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Number: 3235-0420
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hours per response . .. . . 1646 UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-KSB [X] ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
endedFebruary 29, 2008 [   ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the transition
period from _________________ to ____________________ 000-29990(Commission file number) SENSE TECHNOLOGIES INC.(Name of small business issuer in its charter) British Columbia
90010141(State or other jurisdiction of
(I.R.S. Employerincorporation or organization)
Identification No.)2535 N. Carleton Avenue, Grand
Island, Nebraska
68803(Address of principal executive
offices)
(Zip Code) Issuers telephone
number: (308) 381-1355 Securities
registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act: Common Stock Check whether the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
[   ] Check whether the issuer (1)
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]   No [   ] Check if there is no disclosure
of delinquent filers in response to Item 405 of Regulation S-B is contained, and
will not be contained, to the best of the registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [   ] Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes [   ] No [X] State issuers revenues for its
most recent fiscal year: US$75,545 As of July 7, 2008, the aggregate
market value of the voting common equity held by non-affiliates of the
registrant was US$2,300,755, 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 form this calculation as
such persons may be considered to be affiliated with the Company As of July 7, 2008, the
Registrants outstanding common stock consisted of 50,904,651 shares. 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  8A Controls and Procedures  8B Other Information  III 9 Directors, Executive
Officers, Promoters, Control Persons and Corporate Governance; 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  IV 13 Exhibits  14 Principal Accountant
Fees and Services  Signatures  Financial Statements


