**U.S. Securities and Exchange Commission**
  Washington, D.C. 20549

Form 10-KSB

x Annual report pursuant
  to section 13 or 15(d) of the Securities Exchange Act of 1934 
  for the fiscal year ended February 28, 2003

 ̈ Transition
  report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
  [No fee required]
  for the transition period from _________________to ____________________

000-29990 (Commission file number)

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

|Yukon Territory(State or other
      jurisdiction of incorporation or organization) | 90010141(I.R.S. Employer I.D. No.)
|----------------------------------------------------------------------------------- | ----------------------------------

800 Clanton Road, Suite U, Charlotte, North Carolina 28217
  Telephone: (704) 522-7999(Address, zip code, and telephone number of principal executive
  offices)

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) has 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$290,703. As of June 12, 2003, the aggregate market value of the voting common
  equity held by non-affiliates of the registrant was US$1,384,387, 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 June 12, 2003, the Registrants outstanding common stock consisted
  of 12,993,908 shares.

DOCUMENTS INCORPORATED BY REFERENCE: N/A

Transitional Small Business Disclosure Format: Yes  ̈        No
  x

---

SENSE TECHNOLOGIES INC.

Form 10-KSB

Table of Contents

|Part | Item No. |                                                                                                                      
|---- | -------- | ---------------------------------------------------------------------------------------------------------------------
|     |          |                                                                                                                      
|I    | 1        | Description of Business                                                                                              
|     | 2        | Description of Property                                                                                              
|     | 3        | Legal Proceedings                                                                                                    
|     | 4        | Submission of Matters to a Vote of Security
      Holders                                                            
|II   | 5        | Market for Common Equity and Related Stockholder
      Matters                                                       
|     | 6        | Managements Discussion and Analysis
      or Plan of Operation                                                      
|     | 7        | Financial Statements                                                                                                 
|     | 8        | Changes in and Disagreements with Accountants
      on Accounting and                                                
|     |          | Financial Disclosure                                                                                                 
|III  | 9        | Directors, Executive Officers, Promoters and Control
      Persons; Compliance with Section 61(a) of the Exchange Act
|     | 10       | Executive Compensation                                                                                               
|     | 11       | Security Ownership of Certain Beneficial
      Owners and Management                                                 
|     | 12       | Certain Relationships and Related Transactions                                                                       
|     | 13       | Exhibits and Reports on Form 8-K                                                                                     
|     | 14       | Controls and Procedures                                                                                              
|     | 15       | Principal Accountant Fees and Services                                                                               
|     |          |                                                                                                                      
|     |          | Signatures                                                                                                           
|     |          | Section 302 Certification                                                                                            
|     |          | Financial Statements                                                                                                 

1

---

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
  under section entitled Risk Factors and elsewhere herein. You should not place
  undue reliance on these forward-looking statements.

PART I.

Item 1. DESCRIPTION OF THE BUSINESS

Overview

We develop and market sensing devices for the automotive industry.
  Our core product is called the Guardian AlertTM Doppler Awareness
  System. The Guardian AlertTM Doppler Awareness System uses radar
  technology to warn vehicle drivers of the presence of people or obstacles in
  blind spots that exist behind their vehicles when backing up. Our business strategy
  is to utilize the skills and industry background of management in order to market
  the product to automobile and truck manufacturers and dealers, fleet operators,
  and other automotive industry participants. We will require additional financing
  in order to carry out our strategy. The Company began manufacturing the Guardian
  AlertTM 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.

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.

2

---

Our shares are currently quoted on the Over-the-Counter Bulletin
  Board (OTCBB) under the trading symbol SNSG. 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.

Our head office is located at 800 Clanton Road, Suite U, Charlotte,
  North Carolina. Prior to May of 2002, our head office was located at 14441 Dupont
  Court, Suite 103, Omaha, Nebraska.

Industry Overview

We compete in the vehicle backing awareness 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. Almost
  all reversing vehicles have blind spots that limit the ability of the operator
  to see obstacles or people that are 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. The
  Company has also received testimonials from fleet customers that they have virtually
  eliminated damage to vehicles and property as a result of the system which support
  the benefits of our backing awareness product.

Various backing awareness products are currently
  being installed by automobile manufacturers and dealers as optional equipment
  on consumer and commercial vehicles.

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
  AlertTM 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.

3

---

Our Backing Awareness Products

Our Guardian AlertTM 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 AlertTM 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 AlertTM
  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.

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

The Guardian AlertTM 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 AlertTM Doppler Awareness Systemproducts.
  There are a number of product extensions and new

4

---

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 AlertTMDoppler Awareness System

We outsource the manufacture of the components of our Guardian
  AlertTM 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.

We have also established a partnership with S&S Distributing
  LLC to develop applications and market the Guardian AlertTM Doppler
  Awareness System to the fleet vehicle market. To date, S&S has placed approximately
  7,000 units in the field. S&S has led the development of a variety of mountings
  appropriate for most commercial vehicles. Additionally, S&S has pioneered
  the commercialization effort to the fleet segment of the market.

During the fiscal years ending February 28, 2001 and 2002,
  we did not incur any material costs for the development of our Guardian AlertTM
  Doppler Awareness System products.

Market and Marketing of our Guardian AlertTMDoppler Awareness System

The end user of our Guardian AlertTM 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 AlertTM
  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 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

5

---

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
  AlertTM 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 $450 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 AlertTM 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

6

---

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 AlertTM 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 AlertTM Doppler Awareness System is
  the only product that uses a single sensor, which we believe 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 AlertTM 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,

7

---

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 Patents, Trademarks & Licenses

Patents & Trademarks

The following countries have granted patent rights respecting
  the Guardian AlertTM 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 AlertTM
  Doppler Awareness System is a registered trademark.

Licenses & Royalties

We hold the worldwide rights to develop, manufacture, market
  and license the Guardian AlertTM 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.                                                                                              

8

---

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 the Company did
  not pay its minimum royalty payment.

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 AlertTM Doppler Awareness System products.
  The sub-license agreement provides for certain minimum purchases of products
  from Sense, and certain expenditure requirements for development and marketing.
  The sub-license also provides that any new versions of the sensing device that
  are developed by S&S will be made available for manufacture and distribution
  by Sense.

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

Governmental Approval

Because the 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 employ two (2) full time employees.

Item 2. DESCRIPTION OF PROPERTY

Our executive offices are located in Charlotte, North Carolina.
  The offices comprise 3,000 square feet of floor space which we lease under an
  industry standard operating lease with a term expiring in May of 2005. Current
  monthly lease obligations are $2,114. The current facilities are adequate and
  are suitable for the Companys current purposes as contemplated in our
  business plan. The facilities are insured against perils in a manner consistent
  with industry practice.

Item 3. LEGAL PROCEEDINGS

We have not received notice of any current legal proceedings
  involving our company. We are aware of two product manufacturers that we believe
  are clearly infringing our patent. We intend to aggressively defend our patent
  rights and pursue manufacturers that we believe are infringing on our patent
  rights.

9

---

Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None.

PART II.

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Stock and Shareholder Matters

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, 2003 | $0.44  | $0.17
|November 30, 2002 | $0.55  | $0.17
|August 31, 2002   | $1.39  | $0.27
|May 31, 2002      | $2.75  | $0.70
|February 28, 2002 | $3.95  | $1.73
|November 30, 2001 | $4.23  | $0.99
|August 31, 2001   | $5.00  | $1.70
|May 31, 2001      | $10.50 | $4.11

The following table shows the high and low sales prices, in
  Canadian dollars, of our common stock on the TSX Venture Exchange for each quarter
  within the last two fiscal years, until we voluntarily delisted on October 3,
  2001:

|Quarter Ended     | High   | Low   
|----------------- | ------ | ------
|November 30, 2001 | $3.30  | $2.20 
|August 31, 2001   | $7.50  | $3.20 
|May 31, 2001      | $15.00 | $11.00

As of February 28, 2003, there were 12,993,908 shares of our
  common stock issued and outstanding. As of February 28, 2003, there were 230
  holders of record of our common stock.

The Company has not declared any cash dividends for the last
  two fiscal years. There are no dividend restrictions in the Company.

Recent Sales of Unregistered Securities

On January 31, 2002, we issued 450,000 common shares to six
  (6) accredited investors under Rule 506 of Regulation D at a price of US$1.03
  per share for total proceeds to the Company of

10

---

US$463,500. 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 February 19, 2002, we issued 415,000 common shares to seven
  (7) accredited investors under Rule 506 of Regulation D at a price of US$1.03
  per share for total proceeds to the Company of US$427,450. 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 May 7, 2002, we issued 10,000 common shares to one (1) accredited
  investor under Rule 506 of Regulation D at a deemed price of US$1.05 per share
  to settle debt in the amount of US$34,494. 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.

