed primarily to detect the bumper of another
  vehicle while parallel parking. They do not provide coverage all of the way
  to the ground and therefore tend to offer the vehicle operator a false sense
  of security. Additionally, since the sensors cannot “see” through
  a bumper, the systems cannot be mounted behind the skin of the bumper, which
  affects the aesthetic appearance of the vehicle.

We also believe our product has competitive advantages over
  infrared systems as those systems require a clear line of site with the obstacle
  in order to function properly, which means effectiveness may diminish with environmental
  conditions such as dirt or bright light.

The infrared and ultra sonic technologies were independently
  tested and evaluated along with a microwave radar system by the U.S. Bureau
  of Mines (Bureau of Mines Circular/1986) in a study of back-up driver's aid
  systems for mining vehicles. Infrared Systems were found to be the least reliable
  for detecting objects in the rear blind area. Bright sunlight and reflections
  from bright objects could trigger false alarms and their range depends upon
  the reflectivity of the detected object. Also, the narrow beam pattern necessitates
  the use of arrays of sensors to scan the desired zone, increasing system cost
  and complexity and decreasing reliability. Furthermore, both of the competitive
  technologies are to some degree affected by adverse weather conditions such
  as rain, fog, snow, ice or wind. The Bureau of Mines Study found that the microwave
  radar system was not affected by weather conditions.

Our product is robust, uses a single sensor that is not affected
  by most environmental conditions, and provides a full range of detection behind
  the vehicle, including near ground level. We have also priced our product competitively
  or below most other competing products.

Our ScopeOut® Product

ScopeOut®

ScopeOut® is a system of specially designed mirrors which
  are placed at specific points on automobiles, trucks, vans, sport utility vehicles
  and commercial vehicles, to offer drivers a more complete view of the blind
  spots located toward the rear of the vehicle. Drivers 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. ScopeOut®’s
  high-tech aerodynamic mirrors help drivers see approaching traffic and more
  easily detect a host of potential hazards behind the vehicle that might otherwise
  be blocked from view.

This after-market automotive device installs easily on vehicles
  within minutes, and it provides drivers with 270 degrees of rear visibility,
  allowing drivers to see a panoramic view behind them. Two models are available,
  one for cars and one designed to fit most sport utility vehicles, trucks, minivans,
  station wagons or hatchbacks. Either model fits a wide variety of vehicles,
  can be installed with no special equipment, and can be removed at any time without
  altering or damaging the vehicle.

We have entered an exclusive worldwide license agreement to
  manufacture and market the ScopeOut® adjustable mirrors system. The product
  is a stand-alone or complementary product to the existing Guardian Alert®
  product line.

Production of our ScopeOut® Product

All of our manufacturing and engineering is being out-sourced
  to a firm located in Phoenix, Arizona. The product is manufactured in China
  in order to reduce manufacturing costs. The ScopeOut® product is ready for
  immediate

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commercial production and sales, which we anticipate to commence
  in the third quarter of 2005.

Market and Marketing of our ScopeOut® Product

The potential market for ScopeOut® is owners or operators
  of cars, vans, SUV’s and trucks worldwide. There are over 200 million
  vehicles on the road at any given time, and 16 to 18 million new vehicles being
  built and sold each year. In combination with our Guardian Alert®, we have
  the only “Surround Safety System” that addresses all the blind spots
  encountered around the rear of most vehicles at a cost that permits us to set
  price points that are affordable for most consumers.

There are a number of ways to market this product, both individually,
  or as a combination.

Marketing outlets include, but are not limited to, the following:

- AAA Insurance
- AARP
- Mass merchandisers such as Wal-Mart, Target, Costco, Sam’s Club,
    K-Mart, etc.
- Drugstore chains such as Walgreen, Osco, CVS etc.
- Insurance companies
- Rental car companies
- Electronics stores such as Best Buy, Radio Shack, Circuit City, etc.
- Supermarket chains such as Fry’s, Albertson’s, Safeway, Kroge,
    etc.
- Independent auto aftermarket stores
- New and used auto dealers
- OEM market
- Internet and infomercials
- QVC and HSN

We are presently building a National Representative Organization
  that will allow for our products to be introduced to all the various markets.

Competition and Our Competitive Advantages

In our research, we have found no products comparable to ScopeOut®
  that addresses the hazard created with vehicles backing out blind in parking
  lots and driveways, all while offering an additional lane-changing safety feature.
  We believe the product design and pricing are unique.

Our Patents, Trademarks & Licenses

Patents & Trademarks

The following countries have granted patent rights respecting
  the Guardian Alert® Doppler Awareness System backing awareness system in
  the following countries: United States, Canada, Australia, South Africa, Taiwan,
  the United Kingdom, Korea and Japan. The Guardian Alert® Doppler Awareness
  System is a registered trademark.

We have also received a US Patent on our trailer hitch mount
  sensor product that easily installs in the receiver-hitch on any vehicle equipped
  with such a hitch.

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The ScopeOut® product is generally covered by US Patent
  Numbers 6,715 893 and 6,799,857, with various other patent applications currently
  pending, all of which are included in the exclusive license agreement.

Licenses & Royalties

We hold worldwide rights to develop, manufacture, market and
  license the Guardian Alert® Doppler Awareness System technology and products.
  We hold these rights pursuant various license agreements with S&S and Driver
  Alert Group, the original group of patent holders and Stinson & Associates,
  a holder of certain rights under license from Driver Alert Group. These license
  agreements provide us with the right to market the products to all federal,
  state, local and foreign governments and agencies, including the postal service,
  the rights to enter into manufacturing and marketing agreements with automotive
  and other manufacturers worldwide, and generally the rights to any other markets
  including school buses, construction equipment and mining equipment.

Pursuant to these licenses, we are required to make royalty
  payments to the licensors and meet sales targets as follows:

|a) | $6.00(US) per unit on the first one million
        units sold;                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | thereafter, the greater of $4.00(US) per unit
        sold or 6% of the wholesale selling price on units sold; and                                                                                           
|  
|c) | 50% of any fees paid to Sense in consideration for
        tooling, redesign, technical or aesthetic development or, should the licensors
        receive a similar fee, the licensors will pay 50% to Sense.

If we obtain a royalty agreement with a vehicle manufacturer,
  other than General Motors, whereby the manufacturer produces the product for
  its own equipment, the royalty shall be shared, one-third to Sense and two-thirds
  to the licensors.

The license agreements also provide that we are required to
  manufacture and sell a minimum number of units as follows:

|(i)   | 30,000 units by the end of the calendar year containing
        the second anniversary of the date of commencement of commercial production;                                  
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | a cumulative total of 60,000 units by the end of
        the calendar year containing the third anniversary of the date of commencement
        of commercial production;     
|     
|(iii) | a cumulative total of 110,000 units by the end of
        the calendar year containing the fourth anniversary of the date of commencement
        of commercial production;   
|     
|(iv)  | a cumulative total of 210,000 units by the end of
        the calendar year containing the fifth anniversary of the date of commencement
        of commercial production; and
|     
|(v)   | an additional 125,000 units by the end of each calendar
        year thereafter.                                                                                              

In the event these minimum sales are not realized, we are
  obligated to pay an amount in lieu of royalties equal to the royalties that
  would have been payable if the minimum number of units were manufactured and
  sold. Commencement of Commercial Production took place on October 1, 1999. During
  the fiscal year ended February 28, 2002 we paid a minimum royalty payment of
  $128,388 to maintain the licenses in good standing. In 2003, 2004 and 2005,
  the Company did not pay its minimum royalty payment. The effect of this is to
  convert the license from exclusive to non-exclusive status. All other provisions
  remain the same.

We entered into a sub-license agreement with S&S Distributing,
  LLC of Elkhorn, Nebraska whereby S&S acquired certain rights to develop,
  market and distribute Guardian Alert® Doppler Awareness System products
  in 1998, but it is no longer in effect. The sub-license agreement provided for
  certain minimum purchases of products from Sense, and certain expenditure requirements
  for development and marketing. The sub-license also provided that any new versions
  of the sensing device that are developed by S&S will be made available for
  manufacture and distribution by Sense. S&S is continuing to sell Sense units.

Pursuant to a consulting and engineering agreement with Maple
  Consulting, we agreed to pay a royalty of $0.50 for each Guardian Alert®
  Doppler Awareness System sold that was designed pursuant to the agreement, up
  to a maximum of 200,000 units.

We hold a world-wide exclusive and perpetual license with
  ScopeOut® products pursuant to a license agreement with Palowmar Industries,
  LLC and Lowell Martinson.

Our ScopeOut® license calls for $150,000 to be paid
  over two years along with a royalty of 10% of wholesale price for each ScopeOut®
  unit sold, but not less than $2.00 per unit.

8

---

Minimum quantities are:

|(i)   | 30,000 units per year beginning in years 1-2          
|----- | ------------------------------------------------------
|     
|(ii)  | 60,000 units per year beginning in years 3-4          
|     
|(iii) | 100,000 units per year beginning in years 5 and above.

Governmental Approval

Because our Guardian Alert product is an emitting device,
  the Federal Communications Commission (FCC) we were required to obtain equipment
  authorization which was granted on October 31, 1995. The microwave signals emitted
  by the device can potentially interfere with radar detectors and other existing
  emitting systems. All FCC tests have been completed and a FCC certification
  in the name of Sense Technologies Inc. has been obtained. There are no other
  material regulatory approvals required for Sense to achieve its stated business
  objectives.

Employees

We currently are selling product by paying commissions on
  achieved sales, and have no payroll.

Item 2. Description of Property

Sales inquiries are being processed for Sense by Tim Goldsbury
  and Associates, Inc., at Alhambra Plaza, 725 N. Hwy A-1-A, Jupiter, FL 33477.
  Administration is handled from offices located at 2535 N Carleton Avenue, Grand
  Island, Nebraska. We have permanently vacated 800 Clanton Road, Suite U, Charlotte,
  North Carolina. Both the Florida and Nebraska office space is provided to us
  at no cost.

Item 3. Legal Proceedings

To the best of our knowledge, there are no legal actions pending,
  threatened or contemplated against us. We are aware of one product manufacturer
  that we believe is infringing our Doppler radar patents and will continue to
  evaluate whether to pursue litigation as resources permit.

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

No matters were submitted to a vote of the Company’s
  shareholders during the fourth quarter of fiscal 2004.

