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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, 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 ended******February
28, 2007**

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to
____________________

000-29990(Commission file number)

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

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

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$97,532

As of June 1, 2007, the aggregate market value of the voting
common equity held by non-affiliates of the registrant was US$2,050,900,
based on the closing trade reported on the NASD Over-the-Counter Bulletin Board
quotation system. Shares of Common Stock held by each officer and director
and by each person known to the issuer who owns 5% or more of the
outstanding Common Stock have been excluded from this calculation as such
persons may be considered to be affiliated with the Company.

As of June 1, 2007, the Registrants outstanding common stock
consisted of 45,575,551 shares.

Transitional Small Business Disclosure Format: Yes [ 
 ] No [X]

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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

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SENSE TECHNOLOGIES INC. FORM 10-KSB

Note Regarding Forward Looking Statements

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

PART I

Item 1. Description of Business Overview

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

Our Guardian Alert® product uses Doppler radar technology to
warn vehicle drivers of the presence of people or obstacles in blind spots that
exist behind their vehicles when backing up. Marketing of the product has been
primarily to automobile and truck dealers, fleet operators, and other
after-market automotive industry participants. The Company began manufacturing
the Guardian Alert® Doppler Awareness System for the passenger car market during
the first quarter of fiscal 2003. 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 was incorporated under the laws of the Province of
British Columbia, Canada, on May 25, 1988 under the name Wizard Resources Ltd.
Our corporate name was changed to Graham Gold Mining Corporation on October 11,
1988 and subsequently to Sense Technologies Inc. on October 27, 1997 in
connection with the acquisition of our current business. On December 14, 2001,
we changed our jurisdiction of organization from British Columbia to the Yukon
Territories.

Our shares are currently quoted on the Over-the-Counter
Bulletin Board (OTCBB) under the trading symbol SNSG.OB. We were previously
listed on the both the Canadian Venture Exchange (now called the TSX Venture
Exchange) and the Nasdaq SmallCap Market. We voluntarily delisted our shares
from the Canadian Venture

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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 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

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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 believe that currently production of our
products is more cost effectively achieved by outsourcing the manufacturing and
assembly of the components.

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

Market and Marketing of our Guardian
Alert® Doppler Awareness System

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

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

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- 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 between $300 to $700 which
we believe would appeal to most new-vehicle buyers that are interested in the
safety and protection aspect of the product. In perspective, the cost of the
product is less than typical insurance deductibles and therefore avoiding one
incident would allow the product to pay for itself. In addition to actual repair
cost, Guardian Alert ® Doppler Awareness Systempurchasers also receive
the benefit of saving the considerable time and inconvenience of having their
vehicle repaired and processing insurance claims. Our product can also be
installed beneath the plastic skin of a bumper, thereby not altering the
appearance of the vehicle.

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

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

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

Competition and Our Competitive Advantages

The backing awareness industry includes manufacturers of active
sensing devices using ultrasonic, infrared and radar technology to detect the
presence of obstacles or persons behind a reversing vehicle. There are also a
number of passive systems such as convex rear cross-view mirrors, rearward
facing television cameras and

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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.

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.

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

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

Production of our ScopeOut® Product

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

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

Competition and Our Competitive Advantages

In our research, we have found no products comparable 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.

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Our Patents, Trademarks & Licenses

Patents & Trademarks

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

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

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

Licenses & Royalties

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

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

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

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

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

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

In the event these minimum sales are not realized, we are
obligated to pay an amount in lieu of royalties equal to the royalties that
would have been payable if the minimum number of units were manufactured and
sold. Commencement of Commercial Production took place on October 1, 1999.
During the fiscal year ended February 28, 2002 we paid a minimum royalty payment
of $128,388 to maintain the licenses in good standing. In 2003, 2004, 2005 and
2006, the Company did not pay its minimum royalty payment. The effect of this is
to convert the license from exclusive to non-exclusive status. All other
provisions remain the same.

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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 (which did occur) along with a royalty of 10% of wholesale price for each
ScopeOut® unit sold, but not less than $2.00 per unit.

Minimum quantities are:

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

Governmental Approval

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

Employees

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

Item 2. Description of Property

Sales inquiries 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.

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 2007.

PART II

Item 5. Market for Common equity and Related Stockholder
Matters

Market and Trading Price

8

---

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 28, 2007
    $0.05
    $0.05November 30, 2006
    $0.18
    $0.18August 31, 2006
    $0.20
    $0.20May 31, 2006
    $0.13
    $0.13February 28, 2006
    $0.22
    $0.22November 30, 2005
    $0.25
    $0.20August 31, 2005
    $0.35
    $0.35May 31, 2005
    $0.20
    $0.15


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 28, 2007, there were 330 shareholders of record
holding 45,575,551 shares of our common stock.

Dividends

There are no dividend restrictions in the Company.

Recent Sales of Unregistered Securities

On April 11,2006, one investor under Rule 506 of Regulation D,
subscribed for 50,000 common shares at a price of US$0.20 per share for total
proceeds to the Company of US$10,000. The shares are restricted pursuant to Rule
144 promulgated under the U.S. Securities Act of 1933.

On June 29,2006, two investors under Rule 506 of Regulation D,
subscribed for 600,000 common shares at a price of US$0.10 per share for total
proceeds to the Company of US$60,000. The shares are restricted pursuant to Rule
144 promulgated under the U.S. Securities Act of 1933.

On September 7, 2006, we issued 116,407 common shares to one
investor pursuant to the conversion of 27,134 Class A Preferred Shares and the
subscription, under Rule 506 of Regulation D, equal to the amount of accrued
dividends payable by the Company at $0.10 per share. The shares are restricted
pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933.

In the year ended February 28, 2007, we issued a total of
523,333 shares pursuant to the exercise of previously issued common share
purchase warrants. The warrants were exercised at $0.15 per share for aggregate
proceeds to the Company of $78,500. The warrants were issued under Rule 506 of
Regulation D and the shares are restricted pursuant to Rule 144 promulgated
under the U.S. Securities Act of 1933.

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

The following discussion and analysis should be read in
conjunction with our audited Financial Statements and Notes thereto for the
period ended February 28, 2007 and February 28, 2006.

9

---

Overview of Operations

Sense holds a license to manufacture, distribute, market and
sublicense world-wide, a patented technology which is used to produce the
Guardian Alert® backing awareness system for motor vehicles utilizing microwave
radar technology. The Company assembles the product in Charlotte, NC. The
company also holds an exclusive license to manufacture, distribute, market and
sublicense world-wide, 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 28, 2007 as compared to the
period ended February 28, 2006.

Sales for the period ended February 28, 2007 were $97,532, a 30
percent increase over the period ended February 28, 2006. This difference is
mainly due to some increasing demand for the Guardian Alert® product.

