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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                   FORM 10-KSB

(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, 2007

                                       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              (I.R.S. Employer Identification No.)
of incorporation or organization)

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:

                                  Common Stock

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      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) has filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  Registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.
Yes |X| No |_|

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  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. |_|

      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. $3,947,395

      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  15,  2007,  was  approximately  $3,567,589.  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 December 15, 2007 was 14,075,662 shares.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

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<PAGE>

                                     PART I

                           FORWARD LOOKING STATEMENTS

      You should read the following  discussion in conjunction  with our audited
financial  statements and the notes thereto that appear elsewhere in this Annual
Report  on  Form  10-KSB.  The  following  discussion  contains  forward-looking
statements,  within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the  Securities  Exchange Act of 1934,  which  involve  risks and
uncertainties. Forward-looking statements generally include words such as "may,"
"will,"  "plans,"  "seeks,"  "expects,"   "anticipates,"  "outlook,"  "intends,"
"believes"  and words of similar  import as well as the negative of those terms.
In addition,  any statements  that refer to  expectations,  projections or other
characterizations  of future events or  circumstances,  including any underlying
assumptions,  are forward-looking  statements.  All  forward-looking  statements
included in this Annual  Report on Form 10-KSB,  including,  but not limited to,
statements regarding the future growth of our wireless product line;  statements
regarding  future  revenues  from  our  products;  statements  regarding  future
financings  statements  regarding  future  costs;  statements  regarding  future
research and development efforts; statements regarding competition in the market
for  wireless  products;   statements   regarding  future  patent  applications;
statements  regarding future financial results;  and statements regarding future
plans to extend our  product  line;  are based on current  expectations  and are
subject  to  important  factors  that  could  cause  actual  results  to  differ
materially  from  those  projected  in  the  forward-looking   statements.  Such
important  factors include,  but are not limited to, those discussed below under
"Risk  Factors" and  elsewhere in this Annual  Report and in other  documents we
file with the U.S. Securities and Exchange Commission.

ITEM 1. Description of Business

      We were  incorporated in the State of California in August 1994. We are an
independent  software  vendor  ("ISV")  focused on  providing  secure,  wireless
synchronization of email and personal information  management ("PIM") (calendar,
contacts,  and tasks information) across a variety of wireless devices and email
collaborations  suites.  Our product  provides  solutions to  organizations  and
businesses  supporting  Novell  GroupWise(TM),  Microsoft  Exchange(TM),  and  a
variety  of  alternative  email  collaboration  suites  such  as  the  Sun  Java
Communications  Suite, the Oracle  Collaboration  Suite, The Mirapoint Messaging
Suite,  CommunigatePro,  Scalix  Enterprise  Server,  Kerio Messaging Suite, The
MDaemon Messaging Suite, FirstClass,  and Meeting Maker. We support a variety of
wireless  device  platforms on each of these suites  including  the  Blackberry,
Palm,  Windows  Mobile,  and Symbian.  As of July 4, 2006, we became an official
BlackBerry ISV Alliance  Partner with Research In Motion.  Our product  provides
our customers with secure wireless mobile access using various handheld wireless
devices to manage their email,  calendar appointments and address book on any of
the email collaboration suites we support. Our product supports wireless devices
from different manufacturers and different network carriers around the world.

      Historically,  we also have  provided  services  related to our Visual Got
Mail  Solution,  a wireline  legacy product for voice mail  notification.  As of
February  2007,  we have  discontinued  this product due to our contract for the
service being terminated by our single customer. Even though the Visual Got Mail
Solution is no longer sold, we generated service revenue from the installed base
of voice mail users during fiscal 2007 from October 2006 until February 2007.

      Since 2004,  our  wireless  software  product  line  revenue has grown and
constituted  the  majority of our total  revenue in fiscal 2006 and fiscal 2007.
The focus of our sales, marketing and development effort in fiscal 2007 has been
in our wireless software products.  Wireless products contributed  approximately
94% of our total revenue in fiscal 2007 as compared to 66% of total  revenues in
fiscal 2006. We sell our products  primarily  through direct sales in the United
States and Canada and through resellers internationally.

      We are  currently  the  only  provider  of a  single  wireless  enterprise
synchronization   solution   enabling   organizations   a  single   solution  to
simultaneously  support any  BlackBerry,  Palm and  Windows  Mobile  device.  We
provide  a  network  independent  solution  thereby  facilitating   unparalleled
flexibility to change  devices or networks as technology  develops or user needs
evolve.  In  addition,  we are the  only  provider  of  wireless  email  and PIM
synchronization  middleware  supporting  BlackBerry  wireless devices other than
Research  In  Motion  Limited  ("RIM").  As  such,  we have  an ISV  partnership
agreement   with  RIM   recognizing   our  ability  to  provide  email  and  PIM
synchronization  support to BlackBerry users. Our NotifyLink Enterprise provides
both wired and wireless  synchronization for email, calendar,  contacts and task
information.  Our NotifyLink  Enterprise comes in an "On-Premise" Edition and an
"On-Demand"  Edition.  Both the NotifyLink  Enterprise  On-Premise and On-Demand
Editions  can be  integrated  into  an  organization's  existing  network  while
offering broad wireless device support.


                                       2
<PAGE>

      For wireless device users,  NotifyLink  provides  support for a variety of
wireless  networks   including   cellular  networks  such  as   CDMA/1XRTT/EVDO,
GSM/GPRS/EDGE, and all fixed wireless networks using 802.11x technology. We have
designed the  NotifyLink  On-Premise  Edition for  information  technology  (IT)
organizations  that desire  centralized  management and support for their mobile
user needs. With the NotifyLink  On-Premise  Edition,  organizations can support
their growing mobile  workforce  while  providing a migration path from wired to
wireless device usage.

      We expanded our product offering with the NotifyLink  Enterprise On-Demand
Edition in fiscal 2005 and it has grown to  represent  approximately  25% of our
NotifyLink sales. The NotifyLink  On-Demand Edition provides users with the same
features  as the  NotifyLink  On-Premise  Edition  without the need to install a
NotifyLink server on the customer's premise. The NotifyLink On-Demand Edition is
particularly well suited for smaller user organizations  seeking a comprehensive
wireless synchronization  solution while minimizing  infrastructure costs and IT
resources.

Products

NotifyLink Enterprise Edition ("NotifyLink")

      NotifyLink Enterprise is comprised of the NotifyLink Enterprise On-Premise
Edition and the NotifyLink  Enterprise  On-Demand  Edition.  NotifyLink has been
designed to uniquely address the needs of organizations of all sizes.

      Using either of the NotifyLink Enterprise Editions, mobile users can read,
compose,  reply,  forward,  mark as read,  and delete email  messages from their
mobile device. NotifyLink provides users with an "automatic"  synchronization of
emails sent to end users' email mailbox and all emails originated, forwarded and
replied to from the mobile device will be synchronized  with the user's desktop.
NotifyLink is device  agnostic  because email users are provided with a platform
specific smart client,  which is loaded on the mobile device.  Once the platform
specific  smart client mobile device is installed on their  wireless  device and
the  server  on-line,  the user is able to open  their  email,  read it and then
perform  any  number of  operations  including  replying,  forwarding,  and even
deleting the email. NotifyLink supports attachment download and upload for Palm,
Windows  Mobile,  and BlackBerry  mobile  devices.  NotifyLink also supports the
ability  to  forward  attachments.  NotifyLink  provides  bi-directional  mobile
synchronization  of the  user's  calendar,  contacts,  and tasks  regardless  of
whether  the  information  was  entered  on the  mobile  device or at the user's
desktop. The transmitted  information keeps personal calendars continually up to
date at both the client server level and the mobile device level.