PART II

Item 5. Market for Common equity and Related Stockholder
  Matters

Market and Trading Price

Price quotations for trades in our shares are currently posted
  on the Over-the-Counter Bulletin Board (“OTCBB”), which is a quotation
  service administered by the National Association of Securities Dealers (NASD).
  Our trading symbol on this service is “SNSG”. From June of 2000
  to April 25, 2002, our shares were traded on the Nasdaq SmallCap Market. Our
  shares were also listed on the Canadian Venture Exchange (now called the TSX
  Venture Exchange) until October 3, 2001, when we voluntarily delisted.

The following table shows the high and low sales prices, in
  U.S. dollars, of our common stock on the Nasdaq SmallCap Market and high/low
  trading prices on the OTCBB for each quarter within the last two fiscal years:

|Quarter Ended     | High  | Low  
|----------------- | ----- | -----
|February 28, 2005 | $0.38 | $0.08
|November 30, 2004 | $0.14 | $0.05
|August 31, 2004   | $0.08 | $0.05
|May 31, 2004      | $0.18 | $0.06
|February 29, 2004 | $0.25 | $0.11

9

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|November 30, 2003 | $0.39 | $0.06
|----------------- | ----- | -----
|August 31, 2003   | $0.38 | $0.11
|May 31, 2003      | $0.37 | $0.11




The Company accrued dividends in the amount of $236,116.86
  on its Class “A” Preferred Shares as at March 15. Certain shareholders
  electing to convert their Class A Preferred Shares agreed to apply a total of
  $185,270 of the dividends payable as at March 15, 2005 towards the purchase
  of additional common shares.

There are no dividend restrictions in the Company.

Recent Sales of Unregistered Securities

On July 25, 2003, we issued 5,000 common shares to one accredited
  investor under Rule 506 of Regulation D, valued for accounting purposes at US$0.25,
  in settlement of debt in the amount of US$5,150. The price per share was
  determined by management based on the stage of development of the Company and
  the fact that there were no significant operations or assets in the Company.
  The shares are restricted pursuant to Rule 144 promulgated under the U.S. Securities
  Act of 1933.

On July 25, 2003, one accredited investor under Rule 506 of
  Regulation D, subscribed for 50,000 common shares at a price of US$1.03
  per share for total proceeds to the Company of US$51,500. The shares are
  restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
  of 1933.

On July 25, 2003, three accredited investors under Rule 506
  of Regulation D, subscribed for an aggregate of 266,664 common shares at a price
  of US$0.15 per share for total proceeds to the Company of US$39,999.60.
  The price per share was determined by management based on the stage of development
  of the Company and the fact that there were no significant operations or assets
  in the Company. The shares are restricted pursuant to Rule 144 promulgated under
  the U.S. Securities Act of 1933.

On July 25, 2003, we issued 10,000 common shares to one accredited
  investor under Rule 506 of Regulation D, valued for accounting purposes at US$0.25,
  in settlement of debt in the amount of US$10,000. The shares are restricted
  pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

On July 25, 2003, we issued 10,000 common shares to one accredited
  investor under Rule 506 of Regulation D, valued for accounting purposes at US$0.25,
  in settlement of debt in the amount of US$10,500. The shares are restricted
  pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

On October 2, 2003, we issued Series “B” convertible
  secured promissory notes (the “Secured Notes”) in the aggregate
  principal amount of US$45,000 to two investors, under Rule 506 of Regulation
  D. One note for $15,000 bears interest at 10%, and the other note for $30,000
  bears no interest. The Secured Notes will become due on demand made on or after
  August 30, 2005 and will be convertible into our common shares at the rate of
  US$0.29 per share. The Secured Notes may be redeemed in whole or in part
  at the election of Sense upon 10 days of notice being sent to the holder, at
  any time after August 30, 2005 at a redemption price equal to the principal
  amount being redeemed, plus accrued but unpaid interest thereon. The offer to
  redeem the Note will be made pro-rata to all note holders. The shares are restricted
  pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

On July 25, 2003, we issued 4,950 common shares to one accredited
  investor under Rule 506 of Regulation D at a deemed price of US$1.00 per
  share to settle debt in the amount of US$4,950. The price per share was
  determined by management based on the stage of development of the Company and
  the fact that there were no significant operations or assets in the Company.
  The shares are restricted pursuant to Rule 144 promulgated under the U.S.

Securities Act of 1933.

During the year ended February 29, 2004, we issued Series
  “B” 10% convertible secured promissory notes (the “Secured
  Notes”) in the aggregate principal amount of US$560,000, in exchange
  for an equal principal amount of our outstanding Series “A” 10%
  convertible secured promissory notes to nine accredited investors, under Rule
  506 10

---

of Regulation D. The Secured Notes are due on demand made
  on or after August 30, 2005 and are convertible into our common shares at the
  rate of US$0.29 per share. The Secured Notes may be redeemed in whole or
  in part at the election of Sense upon 10 days of notice being sent to the holder,
  at any time after August 30, 2005 at a redemption price equal to the principal
  amount being redeemed, plus accrued but unpaid interest thereon. The offer to
  redeem the Note will be made pro-rata to all note holders. The shares are restricted
  pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

During the year ended February 29, 2004, we issued for Class
  “A” Preferred Shares (the “Class A Shares”) in the principal
  amount of US$1,593,025, in exchange for our outstanding Convertible Unsecured
  Promissory Notes (the “Unsecured Notes”) in the amount of US$1,276,000
  plus accrued interest thereon of US$317,025, to 22 investors, under Rule
  506 of Regulation D. The Class A Shares were issued at a deemed price of US$1.00
  and are convertible into common shares at the rate of US$0.29. The holders
  of the Class A Shares are entitled to receive quarterly dividends calculated
  at the rate of US$0.10 per annum per Class A Share. If dividends are not
  paid in any quarter, then they shall cumulate and be payable in a subsequent
  quarter. The Class A Shares may be redeemed pro-rata at the option of the Company
  at any time after August 30, 2005 at the rate of US$1.00 per share plus
  all outstanding dividends thereon. The shares are restricted pursuant to Rule
  144 promulgated under the U.S. Securities Act of 1933.

During the year ended February 29, 2004, we granted stock
  options to purchase up to 50,000 common shares of the Company at an exercise
  price of US$1.00 to one investor, under Rule 506 of Regulation D. The exercise
  price per share was determined by management based on the stage of development
  of the Company and the fact that there were no significant operations or assets
  in the Company. The shares are restricted pursuant to Rule 144 promulgated under
  the U.S. Securities Act of 1933.

On January 24, 2005, 36 investors under Rule 506 of Regulation
  D, subscribed for an aggregate of 9,020,000 units at a price of US$0.05
  per unit for total proceeds to the Company of US$451,000. Each unit consists
  of one common share and one common share purchase warrant. Each warrant entitles
  the holder thereof upon due exercise to acquire one additional common share
  in the capital stock of the company at a price of USD$0.15 for a period
  of eighteen months from the date of closing of the sale of the units. If the
  market price for the company’s common stock, as quoted on a quotation
  facility or stock exchange, exceeds USD$0.40 for 5 consecutive trading days,
  the company may, require the holder to exercise the warrants on or before 60
  calendar days from delivery of such notice, failing which any unexercised warrants
  will be deemed expired. The shares and warrants are restricted pursuant to Rule
  144 promulgated under the U.S. Securities Act of 1933.

On February 28, 2005 we issued 594,636 common shares to three
  investors, under Rule 506 of Regulation D, in exchange for the cancellation
  of five Series “B” 10% convertible secured promissory notes in the
  aggregate amount of US$134,526.72 plus US$14,132.66 in accrued interest.
  The shares are restricted pursuant to Rule 144 promulgated under the U.S. Securities
  Act of 1933.

On March 15, 2005, we issued 5,494,852 common shares to 16
  investors pursuant to the conversion of 1,249,927 Class “A” Preferred
  Shares and the subscription, under Rule 506 of Regulation D, equal to the amount
  of accrued dividends payable by the Company at $0.13 per share. The shares
  are restricted pursuant to Rule 144 promulgated under the U.S. Securities
  Act of 1933.

On March 30, 2005, we issued 25,000 common shares to one investor
  under Rule 506 of Regulation D, at a deemed price of US$0.15, pursuant to
  a bonus granted by the Company. The shares are restricted pursuant to Rule 144
  promulgated under the U.S. Securities Act of 1933.

On March 30, 2005, one investor under Rule 506 of Regulation
  D, subscribed for 200,001 common shares at a price of US$0.15 per share
  for total proceeds to the Company of US$30,000. The shares are restricted
  pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

On May 9, 2005, 12 investors under Rule 506 of Regulation
  D, subscribed for an aggregate of 5,304,000 units at a price of US$0.05
  per unit for total proceeds to the Company of US$265,200. The price per
  unit was determined by management based on the stage of development of the Company
  and the fact that there were no significant operations or assets in the Company.
  Each unit consists of one common share and one common share purchase warrant.
  Each warrant entitles the holder thereof upon due exercise to acquire one additional
  common share in the capital stock of the company at a price of USD$0.15
  for a period of eighteen months from the date of closing of the sale of the
  units. If the market price for the company’s common stock, as quoted on
  a quotation facility or stock exchange, exceeds USD$0.40 for 5 consecutive
  trading days, the company may, require the holder to exercise the warrants on
  or before 60 calendar days from delivery of such notice, failing which any unexercised
  warrants will be deemed expired.

11

---

The following table sets forth information respecting our
  compensation plans as at February 28, 2005, under which shares of our common
  stock are authorized to be issued.

|Plan Category                                              | Number of securitiesto be issued uponexercise of outstanding  options,
      warrants and  rights(a) | Weighted-averageexercise price ofoutstanding options,warrants and rights(b) | Number of securitiesremaining available forfuture issuance underequity compensationplans (excludingsecurities reflected incolumn (a))(c)
|---------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plans approved by security holders     | 1,200,000                                                                                            | $1.31                                                                       | 800,000                                                                                                                                 
|Equity compensation plans not approved by security holders | Nil                                                                                                  | N/A                                                                         | N/A                                                                                                                                     
|Total                                                      | 1,200,000                                                                                            | $1.31                                                                       | 800,000                                                                                                                                 

Item 6. Management’s Discussion and Analysis or Plan
  of Operation

The following discussion and analysis should be read in conjunction
  with our audited Financial Statements and Notes thereto for the period ended
  February 28, 2005 and February 29, 2004.