Direct costs were $143,825, an 82 percent decrease from the
period ended February 28, 2006. They Company realized a positive gross margin
contribution of $91,776 on sales less cost of sales and manufacturing expenses.
Research and Development costs of $9,762, and minimum royalties on ScopeOut®
products of $60,000 have also been charged in Direct Costs. Additionally, as
required by the Company's outside auditors, $68,307 of ScopeOut® inventory
products have been written off due to slow sales.

General and administrative expenses were $1,182,076 for the
period ended February 28, 2007 as compared to $761,355 for the period ended
February 28, 2006. The increase was primarily attributable to increased costs
necessary to test market and launch the ScopeOut® product lines.

Liquidity and Capital Resources

At February 28, 2007, the Company had cash and cash equivalents
on hand of negative $8,965 compared with $9,220 at February 28, 2006. During the
period ended February 28, 2007, the Company funded operations using existing
cash balances, cash flow from operations, and by raising money through the
issuance of Common Stock.

At February 28, 2007, we had a working capital deficit of
$1,654,970 compared to a working capital deficit of $1,376,041 at February 28,
2006. The reduction of working capital is largely due to the write off of
ScopeOut® inventory products.

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

Item 7. Financial Statements

The Companys audited financial statements for the fiscal year
ended February 28, 2007 are attached to this report following the signature page
and Certifications.

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

None

Item 8A. Controls and Procedures

The Companys management, with the participation of the
Companys Chief Executive Officer, who is also acting in the capacity as
principal accounting officer, has evaluated the effectiveness of the Companys
disclosure controls and procedures as of a time within 60 days prior to February
28, 2007. Based on this evaluation, the Companys Chief Executive Officer
concluded that the Companys disclosure controls and procedures are effective
for gathering, analyzing and disclosing the information the Company is required
to disclose in the

10

---

reports it files under the Securities Exchange Act of 1934,
within the time periods specified in the SECs rules and forms. Such evaluation
did not identify any change in the Companys internal control over financial
reporting that occurred during the year ended February 28, 2007 that has
materially affected or is reasonably likely to materially affect the Companys
internal control over financial reporting.

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

In connection with this annual report, management carried out
an evaluation, under the supervision and with the participation of the
management, including the President and principal accounting officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing,
the President and principal accounting officer concluded that the Companys
disclosure controls and procedures are effective in connection with the filing
of this Annual Report on Form 10-KSB for the year ended February 28, 2007.

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

Item 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 June 1, 2007, 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, 1993Cynthia L. Schroeder
    47
    Director
    June 8, 2000James R. Iman
    62
    Director
    June 21, 2004James N. Morton
    61
    Secretary
    From June 18, 2004 to April 23, 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.

CYNTHIA L. SCHROEDER, Director.Ms. Schroeder was
appointed as a director of Sense on June 8, 2000. From 1987 to the present, Ms.
Schroeder has been the Senior Vice President and Chief Financial Officer of
Mosaic located in Omaha, Nebraska.

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.

11

---

JAMES N. MORTON, Secretary. Mr. Morton ceased being the
Secretary of Sense on April 23, 2007.

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 28, 2007, 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. Each of the Audit and Compensation Committees is responsible to the
full Board of Directors. The functions performed by these committees are
summarized below:

Audit Committee. The Audit Committee considers the
selection and retention of independent auditors and reviews the scope and
results of the audit. In addition, it reviews the adequacy of internal
accounting, financial and operating controls and reviews Sense's financial
reporting compliance procedures. The members of the Audit Committee are Cynthia
Schroeder, 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 28, 2007; (2) received
a report from Amisano Hanson, 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 28, 2007 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 Cynthia L. Schroeder 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.

12

---

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
Golden Queen in all capacities for the year ended February 28, 2007.

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
    2007
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil


OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR

There were no stock options granted during the Companys fiscal
year ended February 28, 2007.

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

There were no stock options exercised during the Companys
fiscal year ended February 28, 2007.

TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND
EMPLOYMENT CONTRACTS

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

COMPENSATION 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. The Directors of Sense did not receive any
compensation for the year ended February 28, 2007 for services provided as a
Director or member of a committee of the Board of Directors.

13

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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 28, 2007 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
    275,000
    $.91
    1,725,000Equity compensation plans not approved by security
      holders
    Nil
    N/A
    N/ATotal
    275,000
    $.91
    1,725,000


On June 1, 2007 there were 45,575,551 shares of our common
stock (the "Common Stock"), issued and outstanding, each share carrying the
right to one vote, and 309,290 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 June 1, 2007,
by

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

Except as noted 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]
    7.43%First Americans Insurance Service Inc. 2621 West
      Highway 30 Grand Island, NE 68803
    2,700,000
    5.93%Bruce E. Schreiner, Director 3535 Grassridge Drive
      Grand Island, Nebraska 68803
    1,184,838
    2.60%Cynthia L. Schroeder, Director 15409 Garfield
      Omaha, Nebraska 68144
    49,722
    0.10%


14

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James Iman, Director 2601 Ridgmar Plaza Suite 201
      Fort Worth TX 76116
    150,000
    0.33%All directors and
      officers as a group (3 persons)
    1,384,560
    3.04%


[1]
    Based upon information furnished to Sense by either 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 45,575,551 shares of common stock
      currently issued and outstanding, and includes in each case any stock
      underlying immediately exerciseable 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

We have not entered into any transactions with related persons
for the year ended February 28, 2007.

Item 13. EXHIBITS

|Exhibit No. | Description of Exhibit                                                                                                           |  | Manner of Filing                                                                                                                                                                   
|----------- | -------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|3.1         | The Articles
        of Continuance                                                                                              |  | Incorporated
        by reference as Exhibit 3.1 to the Companys Form 10-KSB, filed with
        the SEC on May 24, 2002 (2002 Form 10-KSB)                                     
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|3.2         | By-Laws                                                                                                                          |  | Incorporated
        by reference as Exhibit 3.2 to the 2002 Form 10- KSB                                                                                                          
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|3.3         | Articles of Amendment                                                                                                            |  | Incorporated
        by reference to as Appendix A to the Companys Schedule 14A 
        Definitive Proxy Statement, filed with the SEC on June 17, 2002 (Schedule
        14A)
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|10.1        | Amended Stock
        Option Agreement dated October 2, 2001 between Bruce E. Schreiner and
        the Company.                 |  | Incorporated
        by reference as Exhibit 10.1 to the 2002 Form 10-KSB                                                                                                          
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|10.2        | Two (2) Amended
        Stock Option Agreements both dated October 2, 2001 between Cynthia L.
        Schroeder and the Company. |  | Incorporated
        by reference as Exhibit 10.2 to the 2002 Form 10-KSB                                                                                                          
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|10.3        | 2002 Stock Option
        Plan                                                                                                   |  | Incorporated
        by reference as Appendix B to the 2002 Schedule 14A                                                                                                           
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|10.4        | 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-KSB                                                                                                          
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|31.1        | Rule
        13a-14(a)/15d-14(a) Certification                                                                                   |  | Filed
        herewith                                                                                                                                                             
|            |                                                                                                                                  |  |                                                                                                                                                                                    
|32.1        | Section
        1350 Certifications                                                                                              |  | Filed
        herewith                                                                                                                                                             