      NotifyLink's  "wireless"  functionality  supports all Palm, Windows Mobile
and BlackBerry OS devices  simultaneously  over a variety of wireless  networks:
GSM/GPRS/EDGE,    CDMA/1XRTT/EVDO   and   any   802.11x.   NotifyLink   wireless
functionality also provides "over-the-air" synchronization of email and personal
information  management  thereby  freeing users from the  requirement  to cradle
their wireless devices in order to maintain synchronization. NotifyLink provides
automatic  notification  of new email and PIM  eliminating the need for users to
initiate a data session in order to retrieve their personal data.

      All email and PIM is stored behind an organization's  firewall,  while all
delivery of information to and from the wireless devices is encrypted  utilizing
either Triple Data Encryption  Algorithum (TDES) or Advanced Encryption Standard
(AES)  encryption   algorithms.   Information   security  is  increased  because
NotifyLink  supports both TDES and the latest AES. AES is a Federal  Information
Processing  Standard,  that specifies a cryptographic  algorithm for use by U.S.
Government organizations to protect sensitive, unclassified information.

      NotifyLink Enterprise On-Premise Edition

      The NotifyLink  On-Premise  Edition provides a single enterprise  solution
supporting  the  wireless  needs of its users  through the use of an  on-premise
server.   The  NotifyLink   On-premise  Edition  is  based  on  a  client-server
architecture  comprised of the NotifyLink  Enterprise  server and the NotifyLink
device client module.  The NotifyLink  Enterprise  server product involves three
components:  database component,  web component and a messaging  component.  All
three  components  may be installed to the same server or each  component can be
installed to a separate server in a more distributed environment. The NotifyLink
On-Premise Edition is ideal for companies with a volume of mobile  professionals
who  need  real-time  synchronization  of their  existing  email to any one of a
variety of supported mobile devices.


                                       3
<PAGE>

      NotifyLink Enterprise On-Demand Edition

      Beginning in November  2004,  we began to actively  market our  NotifyLink
On-Demand  Edition  for  Novell  GroupWise.  In  March  2005,  we  launched  the
NotifyLink  On-Demand  Edition  for  Microsoft  Exchange.  Throughout  2006  the
NotifyLink Enterprise On Demand product line was expanded to support the variety
of alternative  collaboration  suites also supported by the On-Premise  Edition.
The NotifyLink  On-Demand Edition provides the same wireless  synchronization of
email,  calendar,  contacts and task  information as our  NotifyLink  On-Premise
Edition,  except  without the need of any on-premise  hardware or software.  The
NotifyLink  On-Demand  Edition provides  wireless  synchronization  services and
support  from a  hardened  data  center  that  provides  users a high  level  of
reliability and  availability.  It remotely accesses email and PIM data from the
customer email collaboration suite and synchronizes to a user's BlackBerry, Palm
or Windows Mobile wireless  device.  The NotifyLink  On-Demand  Edition provides
organizations  with a simple solution to their immediate  mobility needs. It was
designed  as a cost  efficient  alternative  for  customers  whose  universe  of
wireless  users  does not  justify  an  internal  server  or who do not have the
internal IT resources to maintain a NotifyLink Enterprise server. The NotifyLink
On-Demand  Edition is also targeted at  organizations  interested in outsourcing
the wireless synchronization of email and PIM.

Visual Got Mail Solution

      Our legacy  Visual Got Mail  Solution was  designed to provide  voice mail
notification  services to customers.  In fiscal 2006 and 2007, our revenues from
our Visual Got Mail Solution  consisted  principally of sales to one customer in
connection  with its local  voice mail  telephone  service.  The Visual Got Mail
Solution,  designed for  telephone  company  deployment  as a service  offering,
included a scalable  carrier  class server  infrastructure  that we hosted and a
Call Manager  telephone  adjunct (CPE) that we manufactured and sold. The Visual
Got Mail Solution  integrated our caller-id  technology  with a unique method of
voice mail  notification into a single device that can fit into the palm of your
hand.  Revenues for the Visual Got Mail  Solution  declined  substantially  from
fiscal 2003 to fiscal 2004 as the customer  reduced its  commitment to providing
local telephone services.  The program was finally cancelled as of March 1, 2007
and our services  ceased on February 28, 2007.  This product has no other market
so it has been discontinued.

Sales, Marketing and Distribution

      We are  expanding our customer  base by gathering  leads  through  several
channels.  We have an inside sales force that handles leads  generated  from our
corporate  web site,  the web sites of our email and  device  partners  where we
maintain  a  presence,  referrals  from  referral  partners  with  whom  we have
agreements, 2way wireless carriers and other customers. Another channel is based
on referrals from 2way device  manufacturers  such as RIM and Palm, Inc. We will
continue to receive  referrals  from these  channel  partners only to the extent
that they successfully refer our products and services to interested customers.

      Our  NotifyLink  products  consist of numerous  contracts sold directly to
individual companies.  We typically sell annual licenses recognized ratably over
the term of the  contract.  The  NotifyLink  product  line and the  discontinued
Visual Got Mail Solution  accounted  for 94% and 6% of total  revenues in fiscal
2007,  respectively.  In fiscal 2006, the NotifyLink product line and Visual Got
Mail Solution accounted for 66% and 34% of total revenue, respectively.

Technical and Marketing Support

      We have  developed  product  collateral,  improved  web  site  design  and
expanded marketing programs for the NotifyLink  products.  This program includes
product awareness  branding and product training through various mediums such as
Notify web site  marketing;  strategic  partner  web site  marketing;  regional,
national  and  international  trade  shows;   strategic  partner  regional  user
meetings; carrier training seminars; webinars; user market surveys and a monthly
news letter.

      We provide  customer  technical  support to our  customers  for all of our
products and product  installation for our NotifyLink  customers.  We maintain a
hosting  center for our  NotifyLink  product  line in Ohio.  We also  supply the
support to maintain up-time requirements for our NotifyLink On-Demand products.


                                       4
<PAGE>

Research and Development

      We incurred  $1,308,427 and $975,611 in research and development  expenses
in fiscal 2007 and 2006,  respectively.  Our development efforts were devoted to
improving  our software  product,  porting our solution to new wireless  devices
released by wireless device manufacturers,  and creating new products within the
NotifyLink  family.  Our  software  engineering  development  is  located in our
offices in Canfield, Ohio. A growing part of our engineering efforts are devoted
to porting our product to new devices as they are released by manufacturers  and
assuring  backwards  compatibility with older devices.  In addition,  we believe
that our  future  success,  if any,  depends  significantly  on our  ability  to
continue to enhance our existing  wireless products and to develop new products.
Therefore,  we intend to continue to incur research and  development  costs.  We
expect that our  research  and  development  efforts will be focused in wireless
software.