In May 2003, two (2) accredited investors under Rule 506 of
  Regulation D, subscribed for an aggregate of 133,332 common shares at a price
  of US$0.15 per share for total proceeds to the Company of US$20,000. 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 28, 2003, we issued convertible
  promissory notes to nine (9) accredited investors under Rule 506 of Regulation
  D for total proceeds to the Company of US$560,0000. Promissory notes representing
  US$70,000 are convertible into common shares of the Company at a conversion
  rate of US$0.40 per share and promissory notes representing US$490,000 are convertible
  into common shares of the Company at a conversion rate of US$1.00 per share.
  The Company has agreed to pay interest on the promissory notes at a rate of
  10% per annum on the principal amount of the note. The promissory notes are
  convertible on various dates ranging from May 2003 to August 2005. The conversion
  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 28, 2003, we granted stock options
  to purchase up to an aggregate 1,550,000 common shares of the Company at an
  exercise price of US$0.50 as to 600,000 of the options, US$0.75 as to 100,000
  of the options and US$1.00 as to 850,000 of the options, to ten (10) accredited
  investors, of which two (2) were non-employees of the Company, 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.

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, 2003 and 2002.

11

---

Overview of Operations

Sense holds an exclusive license to manufacture, distribute,
  market and sublicense on a worldwide basis, a patented technology which is used
  to produce the Guardian Alert backing awareness system for motor vehicles
  utilizing microwave radar technology. The Company has begun manufacturing the
  product in Charlotte, NC by an outsourced vendor with extensive experience producing
  products for auto dealerships and OEMs. The Company has established a relationship
  with Hendrick Automotive Group (HAG) one of the largest auto dealership
  groups in the United States. HAG has agreed to offer the product at all of its
  60 dealership nationwide. During 2001, HAG sold approximately 85,000 cars and
  trucks. Management has expanded the Companys distribution capabilities
  extensively during fiscal 2003.

Results of Operations

For the year ended February 28, 2003 as compared to February
  28, 2002.

Sales for the year ended February 28, 2003 were $290,703,
  an increase of greater than 400% as compared to revenue of $72,411 in the year
  ended February 28, 2002. This increase is due to the Companys entrance
  into the passenger car aftermarket including sales to Hendrick Automotive Group
  and UnitedAuto Group, among others.

Direct costs of $324,380 for the year ended February 28, 2003
  represent a 108% increase over direct costs of $156,055 for the year ended February
  28, 2002. Cost of sales increased from $32,986 during 2002 to $131,977 during
  2003 as volume increased and the sales mix changed from selling components to
  selling finished Guardian Alerte Doppler Awareness Systems. The increase in
  manufacturing expenses from $29,381 during 2002 to $183,193 during 2003 is largely
  attributable to start up expenses in the manufacturing process.

General and administrative expenses were $1,224,550 for the
  year ended February 28, 2003 as compared to $1,300,133 for the year ended February
  28, 2002, a decrease of approximately 6%. Consulting fees decreased from $217,623
  during 2002 to $19,584 during 2003. However, the savings were offset by an increase
  in legal an accounting fees, largely associated with the appeal of the delisting
  from the Nasdaq Smallcap Market.

Included in other items in the current year was a charge for
  license fees in the amount of $170,790, an increase of $44,591 or 35% from $126,199
  charged in 2002. In accordance with the Companys license agreement, the
  Company must achieve production milestones in each calendar year to maintain
  its exclusivity with respect to the product. These license fee charges reflect
  the royalty owed on a minimum sales requirement of a cumulative 60,000 units
  up to December 31, 2002.

Liquidity and Capital Resources

At February 28, 2003, the company had cash and cash equivalents
  on hand of $4,976 compared with $268,339 at February 28, 2002. During the year
  ended February 28, 2003, the company funded operations using existing cash balances
  and by raising money through the issuance of Secured Convertible Notes.

At February 28, 2003, we had a working capital deficit of
  $1,620,439 compared to working capital of $376,885 at February 28, 2002. The
  decrease of working capital is largely reflected in

12

---

the promissory notes payable in the amount of $1,863,000 that
  come due in the next fiscal year. Excluding the promissory notes payable, which
  the Company expects to renegotiate with longer maturities, working capital at
  February 28, 2003 was $262,561.

Investing activities consists primarily of purchases of equipment,
  principally testing equipment. Capital expenditures for the year ended February
  28, 2003 totaled $8,906.

We have not invested in derivative securities or any other
  financial instruments that involve a high level of complexity or risk. We expect
  that in the future, any excess cash will continue to be invested in high credit
  quality, interest bearing- securities.

Item 7. FINANCIAL STATEMENTS

The Companys audited financial statements for the fiscal
  year ended February 28, 2003 are attached to this Report following the signature
  page.

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
  ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has had no changes in or disagreements with its
  accountants during its two most recent fiscal years.

PART III.

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
  PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table contains information regarding the members
  of the Board of Directors and the Executive of Sense as of the date of this
  Form 10-KSB:

|Name                 | Age | Position                                       
|-------------------- | --- | -----------------------------------------------
|James H. Cotter      | 37  | President, Chief Executive Officer and Director
|Bruce E. Schreiner   | 48  | Director                                       
|Cynthia L. Schroeder | 43  | Secretary and Director                         
|Richard L. Sullivan  | 39  | Director                                       
|David Hansing        | 53  | Director                                       
|Glenn Massey         | 49  | Director                                       
|Kevin McQuilkin      | 49  | Director                                       
|Pam Morrell          | 62  | Director                                       
|Toni Steedman        | 49  | Director                                       

All of the Officers identified above serve at the discretion
  of the Board and have consented to act as Directors of the Company.

Biographical information for each of the above-noted Directors
  is set forth below:

JAMES H. COTTER. Mr. Cotter has been the President,
  Chief Executive Officer and a Director of Sense since March 20, 2002. Mr. Cotter
  joins the Company from JPMorgan Securities Global Mergers & Acquisitions
  Group. While with JPMorgan Securities and its predecessor Chase Securities,
  Mr. Cotter advised clients regarding business strategy, capital structure, restructuring,
  private equity, mergers,

13

---

acquisitions and divestitures in several industries; including
  automotive parts, consumer products, chemicals, and telecommunications. Mr.
  Cotter received his Masters degree in Business Administration (M.B.A.) from
  Cornells Johnson Graduate School of Management.

BRUCE E. SCHREINER. Mr. Schreiner has been a Director
  of Sense since August 10, 1993. Mr. Schreiner is responsible for all financial
  matters customarily related to Senses operations and serves as the general
  manager of Sense. Mr. Schreiner received a Bachelor of Arts Degree, from Hastings
  College in 1975, graduating magna cum laude, with majors in Economics and Business
  Administration with an emphasis in accounting. Mr. Schreiner has been a certified
  public accountant since November 1976, to the present. Mr. Schreiner is presently
  a partner in Schroeder & Schreiner, P.C., a certified public accounting
  firm. Mr. Schreiner has experience in the wholesale automotive parts industry,
  electronic parts manufacturing and national-level retail marketing. Mr. Schreiner
  is also an expert in tax law and accounting.

CYNTHIA L. SCHROEDER, CPA. Ms. Schroeder was appointed
  as a Director on June 8, 2000. Ms. Schroeder from 1987 to the present has been
  the Senior Vice President and Chief Financial Officer of Bethphage located in
  Omaha, Nebraska. In her current position as a Certified Public Accountant, Ms.
  Schroeder is responsible for the financial analysis of a number of corporations.
  She is responsible for reviewing the financial condition of each organization
  with the respective CEO and to serve as staff liaison to each Board and related
  Finance and Audit Committees. From 1982 to 1987, Ms. Schroeder worked with Larsen,
  Schroeder & Associates, P.C. where she was a staff accountant and Manager
  for auditing, accounting and tax engagements. Ms. Schroeder received a Bachelor
  of Science Degree in Accounting from the University of Nebraska and passed the
  Certified Public Accountant exam in 1982. Ms. Schroeder is a member of the American
  Institute of Certified Public Accountants and Nebraska Society of Certified
  Public Accountants.

RICHARD L. SULLIVAN.Mr. Sullivan currently serves
  as Senior Vice President for The Washington Group. The Washington Group is a
  public/ federal legislative affairs and business development firm. In the legislative
  affairs area, The Washington Group represents over thirty major companies including
  Fortune 500 members Delta, AT&T, Microsoft and Boeing. The Washington Group
  also provides business development opportunities to over 15 companies in eleven
  different states. Prior to joining The Washington Group, Mr. Sullivan served
  as Finance Director for the Democratic Unity 98 Committee, (a joint effort
  of the Democratic National Committee, Democratic Senatorial Campaign Committee
  and Democratic Congressional Campaign Committees,). From 1994 to 1996, Mr. Sullivan
  served as National Finance Director and Deputy Finance Director for the Democratic
  National Committee (DNC). In this capacity, Mr. Sullivan served as a senior
  member of the 1996 Clinton/Gore Re-election Campaign. From 1991 to 1993, Mr.
  Sullivan served as National Fundraising Director for the Democratic Senatorial
  Campaign Committee (DSCC). From 1987 to 1991, Mr. Sullivan served as Special
  Assistant to House Majority Leader Richard Gephardt. As Special Assistant in
  the House Majority Leaders office, Mr. Sullivan helped formulate strategic
  policy for the Democratic House Caucus and also served as liaison to Democratic
  business supporters. Mr. Sullivan currently serves as Senior Fundraising Advisor
  to the Democratic Senatorial Campaign Committee. He also served as Chair of
  the DSCCs 2002 Kick-off National Gala and DSCC Chairman for the 2000 National
  Convention. In addition, Mr. Sullivan served as Senior Fundraising Advisor to
  the Gore 2000 campaign and on the State Board of Advisors for the Mike Easley
  for Governor campaign. Mr. Sullivan also serves on the Board of Advisors of
  Inculab, Boland Advisory Services and the Tarten Fund. Inculab is an Internet
  incubator based in New York. Boland Advisory Services provides commercial real
  estate consulting services to the Washington, DC corporate community. The Tarten
  Fund is a $150 million investment and venture capital fund based in New York.
  Mr. Sullivan received a B.A. degree with honors from the University of South
  Carolina and a Doctor of Laws degree (J.D.) from Georgetown University Law Center.