Overview of Operations

Sense holds an exclusive license to manufacture, distribute,
  market and sublicense world-wide, a patented technology which is used to produce
  the Guardian Alert® backing awareness system for motor vehicles utilizing
  microwave radar technology. The Company manufactures the product in Charlotte,
  NC through an outsourced vendor with extensive experience producing products
  for auto dealerships and OEMs. The Company has established relationships with
  multiple large dealership groups and aftermarket product distributors.

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

Results of Operations

For the period ended February 28, 2005 as compared to the
  period ended February 29, 2004.

Sales for the period ended February 28, 2005 were $47,177,
  a 90 percent decrease from the period ended February 29, 2004. This difference
  is due to a concentration of sales and one large sale to one customer in 2004
  that did not recur in 2005.

Direct costs were $436,279, a 91 percent decrease from
  the period ended February 29, 2004, which is based on the reduction in sales.
  The Company realized a positive gross margin contribution of $10,898. These
  numbers exclude an inventory write off of $184,584 in 2005, and $114,371
  in 2004.

General and administrative expenses were $360,930 for
  the period ended February 28, 2005 as compared to $772,632 for the period
  ended February 29, 2004. The decrease was partially attributable to a reduction
  in wages and benefits, interest, professional fees, rent, advertising and travel
  costs

Liquidity and Capital Resources

At February 28, 2005, the Company had cash and cash equivalents
  on hand of $131,313 compared with $1,800 at February 29, 2004. During
  the period ended February 28, 2005, the Company funded operations using existing
  cash balances, cash flow from operations, and by raising money through the issuance
  of Common Stock.

12

---

At February 28, 2005, we had a working capital deficit of
  $997,332 compared to a working capital deficit of $307,101 at February
  29, 2004. The reduction of working capital is largely due to certain unsecured
  promissory notes coming due within one year.

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

Critical Accounting Policies:

The Company’s discussion and analysis of its financial
  condition and results of operations, including the discussion on liquidity and
  capital resources, are based upon the Company’s financial statements,
  which have been prepared in accordance with accounting principles generally
  accepted in the United States. The preparation of these financial statements
  requires the Company to make estimates and judgments that affect the reported
  amounts of assets, liabilities, revenues and expenses, and related disclosure
  of contingent assets and liabilities. On an ongoing basis, management re-evaluates
  its estimates and judgments, particularly those related to the determination
  of the estimated recoverable amounts of investment tax credits, trade accounts
  receivable, and deferred tax assets. The Company believes the following critical
  accounting policies require its more significant judgment and estimates used
  in the preparation of the consolidated financial statements.

The Company follows the cost reduction method of accounting
  for investment tax credits and recognizes the estimated net recoverable amount
  when reasonable assurance exists as to their collectability.

The Company maintains an allowance for doubtful accounts for
  estimated losses that may arise if any of its customers are unable to make required
  payments. Management specifically analyzes the age of customer balances, historical
  bad debt experience, customer credit-worthiness, and changes in customer payment
  terms when making estimates of the uncollectability of the Company’s trade
  accounts receivable balances. If the Company determines that the financial conditions
  of any of its customers deteriorated, whether due to customer specific or general
  economic issues, increases in the allowance may be made.

The Company reviews its intangible assets on an annual basis
  for impairment. The intangible assets are primarily comprised of license agreements.
  Management specifically reviews the number of contracts on hand and if there
  will be significant future cash flows to be generated from these contracts.
  If the Company determines that there is an impairment, then a write-down will
  be made.

The Company maintains an allowance for inventory obsolescence.
  Management reviews the inventory on a quarterly basis by directly testing for
  obsolete inventory. If management determines that obsolete inventory has increased,
  then an increase in the allowance will be made.

Income taxes are accounted for under the asset and liability
  method. Under this method, to the extent that it is not more likely than not
  that a deferred tax asset will be recovered, a valuation allowance is provided.
  In making this determination, the Company considers estimated future taxable
  income and taxable timing differences expected to reverse in the future. Actual
  results may differ from those estimates.

RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123R, “Share-Based
  Payment” (“SFAS 123R”), a revision of SFAS No. 123, “Accounting
  for Stock-Based Compensation,” requiring that the compensation cost relating
  to share-based payment transactions, including grants of employee stock options,
  be measured and recognized in the financial statements using the fair value
  of the compensation awards. The provisions of SFAS 123R are effective for the
  Company for the first interim or annual period that begins after December 15,
  2005; therefore, the Company will adopt the new requirements no later than the
  beginning of the first quarter of its year ending February 28, 2006. Adoption
  of the expensing requirements will reduce the Company’s reported earnings.
  Management is currently evaluating the two methods of adoption allowed by SFAS
  123R; the modified-prospective transition method and the modified-retrospective
  transition method.

13

---

In November 2004, the FASB issued SFAS No. 151, “Inventory
  Costs, an amendment of ARB No. 43, Chapter 4” (“SFAS 151”).
  SFAS 151 clarifies that abnormal inventory costs such as costs of idle facilities,
  excess freight and handling costs, and wasted materials (spoilage) are required
  to be recognized as current period charges. The provisions of SFAS 151 are effective
  for fiscal years beginning after June 15, 2005. The adoption of SFAS 151 is
  not expected to have a significant impact on the Company’s consolidated
  financial position or results of operations.

Item 7. Financial Statements

The Company’s audited financial statements for the fiscal
  year ended February 28, 2005 are attached to this report following the signature
  page and Certifications.

Item 8. Changes In and Disagreements with Accountants and
  Financial Disclosure

None

Item 8A. 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 a time within 60 days prior to February
  28, 2005. 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 year ended February 28, 2005 that has materially
  affected or is reasonably likely to materially affect the Company’s internal
  control over financial reporting.

The Company maintains disclosure controls and procedures that
  are designed to ensure that information required to be disclosed in its reports
  filed pursuant to the Securities Exchange Act of 1934 is recorded, processed,
  summarized and reported within the time periods specified in the rules and forms
  promulgated under such Act, and that such information is accumulated and communicated
  to management, including its President and principal financial officer, as appropriate,
  to allow timely decisions regarding required disclosure.

In connection with this annual report, management carried
  out an evaluation, under the supervision and with the participation of the management,
  including the President and principal accounting officer, of the effectiveness
  of the design and operation of the Company’s disclosure controls and procedures
  pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, the President
  and principal accounting officer concluded that the Company’s disclosure
  controls and procedures are effective in connection with the filing of this
  Annual Report on Form 10-KSB for the year ended February 28, 2005.

There were no significant changes in our internal controls
  or in other factors that could significantly affect these controls subsequent
  to the date of their evaluation, including any significant deficiencies or material
  weaknesses of internal controls that would require corrective action.

PART III

Information with respect to Items 9 through 12 and Item 14
  is set forth in the definitive Proxy Statement to be filed with the Securities
  and Exchange Commission on or before June 29, 2005 and is incorporated herein
  by reference. If the definitive Proxy Statement cannot be filed on or before
  June 29, 2005, the issuer will instead file an amendment to this Form 10-KSB
  disclosing the information with respect to Items 9 through 12.

14

---

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

|Exhibit No. | Description
      of Exhibit                                                                                                       |  | Manner of Filing                                                                                                                                                           
|----------- | ---------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                    |  |                                                                                                                                                                            
|3.1         | The Articles of Continuance                                                                                                        |  | Incorporated by reference as
        Exhibit 3.1 to the Company’s Form 10-KSB, filed with the  SEC
        on May 24, 2002 (“2002  Form 10-KSB”)                           
|3.2         | By-Laws                                                                                                                            |  | Incorporated by reference as
        Exhibit 3.2 to the 2002 Form 10- KSB                                                                                                  
|3.3         | Articles of Amendment                                                                                                              |  | Incorporated by reference to
        as Appendix A to the Company’s Schedule 14A – Definitive Proxy
        Statement, filed with the SEC on June 17, 2002 (“Schedule 14A”)
|10.1        | Amended Stock Option Agreement dated
        October 2,  2001 between Bruce E. Schreiner and the Company.                          |  | Incorporated by reference
        as Exhibit 10.1 to the 2002 Form 10-KSB                                                                                                  
|10.2        | Two (2) Amended Stock Option Agreements
        both  dated October 2, 2001 between Cynthia L. Schroeder  and
        the Company. |  | Incorporated by reference
        as Exhibit 10.2 to the 2002 Form 10-KSB                                                                                                  
|10.3        | 2002 Stock Option Plan                                                                                                             |  | Incorporated by reference
        as Appendix B to the 2002 Schedule  14A                                                                                                  
|10.4        | Series B 10% Convertible Secured Promissory
        Note for Bruce Schreiner (7-B)                                                 |  | Incorporated by reference to
        the Form 10KSB filed June 16, 2005                                                                                                    
|10.5        | Series B 10% Convertible Secured Promissory
        Note for Bruce Schreiner (8-B)                                                 |  | Incorporated by reference to
        the Form 10KSB filed June 16, 2005                                                                                                    
|10.6        | Promissory Note for Bruce Schreiner (11-B)                                                                                         |  | Incorporated by reference to the Form 10KSB
      filed June 16, 2005                                                                                                      
|10.7        | Series B 10% Convertible Secured Promissory Note for Cynthia
      Schroeder (9-B)                                                 |  | Incorporated by reference to the Form 10KSB filed June 16,
      2005                                                                                                      
|10.8        | License agreement with Palowmar Industries,
      LLC and Lowell Martinson, inventor respecting the ScopeOut® product.             |  | Incorporated by reference to the Form 8-K
      filed June 14, 2005                                                                                                        
|31.1        | Rule 13a-14(a)/15d-14(a) Certification                                                                                             |  | Incorporated by reference to
        the Form 8-K filed June 14, 2005                                                                                                      
|32.1        | Section 1350 Certifications                                                                                                        |  | Incorporated
        by reference to the Form 8-K filed June 14, 2005                                                                                                      

No reports on Form 8-K were filed by the registrant during the fourth quarter
  of the fiscal year ended February 28, 2005.