Manufacturing

      We had  virtually no  manufacturing  efforts in fiscal 2007 with the final
termination of our Visual Got Mail Solution program.  Those costs still included
in cost of revenue  consist of our  hosting  site  expenses  for the  NotifyLink
product and royalty fees paid to NCR  Corporation  ("NCR") on certain aspects of
the technology we use in the NotifyLink product.

Competition

      We believe the market for our wireless products is generally  competitive.
In  particular,  in the market for wireless  email  notification  and management
software  for  Microsoft  Exchange  and Novell  GroupWise,  there is very strong
competition.  In the market  for  wireless  email  notification  and  management
software for alternative  email  collaboration  partners,  we have minimal to no
competition  at this  time.  We expect  that to the  extent  the  market for our
products develops, competition will intensify and new competitors will enter the
market.  We may not be able to compete  successfully  against  existing  and new
competitors as the market for our products  evolves and the level of competition
increases.   A  failure  to  compete   successfully  against  existing  and  new
competitors  would  materially  and  adversely  affect  our  business,  revenue,
operating results, and financial condition.

Proprietary Rights

      We  regard  various  features  and  design  aspects  of  our  products  as
proprietary  and we rely  primarily on a combination of patent,  copyright,  and
trademark laws and employee and third-party  nondisclosure agreements to protect
our proprietary  rights. Our patents expire between July 2013 and February 2014.
In fiscal  2006,  we sold our rights to several  patents for legacy  products no
longer in production.  Our software products are generally not subject to patent
claims although we intend to continue to apply for patents, as appropriate,  for
our future  technologies and products.  There are few barriers to entry into the
market for our products, and there can be no assurance that any patents we apply
for will be granted,  that any issued patents will be  enforceable or valid,  or
that the scope of our patents or any patents granted in the future will be broad
enough to protect us against the use of similar technologies by our competitors.
There can be no assurance,  therefore, that any of our competitors, some of whom
have  far  greater  resources  than  we  do,  will  not  independently   develop
technologies that are substantially equivalent or superior to our technology.

      In August 2006, we entered into an ISV Partnership  with RIM, the maker of
the BlackBerry  hand-held device to provide email and PIM synchronization to any
of the alternative email collaboration suites we support. Our agreement with RIM
is renewed annually.

      We may be  involved  from  time to time in  litigation  to  determine  the
enforceability,  scope and validity of any of our proprietary rights or of third
parties asserting  infringement  claims against us. These claims could result in
substantial  cost to us and could divert our management and technical  personnel
away from their normal responsibilities.

      In November of 2003,  we entered into a  non-exclusive  license  agreement
with NCR that allows us to offer  certain  product  features  on our  NotifyLink
Enterprise  Editions  that are covered by a patent held by NCR.  This  agreement
requires a royalty  payment on  Enterprise  revenue  subject to the patent.  The
agreement  contains a $500,000  cap on the  aggregate  royalty to be paid and an
exit clause if we were to no longer sell our NotifyLink  Enterprise Editions. We
paid  $103,225 in  royalties  under this  agreement  in the twelve  months ended
September  30,  2007  compared  to  $80,229  in the twelve  month  period  ended
September  30,  2006.  We have paid  $265,375  against  the  $500,000  cap as of
September  30, 2007.  Once the $500,000 cap is reached we will hold a fully paid
up non-exclusive right for the use of the NCR patent.


                                       5
<PAGE>

Employees

      As of September  30,  2007,  we employed  forty-nine  (49) persons of whom
twenty-three  (23) were engaged in research and development,  eight (8) in sales
and  marketing,  fourteen  (14) in  customer  service,  and four (4) in  general
administration  and finance.  All but one of these  employees  are employed on a
full-time  basis.  None of our employees are  currently  represented  by a labor
union. We consider our relations with our employees to be good.

      Our  success,  if any,  will be  dependent  on our  ability to attract and
retain  highly  skilled  technical  personnel  as well as  marketing  and  sales
personnel.  If we were  unable to retain or hire the  necessary  personnel,  the
development of new products and enhancements to current products would likely be
delayed or prevented.  Competition  for highly  skilled  technical,  managerial,
sales,  and marketing  personnel is intense.  There can be no assurance  that we
will  be  successful  in  retaining  our key  personnel  and in  attracting  and
retaining the personnel we require for expansion.


RISK FACTORS

We have a history of losses, and there is no assurance of future profitability

      We  commenced  operations  in August  1994 and through  January  1996 were
engaged primarily in research and development. We introduced the Visual Got Mail
Solution in fiscal 2001 and made a subsequent decision in fiscal 2003 to refocus
our  strategy on  developing  and  selling  software  applications  for the 2way
wireless data market.  Accordingly,  our business has changed  substantially  in
recent years,  making it difficult to make  period-to-period  comparisons of our
operations,  and we face  all of the  risks  and  uncertainties  encountered  by
early-stage  companies.  For the fiscal years ended September 30, 2006, 2005 and
2004, we incurred net losses of $ 314,892, $557,452 and $655,908,  respectively.
We incurred a net loss of $426,004 for the twelve  month period ended  September
30,  2007  and as of  September  30,  2007,  we had an  accumulated  deficit  of
$24,374,583 and a working capital deficit of $1,089,319.  Although the cash flow
from  operations  was positive in the twelve month  period ended  September  30,
2007,  we are not assured we can  maintain a positive  cash flow from  operating
activities in future  quarters and years.  We may also incur  further  operating
losses in future  quarters  and years  until such time,  if ever,  as there is a
substantial  increase in orders for our  products and product  sales  generating
sufficient revenue to fund our continuing operations.  There can be no assurance
that sales of our products will ever generate significant revenue,  that we will
generate  or maintain  positive  cash flow from our  operations  or that we will
attain or thereafter sustain profitability in any future period.

If the market for wireless data communications devices does not grow, we may not
successfully increase or maintain the sale of our NotifyLink products

      The  overall   market  for  wireless  data   communications   devices  has
experienced  significant  growth in recent years.  The success of our NotifyLink
Enterprise On-Premise and On-Demand products depends upon this growth. There can
be no assurance that the market for wireless  software products will continue to
grow,  that firms  within the  industry  will adopt our  software  products  for
integration with their wireless data communications  solutions,  or that we will
be successful in  independently  establishing  product  markets for our wireless
software products. We cannot predict that growth of our NotifyLink products will
continue or  maintain  itself at the current  level.  If the various  markets in
which our software  products  compete fail to grow,  or grow more slowly than we
currently anticipate,  or if we were unable to establish product markets for our
new  software  products,  our  business,  results  of  operation  and  financial
condition would be materially adversely affected.


                                       6
<PAGE>

A significant portion of our revenue was historically derived from the sale of a
single  solution to a single  customer and that  customer has  discontinued  the
program our product supports

      For the fiscal year ended  September 30, 2007, 6% of our revenue came from
the  sale of our  Visual  Got Mail  Solution  service  to a  single  competitive
provider  of local  phone  services.  In July 2004,  the  customer  changed  its
business  position in the market in which our product is sold and terminated its
outbound  marketing  efforts.  Although our  customer  continued to purchase our
service  product from us until February 28, 2007,  they have since  discontinued
the program that our product  supports and  terminated  our service.  We have no
alternative  distribution  channel for our Visual Got Mail  Solution and, in the
future,  we will have to rely  exclusively on our NotifyLink  product revenue to
support operations. If we are unable to increase our NotifyLink product revenues
for any reason,  it would have a material  and adverse  effect on our  business,
operating results, and financial condition.