DAVID HANSING.Mr. Hansing is currently the General
  Manager of Terry Labonte Chevrolet in Greensboro, North Carolina since 1998.
  Previously he was employed with Saturn of Raleigh, North Carolina. He has also
  worked closely with Hendrick MotorSports since its inception in 1981. Hendrick
  MortorSports. owns seven racing teams in the NASCAE Winston Cup, Busch Grand
  National and

14

---

Craftsman Truck Series. Mr. Hansing obtained his Bachelors
  degree in Finance at Valparaiso University in 1972.

GLENN MASSEY.Mr. Massey has been the Senior Vice-President
  of Marketing for FileControl, Inc., a company in the document imaging business,
  since 1991. Mr. Massey was formerly the founder/owner of SmokeSignal Communications,
  a telecommunications company. Mr. Massey obtained his Bachelor of Science degree
  from the University of Texas in 1976.

KEVIN MCQUILKIN. Mr. McQuilkin is a Managing Director
  in JPMorgans Global Mergers & Acquisitions Group, and is responsible
  for the firms M&A practice for Transportation & Logistics sector,
  as well as the Mining & Metals industries on a global basis. Mr. McQuilkin
  joined JPMorgans predecessor, Chemical Bank, in 1987. His experience includes
  merger, acquisition and divestiture assignments, many involving cross-border
  transactions, as well as debt and equity financing transactions. Mr. McQuilkin
  has significant experience in the natural resource industries, including energy,
  metals and mining, and chemicals. He has represented natural resource clients
  such as Freeport-McMoRan, Grupo Mexico, MAPCO, Newmont Mining, North Ltd., Phillips
  Petroleum, RAG International Mining, The Williams Companies, Total Petroleum
  and Union Carbide. Mr. McQuilkins transportation industry experience includes
  advising clients from a broad range of industry sectors, such as Alliant Techsystems,
  Boeing, Cummins Engine, General Motors and Lockheed Martin. Mr. McQuilkin graduated
  with honors from Gonzaga University in Spokane, Washington and received a Masters
  in Management from Northwestern University's J.L. Kellogg Graduate School of
  Management, where he was a Chevron Fellow.

PAM MORRELL.Pam Morrell is a North Carolina and South
  Carolina licensed realtor based in Rock Hill, South Carolina with Coldwell Banker
  Stepp Tuttle Realty. Ms Morrell has been a realtor since 1978 with her specialty
  being residential real estate and land sales. Ms Morrell has been the President
  of the Tri County Association of Realtors two times and served as its officer
  and director for many years. She also has served as the President of the South
  Carolina Chapter of the Certified Residential Specialist Group. In 2002 Ms Morrell
  received the State Highest Civilian Award, the Palmetto State Award, given by
  the Governor of South Carolina for her citizenship and contributions to South
  Carolina and her real estate industry over the years. Ms Morrell has chaired
  many committees at the local and state level she has received the Realtor of
  the Year and the Business Woman of the Year (both at the local level and at
  the state level).

TONI STEEDMAN.For 20 years, Toni Steedman headed Steedman
  Communications, an award-winning regional advertising agency, where she specialized
  in building brand awareness, sales strategies and corporate programs. In late
  2002, she sold the agency to further develop a childrens entertainment
  company, RAGGS LLC, which she founded in 1997. RAGGS stars five furry canine
  characters who sing in a rock n roll band. The company has launched a
  full theater production; produces CDs, videos and toys and has a TV pilot in
  the works.

RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS

There are no family relationships among any of the existing
  Directors or Executive Officers of Sense.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

During the fiscal year ended February 28, 2003, the Board
  of Directors held four Directors Meetings. All other matters which required
  Board approval were consented to in writing by all of the Companys Directors.

The Board of Directors has established an Audit Committee
  and a Compensation Committee. The Board of Directors has no standing nominating
  committee. Each of the Audit and Compensation Committees is

15

---

responsible to the full Board of Directors. The functions
  performed by these committees are summarized below:

Audit Committee. The Audit Committee considers the
  selection and retention of independent auditors and reviews the scope and results
  of the audit. In addition, it reviews the adequacy of internal accounting, financial
  and operating controls and reviews Sense's financial reporting compliance procedures.
  The members of the Audit Committee are Bruce L. Schreiner, Cynthia L. Schroeder
  and Glenn Massey.

Compensation Committee. The Compensation Committee
  reviews and approves the compensation of Senses officers, reviews and
  administers Senses stock option plans for employees and makes recommendations
  to the Board of Directors regarding such matters. The members of the Compensation
  Committee are Bruce L. Schreiner, Kevin McQuilkin and Glenn Massey.

DIRECTORS COMPENSATION

There are no standard arrangements pursuant to which Directors
  of Sense are compensated for services provided as a Director or members of committees
  of the Board of Directors. The Directors of Sense did not receive any compensation
  for the year ended February 28, 2003 for services provided as a Director or
  member of a committee of the Board of Directors.

Item 10. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth all compensation paid or earned
  for services rendered to us in all capacities during the fiscal years ended
  February 28, 2001, 2002 and 2003 by Senses President and Chief Executive
  Officer (CEO) and each executive officer who earned over $100,000
  in total salary and bonus during the three most recently completed financial
  years, for services rendered to the Company.

SUMMARY COMPENSATION TABLE

|Name and Principal Position (a)                                       | Annual Compensation                                                                     | Long Term Compensation                
|--------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------
|Year
      (b)                                                        | Salary
      ($)
      (c)                                                              | Bonus
      ($)
      (d)             
|Securities
      Under Options/SARs
      Granted
      (#)
      (f) | Restricted
      Shares
      Or
      Restricted
      Share Units
      ($)
      (g) | LTIP
      Payouts
      ($)
      (h)
|James H. Cotter
      President & CEO                                 | 2003                                                                                    | Nil                                   
|Mark Johnson[1]
      President & CEO                                 | 2002                                                                                    | Nil                                   
|Gerald R. McIlhargey[2]President & CEO                                | 2002                                                                                    | Nil                                   
|2001                                                                  | Nil                                                                                     | Nil                                   
|Bruce E. Schreiner
      Director                                     | 2002                                                                                    | Nil                                   
|2001                                                                  | Nil                                                                                     | Nil                                   

[1]       Mark Johnson resigned
  as President, CEO and a Director of the Company on March 20, 2002 and James
  H. Cotter was appointed in his stead.

[2]       Gerald McIlhargey
  resigned as President, CEO and a Director of the Company on November 26, 2001
  and Mark Johnson was appointed in his stead.

[3]       During the fiscal
  year ended February 28, 2001, the Company agreed to pay management fees in the
  amount of $120,000 to each of Mr. McIlhargey and Bruce E. Schreiner (through
  his wholly owned company). The payment was made by way of issuing 29,703 common
  shares of the Company to each of Messrs. McIlhargey and Schreiner (through his
  wholly owned company), at a deemed price of $4.04 per share.

16

---

OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL
  YEAR

|Name(a)                               | Securities
      Under
      Options/
      SARs
      Granted
      (#)(b) | % of Total
      Options/
      SAR's
      Granted to
      Employees
      in Fiscal
      Year(c) | Exercise
      or
      Base Price
      ($/Security)(d) | Expiration
      Date(f)
|------------------------------------- | --------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------
|                                      |                                                                             |                                                                                                      |                                                          |                         
|James H. Cotter
      President & CEO | 500,000                                                                     | 40%                                                                                                  | $0.50                                                    | February 6, 2008        
|450,000                               | 36%                                                                         | [1]                                                                                                  | June 6, 2007                                            

[1]       Mr. Cotters
  450,000 stock options shall vest and become exercisable as set out in the table
  below. In addition, during the fiscal year ended February 28, 2003, the exercise
  price of Mr. Cotters 450,000 stock options were amended as set out in
  the table below:

|Tranche | Number of Shares
      to be Vested | Vesting Provisions                                                     | Original Exercise
      Price | Amended Exercise
      Price
|------- | ----------------------------------- | ---------------------------------------------------------------------- | ----------------------------- | ----------------------------
|A       | 50,000                              | Vested                                                                 | $2.50                         | $1.00                       
|B       | 50,000                              | The later of the close of a $3,000,000 financing
      or June 6, 2003 | $3.00                         | $1.00                       
|C       | 50,000                              | The later of reaching Sales
      of $2,000,000 or June 6, 2003        | $3.00                         | $1.00                       
|D       | 50,000                              | The later of reaching Sales
      of $5,000,000 or June 6, 2003        | $5.00                         | $1.00                       
|E       | 50,000                              | The later of reaching Sales of $10,000,000
      or June 6, 2003       | $5.00                         | $1.00                       
|F       | 25,000                              | Vested                                                                 | $2.50                         | $1.00                       
|G       | 75,000                              | Vested                                                                 | $2.50                         | $1.00                       
|H       | 100,000                             | Vested                                                                 | $3.00                         | $1.00                       

AGGREGATED OPTION/SAR EXERCISES DURING THE MOST RECENTLY
  COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES

There were no stock options exercised during the Companys
  fiscal year ended February 28, 2003.

