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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB/A

(Amendment No. 1)



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(Mark one)

|x | Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------

| | For the Fiscal Year Ended September 30, 2003
| | --------------------------------------------



or



| ̈ | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------



Commission File Number 000-23025



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NOTIFY TECHNOLOGY CORPORATION

(Name of small business issuer in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 77-0382248                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|1054 S. De Anza Blvd. Suite 105 San Jose, California           |  | 95129                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



Issuers
telephone number: (408) 777-7920



Securities registered
under Section 12(b) of the Exchange Act:



None



Securities registered under Section 12(g) of the
Exchange Act:



Units

Common Stock

Class A Warrants



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Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  xNo ̈



Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. ̈



State issuers revenues for its most recent fiscal year. $8,340,750



The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based upon
the closing sale price of the Common Stock on December 3, 2003, was approximately $839,539. Shares of Common Stock held by officers and directors and their affiliated entities have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily conclusive for other purposes.



The number of shares outstanding of Registrants common stock, $0.001 par value at September 30, 2003 was 5,833,670 shares.



Transitional Small Business Disclosure Format (check one):    Yes ̈No  x



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This report on Form 10-KSB/A (Amendment No. 1) is being filed to disclose those items previously omitted
from Part III of the Annual Report on Form 10-KSB, filed by Notify Technology Corporation, a California corporation, on December 29, 2003, in compliance with General Instruction E.3. to Form 10-KSB.



ITEM 9. Directors, Executive Officers and Key Employees, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act



Directors



Our directors and their ages as of September 30, 2003 are
as follows:



|                         |  |     |  |                                                                                         
|------------------------ |  | --- |  | ----------------------------------------------------------------------------------------
|Name of Nominee          |  | Age |  | Position                                                                                
|Paul F. DePond           |  | 50  |  | President, Chief Executive Officer and Chairman of the Board of Directors of the Company
|Michael K. Ballard(1)(2) |  | 48  |  | Director                                                                                
|Harold S. Blue           |  | 42  |  | Director                                                                                
|David A. Brewer(1)(2)    |  | 51  |  | Director                                                                                
|Andrew H. Plevin(1)(2)   |  | 40  |  | Director                                                                                
|Inder Tallur             |  | 39  |  | Director                                                                                

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|(1) | Member of the audit committee of the board of directors.
|--- | --------------------------------------------------------

|(2) | Member of the compensation committee of the board of directors.
|--- | ---------------------------------------------------------------



Biographical information for directors



Paul F. DePond, our founder, has served as our President, Chief Executive Officer and Chairman of our Board of Directors since our inception in
August 1994. From September 1992 through May 1994, Mr. DePond served as Vice President of Corporate Marketing at Telebit Corporation, a supplier of high speed modems and dialup remote access products. From January 1991 through September 1992, Mr.
DePond served as Vice President of Marketing at Alantec Corporation, a manufacturer of networking products.



Michael K. Ballard has served as one of our directors since January 1995. Mr. Ballard is currently serving as VP Finance and CFO at FoodSwing Inc.
a private label specialty food producer based in Nyack, NY. Since September 1996, Mr. Ballard has also been the President of Savannah Chanelle Vineyards, Inc. and since 1998, Mr. Ballard has been a partner of Aragon Ventures LLC, a private equity
investment firm. From September 1999 to November 2000, he served as President and Chief Executive Officer of e-lingo Corporation, an Internet translation infrastructure company, and from June 1996 to October 1997, he served as a Division Director
for Cisco Systems, Inc.



Harold S. Blue has served as
one of our directors since July 2001. Mr. Blue has been a partner of Commonwealth Group Holding, Inc., an investment and merchant bank, since January 2001, and has served as its President since January 2002. From February 1993 to December 2000, Mr.
Blue served as Chairman and CEO of ProxyMed, Inc., a healthcare information systems company. From 1990 to 1993, Mr. Blue was founder and CEO of Health Services, Inc., a physician practice management company, which was sold to InPhyNet Medical
Management, Inc. From 1984 to 1988, Mr. Blue was the founder and President of Best Generics, a generic pharmaceutical distributor, which was sold to IVAX Corporation in 1988 at which time Mr. Blue joined IVAX as a director. From 1979 to 1984 he was
the founder and CEO of Budget Drugs, a pharmacy chain in South Florida. In addition to being a director of the Company, Mr. Blue serves on the Board of Directors of EB2B Commerce, Inc., and Commonwealth Group Holding, Inc., which is the general
partner of Commonwealth Associates, L.P. Mr. Blue was nominated for election to, and serves on the Board of Directors pursuant to provisions of that certain placement agency agreement between the Company and Commonwealth Associates, L.P., dated as
of April 25, 2001 and amended as of July 11, 2001. The provision provides that Commonwealth Associates, L.P. shall have the right to designate two directors of the Companys Board of Directors until less than 100,000 shares of the
Companys Series A Preferred Stock sold in the Companys July 2001 private placement are outstanding.