We may be unable to generate the capital  necessary to support our planned level
of research and development activities or to manufacture and market our products

      At September 30, 2007, we had an accumulated  deficit of  $24,374,583  and
incurred a net loss for the year ended  September 30, 2007 of $426,004.  We also
had a working capital deficit at that date of $1,089,319. Our recently developed
NotifyLink products will need to attain favorable market acceptance in order for
us to be able to continue our research and  development  activities  and to fund
operating  expenses  at  current  levels.  Regardless,  because  our  NotifyLink
wireless product line has not provided sufficient  contributions to our revenues
to date to operate  profitably,  the  success of our  business  operations  will
depend upon a significant  favorable market  acceptance of our wireless software
products and could require us to obtain further financing.  Obtaining additional
financing will be subject to a number of factors  including  market  conditions,
investor acceptance of our business plan, and investor sentiment.  These factors
may make the  timing,  amount,  terms and  conditions  of  additional  financing
unattractive or unavailable to us. If we are unable to obtain significant market
acceptance of our wireless products or raise additional financing,  we will have
to  significantly  reduce our spending,  delay or cancel  planned  activities or
substantially  change our  current  corporate  structure.  In such an event,  we
intend to implement expense reduction plans in a timely manner.  However,  these
actions  would  have  material  adverse  effects  on our  business,  results  of
operations, and prospects, resulting in a possible failure of our business.

If we are unable to develop,  market and sell new and improved wireless software
products on a timely basis,  we could lose existing and potential  customers and
our sales could decrease

      We  continue  to  invest  in our  wireless  products  in order to grow our
revenue and improve our financial condition. We need to develop, market and sell
new and improved  wireless software products on a timely basis to keep pace with
technological  developments,  emerging industry standards, and the growing needs
of our sophisticated  customers. We may experience difficulties in marketing and
selling new products, and our inability to timely and cost-effectively introduce
new  products and future  enhancements,  or the failure of these new products or
enhancements  to achieve market  acceptance,  could seriously harm our business.
Life cycles of wireless software products are difficult to predict,  because the
market for such products is  relatively  new and evolving and  characterized  by
rapid technological  change,  frequent enhancements to existing products and new
product introductions,  changing customer needs and evolving industry standards.
The introduction of competing products that employ new technologies and emerging
industry   standards  could  render  our  products  and  services  obsolete  and
unmarketable  or shorten  the life  cycles of our  products  and  services.  The
emergence of new industry  standards  might require us to redesign our products.
If our  products  are not in  compliance  with  industry  standards  that become
widespread, our customers and potential customers may not purchase our products.

Our quarterly operating results may vary

      We anticipate  that we will  experience  significant  fluctuations  in our
operating results in the future. Fluctuations in operating results may cause the
price of our common stock to be volatile. Operating results may vary as a result
of many factors, including the following:

o     our level of research and development;

o     our sales and marketing activities;

o     announcements by us or our competitors;

o     size and timing of orders from customers;

o     new product introductions by us or our competitors;

o     future market acceptance of our products;

o     licensing costs of patent conflicts; and

o     price erosion.

      Each of the above factors is difficult to control and forecast. Thus, they
could have a material  adverse effect on our business,  financial  condition and
results of operations.

      Notwithstanding  the difficulty in forecasting  future sales, we generally
must undertake  research and development and sales and marketing  activities and
other  commitments  months or years in advance.  Accordingly,  any  shortfall in
product  revenues  in a  given  quarter  may  materially  adversely  affect  our
financial  condition and results of  operations  because we are unable to adjust
expenses during the quarter to match the level of product revenues,  if any, for
the quarter.  Due to these and other factors, we believe that quarter to quarter
comparisons  of our results of operations  are not  necessarily  meaningful  and
should not be relied upon as indications of future performance.


                                       7
<PAGE>

We need to continue to develop our marketing channels and build our sales force

      We are  building a formal  referral  channel,  an  international  reseller
channel and participate in informal referral  arrangements with several wireless
carriers,  2way wireless device  manufacturers  and one net ware company for the
sale of our NotifyLink  products and services  where our products  assist in the
sale of  their  products.  We have a  limited  direct  sales  force  to sell our
NotifyLink  products and services to eventual users and we rely upon both formal
and informal referral arrangements to provide leads for our NotifyLink products.
To date,  most of our  referral  arrangements  are  formal  and we will  receive
referrals only to the extent that our referral partners  successfully  refer our
products and services to potential users. There can be no assurance that we will
achieve a significant volume of sales of our NotifyLink products and services to
end users or will continue to receive referrals through our formal arrangements.
Our Enterprise  solution product is sold into an emerging market and although we
have operated on a cash positive basis in the fiscal years ending  September 30,
2006 and  2007,  we have not yet  achieved  sufficient  growth  in our  sales to
operate profitably on an income statement basis.

      We are expanding our  distribution  channels for our wireless  products by
participating  in national and regional trade shows,  promotions  with strategic
partners and  presenting at Novell  GroupWise  user  meetings  across the United
States.  We cannot  predict  whether these  activities  will result in increased
wireless  revenue.  We also have  limited  international  sales  due to  limited
resources to build a reseller  network.  Our management will need to expend time
and effort to develop  these  channels.  Our customer  profile has  successfully
changed  from  volume  sales to a  limited  number  of  large  telecommunication
customers  to  relatively  small sales to a large  number of business  customers
thereby  reducing  our  dependence  on any one  customer.  We have  expanded our
internal sales force in response.  We are building  experience  selling into the
wireless  market  but may not be able to adapt  our  traditional  marketing  and
distribution  programs to expand our  distribution  channels  and any  marketing
efforts undertaken by or on behalf of us may not be successful.

One of our directors holds a large  percentage of our stock and is able to exert
substantial control over us

      On May 29, 2007, 21X Investments  LLC, an entity of which David A. Brewer,
one of our  directors  since  February  2000,  is the sole  member and  manager,
purchased securities of Notify held by Commonwealth Associates,  LLC and several
other  investors.  Following  the  purchase  of these  securities,  Mr.  Brewer,
beneficially  owned,  in the  aggregate,  approximately  55% of our  outstanding
common stock assuming the conversion of all outstanding warrants, preferred unit
options and options held by 21X Investments LLC that were exercisable  within 60
days of the  purchase.  As a result of this  purchase,  Mr.  Brewer  will have a
significant  influence  over all matters  requiring  approval  by  stockholders,
including  the  election  of  directors,   amendments  to  our   certificate  of
incorporation and significant corporate transactions,  such as a merger or other
sale of our company or its assets.  This  concentration  of ownership will limit
other  shareholders'  ability to  influence  corporate  matters and may have the
effect of delaying or preventing a third party from acquiring control over us.

Our products may suffer from defects

      Most of our  products  consist of  software  and  services  related to our
wireless NotifyLink product line. Our NotifyLink  products  incorporate a mix of
new and  proven  technology  that has been  tested  extensively,  but may  still
contain  undetected design flaws. A failure by us to detect and prevent a design
flaw or a widespread product defect could materially  adversely affect the sales
of the affected  product and our other products and materially  adversely affect
our business, financial condition and operating results.