SENSE TECHNOLOGIES INC. FORM 10-KSB   Note Regarding Forward Looking
Statements  This Form 10-KSB contains forward-looking
statements, which may be identified as statements containing, including without
limitation, the words believes, anticipates, intends, expects or similar words.
 These statements are based on our belief as well as assumptions we made
using information currently available to us.  Because these statements
reflect our current views concerning future events, these statements involve
risks, uncertainties and assumptions.  Actual future results may differ
significantly from the results discussed in the forwards-looking statements.
 Some, but not all, of the factors that may cause these differences
include:  risks related to political and economic uncertainties; risks
related to the implementation of our new business strategy; our ability to
obtain financing on acceptable terms; competition in the automotive sensing
device industry; our ability to obtain widespread acceptance of our sensing
devices in the automotive industry; our ability to manage growth; our ability to
protect our intellectual property rights; government regulation of the
automotive industry as it relates to use of sensing devices; and other
uncertainties described elsewhere herein. You should not place undue reliance on
these forward-looking statements.   PART I  Item 1.  Description of
Business  Overview  We develop and market automotive safety
devices that increase driver awareness of people or obstacles located in vehicle
blind spots.  Our two product lines consist of Guardian Alert® and
ScopeOut®.  Our Guardian Alert® product uses Doppler
radar technology to warn vehicle drivers of the presence of people or obstacles
in blind spots that exist behind their vehicles when backing up.  Marketing
of the product has been primarily to automobile and truck dealers, fleet
operators, and other after-market automotive industry participants.  The
Company began manufacturing the Guardian Alert® Doppler Awareness System for the
passenger car market during the first quarter of fiscal 2003. We are expending
marketing efforts to increase our presence in the fleet vehicle market,
passenger car aftermarket and additional new channels.  Changes in our
management, business plan and the need for additional financing has delayed our
marketing and sales plans for the product.  In addition, we require
additional funding to continue with development of the product.  In 2004, we acquired the worldwide rights
to market and sell the ScopeOut® product.  ScopeOut® is a system of
specially designed mirrors which are placed at specific points on automobiles,
trucks, sport utility vehicles or commercial vehicles to offer drivers a more
complete view behind the vehicle.  Drivers using the product are able to
have increased visibility when backing out of parking spaces or garages, and
have additional protection from blind spots during lane changes in traffic.
 ScopeOut® is being marketed to department stores and other retailers as an
after-market automotive safety product, and is also available on-line at
www.sensetech.com.  Corporate History  Sense Technologies, Inc. (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.
 On November 15, 2007, we changed our jurisdiction of organization from the
Yukon Territory back to British Columbia.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page1______________________________________________________________________________________________________________    Our shares are currently quoted on the
Over-the-Counter Bulletin Board (OTCBB) under the trading symbol SNSG.OB.
 We were previously listed on the both the Canadian Venture Exchange (now
called the TSX Venture Exchange) and the Nasdaq SmallCap Market.  We
voluntarily delisted our shares from the Canadian Venture Exchange on October 3,
2001.  On April 25, 2002 our stock was delisted from the Nasdaq Small Cap
Market as we were unable to meet quantitative listing requirements.  Our administrative office is located at
2535 N. Carleton Avenue, Grand Island, Nebraska.  Industry Overview  We compete in the automotive backing
awareness and safety industry. Our products are designed to protect people from
death or injury and property from damage that can result from a collision with a
vehicle that is backing up or changing lanes.  In those circumstances,
vehicles have blind spots that limit the ability of the operator to see
obstacles or people that are towards the rear or behind the vehicle.  This
has repeatedly resulted in death, injury and property damage, which has in turn
prompted several companies to develop and manufacture backing awareness sensing
products. The National Highway Traffic Safety Administration reported that
approximately 400 people die in the United States annually from accidents
involving vehicles backing up.  In addition, property damage and personal
injury claims resulting from back-up accidents all suggest a market need for
backing awareness safety devices.  While there are no known products that are
similar to our ScopeOut® product, there are a number of backing awareness
products available that compete with our Guardian Alert® product.  Various backing awareness products are
currently being installed by automobile manufacturers and dealers as optional
equipment on consumer and commercial vehicles. However, backing awareness
products can range in sophistication and effectiveness.  Such products
include loud beeping alerts that sound when a vehicle is placed in reverse gear.
 A beeping alert is limited in effectiveness as it does not notify the
driver of obstacles behind the vehicle.  Young children up to four years
old typically do not have the capacity to understand what the beeping noise
means or to understand the possibility of injury from remaining behind a
reversing vehicle.  Other awareness products include large round convex
mirrors placed at the rear of a vehicle which provide the driver with a line of
vision across the rear area of their vehicle.  These devices can be
effective for a small class of vehicles such as delivery vans, however are not
practical for most consumer or commercial vehicles due to their size and need
for training.  There are also backing awareness products,
including our Guardian Alert(® Doppler Awareness System product, that
use ultrasound and radar technologies to sense obstacles and people behind a
reversing vehicle.  These electronic sensing and alert systems will warn a
driver to the existence of obstacles behind a vehicle. Ultrasound backing
awareness products are currently being used by some automobile manufacturers as
a factory-installed option on certain new vehicle lines.  These products
are designed primarily to protect the vehicle from damage in parallel parking
situations.  They are designed to detect the bumper of another vehicle when
parking and accordingly will typically not detect obstacles below ten inches
from the ground.  These sensors must be kept clear of dirt and dust in
order to ensure proper functioning.  The system requires that four
ultrasonic sensors be placed at various locations on the rear bumper.  The
sensors extend through the skin of the bumper, thereby changing the appearance
of the exterior of the vehicle.  Backing awareness systems also exist that
use pulse radar to detect obstacles.  These systems are installed on the
exterior of a vehicle thereby affecting aesthetics of the vehicle, and are
typically used for commercial vehicles.  Our Guardian Alert Product  Guardian Alert®  Our Guardian Alert® Doppler Awareness
System backing awareness products use a patented process based on Doppler radar
technology.  Our Doppler radar sensing products offer several advantages
over ultrasonic and pulse radar sensors.  The Guardian Alert® Doppler
Awareness System creates a three-dimensional awareness zone behind a vehicle
that extends from the rear of the vehicle outward for the width of the vehicle.
 Vertically, the awareness zone begins at ground level and rises up to
approximately five feet.  The operator of the vehicle is alerted should any
person or obstacle come within the awareness zone as the vehicle is reversing.
 The Guardian  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page2______________________________________________________________________________________________________________     Alert® Doppler Awareness System consists of
a single sensor that can be placed under the skin of a plastic bumper thereby
not altering the appearance of the vehicle.  We also have a number of other
product shapes and installation options to accommodate a wide
range of consumer and commercial vehicles. Our products are designed to be
robust and to operate in almost all weather and road conditions.  In
contrast to ultrasound and some other backing awareness products, our sensor
using the Doppler radar technology is not affected by dust, dirt, snow or other
environmental materials that can cover a sensor.  Our Guardian Alert® Doppler Awareness
System products are based on a patented system using Doppler radar technology.
 We acquired and hold worldwide rights to manufacture and sell the
system.  The Guardian Alert® Doppler Awareness
System consists of a radar transceiver, a flat antenna, a signal processor, and
an audio-visual display unit. The transceiver and antenna are enclosed in an
environmentally sealed, high impact resistant, resin housing and mounted on the
rear of the vehicle. When activated by placing the vehicle in reverse, the
transceiver continuously projects signals and the antenna receives return
signals reflected off of objects within the predefined awareness zone. Doppler
Shift technology is based on the principle that signals return on a slightly
different frequency than they are projected.  The relationship between the
phase of the projected signals and the returning signals is used by the product
to determine the distance between the rear of the vehicle and the object.
 The signal processor then sends a signal to the audio-visual display unit
typically located on the dashboard of the vehicle thereby alerting the vehicle
operator to the presence of a person or object.  The display unit informs
the operator about the presence of an obstacle via a sequence of green, yellow,
and red lights set to illuminate at preset distances such as twelve feet, five
feet and three feet.  In conjunction with the visual alarm, the audio alarm
alerts the driver at corresponding distances with a pulsating tone changing to a
constant tone.  The visual display is approximately the size of a small box
of matches.  The external units are produced by us using
various suppliers.  The external units can be manufactured in various
shapes to suit a wide variety of vehicles.  For example, we produce a
trailer hitch mount version which fits directly into the receiver on a trailer
hitch when not towing.  We also produce a version that is mounted under the
skin of a plastic bumper in order that the esthetics of a vehicle are not
affected.  Our distribution partner has developed six design options
ranging from a license plate mount, to sensors protected by steel casings for
commercial applications.  The focus of our current business strategy
is the commercialization of our Guardian Alert® Doppler Awareness Systemproducts.  There are a number of product extensions and new
applications that we may develop in the future as we grow.  These products
include side blind spot awareness and docking aids for industrial safety and
velocity sensing applications.  Production of
our Guardian Alert®Doppler
Awareness System  We outsource the manufacture of the
components of our Guardian Alert® Doppler Awareness System.  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 in North Carolina.  We
currently believe that production of our products is more cost effective by
outsourcing the manufacturing and assembly of the components.  Market and Marketing of our Guardian
Alert® Doppler Awareness System  The end user of our Guardian Alert® Doppler
Awareness System product is the safety conscious vehicle owner
or operator seeking to minimize the risk of loss associated with backing
accidents.  Users of backing awareness sensing products, may purchase the
product as a factory installed option from the vehicle manufacturer, purchase
the product after-market or directly from distributor for installation in
commercial or fleet vehicles, or purchase as an after-market consumer add-on to
their vehicle.    ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page3______________________________________________________________________________________________________________     Accordingly, the target market for our
Guardian Alert® Doppler Awareness Systemproduct can be identified as
follows: · Manufacturers of
vehicles, including cars, sport utility vehicles, light trucks, heavy vehicles
and equipment, and original equipment suppliers to these manufacturers. · Owners of commercial
fleet vehicles and government departments and agencies using fleet vehicles. · Consumer outlets of
after-market automotive accessories, including dealerships, automotive service
shops and automotive retailers, direct sales via the Internet and
infomercials.  The North American automotive manufacturers
segment has been growing consistently for the last several years beginning with
the emergence of the minivan 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 our products. Our
primary efforts will initially be focused on the mid to higher end of this
market that is expected to be less price sensitive and more interested in new
technologies. We are actively marketing to decision makers in the original
equipment market through manufacturers.  Our marketing emphasis has,
however, been to the higher margin market including dealerships and consumer
outlets.  Dealerships provide an opportunity to add our product to a
vehicle after it leaves the manufacturer, but before it is sold.  The 200 million vehicles currently on US
roads also provide a number of opportunities for marketing our backing awareness
products. There are also eight million large trucks owned by commercial
enterprises and approximately 4.5 million fleet vehicles on dealership service
plans, which provide a significant point of sale opportunity. Millions of
vehicles each year are repaired at collision centers, which could offer the
product in conjunction with the repair of a rear bumper. Additionally, most new
car warranties require regular oil changes, which are often performed at
dealerships. These visits will provide additional point of sale opportunities
for dealerships that are already stocked with Guardian Alert® Doppler Awareness
Systems.  Our product can result in economic benefit
as well as improved vehicle safety to fleet operators and consumers in these
markets. Based on our research and experience in the fleet market tells us that
fleet operators and risk managers place a greater emphasis on statistical
economic analysis than consumers. Equipping fleets of vehicles requires a
significant capital expenditure that needs to be evaluated relative to the fleet
owner's other needs and limited capital.  We believe that consumers weigh cost,
safety benefit to persons and property and aesthetic appeal in making a decision
to purchase a backing awareness product.  We believe that the products ease
of demonstration and high degree of functionality can provide a consumer with an
appreciation of the benefits in protection of property and person.  We
estimate the cost of a system installed on a consumer vehicle would generally
range from $300 to $700, which we believe would appeal to most new-vehicle
buyers that are interested in the safety and protection aspect of the product.
 In perspective, the cost of the product is less than typical insurance
deductibles and therefore avoiding one incident would allow the product to pay
for itself. In addition to actual repair cost, Guardian Alert ® Doppler
Awareness Systempurchasers also receive the benefit of saving the
considerable time and inconvenience of having their vehicle repaired and
processing insurance claims.  Our product can also be installed beneath the
plastic skin of a bumper, thereby not altering the appearance of the vehicle.  Sense has designed distinct pricing
strategies for each of its three primary markets according to the following
principles:  · The product should be
priced at a level readily acceptable to SUV and light truck purchasers; · Attractive margin must
be made available to OEMs and distribution partners; · Fleet products must
offer attractive ROI to owners; and · Margins to Sense will
increase faster with higher volume than higher pricing.  We believe our price points are somewhat
better than 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.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page4______________________________________________________________________________________________________________     Competition and Our Competitive
Advantages  The backing awareness industry includes
manufacturers of active sensing devices using ultrasonic, infrared and radar
technology to detect the presence of obstacles or persons behind a reversing
vehicle.  There are also a number of passive systems such as convex rear
cross-view mirrors, rearward facing television cameras and reversing sound
alerts.  While we compete with all backing awareness devices, we view our
primary source of competition as being in the active sensing market.
 Passive devices require driver training and are susceptible to driver
error as they do not actively warn a driver of the presence of obstacles or
people behind the vehicle.  We have identified seven competitors in the
active sensor market: Echo Vision, Hindsight 20/20, Bosch, Delphi, Valeo, Rostra
and Groenveld which is manufactured by Gintec LTD in Israel.  We believe the Guardian Alert® Doppler
Awareness System is superior to any competing technology in each active sensor
category.  Our system is the only patented Doppler radar device available.
 Among Doppler radar products, our Guardian Alert® Doppler Awareness System
is the only product that uses a single sensor, which we believe 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 emerged as a
factory installed option on some vehicle lines.  Due to the four precisely
tuned sensors and the in-bumper design requirements of these systems it is not
practical to install them outside of the factory on cars or light trucks. The
most important distinguishing characteristic between the Guardian Alert® Doppler
Awareness System and ultrasonic systems is that ultrasonic systems are designed
primarily to detect the bumper of another vehicle while parallel parking. They
do not provide coverage all of the way to the ground and therefore tend to offer
the vehicle operator a false sense of security. Additionally, since the sensors
cannot see through a bumper, the systems cannot be mounted behind the skin of
the bumper, which affects the aesthetic appearance of the vehicle.  We also believe our product has competitive
advantages over infrared systems as those systems require a clear line of site
with the obstacle in order to function properly, which means effectiveness may
diminish with environmental conditions such as dirt or bright light.  The infrared and ultra sonic technologies
were independently tested and evaluated along with a microwave radar system by
the U.S. Bureau of Mines (Bureau of Mines Circular/1986) in a study of back-up
driver's aid systems for mining vehicles. Infrared Systems were found to be the
least reliable for detecting objects in the rear blind area. Bright sunlight and
reflections from bright objects could trigger false alarms and their range
depends upon the reflectivity of the detected object. Also, the narrow beam
pattern necessitates the use of arrays of sensors to scan the desired zone,
increasing system cost and complexity and decreasing reliability. Furthermore,
both of the competitive technologies are to some degree affected by adverse
weather conditions such as rain, fog, snow, ice or wind. The Bureau of Mines
Study found that the microwave radar system was not affected by weather
conditions.  Our product is robust, uses a single sensor
that is not affected by most environmental conditions, and provides a full range
of detection behind the vehicle, including near ground level.   We
have also priced our product competitively or below most other competing
products.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page5______________________________________________________________________________________________________________     Our ScopeOut® Product  ScopeOut®  ScopeOut® is a system of specially designed
mirrors which are placed at specific points on automobiles, trucks, vans, sport
utility vehicles and commercial vehicles, to offer drivers a more complete view
of the blind spots located toward the rear of the vehicle.  Drivers are
able to have increased visibility when backing out of parking spaces or garages,
and have additional protection from blind spots during lane changes in
traffic.  ScopeOut®s high-tech aerodynamic mirrors help drivers see
approaching traffic and more easily detect a host of potential hazards behind
the vehicle that might otherwise be blocked from view.  This after-market automotive device
installs easily on vehicles within minutes, and it provides drivers with 270
degrees of rear visibility, allowing drivers to see a panoramic view behind
them. Two models are available, one for cars and one designed to fit most sport
utility vehicles, trucks, minivans, station wagons or hatchbacks. Either model
fits a wide variety of vehicles, can be installed with no special equipment, and
can be removed at any time without altering or damaging the vehicle.  We have an exclusive worldwide license
agreement to manufacture and market the ScopeOut® adjustable mirrors system. The
product is a stand-alone or complementary product to the existing Guardian
Alert® product line.  Production of our ScopeOut®
Product  All of our manufacturing and engineering is
being out-sourced to a firm located in Phoenix, Arizona.  The product is
ready for immediate commercial production and sales.  Market and Marketing of our ScopeOut®
Product  The potential market for ScopeOut® is
owners or operators of cars, vans, SUVs and trucks worldwide.   There
are over 200 million vehicles on the road at any given time, and 16 to 18
million new vehicles being built and sold each year.  In combination with
our Guardian Alert®, we have the only Surround Safety System that addresses
all the blind spots encountered around the rear of most vehicles at a cost that
permits us to set price points that are affordable for most consumers.  There are a number of ways to market this
product, either individually, or as a combination.  Marketing outlets include, but are not
limited to, the following:  · New and used
auto dealers · AAA
Insurance · AARP · Mass
merchandisers · Drugstore
chains · Insurance
companies · Rental car
companies · Electronics
stores · Supermarket
chains · Independent
auto aftermarket stores · OEM
market · Internet and