David A. Brewer has served as one of our directors since February 2000. Since January 1999, Mr. Brewer has served as general manager for Aragon
Ventures LLC, a private equity investment firm. Mr. Brewer has been Chairman of the End Poverty Foundation, a charity organization, since January 2001. From November 1999 to present, Mr. Brewer has served as Chief Executive Officer of Explore
Holdings LLC, a private equity investment firm, and from July 1995 to present he has



2



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served as a managing member of Inktomi LLC, an internet research company. From September 1996 to December 1998, Mr.
Brewer served as President, Chief Executive Officer and director of Explore Technologies, Inc., an educational toy manufacturer. From February 1996 to May 1996, Mr. Brewer served as President, Chief Executive Officer, Chief Financial Officer and
director of Inktomi Corporation, an internet software developer. Mr. Brewer was nominated for election to our Board of Directors pursuant to a requirement contained in that certain securities purchase agreement between us and Mr. Brewer dated March
4, 1999.



Andrew H. Plevin has served as one of our
directors since February 1998. Since September 2000, he has served as managing partner of Carnegie Hill Venture Partners, a private equity investment firm. From November 1997 to August 2000, Mr. Plevin served as President, Chief Executive Officer
and Chief Financial Officer of Core Software Technology, Inc.



Inder Tallur has served as one of our directors since November 2003. He is a Partner of ComVest Investment Partners. Mr. Tallur joined Commonwealth in 1995 and was Director of Research for four years, following the internet and
e-commerce sectors. Prior to Commonwealth, he spent five years in the telecommunications and computer industry with companies including Digital Equipment Corporation and HCL-HP India, a subsidiary of Hewlett Packard. Mr. Tallur received a BE in
electronics from Visvesvaraya Regional College of Engineering, Nagpur, India in 1987. He also received an MBA from Tulane Universitys A.B. Freeman School of Business in 1994 and an MS in finance from Boston College in 1995. Mr. Tallur was
nominated for election to, and serves on the Board of Directors pursuant to provisions of that certain placement agency agreement between the Company and Commonwealth Associates, L.P. dated as of April 25, 2001 and amended as of July 11, 2001. The
provision provides that Commonwealth Associates, L.P. shall have the right to designate two directors of the Companys Board of Directors until less than 100,000 shares of the Companys Series A Preferred Stock sold in the Companys
July 2001 private placement are outstanding.



All directors are
elected annually and serve until the next annual meeting of shareholders or until the election and qualification of their successors. All executive officers serve at the discretion of our board of directors. There are no family relationship between
any of our directors or executive officers.



Section 16(a) Beneficial
Ownership Reporting Compliance



Section 16(a) of the
Securities Exchange Act of 1934, as amended (the Exchange Act) requires the Companys executive officers and directors and persons who own more than ten percent of a registered class of the Companys equity securities to file
an initial report of ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange Commission (the SEC) and the National Association of Securities Dealers, Inc. Executive officers, directors and greater
than ten percent shareholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of such forms received by it, or written representations from certain
reporting persons, the Company believes that during the fiscal year ended September 30, 2003 all filing requirements applicable to its officers, directors and ten percent shareholders were fulfilled, except for the delinquent filings noted below.



Paul DePond and Gaylan Larson, were each delinquent in the
filing of their respective Form 4s relating to an option to purchase common stock granted to each of the named individuals.



3



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ITEM 10. Executive Compensation



The following table sets forth information for the three most recently completed fiscal years concerning the compensation of
(i) the Chief Executive Officer and (ii) all other executive officers of the Company who earned over $100,000 in salary and bonus in the fiscal year ended September 30, 2003 (together the Named Executive Officers).