15

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Item 14. Principal Accountant Fees and Services

The fees for services provided by Amisano Hanson, Chartered
Accountants, to us in each of the fiscal years ended February 29, 2006 and
February 28, 2007 were as follows:

Fees
      2006
      2007Audit fees
    $22,275
    $22,800Audit related fees
    $17,200
    $18,425Tax fees
    Nil
    NilAll other fees
    Nil
    Nil


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

Within 90 days prior to the date of this report, management
carried out an evaluation, under the supervision and with the participation of
the management, including the President and principal accounting officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing,
the President and principal accounting officer concluded that the Companys
disclosure controls and procedures are effective in connection with the filing
of this Annual Report on Form 10-KSB for the year ended February 28, 2007.

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

16

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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 11, 2007.

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

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

|By:                            |  | Title:                               | Date:        
|------------------------------ |  | ------------------------------------ | -------------
|                               |  |                                      |              
|                               |  |                                      |              
|/s/ Bruce E.
      Schreiner   |  | Chief Executive Officer, President   | July 11, 2007
|Bruce E. Schreiner             |  | Director and Chief Financial Officer |              
|                               |  |                                      |              
|                               |  |                                      |              
|/s/ James R. Iman              |  | Director                             | July 11, 2007
|James R. Iman                  |  |                                      |              
|                               |  |                                      |              
|                               |  |                                      |              
|/s/ Cynthia L.
      Schroeder |  | Director, Secretary                  | July 11, 2007
|Cynthia L. Schroeder           |  |                                      |              



---



SENSE TECHNOLOGIES INC.

REPORT AND FINANCIAL STATEMENTS

February 28, 2007 and 2006

(Stated in U.S. Dollars)

F-1

---

|A PARTNERSHIPOFINCORPORATEDPROFESSIONALS | AMISANO HANSON      
|---------------------------------------- | --------------------
|                                         | CHARTEREDACCOUNTANTS



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders, 
  Sense Technologies Inc.

We have audited the accompanying balance sheets of Sense Technologies
  Inc. as of February 28, 2007 and 2006 and the related statements of loss, shareholders
  deficiency and cash flows for the years ended February 28, 2007 and 2006. These
  financial statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based
  on our audits.

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

In our opinion, these financial statements present fairly, in
  all material respects, the financial position of the Company as of February
  28, 2007 and 2006 and the results of its operations and its cash flows for the
  years ended February 28, 2007 and 2006, in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 1 to the financial statements, conditions exist which raise
  substantial doubt about the Companys ability to continue as a going concern.
  Managements plan in this regard to these matters are also described in
  Note 1. The financial statements do not include any adjustments that might result
  from the outcome of this uncertainty.

|Vancouver, Canada | AMISANO HANSON     
|----------------- | ---------------------
|June 12, 2007     | Chartered Accountants



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


---

SENSE TECHNOLOGIES INC.BALANCE SHEETS 
  February 28, 2007 and 2006 
  (Stated in U.S. Dollars)

|                                                                               |   | 2007        |   |   | 2006        |  
|------------------------------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                                               |   |             |   |   |             |  
|***ASSETS***                                                                   |  
|                                                                               |   |             |   |   |             |  
|Current                                                                        |   |             |   |   |             |  
|Cash                                                                           | $ | -           |   | $ | 9,220       |  
|Accounts receivable                                                            |   | -           |   |   | 7,449       |  
|Inventory                                                                      |   | 76,891      |   |   | 130,687     |  
|Prepaids                                                                       |   | 17,933      |   |   | 17,526      |  
|                                                                               |   |             |   |   |             |  
|                                                                               |   | 94,824      |   |   | 164,882     |  
|Equipment  Note 3                                                             |   | 44,409      |   |   | 54,899      |  
|Intangible assets  Note 4                                                     |   | 196,109     |   |   | 163,636     |  
|Security deposit                                                               |   | 15,699      |   |   | 15,699      |  
|                                                                               |   |             |   |   |             |  
|                                                                               | $ | 351,041     |   | $ | 399,116     |  
|                                                                               |   |             |   |   |             |  
|                                                                               |   |             |   |   |             |  
|LIABILITIES                                                                    |  
|                                                                               |   |             |   |   |             |  
|Current                                                                        |   |             |   |   |             |  
|Bank indebtedness                                                              | $ | 8,965       |   | $ | -           |  
|Accounts payable
       Notes 5 and 11                                        |   | 910,520     |   |   | 810,610     |  
|Promissory note payable  Notes
      7 and 10                                 |   | 75,000      |   |   | -           |  
|Advances payable
       Notes 6 and 11                                        |   | 30,900      |   |   | 30,875      |  
|Dividends payable  Note 9                                                     |   | 139,962     |   |   | 114,991     |  
|Current portion
      of convertible promissory notes payable  Note 7         |   | 584,447     |   |   | 584,447     |  
|                                                                               |   |             |   |   |             |  
|                                                                               |   | 1,749,794   |   |   | 1,540,923   |  
|                                                                               |   |             |   |   |             |  
|                                                                               |   |             |   |   |             |  
|STOCKHOLDERS DEFICIENCY                                                       |  
|                                                                               |   |             |   |   |             |  
|Class A preferred shares, without par value, redeemable at
      $1 per share  |   |             |   |   |             |  
|20,000,000 shares
      authorized, 309,290 shares issued at February 28, 2007 |   |             |   |   |             |  
|(February 28, 2006: 343,050)                                                   |   | 315,914     |   |   | 343,048     |  
|Common stock, without par value  Note
      9                                 |   |             |   |   |             |  
|100,000,000 shares authorized, 45,575,551
      issued at February 28, 2007    |   |             |   |   |             |  
|(February 28, 2006:
      42,225,811)                                          |   | 12,362,142  |   |   | 11,580,664  |  
|Common stock subscribed  Note 9                                               |   | 440,500     |   |   | 76,000      |  
|Common stock receivable                                                        |   | (891,432    | ) |   | (772,332    | )
|Promissory note receivable  Note 10                                           |   | (585,000    | ) |   | (585,000    | )
|Additional paid-in capital                                                     |   | 62,529      |   |   | 62,529      |  
|Deficit                                                                        |   | (13,103,406 | ) |   | (11,846,716 | )
|                                                                               |   |             |   |   |             |  
|                                                                               |   | (1,398,753  | ) |   | (1,141,807  | )
|                                                                               |   |             |   |   |             |  
|                                                                               | $ | 351,041     |   | $ | 399,116     |  
|                                                                               |   |             |   |   |             |  
|Nature and Continuance of Operations  Note 1                                  |   |             |   |   |             |  
|Commitments and Contractual Obligations 
      Notes 7, 9 and 13              |   |             |   |   |             |  