infomercials · QVC and
HSN  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page6______________________________________________________________________________________________________________     We are presently building a National
Representative Organization that will allow for our products to be introduced to
all the various markets.  Competition and Our Competitive
Advantages  Based on our research, we have found no
products comparable in pricing and design to ScopeOut® that addresses the hazard
created with vehicles backing out blind in parking lots and driveways, while
offering an additional lane-changing safety feature.  Our Patents, Trademarks &
Licenses  Patents & Trademarks  The following countries have granted patent
rights respecting the Guardian Alert® Doppler Awareness System backing awareness
system: United States, Canada, Australia, South Africa, Taiwan, the United
Kingdom, Korea and Japan.  The Guardian Alert® Doppler Awareness System is
a registered trademark.  We have also received a US Patent on our
trailer hitch mount sensor product that easily installs in the receiver-hitch on
any vehicle equipped with such a hitch. The ScopeOut®
product is generally covered by US Patent Numbers 6,715 893 and 6,799,857, with
various other patent applications currently pending, all of which are included
in the exclusive license agreement.  Licenses & Royalties  We hold non-exclusive worldwide rights to
develop, manufacture, market and license the Guardian Alert® Doppler Awareness
System technology and products.  We hold these rights pursuant various
license agreements with the 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.  Prior to 2004, the Company had held an
exclusive license and patent rights.  Under the terms and conditions of
maintaining the exclusive rights, the Company was 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.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page7______________________________________________________________________________________________________________      In order to retain the exclusive right to
manufacture, market and distribute the Guardian Alert, the Company had been
required, upon being assigned the license, to manufacture and sell various
minimum numbers of units by certain milestone dates.  As a result of not
being able to meet the minimum milestone requirements under the license
agreement, during the year ended February 28, 2004, the Company determined that
it did not wish to retain the exclusive right to manufacture, market and
distribute the Guardian Alert unit and ceased accruing the minimum royalty due
to the licensor. Any product sales subsequent to this date are considered to be
part of the minimum royalty until such time that amounts exceed the minimum
royalty accrued.  We entered into a sub-license agreement
with S&S Distributing, LLC of Elkhorn, Nebraska whereby S&S acquired
certain rights to develop market and distribute Guardian Alert® Doppler
Awareness System products in 1998, but it is no longer in effect.  The
sub-license agreement provided for certain minimum purchases of products from
Sense, and certain expenditure requirements for development and marketing.
 The sub-license also provided that any new versions of the sensing device
that are developed by S&S will be made available for manufacture and
distribution by Sense.  S&S is continuing to sell Sense units.  Pursuant to a consulting and engineering
agreement with Maple Consulting, we agreed to pay a royalty of $0.50 for each
Guardian Alert® Doppler Awareness System sold that was designed pursuant to the
agreement, up to a maximum of 200,000 units.  We hold a world-wide exclusive and
perpetual license with ScopeOut® products pursuant to a license agreement with
Palowmar Industries, LLC and Lowell Martinson.  Our ScopeOut® license called for $150,000
to be paid over two years (paid) along with a royalty of 10% of wholesale price
for each ScopeOut® unit sold, but not less than $2.00 per unit.  In order
to maintain the exclusive license for the ScopeOut® products, in accordance with
the license agreement with Palowmar Industries, LLC, we are required to pay
royalties to the licensor based on the following minimum quantities of units
sold:  (i) 30,000 units per year
beginning in years 1-2 (ii) 60,000 units per year
beginning in years 3-4 (iii) 100,000 units per year
beginning in years 5 and above.  We have not been able to pay the minimum
royalty requirement as noted above but we have accrued the required minimum
royalty annually and we have an agreement with the licensor to extend the
requirement for payment to September 1, 2008.  Governmental Approval  Because our Guardian Alert product is an
emitting device, the Federal Communications Commission (FCC) we were required to
obtain equipment authorization which was granted on October 31, 1995.  The
microwave signals emitted by the device can potentially interfere with radar
detectors and other existing emitting systems. All FCC tests have been completed
and a FCC certification in the name of Sense Technologies Inc. has been
obtained. There are no other material regulatory approvals required for Sense to
achieve its stated business objectives.  Employees  We currently have no employees.  We
have hired three independent consultants for purposes of marketing and selling
our ScopeOut® products.  Item 2.  Description of
Property  Sales inquiries for Guardian Alert®
products are being processed for Sense by Tim Goldsbury and Associates, Inc., at
Alhambra Plaza, 725 N. Hwy A-1-A, Jupiter, FL  33477, and for Scopeout® by
Lowell Martinson at the Sense offices at 4043 W. Kitty Hawk, Suite 7, Chandler,
AZ 85226.  Administration is handled from offices located at 2535 N
Carleton Avenue, Grand Island, Nebraska. Both the Florida and Nebraska office
spaces are provided to us at no cost.  We have determined that the value of
contributed premises to be insignificant.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page8______________________________________________________________________________________________________________      Item 3.  Legal Proceedings  To the best of our knowledge, there are no
legal actions pending, threatened or contemplated against us.  Item 4.  Submission of Matters to a
Vote of Security Holders  No matters were submitted to a vote of the
Companys shareholders during the fourth quarter of fiscal year 2008.         PART II  Item 5. Market for Common
and Preferred equity and Related Stockholder Matters  Market and Trading Price for Common
Shares  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 OTCBB for each quarter
within the last two fiscal years:  Quarter Ended
High
LowFebruary 29, 2008
$0.18
$0.06November 30, 2007
$0.20
$0.06August 31, 2007
$0.07
$0.03May 31, 2007
$0.07
$0.04February 28, 2007
$0.31
$0.04November 30, 2006
$0.35
$0.15August 31, 2006
$0.29
$0.10May 31, 2006
$0.40
$0.12  The above sales prices were based on the
closing trades reported on the NASD Over-the-Counter Bulletin Board quotation
system and reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.  As of February 29,
2008, there were 319 shareholders of record holding 45,575,551shares of our common stock; as of July
7, 2008, there were 50,904,651 common shares outstanding.  Dividends  There are no dividend restrictions in the
Company.  Recent Sales of
Unregistered Securities On May 14, 2007, one investor under Rule
506 of Regulation D, subscribed for 150,000 common shares at a price of $.10 per
share for total proceeds to the Company of $15,000.  The shares are
restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
of 1933.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page9______________________________________________________________________________________________________________     On June 14, 2007, one investor under Rule
506 of Regulation D, subscribed for 300,000 common shares at a price of $.10 per
share for total proceeds to the Company of $30,000.  The shares are
restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
of 1933.  On July 13, 2007, one investor under Rule
506 of Regulation D, subscribed for 25,000 common shares at a price of $.10 per
share for total proceeds to the Company of $2,500.  The shares are
restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
of 1933.  On October 9, 2007, one investor under Rule
506 of Regulation D, subscribed for 75,000 common shares at a price of $.10 per
share for total proceeds to the Company of $7,500.  The shares are
restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
of 1933.  On October 16, 2007, three investors under
Rule 506 of Regulation D, subscribed for 1,000,000 common shares at a price of
$.05 per share for total proceeds to the Company of $50,000.  The shares
are restricted pursuant to Rule 144 promulgated under the U.S. Securities
Act of 1933.  On November 9, 2007, one investor under
Rule 506 of Regulation D, subscribed for 50,000 common shares at a price of $.10
per share for total proceeds to the Company of $5,000.  The shares are
restricted pursuant to Rule 144 promulgated under the U.S. Securities Act
of 1933.  On November 30, 2007, one investor under
Rule 506 of Regulation D, subscribed for 500,000 common shares at a price of
$.10 per share for total proceeds to the Company of $50,000.  The shares
are restricted pursuant to Rule 144 promulgated under the U.S. Securities
Act of 1933.  On December 11, 2007, one investor under
Rule 506 of Regulation D, subscribed for 100,000 common shares at a price of
$.10 per share for total proceeds to the Company of $10,000.  The shares
are restricted pursuant to Rule 144 promulgated under the U.S. Securities
Act of 1933.  On December 19, 2007, one investor under
Rule 506 of Regulation D, subscribed for 300,000 common shares at a price of
$.10 per share for total proceeds to the Company of $30,000.  The shares
are restricted pursuant to Rule 144 promulgated under the U.S. Securities
Act of 1933.  On February 15, 2008, one investor under
Rule 506 of Regulation D, subscribed for 100,000 common shares at a price of
$.10 per share for total proceeds to the Company of $10,000.  The shares
are restricted pursuant to Rule 144 promulgated under the U.S. Securities
Act of 1933.  All of these shares were issued on July 2,
2008.  Preferred
Shares  The preferred
shares are entitled an annual dividend of $0.10 per share payable on July 31 of
each calendar year.  The preferred
shares are convertible into common shares of the Company at the rate of one
common share for each 0.29 preferred share. Upon conversion, all preferred share
rights cease except the right to receive declared and unpaid dividends  The preferred
shares are redeemable at the option of the Company at the redemption price of $1
per Class A preferred share plus payment of all dividends cumulated thereon.  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 29, 2008 and our revised audited Financial
Statements and notes thereto for the period ended February 28, 2007.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page10______________________________________________________________________________________________________________     Overview of Operations  Sense holds a non-exclusive license to
manufacture, distribute, market and sublicense world-wide, a patented technology
which is used to produce the Guardian Alert® backing awareness system for motor
vehicles utilizing microwave radar technology.  The Company assembles the
product in Charlotte, NC.  The company also holds an exclusive license to
manufacture, distribute, market and sublicense world-wide, the ScopeOut®
product, a patented system of specially-designed mirrors which are placed at
specific points on vehicles to offer drivers a more complete view of the blind
spots toward the rear of the vehicle.  This product is manufactured in
China through an outsourced vendor.  The Company has established
relationships with large dealership groups and aftermarket product distributors.
The Company plans to increase sales through continued development of new
marketing relationships.  Results of Operations  For the period ended February 29, 2008
as compared to the period ended February 28, 2007.  Sales for the period ended February 29,
2008 decreased by 23% from $97,532 to $75,546 due to reduced demand.
 Revenue is recognized by management only upon receipt of an actual
purchase order from a customer, and the related invoicing to the company, or, in
the absence of a purchase order (i.e., verbal order), the actual invoicing to
the customer, when the products are shipped and collection is reasonably
assured.  We continued to market both products with
emphasis on large sales opportunities for ScopeOut®.  While it is the
company objective to grow sales, no assurance can be given that we will be
successful in this manner and sustain comparable sales in future periods.  Direct costs in 2008 were abnormally high
due to significant expenses, such as  the write-off of certain of the
ScopeOut® inventory in the amount of  $76,891 in and $162,500 in minimum
royalties under the ScopeOut® license.  Direct costs in 2007 were also high
due to the write-off of $68,307 of certain of the ScopeOut® inventory and
$60,000 in minimum royalties under the ScopeOut® license.  Direct costs typically include the cost of
raw materials necessary to make our products.  It also includes the cost of
shipping the products from manufacturing location to our warehouse.  Direct
costs also include costs in respect of obsolete/unsaleable inventory.  Management periodically reviews inventory
and makes a determination as to whether any inventory is obsolete.  If we
determine that certain materials and or products are not in saleable condition
and that the likelihood of them being sold is remote, management will make a
decision to write off the inventory and or parts of inventory that it deems will
not sell.  If previously written-off inventory later sells, costs of sale
are significantly lower due to the previous write-off of those costs.  This
can materially affect period gross profit ratios. .  Regarding intangible assets, the company
conducts reviews annually in accordance with SFAS 142 regarding possible
impairment of related assets.   We have written off the GuardianAlert®
license agreement intangible asset in 2005 and the ScopeOut® license agreement
intangible asset in 2007 due to poor sales performance results in the past and
the uncertainty of the recoverability of the assets.  After careful consideration, management
felt the ScopeOut® license should be treated as fully impaired at February 28,
2007.  The initial license was entered in September, 2004, and the first
molds for the first iteration of the product were completed in September of
2005.  The initial inventory, now all written off,
was manufactured and delivered to the Company in November 2005.
 Significant marketing efforts were undertaken with respect to that first
version which resulted in significant promise for potential large sales to occur
based on initial meetings introducing the product.  It generally took
several meetings with each such potential customer to ultimately learn that the
products' aesthetics were not acceptable for mass consumer acceptance.
 This was especially true with respect to dealers' installation of the
product on its new and used car inventory for such vehicle to be sold with the
product intact.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page11______________________________________________________________________________________________________________     In late 2006, and by fiscal year end
February 28, 2007, solutions to those aesthetic problems were being developed.
 We still expected that inventory of the first iteration was saleable, but
likely not with large customers such as retail chains.  Some automobile
dealerships previously contacted also had not yet made a final decision whether
to use the product on its existing inventory for resale.  The Company undertook the effort to
redesign the products using the qualified engineers that assisted with the first
design, and physically-feasible aesthetics solutions were determined and
evaluated.  The new designs iterations were finally approved in August of
2007, and the first inventory of both versions of the new iterations were
manufactured and delivered in November, 2007.  Based on this, management believed at
February 28 2007 that existing inventory was still resalable, though likely not
in the large volumes per customer as originally anticipated.  Further,
management believed that the product could successfully be redesigned,
engineered, and prototyped and manufactured in the appropriate aesthetic
versions necessary to achieve such large customer sales.  Based on this,
when the initial 10-KSB was filed and financial statements issued, no impairment
of the intangible asset was believed to exist.  However, management now
believes that the total impairment of that intangible asset as of that date is
appropriate as there was no assurance at the time that our expectations of
solving the aesthetics and other marketing problems would actually be
successful.  This is further because no significant sales of the new
versions of the product have yet occurred, notwithstanding significant marketing
effort to do so.  Since six months have elapsed since the new iteration
versions of the products have arrived for demonstration and marketing purposes,
within which such sales could have occurred, it seems most appropriate to look
at that historical result to anticipate what potential sales might occur in the
future.  Unit sales of ScopeOut® products are as follows:  Sense Technologies Inc.
Schedule of Scope-Out unit sales
for the fiscal years ended February 29,
2008
and February 28, 2007, 2006 and
20052005
2006
2007
2008Car model
-
10
6
13SUV model
-
18
7
10Total ScopeOut® units
-
28
13
23 Accordingly, the Company has concluded that
based on the approximately two-year period from entering the ScopeOut® license
to February 28, 2007, and considering all events subsequent to that date, the
circumstances merited an impairment in value of the ScopeOut® license effective
February 28, 2007, in the full amount of the license value, $196,107.  Also, we expensed the amounts we paid to
attorneys to obtain ScopeOut® patents in foreign jurisdictions in our revised
Financial Statements.  Originally, the company chose to capitalize these
amounts because of the Company's experience with intellectual properties
embodied in issued patents.  First, management understood that in the
United States, an issued patent maintains a presumption of validity until
determined otherwise.  While that is our understanding of the law in the
United States, it may not necessarily that of any or all foreign countries.
However, it was our presumption that that should more often than not be the
case.  Additionally, the Company is presently interacting with a major
company in informally evaluating the scope of the patents in covering a product
they sell.  That added to management's presumption of a valid patent,
insofar as that effort has not yet been completed.  The company's intent
was to react with appropriate reductions in values should this informal effort
result negatively for the Company.  Secondly, our experience in filing for
foreign patents has led to opportunities for evaluation of the subject invention
in foreign marketplaces.  Evidently such documents become databases of
opportunities for interested companies in the foreign venues for consideration
of business relationships.  Such information contained in the application
provides for a sufficient amount of means to contact the Company by any
interested party in the foreign location.  Accordingly, there is a value
with respect to the potential of such networking opportunities to enter business
relationships regarding the product by such interested parties.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page12______________________________________________________________________________________________________________     Notwithstanding, since the Company has
determined that a total impairment of the ScopeOut® license is appropriate at
February 28, 2007, such would be indicative that the value of all of the
underlying patents to the ScopeOut® license would also be in-turn impaired.
 Such weighs on whether any foreign patents should therefore maintain any
intangible value for the Company.  Based on these overall circumstances,
management believes again that these costs should be treated as expense.  We also wrote off equipment of $19,341 and
an uncollectible promissory note receivable from a group of original investors
in the Company in the amount of $585,000 during the current year. This note has
been outstanding for several years and its collection was contingent on
successful resolution of a bankruptcy proceeding of an unrelated company. During
the year ended February 29, 2008, management made the determination that the
possibility of collection on this note was remote and determined it should be
written-off.  Royalties increased from $60,000 in 2007 to
$162,500 in 2008, and increase of 170%, due to the increased requirement of
minimum royalties necessary to maintain the exclusivity regarding the ScopeOut®
license.  Consulting fees decreased from $478,855 in
2007 to $198,749 in 2008, a decrease of 58%.  However, the Company was
concentrating on marketing, especially its ScopeOut® products, and, accordingly,
advertising and marketing expenses increased from $163,369 in 2007 to $235,242
in 2008, an increase of 44% as a result of the Companys efforts to market the
ScopeOut® products.  Insurance expense decreased to $37,226 in
the year ended February 29, 2009 from $53,554 in the prior year largely as a
result of decreased premiums for each of the product liability and directors and
officers policies.  Legal, accounting and audit fees increased
from $123,271 in 2007 to $186,882 for the year ended February 29, 2008 largely
as a result of increased legal expenses associated with services performed in
connection with providing opinions on the companys share capital.  Management fees increased from $nil to
$274,800 in 2008 as a result of  $200,000 for common shares to be issued to
Bruce Schreiner, President and CEO for past and present services to the Company
and $74,800 in respect of stock-based compensation  for options issued to
directors, James Iman and Robert Doviak for past and  present
 services to the Company.  Research and development costs increased
from $9,762 in 2007 to $18,091 in 2008, an increase of 85%.  This was
primarily due to the ScopeOut® products aesthetic re-design.  Travel expenses decreased to $13,056 in
2008 from $32,521 in 2008 due to the Company not having to travel as extensively
in order to market its ScopeOut® products as many of the costs are being borne
by intermediaries  Following summarizes the overall operations
results: Increase
%  Increase2008
2007
( Decrease)
(decrease)Sales
$75,546
$97,532
$(21,986)
(23) %Direct Costs
$260,560
$141,686
$118,874
84 %General and Administrative expenses
$1,717,595
$1,237,513
$(480,082)