We participate in a competitive market

      We believe the market for our wireless products is generally  competitive.
In  particular,  in the market for wireless  email  notification  and management
software,  for  Microsoft  Exchange and Novell  GroupWise,  there is very strong
competition.  We expect  that to the extent  that the  market  for our  products
develops,  competition will intensify and new competitors will enter the market.
We may not be able to compete  successfully against existing and new competitors
as the market for our products evolves and the level of competition increases. A
failure to compete  successfully  against  existing  and new  competitors  would
materially and adversely affect our business,  revenue,  operating results,  and
financial condition


                                       8
<PAGE>

Delisting  from the Nasdaq  SmallCap  Market may  affect  the  liquidity  of our
trading market and the market price of our common stock

      Since  September  4,  2002,  our  common  stock  has  been  quoted  on the
Over-the-Counter  Bulletin Board. As a result,  our  shareholders  could find it
difficult to dispose of or to obtain accurate  quotations as to the market value
of,  our  common  stock.  In  addition,  delisting  may  make our  common  stock
ineligible for use as, or make our common stock  substantially  less  attractive
as,  collateral  for margin and  purpose  loans,  for  investment  by  financial
institutions  under their internal  policies or state legal  investment laws, as
consideration in the financing of future acquisitions of businesses or assets by
us, and for issuance by us in future capital raising  transactions  any of which
could cause the market price of our common stock to decrease. Delisting subjects
our common stock to the "penny stock  rules"  contained in Section  15(g) of the
Securities Exchange Act of 1934.

We depend on key executives

      Our  potential  for  success  depends   significantly  on  key  management
employees,  including our Chairman,  President and Chief Executive Officer,  Mr.
Paul F. DePond, our Vice President of Development,  Rhonda Chicone and our Chief
Financial  Officer,  Gerald W. Rice. We have entered into employment  agreements
with these three key management  employees.  The loss of their services or those
of any of our other key employees would materially  adversely affect us. We also
believe  that our future  success  will  depend in large part on our  ability to
attract and retain additional highly skilled  technical,  management,  sales and
marketing  personnel.  If we  were  unable  to  retain  or  hire  the  necessary
personnel,  the development of new products and enhancements to current products
would  likely be  delayed or  prevented.  Competition  for these  highly-skilled
employees  is  intense.  Therefore,  there can be no  assurance  that we will be
successful in retaining  our key  personnel and in attracting  and retaining the
personnel we require for expansion.

Our  intellectual  property may not be adequately  protected and we may infringe
the rights of others

      We  regard  various  features  and  design  aspects  of  our  products  as
proprietary  and we rely  primarily on a combination of patent,  copyright,  and
trademark laws and employee and third-party  nondisclosure agreements to protect
our  proprietary  rights.  In fiscal 2006, we sold our rights to several patents
for legacy products no longer in production. Our software products are generally
not  subject  to patent  claims  although  we intend  to  continue  to apply for
patents, as appropriate, for our future technologies and products. There are few
barriers  to  entry  into the  market  for our  products,  and  there  can be no
assurance that any patents we apply for will be granted, that any issued patents
will be  enforceable  or valid,  or that the scope of our patents or any patents
granted in the  future  will be broad  enough to  protect us against  the use of
similar technologies by our competitors.  There can be no assurance,  therefore,
that any of our competitors, some of whom have far greater resources than we do,
will not independently develop technologies that are substantially equivalent or
superior to our technology.

Our stock price may be volatile

      The  market  price for our  common  stock may be  affected  by a number of
factors,  including the announcement of new products or product  enhancements by
us or our  competitors,  the loss of  services  of one or more of our  executive
officers or other key employees, quarterly variations in our or our competitors'
results  of  operations,  changes in  earnings  estimates,  developments  in our
industry,  sales of  substantial  numbers of shares of our  common  stock in the
public market,  general market  conditions and other factors,  including factors
unrelated to our  operating  performance  or the  operating  performance  of our
competitors.  In  addition,  stock prices for many  companies in the  technology
sector have experienced wide  fluctuations that have often been unrelated to the
operating  performances of these companies.  These factors and fluctuations,  as
well as general economic,  political and market conditions,  such as recessions,
may materially adversely affect the market price of our common stock.

Our charter provisions may discourage acquisition bids

      Our Articles of  Incorporation  gives our board of directors the authority
to issue an aggregate of  5,000,000  shares of preferred  stock and to determine
the price, rights,  preferences,  privileges and restrictions,  including voting
rights for these shares, without any further vote or action by our shareholders.
The rights of the  holders of our  common  stock will be subject  to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the  future.  The  issuance of  preferred  stock,  while  providing
flexibility  in  connection  with  possible   acquisition  and  other  corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock.


                                       9
<PAGE>

Our articles of incorporation  limit the liability of officers and directors and
we have entered into indemnification agreements with them

      Our Articles of Incorporation  eliminate,  in certain  circumstances,  the
liability of our  directors for monetary  damages for breach of their  fiduciary
duties as directors.  We have also entered into indemnification  agreements with
each of our  directors and officers.  Each of these  indemnification  agreements
provides  that we will  indemnify the  indemnitee  against  expenses,  including
reasonable  attorneys' fees,  judgments,  penalties,  fines, and amounts paid in
settlement actually and reasonably incurred by them in connection with any civil
or criminal action or administrative proceeding arising out of their performance
of duties as a  director  or  officer,  other than an action  instituted  by the
director or officer.  These  indemnification  agreements  also  require  that we
indemnify the director or other party thereto in all cases to the fullest extent
permitted by applicable law. Each indemnification agreement permits the director
or officer that is party  thereto to bring suit to seek  recovery of amounts due
under the  indemnification  agreement and to recover the expenses of such a suit
if they are successful.

ITEM 2. Description of Property

      Our  principal   executive  offices  are  located  at  1054  South  DeAnza
Boulevard,  Suite 105, San Jose,  California 95129.  These facilities consist of
approximately 2,500 square feet of office space pursuant to a lease that expires
March 31, 2009. We have a second location at 6570 Seville Drive, Canfield,  Ohio
44406 that houses an engineering  group and our customer  support  organization.
The Ohio facility  consists of  approximately  5,000 square feet of office space
pursuant to a lease that expires in October 2008.

      We have not invested in real  property at this time nor do we intend to do
so. We have no formal  policy  with  respect to  investments  in real  estate or
investments with persons primarily engaged in real estate activities.

ITEM 3. Legal Proceedings

      We are not a party to any litigation.

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

      No matters were submitted to a vote by security  holders during the fourth
quarter of fiscal 2007.


                                     PART II

ITEM 5. Market  for  Common  Equity,  Related  Stockholder  Matters,  and  Small
        Business Issuer Purchases of Equity Securities

(a)   Market for Common Equity.

      Our common stock was listed on the Nasdaq SmallCap Market under the symbol
NTFY until our common  stock was  delisted  from the Nasdaq  SmallCap  Market on
September 4, 2002.  From September 4, 2002 until  present,  our common stock has
been trading on the OTC Bulletin Board under the symbol NTFY.