SEE ACCOMPANYING NOTES

F-3

---

SENSE TECHNOLOGIES INC.STATEMENTS OF LOSS 
  for the years ended February 28, 2007 and 2006 
  (Stated in U.S. Dollars)

|                                                 |   | 2007       |   |   | 2006       |  
|------------------------------------------------ | - | ---------- | - | - | ---------- | -
|                                                 |   |            |   |   |            |  
|Sales                                            | $ | 97,532     |   | $ | 74,903     |  
|                                                 |   |            |   |   |            |  
|Direct costs  Schedule 1                        |   | 143,825    |   |   | 808,460    |  
|                                                 |   |            |   |   |            |  
|                                                 |   | (46,293    | ) |   | (733,557   | )
|                                                 |   |            |   |   |            |  
|Expenses                                         |   |            |   |   |            |  
|Advertising and marketing                        |   | 163,369    |   |   | 129,650    |  
|Bad debts (recovered)                            |   | 32,325     |   |   | (5,199     | )
|Consulting fees  Note 9                         |   | 478,855    |   |   | 197,548    |  
|Depreciation                                     |   | 10,746     |   |   | 11,090     |  
|Filing fees                                      |   | 15,871     |   |   | 8,176      |  
|Insurance                                        |   | 53,544     |   |   | 53,755     |  
|Interest and bank charges  Note 11              |   | 82,588     |   |   | 14,921     |  
|Interest on long-term debt                       |   | 60,221     |   |   | 60,249     |  
|Legal, accounting and audit fees 
      Note 11 |   | 123,271    |   |   | 167,806    |  
|Loan fees                                        |   | 7,500      |   |   | 4,000      |  
|Office and miscellaneous                         |   | 45,716     |   |   | 50,670     |  
|Rent                                             |   | 64,276     |   |   | 24,643     |  
|Repairs and maintenance                          |   | 829        |   |   | 520        |  
|Shareholder information
      and printing       |   | 2,673      |   |   | 11,071     |  
|Telephone and utilities                          |   | 5,493      |   |   | 3,201      |  
|Transfer agent fees                              |   | 2,278      |   |   | 4,722      |  
|Travel                                           |   | 32,521     |   |   | 24,532     |  
|                                                 |   |            |   |   |            |  
|                                                 |   | 1,182,076  |   |   | 761,355    |  
|                                                 |   |            |   |   |            |  
|Loss before other item                           |   | (1,228,369 | ) |   | (1,494,912 | )
|                                                 |   |            |   |   |            |  
|Other item:                                      |   |            |   |   |            |  
|Other income                                     |   | 3,274      |   |   | 5,093      |  
|                                                 |   |            |   |   |            |  
|Net loss for the year                            | $ | (1,225,095 | ) | $ | (1,489,819 | )
|                                                 |   |            |   |   |            |  
|Basic and diluted loss per share                 | $ | (0.03      | ) | $ | (0.06      | )
|                                                 |   |            |   |   |            |  
|Weighted average number of shares outstanding    |   | 37,730,205 |   |   | 27,337,373 |  

SEE ACCOMPANYING NOTES

F-4

---

SENSE TECHNOLOGIES INC.STATEMENTS OF CASH FLOWS 
  for the years ended February 28, 2007 and 2006 
  (Stated in U.S. Dollars)

|                                                                          |   | 2007       |   |   | 2006       |  
|------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                          |   |            |   |   |            |  
|Operating Activities                                                      |   |            |   |   |            |  
|Net loss for the period                                                   | $ | (1,225,095 | ) | $ | (1,489,819 | )
|Add (deduct) items not
      involving cash:                              |   |            |   |   |            |  
|Common shares issued
      for legal and consulting services              |   | 380,220    |   |   | 180,000    |  
|Common
      shares issued for a loan fee                                 |   | -          |   |   | 4,000      |  
|Write-off of inventory                                                    |   | 68,307     |   |   | 675,378    |  
|Depreciation                                                              |   | 10,746     |   |   | 11,090     |  
|Changes in non-cash working capital balances
      related to operations: |   |            |   |   |            |  
|Accounts
      receivable                                                 |   | 7,449      |   |   | 10,898     |  
|Inventory                                                                 |   | (14,511    | ) |   | (228,780   | )
|Prepaids                                                                  |   | (407       | ) |   | (19,833    | )
|Accounts payable                                                          |   | 99,910     |   |   | 36,059     |  
|Advances
      payable                                                    |   | 25         |   |   | (18,225    | )
|                                                                          |   |            |   |   |            |  
|Cash used in operating activities                                         |   | (673,356   | ) |   | (839,232   | )
|                                                                          |   |            |   |   |            |  
|Financing Activities                                                      |   |            |   |   |            |  
|Bank indebtedness                                                         |   | 8,965      |   |   | -          |  
|Proceeds from issuance
      of common stock                              |   | 155,900    |   |   | 780,888    |  
|Common stock subscriptions receivable                                     |   | 37,500     |   |   | -          |  
|Promissory note payable                                                   |   | 75,000     |   |   | -          |  
|Note payable                                                              |   | -          |   |   | (40,000    | )
|License fee payable                                                       |   | -          |   |   | (62,500    | )
|Proceeds from common share subscriptions                                  |   | 419,500    |   |   | 55,000     |  
|                                                                          |   |            |   |   |            |  
|Cash provided by financing activities                                     |   | 696,865    |   |   | 733,388    |  
|                                                                          |   |            |   |   |            |  
|Investing Activities                                                      |   |            |   |   |            |  
|Acquisition of equipment                                                  |   | (256       | ) |   | (10,963    | )
|Acquisition of intangible assets                                          |   | (32,473    | ) |   | (5,286     | )
|                                                                          |   |            |   |   |            |  
|Cash used in investing activities                                         |   | (32,729    | ) |   | (16,249    | )
|                                                                          |   |            |   |   |            |  
|Decrease in cash during the year                                          |   | (9,220     | ) |   | (122,093   | )
|                                                                          |   |            |   |   |            |  
|Cash, beginning of the year                                               |   | 9,220      |   |   | 131,313    |  
|                                                                          |   |            |   |   |            |  
|Cash, end of the year                                                     | $ | -          |   | $ | 9,220      |  
|                                                                          |   |            |   |   |            |  
|Supplementary cash flow information:                                      |   |            |   |   |            |  
|Cash paid for                                                             |   |            |   |   |            |  
|Interest                                                                  | $ | 74,572     |   | $ | 117,139    |  
|                                                                          |   |            |   |   |            |  
|Non-Cash Transactions  Note 13                                           |   |            |   |   |            |  