Defined benefit of actuarial plan

Sense does not have a defined benefit or actuarial plan in
  place.

Employment Contracts and Termination of Employment and
  Change-in-Control Arrangements

There are currently no employment contracts in place with
  the Directors and Officers of Sense other than the standard employment agreements
  used for all employees.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are Bruce L. Schreiner,
  Glenn Massey and Kevin McQuilkin. All of the members of the Committee are Directors
  of Sense.

17

---

Board Compensation Committee Report on Executive Compensation

The Board has not prepared a report on executive compensation
  at this time.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
  AND MANANGEMENT

The following table sets forth certain information regarding
  the beneficial ownership of the Companys Common Stock as of June 13, 2003
  by

|(i)   | each person or entity known by Sense to beneficially own
      more than 5% of the Common Stock;
|----- | ------------------------------------------------------------------------------------------------
|      |                                                                                                 
|(ii)  | each Director of Sense;                                                                         
|      |                                                                                                 
|(iii) | each of the named Executive Officers of Sense; and                                              
|      |                                                                                                 
|(iv)  | all Directors and Executive Officers as a group.                                                

Except as noted below, Sense believes that the beneficial
  owners of the Common Stock listed below, based on information furnished by such
  owners, have sole voting and investment power with respect to such shares.

|Title of Class | Name and Address of
      Beneficial Owner                                                       | Amount of Beneficial
      Ownership[1] | Percent of Class [2]
|-------------- | ------------------------------------------------------------------------------------------------ | --------------------------------------- | --------------------
|Common Stock   | Steve Sommers[3]21018 Buckskin Trail
      Elkhorn, NE 68022                                     | 3,796,187                               | 29.2%               
|Common Stock   | James H. Cotter, Director
      56 Hillcrest Avenue
      Larchmont, NY 10538                    | 964,500                                 | 7.4%                
|Common Stock   | Bruce E. Schreiner, Director
      3535 Grassridge Drive
      Grand Island, Nebraska 68803      | 532,534                                 | 4.1%                
|Common Stock   | Cynthia L. Schroeder,
      Director, Secretary
      15409 Garfield
      Omaha, Nebraska 68144 | 101,770                                 | 0.8%                
|Common Stock   | Richard L. Sullivan, Director
      1306 Rand Road
      Raleigh, NC 27607                       | 154,000                                 | 1.2%                
|Common Stock   | Glenn Massey, Director
      777 Post Oak
      Houston, Texas 77056                             | 109,600                                 | 0.8%                
|Common Stock   | Kevin McQuilkin, Director
      585 Ponus Ridge Road
      New Caanan, CT 06840                  | 50,000                                  | 0.4%                
|Common Stock   | Pam Morrell, Director
      1326 Ebenezer Road
      Rock Hill, SC 29732                         | 72,900                                  | 0.6%                
|Common Stock   | Toni Steedman, Director
      1930 Camden Road, Suite 2010
      Charlotte, NC 28203             | 60,000                                  | 0.5%                
|Common Stock   | All directors and officers as a
      group (8 persons)                                          | 2,045,304                               | 15.7%               

18

---

[1]       Based upon information
  furnished to Sense by either the Directors and Executive Officers or obtained
  from the stock transfer agent of Sense.

[2]       Based upon a total
  of 12,993,908 shares of common stock currently issued and outstanding, and includes
  in each case any stock underlying options granted to each person listed.

[3]       Includes 3,302,617
  shares held by SFS Resources Inc., an entity in which Steve Sommers is a controlling
  shareholder.

[4]       These amounts include
  beneficial ownership of securities not currently outstanding but which are reserved
  for immediate issuance on exercise of options. In particular, these amounts
  include, respectively for each director or officer, shares issuable upon exercise
  of options as follows: 950,000 shares issuable to James H. Cotter; 200,000 shares
  issuable to Bruce E. Schreiner; 100,000 shares issuable to Richard L. Sullivan;
  and 50,000 shares issuable to each of Cynthia L. Schroeder, Glenn Massey, Kevin
  McQuilkin, Pam Morrell, and Toni Steedman.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management and Others

No transactions with management or other parties occurred
  during the year that would otherwise be reported under this section.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

|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 (Form 10-KSB)                                          
|3.2         | By-Laws                                                                                                                          | Incorporated
        by reference as Exhibit 3.2 to the 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 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 Form 10-KSB                                                                                                               
|10.3        | Stock Option
        Agreement dated December 18, 2001 between Ambassador Mark Erwin and the
        Company.                    | Incorporated
        by reference as Exhibit 10.3 to the Form 10-KSB                                                                                                               
|10.4        | Stock Option
        Agreement dated December 18, 2001 between J. Rick Hendrick III and the
        Company.                     | Incorporated
        by reference as Exhibit 10.4 to the Form 10-KSB                                                                                                               
|10.5        | Private Placement
        Subscription Agreement dated December 21, 2001 between J. Rick Hendrick
        III and the Company.   | Incorporated
        by reference as Exhibit 10.5 to the Form 10-KSB                                                                                                               
|10.6        | Private Placement
        Subscription Agreement dated December 22, 2001 between Ambassador Mark
        Erwin and the Company.  | Incorporated
        by reference as Exhibit 10.6 to the Form 10-KSB                                                                                                               
|10.7        | Private Placement
        Subscription Agreement dated January 23, 2002 between Cynthia L. Schroeder
        and the Company.    | Incorporated
        by reference as Exhibit 10.7 to the Form 10-KSB                                                                                                               
|10.8        | Private Placement
        Subscription Agreement dated January 24, 2002 between Bruce E. Schreiner
        and the Company.      | Incorporated
        by reference as Exhibit 10.8 to the Form 10-KSB                                                                                                               

19

---

|10.9  | Private Placement Subscription Agreement
        dated December 19, 2001 between Ambassador Mark Erwin and the Company.                                                                                                      | Incorporated by reference
        as Exhibit 10.9 to the Form 10-KSB 
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------
|10.10 | Private Placement Subscription
        Agreement dated January 24, 2002 between Ambassador Mark Erwin and the
        Company.                                                                                               | Incorporated by reference as Exhibit
        10.10 to the Form 10-KSB
|10.11 | 2002 Stock Option Plan                                                                                                                                                                                                       | Incorporated by reference
        as Appendix B to the Schedule 14A  
|10.12 | Convertible Promissory
        Note issued on January 16, 2003 to Bruce E. Schreiner, Ancillary Trustee
        of the Schroeder and Schreiner, P.C., 401(k) Profit Sharing Plan and Trust,
        in the amount of $20,000 | Filed herewith                                                       
|10.13 | Convertible Promissory Note issued
        on July 10, 2002 to Bruce E. Schreiner, Ancillary Trustee of the Schroeder
        and Schreiner, P.C., 401(k) Profit Sharing Plan and Trust, in the amount
        of $50,000    | Filed herewith                                                       
|10.14 | Convertible Promissory Note issued
        on December 11, 2002 to Cynthia Schroeder in the amount of $5,000                                                                                                                 | Filed herewith                                                       
|99.1  | Certificate pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002                                                                                                                                                | Filed herewith                                                       

(b) Reports on Form 8-K

The following reports on Form 8-K were filed during the last
  quarter of the period covered by this report. On March 20, 2002 we filed a Form
  8-K disclosing the resignation of Mark Johnson as Interim President and a Director
  of Sense and the appointment of James H. Cotter as President, Chief Executive
  Officer and a Director of Sense.

On March 26, 2002 we filed a Form 8-K disclosing the resignation
  of J. R. Hendrick, III as a Director of Sense and disclosing that Mr. Hendrick,
  III agreed to continue with the Company as Chairman of its newly formed
  Strategic Advisory Board.

Item 14. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed
  to ensure that information required to be disclosed in our reports filed pursuant
  to the Securities Exchange Act of 1934 are 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 Chief Executive Officer, as appropriate, to allow
  timely decisions regarding required disclosure.