(39) %  The stockholders and directors of the
Company have been advised in the independent auditors report that there is
substantial doubt that our company has the ability to continue as a going
concern.  With respect to the financial condition
beyond the fiscal year ending February 29, 2008, the Company will need access to
additional funding to meet operating requirements based on its current state of
affairs.  Access to funding may come from debts, loans from related
parties, stock placement or a combination of the available options. Revenues for
fiscal year ended February 29, 2008 were $75,546 and thus, expenses exceeded
revenues.  Accordingly, the Company does not expect to be able to fund
operations from internally-generated funds until such time as its sales exceed
expenses.  As of the date of this filing, the Company
had no other funding commitments and there can be no assurance that any such
commitments in the future would be obtained on favorable terms, if at all.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page13______________________________________________________________________________________________________________     The Company has previously maintained its
operations from the sale of capital stock and advances and loans from related
and unrelated parties. Although management is cautiously
optimistic about its progress for resolutions to its financing needs, no
assurances can be made that its plans will be successful.  Adverse market
conditions, general economic conditions and limited access to capital markets
can adversely impact the Company and its progress as a going concern.  Liquidity and Capital Resources  Our cash position at February 29, 2008 was
$988 as compared to $3,100 at February 28, 2007. This decrease was due to the
net of our use of cash in operating and investing activities and cash
provided by financing activities as described below.  Our net loss of $2,041,704 for fiscal year
2008 includes non-cash charges of $88,889 for consulting fees to be paid through
the issuance of our common stock, management fees expense of $274,800 by virtue
of $74,800 as stock based compensation and $200,000 for common shares to be
issued, a write-down of $585,000 in respect of a promissory note receivable,
write-offs of inventory and equipment totaling $96,232 and a depreciation
expense of $15,219. Increases in non-cash working capital during the year
amounted to $452,995. Non-cash working capital changes included decreases in
inventory and, prepaid expenses and an increase in accounts payable. The net
cash used in operating activities for fiscal 2008 was $528,569.  Net cash used in operating
activities  Net cash used in operating activities was
$528,569 during fiscal year 2008, compared to $673,381 during fiscal 2007. The
decrease in cash used in fiscal 2007 was primarily due to the following
factors:  (i)
The reduction in cash royalty
payments from $60,000 in 2007 to $Nil in 2008(ii)
The 58% reduction in consulting
expenses  (iii)
the issuance of our equity
instruments in exchange for services.  Net cash used in investing
activities  Net cash used in investing activities was
$66,055 during fiscal year 2008 compared to $32,279 during fiscal 2007. The cash
used in the current year was used to find the purchase of property and equipment
which is primarily used to manufacture our products.  Net cash provided by financing
activities  Net cash provided by financing activities
was $592,512 during fiscal year 2008 compared to net cash provided of $699,900
during fiscal year 2007.  During fiscal year 2008, we received
$210,000 through subscriptions to private placements of our common shares and
$370,852 through the issuance of promissory notes receivable. In the fiscal
2007, we had received $419,500 from through subscriptions to private placements
of our common shares and $155,900 from the issuance of our common stock. During
the year ended February 29, 2008 we issued no common shares for cash.  FUTURE OPERATIONS  Presently, our cash flow generated from
operations is not sufficient to meet operating and capital expenses. We have
incurred operating losses since inception, and we project this to continue for
the next nine to twelve months.  Our present average monthly costs are
approximately $40,000 per month. Our plan is to sustain the Company while
continuing to market both products, but with the majority of the emphasis on our
ScopeOut® products.  We have approximately 4,000 current version
ScopeOut® units in inventory. We estimate, at their lowest volume purchase
price, we can obtain 5,000 units (one shipping container) at a cost of
approximately $65,000 and which should generate a selling price of $105,000.
Thus, this leaves approximately $40,000 gross profit per shipping container at
the lowest expected selling prices. We anticipate being able to increase the
wholesale selling prices for  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page14______________________________________________________________________________________________________________     different markets and that would result in
larger gross profit per container as the inventory purchase price should not go
up appreciably. Product costs should decrease as the volume of purchases
increases.  As of the date of this report, we have sold
approximately 3000 units, necessitating our need to raise enough cash to both
re-order the ScopeOut® inventory and maintain our average monthly cash flow
obligations. This cost of sales growth will recur if we are successful in
selling the products ensuring cash needs are a constant focus for
management.  The Companys payables and presently
unserviced debt will be retired only as the net cash flow from this anticipated
growth allows.  We project that we will have the following
cash needs to fund our ongoing operating expenses and working capital
requirements through to February 28, 2009 as detailed below. Marketing
$           150,000Engineering, research and
development
30,000General and administrative
300,000Debt repayment
100,000General Working Capital (1)
1,000,000TOTAL
$         1,580,000  (1)
Our working capital requirements are
impacted by our inventory requirements. Therefore, any increase in sales
of our products will be accompanied not only by an increase in revenues,
but also by an increase in our working capital
requirements.  The continuation of our business is
dependent upon obtaining further financing, further market acceptance of our
current products and any new products that we may introduce, the continuing
successful development of our products and related technologies, and, finally,
achieving a profitable level of operations.  We are hopeful that internal cash flow will cover our
cash requirements, but otherwise plan to raise additional capital as required to
meet the balance of our estimated funding requirements through February 28,
2009, through either or a combination of:  (1)
issuance of promissory notes payable(2)
private placements of our common
shares  (3)
cash flow from operations The issuance of additional equity
securities by us could result in a significant dilution in the equity interests
of our current stockholders. Obtaining commercial loans, assuming those loans
would be available, will increase our liabilities and future cash commitments.
In respect of our cash requirements, we plan to raise $50,000 from equity
investors via private placements of our common stock  and we need to secure
debt financing through a line of credit facility in the amount of $400,000 to
finance our initial inventory purchases. Should our inventory not turn over as
anticipated, we will need to raise additional funds through a combination of
debt issuances and equity offerings. Given our lack of sales in recent years,
projecting cash flow from operations is inherently uncertain.  Any funds we
generate from operations must, in part, be used to pay down our debt obligations
which total $1,246,799 as at February 29, 2008. Our convertible promissory notes
payable totaling $584,000 and various accounts payable are significantly in
arrears.  While we anticipate being successful in obtaining our required
financing, there is no assurance we will be able to do so at terms we find
acceptable.   Additionally, we rely upon the continuing support and
patience of creditors in connection with current and in-arrears amounts owed to
them.  The failure to obtain sufficient financing or continued support of
the creditors could result in our company ceasing operations.  Item
7. Financial
Statements  The Companys audited financial statements
for the fiscal year ended February 29, 2008 are attached to this report
following the signature page and Certifications.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page15______________________________________________________________________________________________________________     Item 8. Changes In and
Disagreements with Accountants and Financial Disclosure  None  Item 8A. Controls and Procedures  We have effected a restatement of our financial results
for the year ended February 28, 2007 as previously included in our 2007 Annual
Report on form 10-KSB. The Restatement This restatement was effected to
correct errors in our accounting treatment of: (i)
the impairment
assessment of the ScopeOut® license; and(ii)
the calculation of
non-resident withholding tax and associated
interest As a result of our
review of these transactions, the effect on the amended accounting for the
adjustments above is discussed in Note 18 to our 2008 financial statements. Evaluation of
disclosure controls and procedures and remediation In connection with
the restatement of our financial results for the year ended February 28, 2007,
under the direction of our management, we have reevaluated certain disclosure
controls and procedures and internal controls over financial reporting. In
connection with the restatement we identified a material weakness in our
internal controls and procedures relating to the accounting treatment of our
intangible asset impairment assessments, the calculation of the proper
withholding taxes on payments to non-residents and presentation of preferred
stock. As required by Rule
13(a)-15 under the Exchange Act, in connection with this annual report on Form
10-KSB, under the direction of our Chief Executive Officer, we have evaluated
our disclosure controls and procedures as of February 29, 2008, and we have
concluded our disclosure controls and procedures were ineffective as discussed
in greater detail below. As of the date of this filing, we are still in the
process of remediating such material weaknesses in our internal controls and
procedures. It should be noted
that while our management believes our disclosure controls and procedures
provide a reasonable level of assurance, they do not expect that our disclosure
controls and procedures or internal controls will prevent all error and all
fraud. A control system, no matter how well conceived or operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within our company have been
detected. These inherent limitations include the realities that judgments in
decision making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of internal control is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions. Over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected. Managements
annual report on internal control over financial reporting Management is responsible for establishing
and maintaining internal control over financial reporting, as such term is
defined in Exchange Act Rule 13a-15(f). Our management evaluated, under the
supervision and with the participation of our Chief Executive Officer, the
effectiveness of our internal control over financial reporting as of February
29, 2008. Based on its
evaluation under the framework in Internal ControlIntegrated Framework , issued
by the Committee of Sponsoring Organizations of the Treadway Commission, our
management concluded that our internal control over financial reporting was not
effective as of February 29, 2008, due to the existence of significant
deficiencies constituting material weaknesses, as described in greater detail
below. A material weakness is a control deficiency, or combination of control
deficiencies, such that there is a reasonable possibility that a material
misstatement of the annual or interim financial statements will not be prevented
or detected on a timely basis.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page16______________________________________________________________________________________________________________     This annual report
does not include an attestation report of our companys independent registered
public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by our companys independent
registered public accounting firm pursuant to temporary rules of the SEC that
permit our company to provide only managements report in this annual report. Limitations on
Effectiveness of Controls Our Chief Executive
Officer does not expect that our disclosure controls or our internal control
over financial reporting will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of a simple error or mistake.
Additional controls can be circumvented by the individual acts of some persons,
by collusion of two or more people, or by management override of the controls.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected. Material
Weaknesses Identified In connection with
the preparation of our financial statements for the year ended February 29,
2008, certain significant deficiencies in internal control became evident to
management that represent material weaknesses, including: (i)
Insufficient
segregation of duties in our finance and accounting functions due to
limited personnel. During the year ended February 29, 2008, we had limited
staff that performed nearly all aspects of our financial reporting
process, including, but not limited to, access to the underlying
accounting records and systems, the ability to post and record journal
entries and responsibility for the preparation of the financial
statements. This creates certain incompatible duties and a lack of review
over the financial reporting process that would likely result in a failure
to detect errors in spreadsheets, calculations, or assumptions used to
compile the financial statements and related disclosures as filed with the
SEC. These control deficiencies could result in a material misstatement to
our interim or annual consolidated financial statements that would not be
prevented or detected;(ii)
There is a
lack of sufficient supervision and review by our corporate
management;(iii)
Insufficient
corporate governance policies. Our corporate governance activities and
processes are not always formally documented. Specifically, decisions made
by the board to be carried out by management should be documented and
communicated on a timely basis to reduce the likelihood of any
misunderstandings regarding key decisions affecting our operations and
management; and(iv)
Our company's
accounting personnel does not have sufficient technical accounting
knowledge relating to accounting for income taxes and complex US GAAP
matters. Management corrected any errors prior to the release of our
company's February 29, 2008 financial statements. Plan for
Remediation of Material Weaknesses We intend to take
appropriate and reasonable steps to make the necessary improvements to remediate
these deficiencies. We intend to consider the results of our remediation efforts
and related testing as part of our year-end 2009 assessment of the effectiveness
of our internal control over financial reporting. We have implemented
certain remediation measures and are in the process of designing and
implementing additional remediation measures for the material weaknesses
described in this annual report. Such remediation activities include the
following:  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page17______________________________________________________________________________________________________________      (1)
We will
document a formal code of ethics(2)
We will revise processes to provide
for a greater role of independent board members in the oversight and
review until such time that we are adequately capitalized to permit hiring
additional personnel to address segregation of duties issues.(3)
We will continue to update the
documentation of our internal control processes, including formal risk
assessment of our financial reporting processes.(4)
We will seek
to establish a relationship with a firm of certified public accountants to
assist in the preparation of financial statements and with whom to consult
on complex US GAAP matters. Changes in
Internal Controls over Financial Reporting There were no
changes in our internal control over financial reporting during the fourth
quarter of our fiscal year ended February 29, 2008 that have materially affected
or are reasonably likely to materially affect, our internal control over
financial reporting.  Item
8B. Other
Information  None.  PART III  Item
9. Directors, Executive Officers,
Promoters and Control Persons; Compliance with Section 16(a) of the Exchange
Act  The names, ages, and business experience
for at least the past five years and positions of the directors and executive
officers of the Company as of July 1, 2008, are as follows. The Companys board
of directors consists of three directors. All directors serve until the next
annual meeting of the Companys stockholders or until their successors are
elected and qualified. Executive officers of the Company are appointed by the
board of directors.  Name
Age
Position
Position Held SinceBruce E. Schreiner
52
Director, President, CEO, &
CFO
August 10, 1993James R. Iman
61
Director
June 21, 2004Robert Doviak
47
Director
November 15,
2007  Biographical
Information Concerning Directors and Executive Officers  BRUCE E. SCHREINER, Director, President,
CEO, and CFO.Mr. Schreiner was appointed as a director of Sense on August
10, 1993 and has been the President and Chief Executive Officer of Sense since
March 4, 2004.  Mr. Schreiner is a certified public accountant and has been
a partner in Schroeder & Schreiner, P.C., a certified public accounting firm
since 1991.  ROBERT DOVIAK, Director.  Mr.
Doviak was appointed as a director of Sense on November 15, 2007.  Mr.
Doviak is a management consultant whose clients have included oil and gas
companies, technology companies, and software support and consulting companies.
 He assists with capital architecture, business development, overall
strategy with particular emphasis on growing the business, and establishing a
dominant market position in the selected segment.   Mr. Doviak
maintains an extensive network of contacts in North America, South and Central
America, and the UK.  He holds a B.B.A. in Accounting with concentration in
Finance from Texas Tech University.  He is a past president and vice
president of the 100 of Dallas, Inc., and a member of the National Association
of Corporate Directors, the Institute of Management Accountants, and Ernst Young
Alumni.  JAMES R. IMAN, Director. Mr. Iman
was appointed as a director of Sense on June 21, 2004.  Mr. Iman is
currently associated with Corporate Finance Consulting Services of Fort Worth,
Texas.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page18______________________________________________________________________________________________________________     Section 16(a) Beneficial Ownership
Reporting Compliance  Section 16(a) of the Securities Exchange
Act of 1934, as amended, requires Sense's Directors, executive officers and
persons who own more than 10% of a registered class of Sense's securities to
file with the SEC initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of Sense. Directors,
executive officers and greater than 10% stockholders are required by SEC
regulation to furnish Sense with copies of all Section 16(a) reports they
file.  To Sense's knowledge, based solely on a
review of the copies of Forms 3 and 4, as amended furnished to it during its
most recent fiscal year, and Form 5, as amended, furnished to it with respect to
such year, Sense believes that during the year ended February 29, 2008, its
Directors, executive officers and greater than 10% stockholders complied with
all Section 16(a) filing requirements of the Securities Exchange Act of
1934.  Code of Ethics  The Company has not adopted a code of
ethics; however, it intends to do so in connection with any expansion of its
management.  Corporate Governance  The Board of Directors has established an
Audit Committee and a Compensation Committee. The Board of Directors has no
standing nominating committee.  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 Robert
Doviak, James R. Iman and Bruce Schreiner.  In the course of its oversight of our
financial reporting process, the directors have: (1) reviewed and discussed with
management our audited financial statements for the year ended February 29,
2008; (2) received a report from BDO Dunwoody LLP, Chartered Accountants, our
independent auditors, on the matters required to be discussed by Statement on
Auditing Standards No. 61, Communications with Audit Committees; (3) received
the written disclosures and the letter from the auditors required by
Independence Standards Board Statement No. 1, Independence Discussions with
Audit Committee; and (4) considered whether the provision of non-audit services
by the auditors is compatible with maintaining their independence and has
concluded that it is compatible at this time.  Based on the foregoing review and
discussions, the board has concluded that the audited financial statements
should be included in our Annual Report on Form 10-KSB for the year ended
February 29, 2008 filed with the SEC.  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 functions of the Compensation Committee are performed by the Board
of Directors. The members of the Compensation Committee are Robert Doviak and
James R. Iman. Nominating
Committee. No Nominating Committee has been appointed. Nominations of
directors are made by the board of directors. The Directors are of the view that
the present management structure does not warrant the appointment of a
Nominating Committee.  Item
10. Executive Compensation  EXECUTIVE
COMPENSATION The following table sets forth all
information concerning the total compensation of Senses president, chief
executive officer, chief financial officer, and the three other most highly
compensated officers during the last fiscal year (the Named Executive
Officers) for services rendered to Sense Technologies, Inc. in all capacities
for the year ended February 29, 2008.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page19______________________________________________________________________________________________________________     Summary Compensation Table   Name and Principal
Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Nonequity incentive plan compensation
($)
Nonqualified deferred compensation earnings
($)
All other compens-
ation
($)
Total
($)Bruce
Schreiner,
President, Chief
Executive Officer, Chief Financial Officer
2008