15

---

Signatures

In accordance with Section 13 or 15(d) of the Exchange Act,
  the registrant caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized, on June 14, 2005.

| | SENSE TECHNOLOGIES INC.
| | -----------------------
| |                        
| | By:                    
| |                        
| |                        
| |                        

In accordance with the requirements of the Exchange Act, this
  report has been signed by the following persons on behalf of the registrant
  and in the capacities indicated.

|By:                      |  | Title:                                    | Date:        
|------------------------ |  | ----------------------------------------- | -------------
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Bruce E. Schreiner   |  | Chief Executive Officer, President        | June 14, 2005
|Bruce E. Schreiner       |  | Director and Principal Accounting Officer |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ James R. Iman        |  | Director                                  | June 14, 2005
|James R. Iman            |  |                                           |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Cynthia L. Schroeder |  | Director                                  | June 14, 2005
|Cynthia L. Schroeder     |  |                                           |              

16

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SENSE TECHNOLOGIES INC.

REPORT AND FINANCIAL STATEMENTS

February 28, 2005 and February 29, 2004

(Stated in U.S. Dollars)

---

|**A PARTNERSHIP OF
      INCORPORATED PROFESSIONALS** | **AMISANO HANSONCHARTERED ACCOUNTANTS**
|----------------------------------------------------- | ---------------------------------------

To the Shareholders, 
  Sense Technologies Inc.

We have audited the accompanying balance sheets of Sense Technologies
  Inc. as of February 28, 2005 and February 29, 2004 and the related statements
  of loss, deficit, shareholders’ deficiency and cash flows for each of
  the years in the two-year period ended February 28, 2005. These financial statements
  are the responsibility of the Company's management. Our responsibility is to
  express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of
  the Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  about whether the financial statements are free of material misstatement. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as
  well as evaluating the overall financial statement presentation. We believe
  that our audits provide a reasonable basis for our opinion.

In our opinion, these financial statements present fairly,
  in all material respects, the financial position of the Company as of February
  28, 2005 and February 29, 2004 and the results of its operations and its cash
  flows for each of the years in the two-year period ended February 28, 2005,
  in conformity with accounting principles generally accepted in the United States
  of America.

The accompanying consolidated financial statements referred
  to above have been prepared assuming that the Company will continue as a going
  concern. As discussed in Note 1 to the financial statements, conditions exist
  which raise substantial doubt about the Company’s ability to continue
  as a going concern unless it is able to generate sufficient cash flows to meet
  its obligations and sustain its operations. Management’s plan in this
  regard to these matters are also described in Note 1. The financial statements
  do not include any adjustments that might result from the outcome of this uncertainty.

|Vancouver, Canada                 | ***“AMISANO HANSON”***
|--------------------------------- | ----------------------
|May 23, 2005 except Note 16 which | Chartered Accountants 
|is as of June 6, 2005             |                       

|750 WEST PENDER STREET, SUITE 604
      VANCOUVER CANADA
      V6C 2T7 | TELEPHONE: 604-689-0188
      FACSIMILE: 604-689-9773
      E-MAIL: amishan@telus.net
|---------------------------------------------------------------------- | -------------------------------------------------------------------------------------

F-1

---

SENSE TECHNOLOGIES INC.
  BALANCE SHEETS 
  February 28, 2005 and February 29, 2004
  (Stated in U.S. Dollars)

|                                                                               |   | February 28, |   |   | February 29, |  
|------------------------------------------------------------------------------ | - | ------------ | - | - | ------------ | -
|                                                                               |   | 2005         |   |   | 2004         |  
|                                                                               |   |              |   |   |              |  
|ASSETS                                                                         |  
|                                                                               |   |              |   |   |              |  
|Current                                                                        |   |              |   |   |              |  
|Cash                                                                           | $ | 131,313      |   | $ | 1,800        |  
|Accounts receivable – Note
      11                                            |   | 18,347       |   |   | 8,733        |  
|Inventory – Note 3                                                             |   | 577,285      |   |   | 747,506      |  
|Prepaids                                                                       |   | 13,392       |   |   | 17,253       |  
|                                                                               |   |              |   |   |              |  
|                                                                               |   | 740,337      |   |   | 775,292      |  
|Equipment – Note 4                                                             |   | 55,027       |   |   | 30,420       |  
|Intangible assets – Note 5                                                     |   | 158,350      |   |   | 8,300        |  
|                                                                               |   |              |   |   |              |  
|                                                                               | $ | 953,714      |   | $ | 814,012      |  
|                                                                               |   |              |   |   |              |  
|LIABILITIES                                                                    |  
|                                                                               |   |              |   |   |              |  
|Current                                                                        |   |              |   |   |              |  
|Accounts payable – Notes
      6 and 11                                        | $ | 774,551      |   | $ | 885,925      |  
|Advances payable                                                               |   | 49,100       |   |   | 76,200       |  
|Dividends payable – Note
      16                                              |   | 229,571      |   |   | 70,268       |  
|Current portion of convertible
      promissory notes payable – Notes 7 and 11 |   | 584,447      |   |   | 50,000       |  
|Current portion of license fee
      payable – Note 5                          |   | 60,000       |   |   | -            |  
|Promissory note payable –
      Note 8                                         |   | 40,000       |   |   | -            |  
|                                                                               |   |              |   |   |              |  
|                                                                               |   | 1,737,669    |   |   | 1,082,393    |  
|Convertible promissory notes payable – Notes 7 and 11                          |   | -            |   |   | 668,974      |  
|License fee payable – Note 5                                                   |   | 2,500        |   |   | -            |  
|                                                                               |   |              |   |   |              |  
|                                                                               |   | 1,740,169    |   |   | 1,751,367    |  
|                                                                               |   |              |   |   |              |  
|STOCKHOLDERS' DEFICIENCY                                                       |  
|                                                                               |   |              |   |   |              |  
|Class A preferred shares, without par value, redeemable at
      $1 per share, |   |              |   |   |              |  
|20,000,000 shares authorized, 1,593,028
      shares issued at February 28,    |   |              |   |   |              |  
|2005 (February 29, 2004: None)
      – Note 16                                 |   | 1,593,025    |   |   | -            |  
|Common stock, without par value, 100,000,000 shares authorized,                |   |              |   |   |              |  
|22,875,158 issued at February 28,
      2005 (February 29, 2004: 13,340,522)   |   | 8,228,246    |   |   | 7,599,828    |  
|– Note 16                                                                      |   |              |   |   |              |  
|Common stock subscribed – Notes 9 and 16                                       |   | 232,200      |   |   | 51,000       |  
|Preferred stock subscribed – Note 9                                            |   | -            |   |   | 1,593,025    |  
|Promissory note receivable – Note 10                                           |   | (585,000     | ) |   | (585,000     | )
|Additional paid-in capital                                                     |   | 62,529       |   |   | 62,529       |  
|Deficit                                                                        |   | (10,317,455  | ) |   | (9,658,737   | )
|                                                                               |   |              |   |   |              |  
|                                                                               |   | (786,455     | ) |   | (937,355     | )
|                                                                               |   |              |   |   |              |  
|                                                                               | $ | 953,714      |   | $ | 814,012      |  
|Nature and Continuance of Operations – Note 1                                  |   |              |   |   |              |  
|Commitments – Notes 5, 9 and 13                                                |   |              |   |   |              |  
|Subsequent Events – Note 16                                                    |   |              |   |   |              |  

SEE ACCOMPANYING NOTES

F-2

---

SENSE TECHNOLOGIES INC.
  STATEMENTS OF LOSS
  for the years ended February 28, 2005 and February 29, 2004
  (Stated in U.S. Dollars)

|                                                      |   | February 28, |   |   | February 29, |  
|----------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                      |   | 2005         |   |   | 2004         |  
|                                                      |   |              |   |   |              |  
|Sales                                                 | $ | 47,177       |   | $ | 474,817      |  
|Direct costs – Schedule 1                             |   | 220,863      |   |   | 514,634      |  
|                                                      |   |              |   |   |              |  
|                                                      |   | (173,686     | ) |   | (39,817      | )
|                                                      |   |              |   |   |              |  
|Expenses                                              |   |              |   |   |              |  
|Advertising and marketing                             |   | 21,462       |   |   | 6,399        |  
|Amortization                                          |   | 6,392        |   |   | 13,037       |  
|Bad debts                                             |   | 22,100       |   |   | 25,418       |  
|Consulting fees – Note 11                             |   | 36,809       |   |   | 10,413       |  
|Filing fees                                           |   | 2,524        |   |   | 5,386        |  
|Insurance                                             |   | 60,036       |   |   | 75,296       |  
|Interest and bank charges                             |   | 4,207        |   |   | 3,745        |  
|Interest on long-term debt –
      Note 11            |   | 69,913       |   |   | 145,428      |  
|Legal, accounting and audit fees
      – Note 11      |   | 81,913       |   |   | 153,598      |  
|Office and miscellaneous                              |   | 13,480       |   |   | 15,396       |  
|Rent                                                  |   | 592          |   |   | 20,865       |  
|Repairs and maintenance                               |   | -            |   |   | 894          |  
|Shareholder information and printing                  |   | 13,838       |   |   | 12,114       |  
|Stock-based compensation charge
      – Note 9        |   | -            |   |   | 5,250        |  
|Telephone and utilities                               |   | 4,108        |   |   | 14,801       |  
|Transfer agent fees                                   |   | 5,766        |   |   | 6,204        |  
|Travel                                                |   | 14,328       |   |   | 18,552       |  
|Wages and benefits – Note
      11                    |   | 3,462        |   |   | 245,086      |  
|                                                      |   |              |   |   |              |  
|                                                      |   | 360,930      |   |   | 777,882      |  
|                                                      |   |              |   |   |              |  
|Loss before other items                               |   | (534,616     | ) |   | (817,699     | )
|                                                      |   |              |   |   |              |  
|Other items:                                          |   |              |   |   |              |  
|Premium on conversion of convertible
      promissory |   |              |   |   |              |  
|notes
      payable                                   |   | (32,723      | ) |   | -            |  
|Loss on sale of capital assets                        |   | (3,455       | ) |   | (20,524      | )
|Provision for accrued interest
      receivable       |   |              |   |   |              |  
|–
      Notes 10 and 11                               |   | (52,650      | ) |   | (52,650      | )
|Other income                                          |   | 71,379       |   |   | 5,579        |  
|License fees – Notes 5 and
      11                   |   | -            |   |   | (280,380     | )
|Write-down of license fee –
      Notes 3 and 5       |   | -            |   |   | (135,010     | )
|Interest income – Note 11                             |   | 52,650       |   |   | 52,650       |  
|                                                      |   |              |   |   |              |  
|Net loss for the year                                 | $ | (499,415     | ) | $ | (1,248,034   | )
|                                                      |   |              |   |   |              |  
|Basic and diluted loss per share                      | $ | (0.06        | ) | $ | (0.17        | )
|                                                      |   |              |   |   |              |  
|Weighted average number of shares outstanding         |   | 8,178,606    |   |   | 7,208,389    |  