Within 90 days prior to the date of this report, management
  carried out an evaluation, under the supervision and with the participation
  of the management, including the Chief Executive Officer, of the effectiveness
  of the design and operation of our disclosure controls and procedures pursuant
  to Exchange Act Rule 13a-14. Based upon the foregoing, the Chief Executive Officer
  concluded that our 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, 2003.

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.

Item 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed by the Companys principal
  accountant in connection with the review and preparation of the Companys
  audited financial statements for its fiscal years ended February 28, 2003 and
  February 28, 2002 were US$16,850 and US$7,500, respectively.

20

---

Audit-Related Fees

The aggregate fees billed by the Companys principal
  accountant in connection with the review of the Companys interim quarterly
  reports during its fiscal years ended February 28, 2003 and February 28, 2002
  were US$12,250 and US$11,390, respectively.

Approval of Principal Accountant

Prior to engagement, the appointment of the principal accountant
  is approved by the audit committee following each annual meeting of shareholders
  of the Company. The engagement of the principal accountant is limited to audit
  and review services.

21

---

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 13, 2003.

| | 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/ James H. Cotter      |  | Chief Executive Officer, President        | June 13, 2003
|                         |  |                                           |              
|James H. Cotter          |  | Director and Principal Accounting Officer |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Bruce E. Schreiner   |  | Director                                  | June 13, 2003
|                         |  |                                           |              
|Bruce E. Schreiner       |  |                                           |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Cynthia L. Schroeder |  | Director                                  | June 13, 2003
|                         |  |                                           |              
|Cynthia L. Schroeder     |  |                                           |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Richard L. Sullivan  |  | Director                                  | June 13, 2003
|                         |  |                                           |              
|Richard L. Sullivan      |  |                                           |              
|                         |  |                                           |              
|                         |  |                                           |              
|/s/ Glenn Massey         |  | Director                                  | June 13, 2003
|                         |  |                                           |              
|Glenn Massey             |  |                                           |              

22

---

SECTION 302 CERTIFICATION

I, James H. Cotter, certify that:

|1. | I have reviewed this annual report
        of February 28, 2003 of Sense Technologies Inc.                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge, this annual report
        does not contain any untrue statement of a material fact or omit to state
        a material fact necessary in order to make the statements made, in light
        of the circumstances under which such statements were made, not misleading
        with respect to the period covered by this annual report;                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial
        statement, and other financial information included in this annual report,
        fairly present in all material respects the financial condition, results
        of operations and cash flows of the registrant as of, and for, the periods
        presented in this annual report;                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | The registrants other certifying
        officers and I are responsible for establishing and maintaining disclosure
        controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
        for the registrant and have:                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | The registrants other certifying
        officers and I have disclosed, based on our most recent evaluation, to
        the registrants auditors and the audit committee of registrants
        board of directors (or persons performing the equivalent function):                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | The registrants other certifying
        officers and I have indicated in this annual report whether or not there
        were significant changes in internal controls or in other factors that
        could significantly affect internal controls subsequent to the date of
        our most recent evaluation, including any corrective actions with regard
        to significant deficiencies and material weaknesses.



|                    | By: /s/ James H. Cotter                   
|------------------- | ------------------------------------------
|                    |                                           
|                    | James H. Cotter                           
|                    | President and Principal Accounting Officer
|Dated June 13, 2003 |                                           

23

---





SENSE TECHNOLOGIES INC.

REPORT AND FINANCIAL STATEMENTS

February 28, 2003 and 2002

(Stated in U.S. Dollars)





---

|TERRY AMISANO
      LTD. | AMISANO HANSON       
|------------------------ | ---------------------
|KEVIN HANSON,
      CA   | CHARTERED ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT

To the Shareholders,
  Sense Technologies Inc.

We have audited the accompanying balance sheets of Sense Technologies
  Inc. as of February 28, 2003 and 2002 and the related statements of loss, deficit,
  shareholders equity and cash flows for each of the years in the three
  year period ended February 28, 2003. 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 accounting principles
  generally accepted in the 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 audit provides
  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, 2003 and 2002 and the results of its operations and its cash flows for each
  of the years in the three year period ended February 28, 2003, 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 29, 2003      | Chartered Accountants



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

---

SENSE TECHNOLOGIES INC.BALANCE SHEETS
  February 28, 2003 and 2002(Stated in U.S. Dollars)

|ASSETS                                                        |   | 2003       |   |   | 2002       |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                              |   |            |   |   |            |  
|Current                                                       |   |            |   |   |            |  
|Cash                                                          | $ | 4,976      |   | $ | 268,339    |  
|Accounts receivable  Note 9                                  |   | 64,575     |   |   | 1,695      |  
|Inventory                                                     |   | 920,280    |   |   | 1,105,494  |  
|Prepaids                                                      |   | 30,652     |   |   | 22,276     |  
|                                                              |   |            |   |   |            |  
|                                                              |   | 1,020,483  |   |   | 1,397,804  |  
|Capital assets  Note 3                                       |   | 61,532     |   |   | 74,656     |  
|Intangible assets  Note 4                                    |   | 142,822    |   |   | 140,910    |  
|                                                              |   |            |   |   |            |  
|                                                              | $ | 1,224,837  |   | $ | 1,613,370  |  
|LIABILITIES                                                   |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|Current                                                       |   |            |   |   |            |  
|Accounts payable 
      Notes 5 and 9                        | $ | 757,922    |   | $ | 190,919    |  
|Advance payable                                               |   | 20,000     |   |   | -          |  
|Current portion of convertible
      promissory notes payable |   |            |   |   |            |  
| Note 6                                                      |   | 1,863,000  |   |   | 830,000    |  
|                                                              |   |            |   |   |            |  
|                                                              |   | 2,640,922  |   |   | 1,020,919  |  
|Convertible promissory notes payable 
      Note 6           |   | 25,000     |   |   | 496,000    |  
|                                                              |   |            |   |   |            |  
|                                                              |   | 2,665,922  |   |   | 1,516,919  |  
|STOCKHOLDERS' EQUITY (DEFICIENCY)                             |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|Common stock  Notes 7 and 14                                 |   | 7,497,128  |   |   | 7,486,628  |  
|Common stock subscribed  Note 7                              |   | 51,500     |   |   | -          |  
|Promissory note receivable  Note 8                           |   | (585,000   | ) |   | (585,000   | )
|Additional paid-in capital                                    |   | 57,279     |   |   | 5,279      |  
|Deficit                                                       |   | (8,461,992 | ) |   | (6,810,456 | )
|                                                              |   |            |   |   |            |  
|                                                              |   | (1,441,085 | ) |   | 96,451     |  
|                                                              |   |            |   |   |            |  
|                                                              | $ | 1,224,837  |   | $ | 1,613,370  |  
|                                                              |   |            |   |   |            |  

Nature of Operations  Note 1 
  Commitments  Notes 4, 7 and 11 
  Subsequent Events  Note 14

APPROVED BY THE DIRECTORS:

|Bruce E. Schreiner                   | Cynthia Schroeder                   
|-------------------------------------- | --------------------------------------
|----------------------------, Director | ----------------------------, Director

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.STATEMENTS OF LOSS
  for the years ended February 28, 2003, 2002 and 2001(Stated in U.S. Dollars)