Summary Compensation Table



|                                               |  |                     |  |                          |  |                                 |  |                             |  |     |  |                       |  |     |  |                    
|---------------------------------------------- |  | ------------------- |  | ------------------------ |  | ------------------------------- |  | --------------------------- |  | --- |  | --------------------- |  | --- |  | -------------------
|                                               |  |                     |  | Long-Term Compensation   |  | All OtherCompensation($)(1)    
|                                               |  |                     |  | Awards                   |  | Payouts                         | 
|                                               |  | Annual Compensation |  | RestrictedStockAwards($) |  | SecuritiesUnderlyingOptions (#) |  | LTIPPayouts($)              | 
|Name and Principal Position                    |  | Year                |  | Salary ($)               |  | Bonus ($)                       |  | Other AnnualCompensation($) |  |     |  |                      
|Paul F. DePond Chief Executive Officer         |  | 200320022001        |  | $224,485208,284184,424   |  | $ 10,00022,500                 |  |                          |  |  |  | 400,000150,000650,000 |  |  |  | $15,04612,0018,993 
|Gaylan I. Larson(2) Vice President, Operations |  | 200320022001        |  | $121,23890,837102,633    |  | $ 7,50010,000                  |  |                          |  |  |  | 125,00050,000200,000  |  |  |  | $16,98311,25112,787
|Gerald W. Rice Chief Financial Officer         |  | 200320022001        |  | $165,576150,653134,573   |  | $ 7,500                        |  |                          |  |  |  | 125,00050,000160,000  |  |  |  | $16,9349,84011,237 
|Rhonda Chicone-Shick Vice President, R&D       |  | 200320022001        |  | $100,37598,19377,176     |  | $ 2,500                        |  |                          |  |  |  | 150,00050,000150,000  |  |  |  | $1,7561,0472,186   

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|(1) | Represents payments of health insurance premiums on behalf of the Named Executive Officers.
|--- | -------------------------------------------------------------------------------------------

|(2) | Mr. Larson works on a part-time basis.
|--- | --------------------------------------



The following tables set forth certain information for the Named Executive Officers with respect to grants and exercises in fiscal 2003 of options to
purchase Common Stock of the Company:



Option Grants in Last
Fiscal Year



|                     |  |                                                 |  |                                                     |   |  |                             |      |                |       
|-------------------- |  | ----------------------------------------------- |  | --------------------------------------------------- | - |  | --------------------------- | ---- | -------------- | ------
|Name                 |  | Number ofSecuritiesUnderlyingOptions Granted(#) |  | % of TotalOptions Grantedto Employees inFiscal Year |   |  | Exercise orBase Price($/Sh) |      | ExpirationDate
|Paul F. DePond       |  | 400,000                                         |  | 33.0                                                | % |  | $                           | 0.25 |                | 8/5/13
|Gaylan I. Larson     |  | 125,000                                         |  | 10.4                                                | % |  | $                           | 0.25 |                | 8/5/13
|Gerald W. Rice       |  | 125,000                                         |  | 10.4                                                | % |  | $                           | 0.25 |                | 8/5/13
|Rhonda Chicone-Shick |  | 150,000                                         |  | 12.5                                                | % |  | $                           | 0.25 |                | 8/5/13



Aggregated Option
Exercises in Last Fiscal Year and Fiscal Year End Option Values



|                     |  |                               |  |                  |  |                                                                          |  |                                                                 |  |               |  |        
|-------------------- |  | ----------------------------- |  | ---------------- |  | ------------------------------------------------------------------------ |  | --------------------------------------------------------------- |  | ------------- |  | -------
|                     |  | SharesAcquired onExercise (#) |  | ValueRealized($) |  | Number of SecuritiesUnderlying Unexercised Optionsat Fiscal Year End (#) |  | Value of Unexercised In-the-Money Optionsat Fiscal Year End ($)
|Name                 |  |                               |  | Exercisable      |  | Unexercisable                                                            |  | Exercisable                                                     |  | Unexercisable
|Paul F. DePond       |  |                              |  |                 |  | 681,944                                                                  |  | 568,056                                                         |  | 11,111        |  | 388,889
|Gaylan I. Larson     |  |                              |  |                 |  | 260,416                                                                  |  | 164,594                                                         |  | 3,472         |  | 121,528
|Gerald W. Rice       |  |                              |  |                 |  | 220,416                                                                  |  | 164,584                                                         |  | 3,472         |  | 121,528
|Rhonda Chicone-Shick |  |                              |  |                 |  | 171,320                                                                  |  | 203,680                                                         |  | 4,167         |  | 145,833



Director Compensation



Our directors do not currently receive any cash
compensation for service on the board of directors of any committee thereof. Directors are eligible for option grants under our 1997 Stock Plan. During the fiscal year ended September 30, 2003, no directors received option grants.



4



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Employment Agreements and Change-in-Control Arrangements



In December 1996, we entered into an employment agreement with Paul F.
DePond. The agreement, as amended from time to time, provided for an initial base annual salary of $130,000, which subsequently increased to $150,000 thirteen months following our initial public offering, to $175,000 in February 2000, to $200,000 in
October 2001 and to $225,000 in January 2003. Mr. DePond is eligible for a $50,000 bonus contingent upon our attainment of certain performance milestones.