SEE ACCOMPANYING NOTES

F-3

---

SENSE TECHNOLOGIES INC.
   STATEMENTS OF DEFICIT
  for the years ended February 28, 2005 and February 29, 2004 
  (Stated in U.S. Dollars)

|                               |   | February 28, |   |   | February 29, |  
|------------------------------ | - | ------------ | - | - | ------------ | -
|                               |   | 2005         |   |   | 2004         |  
|                               |   |              |   |   |              |  
|Deficit, beginning of the year | $ | (9,658,737   | ) | $ | (8,340,435   | )
|                               |   |              |   |   |              |  
|Net loss for the year          |   | (499,415     | ) |   | (1,248,034   | )
|                               |   |              |   |   |              |  
|Dividends                      |   | (159,303     | ) |   | (70,268      | )
|                               |   |              |   |   |              |  
|Deficit, end of year           | $ | (10,317,455  | ) | $ | (9,658,737   | )

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.
  STATEMENTS OF CASH FLOWS
  for the years ended February 28, 2005 and February 29, 2004
  (Stated in U.S. Dollars)

|                                                   |   | February 28, |   |   | February 29, |  
|-------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                   |   | 2005         |   |   | 2004         |  
|                                                   |   |              |   |   |              |  
|Operating Activities                               |   |              |   |   |              |  
|Net loss for the year                              | $ | (499,415     | ) | $ | (1,248,034   | )
|Add (deduct) items not involving
      cash:       |   |              |   |   |              |  
|Common
      shares issued for advertising and     |   |              |   |   |              |  
|consulting services                                |   | -            |   |   | 3,750        |  
|Premium
      on conversion of convertible         |   |              |   |   |              |  
|promissory notes payable                           |   | 32,723       |   |   | -            |  
|Non-cash
      compensation charge                 |   | -            |   |   | 5,250        |  
|Write-off
      of inventory                       |   | 184,584      |   |   | 114,371      |  
|Loss
      on sale of capital assets               |   | 3,455        |   |   | 20,524       |  
|Write-down
      of license fee                    |   | -            |   |   | 135,010      |  
|Gain
      on settlement of accounts payable       |   | -            |   |   | (7,851       | )
|Gain
      on write-off of accounts payable        |   | (67,912      | ) |   | -            |  
|Amortization                                       |   | 6,392        |   |   | 13,037       |  
|Changes in non-cash working capital
      balances |   |              |   |   |              |  
|related to operations:                             |   |              |   |   |              |  
|Accounts
      receivable                          |   | (9,615       | ) |   | 55,842       |  
|Inventory                                          |   | (14,363      | ) |   | 179,960      |  
|Prepaids                                           |   | 3,861        |   |   | 13,399       |  
|Accounts
      payable                             |   | (29,294      | ) |   | 519,353      |  
|Advances
      payable                             |   | (27,100      | ) |   | 54,200       |  
|Dividends
      payable                            |   | 159,303      |   |   | 70,268       |  
|                                                   |   |              |   |   |              |  
|Cash used in operating activities                  |   | (257,381     | ) |   | (70,921      | )
|                                                   |   |              |   |   |              |  
|Financing Activities                               |   |              |   |   |              |  
|Proceeds from issuance of common
      stock       |   | 397,000      |   |   | 40,000       |  
|Dividends                                          |   | (159,303     | ) |   | (70,268      | )
|Note payable                                       |   | 40,000       |   |   | -            |  
|Proceeds from issuance of convertible              |   |              |   |   |              |  
|promissory
      notes payable                     |   | -            |   |   | 45,000       |  
|Proceeds from common share subscriptions           |   | 181,200      |   |   | 51,000       |  
|                                                   |   |              |   |   |              |  
|Cash provided by financing activities              |   | 458,897      |   |   | 65,732       |  
|                                                   |   |              |   |   |              |  
|Investing Activities                               |   |              |   |   |              |  
|Proceeds from the sale of capital
      assets     |   | 7,000        |   |   | 2,500        |  
|Acquisition of equipment                           |   | (41,454      | ) |   | -            |  
|Acquisition of license fee                         |   | (37,500      | ) |   | -            |  
|Acquisition of intangible assets                   |   | (49          | ) |   | (487         | )
|                                                   |   |              |   |   |              |  
|Cash provided by (used in) investing activities    |   | (72,003      | ) |   | 2,013        |  

.../Cont’d.

SEE ACCOMPANYING NOTES

F-4

---

| | SENSE TECHNOLOGIES INC.                                     | Continued
| | ----------------------------------------------------------- | ---------
| | STATEMENTS OF CASH FLOWS                                    |          
| | for the years ended February 28, 2005 and February 29, 2004 |          
| | (Stated in U.S. Dollars)                                    |          

|                                            |   | February 28, |  |   | February 29, |  
|------------------------------------------- | - | ------------ |  | - | ------------ | -
|                                            |   | 2005         |  |   | 2004         |  
|                                            |   |              |  |   |              |  
|Increase (decrease) in cash during the year |   | 129,513      |  |   | (3,176       | )
|                                            |   |              |  |   |              |  
|Cash, beginning of year                     |   | 1,800        |  |   | 4,976        |  
|                                            |   |              |  |   |              |  
|Cash, end of year                           | $ | 131,313      |  | $ | 1,800        |  
|                                            |   |              |  |   |              |  
|Supplementary cash flow information:        |   |              |  |   |              |  
|Cash paid for                               |   |              |  |   |              |  
|Interest                                    | $ | -            |  | $ | -            |  
|                                            |   |              |  |   |              |  
|Taxes                                       | $ | -            |  | $ | -            |  
|                                            |   |              |  |   |              |  
|Non-cash Transactions – Note 14             |   |              |  |   |              |  

SEE ACCOMPANYING NOTES

F-5

---

SENSETECHNOLOGIESINC.
  STATEMENT OF STOCKHOLDERS’ DEFICIENCY 
  for the years ended February 28, 2005 and February 29, 2004
  (Stated in U.S. Dollars)

|                                                                        | Common Stock |  | Preferred Stock |           |  |           |  |   | Promissory |  |   | Common  |  |   | Preferred  |   |   |            |   |   |            |  
|----------------------------------------------------------------------- | ------------ |  | --------------- | --------- |  | --------- |  | - | ---------- |  | - | ------- |  | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                                        | Issued       |  |                 |           |  | Issued    |  |   |            |  |   | Paid-in |  |   | Note       |   |   | Stock      |   |   | Stock      |  
|                                                                        | Shares       |  |                 | Amount    |  | Shares    |  |   | Amount     |  |   | Capital |  |   | Receivable |   |   | Subscribed |   |   | Subscribed |  
|                                                                        |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|Balance, February 28, 2003                                              | 12,993,908   |  | $               | 7,497,128 |  | -         |  | $ | -          |  | $ | 57,279  |  | $ | (585,000   | ) | $ | 51,500     |   | $ | -          |  
|Issue of shares for cash pursuant to an                                 |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|agreement to settle debt                      
      – at $0.25         | 10,000       |  |                 | 2,500     |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Issue of shares pursuant
      to private                               |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|placements                                                              | 50,000       |  |                 | 51,500    |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|–
      at $1.03                                                        |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|–
      at $0.15                                                        | 266,664      |  |                 | 40,000    |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Issue of shares pursuant to advertising and                             |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|consulting services provided               
      – at $0.25            | 15,000       |  |                 | 3,750     |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Issue of shares pursuant to capital assets                              |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|contributed                                           
      – at $1.00 | 4,950        |  |                 | 4,950     |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Common stock subscribed                                                 | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | 51,000     |   |   | -          |  
|Common stock subscriptions utilized                                     | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | (51,500    | ) |   | -          |  
|Non-cash compensation charge                                            | -            |  |                 | -         |  | -         |  |   | -          |  |   | 5,250   |  |   | -          |   |   | -          |   |   | -          |  
|Preferred stock subscribed                                              | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | 1,593,025  |  
|Dividends                                                               | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Net loss for the year ended February 29, 2004                           | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|                                                                        |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|Balance, February 29, 2004                                              | 13,340,522   |  |                 | 7,599,828 |  | -         |  |   | -          |  |   | 62,529  |  |   | (585,000   | ) |   | 51,000     |   |   | 1,593,025  |  
|Issuance of common stock pursuant to a                                  |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|private placement                              
      - at $0.05        | 7,940,000    |  |                 | 397,000   |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Pursuant to an agreement to acquire the                                 |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|license fee for the Scope
      Out mirror                              |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|-
      at $0.05                                                        | 1,000,000    |  |                 | 50,000    |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Pursuant to agreements to settle promissory                             |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|notes and accrued interest
      thereon with                           |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|common shares                                  
      - at $0.25        | 594,636      |  |                 | 148,695   |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Premium on conversion of convertible                                    |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|promissory note                                                         | -            |  |                 | 32,723    |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Common share subscriptions                                              | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | 181,200    |   |   | -          |  
|Preferred share subscriptions utilized                                  | -            |  |                 | -         |  | 1,593,027 |  |   | 1,593,025  |  |   | -       |  |   | -          |   |   | -          |   |   | (1,593,025 | )
|Dividends                                                               | -            |  |                 | -         |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|Net loss for the year ended February 28, 2005                           | -            |  |                 |           |  | -         |  |   | -          |  |   | -       |  |   | -          |   |   | -          |   |   | -          |  
|                                                                        |              |  |                 |           |  |           |  |   |            |  |   |         |  |   |            |   |   |            |   |   |            |  
|Balance, February 28, 2005                                              | 22,875,158   |  | $               | 8,228,246 |  | 1,593,027 |  | $ | 1,593,025  |  | $ | 62,529  |  | $ | (585,000   | ) | $ | 232,200    |   | $ | -          |  