|                                              |   | 2003       |   |   | 2002        |   |   | 2001       |  
|--------------------------------------------- | - | ---------- | - | - | ----------- | - | - | ---------- | -
|                                              |   |            |   |   |             |   |   |            |  
|Sales  Note 9                                | $ | 290,703    |   | $ | 72,411      |   | $ | 44,547     |  
|Direct costs  Schedule 1                     |   | 324,380    |   |   | 156,055     |   |   | 152,189    |  
|                                              |   |            |   |   |             |   |   |            |  
|Gross loss                                    |   | (33,677    | ) |   | (83,644     | ) |   | (107,642   | )
|                                              |   |            |   |   |             |   |   |            |  
|Expenses                                      |   |            |   |   |             |   |   |            |  
|Advertising and marketing  Note
      9      |   | 132,844    |   |   | 117,820     |   |   | 145,548    |  
|Amortization                                  |   | 22,030     |   |   | 83,448      |   |   | 79,269     |  
|Automobile                                    |   | -          |   |   | 19,913      |   |   | 14,752     |  
|Bad debts                                     |   | 9,459      |   |   | -           |   |   | -          |  
|Consulting fees  Note 9                      |   | 19,584     |   |   | 217,623     |   |   | 364,670    |  
|Filing fees                                   |   | 14,344     |   |   | 8,902       |   |   | 19,957     |  
|Insurance                                     |   | 46,588     |   |   | 30,933      |   |   | 31,242     |  
|Interest and bank charges  Note
      9      |   | 4,242      |   |   | 765         |   |   | 619        |  
|Interest on long-term debt                    |   | 176,401    |   |   | 159,498     |   |   | 87,237     |  
|Investor relations                            |   | -          |   |   | 10,000      |   |   | -          |  
|Legal and accounting fees                     |   | 281,371    |   |   | 104,666     |   |   | 123,988    |  
|Management fees  Note 9                      |   | -          |   |   | -           |   |   | 240,000    |  
|Office and miscellaneous                      |   | 32,159     |   |   | 35,239      |   |   | 25,361     |  
|Rent                                          |   | 37,574     |   |   | 54,596      |   |   | 29,942     |  
|Repairs and maintenance                       |   | 2,013      |   |   | -           |   |   | -          |  
|Shareholder information and printing          |   | 19,474     |   |   | 8,600       |   |   | 10,355     |  
|Telephone and utilities                       |   | 18,534     |   |   | 16,623      |   |   | 8,202      |  
|Transfer agent fees                           |   | 11,990     |   |   | 6,949       |   |   | 4,381      |  
|Travel                                        |   | 72,721     |   |   | 118,200     |   |   | 122,219    |  
|Wages and benefits  Note 9                   |   | 323,222    |   |   | 306,358     |   |   | 73,206     |  
|                                              |   |            |   |   |             |   |   |            |  
|                                              |   | 1,224,550  |   |   | 1,300,133   |   |   | 1,380,948  |  
|                                              |   |            |   |   |             |   |   |            |  
|Loss before other items                       |   | (1,258,227 | ) |   | (1,383,777  | ) |   | (1,488,590 | )
|Other items:                                  |   |            |   |   |             |   |   |            |  
|Non-cash compensation charge                  |   | (52,000    | ) |   | -           |   |   | -          |  
|Write-off of inventory                        |   | (201,496   | ) |   | -           |   |   | -          |  
|Gain on write-off of accounts payable         |   | -          |   |   | -           |   |   | 2,178      |  
|Provision for accrued interest receivable     |   | (52,650    | ) |   | (212,981    | ) |   | -          |  
|Other income                                  |   | 31,700     |   |   | 21,439      |   |   | -          |  
|License fees  Notes 4 and 9                  |   | (170,790   | ) |   | (126,199    | ) |   | -          |  
|Interest income  Note 9                      |   | 52,665     |   |   | 59,912      |   |   | 74,194     |  
|Foreign exchange gain (loss)                  |   | (738       | ) |   | 10,714      |   |   | (15,361    | )
|                                              |   |            |   |   |             |   |   |            |  
|Net loss for the year                         | $ | (1,651,536 | ) | $ | (1,630,892) |   | $ | (1,427,579 | )
|                                              |   |            |   |   |             |   |   |            |  
|Basic and diluted loss per share              | $ | (0.23      | ) | $ | (0.27       | ) | $ | (0.25      | )
|                                              |   |            |   |   |             |   |   |            |  
|Weighted average number of shares outstanding |   | 7,021,718  |   |   | 6,002,242   |   |   | 5,779,093  |  
|                                              |   |            |   |   |             |   |   |            |  

SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.STATEMENTS OF DEFICIT
  for the years ended February 28, 2003 and 2002(Stated in U.S. Dollars)

|                           |   | 2003       |   |   | 2002       |  
|-------------------------- | - | ---------- | - | - | ---------- | -
|                           |   |            |   |   |            |  
|Deficit, beginning of year | $ | (6,810,456 | ) | $ | (5,179,564 | )
|                           |   |            |   |   |            |  
|Net loss for the year      |   | (1,651,536 | ) |   | (1,630,892 | )
|                           |   |            |   |   |            |  
|Deficit, end of year       | $ | (8,461,992 | ) | $ | (6,810,456 | )
|                           |   |            |   |   |            |  









SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.STATEMENTS OF CASH FLOWS
  for the years ended February 28, 2003, 2002 and 2001(Stated in U.S. Dollars)

|                                                |   | 2003       |   |   | 2002       |   |   | 2001       |  
|----------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|Operating Activities                            |   |            |   |   |            |   |   |            |  
|Net loss for the year                           | $ | (1,651,536 | ) | $ | (1,630,892 | ) | $ | (1,427,579 | )
|Add (deduct) items not involving cash:          |   |            |   |   |            |   |   |            |  
|Non-cash
      compensation charge              |   | 52,000     |   |   | -          |   |   | -          |  
|Write-off
      of inventory                    |   | 201,496    |   |   | -          |   |   | -          |  
|Amortization                                    |   | 22,030     |   |   | 83,448     |   |   | 79,269     |  
|Amortization
      of license fees              |   | -          |   |   | 90,508     |   |   | 89,816     |  
|Write-down
      of inventory                   |   | -          |   |   | -          |   |   | 4,480      |  
|Gain
      on write-off of accounts payable     |   | -          |   |   | -          |   |   | (2,178     | )
|Changes in non-cash working capital balances    |   |            |   |   |            |   |   |            |  
|related to operations:                          |   |            |   |   |            |   |   |            |  
|Accounts
      receivable                       |   | (62,880    | ) |   | 106,809    |   |   | 129,343    |  
|Accrued
      interest receivable               |   | -          |   |   | 160,330    |   |   | (52,651    | )
|Advance
      receivable                        |   | -          |   |   | 25,000     |   |   | (25,000    | )
|Inventory                                       |   | (16,282    | ) |   | (7,895     | ) |   | (85,944    | )
|Prepaids                                        |   | (8,376     | ) |   | 500        |   |   | (10,901    | )
|Accounts
      payable                          |   | 577,503    |   |   | 87,127     |   |   | 166,274    |  
|                                                |   |            |   |   |            |   |   |            |  
|Cash used in operating activities               |   | (886,045   | ) |   | (1,085,065 | ) |   | (1,135,071 | )
|                                                |   |            |   |   |            |   |   |            |  
|Financing Activities                            |   |            |   |   |            |   |   |            |  
|Proceeds from issuance of common stock          |   | -          |   |   | 1,096,950  |   |   | 3,777      |  
|Proceeds from issuance of (redemption
      of) |   |            |   |   |            |   |   |            |  
|convertible promissory
      notes payable      |   | 582,000    |   |   | (200,000   | ) |   | 1,500,000  |  
|Proceeds from common share subscriptions        |   | 51,500     |   |   | -          |   |   | -          |  
|                                                |   |            |   |   |            |   |   |            |  
|Cash provided by financing activities           |   | 633,500    |   |   | 896,950    |   |   | 1,503,777  |  
|                                                |   |            |   |   |            |   |   |            |  
|Investing Activities                            |   |            |   |   |            |   |   |            |  
|Acquisition of capital assets                   |   | (8,906     | ) |   | (64,274    | ) |   | (133,156   | )
|Intangible assets                               |   | (1,912     | ) |   | (2,753     | ) |   | (3,146     | )
|Deposit on software                             |   | -          |   |   | -          |   |   | 127,500    |  
|                                                |   |            |   |   |            |   |   |            |  
|Cash used in investing activities               |   | (10,818    | ) |   | (67,027    | ) |   | (8,802     | )
|                                                |   |            |   |   |            |   |   |            |  
|Increase (decrease) in cash during the year     |   | (263,363   | ) |   | (255,142   | ) |   | 359,904    |  
|                                                |   |            |   |   |            |   |   |            |  
|Cash and cash equivalents, beginning of year    |   | 268,339    |   |   | 523,481    |   |   | 163,577    |  
|                                                |   |            |   |   |            |   |   |            |  
|Cash and cash equivalents, end of year          | $ | 4,976      |   | $ | 268,339    |   | $ | 523,481    |  
|                                                |   |            |   |   |            |   |   |            |  

/Contd.

SEE ACCOMPANYING NOTES

---

|SENSE TECHNOLOGIES INC.                              | Continued
|---------------------------------------------------- | ---------
|STATEMENTS OF CASH FLOWS                             |          
|for the years ended February 28, 2003, 2002 and 2001 |          
|(Stated in U.S. Dollars)                             |          

|                                     |   | 2003   |  |   | 2002   |  |   | 2001   | 
|------------------------------------ | - | ------ |  | - | ------ |  | - | ------ | 
|Supplementary cash flow information: |   |        |  |   |        |  |   |        | 
|Cash paid for                        |   |        |  |   |        |  |   |        | 
|Interest                             | $ | 17,045 |  | $ | 77,398 |  | $ | 47,860 | 
|                                     |   |        |  |   |        |  |   |        | 
|Taxes                                | $ | -      |  | $ | -      |  | $ | -      | 
|                                     |   |        |  |   |        |  |   |        | 
|Non-cash Transactions  Note 12      |   |        |  |   |        |  |   |        | 







SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.STATEMENT OF STOCKHOLDERS EQUITY
  for the years ended February 28, 2003, 2002 and 2001(Stated in U.S. Dollars)