In the event that the Company terminates Mr. DePond without cause within twelve (12) months following a change in control, Mr. DePond is entitled to
receive severance compensation equal to a continuation of his salary for a period of twelve (12) months. In the event that the Company terminates Mr. DePond without cause apart from a change of control, Mr. DePond is entitled to receive severance
compensation equal to a continuation of his salary for a period of three (3) months. Mr. DePond is not entitled to severance compensation in the event of a termination for cause or voluntary resignation. In the event of a termination due to
disability, Mr. DePond is entitled to receive only those severance or disability benefits as are established under the Companys then existing severance and benefits plans and policies.



In December 1996, we entered into an employment agreement with Mr. Rice that
provided for an initial base annual salary of $105,000. Mr. Rices base salary increased to $130,000 in February 2000, to $150,000 October 2001 and to $170,000 in January 2003. Under the agreement, Mr. Rice is eligible to receive annual bonuses
based on an earnings target approved by our Board of Directors. In November 2002, we entered into an employment agreement with Mr. Larson that provides that Mr. Larson will be paid an initial base annual salary of $96,000 and that Mr. Larson will
work a minimum of 24 hours per week.



In the event that the
Company terminates Messrs. Larson or Rice without cause within twelve (12) months following a change in control, Messrs. Larson and Rice will be entitled to receive severance compensation equal to a continuation of his salary for a period of six (6)
months. In the event that the Company terminates Mr. Larson without cause apart from a change of control, Mr. Larson is entitled to receive severance compensation equal to a continuation of his salary for a period of three (3) months. In the event
that the Company terminates Mr. Rice without cause apart from a change of control, Mr. Rice is entitled to receive severance compensation equal to a continuation of his salary for a period of six (6) months. Messrs. Larson and Rice are not entitled
to severance compensation in the event of a termination for cause or voluntary resignation. In the event of a termination due to disability, the terminated officer is entitled to receive only those severance or disability benefits as are established
under the Companys then existing severance and benefits plans and policies.



The foregoing agreements define a change in control as (i) the acquisition of more than 30% of our voting securities by any person or group; (ii) a change in a majority of our Board of Directors occurring
within a two year period; or (iii) the approval by our shareholders of a transaction which would result in a transfer of more than 50% of our voting power provided, however, that a public offering of our common stock does not constitute a change in
control. The agreements define cause as an act of dishonesty in connection with employment; a conviction of a felony that will detrimentally affect our reputation or business; willful and gross misconduct injurious to us; and continued
and willful failure to perform duties. The agreements define disability as the inability to perform duties under the agreement due to mental or physical illness determined to be total and permanent by a physician.



ITEM 11. Security Ownership of Certain Beneficial Owners and Management



The following tables set forth certain information regarding beneficial
ownership of our common stock and our Series A Preferred Stock as of January 1, 2004, by (i) each person or entity who is known by us to own beneficially more than 5% of the outstanding shares of that class of our stock, (ii) each of our directors,
(iii) each of the executive officers, and (iv) all directors and executive officers as a group.



These tables are based on information provided to us or filed with the SEC by our directors, executive officers and principal shareholders. Unless
otherwise indicated, the address for each shareholder listed in the following tables is c/o Notify Technology Corporation, 1054 S. De Anza Blvd., Suite 105, San Jose, California 95129.



5



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Common Stock



|                                                                                                                          |  |                                  |  |               |  
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- |  | ------------- | -
|                                                                                                                          |  | Common Shares Beneficially Owned | 
|Name and Address of Beneficial Owner                                                                                      |  | Number(1)                        |  | Percentage(1) |  
|Michael S. Falk(2) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022                                  |  | 2,990,434                        |  | 39.4          | %
|ComVest Management LLC(3) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022                           |  | 2,357,801                        |  | 33.9          |  
|ComVest Venture Partners, LP(4) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022                     |  | 2,357,801                        |  | 33.9          |  
|David A. Brewer(5)                                                                                                        |  | 1,232,801                        |  | 26.5          |  
|Robert Priddy(6) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022                                    |  | 1,350,000                        |  | 22.7          |  
|RMC Capital, LLC(7) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022                                 |  | 1,350,000                        |  | 22.7          |  
|Paul F. DePond(8)                                                                                                         |  | 1,146,217                        |  | 18.0          |  
|Commonwealth Associates Management Company, Inc.(9) c/o Commonwealth Associates, L.P. 830 Third Avenue New York, NY 10022 |  | 483,421                          |  | 9.5           |  
|Commonwealth Associates, L.P.(10) 830 Third Avenue New York, NY 10022                                                     |  | 483,421                          |  | 9.5           |  
|Gaylan I. Larson(11)                                                                                                      |  | 370,618                          |  | 7.6           |  
|Andrew Plevin(12)                                                                                                         |  | 160,736                          |  | 3.5           |  
|Gerald W. Rice(13)                                                                                                        |  | 283,814                          |  | 5.8           |  
|Rhonda Chicone-Shick(14)                                                                                                  |  | 241,180                          |  | 5.0           |  
|Michael Ballard(15)                                                                                                       |  | 124,781                          |  | 2.7           |  
|Harold S. Blue(16)                                                                                                        |  | 49,915                           |  | 1.1           |  
|Inder Tallur                                                                                                              |  |                                 |  | *             |  
|All directors and executive officers as a group (9 persons)                                                               |  | 3,415,238                        |  | 53.1          |  