2007
None

None
None

None
200,000

None
None

None
None

None
None

None
None

None
200,000

None  During the year ended February 29, 2008,
the Company granted Bruce Schreiner the right to receive 2,500,000 common shares
for past services provided.  The fair value of each common share was $0.08
on the grant date.   The shares, fully vested and non-forfeitable on
the grant date, have not yet been issued.  The Company has recognized
$200,000 as additional management fees on the Statement of Loss and as Common
Shares to be Issued on the 2008 Balance Sheet.  OPTION/SAR
GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR The particulars of unexercised
options, stock that has not vested and equity incentive plan awards for our
named executive officers and directors are set out in the following table:  Options Awards
Stock AwardsName
Number of Securities
Underlying Unexercised Options
(#) Exercisable
Number of Securities
Underlying Unexercised Options
(#) Unexercisable
Equity Incentive Plan
Awards: Number of Securities
Underlying Unexercised Unearned
Options (#)
Option Exercise Price
($)
Option Expiration Date
Number of Shares or
Units of Stock That
Have Not Vested (#)
Market Value of
Shares or Units of
Stock That Have Not Vested
($)
Equity Incentive Plan
Awards: Number of Unearned
Shares, Units or Other Rights
That Have Not Vested (#)
Equity Incentive Plan
Awards: Market or Payout Value
of Unearned Shares, Units or
Other Rights That Have Not
Vested ($)Bruce Schreiner, President, CEO and Director
Nil
Nil
Nil
Nil
Nil
Nil
N/A
N/A
N/ARobert Doviak,
Director
500,000
Nil
Nil
$0.05
December 31, 2012
N/A
N/A
N/A
N/AJames Iman, Director
500,000
Nil
Nil
$0.05
December 31, 2012
N/A
N/A
N/A
N/ACindy Schroeder (1)
Nil
Nil
Nil
Nil
Nil
N/A
N/A
N/A
N/A (1)
 Cindy Schroeder resigned as a director of the Company on November 15,
2007.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page20______________________________________________________________________________________________________________     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 29, 2008.  TERMINATION OF EMPLOYMENT, CHANGE IN
RESPONSIBILITIES AND EMPLOYMENT CONTRACTS  There are currently no employment contracts
in place with the Directors and Officers of Sense. .   COMPENSATION OF DIRECTORS  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. Two of the Directors of Sense Robert Doviak and James Iman, each
received options to purchase 500,000 shares of common stock of Sense
Technologies for $.05 a five year period, until December 31, 2012 as
compensation for the year ended February 29, 2008 for services provided as a
Director or member of a committee of the Board of Directors.   They
received no cash compensation.  Value of the options granted to these two
directors during the year ended February 29, 2008 amounted to $37,400 each.
 The stock options were accounted for under the provisions of
SFAS 123(R), which requires  recognition of the fair value of
equity-based compensation. The fair value of stock options was estimated using a
Black-Scholes option valuation model. This methodology requires the use of
subjective assumptions in implementing SFAS 123(R), including expected
stock price volatility and the estimated life of each award.  See Note 10©
to our February 29, 2008 financial statements.  Item
11. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters  Securities Authorized for Issuance Under
Equity Compensation Plans  The following table sets forth information
respecting our compensation plans as at February 29, 2008 under which shares of
our common stock are authorized to be issued.  Plan Category
Number of securities to be issued
upon exercise of outstanding options, warrants and rights
(a)
Weighted-average exercise price of
outstanding options, warrants and rights