SEE ACCOMPANYING NOTES

---

|SENSE TECHNOLOGIES INC.                                                 | Schedule 1
|----------------------------------------------------------------------- | ----------
|SCHEDULE OF DIRECT COSTS                                                |           
|for the years ended February 28, 2003, 2001 and February
      29, 2000 |           
|(Stated in U.S. Dollars)                                                |           

|                             |   | 2003    |  |   | 2002    |  |   | 2001    | 
|---------------------------- | - | ------- |  | - | ------- |  | - | ------- | 
|Direct costs                 |   |         |  |   |         |  |   |         | 
|Amortization of license fees | $ | -       |  | $ | 90,508  |  | $ | 89,816  | 
|Cost of sales                |   | 131,977 |  |   | 32,986  |  |   | 24,392  | 
|Equipment rental             |   | -       |  |   | -       |  |   | 7,299   | 
|Freight and customs          |   | -       |  |   | -       |  |   | 8,856   | 
|Manufacturing expenses       |   | 183,193 |  |   | 29,381  |  |   | 13,146  | 
|Product testing              |   | -       |  |   | -       |  |   | 491     | 
|Royalties  Notes 9 and 11   |   | 9,210   |  |   | 3,180   |  |   | 3,709   | 
|Write-down of inventory      |   | -       |  |   | -       |  |   | 4,480   | 
|                             |   |         |  |   |         |  |   |         | 
|                             | $ | 324,380 |  | $ | 156,055 |  | $ | 152,189 | 
|                             |   |         |  |   |         |  |   |         | 







SEE ACCOMPANYING NOTES

---

SENSE TECHNOLOGIES INC.NOTES TO THE FINANCIAL STATEMENTS
  February 28, 2003 and 2002(Stated in U.S. Dollars)

|Note 1 | Nature of Operations
      The Company holds an exclusive license to manufacture,
        distribute, market and sublicense, on a world-wide basis, a patented technology
        which is used to produce a backup 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. The Company has accumulated a deficit of $8,461,992 since
        inception and has a working capital deficiency of $1,620,439 at February
        28, 2003. 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.
      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 | 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 judgement. 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 2

|Note 2 | Significant Accounting Policies (contd)
|------ | ----------------------------------------
|       |                                         
|       | b)                                      

| |                        |   | 2003    |  |   | 2002      | 
| | ---------------------- | - | ------- |  | - | --------- | 
| |                        |   |         |  |   |           | 
| | Manufacturing supplies | $ | 57,872  |  | $ | -         | 
| | Component parts        |   | 761,067 |  |   | 1,105,494 | 
| | Finished goods         |   | 101,342 |  |   | -         | 
| |                        |   |         |  |   |           | 
| |                        | $ | 920,280 |  | $ | 1,105,494 | 
| |                        |   |         |  |   |           | 

| | 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 an effective dividend or capital withdrawal.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                       
| | d) | Capital Assets and Amortization
      Capital assets are recorded at cost. Amortization is
        provided using the declining balance method at the following rates:                                                                                                                                                                

| | Computer equipment      | 30%  | 
| | ----------------------- | ---- | 
| | Computer software       | 100% | 
| | Furniture and fixtures  | 20%  | 
| | Manufacturing equipment | 30%  | 

| |    | Capital asset additions during the year are amortized at one-half rates.                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 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 re-assessing
        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.

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 3

|Note 2 | Significant Accounting Policies (contd)
|------ | ----------------------------------------
|       |                                         
|       | e)                                      

| |                                     |   | 2003       |   |   | 2002       |   |   | 2001       |  
| | ----------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                     |   |            |   |   |            |   |   |            |  
| | Net loss as reported                | $ | (1,651,536 | ) | $ | (1,630,892 | ) | $ | (1,427,579 | )
| | Add back amortization of license    |   |            |   |   |            |   |   |            |  
| | fees                                |   | -          |   |   | 90,508     |   |   | 89,816     |  
| |                                     |   |            |   |   |            |   |   |            |  
| | As adjusted                         | $ | (1,651,536 | ) | $ | (1,540,384 | ) | $ | (1,337,763 | )
| |                                     |   |            |   |   |            |   |   |            |  
| | Basic and diluted loss per share as |   |            |   |   |            |   |   |            |  
| | reported                            | $ | (0.23      | ) | $ | (0.27      | ) | $ | (0.25      | )
| |                                     |   |            |   |   |            |   |   |            |  
| | As adjusted                         | $ | (0.23      | ) | $ | (0.26      | ) | $ | (0.23      | )
| |                                     |   |            |   |   |            |   |   |            |  

| | f) | Foreign Currency Translation
      The functional 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.

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 4

|Note 2 | Significant Accounting Policies (contd)
|------ | ----------------------------------------
|       |                                         
|       | h)                                      
|       |                                         
|       | i)                                      
|       |                                         
|       | j)                                      
|       |                                         
|       | k)                                      
|       |                                         
|       | l)                                      
|       |                                         
|Note 3 | Capital Assets                          

| |                         |   |         |  |   | 2003         |  |   |        |  |   | 2002   | 
| | ----------------------- | - | ------- |  | - | ------------ |  | - | ------ |  | - | ------ | 
| |                         |   |         |  |   |              | 
| |                         |   |         |  |   | Accumulated  |  |   |        |  |   |        | 
| |                         |   | Cost    |  |   | Amortization |  |   | Net    |  |   | Net    | 
| |                         |   |         |  |   |              |  |   |        |  |   |        | 
| | Computer equipment      | $ | 38,297  |  | $ | 27,132       |  | $ | 11,165 |  | $ | 15,951 | 
| | Furniture and fixtures  |   | 25,108  |  |   | 7,034        |  |   | 18,074 |  |   | 12,573 | 
| | Manufacturing equipment |   | 54,274  |  |   | 21,981       |  |   | 32,293 |  |   | 46,132 | 
| |                         |   |         |  |   |              |  |   |        |  |   |        | 
| |                         | $ | 117,679 |  | $ | 56,147       |  | $ | 61,532 |  | $ | 74,656 | 
| |                         |   |         |  |   |              |  |   |        |  |   |        | 

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 5

|Note 4 | Intangible Assets
      License Fees
|------ | ------------------------------------

| | Acquisition Consideration:                        |   | 2003     |   |   | 2002     |  
| | ------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                   |   |          |   |   |          |  
| | Issuance of 5,220,190 escrow shares  at $ 0.01   | $ | 36,088   |   | $ | 36,088   |  
| | Issuance of 66,628 common shares on conversion of |   |          |   |   |          |  
| | promissory note payable                           |   | 416,365  |   |   | 416,365  |  
| |                                                   |   |          |   |   |          |  
| |                                                   |   | 452,453  |   |   | 452,453  |  
| | Less: accumulated amortization                    |   | (317,442 | ) |   | (317,442 | )
| |                                                   |   |          |   |   |          |  
| |                                                   | $ | 135,011  |   | $ | 135,011  |  
| |                                                   |   |          |   |   |          |  

| | 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 dated January 16, 1992 to manufacture, market and
        distribute a microwave radar collision avoidance device for motor vehicles
        in consideration for the following:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

Sense Technologies Inc.
  Notes to the Financial Statements
  February 28, 2003  Page 6

|Note 4 | Intangible Assets  (contd)
|------ | ----------------------------
|       |                             
|       | v)                          
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       | vi)                         
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       |                             
|       | vii)                        
|       |                             
|       | viii)                       

---

Sense Technologies Inc.
  Notes to the Financial Statements
  February 28, 2003  Page 7

|Note 5 | Accounts Payable
|------ | ----------------

| |                          |   | 2003    |  |   | 2002    | 
| | ------------------------ | - | ------- |  | - | ------- | 
| |                          |   |         |  |   |         | 
| | Trade payables           | $ | 244,050 |  | $ | 51,646  | 
| | Accrued fees             |   | 725,220 |  |   | 9,673   | 
| | Accrued payroll          |   | 19,695  |  |   | -       | 
| | Accrued interest payable |   | 269,935 |  |   | 110,579 | 
| | Accrued royalty payable  |   | 180,000 |  |   | -       | 
| | Accrued taxes payable    |   | 19,022  |  |   | 19,022  | 
| |                          |   |         |  |   |         | 
| |                          | $ | 757,022 |  | $ | 190,919 | 
| |                          |   |         |  |   |         | 

|Note 6 | Convertible Promissory Notes Payable
|------ | ------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   | 2003       |   |   | 2002      |  
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | - | - | --------- | -
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   |            |   |   |           |  
| | Promissory notes payable are due to
        shareholders of the Company bearing interest at 10% per annum and are
        due at various dates ranging from August 8, 2002 to August 31, 2005. Each
        of the notes entitles the holder thereof up to the end of the term of
        the note to convert all or part of the principal portion of the note as
        well as accrued interest thereon into common shares of the Company at
        various prices ranging from $0.40 to $5.40 per share. Certain notes have
        matured as a February 28, 2003 and the Company is negotiating extension
        agreements. Certain of these notes are secured by a charge over inventory. |  | $ | 1,888,000  |   | $ | 1,326,000 |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   |            |   |   |           |  
| | Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   | (1,863,000 | ) |   | ( 830,000 | )
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   |            |   |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $ | 25,000     |   | $ | 496,000   |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   |            |   |   |           |  

|Note 7 | Common Stock  Note 14
|------ | ----------------------
|       |                       
|       | a)                    
|       |                       
|       | b)                    