SEE ACCOMPANYING NOTES

F-5

---

SENSETECHNOLOGIESINC.STATEMENT OF STOCKHOLDERS DEFICIENCY 
  for the years ended February 28, 2007 and 2006 
  (Stated in U.S. Dollars)

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

contd

SEE ACCOMPANYING NOTES

F-6

---

| | SENSE TECHNOLOGIES INC.                        | Continued
| | ---------------------------------------------- | ---------
| | STATEMENT OF STOCKHOLDERS DEFICIENCY          |          
| | for the years ended February 28, 2007 and 2006 |          
| | (Stated in U.S. Dollars)                       |          

|                                           |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   | Common        |   |   |             |   |   |            |  
|------------------------------------------ | ------------------ |  | - | --------------------- |  |  | ------- | - | - | ---------- | - | - | ------- |  | - | ---------- | - | - | ---------- | - | - | ------------- | - | - | ----------- | - | - | ---------- | -
|                                           | Common
      Stock |  |   | Preferred
      Stock |  |  |         |   |   | Promissory |   |   | Common  |  |   | Stock      |   |   |            |   |   |               |  
|                                           | Issued             |  |   |                       |  |  | Issued  |   |   |            |   |   | Paid-in |  |   | Note       |   |   | Stock      |   |   | Subscriptions |   |   | Accumulated |   |   |            |  
|                                           | Shares             |  |   | Amount                |  |  | Shares  |   |   | Amount     |   |   | Capital |  |   | Receivable |   |   | Subscribed |   |   | Receivable    |   |   | Deficit     |   |   | Total      |  
|                                           |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|Balance, February 28, 2006                 | 42,225,811         |  |   | 11,580,664            |  |  | 343,050 |   |   | 343,048    |   |   | 62,529  |  |   | (585,000   | ) |   | 76,000     |   |   | (772,332      | ) |   | (11,846,716 | ) |   | (1,141,807 | )
|Pursuant to private placement              |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|-
      at $0.10                           | 600,000            |  |   | 60,000                |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | -          |   |   | -             |   |   | -           |   |   | 60,000     |  
|-
      at $0.20                           | 250,000            |  |   | 50,000                |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | (40,000    | ) |   | -             |   |   | -           |   |   | 10,000     |  
|Pursuant to the exercise of warrants       |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|-
      at $0.15                           | 383,333            |  |   | 57,500                |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | (15,000    | ) |   | 7,500         |   |   | -           |   |   | 50,000     |  
|Pursuant to agreements to convert          |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|preferred shares into common shares        |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|-
      at $0.29                           | 116,407            |  |   | 33,758                |  |  | (27,134 | ) |   | (27,134    | ) |   | -       |  |   | -          |   |   | -          |   |   | -             |   |   | -           |   |   | 6,624      |  
|Common 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               |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | -          |   |   | -             |   |   | -           |   |   | 380,220    |  
|Cash consideration thereon - at $0.10      | -                  |  |   | 200,000               |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | -          |   |   | (156,600      | ) |   | -           |   |   | 43,400     |  
|Dividends                                  | -                  |  |   | -                     |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | -          |   |   | -             |   |   | (31,595     | ) |   | (31,595    | )
|Common share subscriptions                 | -                  |  |   | -                     |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | 419,500    |   |   | 30,000        |   |   | -           |   |   | 449,500    |  
|Net loss for the year                      | -                  |  |   | -                     |  |  | -       |   |   | -          |   |   | -       |  |   | -          |   |   | -          |   |   | -             |   |   | (1,225,095  | ) |   | (1,225,095 | )
|                                           |                    |  |   |                       |  |  |         |   |   |            |   |   |         |  |   |            |   |   |            |   |   |               |   |   |             |   |   |            |  
|Balance, February 28, 2007                 | 45,575,551         |  | $ | 12,362,142            |  |  | 315,916 |   | $ | 315,914    |   | $ | 62,529  |  | $ | (585,000   | ) | $ | 440,500    |   | $ | (891,432      | ) | $ | (13,103,406 | ) | $ | (1,398,753 | )

SEE ACCOMPANYING NOTES

F-7

---

| | SENSE TECHNOLOGIES INC.                        | Schedule 1
| | ---------------------------------------------- | ----------
| | SCHEDULE OF DIRECT COSTS                       |           
| | for the years ended February 28, 2007 and 2006 |           
| | (Stated in U.S. Dollars)                       |           

|                                   |   | 2007    |  |   | 2006    | 
|---------------------------------- | - | ------- |  | - | ------- | 
|                                   |   |         |  |   |         | 
|Direct costs                       |   |         |  |   |         | 
|Cost of sales                      | $ | 5,756   |  | $ | 7,290   | 
|Manufacturing expenses             |   | -       |  |   | 7,491   | 
|Research and development  Note 11 |   | 9,762   |  |   | 58,301  | 
|Royalties  Note 4                 |   | 60,000  |  |   | 60,000  | 
|Write-off of inventory             |   | 68,307  |  |   | 675,378 | 
|                                   |   |         |  |   |         | 
|                                   | $ | 143,825 |  | $ | 808,460 | 

SEE ACCOMPANYING NOTES

F-8

---

SENSE TECHNOLOGIES INC.NOTES TO THE FINANCIAL STATEMENTS 
  February 28, 2007 and 2006 
  (Stated in U.S. Dollars)

|Note 1 | Nature and Continuance of
        Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The Company holds a non-exclusive
        license to manufacture, distribute, market and sublicense, on a world-wide
        basis, a patented technology which is used to produce a back-up obstacle
        detection/collision warning system utilizing microwave radar technology.
        The Company is using this technology to produce the Guardian Alert Back-up
        System for use on motor vehicles and intends to sell the units for use
        in the after market for existing motor vehicles and also, negotiate agreements
        with Original Equipment Manufacturers to license the use of the product
        on factory produced motor vehicles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | These financial statements have
        been prepared in accordance with generally accepted accounting principles
        applicable to a going concern, which assumes that the Company will be
        able to meet its obligations and continue its operations for its next
        fiscal year. 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 28, 2007, the Company had not yet achieved profitable operations,
        has accumulated losses of $13,103,406 since its inception, has a working
        capital deficiency of $1,654,970 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 that the Company will be
        able to obtain additional funds by equity financing and/or related party
        advances, however there is no assurance of additional funding being available.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The Company was incorporated
        pursuant to the British Columbia Companies Act on May 25, 1988 as Graham
        Gold Mining Corporation. On October 27, 1997, the Company changed its
        name to Sense Technologies Inc. and on December 14, 2001, the Company
        was continued in the Yukon Territory, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The Companys shares are
        publicly traded on the OTCBulletin Board under the symbol SNSG.OB                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 2 | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The financial statements of
        the Company have been prepared in accordance with accounting principles
        generally accepted in the United States of America and are stated in U.S.
        dollars. Because a precise determination of many assets and liabilities
        is dependent upon future events, the preparation of financial statements
        for a period necessarily involves the use of estimates which have been
        made using careful judgment. Actual results may vary from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-9