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|* | less than 1%
|- | ------------

|(1) | Applicable percentage of ownership is based on 4,599,800 shares of our common stock outstanding as of January 1, 2004, together with applicable options, warrants or convertible
Series A Preferred Stock for such shareholder. Beneficial ownership is determined in accordance with the rules of the Securities Exchange Commission, and includes voting and investment power with respect to shares. Shares of common stock (i)
issuable upon exercise of options or warrants that are currently exercisable or are exercisable within 60 days after January 1, 2004, or (ii) issuable upon conversion of Series A Preferred Stock that is currently convertible or is convertible within
60 days after January 1, 2004, are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, warrants or Series A Preferred Stock, but are not deemed outstanding for computing the percentage of any
other shareholder.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consists of (i) 2,357,801 shares issuable to ComVest Venture Partners, LP, (ii) 483,421 shares issuable to Commonwealth Associates, L.P. and (iii) 149,214 shares issuable to Mr.
Falk upon the conversion and exercise of the Series A Preferred Stock and warrants that are issuable upon the exercise of an option to purchase 1.105267 units, in which each unit consists of 10,000 shares of Series A Preferred Stock and a warrant to
purchase 35,000 shares of
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6



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| | common stock (a Preferred Unit). Mr. Falk is a manager of ComVest Management LLC, which is the general partner of ComVest Venture Partners, LP, and a director of
Commonwealth Associates Management Company, Inc., which is the general partner of Commonwealth Associates, L.P. Mr. Falk shares voting and dispositive power over the shares held by ComVest Venture Partners, LP and Commonwealth Associates, L.P.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Consists of 2,357,801 shares issuable to ComVest Venture Partners, LP. ComVest Management LLC is the general partner of ComVest Venture Partners, LP and shares voting and
dispositive power over the shares held by ComVest Venture Partners, LP.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Consists of (i) 608,151 shares issuable upon exercise of warrants, (ii) 1,400,000 shares issuable upon conversion of 140,000 shares of Series A Preferred Stock and (iii) 349,650
shares issuable upon the conversion and exercise of the Series A Preferred Stock and warrants that are issuable upon exercise of an option to purchase 2.59 Preferred Units.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes (i) 40,000 shares issuable upon exercise of options, (ii) 7,201 shares of common stock owned by New Madrone Fund, Inc., of which Mr. Brewer is a shareholder and (iii) 3,500
shares of common stock issuable upon exercise of warrants owned by JEB Associates, of which Mr. Brewer is a shareholder.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes 1,350,000 shares issuable to RMC Capital, LLC. Mr. Priddy is a manager of RMC Capital, LLC and shares voting and dispositive power over these shares.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Includes 1,000,000 shares issuable upon conversion of 100,000 shares of Series A Preferred Stock and 350,000 shares issuable upon exercise of warrants.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Includes 827,778 shares issuable upon exercise of options.
|--- | ----------------------------------------------------------

|(9) | Consists of 483,421 shares issuable to Commonwealth Associates, L.P. Commonwealth Associates Management Company, Inc. is the general partner of Commonwealth Associates, L.P. and
shares voting and dispositive power over the shares held by Commonwealth Associates, L.P.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Includes 483,421 shares issuable upon the conversion and exercise of the Series A Preferred Stock and warrants that are issuable upon the exercise of an option to purchase 3.580907
Preferred Units.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Includes 298,611 shares issuable upon exercise of options.
|---- | ----------------------------------------------------------

|(12) | Includes 50,000 shares issuable upon exercise of options.
|---- | ---------------------------------------------------------

|(13) | Includes 258,611 shares issuable upon exercise of options.
|---- | ----------------------------------------------------------

|(14) | Includes 241,180 shares issuable upon exercise of options.
|---- | ----------------------------------------------------------

|(15) | Includes 60,000 shares issuable upon exercise of options.
|---- | ---------------------------------------------------------