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 8

|Note 7 | Common Stock  Note 14  (contd)
|------ | ---------------------------------
|       |                                  
|       | c)                               

| |                                                      | February 28, 2003 |  
| | ---------------------------------------------------- | ----------------- | -
| |                                                      |                   |  
| |                                                      |                   |  
| |                                                      | Optioned          |  
| |                                                      | Shares            |  
| |                                                      |                   |  
| | Outstanding, beginning of year                       | 1,385,000         |  
| | Granted                                              | 1,750,000         |  
| | Less: common stock purchase options not
      vested | (325,000          | )
| | Cancelled                                            | (580,000          | )
| |                                                      |                   |  
| | Outstanding and exercisable at end of year           | 2,230,000         |  
| |                                                      |                   |  
| |                                                      |                   |  
| |                                                      | February 28, 2002 |  
| |                                                      |                   |  
| |                                                      |                   |  
| |                                                      | Optioned          |  
| |                                                      | Shares            |  
| |                                                      |                   |  
| | Outstanding, beginning of year                       | 960,000           |  
| | Granted                                              | 1,570,000         |  
| | Cancelled                                            | (945,000          | )
| | Exercised                                            | (200,000          | )
| |                                                      |                   |  
| | Outstanding and exercisable at end of year           | 1,385,000         |  
| |                                                      |                   |  

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 9

|Note 7 | Common Stock  Note 14  (contd)
|------ | ---------------------------------
|       |                                  
|       | c)                               

| |                                            | February 28, 2001 |  
| | ------------------------------------------ | ----------------- | -
| |                                            |                   |  
| |                                            |                   |  
| |                                            | Optioned          |  
| |                                            | Shares            |  
| |                                            |                   |  
| | Outstanding, beginning of year             | 110,000           |  
| | Granted                                    | 855,000           |  
| | Exercised                                  | (5,000            | )
| |                                            |                   |  
| | Outstanding and exercisable at end of year | 960,000           |  
| |                                            |                   |  

| | At February 28, 2003, the following employee and
        director common share purchase options were outstanding and exercisable
        entitling the holders thereof the right to purchase one common share for
        each share purchase option held:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|          |  | Exercise | Expiry            
|--------- |  | -------- | ------------------
|Number    |  | Price    | Date              
|          |  |          |                   
|10,000    |  | $1.03    | June 22, 2003     
|15,000    |  | $1.03    | June 25, 2004     
|25,000    |  | $1.03    | June 8, 2005      
|305,000   |  | $1.03    | August 4, 2005    
|25,000    |  | $1.03    | March 22, 2006    
|25,000    |  | $1.03    | January 8, 2006   
|550,000   |  | $2.30    | December 18, 2006 
|50,000    |  | $2.30    | January 10, 2007  
|75,000    |  | $1.00    | June 5, 2007      
|100,000   |  | $0.75    | September 26, 2007
|275,000   |  | $1.00    | February 1, 2008  
|100,000   |  | $1.00    | February 6, 2008  
|600,000   |  | $0.50    | February 6, 2008  
|25,000    |  | $1.00    | March 5, 2008     
|50,000    |  | $1.00    | June 6, 2008      
|          |  |          |                   
|2,230,000 |  |          |                   
|          |  |          |                   

| | 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 10

|Note 7 | Common Stock  Note 14  (contd)
|------ | ---------------------------------
|       |                                  
|       | c)                               

| |                                   |  | 2003         |   | 2002          |   | 2001          |  
| | --------------------------------- |  | ------------ | - | ------------- | - | ------------- | -
| |                                   |  |              |   |               |   |               |  
| | Net loss                          |  | $ (1,651,536 | ) | $ ( 1,630,892 | ) | $ ( 1,427,579 | )
| | Pro-forma adjustment for SFAS 123 |  | (764,000     | ) | (1,525,150    | ) | (5,001,805    | )
| |                                   |  |              |   |               |   |               |  
| | Pro-forma net loss                |  | $ (2,415,536 | ) | $ ( 3,156,042 | ) | $ ( 6,429,384 | )
| |                                   |  |              |   |               |   |               |  
| | Pro-forma net loss per share      |  | $ (0.34      | ) | $ (0.53       | ) | $ (1.11       | )
| |                                   |  |              |   |               |   |               |  

| | The fair value for these options was estimated at
        the date of the grant using the following weighted average assumption:
| | --------------------------------------------------------------------------------------------------------------------------------

| |                                      | 2003 |  | 2002 |  | 2001 | 
| | ------------------------------------ | ---- |  | ---- |  | ---- | 
| |                                      |      |  |      |  |      | 
| | Volatility factor of expected market |      |  |      |  |      | 
| | price of companys shares            | 173% |  | 118% |  | 53%  | 
| | Dividend yield                       | 0%   |  | 0%   |  | 0%   | 
| | Weighted average expected life of    |      |  |      |  |      | 
| | stock options                        | 5yrs |  | 5yrs |  | 5yrs | 
| | Risk-free interest rate              | 2%   |  | 6.5% |  | 5.5% | 

| | 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 11

|Note 8 | Promissory Note Receivable
      The promissory note in the principal amount of $585,000
        (2001: $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.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 9 | Related Party Transactions  Notes 6 and
        8
      The Company incurred the following items with directors,
        shareholders and companies with common directors and shareholders:                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                |   | 2003    |   |   | 2002    |   |   | 2001    |  
| | ------------------------------ | - | ------- | - | - | ------- | - | - | ------- | -
| |                                |   |         |   |   |         |   |   |         |  
| | Advertising and marketing      | $ | 72,249  |   | $ | -       |   | $ | -       |  
| | Consulting fees                | $ | 6,346   |   | $ | -       |   | $ | 12,000  |  
| | Interest expense               | $ | 3,675   |   | $ | -       |   | $ | -       |  
| | Interest income                | $ | (52,650 | ) | $ | (54,736 | ) | $ | (52,650 | )
| | Licence fees                   | $ | 170,790 |   | $ | 126,199 |   | $ | -       |  
| | Management fees                | $ | -       |   | $ | -       |   | $ | 240,000 |  
| | Provision for accrued interest |   |         |   |   |         |   |   |         |  
| | receivable                     | $ | 52,650  |   | $ | 212,981 |   | $ | -       |  
| | Royalty expense                | $ | 9,210   |   | $ | 3,180   |   | $ | 3,710   |  
| | Sales                          | $ | (68,435 | ) | $ | (72,411 | ) | $ | (44,547 | )
| | Wages and benefits             | $ | 153,228 |   | $ | -       |   | $ | -       |  

|        | The above noted items were measured by the exchange
        amount which is the amount agreed upon by transacting parties.
      As at February 28, 2003, included in accounts receivable
        is $38,237 (2002: $Nil) due from a company with a common shareholder.
      As at February 28, 2003, included in accounts payable
        is $69,985 (2002: $Nil) owing to directors, companies with common directors
        and a shareholder with respect to unpaid fees, purchases and expenses
        and $180,000 (2002: $Nil) owing to shareholders in respect of royalties
        payable.
      As at February 28, 2003, included in convertible promissory
        notes payable is $77,000 (2002: $Nil) due to directors.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 10 | 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:                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 12

|Note 10 | Corporation Income Tax Loss Carry-Forwards  (contd)
|------- | -----------------------------------------------------

| | Deferred tax assets                               |   |            |  
| | ------------------------------------------------- | - | ---------- | -
| | Net operating loss carryforwards                  | $ | 2,768,400  |  
| | Valuation allowance for deferred tax
      assets |   | (2,768,400 | )
| |                                                   |   |            |  
| | Net deferred tax assets                           | $ | -          |  
| |                                                   |   |            |  

|        | 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, 2003, the Company
        had net operating loss carryforwards of approximately $6,921,000 for federal
        income tax purposes. These carryforwards, if not utilized to offset taxable
        income, begin to expire in 2004.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 11 | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | 2004 | $ | 25,875 | 
| | ---- | - | ------ | 
| | 2005 |   | 26,413 | 
| | 2006 |   | 8,971  | 
| |      |   |        | 
| |      | $ | 61,259 | 
| |      |   |        | 

|Note 12 | 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, 2003, the Company
        issued 10,000 common shares at $1.05 per share pursuant to an agreement
        to settle debt totalling $10,500.
      During the year ended February 28, 2002, the Company
        issued 59,406 common shares at $4.04 per share pursuant to agreements
        to settle debt totalling $240,000.

---

Sense Technologies Inc.
  Notes to the Financial Statements 
  February 28, 2003  Page 13

|Note 12 | Supplemental Cash Flow Disclosures (contd)
      During the year ended February 28, 2001:                                                                                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                          
|        | i)                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                          
|        | ii)                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                          
|Note 13 | Major Customer
      One customer of Sense Technologies Inc. accounted for
        approximately 24% of the sales for the year ended February 28, 2003. This
        customer had a balance of approximately $38,200 in accounts receivable
        at February 28, 2003.
|        |                                                                                                                                                                                                                                                                          
|Note 14 | Subsequent Events
      Subsequent to February 28, 2003:                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                          
|        | -                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                          
|        | -                                                                                                                                                                                                                                                                        

---