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 2

Note 2
      Significant Accounting Policies
        (contt)The financial statements have,
          in managements opinion, been properly prepared within the framework
          of the significant accounting policies summarized below:


| | a) | Inventory                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                             
| |    | The Companys inventory consists of finished goods
        and is recorded at cost. If appropriate, the Companys inventory
        balances are adjusted to approximate the lower of manufacturing costs
        or market.
| |    |                                                                                                                                                                                                                             
| | b) | Promissory Note Receivable                                                                                                                                                                                                  

The promissory note receivable is carried
  at cost when there is no impairment in value. The note receivable, which is
  due from shareholders of the Company and bears no specific terms as to its collection,
  is accounted for as a separate component of stockholders equity as an
  effective dividend or capital withdrawal.

| | c) | Equipment
| | -- | ---------

Equipment is recorded at cost. Depreciation
  is provided using the following rates:

| | Computer equipment      | 30% declining balance
| | ----------------------- | ---------------------
| | Furniture and equipment | 20% declining balance
| | Product moulds          | 7 years straight-line
| | Manufacturing equipment | 30% declining balance

| | d) | Intangible Assets
| | -- | -----------------

The Companys intangible assets
  are comprised of licenses fees and patent costs. The Company has adopted the
  provisions of SFAS No. 142 Goodwill and Other Intangible Assets.
  In assessing the useful lives of its intangible assets, the Company has determined
  these assets to have indefinite useful lives. SFAS No. 142 requires that the
  Company annually perform an impairment analysis to assess the recoverability
  of the recorded balance of intangible assets. The provisions of the Statement
  indicate that the impairment test should be conducted more frequently if events
  occur or circumstances change that would more likely than not reduce the fair
  value of a reporting unit (as defined) below its carrying value.

| | e) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The functional and reporting currency of the Company
        is the United States dollar. Monetary assets and liabilities denominated
        in currencies other than the U.S. dollar are translated into U.S. dollars
        at the fiscal year-end rate of exchange. Non-monetary assets and liabilities
        denominated in other currencies are translated at historic rates and revenues
        and expenses are translated at average exchange rates prevailing during
        the month of transaction.

F-10

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 3

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

| | f) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company uses the asset and liability method of accounting
        for income taxes pursuant to Statement of Financial Accounting Standards
        No. 109, Accounting for Income Taxes. Deferred tax assets
        and liabilities are recognized for future tax consequences attributable
        to differences between the financial statement carrying amounts of existing
        assets and liabilities and their respective tax bases. When necessary,
        a valuation allowance is recorded to reduce tax assets to an amount for
        which realization is more likely-than-not. The effect of changes in tax
        rates is recognized in the period in which the rate change occurs.                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | g) | 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 shareholders 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.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | h) | Fair Market Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The carrying value of bank indebtedness, accounts payable,
        advances payable, dividends payable and promissory notes payable approximate
        fair value because of the short maturity of those instruments. The carrying
        value of the promissory note receivable and convertible promissory notes
        payable also approximates their fair value. Unless otherwise noted, it
        is managements opinion that the Company is not exposed to significant
        interest, currency or credit risks arising from these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | i) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Revenue is recognized when title to a product has transferred
        to a customer, delivery has occurred and collection is reasonably assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | j) | Research and Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Research and development costs are incurred
  in order to enhance the performance of the back- up obstacle detection/ collision
  warning system. These costs are expensed as incurred.

F-11

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 4

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

| | k) | 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. The adoption of FIN 48 is not
        expected to have a material impact on the Companys financial position,
        results of operations or cash flows.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | 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. The
        Statement is to be effective for the Companys financial statements
        issued in 2008; however, earlier application is encouraged. The Company
        is currently evaluating the timing of adoption and the impact that adoption
        might have on its financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In September 2006, the Securities and Exchange Commission
        (SEC) issued Staff Accounting Bulletin No. 108 (SAB
        108). Due to diversity in practice among registrants, SAB 108 expressed
        SEC staff views regarding the process by which misstatements in financial
        statements are evaluated for purposes of determining whether financial
        statement restatement is necessary. SAB 108 is effective for fiscal years
        ending after November 15, 2006, and early application is encouraged. The
        Company does not believe SAB 108 will have a material impact on its financial
        position or results from operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In December 2006, the FASB issued FASB Staff Position
        (FSP) EITF 00-19-2, Accounting for Registration Payment
        Arrangements. This FSP specifies that the contingent obligation
        to make future payments or otherwise transfer consideration under a registration
        payment arrangement should be separately recognized and measured in accordance
        with FASB No. 5, Accounting for Contingencies. This FSP is
        effective immediately for registration payment arrangements and the financial
        instruments subject to those arrangements that re entered into or modified
        subsequent to December 31, 2006. For registration payment arrangements
        and financial instruments subject to those arrangements that were entered
        into prior to December 31, 2006, the guidance in the FSP is effective
        January 1, 2006 for the Company. The Company does not believe that this
        FSP will have a material impact on its financial position or results from
        operations.                                                                                          

F-12

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 5

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

| | k) | Recently Issued Accounting Pronouncements
        (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | 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 No. 159 is
        effective for the Companys financial statements issued in 2008.
        The Company is currently evaluating the impact that the adoption of SFAS
        No. 159 might have on its financial position or results of operations.