      The  quarterly  high and low bid prices of our common stock during  fiscal
2007 and the quarterly  high and low sales prices of our common stock for fiscal
2006 are as follows:


                                       10
<PAGE>

                                NTFY Common Stock

                                                             High         Low
                                                             ----         ---
      Fiscal Year Ended September 30, 2007
           Fourth Quarter...............................    $0.400       $0.230
           Third Quarter................................    $0.320       $0.170
           Second Quarter...............................    $0.300       $0.160
           First Quarter................................    $0.250       $0.160

       Fiscal Year Ended September 30, 2006
           Fourth Quarter...............................    $0.300       $0.190
           Third Quarter................................    $0.310       $0.140
           Second Quarter...............................    $0.280       $0.031
           First Quarter................................    $0.260       $0.160

      These  quotations  reflect  inter-dealer  prices,  without retail mark-up,
mark-down  or  commission,  and  may  not  represent  actual  transactions.  The
quarterly  high and low bid prices of our common stock  during  fiscal 2007 were
provided by Bloomberg L.P.

(b)   Holders.

      As of December 14, 2007, there were  approximately 67 holders of record of
      our common stock.

(c)   Dividends.

      We have never declared or paid any cash dividends on our common stock.  We
      currently  anticipate  that we will  retain  all future  earnings  for the
      expansion and operation of our business and do not anticipate  paying cash
      dividends in the foreseeable future.

(d)   Equity Compensation Plans

      The information  required by this item regarding equity compensation plans
      is  incorporated  by reference to the  information set forth in Item 11 of
      this Annual Report on Form 10-KSB.

(e)   Recent sales of Unregistered Securities

      During the period covered by this Annual Report on Form 10-KSB, there were
no sales of unregistered securities of Notify.

ITEM 6. Management's Discussion and Analysis or Plan of Operation

Overview

      We were  incorporated  in the State of California in August 1994. We are a
provider  of  secure  real time  wireless  synchronization  of email,  calendar,
contacts and tasks, supporting any BlackBerry,  Palm and Windows Mobile Wireless
device on all major domestic cellular voice and data networks.  NotifyLink,  our
middleware  enterprise  On-Premise and On-Demand solutions,  work with Microsoft
Exchange,  Novell  GroupWise and a variety of IMAP4 email systems  including Sun
Java  Communications  Suite,  the  Oracle  Collaboration  Suite,  The  Mirapoint
Messaging  Suite,  CommunigatePro,  Scalix  Enterprise  Server,  Kerio Messaging
Suite, The MDaemon Messaging Suite,  FirstClass,  and Meeting Maker.  NotifyLink
users have the ability to compose,  reply, forward and delete their emails while
mobile. In addition,  users have the ability to maintain mobile  synchronization
with their calendar, contacts and tasks from their wireless device.


                                       11
<PAGE>

      Although we primarily  provide a software based product in NotifyLink,  we
also have a history of supplying wireline call and message notification products
and  services.  In fiscal 2001, we developed a voice mail  notification  product
known as the Visual Got Mail Solution for a long distance  company  entering the
local telephone market. Although we shifted our focus to the enterprise mobility
software  business  in fiscal  2003,  the  Visual  Got Mail  Solution  generated
substantially all of our revenue in fiscal 2002 and 2003, a substantial majority
of our  revenue in fiscal 2004 and 2005 and  approximately  34% and 6% in fiscal
2006 and 2007, respectively.  Finally, on March 1, 2007, our customer terminated
the product as a result of a merger.  There is no other  market for this product
and we have  discontinued  all our  wireline  products.  Because we believe  our
greatest  opportunity for future growth lies with our wireless product line, the
focus of our sales,  marketing and development effort in fiscal 2007 has been in
our mobility software products.  Wireless products contributed approximately 94%
of our total  revenue in fiscal  2007 as  compared  to 66% of total  revenues in
fiscal 2006. We currently sell our products primarily through direct sales. To a
lesser extent,  we sell our products through  resellers,  both  domestically and
internationally.

      We  completed  our initial  public  offering in September  1997,  with net
proceeds of  approximately  $6.2 million.  Prior to our initial public offering,
our working  capital  requirements  were met through the sale of equity and debt
securities  and, to a lesser extent,  product  revenue and a line of credit.  We
have  sustained  significant  operating  losses  in every  fiscal  period  since
inception  and expect to incur  substantial  quarterly  operating  losses in the
future.  Our limited  operating history makes the prediction of future operating
results  difficult if not impossible.  Future  operating  results will depend on
many factors,  including  the demand for our products,  the level of product and
price competition,  our ability to expand our existing distribution channels and
to create new distribution  channels,  and our ability to develop and market new
products and control costs. There can be no assurance that our revenue will grow
or be sustained in future periods or that we will ever achieve profitability.

Critical Accounting Policies and Estimates

      Our financial  statements have been prepared in accordance with accounting
principles  generally accepted in the United States of America.  The preparation
of these  financial  statements  requires us to make  significant  estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses  and  related  disclosure  of  contingent  assets and  liabilities.  We
evaluate estimates, including those related to bad debts, inventories and income
taxes, on an ongoing basis.  We base our estimates on historical  experience and
on various  other  assumptions  that are  believed  to be  reasonable  under the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions.

      We believe the  following  critical  accounting  policies,  among  others,
involve the more significant  judgments and estimates used in the preparation of
our financial statements:

      We  recognize  revenue  in  accordance  with  the  American  institute  of
Certified Public Accounts Statement of Position ("SOP") 97-2,  "Software Revenue
Recognition," and SEC Staff Accounting  Bulletin No. 104, "Revenue  Recognition"
("SAB 104").

      Under SOP 97-2, we recognize  software license  agreements when persuasive
evidence of an  agreement  exists,  delivery of the  product has  occurred,  the
license fee is fixed or  determinable  and  collection is probable.  Our license
agreements  generally  have a fixed term and the license  revenue is  recognized
ratably over the term of each license.

      Under SAB 104, we  recognize  revenue when the title and risk of loss have
passed to the customer, there is persuasive evidence of an arrangement, delivery
of the product has occurred or services have been  rendered,  the sales price is
fixed or determinable and collection is probable.  We recognize revenues at time
of shipment of our products and sales are recorded net of discounts and returns.

      We maintain  allowances for doubtful  accounts for estimated bad debts. If
the financial  condition of our customers were to  deteriorate,  resulting in an
impairment of their ability to make  payments,  additional  allowances  might be
required.

      We generally  warrant our products for a specific period of time,  usually
one year, against material defects. We provide for the estimated future costs of
warranty  obligations  in costs of  goods  sold  when  the  related  revenue  is
recognized.  The accrued  warranty costs represent our best estimate at the time
of sale of the total  costs  that we will  incur to repair  or  replace  product
parts,  which fail while still under warranty.  The amount of accrued  estimated
warranty  costs  is  primarily  based on  historical  experience  as to  product
failures as well as current  information on repair costs.  Actual warranty costs
could differ from the estimated  amounts.  On a quarterly  basis,  we review the
accrued  balances and update the  historical  warranty  cost trends.  If we were
required to accrue  additional  warranty cost in the future, it would negatively
affect  operating  results.  As of September  30, 2005,  we had no product under
warranty and our warranty reserves were zero.