|(16) | Includes 43,248 shares issuable upon the conversion and exercise of the Series A Preferred Stock and warrants that are issuable upon the exercise of an option to purchase 0.320367
Preferred Units. Also includes 6,667 shares issuable upon exercise of options.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Series A Preferred Stock



|                                                                                                   |  |                                                      |  |               |  
|-------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- |  | ------------- | -
|                                                                                                   |  | Shares of Series A Preferred StockBeneficially Owned | 
|Name and Address of Beneficial Owner                                                               |  | Number(1)                                            |  | Percentage(1) |  
|Michael S. Falk(2)c/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY 10022              |  | 212,761                                              |  | 39.5          | %
|ComVest Management LLC(3)c/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY 10022       |  | 165,900                                              |  | 33.7          |  
|ComVest Venture Partners, LP(4)c/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY 10022 |  | 165,900                                              |  | 33.7          |  
|Robert Priddy(5)c/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY 10022                |  | 100,000                                              |  | 21.5          |  
|RMC Capital, LLCc/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY 10022                |  | 100,000                                              |  | 21.5          |  



7



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|                                                                                                                       |  |                                                      |  |              
|---------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- |  | -------------
|                                                                                                                       |  | Shares of Series A Preferred StockBeneficially Owned
|Name and Address of Beneficial Owner                                                                                   |  | Number(1)                                            |  | Percentage(1)
|Commonwealth Associates Management Company, Inc.(6)c/o Commonwealth Associates, L.P.830 Third AvenueNew York, NY
10022 |  | 35,809                                               |  | 7.1          
|Commonwealth Associates, L.P.(7)830 Third AvenueNew York, NY 10022                                                     |  | 35,809                                               |  | 7.1          
|Harold S. Blue(8)                                                                                                      |  | 3,203                                                |  | *            
|David A. Brewer                                                                                                        |  |                                                     |  |             
|Paul F. DePond                                                                                                         |  |                                                     |  |             
|Gaylan I. Larson                                                                                                       |  |                                                     |  |             
|Andrew Plevin                                                                                                          |  |                                                     |  |             
|Gerald W. Rice                                                                                                         |  |                                                     |  |             
|Michael Ballard                                                                                                        |  |                                                     |  |             
|Inder Tallur                                                                                                           |  |                                                     |  |             
|All directors and executive officers as a group (9 persons)                                                            |  | 3,203                                                |  | *            

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|* | less than 1%
|- | ------------

|(1) | Applicable percentage of ownership is based on 461,000 shares of Series A Preferred Stock outstanding as of January 1, 2004, together with applicable warrants for such shareholder.
Beneficial ownership is determined in accordance with the rules of the Securities Exchange Commission, and includes voting and investment power with respect to shares. Shares of Series A Preferred Stock issuable upon exercise of options that are
currently exercisable or are exercisable within 60 days after January 1, 2004, are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage
of any other shareholder.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consists of (i) 140,000 shares held by ComVest Venture Partners, LP, (ii) 25,900 shares issuable to ComVest Venture Partners, LP, (iii) 35,809 shares issuable to Commonwealth
Associates, L.P. and (iv) 11,052 shares issuable to Mr. Falk upon exercise of an option. Mr. Falk is a manager of ComVest Management LLC, which is the general partner of ComVest Venture Partners, LP, and a director of Commonwealth Associates
Management Company, Inc., which is the general partner of Commonwealth Associates, L.P. Mr. Falk shares voting and dispositive power over the shares held by ComVest Venture Partners, LP and Commonwealth Associates, L.P.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Consists of 140,000 shares held by ComVest Venture Partners and 25,900 shares issuable to ComVest Venture Partners, LP. ComVest Management LLC is the general partner of ComVest
Venture Partners, LP and shares voting and dispositive power over the shares held by ComVest Venture Partners, LP.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes 25,900 shares issuable upon the exercise of an option.
|--- | ---------------------------------------------------------------

|(5) | Consists of 1,000,000 shares held by RMC Capital, LLC. Mr. Priddy is a manager of RMC Capital, LLC and shares voting and dispositive power over these shares.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Consists of 35,809 shares issuable to Commonwealth Associates, L.P. Commonwealth Associates Management Company, Inc. is the general partner of Commonwealth Associates, L.P. and
shares voting and dispositive power over the shares held by Commonwealth Associates, L.P.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Consists of 35,809 shares issuable upon the exercise of an option.
|--- | ------------------------------------------------------------------

|(8) | Consists of 3,203 shares issuable upon the exercise of an option.
|--- | -----------------------------------------------------------------



8



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Equity Compensation Plan Information