|Note 3 | Equipment
|------ | ---------

| |                         |   |         |  |   | 2007         |  |   |        | 
| | ----------------------- | - | ------- |  | - | ------------ |  | - | ------ | 
| |                         |   |         |  |   | Accumulated  |  |   |        | 
| |                         |   | Cost    |  |   | Depreciation |  |   | Net    | 
| |                         |   |         |  |   |              |  |   |        | 
| | Computer equipment      | $ | 38,297  |  | $ | 35,616       |  | $ | 2,681  | 
| | Furniture and equipment |   | 11,217  |  |   | 3,069        |  |   | 8,148  | 
| | Product molds           |   | 41,454  |  |   | 11,844       |  |   | 29,610 | 
| | Manufacturing equipment |   | 27,136  |  |   | 23,166       |  |   | 3,970  | 
| |                         |   |         |  |   |              |  |   |        | 
| |                         | $ | 118,104 |  | $ | 73,695       |  | $ | 44,409 | 

| |                         |   |         |  |   | 2006         |  |   |        | 
| | ----------------------- | - | ------- |  | - | ------------ |  | - | ------ | 
| |                         |   |         |  |   | Accumulated  |  |   |        | 
| |                         |   | Cost    |  |   | Depreciation |  |   | Net    | 
| |                         |   |         |  |   |              |  |   |        | 
| | Computer equipment      | $ | 38,297  |  | $ | 34,467       |  | $ | 3,830  | 
| | Furniture and equipment |   | 10,962  |  |   | 1,096        |  |   | 9,866  | 
| | Product molds           |   | 41,454  |  |   | 5,922        |  |   | 35,532 | 
| | Manufacturing equipment |   | 27,136  |  |   | 21,465       |  |   | 5,671  | 
| |                         |   |         |  |   |              |  |   |        | 
| |                         | $ | 117,849 |  | $ | 62,950       |  | $ | 54,899 | 

F-13

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 6

|Note 4 | Intangible Assets                          
|------ | -------------------------------------------
|       |                                            
|       | Intangible assets are comprised as follows:

| | Guardian Alert License Fee                                                    |   | 2007    |  |   | 2006    | 
| | ----------------------------------------------------------------------------- | - | ------- |  | - | ------- | 
| |                                                                               |   |         |  |   |         | 
| | Net carrying cost                                                             | $ | 1       |  | $ | 1       | 
| |                                                                               |   |         |  |   |         | 
| | Scope Out Mirror License                                                      |   |         |  |   |         | 
| |                                                                               |   |         |  |   |         | 
| | Cash                                                                          |   | 37,500  |  |   | 37,500  | 
| | Issuance of 1,000,000 units                                
        at $0.05 |   | 50,000  |  |   | 50,000  | 
| | Promissory note payable                                                       |   | 62,500  |  |   | 62,500  | 
| |                                                                               |   |         |  |   |         | 
| |                                                                               |   | 150,000 |  |   | 150,000 | 
| | Patent costs                                                                  |   | 46,108  |  |   | 13,636  | 
| |                                                                               |   |         |  |   |         | 
| |                                                                               |   | 196,108 |  |   | 163,636 | 
| |                                                                               |   |         |  |   |         | 
| |                                                                               | $ | 196,109 |  | $ | 163,637 | 

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. During the year ended February 28, 2005,
  the Company did not manufacture the minimum quantities required by the License
  Agreement and the Company lost the exclusivity it previously held.

Scope Out Mirror License

During the year ended February 28, 2005,
  the Company acquired a license to manufacture, sell, deliver and install the
  Lateral-View Mirror (Scope Out Mirror).

As consideration, the company paid a
  license fee of $150,000.

The Company is obligated to pay a royalty
  of 10% of the wholesale price for each Scope Out Mirror sold which, in any event,
  shall not be less than $2.00 per unit in the following minimum quantities:

A.   30,000 units per year beginning
  in years 1 and 2. 
  B.   60,000 units per year in years 3 and 4. 
  C.   100,000 units per year in year 5 and thereafter.

F-14

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 7

|Note 4 | Intangible Assets (contd)                                                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                          
|       | Scope Out Mirror License (contd)                                                                                                                                                       
|       |                                                                                                                                                                                          
|       | During the year ended February
        28, 2007, the Company accrued $60,000 (2006: $60,000) in respect of the
        royalty owed in respect of the Scope Out Mirror License agreement.
|       |                                                                                                                                                                                          
|Note 5 | Accounts Payable Note 11                                                                                                                                                                

| |                           |   | 2007    |  |   | 2006    | 
| | ------------------------- | - | ------- |  | - | ------- | 
| |                           |   |         |  |   |         | 
| | Trade payables            | $ | 185,955 |  | $ | 144,342 | 
| | Accrued fees              |   | 15,000  |  |   | 20,000  | 
| | Accrued payroll           |   | 54,026  |  |   | 53,695  | 
| | Accrued interest payable  |   | 96,485  |  |   | 32,218  | 
| | Accrued royalties payable |   | 540,000 |  |   | 540,000 | 
| | Accrued taxes payable     |   | 19,054  |  |   | 19,355  | 
| |                           |   |         |  |   |         | 
| |                           | $ | 910,520 |  | $ | 810,610 | 

|Note 6 | Advances Payable Note 11                                                                          
|------ | ---------------------------------------------------------------------------------------------------
|       |                                                                                                    
|       | Advances payable are unsecured, non-interest bearing
      and have no specific terms of repayment.
|       |                                                                                                    
|Note 7 | Convertible Promissory Notes Payable                                                               

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2007     |   |   | 2006     |  
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |          |  
| | Series 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 balance. As at February 28, 207, these notes were in arrears. |   | 534,447  |   |   | 534,447  |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |          |  
| | Unsecured promissory notes
        bearing interest at 10% per annum. These notes have matured and the holders
        thereof have received default judgements against the Company.                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 50,000   |   |   | 50,000   |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |          |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 584,447  |   |   | 584,447  |  
| | Less: current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | (584,447 | ) |   | (584,447 | )
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |          |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $ | -        |   | $ | -        |  

F-15

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 8

|Note 8 | Promissory Note Payable Note 11
|------ | --------------------------------

| |                                                                                                                                                                                                                                               |   | 2007   |  |   | 2006 | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------ |  | - | ---- | 
| |                                                                                                                                                                                                                                               |   |        |  |   |      | 
| | Promissory note payable,
        unsecured, was non-interest bearing and due on October 4, 2006. Once in
        arrears, the promissory note payable commenced bearing interest on the
        overdue balance at the rate of 10% per annum. | $ | 75,000 |  | $ | -    | 

|Note 9 | Common Stock
|------ | ------------

| | a) | Escrow:
| | -- | -------

At February 28, 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.

| | 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.                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | 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 fair value pricing model based on historical
        share price with the following assumptions:

| |                         | 2007   
| | ----------------------- | -------
| |                         |        
| | Volatility              | 174.49%
| | Expected life           | 2 years
| | Dividend yield          | 0.00%  
| | Risk-free interest rate | 3.91%  

| | c) | Commitments:                 
| | -- | -----------------------------
| |    |                              
| |    | Stock-based Compensation Plan

The Company has granted employees and
  directors common share purchase options. These options were granted with an
  exercise price equal to the market price of the Companys stock on the
  date of the grant.