SEE ACCOMPANYING NOTES

F-6

---

| | SENSE TECHNOLOGIES INC.                                     | Schedule 1
| | ----------------------------------------------------------- | ----------
| | SCHEDULE OF DIRECT COSTS                                    |           
| | for the years ended February 28, 2005 and February 29, 2004 |           
| | (Stated in U.S. Dollars)                                    |           

|                                         |   | February 28, |  |   | February 29,
|---------------------------------------- | - | ------------ |  | - | ------------
|                                         |   | 2005         |  |   | 2004        
|                                         |   |              |  |   |             
|Direct costs                             |   |              |  |   |             
|Cost of sales                            | $ | 25,819       |  | $ | 244,735     
|Manufacturing expenses                   |   | 2,460        |  |   | 105,908     
|Research and development –
      Note 11 |   | 8,000        |  |   | 30,000      
|Royalties – Notes 5, 11 and
      13     |   | -            |  |   | 19,620      
|Write-off of inventory                   |   | 184,584      |  |   | 114,371     
|                                         |   |              |  |   |             
|                                         | $ | 220,863      |  | $ | 514,634     

SEE ACCOMPANYING NOTES

F-7

---

SENSE TECHNOLOGIES INC.
  NOTES TO THE FINANCIAL STATEMENTS 
  February 28, 2005 and February 29, 2004
  (Stated in U.S. Dollars)

|Note 1 | Nature and Continuance
        of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The Company holds a non-exclusive
        license to manufacture, distribute, market and sublicense, on a world-wide
        basis, a patented technology which is used to produce a back-up obstacle
        detection/collision warning system utilizing microwave radar technology.
        The Company is using this technology to produce the Guardian Alert Back-up
        System for use on motor vehicles and intends to sell the units for use
        in the after market for existing motor vehicles and also, negotiate agreements
        with Original Equipment Manufacturers to license the use of the product
        on factory produced motor vehicles.                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | These financial statements
        have been prepared on a going concern basis. As at February 28, 2005,
        the Company has a working capital deficiency of $997,332, has yet
        to achieve profitable operations and has accumulated a deficit of $10,317,455
        since inception. Its ability to continue as a going concern is dependent
        upon the ability of the Company to maintain its license, to generate profitable
        operations in the future and/or to obtain the necessary financing to meet
        its obligations and repay its liabilities arising from normal business
        operations when they come due. The Company plans to satisfy its capital
        needs through revenue generated from its business operations and through
        equity offerings. These financial statements do not include any adjustments
        to the amount and classification of assets and liabilities that may be
        necessary should the Company be unable to continue as a going concern.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The Company was incorporated
        pursuant to the British Columbia Companies Act on May 25, 1988 as Graham
        Gold Mining Corporation. On October 27, 1997, the Company changed its
        name to Sense Technologies Inc. and on December 14, 2001, the Company
        was continued in the Yukon Territory, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The Company’s shares
        are publicly traded on the OTC–Bulletin Board under the symbol SNSG.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Note 2 | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | Certain comparative figures
        for the year ended February 29, 2004 have been restated to conform with
        the presentation used for the year ended February 28, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Note 3 | Significant Accounting
        Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The financial statements
        of the Company have been prepared in accordance with accounting principles
        generally accepted in the United States of America and are stated in U.S.
        dollars. Because a precise determination of many assets and liabilities
        is dependent upon future events, the preparation of financial statements
        for a period necessarily involves the use of estimates which have been
        made using careful judgment. Actual results may vary from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The financial statements
        have, in management’s opinion, been properly prepared within reasonable
        limits of materiality and within the framework of the significant accounting
        policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | a) | Cash and Cash Equivalents
      The Company considers all highly liquid instruments with
        a maturity of three months or less at the time of purchase to be cash
        equivalents and are recorded at cost.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-8

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 2

|Note 3 | Significant Accounting Policies– (cont’d)
|------ | -----------------------------------------
|       |                                          
|       | b)                                       
|       |                                          
|       |                                          
|       |                                          
|       |                                          

| |  |                        |   | 2005    |  |   | 2004    | 
| |  | ---------------------- | - | ------- |  | - | ------- | 
| |  |                        |   |         |  |   |         | 
| |  | Component parts        | $ | 545,990 |  | $ | 547,161 | 
| |  | Finished goods         |   | 17,009  |  |   | 49,814  | 
| |  | Manufacturing supplies |   | 14,286  |  |   | 150,531 | 
| |  |                        |   |         |  |   |         | 
| |  |                        | $ | 577,285 |  | $ | 747,506 | 

| | c) | Promissory Note Receivable                                                                                                                                                                                                                                                                                                                                   
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | The promissory note receivable is carried at cost
        when there is no impairment in value. The note receivable, which is due
        from shareholders of the Company and bears no specific terms as to its
        collection, is accounted for as a separate component of stockholders’
        equity as an effective dividend or capital withdrawal.
|
| | d) | Capital Assets and Amortization                                                                                                                                                                                                                                                                                                                              
|
| |    | Capital assets are recorded at cost. Amortization
        is provided using the following rates:                                                                                                                                                                                                                                                             

|Computer equipment      | 30% declining balance
|----------------------- | ---------------------
|Product molds           | 7 years straight-line
|Manufacturing equipment | 30% declining balance

| | e) | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | The Company’s intangible assets are comprised
        of licenses fees and patent costs. On March 1, 2002, the Company adopted
        the provisions of SFAS No. 142 “Goodwill and Other Intangible Assets”.
        In reassessing the useful lives of its intangible assets, the Company
        determined these assets to have indefinite useful lives and accordingly,
        amortization of these assets ceased on that date.                                                                                                                                                                                                                                             
|
| |    | SFAS No. 142 requires that the Company annually
        perform an impairment analysis to assess the recoverability of the recorded
        balance of intangible assets. The provisions of the Statement indicate
        that the impairment test should be conducted more frequently if events
        occur or circumstances change that would more likely than not reduce the
        fair value of a reporting unit (as defined) below its carrying value.
        The Company performed an initial impairment analysis upon adoption of
        the standard. During the year ended February 29, 2004, the Company recorded
        an impairment loss of $135,010 (Note 5).

F-9

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 3

|Note 3 | Significant Accounting Policies – (cont’d)
|------ | ------------------------------------------

| | f) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | The functional and reporting currency of the Company
        is the United States dollar. Monetary assets and liabilities denominated
        in currencies other than the U.S. dollar are translated into U.S. dollars
        at the fiscal year-end rate of exchange. Non-monetary assets and liabilities
        denominated in other currencies are translated at historic rates and revenues
        and expenses are translated at average exchange rates prevailing during
        the month of transaction.                                                                                                                                                                                            
|
| | g) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |    | The Company uses the asset and liability method
        of accounting for income taxes pursuant to Statement of Financial Accounting
        Standards No. 109, “Accounting for Income Taxes”. Deferred
        tax assets and liabilities are recognized for future tax consequences
        attributable to differences between the financial statement carrying amounts
        of existing assets and liabilities and their respective tax bases. When
        necessary, a valuation allowance is recorded to reduce tax assets to an
        amount for which realization is more likely than not. The effect of changes
        in tax rates is recognized in the period in which the rate change occurs.
|
| | h) | Basic Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |    | The Company reports basic loss per share in accordance
        with Statement of Financial Accounting Standards No. 128 “Earnings
        Per Share”. Basic loss per share is computed by dividing the net
        loss by the weighted average number of shares outstanding for the period.
        Shares held in escrow are excluded from the determination of basic loss
        per share when the escrow release is performance based.                                                                                                                                                                                                                                                                    
|
| | i) | Fair Market Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |    | The carrying value of cash, accounts receivable,
        accounts payable, advances payable, dividends payable, license fee payable
        and promissory notes payable approximate fair value because of the short
        maturity of those instruments. The carrying value of the promissory note
        receivable and convertible promissory notes payable also approximates
        their fair value. Unless otherwise noted, it is management’s opinion
        that the Company is not exposed to significant interest, currency or credit
        risks arising from these financial instruments.                                                                                                    
|
| | j) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |    | Revenue is recognized when persuasive evidence of
        a sale exists, delivery has occurred and collection is reasonably assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | k) | Research and Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |    | Research and development costs are incurred in order
        to enhance the performance of the back- up obstacle detection/ collision
        warning system. These costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-10

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 4

|Note 3 | Significant Accounting Policies – (cont’d)
|------ | ------------------------------------------

| | m) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | In April 2004, the Emerging Issues Task Force (“EITF”)
        issued No. 03-6, “Participating Securities and Two-Class Method
        Under FASB Statement No. 128, Earnings Per Share”. EITF No. 03-6
        addresses a number of questions regarding the computation of earnings
        per share by companies that have issued securities other than common stock
        that contractually entitle the holder to participate in dividends and
        earnings of the Company when, and if, it declares dividends on its common
        stock. The pronouncement also provides further guidance in applying the
        two-class method of computing earnings per share once it is determined
        that a security is participating, including how to allocate undistributed
        earnings to such a security. EIFT No. 03-6 is effective for fiscal periods
        beginning after March 31, 2004. The Company will adopt this pronouncement
        as required but it is believed it will not have a material effect on the
        Company’s reported earnings per share.
|
| |    | In December 2004, the Financial Accounting Standards
        Board (“FASB”) issued Statement of Financial Accounting Standards
        (“SFAS”) No. 123R, “Share Based Payment”, that
        addresses the accounting transactions in which a company exchanges its
        equity instruments for goods or services. SFAS No. 123R requires that
        such transactions be accounted for using a fair value based method. Adoption
        of SFAS No. 123R is effective for periods beginning after June 15, 2005.
        The Company will adopt this statement as required and management is currently
        assessing the effect SFAS No. 123R will have on the Company’s results
        of operations.                                                                                                                                                                                                                                                                                                                                                                           
|
| |    | In December 2004, the FASB issued SFAS No. 151,
        “Inventory Costs, an amendment of ARB No. 43, Chapter 4,”
        which requires that abnormal amounts of idle facility expense, freight,
        handling costs and wasted material be recognized as current-period charges.
        SFAS No. 151 is effective for fiscal years beginning after June 15, 2005.
        The Company will adopt this standard as required and management does not
        believe the adoption will have a material effect on the Company’s
        results of operations or financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|Note 4 | Equipment
|------ | ---------

| |                         | 2005
| | ----------------------- | ----
| |                         |     
| |                         |     
| |                         |     
| | Computer equipment      | $   
| | Product molds           |     
| | Manufacturing equipment |     
| |                         |     
| |                         | $   