(b)
Number of securities remaining
available for future issuance under equity compensation plans (excluding
securities reflected in column (a))

(c)Equity compensation plans approved by security
holders
1.025,000
$.07
975,000Total
1,025,000
$.07
975,000  On July 7, 2008 there were 50,904,651
shares of our common stock (the "Common Stock"), issued and outstanding, each
share carrying the right to one vote, and 315,916 Class A Preferred Shares.
 The Class A Preferred Shares are non-voting.  The following table
sets forth certain information regarding the beneficial ownership of the
Companys Common Stock as of July 7, 2008, 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.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page21______________________________________________________________________________________________________________     Except as noted in
the following table, Sense believes that the beneficial owners of the Common
Stock listed below have sole voting and investment power with respect to such
shares.  Name and Address of
Beneficial Owner
Amount of Beneficial
Ownership[1]
Percent of Class
[2]Steve Sommers[3]
21018 Buckskin Trail
Elkhorn, NE  68022
3,386,067[3]
6.65%First Americans Insurance Service Inc.
2621 West Highway 30
Grand Island, NE  68803
2,700,000
5.30%Bruce E. Schreiner, Director
3535 Grassridge Drive
Grand Island, Nebraska  68803
3,684,838
7.24%Cynthia L. Schroeder, Director (until Nov 15,
2007)
15409 Garfield
Omaha, Nebraska  68144
49,722
0.10%James Iman, Director
2601 Ridgmar Plaza
Suite 201
Fort Worth TX  76116
650,000
1.28%Robert Doviak (effective Nov 15, 2007)
13237 Montforth Drive
Dallas TX  75240
505,000
.99%All directors and officers as a group (4
persons)
­­­­­­­­­­­­­4,889,560
9.61%  [1] Based upon information
furnished to Sense by the Directors, Executive Officers or beneficial holders,
or obtained from the stock transfer agent of Sense, or obtained from insider
reports.  [2] Based upon a total of
50,904,651 shares of common stock currently issued and outstanding, and includes
in each case any stock underlying immediately exercisable stock options granted
to each person listed.  [3] Includes 3,175,117
shares held by SFS Resources Inc., an entity in which Steve Sommers is a
controlling shareholder; and 100,000 shares held by Steven Sommers II
Investments LLC.  Item
12. Certain Relationships and Related
Transactions   Transactions with management and
others  During the year ended February 29, 2008, we incurred
interest charges in the amount of $32,143 on promissory notes payable to the
Schroeder & Schreiner P.C. 401(K) Profit Sharing Plan administered by Bruce
Schreiner  and we incurred charges of $ 17,150 with an accounting firm of
which Bruce Schreiner is a partner.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page22______________________________________________________________________________________________________________      Item 13.
 EXHIBITS  Exhibit
No.
Description of
Exhibit
Manner of
Filing3.1
The Articles of
Continuance
Incorporated
by reference as Exhibit 3.1 to the Companys Form 10-KSB, filed with the
SEC on May 24, 2002 (2002 Form 10-KSB)3.2
By-Laws
Incorporated
by reference as Exhibit 3.2 to the 2002 Form 10-KSB3.3
Articles of
Amendment
Incorporated
by reference to as Appendix A to the Companys Schedule 14A  Definitive
Proxy Statement, filed with the SEC on June 17, 2002 (Schedule
14A)10.1
Amended Stock Option
Agreement dated October 2,2001 between Bruce E. Schreiner and the
Company.
Incorporated
by reference as Exhibit 10.1 to the 2002 Form 10-KSB10.2
Two (2) Amended Stock
Option Agreements both dated October 2, 2001 between Cynthia L.
Schroeder and the Company.
Incorporated
by reference as Exhibit 10.2 to the 2002 Form 10-KSB10.3
2002 Stock Option
Plan
Incorporated
by reference as Appendix B to the 2002 Schedule 14A10.4
License agreement with
Palowmar Industries, LLC and Lowell Martinson, inventor respecting
the ScopeOut® product.
Incorporated
by reference as Exhibit 10.4 to the 2006 Form 10-KSB23.1
Consent of BDO Dunwoody,
LLP, Chartered Accountants
Filed
herewith31.1
Rule 13a-14(a)/15d-14(a)
 Certification
Filed
herewith32.1
Section 1350
Certification
Filed
herewith              ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page23______________________________________________________________________________________________________________     Item 14. Principal Accountant
Fees and Services  The audit of our financial statements as at February 28,
2007 and for the year then ended was carried out by Amisano Hanson.
 Effective January 1, 2008, Amisano Hanson merged its practice with BDO
Dunwoody LLP with BDO Dunwoody LLP being the continuing auditor.   The
fees for services provided to us in each of the fiscal years ended February 28,
2007 and February 29, 2008 were as follows:   Fees
2007
2008Audit fees
$39,475
$40,100Audit related fees
Nil
NilTax fees
Nil
NilAll other fees
Nil
Nil       Policy on Pre-Approval by
Audit Committee of Services Performed by Independent Auditors We do not use BDO
Dunwoody LLP for financial information system design and implementation. These
services, which include designing or implementing a system that aggregates
source data underlying the financial statements or generates information that is
significant to our financial statements, are provided internally or by other
service providers. We do not engage BDO Dunwoody LLP to provide compliance
outsourcing services.  Effective May 6,
2003, the Securities and Exchange Commission adopted rules that require that
before BDO Dunwoody LLP is engaged by us to render any auditing or permitted
non-audit related service, the engagement be: · approved by our audit committee (which consists of our entire
board of directors); or · entered into pursuant to pre-approval policies and procedures
established by the board of directors, provided the policies and procedures are
detailed as to the particular service, the board of directors is informed of
each service, and such policies and procedures do not include delegation of the
board of directors' responsibilities to management. The board of
directors pre-approves all services provided by our independent auditors. All of
the above services and fees were reviewed and approved by the board of directors
either before or after the respective services were rendered. The board of directors has
considered the nature and amount of fees billed by BDO Dunwoody LLP and believes
that the provision of services for activities unrelated to the audit is
compatible with maintaining BDO Dunwoody LLPs independence.    ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page24______________________________________________________________________________________________________________     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 July, 15,
2008.  SENSE TECHNOLOGIES INC.  By: /s/ Bruce E. Schreiner  Bruce E. Schreiner President, Chief
Executive Officer, Chief Financial
Officer and Director  In accordance with
the requirements of the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities
indicated. By: Title: Date:   /s/ Bruce E.
Schreiner Chief Executive Officer, President July 15, 2008 Bruce E.
Schreiner Director and Chief
Financial Officer   /s/ James R.
Iman Director July 15, 2008 James R. Iman   /s/ Bob
Doviak Director, Secretary July 15, 2008 Bob Doviak          ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page25______________________________________________________________________________________________________________     Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANT  We hereby consent
to the incorporation by reference in the registration statement (No. 333-138218)
on Form S-8 of Sense Technologies Inc. (the Company) of our report dated July
15, 2008 relating to the financial statements of the Company appearing in the
Companys Annual Report on Form 10-KSB. Our report contains an explanatory
paragraph regarding the Companys ability to continue as a going concern.  Vancouver, Canada
/s/ BDO Dunwoody LLPJuly 15, 2008
Chartered Accountants                           ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page26______________________________________________________________________________________________________________     Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
OF THE U.S. SECURITIES EXCHANGE ACT OF 1934 I, Bruce E.
Schreiner, certify that: 1. I have reviewed this report for the fiscal year ended February
29, 2008 of Sense Technologies Inc. 2. Based on my knowledge, this 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
report; 3. Based on my knowledge, the financial statement, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
small business issuer as of, and for, the periods presented in this report; 4. The small business issuers other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have: a) designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which the annual report is
being prepared; b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the small business issuers
disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the companys internal
control over financial reporting that occurred during the period covered by the
annual report that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting. 5. The small business issuers other certifying officers and I
have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuers auditors and the audit
committee of small business issuers board of directors (or persons performing
the equivalent function): a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuers ability to
record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuers
control over financial reporting.  By
:  Bruce E.
Schreiner Bruce E. Schreiner Dated:  July 15, 2008 President and Principal Financial
Officer           ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page27______________________________________________________________________________________________________________     Exhibit
32.1  CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AND
RULE 13a-14(b) OR RULE 15d-14(b) OF
THE U.S. SECURITIES EXCHANGE ACT OF 1934   In connection with the Annual Report of
Sense Technologies Inc. (the "Company") on Form 10-KSB for the fiscal year ended
February 29, 2008 as filed with the Securities and Exchange Commission (the
"Report"), the undersigned, in the capacities and on the dates indicated below,
hereby certifies pursuant to 18 U.S.C. Section 1350, and Rule 13a-14(b), that to
his knowledge:  1. The Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and  2. The information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.    Dated:  July 15, 2008 By: Bruce E. Schreiner Bruce E. Schreiner President and Principal Financial Officer                                  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page28______________________________________________________________________________________________________________


SENSE TECHNOLOGIES INC. FINANCIAL STATEMENTS February 29, 2008 and February 28, 2007 (Stated in U.S. Dollars)


______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page29______________________________________________________________________________________________________________     [sense10ksb_february2008fi001.jpg]
BDO
DunwoodyLLP
Chartered
Accountants
600 Cathedral Place
925 West Georgia Street
Vancouver, BC, Canada V6C 3L2
Telephone:  (604) 688-5421
Facsimile:  (604) 688-5132
E-mail:  vancouver@bdo.ca
www.bdo.ca  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Directors and Stockholders, Sense Technologies Inc.  We have audited the accompanying balance
sheets of Sense Technologies Inc. as of February 29, 2008 and February 28, 2007
and the related statements of loss, cash flows and changes in capital deficit
for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly, we express no
such opinion.  An audit also 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 presentation of the
financial statements. We believe that our audits provide a reasonable basis for
our opinion.  In our opinion, these financial statements
referred to above present fairly, in all material respects, the financial
position of Sense Technologies Inc. as of February 29, 2008 and February 28,
2007 and the results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.  The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company had an accumulated
deficit of $15,473,645 at February 29, 2008 and incurred a net loss of
$2,041,704 for the year then ended. These conditions raise substantial doubt
about the Companys ability to continue as a going concern. Managements plans
in 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.  The financial statements as of February 28,
2007 and for the year then ended have been restated to correct errors in the
accounting for the impairment assessment on intangible assets and the accrual
estimated withholding taxes payable as described in Note 19.  The financial position of the Company as at
February 28, 2007 and the results of its operations and its cash flows for the
year then ended were audited by Amisano Hanson Chartered Accountant.
 Effective January 1, 2008, Amisano Hanson Chartered Accountant merged its
practice with BDO Dunwoody LLP with BDO Dunwoody LLP being the continuing
auditor.  /s/ BDO Dunwoody LLPChartered AccountantsVancouver, CanadaJuly 15, 2008    ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page30______________________________________________________________________________________________________________    SENSE
TECHNOLOGIES INC. BALANCE SHEETS February 29, 2008 and February 28, 2007 (Stated in U.S. Dollars)  February 28,2007February 29,
(Restated -2008
Note 19)ASSETSCurrentCash
$
988
$
3,100Inventory
41,235
76,891Prepaids
30,466
17,93372,689
97,924Equipment  Note 3
75,904
44,409Intangible assets  Note 4
2
2Security deposit
15,699
15,699$
164,294
$
158,034LIABILITIESCurrentBank overdraft
$
9,575
$
12,065Accounts payable  Notes 5 and
13
1,518,123
1,011,360Promissory note payable  Notes
8 and 13
445,852
75,000Advances payable  Notes 6 and
13
45,050
30,900Dividends payable  Note
9
171,550
139,962Convertible promissory notes
payable  Note 7
584,447
584,4472,774,597
1,853,734CAPITAL DEFICITClass A preferred shares, without par value,
redeemable at $1 per share  Note 920,000,000
shares authorized, 315,916 shares issued at
February 29, 2008 (February 28, 2007: 315,916)
315,914
315,914Common stock, without par value  Note 10100,000,000
shares authorized, 45,575,551 issued at February
29, 2008
(February 28, 2007: 45,575,551)
12,362,142
12,362,142Common stock subscribed  Note 10 (c)
650,500
440,500Common stock subscriptions receivable  Note 10
(c)
(891,432)
(891,432)Common stock to be issued  Note 10 (b)
288,889
-Promissory note receivable  Note 11
-
(585,000)Additional paid-in capital
137,329
62,529Deficit
(15,473,645)
(13,400,353)(2,610,303)
(1,695,700)$
164,294
$
158,034 Nature of Operations and Ability to Continue as a Going
Concern  Note 1 Commitments and Contractual Obligations  Note 15  SEE ACCOMPANYING NOTES   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page31______________________________________________________________________________________________________________     SENSE
TECHNOLOGIES INC. STATEMENTS OF LOSS For the years ended February 29, 2008 and
February 28, 2007 (Stated in U.S. Dollars)  February 28,2007February 29,
(Restated -2008
Note 19)Sales
$
75,546
$
97,532Direct costsCost of
sales
1,454
5,756Depreciation 
molds and manufacturing equipment
2,877
7,623Manufacturing
expenses
16,838
-Royalties  Note
4
162,500
60,000Write-off of
inventory  Note 12
76,891
68,307260,560
141,686(185,014)
(44,154)ExpensesAdvertising and
marketing
235,242
163,369Bad debts
-
32,325Consulting fees 
Note 10(b)
198,749
478,855Depreciation
12,342
3,123Filing fees
881
15,871Insurance
37,226
53,544Legal, accounting
and audit fees  Note 13
186,882
123,271Loan fees
-
7,500Management fees 
Notes 10 (b) and (c)
274,800
-Office and
miscellaneous
53,400
45,716Rent
65,678
64,276Repairs and
maintenance
496
829Research and
development
18,091
9,762Shareholder
information and printing
2,570
2,673Telephone and
utilities
5,075
5,493Transfer agent fees
8,766
2,278Travel
13,056
32,521Write-down of promissory note
receivable  Note 11
585,000
-Write-down of intangible assets
 Note 19 (a)
-
196,107Write-off of equipment  Note
3
19,341
-1,717,595
1,237,513    SEE ACCOMPANYING NOTES /contd  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page32______________________________________________________________________________________________________________     Continued SENSE
TECHNOLOGIES INC. STATEMENTS OF LOSS For the years ended February 29, 2008 and
February 28, 2007 (Stated in U.S. Dollars)   February 28,2007February 29,
(Restated -2008
Note 19)Loss before other items
(1,902,609)
(1,281,667)Other items:Other
income
4,855
3,274Interest on debts
(123,830)
(142,809)Interest on income
taxes
(9,120)
(7,668)Interest on
royalties payable  Note 4
(11,000)
-Net loss for the year
$
(2,041,704)
$
(1,428,870)Dividends for preferred shares  Note
9
(31,588)
(31,595)Net loss applicable to common
shareholders
$
(2,073,292)
$
(1,460,465)Basic and diluted loss per
share
$            
(0.05)
$             
(0.04)Weighted average number of shares
outstanding
41,150,354
35,232,704                     SEE ACCOMPANYING NOTES  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page33______________________________________________________________________________________________________________     SENSE
TECHNOLOGIES INC. STATEMENTS OF CASH FLOWS For the
years ended February 29, 2008 and February 28, 2007 (Stated in U.S. Dollars) February 28,2007February 29,
(Restated -2008
Note 19)Operating ActivitiesNet loss for the year
$
(2,041,704)
$
(1,428,870)Adjustments to
reconcile net loss to net cash used in operations:Common shares
issued for legal and consulting services
-
380,220Consulting fees
88,889
-Management
fees
274,800
-Write-down of
intangible assets
-
196,107Write-down of
promissory note receivable
585,000
-Write-off of
inventory
76,891
68,307Write-off of
equipment
19,341
-Depreciation
15,219
10,746Changes in
non-cash working capital balances related to operations:Accounts receivable
-
7,449Inventory
(41,235)
(14,511)Prepaids
(12,533)
(407)Accounts payable
506,763
107,578Cash used in operating activities
(528,569)
(673,381)Financing ActivitiesAdvances payable
14,150
25Bank indebtedness
(2,490)
12,065Proceeds from issuance of common
stock
-
155,900Common stock subscriptions
receivable
-
37,500Promissory note
payable
370,852
75,000Proceeds from
common share subscriptions
210,000
419,500Cash provided by financing
activities
592,512
699,990Investing ActivitiesAcquisition of equipment
(66,055)
(256)Acquisition of intangible
assets
-
(32,473)Cash used in investing activities
(66,055)
(32,729)Decrease in cash during the
year
(2,112)
(6,120)Cash, beginning of the year
3,100
9,220Cash, end of the year
$
988
$               
3,100Supplementary cash flow
information:Cash paid
forInterest
$
8,536
$
-Income
taxes
$
-
$
-  Non-Cash Transactions  Note 16  SEE ACCOMPANYING NOTES  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page34______________________________________________________________________________________________________________