F-16

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Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 9

|Note 9 | Common Stock (contd)
|------ | ----------------------

| | c) | Commitments:  (contd)                 
| | -- | ----------------------------------------
| |    |                                         
| |    | Stock-based Compensation Plan  (contd)

| |                                                            |  | February 28, 2007 |  
| | ---------------------------------------------------------- |  | ----------------- | -
| |                                                            |  |                   |  
| |                                                            |  |                   |  
| |                                                            |  |                   |  
| |                                                            |  | Shares            |  
| |                                                            |  |                   |  
| | Outstanding and exercisable at beginning of
      the year |  | 350,000           |  
| | Expired                                                    |  | (75,000           | )
| |                                                            |  |                   |  
| | Outstanding and exercisable at end of the year             |  | 275,000           |  

| |                                                            |  | February 28, 2006 |  
| | ---------------------------------------------------------- |  | ----------------- | -
| |                                                            |  |                   |  
| |                                                            |  |                   |  
| |                                                            |  |                   |  
| |                                                            |  | Shares            |  
| |                                                            |  |                   |  
| | Outstanding and exercisable at beginning of
      the year |  | 1,200,000         |  
| | Cancelled                                                  |  | (500,000          | )
| | Expired                                                    |  | (350,000          | )
| |                                                            |  |                   |  
| | Outstanding and exercisable at end of the year             |  | 350,000           |  

At February 28, 2007, 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:

ExerciseNumber
      Price
      Expiry Date100,000
      $0.75
      September 26, 2007150,000
      $1.00
      February 1, 200825,000
      $1.00
      March 14, 2008275,000


As at February 28, 2007, the Company
  has 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 yet been issued.

F-17

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 10

|Note 9 | Common Stock (contd)
|------ | ----------------------

| | c) | Commitments:  (contd) Common Share
        Purchase Warrants
| | -- | --------------------------------------------------------------

| |                                    |  | February 28, 2007 |   |  | February 28, 2006 | 
| | ---------------------------------- |  | ----------------- | - |  | ----------------- | 
| |                                    |  |                   |   |  | Exercise          | 
| |                                    |  | Number            |   |  | Price             | 
| |                                    |  |                   |   |  |                   | 
| | Outstanding, beginning of the year |  | 7,250,000         |   |  | $0.15             | 
| | Issued                             |  | -                 |   |  | -                 | 
| | Exercised                          |  | -                 |   |  | -                 | 
| | Expired                            |  | (7,250,000        | ) |  | $0.15             | 
| |                                    |  |                   |   |  |                   | 
| | Outstanding, end of the year       |  | -                 |   |  | -                 | 

Preferred Stock

Dividends on preferred stock are payable
  annually on July 31 of each year. During the year ended February 28, 2007, the
  Company accrued dividends payable of $31,595 (2006: $39,442).

Also, 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.

|Note 10 | Promissory Note Receivable                                                                                                                                                                                                                                                                                                                                                                   
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | The promissory note receivable
        in the principal amount of $585,000 (2006: $585,000) due from significant
        shareholders of the Company is due on demand, secured by a pledge of shares
        of a company owned by shareholders of the Company and bears interest at
        9% per annum. The Company does not expect to demand payment within the
        next fiscal year.
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Note 11 | Related Party Transactions Notes
      7 and 9                                                                                                                                                                                                                                                                                                                                              

The Company incurred the following charges
  with directors, shareholders and companies with common directors and shareholders:

| |                                  |   | 2007   |  |   | 2006   | 
| | -------------------------------- | - | ------ |  | - | ------ | 
| |                                  |   |        |  |   |        | 
| | Interest expense                 | $ | 64,594 |  | $ | -      | 
| | Research and development         | $ | -      |  | $ | 35,000 | 
| | Legal, accounting and audit fees | $ | 10,305 |  | $ | 29,385 | 

F-18

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 11

|Note 11 | Related Party Transactions Notes 7 and 9  (cotd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | The above noted items were measured
        by the exchange amount which is the amount agreed upon by the transacting
        parties.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | As at February 28, 2007, included
        in accounts payable is $36,343 (2006: $5,413) owing to a director 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 (2006: $480,000)
        owing to shareholders of the Company in respect of royalties payable and
        $50,992 (2006: $50,992) owing to the former president of the Company in
        respect of unpaid wages.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | At February 28, 2007, advances
        payable of $30,900 (2006: $30,895) are due to a company controlled by
        a director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | At February 28, 2007, promissory
        note payable of $75,000 (2006: $Nil) is due to a profit sharing and retirement
        plan administered by a director of the Company.                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 12 | Corporation Income Tax Loss
        Carryforwards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | Deferred income taxes reflect
        the net tax effects of temporary differences between the carrying amounts
        of assets and liabilities for financial reporting purposes and the amounts
        used for income tax purposes. Significant components of deferred tax assets
        are as follows:                                                                                                                                                                                                                                                            

| |                                                   |   | 2007       |   |   | 2006       |  
| | ------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                   |   |            |   |   |            |  
| | Deferred tax assets                               |   |            |   |   |            |  
| | Net operating loss carryforwards                  | $ | 3,652,952  |   | $ | 3,243,442  |  
| | Valuation allowance for
      deferred tax assets |   | (3,652,952 | ) |   | (3,243,442 | )
| |                                                   |   |            |   |   |            |  
| | Net deferred tax assets                           | $ | -          |   | $ | -          |  

|        | Realization of deferred tax assets
        is dependent upon future earnings, if any, the timing and amount of which
        are uncertain. Accordingly, the net deferred tax assets have been fully
        offset by a valuation allowance. As of February 28, 2007, the Company
        has accumulated non-capital loss carryforwards of approximately $9,200,000
        for federal income tax purposes. These carryforwards, if not utilized
        to offset taxable income, begin to expire in 2018.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 13 | 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 rent payment of
        $4,085 until September, 2010.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-19

---

Sense Technologies Inc. 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 12

|Note 14 | Non-Cash Transactions                                                                                                                                                                                                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                           
|        | Investing and financing activities
        that do not have a direct impact on current cash flows are excluded from
        the statements of cash flows. The following transactions were excluded
        from the statements of cash flows:                                                                             
|        |                                                                                                                                                                                                                                                                                                                           
|        | During the year ended February
        28, 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.
|        |                                                                                                                                                                                                                                                                                                                           
|        | During the year ended February
        28, 2006, the Company:                                                                                                                                                                                                                                                             

| | i)  | issued 4,310,085 common shares pursuant to agreements
        to convert 1,249,977 preferred shares valued at $1,249,977 to common shares.                 
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                            
| | ii) | issued 1,184,767 common shares pursuant to agreements
        to convert a total of $154,021 of accrued preferred share dividends to
        common shares.

F-20

---