The following table sets forth information with respect to our 1997 Stock Plan as of September 30, 2003.



|                                                           |  |                                                                                          |  |                                                                          |       |                                                                                                                                      |        
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ----- | ------------------------------------------------------------------------------------------------------------------------------------ | -------
|                                                           |  | (a)                                                                                      |  | (b)                                                                      |       | (c)                                                                                                                                 
|                                                           |  | Number of Securities tobe Issued upon Exerciseof OutstandingWarrants, Warrantsand Rights |  | Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights |       | Number of SecuritiesRemaining Available orFuture Issuance underEquity CompensationPlans (ExcludingSecurities Reflected inColumn
(a))
|Equity compensation plans approved by security holders     |  | 3,294,451                                                                                |  | $                                                                        | 2.366 |                                                                                                                                      | 335,211
|Equity compensation plans not approved by security holders |  | N/A                                                                                      |  |                                                                          | N/A   |                                                                                                                                      | N/A    
|                                                           |  |                                                                                          |  |                                                                          |       |                                                                                                                                      |        
|Total                                                      |  | 3,294,451                                                                                |  | $                                                                        | 2.366 |                                                                                                                                      | 335,211
|                                                           |  |                                                                                          |  |                                                                          |       |                                                                                                                                      |        



ITEM 12. Certain Relationships and
Related Transactions



November 2000 Private Placement



In November 2000, we sold in a private placement, 376,865 shares of common
stock and warrants to purchase 188,424 shares of common stock for an aggregate purchase price of $1,225,000. Mr. Andrew H. Plevin, a member of our Board of Directors, purchased 76,916 shares of common stock and warrants to purchase 38,458 shares of
common stock for an aggregate consideration of $250,000 in this private placement. The warrants consisted of two warrants to purchase 19,229 shares of common stock at $3.25 per share. We agreed to issue additional warrants and to decrease the
exercise price of the warrants if we sold shares of our common stock in a capital raising transaction at a price below $3.25 per share prior to the earlier of (1) November 7, 2003 or (2) our calling our outstanding Class A warrants. In addition, we
agreed to register for resale the common stock sold in the private placement and the common stock underlying the warrants.



In July 2001, Mr. Plevin agreed to waive his right to be issued additional warrants if we issued shares of our capital stock at a price below $3.25 per
share with respect to the July 2001 private placement described below. In July 2001, the per share exercise price of Mr. Plevins two warrants decreased to $1.00 per share as a result of the July private placement and Mr. Plevin exercised his
two warrants and received 38,458 shares of common stock for an aggregate purchase price of $38,458.



On July 20, 2001, 337,439 warrants were issued under the anti-dilution terms of the November 2000 private placement. 147,085 of these warrants were
exercised in the period June 2002 through August 2002. 190,354 anti-dilution warrants with an exercise price of $0.01 are outstanding and expire on July 20, 2004. The remaining 74,983 three-year warrants issued with the November 2000 private
placement expired on November 14, 2003.



July 2001 Private Placement



On July 20, 2001, we completed a preferred stock and
warrant financing. In the financing, we sold shares of our Series A Preferred Stock convertible into an aggregate of 5,010,000 shares of our common stock and warrants to purchase an aggregate of 1,753,500 shares of common stock at an exercise price
of $1.00 per share. The proceeds from the financing, net of the placement agents commission, were approximately $4,509,000.



We issued to ComVest Venture Partners, L.P. a warrant to purchase 118,151 shares of common stock on May 15, 2001 in connection with ComVest Venture
Partners commitment to invest in the financing the difference between $5,000,000 and the aggregate amount of money invested by all other investors in the financing. In the financing, ComVest purchased approximately $1,400,000 of securities. In
addition, we granted Commonwealth Associates, L.P., the placement agent for the financing, an option to purchase (i) shares of Series A Preferred Stock convertible into an aggregate of 926,850 shares of common stock and (ii) a warrant to purchase
324,397 shares of common stock.



9



---

Holders of our outstanding Series A Preferred Stock have the right to require us to redeem any
unconverted shares of Series A Preferred Stock at any time and from time to time during the period from July 20, 2003 to July 25, 2004. The per share redemption price is $10.00 plus any accrued dividends. Subject to certain limitations set forth
below, we have the option to pay the redemption price in cash or in shares of our common stock. If all holders of outstanding Series A preferred as of June 30, 2003 elected to redeem, the aggregate redemption price would total $4,610,000. The
holders of Series A Preferred Stock have the option to receive the redemption price in cash or in shares of our common stock; provided, however, that we are not obligated to pay the redemption price in cash unless our Board of Directors unanimously
approves such payment in cash, If all holders of outstanding Series A Preferred as of June 30, 2003 elected to redeem, the aggregate redemption price would total $4,610,000. If we fail to pay the entire redemption price far a cash redemption that is
unanimously approved by our Board of Directors, the redemption price will be increased by five percent (5%) for each thirty (30) day period (and for a pro rata percentage for any portion thereof) during which we fail to make such payment, subject to
certain periods during which we can cure our default.