SENSE
TECHNOLOGIES INC. Continued STATEMENTS OF CHANGE IN CAPITAL DEFICIT For the
years ended February 29, 2008 and February 28, 2007 (Restated) (Stated in U.S. Dollars)   Promissory



CommonCommon
Stock
Preferred Stock
Additional

Common
Common
StockIssued

Issued

Paid-in
Note
Stock
Stock to
Subscriptions
AccumulatedShares
Amount
Shares
Amount
Capital
Receivable
Subscribed
be
issued
Receivable
Deficit
TotalBalance, February 28, 2006, reported
42,225,811
$
11,580,664
343,050
$343,048
$ 62,529
$(585,000)
$
76,000
$     -
$ (772,332)
$
(11,846,716)
$(1,141,807)Restatement due
to Error
 Note 19
(b)
-
-
-
-
-
-
-
-
-
(93,172)
(93,172)Balance, February 28, 2006, restated
42,225,811
$ 11,580,664
343,050
$
343,048
$
62,529
$(585,000)
$
76,000
-
$ (772,332)
$
(11,939,888)
$(1,234,979)Pursuant to
private placement
-
at $0.10
600,000
60,000
-
-
-
-
-
-
-
-
60,000-
at $0.20
250,000
50,000
-
-
-
-
(40,000)
-
-
-
10,000Pursuant to the
exercise of warrants
-
at $0.15
383,333
57,500
-
-
-
-
(15,000)
-
7,500
-
50,000Pursuant to
agreements to convert preferred shares into common shares
-
at $0.29
116,407
33,758
(27,134)
(27,134)
-
-
-
-
-
-
6,624Common
shares issued in exchange for consulting services as per an agreement for
a right to purchase common shares at $0.19
2,000,000
380,220
-
-
-
-
-
-
-
-
380,220Cash
consideration thereon
-
at $0.10
-
200,000
-
-
-
-
-
-
(156,600)
-
43,400Dividends  Note
9
-
-
-
-
-
-
-
-
-
(31,595)
(31,595)Common share
subscriptions
-
-
-
-
-
-
419,500
-
30,000
-
449,500Net loss for the
year
-
-
-
-
-
-
-
-
-
(1,428,870)
(1,428,870)Balance,
February 28, 2007 (Restated)
45,575,551
$12,362,142
315,916
$315,914
$62,529
$(585,000)
$440,500
-
$(891,432)
$(13,400,353)
$(1,695,700)   /contd  SEE ACCOMPANYING NOTES


________________________________________________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page35________________________________________________________________________________________________________________________________________________


Continued SENSE
TECHNOLOGIES INC. STATEMENTS OF CHANGE IN CAPITAL DEFICIT For the years ended February 29, 2008 and
February 28, 2007 (Restated) (Stated in U.S. Dollars)   Promissory



CommonCommon
Stock
Preferred Stock
Additional

Common
Common
StockIssued

Issued

Paid-in
Note
Stock
Stock to
Subscriptions
AccumulatedShares
Amount
Shares
Amount
Capital
Receivable
Subscribed
be issued
Receivable
Deficit
TotalBalance February 28, 2007 (Restated)
45,575,551
$
12,362,142
315,916
315,914
62,529
(585,000)
440,500
-
(891,432)
(13,400,353)
(1,695,700)Dividends  Note 9
-
-
-
-
-
-
-
-
-
(31,588)
(31,588)Common share subscriptions
- Note 10 (c)
-
-
-
-
-
-
210,000
-
-
-
210,000Write-off of promissory note
receivable  Note 11
-
-
-
-
-
585,000
-
-
-
-
585,000Consulting fees  Note 16
-
-
-
-
-
-
-
88,889
-
-
88,889Management fees   Note 10 (b)
-
-
-
-
74,800
-
-
200,000
-
-
274,800Net loss for the year
-
-
-
-
-
-
-
-
-
(2,041,704)
(2,041,704)Balance, February 29, 2008
45,575,551
$
12,362,142
315,916
$
315,914
$
137,329
$
-
$
650,500
$
288,889
$
(891,432)
$
(15,473,645)
$
(2,610,303)               SEE ACCOMPANYING NOTES


________________________________________________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page36________________________________________________________________________________________________________________________________________________