F-11

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 5

|Note 4 | Equipment – (cont’d)
|------ | --------------------

| |                         | 2004
| | ----------------------- | ----
| |                         |     
| |                         |     
| |                         |     
| | Computer equipment      | $   
| | Manufacturing equipment |     
| |                         |     
| |                         | $   

|Note 5 | Intangible Assets                          
|------ | -------------------------------------------
|       |                                            
|       | Intangible assets are comprised as follows:
|       |                                            
|       | Guardian Alert License Fee                 

| | Acquisition Consideration:          |               |   | 2005     |   |   | 2004     |  
| | ----------------------------------- | ------------- | - | -------- | - | - | -------- | -
| |                                     |               |   |          |   |   |          |  
| | Issuance of 5,220,190 escrow shares | – at CDN$0.01 | $ | 36,088   |   | $ | 36,088   |  
| | Issuance of 66,628 common shares    |               |   | 416,365  |   |   | 416,365  |  
| |                                     |               |   |          |   |   |          |  
| |                                     |               |   | 452,453  |   |   | 452,453  |  
| | Less: accumulated amortization      |               |   | (317,442 | ) |   | (317,442 | )
| | Less: impairment write-down         |               |   | (135,010 | ) |   | (135,010 | )
| |                                     |               |   |          |   |   |          |  
| |                                     |               |   | 1        |   |   | 1        |  
| |                                     |               |   |          |   |   |          |  
| | Scope Out Mirror License            |               |   |          |   |   |          |  

| | Cash                        |            |   | 37,500  |  |   | -     | 
| | --------------------------- | ---------- | - | ------- |  | - | ----- | 
| | Issuance of 1,000,000 units | – at $0.05 |   | 50,000  |  |   | -     | 
| | Promissory note payable     |            |   | 62,500  |  |   | -     | 
| | Patent costs                |            |   | 8,349   |  |   | 8,299 | 
| |                             |            |   |         |  |   |       | 
| |                             |            |   | 158,349 |  |   | 8,299 | 
| |                             |            |   |         |  |   |       | 
| |                             |            | $ | 158,350 |  | $ | 8,300 | 

Guardian Alert License

By an Assignment Agreement dated April
  30, 1992 and amendments thereto dated May 27, 1992, July 14, 1992, April 5,
  1993, August 13, 1993, March 10, 1997, May 29, 1997 and February 25, 1999 the
  Company has been assigned the right, title, interest and obligations in a Licence
  Agreement to manufacture, market and distribute a microwave radar collision
  avoidance device for motor vehicles. During the year ended February 28, 2005,
  the Company did not manufacture the minimum quantities required by the License
  Agreement and the Company lost the exclusivity it previously held.

During the year ended February 29,
  2004, the license was written down by $135,010 to its net realizable value
  of $1.

F-12

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 6

|Note 5 | Intangible Assets–
        (cont’d)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | Scope Out Mirror License                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | During the year ended February
        28, 2005, the Company acquired a license to manufacture, sell, deliver
        and install the Lateral-View Mirror (Scope Out Mirror).                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | As consideration, the company
        is to pay a license fee of $150,000 consisting of $100,000 to
        be paid over a period of two years (paid $37,500) and the issuance
        of 1,000,000 units of the Company’s share capital at $0.05 per
        unit (issued). Each unit consists of one common share and one common share
        purchase warrant entitling the holder to purchase an additional common
        share at $0.15 for a period of 18 months.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | The Company is obligated
        to pay a royalty of 10% of the wholesale price for each Scope Out Mirror
        sold which, in any event, shall not be less than $2.00 per unit in
        the following minimum quantities:                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | A.  30,000 units per
        year beginning in years 1 and 2.                                                                                                                                                                                                                                                                                                                                                                                                            
|       | B.   60,000 units
        per year in years 3 and 4.                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | C.   100,000 units
        per year in year 5 and thereafter.                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 6 | Accounts Payable– Note 11                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |  |                          |   | 2005    |  |   | 2004    | 
| |  | ------------------------ | - | ------- |  | - | ------- | 
| |  |                          |   |         |  |   |         | 
| |  | Trade payables           | $ | 116,726 |  | $ | 219,345 | 
| |  | Accrued fees             |   | 15,000  |  |   | 68,351  | 
| |  | Accrued payroll          |   | 53,695  |  |   | 64,843  | 
| |  | Accrued interest payable |   | 90,108  |  |   | 34,364  | 
| |  | Accrued royalty payable  |   | 480,000 |  |   | 480,000 | 
| |  | Accrued taxes payable    |   | 19,022  |  |   | 19,022  | 
| |  |                          |   |         |  |   |         | 
| |  |                          | $ | 774,551 |  | $ | 885,925 | 

F-13

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 7

|Note 7 | Convertible Promissory Notes Payable
|------ | ------------------------------------

| |                                                                             |   | 2005     |   |   | 2004    |  
| | --------------------------------------------------------------------------- | - | -------- | - | - | ------- | -
| |                                                                             |   |          |   |   |         |  
| | Promissory notes payable, due to a director
      of the Company,           |   |          |   |   |         |  
| | bearing no interest and due on demand on
      October 2, 2005. The         |   |          |   |   |         |  
| | note may be converted into common shares
      of the Company at any        |   |          |   |   |         |  
| | time prior to the demand for payment at
      the rate of one common        |   |          |   |   |         |  
| | share for each $0.29 of principal balance.
      During the year ended      |   |          |   |   |         |  
| | February 28, 2005, the Company repriced
      the conversion feature of     |   |          |   |   |         |  
| | this note to allow the holder to convert
      the note into common shares  |   |          |   |   |         |  
| | at the rate of one common share for each
      $0.25 of principal balance   |   |          |   |   |         |  
| | and, as a result, this note was converted
      into 120,000 common shares. | $ | -        |   | $ | 30,000  |  
| |                                                                             |   |          |   |   |         |  
| | Series B secured promissory notes payable
      bearing interest at 10%     |   |          |   |   |         |  
| | per annum and are payable on demand, along
      with accrued interest      |   |          |   |   |         |  
| | thereon, on or after August 30, 2005. These
      notes plus accrued        |   |          |   |   |         |  
| | interest, may be redeemed at any time after
      August 30, 2005. These    |   |          |   |   |         |  
| | notes, secured by a charge over the Company’s
      inventory, may be       |   |          |   |   |         |  
| | converted into common shares of the Company
      at any time prior to      |   |          |   |   |         |  
| | demand for payment at the rate of one common
      share for each           |   |          |   |   |         |  
| | $0.29 of principal balance. During the
      year ended February 28,        |   |          |   |   |         |  
| | 2005, the Company repriced the conversion
      feature of these notes      |   |          |   |   |         |  
| | to allow the holders to convert their notes
      and accrued interest      |   |          |   |   |         |  
| | thereon at the rate of one common share
      for $0.25 of principal and    |   |          |   |   |         |  
| | accrued interest payable. As a result, holders
      of notes totalling     |   |          |   |   |         |  
| | $104,527, along with accrued interest
      of $14,168, converted their     |   |          |   |   |         |  
| | notes into 474,636 common shares.                                           |   | 534,447  |   |   | 638,974 |  
| |                                                                             |   |          |   |   |         |  
| | Unsecured promissory notes bearing interest
      at 10% per annum.         |   |          |   |   |         |  
| | These notes have matured and the holders
      thereof have received        |   |          |   |   |         |  
| | default judgements against the Company.                                     |   | 50,000   |   |   | 50,000  |  
| |                                                                             |   |          |   |   |         |  
| |                                                                             |   | 584,447  |   |   | 718,974 |  
| | Less: current portion                                                       |   | (584,447 | ) |   | (50,000 | )
| |                                                                             |   |          |   |   |         |  
| |                                                                             | $ | -        |   | $ | 668,974 |  

|Note 8 | Promissory Note Payable
|------ | -----------------------

| |                                                                       |   | 2005   |  |   | 2004 | 
| | --------------------------------------------------------------------- | - | ------ |  | - | ---- | 
| |                                                                       |   |        |  |   |      | 
| | The promissory note payable is unsecured,
      bears interest at 10% |   |        |  |   |      | 
| | per annum and is repayable in 12 monthly
      instalments of $3,527  |   |        |  |   |      | 
| | commencing March 1, 2005                                              | $ | 40,000 |  | $ | -    | 

F-14

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 8

|Note 9 | Common Stock – Note 16
|------ | ----------------------

| | a) | Escrow:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | At February 28, 2005, 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.                                                                                                                                                                                                                                                                                                                                                          

| |  |                                                              | February 28, 2005
| |  | ------------------------------------------------------------ | -----------------
| |  |                                                              |                  
| |  |                                                              |                  
| |  |                                                              |                  
| |  |                                                              | Shares           
| |  |                                                              |                  
| |  | Outstanding and exercisable at beginning
      of the period | 1,215,000        
| |  | Expired                                                      | (15,000          
| |  |                                                              |                  
| |  | Outstanding and exercisable at end of the period             | 1,200,000        
| |  |                                                              |                  
| |  |                                                              | February 29, 2004
| |  |                                                              |                  
| |  |                                                              |                  
| |  |                                                              |                  
| |  |                                                              | Shares           
| |  |                                                              |                  
| |  | Outstanding and exercisable at beginning
      of period     | 2,280,000        
| |  | Previously granted options vesting during the period         | 100,000          
| |  | Granted                                                      | 50,000           
| |  | Expired                                                      | (10,000          
| |  | Less: Share purchase options not vested                      | (25,000          
| |  | Cancelled                                                    | (1,405,000       
| |  | Previously granted options cancelled and
      not vested    | 225,000          
| |  |                                                              |                  
| |  | Outstanding and exercisable at end of the
      period       | 1,215,000        