                                       12
<PAGE>

      The  carrying  value of our  deferred  tax assets are  dependent  upon our
ability  to  generate   sufficient   future   taxable   income  in  certain  tax
jurisdictions.  Should we determine  that we would not be able to realize all or
part of our deferred tax assets in the future, an adjustment to the deferred tax
assets  would be charged to income in the period  such  determination  was made.
Currently, our deferred tax assets are fully reserved.

Results of Operations

Revenue

      Total revenue  consists of a combination of gross revenue from the sale of
annual contracts for NotifyLink and revenue from the sale of services related to
our  Visual  Got Mail  Solution.  The  revenue  from the  service  contracts  is
recognized on a straight line basis over the term of the contract.  Revenue from
the Visual Got Mail  Solution  service is recognized in the month the service is
supplied.  Revenue  from  the  sale of  NotifyLink  for the  fiscal  year  ended
September 30, 2007 increased to $3,709,404 from $2,896,829 the fiscal year ended
September  30,  2006.  Revenue  from the sale of the  Visual  Got Mail  Solution
service for the fiscal year ended  September 30, 2007 decreased to $237,991 from
$809,300 for the fiscal year ended September 30, 2006.  Revenue from the sale of
the Visual Got Mail Solution  equipment for the fiscal year ended  September 30,
2007 was zero from $650,232 for the fiscal year ended September 30, 2006.

Cost of Revenue

      Cost of revenue  consists  of the  hosting  center  costs to  support  the
service portion of our NotifyLink product,  the cost of re-sale software related
to NotifyLink and royalty expense to NCR for certain technology  utilized in our
NotifyLink  product.  Cost of revenue  decreased  to $120,824 in the fiscal year
ended  September 30, 2007 from  $556,416 in the fiscal year ended  September 30,
2006. Fiscal 2006 contained  $445,725 of cost of revenue for the Visual Got Mail
Solution  equipment revenue that was recognized.  The comparable cost of revenue
in fiscal 2007 was zero as the product line was  discontinued  and there were no
equipment sales during fiscal 2007.

      The gross margin  increased to 97% in fiscal 2007 from 87% in fiscal 2006.
This increase in gross margin primarily occurred because fiscal 2006 contained a
mix of lower margin CPE sales that were not present in fiscal 2007 sales.

Research and Development

      We incurred  $1,308,428 and $975,611 in research and development  expenses
in  fiscal  2007 and 2006,  respectively.  The  increase  was  primarily  due to
personnel  additions to meet the demand of new devices  being  released into the
market by device  manufacturers  and assuring  backwards  compatibility to older
products. Our development efforts were devoted to improving our software product
in the area of device  management,  porting  our  solution  to new  devices  and
creating new products  within the NotifyLink  family.  Our software  engineering
development  is located in our offices in  Canfield,  Ohio.  We believe that our
future  success,  if any,  depends  significantly  on our ability to continue to
enhance  our  existing  wireless  products  and to  develop  new  products  and,
therefore,  we intend to continue to incur research and  development  costs.  We
expect that our  research  and  development  efforts will be focused in wireless
software as our wireline products have been discontinued.

Sales and Marketing

      Sales and marketing expense consists primarily of personnel,  show, travel
costs and sales commissions  related to our sales and marketing  efforts.  Sales
and  marketing  expenses  decreased  to  $1,612,913  for the  fiscal  year ended
September 30, 2007 from $1,634,729 for the fiscal year ended September 30, 2006.
This  decrease  was  attributable  primarily to the  fluctuations  in both sales
personnel and marketing  expense.  We still emphasize an internal sales force as
sales  tend  to  be  technical  and  difficult  for  third  parties  to  present
effectively.  The sales process for  NotifyLink  also involves a customer  trial
period  that,  in turn,  requires  an  initial  installation  process  involving
assistance  from customer  service  personnel.  We have found that good customer
service is an important tool to in the sales process.


                                       13
<PAGE>

      We believe  that  sales and  marketing  expenses  may  increase  in future
quarters if we continue to emphasize an in-house sales force which we believe is
necessary to implement our NotifyLink  strategy.  Also, any growth of NotifyLink
will  require more sales  support as we attempt to expand our existing  referral
base and create new distribution channels.

General and Administrative

      General and  administrative  expense  consists of general  management  and
finance  personnel,   occupancy  costs,  professional  fees  and  other  general
corporate  expenses.   General  and  administrative   expenses  stayed  flat  at
$1,287,247  for fiscal 2007 versus  $1,286,191  for fiscal  2006.  Decreases  in
compensation,  rent,  legal and audit  helped  prevent the  overall  general and
administrative expense from increasing.

Emerging Issues Task Force (EITF) Issue No. 00-19

      In accordance  with The Emerging Issues Task Force (EITF) Issue No. 00-19,
"Accounting  for Derivative  Financial  Instruments  Indexed to, and Potentially
Settled in a Company's  Stock," the  original  terms of our  warrants for Common
shares issued in connection with our Series A Preferred  offering issued on July
20, 2001,  qualified  for treatment as a liability on our balance sheet at their
fair value until  September 12, 2006 when the holders of the warrants  signed an
amendment changing those terms that made the warrants subject to EITF 00-19.

      The terms contained within the original  Warrant  Agreement that qualified
these  warrants under EITF 00-19 was the penalty clause that granted the warrant
holders a 5%  issuance  of  additional  warrants  for each month we were late in
filing reports required by the SEC. Since the terms in the Warrant Agreement did
not limit the number of times the penalty clause could be triggered, and because
the EITF  declared  that a company  is not in control  of when its  filings  are
effective,  the EITF 00-19 guidelines required that the fair market value of the
warrants be recognized as a liability on our balance sheet.

      The fair value of the  warrants was  estimated as of March 31, 2006,  June
30, 2006 and September  12, 2006 using the  Black-Scholes  option-pricing  model
assuming no dividends and the following assumptions:

      --------------------------------------------------------------------
                         March 2006    June 2006    Sept. 2006    Total
      --------------------------------------------------------------------
      Number of           1,871,151    1,871,151    1,871,151
      warrants
      --------------------------------------------------------------------
      Risk-free
      (10-year
      Treasury yield)
      interest rate         4.76%        5.16%        4.56%
      --------------------------------------------------------------------
      Remaining
      contractual life     2.3096       2.0603        1.8082
      --------------------------------------------------------------------
      Volatility factor    166.16%      180.46%      198.91%
      --------------------------------------------------------------------
      Resulting
      warrant value       $145,252     $457,919      $470,073    $470,073
      --------------------------------------------------------------------
      Loss on FV of
      warrants            $145,252     $312,667      $12,154     $470,073
      --------------------------------------------------------------------

      This change in value reflects the increase in market price of our stock in
the nine-month  period ended  September 12, 2006. The fair value of the warrants
was recorded as "Loss on fair value of warrants" in our statement of operations,
and included in "Warranty  liability" on our balance  sheet until  September 12,
2006 when the warrant value was reclassified to Equity.


                                       14
<PAGE>

Sale of Patents

      On February 13, 2006, we announced an agreement to assign certain  patents
related to our legacy  products that were no longer in production for a one-time
payment of $250,000.  The assignment was completed in June 2006 and the gain was
reported  as Other  income in the  fiscal  quarter  ended  June 20,  2006.  This
assignment  was a one-time  event and the patents  involved are not required for
any current or proposed products.