SENSE
TECHNOLOGIES INC. NOTES TO THE FINANCIAL STATEMENTS February 29, 2008 and February 28, 2007 (Stated in U.S. Dollars)   Note 1 Nature of Operations
and Ability to Continue as a Going Concern  The Company holds an
exclusive license to manufacture, distribute, market and sell the ScopeOut®
product, a system of specially designed mirrors which are placed at specific
points on automobiles, trucks, sport utility vehicles or commercial vehicles to
offer drivers a more complete view behind the vehicle.  These financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States of America on a going concern basis, which
assumes that the Company will continue to realize its assets and discharge its
obligations and commitments in the normal course of operations. Realization
values may be substantially different from carrying values as shown and these
financial statements do not give effect to adjustments that would be necessary
to the carrying values and classification of assets and liabilities should the
Company be unable to continue as a going concern.  At February 29, 2008,
the Company had not yet achieved profitable operations, had an accumulated
deficit of $15,473,645 (2007 (restated) - $13,400,353) since its inception and
incurred a net loss of $2,041,704 (2007 (restated) - $ 1,428,870) for the year
and expects to incur further losses in the development of its business, all of
which casts substantial doubt about the Companys ability to continue as a going
concern.  The Companys ability to continue as a going concern is dependent
upon its ability to generate future profitable operations and/or to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they come due.  Management has no
formal plan in place to address this concern but considers obtaining additional
funds by equity financing and/or from related party. Management expects the
Companys cash requirement over the twelve-month period ended February 28, 2009
to be $1,580,000. While the Company is expending its best efforts to achieve the
above plans, there is no assurance that any such activity will generate funds
for operations.  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 and during the year ended
February 29, 2008, the Company changed its jurisdiction of organization from the
Yukon Territory back to British Columbia, Canada.  During the year ended
February 29, 2008 and February 28, 2007, the Company had assets and generated
sales primarily in the United States of America.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page37______________________________________________________________________________________________________________    Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 38   Note 2 Significant
Accounting Policies  The preparation of
financial statements in accordance with United States generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses in the
reporting period. The Company regularly evaluates estimates and assumptions
related to deferred income tax asset valuations, asset impairment, stock based
compensation and loss contingencies. The Company bases its estimates and
assumptions on current facts, historical experience and various other factors
that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ
materially and adversely from the Companys estimates. To the extent there are
material differences between the estimates and the actual results, future
results of operations will be affected.  The financial
statements have, in managements opinion, been properly prepared within the
framework of the significant accounting policies summarized below:   a) Inventory  Inventory consists of
finished goods which are recorded at the lower of average cost and net
realizable value. Average cost is determined using the weighted-average method
and includes invoice cost, duties and freight where applicable plus direct
labour applied to the product and an applicable share of manufacturing overhead.
A provision for obsolescence for slow moving inventory items is estimated by
management based on historical and expected future sales and is included in cost
of goods sold.  b) Equipment  Equipment is recorded at cost less
accumulated depreciation.  Depreciation is provided using the following
rates:  Computer equipment
30% declining balanceFurniture and equipment
20% declining balanceProduct molds
7 years straight-lineManufacturing equipment
30% declining balance
  c) Intangible Assets  The Companys
intangible assets are comprised of licenses fees and patent costs.
 Licensing fees and patent costs are generally amortized on a straight-line
basis over the periods of benefit and recognized on the statements of loss.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page38______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 3   Note 2 Significant
Accounting Policies  (contd)  d) Foreign Currency
Transactions  The functional and
reporting currency of the Company is the United States dollar.  Monetary
assets and liabilities denominated in currencies other than the U.S. dollar are
translated into U.S. dollars at the fiscal year-end rate of exchange.
 Non-monetary assets and liabilities denominated in other currencies are
translated at historic rates and revenues and expenses are translated at average
exchange rates prevailing during the month of transaction.  e) Income Taxes  The Company accounts
for income taxes in accordance with the asset and liability method. Under this
method, deferred income taxes are recognized for the future income tax
consequences attributable to differences between the financial statement
carrying amounts and their respective income tax bases and for loss and tax
credit carry forwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
temporary differences are expected to be recovered or settled. The effect on
deferred income tax assets and liabilities of a change in tax rates is
recognized in income in the period of enactment. Deferred income tax assets are
evaluated and if their realization is not considered to be "more likely than
not", a valuation allowance is provided.  f) Basic Loss Per
Share  The Company computes net loss per share in accordance with SFAS
No. 128 Earnings Per Share.  SFAS 128 requires presentation of both basic
and diluted earnings per share (EPS) on the face of the income statement.
 Basic loss per share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the year.  Diluted EPS gives effect to all dilutive potential common shares
outstanding during the year including stock options, using the treasury stock
method, and convertible preferred stock, using the if-converted method.  In
computing diluted EPS, the average stock price for the year is used in
determining the number of shares assumed to be purchased from the exercise of
stock options or warrants.  Diluted EPS excludes all dilutive potential
common shares if their effect is antidilutive. For the year ended
February 29, 2008, potentially dilutive common shares relating to options,
convertible promissory notes payable and convertible preferred shares
outstanding totaling 3,957,199 (2007  3,207,199) were not included in the
computation of loss per share because the effect was anti-dilutive.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page39______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 4  Note 2 Significant Accounting Policies  (contd)  g) Fair Market Value of Financial
Instruments  The carrying value of
cash, bank indebtedness, accounts payable, advances payable, dividends payable
and promissory notes payable approximate fair value because of the demand or
short-term maturity of those instruments.  The carrying value of the
promissory note receivable and convertible promissory notes payable also
approximates their fair value.  Unless otherwise noted, it is managements
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments.  h) Revenue Recognition  The Company recognizes
revenue when there is persuasive evidence of an arrangement, goods are shipped
and title passes, collection is probable, and the fee is fixed or determinable.
Provisions are established for estimated product returns and warranty costs at
the time the revenue is recognized. The Company records deferred revenue when
cash is received in advance of the revenue recognition criteria being met.  i) Product Warranty  The Company generally
sells products with a limited warranty on product quality and accrues for known
warranty if a loss is probable and can be reasonably estimated.  The
Company accrues for estimated incurred based on historical activity. The accrual
and the related expense for known issues were not significant during the periods
presented.  j) Research and
Development  Research and
development costs are expensed as incurred.  k) Advertising and
marketing costs The Company
recognizes advertising expenses in accordance with Statement of
Position 93-7, Reporting on Advertising Costs. Accordingly,
the Company expenses the costs of advertisements and marketing at the time the
expenditure occurs, and expenses the costs of communicating advertisements in
the period in which the advertising space or airtime is used.  l) Impairment of long-lived
assets  Long-lived assets are
continually reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page40______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 5   Note 2 Significant
Accounting Policies  (contd)  m) Stock-based
compensation  The Company adopted
SFAS No.123R commenced on March 1, 2006 and had applied the recommendations of
this standard using the modified prospective method. Under this application, the
Company is required to record compensation expense, based on the fair value of
the awards, for all awards granted after the date of the adoption and for the
unvested portion of previously granted awards that remain outstanding as at the
date of adoption. Effective with the adoption SFAS No.123R, the Company has
elected to use the Black-Scholes option pricing model to determine the fair
value of stock options granted. In accordance with SFAS No. 123R for employees,
the compensation expense is amortized on a straight-line basis over the
requisite service period which approximates the vesting period. Compensation
expense for stock options granted to non-employees is amortized over the
contract services period or, if none exists, from the date of grant until the
options vest. Compensation associated with unvested options granted to
non-employees is re-measured on each balance sheet date using the Black-Scholes
option pricing model.  n) Recently Issued Accounting
Pronouncements  In June 2006, the
Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes.  The interpretation clarifies
the accounting for uncertainty in income taxes recognized in a companys
financial statements in accordance with Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes.  Specifically, the
pronouncement prescribes a recognition threshold and a measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return.  The interpretation also provides
guidance on the related derecognition, classification, interest and penalties,
accounting for interim periods, disclosure and transition of uncertain tax
position.  The interpretation is effective for fiscal years beginning after
December 15, 2006.  Effective March 1, 2007, the Company adopted the
provisions of FIN 48. Based on the Companys assessment of FIN 48, as at March
1, 2007, there was no significant impact on the results of operations or
financial position and required no adjustment to the opening balance sheet
accounts. Our year-end analysis supports the same conclusion, and we do not have
an accrual for uncertain tax positions as of February 29, 2008. As a result,
tabular reconciliation of beginning and ending balances would not be meaningful.
If interest and penalties were to be assessed, we would charge interest to
interest expense, and penalties to other operating expense. It is not
anticipated that unrecognized tax benefits would significantly increase or
decrease within 12 months of the reporting date.  For additional
information, see Note 14.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page41______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 6   Note 2 Significant Accounting Policies  (contd)  n) Recently Issued Accounting
Pronouncements  (contd)  In September 2006, the
FASB issued SFAS No. 157, Fair Value Measurements.  This Statement
defines fair value as used in numerous accounting pronouncements, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosure related to the use of fair value measures in financial
statements.  SFAS 157 is effective for fiscal years beginning after
November 15, 2007. The Company is currently evaluating the timing of adoption
and the impact that adoption might have on its financial position or results of
operations.  On February 15, 2007,
the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities.  This Statement establishes presentation and
disclosure requirements designed to facilitate comparisons between companies
that choose different measurement attributes for similar types of assets and
liabilities.  SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The Company is currently evaluating the impact that the
adoption of SFAS No. 159 might have on its financial position or results of
operations.  In December 2007, the
FASB issued SFAS 141R Business Combinations which is effective for fiscal
years beginning after December 15, 2008. SFAS 141R, which will replace FAS 141,
is applicable to business combinations consummated after the effective date of
December 15, 2008.  The Company is currently evaluating the impact that the
adoption of SFAS No. 141R might have on its financial position or results of
operations.  In December 2007, the
FASB also issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements, an amendment of ARB 51.
SFAS No. 160 will change the accounting and reporting for minority
interests, which will be re-characterized as non-controlling interests and
classified as a component of equity. SFAS No. 160 requires retroactive
adoption of the presentation and disclosure requirements for existing minority
interests. SFAS No. 160 is effective for fiscal years beginning on or
after December 15, 2008 and interim periods within those fiscal years. The
Company is currently evaluating the impact that the adoption of SFAS 160 might
have on its financial positions or results of operations.  In March 2008, the FASB
issued SFAS 161 Disclosures about Derivative Instruments and Hedging Activities
 an amendment of SFAS 133.  This Statement requires enhanced disclosures
about an entitys derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. This Statement encourages, but does
not require, comparative disclosures for earlier periods at initial adoption.
 The Company is currently evaluating the impact that the adoption of SFAS
161 might have on its financial position or results of operations.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page42______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 7   Note 3 Equipment  February 29, 2008AccumulatedCost
Depreciation
NetComputer equipment
$
38,297
$
36,420
$
1,877Furniture and equipment
11,217
4,339
6,878Product molds
66,056
1,685
64,371Manufacturing equipment
27,136
24,358
2,778$
142,706
$
66,802
$
75,904
  February 28, 2007AccumulatedCost
Depreciation
NetComputer equipment
$
38,297
$
35,616
$
2,681Furniture and equipment
11,217
3,069
8,148Product molds
41,454
11,844
29,610Manufacturing equipment
27,136
23,166
3,970$
118,104
$
73,695
$
44,409
  During the year, the
Company wrote off the net carrying value of a production mold which is not
expected to be used in the future and has no resale value.  As a result,
the Company recognized $19,341 (2007: $Nil) as a loss from disposal of equipment
on the statements of operations for the fiscal year ended February 29, 2008.  Note 4 Intangible Assets  Intangible assets are
comprised as follows:  February 29,
February 28,Guardian Alert License
2008
2007Net carrying cost
$
1
$
1Scope Out Mirror
LicenseNet carrying cost
1
1$
2
$
2
   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page43______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 8   Note 4 Intangible Assets 
(contd)  Guardian Alert License  By an Assignment
Agreement dated April 30, 1992 and amendments thereto dated May 27, 1992,
July 14, 1992, April 5, 1993, August 13, 1993, March 10, 1997, May 29, 1997 and
February 25, 1999 the Company has been assigned the right, title, interest and
obligations in a License Agreement to manufacture, market and distribute a
microwave radar collision avoidance device for motor vehicles.  Pursuant to this
license, the Company is required to make royalty payments to the licensor 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.  As at February 29,
2008, the royalty payable related to the Guardian Alert License  was
$480,000 (2007: $480,000).  In order to retain the
exclusive right to manufacture, market and distribute the Guardian Alert, the
Company had been required, upon being assigned the license, to manufacture and
sell various minimum numbers of units by certain milestone dates.  As a
result of not being able to meet the minimum milestone requirements under the
license agreement, during the year ended February 28, 2004, the Company
determined that it did not wish to retain the exclusive right to manufacture,
market and distribute the Guardian Alert unit and, with agreement of the
licensor, ceased accruing the minimum royalty due to the licensor.  Any
product sales subsequent to this date are considered to be part of the minimum
royalty until such time that amounts exceed the minimum royalty accrued.  During the year ended
February 28, 2005, based on an assessment of recoverability that took into
consideration a history of operating losses and a forecast that demonstrated
continuing losses associated with the use of the Guardian Alert license, the
Company wrote-down the license rights to a nominal value of $1.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page44______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 9   Note 4 Intangible Assets 
(contd)  Scope Out Mirror
License  During the year ended February 28, 2005, the Company acquired a
license with a unlimited life to manufacture, sell, deliver and install the
Lateral-View Mirror (Scope Out Mirror).  As consideration, the Company
paid a license fee of $150,000.  During the year ended February 28, 2007, the Company determined
the license was impaired and accordingly, wrote it down to a nominal value of $1
(Note 19(a)).  Pursuant to the Scope
Out Mirror License agreement, the Company is obligated to pay a royalty of 10%
of the wholesale price for each Scope Out Mirror sold which, in any event, shall
not be less than $2.00 per unit.  In order to retain the
exclusive right to manufacture, sell, deliver and install the Scope Out Mirror,
the Company is required to pay the royalty due on the following minimum number
of units sold:  i) 30,000 units per year
for the years ended September 23, 2005 and 2006; ii) 60,000 units for the
year ended September 23, 2007; and iii) 100,000 units per year
in the years ended September 23, 2008 and thereafter.  During the year ended
February 29, 2008, the Company accrued $162,500 (2007: $60,000) in respect of
the royalty owed in respect of the Scope Out Mirror License agreement.
 Under the terms and conditions of the license agreement, the Company is
obligated to pay interest on the outstanding royalty payable to the extent that
the minimum royalties due under the agreement have not been paid and is
calculated at a rate of 8% per annum.  As of February 29, 2008, the Company
has accrued $11,000 (2007: Nil) as interest payable.  Note 5 Accounts Payable  Note 13  February 29,
February 28,2008
2007Trade payables
$
304,372
$
185,955Accrued fees
130,000
15,000Accrued payroll
55,804
54,026Accrued interest payable
185,348
96,485Accrued non resident withholding taxes,
including
accrued interest  Note 19(b)
109,960
100,840Accrued royalties payable
713,500
540,000Accrued taxes payable
19,139
19,054$
1,518,123
$
1,011,360
   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page45______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 10   Note 5 Accounts Payable  Note 13 
(contd)  Included in the accrued
fees was $100,000 payable to a consulting firm.  During the year ended
February 29, 2008, the Company entered into a consulting agreement with an
unrelated company.  The Company received the services and as consideration,
the Company agreed to pay $100,000 in cash and to issue 1,111,111 common shares
of the Company.  As of February 29, 2008, the shares have yet to be issued.
 The fair value of the shares was at $0.08 per share based on the quoted
market share price at February 29, 2008.  Note
6 Advances Payable  Note 13  Advances payable are unsecured,
non-interest bearing and have no specific terms of repayment.  Note 7 Convertible Promissory Notes
Payable  February 29,
February 28,2008
2007Series B secured
promissory notes payable, secured by a charge over the Companys
inventory, bearing interest at 10% per annum and are payable on
demand, along with accrued interest thereon, on or after August 30,
2005. These notes plus accrued interest may be redeemed at any time
after August 30, 2005. These notes may be converted into common
shares of the Company at any time prior to demand for payment at the
rate of one common share for each $0.29 of principal and interest owed.
 As at February 28, 2008 and 2007, these notes were in
arrears.
$
534,447
$
534,447Unsecured
promissory notes bearing interest at 10% per annum.  These notes plus
accrued interest are convertible into common shares of the Company at the
rate of one common share for each $5.40 of principal and interest owed.
These notes have matured and the holders thereof have received default
judgements against the Company.
50,000
50,000584,447
584,447Less:  current portion
(584,447)
(584,447)Long-term portion
$                 -
$                
-
   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page46______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 11   Note 8 Promissory Note Payable  Note
12  February 29,
February 28,2008
2007Promissory notes
payable, unsecured, bearing interest at the rate of 10% per annum with
repayment terms between October 2006 and March 1, 2007.
$
105,000
$
75,000Promissory notes
payable, unsecured, bearing interest at the rate of 12% per annum with
repayment terms between October 2006 and March 1, 2007.
240,000
-Promissory note
payable, personally guaranteed by a director of the Company, bearing
interest at 12% per annum and maturing on November 1, 2008. The note is
repayable in monthly payments of $750 representing interest only with the
principal balance due entirely on maturity.
75,000
-Promissory note
payable, personally guaranteed by a director of the Company bearing
interest at 12% per annum and maturing on March 1, 2009. The note is
repayable in monthly principal and interest payments of $2,479.
25,852
-445,852
75,000Less:  current portion
(445,852)
(75,000)Long-term portion
$                   
-
$                    
-
  Note 9 Preferred Stock  The Class A preferred
shares entitle the holders thereof to cumulative dividends of $0.10 per share
annually and the right to convert the preferred shares into common shares at the
rate of $0.29 per share. The shares were redeemable at the option of the Company
at any time after August 30, 2005 at the redemption price of $1.00 per share
plus payment of unpaid dividends.  Dividends on preferred
shares are payable annually on July 31 of each year.  During the year ended
February 29, 2008, the Company accrued dividends payable of $31,588 (2007:
$31,595).  During the year ended February 28, 2007, the Company converted
27,134 preferred shares valued at $27,134 into common shares of the Company at
the ratio of 3.448 common shares for each preferred share held for a total of
93,566 common shares.  The Company also converted $6,624 of accrued
preferred share dividends payable at the rate of 3.448 common shares for each $1
of accrued dividends payable outstanding for a total of 22,841 common
shares.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page47______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 12   Note 10 Common Stock  a) Escrow  At February 29, 2008
and 2007, there are 5,970,190 performance shares held in escrow by the Companys
transfer agent.  Included in this amount are 3,250,000 escrow shares to be
earned out on the basis of one share for each $0.50 of cash flow generated by
the Company.  Once these shares are earned out, the remaining 2,720,190
escrow shares are to be earned out for each $5.00 of cash flow generated by the
Company.  The release of these shares is subject to the direction or
determination of the relevant regulatory authorities.  The escrow shares
have been excluded from the calculation of weighted average number of shares
outstanding for the year on the statements of loss.  Upon the performance
has achieved, the Company will record a compensation expense equal to the fair
value of the common share upon the date of release.  b) Right-to-Purchase Common
Shares  During the year ended
February 28, 2007, the Company granted the right to purchase 2,000,000 common
shares at $0.10 per share for a period of two years in exchange for consulting
services subject to completion of certain milestone achievements.  As the
required milestone was completed prior to the year ended, the Company recognized
$380,220 as consultant fees for the year ended February 28, 2007 and credited to
additional paid-in capital.  The consultant exercised the right to purchase
the 2,000,000 common shares during the year, the Company had reclassified the
$380,220 from additional paid-in capital to share capital.  This Right-to-Purchase,
accounted for in accordance with the provisions of Statement of Financial
Accounting Standards No. 123R, Share-based Payments, and EITF 96-18,
Accounting for Equity Instruments that are issued to other than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services, was valued at
$380,220 using the Black-Scholes option value pricing model based on historical
share price with the following assumptions:  Expected dividend yield
0.00%Expected volatility
174.49%Risk-free interest rate
3.91%Expected term in years
2 years
   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page48______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 13   Note 10 Common Stock  (contd)  b) Right-to-Purchase Common Shares
 (contd)  During the year ended
February 29, 2008, the Company granted an officer and a director of the Company
to the right to receive 2,500,000 common shares for past services provided.
 The fair value of each common share was $0.08 on the grant date.  The
shares, fully vested and non-forfeitable on the grant date, have not yet been
issued.  The Company has recognized $200,000 as additional management fees
on the Statement of Loss and as Common Shares to be Issued on the 2008 Balance
Sheet. Further, in connection with a consulting services agreement, the Company
also committed to issue 1,111,110 common shares with fair value of $88,889,
being $0.08 per share based on the quoted market price of the Companys common
shares.  c) Commitments  Stock-based
Compensation Plan  The Company has
adopted a Stock Option Plan (the plan) in which the Compensation Committee of
the Board of Directors makes a determination to whom options should be granted
and at what price and their terms of vesting. The maximum number of shares to be
issued under the plan is 2,000,000 shares.  The Company adopted
SFAS No.123R commenced on March 1, 2006. Effective with the adoption SFAS
No.123R, the Company has elected to use the Black-Scholes option pricing model
to determine the fair value of stock options granted. In accordance with SFAS
No. 123R for employees, the compensation expense is amortized on a straight-line
basis over the requisite service period which approximates the vesting period.
Compensation expense for stock options granted to non-employees is amortized
over the contract services period or, if none exists, from the date of grant
until the options vest. Compensation associated with unvested options granted to
non-employees is re-measured on each balance sheet date using the Black-Scholes
option pricing model.  The expected
volatility of options granted has been determined using the method described
under SFAS No. 123R using the historical stock price. The Company uses
historical data to estimate option exercise, forfeiture and employee termination
within the valuation model. For non-employees, the expected term of the options
approximates the full term of the options. The risk-free interest rate is based
on a treasury instrument whose term is consistent with the expected term of the
stock options. The Company has not paid and does not anticipate paying dividends
on its common stock; therefore, the expected dividend yield is assumed to be
zero. In addition, SFAS No.123R requires companies to utilize an estimated
forfeiture rate when calculating the expense for the reporting period. Based on
the best estimate, management applied the estimated forfeiture rate of Nil in
determining the expense recorded in the accompanying Statement of Loss.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page49______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 14   Note 10 Common Stock  (contd)  c) Commitments 
(contd)  Stock-based
Compensation Plan  (contd)  The Company has granted
employees and directors common share purchase options.  These options were
granted with an exercise price equal to the market price of the Companys stock
on the date of the grant.  February 29, 2008WeightedAverageExerciseOptions
PriceOutstanding and exercisable at beginning of the
year
275,000
$0.91Granted
1,000,000
$0.05Expired
(250,000)
$0.90Outstanding and exercisable, February 29, 2008
1,025,000
$0.07
  February 28, 2007WeightedAverageExerciseOptions
PriceOutstanding and exercisable at beginning of the
year
350,000
$1.12Expired
(75,000)
$1.88Outstanding and exercisable, February 28, 2007
275,000
$0.91
  The weighted average
remaining contractual life of the share purchase options at February 29, 2008 is
3.24 years (February 28, 2007: 0.87 years)  For the year ended February 29, 2008,
the Company granted a total of 1,000,000 options expiring on December 31, 2012
to the directors of the Company.  These options vested at the grant date
with exercise price of $0.05 per share.  The fair value of these options
was $0.07 per share, totaling $74,800 which was recognized as management fee in
the year ended February 29, 2008.  The fair value of the options was
estimated using the Black-Scholes option pricing model with the following
assumptions:  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page50______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 15  Note 10 Common Stock  (contd)  c) Commitments 
(contd)  Stock-based
Compensation Plan  (contd)  2008
2007Expected dividend yield
0.0%
-Expected volatility
261%
-Risk-free interest rate
3.86%
-Expected term in years
5 years
-
  As at February 29, 2008, the
unamortized compensation expense on the outstanding options was $Nil (2007:
$Nil).  At February 29, 2008, the following
employee and director common share purchase options were outstanding entitling
the holders thereof the right to purchase one common share for each share
purchase option held:  Aggregate IntrinsicExercise
Value ClosingNumber
Price
Price
Expiry Date25,000*
$1.00
$
         -
March 14, 20081,000,000
$0.05
$30,000
December 31, 20121,025,000
  * Subsequent to
February 29, 2008, the 25,000 share purchase options expired unexercised.  Warrants As of February 29, 2008
and February 28, 2007, the Company had no outstanding warrants.  Common Shares Subscribed As at February 29,
2008, the Company has received $21,000 in respect of private placements of
140,000 common shares at $0.15 per share, $579,500 in respect of private
placements of 5,795,000 common shares at $0.10 per share and $50,000 in respect
of private placements of 1,000,000 common shares at $0.05.  Subsequent to
February 29, 2008, the Company issued  6,860,000 common shares.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page51______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 16   Note 10 Common Stock  (contd)  c) Commitments 
(contd)  Common Shares
Subscribed  (contd)  As at February 28, 2007, the Company had received $21,000 in
respect of private placements of 140,000 common shares at $0.15 per share and
$419,500 in respect of private placements of 4,195,000 common shares at $0.10
per share.  As at February 28, 2007, these shares had not been issued. Common Stock
Subscription receivable Subsequent to February
29, 2008, a total of 1,530,900 common shares which were previously issued to
third party investors pursuant to a subscription agreement, but unpaid were
returned to the treasury for nil consideration.  No gain or loss was
recognized on the redemption.  Note 11 Promissory Note Receivable  The promissory note
receivable in the principal amount of $585,000 (2007: $585,000) due from
significant stockholders of the Company is due on demand, secured by a pledge of
shares of a company owned by stockholders of the Company and bears interest at
9% per annum.  During the year ended February 29, 2008, the Company
recorded a write-down of $585,000 as a result of determining the promissory note
receivable to be uncollectible.  Note 12 Write-off inventory  During the year ended
February 29, 2008, the Company wrote off the slow-moving and obsolete inventory
totaling $76,891 (2007: $68,307).  Note 13 Related Party Transactions  The Company incurred the following charges with directors,
stockholders and companies with common directors and stockholders:  February 29,
February 28,2008
2007Interest expense
$
32,143
$
64,594Legal, accounting and audit
fees
$
17,150
$
10,305
  As at February 29,
2008, included in the trade payables (Note 5) is $33,495 (2007: $36,343) owing
to directors of the Company, an accounting firm in which a director of the
Company is a partner and a company controlled by the Companys President and a
director with respect to unpaid fees, purchases and expenses, $480,000 (2007:
$480,000) owing to stockholders of the Company  in respect of royalties
payable and $50,992 (2007: $50,992) owing to the former president of the Company
in respect of unpaid wages.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page52______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 17   Note 13 Related Party Transactions 
(contd)  At February 29, 2008,
advances payable of $40,050 (2007: $30,900) are due to a company controlled
by a director of the Company.  At February 29, 2008,
promissory notes payable of $345,000 (2007:  $75,000) is due to a
profit sharing and retirement plan which is administered by a director of the
Company.  The accounts payable
and advances payable are unsecured, non-interest bearing and have no specific
terms of repayment.  Note 14 Income Taxes  The tax effects of the
temporary differences that give rise to the Company's estimated deferred tax
assets and liabilities are as follows:  February 29,
February 28,2008
2007(26.00%)
(34.12%)Net operating loss carryforwards
$
1,356,000
$
1,307,000Equipment
5,000
-Valuation allowance for deferred tax assets
(1,361,000)
(1,307,000)Net deferred tax assets
$
-
$
-
  The provision for
income taxes differ from the amount established using the Canadian statutory
income tax rate as follows:  February 29,
February 28,2008
2007Income benefit at statutory rate
$
(697,000)
$
(485,000)Stock based compensation
26,000
-Reduction in tax rates
425,000
-Write-off of note receivable
200,000
-Other differences
(8,000)
67,000Increase in valuation allowance
54,000
418,000Deferred income tax recovery
$
-
$
-
  As of February 29,
2008, the Company had net operating loss carryforwards of approximately
$5,216,000 available to offset future taxable income.  The carryforwards
will begin expiring in 2010 unless utilized in earlier years.   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page53______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 18  Note 14 Income Taxes 
(contd)  The Company evaluates
its valuation allowance requirements based on projected future operations. When
circumstances change and this causes a change in managements judgment about the
recoverability of deferred tax assets, the impact of the change on the valuation
allowance is reflected in current income. As management of the Company does not
currently believe that it is more likely than not that the Company will receive
the benefit of this asset, a valuation allowance equal to the deferred tax asset
has been established at both February 29, 2008 and February 28, 2007.  Uncertain Tax
Positions  On March 1, 2007, the
Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes" ("FIN 48"). FIN 48 prescribes a recognition threshold and
measurement attribute for the recognition and measurement of tax positions taken
or expected to be taken in income tax returns. FIN 48 also provides guidance on
de-recognition of income tax assets and liabilities, classification of current
and deferred income tax assets and liabilities, and accounting for interest and
penalties associated with tax positions.  The Company files
income tax returns in the U.S. federal jurisdiction, various state and foreign
jurisdictions.  All our tax returns are subject to tax examinations by U.S.
federal and state tax
authorities, or examinations by foreign tax authorities until respective statue
of limitation.  The Company currently has no tax years under
examination.  Based on the
managements assessment of FIN 48, they concluded that the adoption of FIN 48,
as of March 1, 2007, had no significant impact on the Companys results of
operations or financial position, and required no adjustment to the opening
balance sheet accounts.   The year-end analysis supports the same
conclusion, and the Company does not have an accrual for uncertain tax positions
as of February 29, 2008. As a result, tabular reconciliation of beginning and
ending balances would not be meaningful. If interest and penalties were to be
assessed, we would charge interest to interest expense, and penalties to other
operating expense. It is not anticipated that unrecognized tax benefits would
significantly increase or decrease within 12 months of the reporting date.  The Company is in
arrears on filing its statutory income tax returns and is therefore has
estimated the expected amount of loss carry forwards available once the
outstanding returns are filed.  The Company expects to have significant net
operating loss carry forwards for income tax purposes available to offset future
taxable income.  Note 15 Commitments and
Contractual Obligations  a) In accordance with the terms of a development and consulting
agreement dated May 27, 1997, the Company has agreed to pay a royalty of $0.50
for each unit sold of the backup radar collision avoidance device up to a
maximum of 200,000 units.  b) The Company has entered
into a lease agreement for office premises in Chandler, Arizona requiring a base
monthly rental payment of $4,085 until September, 2010.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page54______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 19   Note 16 Non-Cash
Transactions  Investing and financing activities
that do not have a direct impact on current cash flows are excluded from the
statements of cash flows.  The following transactions were excluded from
the statements of cash flows:  During the year ended
February 29, 2008, the Company granted 2,500,000 common shares to a director and
an officer of the Company.  The fair value of the services provided
($200,000) was recorded as management fees (Note 10(b)).   In
connection with a consulting services agreement, the Company also granted
1,111,110 common shares with fair value of $88,889, being $0.08 per share based
on quoted market price of the common shares as of February 29, 2008.  During the year ended
February 28, 2007, the Company issued 116,407 common shares pursuant to an
agreement to convert 27,134 preferred shares valued at $27,134 to common shares
and also to convert accrued preferred share dividends payable thereon totaling
$6,624 to common shares.  Note 17 Comparative
Figures  Certain of the
comparative figures have been reclassified to conform with the current years
presentation.  Note 18 Segmented
information and sales concentration  The Company operates in
one industry segment being the production, marketing and distribution of safety
awareness products in the automotive industry. Substantially, all of the
Companys operations, and assets are located in the United States. During the
year ended February 29, 2008, there were two customers that accounted for
$32,485 (43%) of sales revenue.  During the year ended February 28, 2007,
there were no significant customers that accounted for greater than 10% of the
sales revenue.  Note 19 Restatement of 2007
Financial Statements  a) Recognition of Impairment of
Intangible Assets  Subsequent to the
issuance of the financial statements for the fiscal year ended February 28,
2007, the Company has corrected an error in respect of the valuation of its
intangible assets.  Based on the undiscounted cash flows analysis, the
potential sales from the underlying licenses would not be sufficient to cover
the costs associated with the products.  Management misinterpreted the
information contained in the impairment assessment in completing its 2007
financial statements.  The Company has now recognized the impairment of its
intangible assets during the year ended 2007 and as a result, has written down
its intangible assets by $196,107 which increased the net loss and accumulated
deficit in 2007 by $196,107.  The statement of cash flows was unaffected by
the restatement.  ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page55______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 20  Note 19 Restatement of 2007
Financial Statements  (contd)  (b) Calculation of
non-resident withholding taxes and interest  Subsequent to the
issuance of the financial statements for the year ended February 28, 2007, the
Company has corrected errors in the omission of an accrual of non-resident
withholding taxes and the associated interest during the period from 1999 to
2007.  As a result of the correction, the Company has now recorded an
accrual for non-resident withholding tax and the associated interest and penalty
of $100,840 at February 28, 2007, of which $7,668 of interest relates to the
fiscal year ended 2007 and $93,172 (of withholding taxes and associated
interest) related to the periods prior to fiscal year ended 2007.  As a
result, the accumulated deficit as of March 1, 2006 had been increased by
$93,172 and the net loss for the year ended February 28, 2007 had also been
increased by $7,668.  The Company has also increased the accounts payable
as of February 28, 2007 by $100,840.  The statement of cash flows was not
affected by the restatement due to correction of errors.  The following
represents the effect on the Companys prior balance sheet after giving effect
to the restatement adjustments discussed above:  February 28,2007Intangible assetsAs previously
recorded
$
196,109Impairment of
Intangible assets (a)
196,107As restated
$
2
  February 28,2007Accounts payableAs previously
recorded
$
910,520Calculation of
non-resident taxes and interest (b)
100,840As restated
$
1,011,360
  February 28,2007Accumulated deficitAs previously
recorded
$
(13,103,406)Impairment of
Intangible assets (a)
(196,107)Calculation of
non-resident taxes and interest (b)
(100,840)As restated
$
(13,400,353)
   ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page56______________________________________________________________________________________________________________     Sense Technologies Inc. Notes to the Financial Statements February 29, 2008 and February 28, 2007 (Stated in US Dollars)  Page 21   Note 19 Restatement of 2007
Financial Statements (contd)  The following represents the
Companys net loss as previously reported and after giving effect to the
restatement adjustments for the year ended February 28, 2007:  February 28,2007Net Loss for the yearAs previously
recorded
$
(1,225,095)Impairment of
intangible assets (a)
(196,107)Interest on unpaid
withholding taxes (b)
(7,668)As restated
$
(1,428,870)Loss per share  basic and dilutedAs previously
recorded
$
(0.03)Impairment of
intangible assets(a), and interest on
non-resident
taxes (b)
(0.01)As restated
$
(0.04)
      ______________________________________________________________________________________________________________ SENSE
TECHNOLOGIES INC. 10KSB Page57______________________________________________________________________________________________________________