If the
holders of Series A Preferred Stock choose to receive the redemption price in shares of common stock, each holder of Series A Preferred Stock requesting redemption will receive that number of shares of common stock equal to (x) the aggregate
redemption price owed to him divided by (y) the redemption conversion price, which is the greater of (i) the average closing bid price for a defined period of twenty (20) trading days and (ii) $0.50 per share. We may pay the redemption price in
shares of our common stock, only if the shares of common stock are registered for resale under the Securities Act pursuant to an effective registration statement or may be sold without any volume or similar restriction and/or limitation under Rule
144 pursuant to Rule 144(k) of the Securities Act. If the shares of common stock do not meet this condition, the redemption conversion price will automatically be reduced by five percent (5%) and the redemption price increased by five percent (5%)
for each thirty (30) day period (and for a pro rata percentage for any portion thereof) during which we are unable to satisfy the condition, subject to certain periods during which we can cure our default.



We agreed to prepare and file with the Securities and Exchange Commission a
registration statement covering the resale of the shares of common stock underlying all securities issued in connection with the financing. Also, we agreed to appoint two designees of Commonwealth Associates, L.P. to our Board of Directors and
caused the authorized number of directors on our Board of Directors to be no greater than six at the 2003 shareholders meeting. Messrs. Harold S. Blue and Inder Tallur are Commonwealth Associates designees to our Board of Directors. We have
covenanted to provide Commonwealth Associates, L.P. with (i) finders fees in connection with certain future financings, (ii) observation rights of members of our Board of Directors and (iii) membership rights to committees of the Board of
Directors.



We believe that all of the transactions set forth
above were made on terms no less favorable to us than could have been obtained from unaffiliated third parties.



10



---

SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, duly authorized, in the City of San Jose, California, on the 27 day of January, 2004.



|                        |  |  |  |                               |  |                       |  |                                                     
|----------------------- |  |  |  | ----------------------------- |  | --------------------- |  | ----------------------------------------------------
|                        |  |  |  | NOTIFY TECHNOLOGY CORPORATION
|                        |  |  | 
|Dated: January 27, 2004 |  |  |  | By:                           |  | /s/    PAUL F. DEPOND
|                        |  |  |  |                               |  |                       | 
|                        |  |  |  |                               |  |                       |  | Paul F. DePond President and Chief Executive Officer



POWER OF ATTORNEY



KNOW ALL MEN BY THESE PRESENTS that each person whose
signature appears below constitutes and appoints Paul F. DePond and Gerald W. Rice and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments to this Report on Form 10-KSB, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys- in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.



In accordance with the requirements of the Securities Exchange Act of 1934,
this Report was signed by the following persons in the capacities indicated below and on the dates stated.



|                                                                      |  |                                                                               |  |                 
|--------------------------------------------------------------------- |  | ----------------------------------------------------------------------------- |  | ----------------
|Signature                                                             |  | Title                                                                         |  | Date            
|                                                                      |  |                                                                              
|/s/    PAUL
DEPONDPaul DePond                                         |  | President, Chief Executive Officer and Chairman (Principal Executive Officer) |  | January 27, 2004
|                                                                      |  |                                                                              
|/s/    GERALD RICE*Gerald Rice                                        |  | Chief Financial Officer (Principal Financial and Accounting Officer)          |  | January 27, 2004
|                                                                      |  |                                                                              
|/s/    MICHAEL
BALLARD*Michael Ballard                                |  | Director                                                                      |  | January 27, 2004
|                                                                      |  |                                                                              
|/s/    DAVID
BREWER*David Brewer                                      |  | Director                                                                      |  | January27, 2004 
|                                                                      |  |                                                                              
|/s/    ANDREW
PLEVIN*Andrew Plevin                                    |  | Director                                                                      |  | January 27, 2004
|                                                                      |  |                                                                              
|/s/    HAROLD BLUE*Harold Blue                                        |  | Director                                                                      |  | January 27, 2004
|                                                                      |  |                                                                              
|/s/    INDER
TALLUR*Inder Tallur                                      |  | Director                                                                      |  | January 27, 2004
|                                                                      |  |                                                                              
|*By:                  /s/    PAUL
DEPONDPaul DePond,
Attorney-in-Fact |  |                                                                               |  |                 





11