F-15

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 9

|Note 9 | Common Stock – Note 16 – (cont’d)
|------ | ---------------------------------

| | b) | Commitments: – (cont’d)                                                                                                                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | Stock-based Compensation Plan – (cont’d)                                                                                                                                                                                                                                                                                                                                              
|
| |    | The Company accounts for its stock-based compensation
        using the intrinsic value method in accordance with Accounting Principles
        Board Opinion No. 25 “Accounting for Stock Issued to Employees”
        and its related interpretations. Accordingly, no compensation expense
        has been recognized in the financial statements for employee stock arrangements.
|
| |    | A non-cash compensation charge of $5,250, associated
        with the granting of options to a consultant, has been recognized in the
        financial statements for the year ended February 29, 2004.                                                                                                                                                                              
|
| |    | The fair value for these options was estimated at
        the date of the grant using the following weighted average assumptions:                                                                                                                                                                                                                                                     

| |  |                                                                      | 2004 |    
| |  | -------------------------------------------------------------------- | ---- | ---
| |  |                                                                      |      |    
| |  | Volatility factor of expected market price
      of company’s shares | 157  | %  
| |  | Dividend yield                                                       | 0    | %  
| |  | Weighted average expected life of stock
      options                | 5    | yrs
| |  | Risk-free interest rate                                              | 1.25 | %  

| |  | The Black-Scholes option valuation model was developed
        for use in estimating the fair value of traded options which have no vesting
        restrictions and are fully transferable. In addition, option valuation
        models require the input of highly subjective assumptions, including expected
        share price volatility. The Company’s employee stock options have
        characteristics significantly different from those of traded options,
        and changes in the subjective input assumptions can materially affect
        fair value estimates.
      At February 28, 2005, 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 Date       
|--------- | -------------- | ------------------
|          |                |                   
|25,000    | $1.03          | June 8, 2005      
|300,000   | $1.03          | August 4, 2005    
|25,000    | $1.03          | January 8, 2006   
|25,000    | $1.03          | March 22, 2006    
|450,000   | $2.30          | December 18, 2006 
|50,000    | $2.30          | January 10, 2007  
|100,000   | $0.75          | September 26, 2007
|200,000   | $1.00          | February 1, 2008  
|25,000    | $1.00          | March 14, 2008    
|          |                |                   
|1,200,000 |                |                   

F-16

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Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 10

|Note 9 | Common Stock – Note 16 – (cont’d)
|------ | ---------------------------------

| |  | b) | Commitments: - (cont’d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |    | Common Share Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  |    | At February 28, 2005, the Company had 8,940,000
        share purchase warrants outstanding entitling the holders thereof to purchase
        one common share for each warrant held at $0.15 per warrant, expiring
        July 24, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |    | Common Stock Subscribed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  |    | As at February 28, 2005, the Company has received
        $51,000 in respect of private placements of 340,000 common shares
        at $0.15 per share and $181,200 in respect of private placements
        of 3,624,000 units at $0.05 per unit. Each unit consists of one common
        share and one common share purchase warrant entitling the holder to purchase
        an additional common share at $0.15 per share for 18 months. As at
        February 28, 2005, these shares had not been issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  |    | Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  |    | During the year ended February 29, 2004, the Company
        entered into agreements with holders of its unsecured promissory notes
        in the principal amount of $1,276,000 to exchange their notes, along
        with accrued interest of $317,025 thereon, for Class A preferred shares.
        These shares entitle the holders thereof to cumulative dividends of $0.10
        per share annually and the right to convert the preferred shares into
        common shares at the rate of $0.29 per share. The shares are redeemable
        at the option of the Company at any time after August 30, 2005 at the
        redemption price of $1.00 per share plus payment of unpaid dividends.
        During the year ended February 28, 2005, the Company issued 1,593,027
        Class A preferred shares to the holders of its unsecured promissory notes.
        Holders of notes in the principal amount of $50,000 which have matured
        received default judgments against the Company for the balance of the
        notes and these notes have not been exchanged.

|Note 10 | Promissory Note Receivable                                                                                                                                                                                                                                                                                                                                        
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                   
|        | The promissory note in the principal
        amount of $585,000 (2004: $585,000) is due from shareholders of
        the Company, is due on demand, secured by a pledge of shares of a company
        owned by shareholders of the Company and bears interest at 9% per annum.
        The Company does not expect to demand payment within the next fiscal year.

F-17

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 11

|Note 11 | Related Party Transactions–
        Notes 7 and 9                                                                                  
|------- | -----------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                    
|        | The Company incurred the following items
        with directors, shareholders and companies with common directors and shareholders:

| |                                  |   | 2005    |   |   | 2004    |  
| | -------------------------------- | - | ------- | - | - | ------- | -
| |                                  |   |         |   |   |         |  
| | Consulting fees                  | $ | -       |   | $ | 1,250   |  
| | Interest on long – term debt     | $ | 8,273   |   | $ | 4,314   |  
| | Interest income                  | $ | (52,650 | ) | $ | (52,650 | )
| | Legal, accounting and audit fees | $ | 3,435   |   | $ | 5,036   |  
| | Licence fees                     | $ | -       |   | $ | 280,380 |  
| | Provision for accrued interest   |   |         |   |   |         |  
| | receivable                       | $ | 52,650  |   | $ | 52,650  |  
| | Research and development         | $ | -       |   | $ | 30,000  |  
| | Royalty expense                  | $ | -       |   | $ | 19,620  |  
| | Wages and benefits               | $ | -       |   | $ | 165,722 |  

|        | The above noted items were measured by
        the exchange amount which is the amount agreed upon by the transacting
        parties.                                                                                                                                                                                                                                                                                                                                                                                    
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | As at February 28, 2005, included in
        accounts receivable is $Nil (2004: $3,518) due from a company
        with a common shareholder.                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | As at February 28, 2005, included in
        accounts payable is $3,330 (2004: $60,900) owing to a director
        of the Company, an accounting firm in which a director of the Company
        is a partner and a shareholder with respect to unpaid fees, purchases
        and expenses, $480,000 (2004: $480,000) owing to shareholders
        of the Company  in respect of royalties payable and $50,992 (2004:
        $64,843) owing to the former president of the Company in respect of
        unpaid wages.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | As at February 28, 2005, included in
        convertible promissory notes payable is $Nil (2004: $74,000) due
        to directors.                                                                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 12 | Corporation Income Tax Loss Carry-Forwards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | Deferred income taxes reflect the net
        tax effects of temporary differences between the carrying amounts of assets
        and liabilities for financial reporting purposes and the amounts used
        for income tax purposes. Significant components of deferred tax assets
        are as follows:                                                                                                                                                                                                            

| | Deferred tax assets                               |   |            |  
| | ------------------------------------------------- | - | ---------- | -
| | Net operating loss carryforwards                  | $ | 2,647,551  |  
| | Valuation allowance
      for deferred tax assets |   | (2,647,551 | )
| |                                                   |   |            |  
| | Net deferred tax assets                           | $ | -          |  

F-18

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 12

|Note 12 | Corporation Income Tax Loss Carry-Forwards– (cont’d)                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Realization of deferred tax assets is
        dependent upon future earnings, if any, the timing and amount of which
        are uncertain. Accordingly, the net deferred tax assets have been fully
        offset by a valuation allowance. As of February 28, 2005, the Company
        has accumulated non-capital loss carryforwards of approximately $7,800,000
        for federal income tax purposes. These carryforwards, if not utilized
        to offset taxable income, begin to expire in 2018.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 13 | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | In accordance with the terms of a development
        and consulting agreement dated May 27, 1997, the Company has agreed to
        pay a royalty of $0.50 for each unit sold of the backup radar collision
        avoidance device up to a maximum of 200,000 units.                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 14 | Supplemental Cash Flow Disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Non-cash Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Investing and financing activities that
        do not have a direct impact on current cash flows are excluded from the
        statements of cash flows. The following transactions were excluded from
        the statements of cash flows:                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | During the year ended February 28, 2005,
        the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| | i)  | issued 1,000,000 units at $0.05 per unit as
        partial consideration for the acquisition of the Scope Out Mirror license
        fee.                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                             
| | ii) | issued 594,636 common shares at $0.25 per share
        for a total of $181,418, including a conversion premium of $32,723,
        pursuant to conversions of convertible promissory notes and accrued interest
        of $14,168 thereon.

| | During the year ended February 29, 2004, the Company:
| | -----------------------------------------------------

| | i)   | issued 15,000 common shares valued at $3,750
        pursuant to advertising and consulting services performed;                                                                                                                                                                                                                 
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | ii)  | issued 10,000 common shares valued at $2,500
        pursuant to an agreement to settle debt;                                                                                                                                                                                                                                   
|
| | iii) | issued 4,950 common shares valued at $4,950
        as consideration for capital assets contributed to the Company; and                                                                                                                                                                                                         
|
| | iv)  | received preferred share subscriptions in the amount
        of $1,593,025 as a result of former unsecured promissory note holders
        agreeing to exchange their notes totalling $1,276,000 in principal,
        along with the accrued interest of $317,025 thereon, for Class A preferred
        shares of the Company.

F-19

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2005 and February 29, 2004
  (Stated in US Dollars) – Page 13

|Note 15 | Major Customer                                                                                                        
|------- | ----------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                       
|        | One customer of the Company accounted
        for approximately 63% of the sales for the year ended February 29, 2004.
|        |                                                                                                                       
|Note 16 | Subsequent Events                                                                                                     
|        |                                                                                                                       
|        | Subsequent to February 28, 2005, the
        Company:                                                                 

| | i)   | issued 200,001 common shares at $0.15 per share
        for total proceeds of $30,000 pursuant to a private placement. Common
        stock subscribed at February 28, 2005 was included in this issuance.                                                                                                                                                                                                        
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | ii)  | issued 25,000 common shares at $0.20 per share
        for consulting services rendered.                                                                                                                                                                                                                                                                                                                          
|
| | iii) | issued 5,384,000 units at $0.05 per unit for
        total proceeds of $269,200. Each unit consisted of one common share
        and one common share purchase warrant entitling the holder thereof the
        right to purchase an additional common share at $0.15 per share for
        a period of 18 months. Common stock subscribed at February 28, 2005 of
        $181,200 was included in this issuance.
|
| | iv)  | issued 40,000 common shares at $0.15 per share
        pursuant to the exercise of share purchase warrants.                                                                                                                                                                                                                                                                                                       
|
| | v)   | issued 5,494,852 common shares pursuant to agreements
        to convert preferred shares of $1,249,975 and dividends payable of
        $185,270 at the rate of 3.448 common shares for each preferred share
        held and 7.692 common shares for each $1 of accrued dividends payable
        outstanding.                                                                                                  

F-20

---