Income Taxes

      There was no provision for federal or state income taxes in fiscal 2006 or
2007 as we incurred net  operating  losses.  We expect to incur a net  operating
loss in future  quarters and years. As of September 30, 2007, we had federal and
state  net  operating  loss  carryforwards  of  approximately   $19,500,000  and
$3,300,000,  respectively.  The net loss  carryforwards and certain research and
development tax credit carryforwards will expire in tax years 2015 through 2026,
if not  utilized.  Utilization  of the net  operating  losses and credits may be
subject to a substantial  annual limitation due to ownership change  limitations
provided by the Internal  Revenue Code of 1986,  as amended  (the  "Code"),  and
similar state provisions.  The annual limitation may result in the expiration of
net operating  losses and credits  carryforwards  before full  utilization.  For
financial reporting  purposes,  deferred tax assets primarily related to the net
operating carryforwards  recognized under Financial Accounting Standard No. 109,
"Accounting for Income Taxes," has been fully offset by a valuation allowance.

Liquidity and Capital Resources

      During fiscal 2007, we funded our operations  through a combination of our
gross profit earned from revenue and existing cash balances. Our ability to fund
our  recurring  losses from  operations  depends upon success of our  NotifyLink
wireless  e-mail  notification  market  solutions.  We continue to evaluate  our
opportunities  to obtain further  financing but it is not a critical  element in
our plans.

      A significant  characteristic  of our business is the sale of our products
customarily  in the form of  annual  contracts  paid for  upon  signing  but the
revenue  amortized over the twelve-month  service period.  As our installed base
grows,  this practice  increases the deferred  revenue  liability on the balance
sheet as we add new contracts faster than old contracts  expire.  The major cost
of operations is comprised of (1) the engineering  design of our product offered
for sale and (2) the physical sale of a contract that requires both direct sales
effort and customer  service  hours to facilitate a trial period of our software
prior to purchase.  The change in the NotifyLink  deferred revenue to $2,126,518
as of September 30, 2007 from $1,623,606 as of September 30, 2006 indicates that
product revenue is improving. Deferred revenue also represents the obligation to
service the contracts underlying the revenue. However, the cash flow required to
service the contracts is  significantly  less than the revenue  recognized  each
month.

      Our  continued  operations  depend on the cash  flow  from the  NotifyLink
sales.  In the event our  revenue  is  interrupted,  we would have to reduce our
operations  to  service  our  existing  contract  obligations  unless we secured
additional   financing.   If  we  were  unable  to  achieve  NotifyLink  revenue
improvements or secure  financing,  we would have to restructure our business to
reduce costs.

      In the event we require additional  capital,  we cannot predict whether we
will be able to obtain  financing on commercially  reasonable  terms, if at all.
Any  future  financings  may  take the form of debt or  equity  securities  or a
combination of debt and equity,  including convertible notes or warrants. In the
event we are required to obtain additional financing,  we cannot predict whether
we could successfully conclude a financing with any new investors. Minimally, we
expect that any additional  financing could result in a substantial  dilution of
the equity and voting interests of our current shareholders.

      At  September  30,  2007,  we had cash and cash  equivalents  of  $839,775
compared to $829,406 at the same time last year. Over the last several years, we
have financed our  operations  primarily  through  revenue from  operations  and
existing cash balances.  The net cash provided by operating  activities  equaled
$70,383 in the  twelve-month  period  ended  September  30, 2007 versus net cash
provided by operating  activities of $442,956 in the  twelve-month  period ended
September 30, 2006. The cash provided by operations in the  twelve-month  period
ended  September  30,  2007  was a  combination  of a net loss of  $426,004,  an
increase in accounts  receivable of $151,786,  offset by an increase in deferred
revenue of $502,912, an increase in royalties payable of $31,554 and an increase
in accrued liabilities of $18,218. We anticipate that we will have negative cash
flow from time to time in operating activities in future quarters and years.


                                       15
<PAGE>

      Net cash used in  investing  activities  was an  outflow  of  $41,794  and
$14,897  for the  twelve-month  periods  ended  September  30,  2007  and  2006,
respectively.  The net cash outflow in both periods was due to capital purchases
partially offset by the sale of fixed assets.

      Net cash used by  financing  activities  was an  outflow  of  $18,219  and
$22,881  for the  twelve-month  periods  ended  September  30,  2007  and  2006,
respectively.  The net cash outflow for the twelve-month  period ended September
30, 2007was due to payments on capital leases.

Off-Balance Sheet Arrangements

      We have no  off-balance  sheet  arrangements  as defined by Item 303(c) of
Regulation S-B.

ITEM 7. Financial Statements

      Our audited  financial  statements  appear  beginning  on page F-1 of this
report.

ITEM 8. Changes  In  and  Disagreements  With  Accountants  on   Accounting  and
        Financial Disclosure

      None.

ITEM 8A. Controls and Procedures

      (a)   Evaluation of Disclosure Controls and Procedures.

      Our  chief  executive  officer  and our  chief  financial  officer,  after
evaluating our  disclosure  controls and procedures (as defined in the rules and
regulations  of the  Securities  and Exchange  Commission  under the  Securities
Exchange Act of 1934 (the "Exchange  Act"),  as of the end of the period covered
by this  Annual  Report  on Form  10-KSB,  have  concluded  that our  disclosure
controls and procedures are effective to ensure that information we are required
to  disclose  in  reports  that we file or  submit  under  the  Exchange  Act is
accumulated  and  communicated  to  our  management,   including  our  principal
executive and  principal  financial  officers,  as  appropriate  to allow timely
decisions regarding required disclosure,  and that such information is recorded,
processed,  summarized  and  reported  within  the  time  periods  specified  in
Securities and Exchange Commission rules and forms.

      (b)   Changes in Internal Control Over Financial Reporting.

      No  significant  changes were made in our internal  control over financial
reporting  in the period  covered by this 10-KSB or in other  factors  that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

ITEM 8B. Other Information

      We did not hold an annual  meeting of  shareholders  during  fiscal  2007.
Therefore,  in  accordance  with Rule  14a-5(f)  under the  Exchange Act and our
bylaws,  our board of directors shall determine a date a reasonable period prior
to our  next  annual  meeting  of  shareholders  by which  date all  shareholder
proposals for such annual meeting must be submitted.


                                       16
<PAGE>

                                    PART III

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

Directors and Executive Officers

Our directors and executive officers and their ages as of October 2, 2007 are as
follows:

Name                                 Age  Position
----                                 ---  --------
Directors and Executive Officers:
Paul F. DePond.....................  54   Chief Executive Officer, President and
                                          Chairman
Gerald W. Rice.....................  59   Chief Financial Officer and Secretary
Rhonda Chicone.....................  43   Vice President of Product Development
David A. Brewer (1)(2).............  55   Director
Mark Frappier (1)(2)(3)............  52   Director

------------
(1)   Member of the audit committee of the board of directors.
(2)   Member of the compensation committee of the board of directors.
(3)   Appointed to the board of directors on October 2, 2007

Biographical information for directors and executive officers:

      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.  Mr. DePond received a Bachelor of Science
Degree in Electrical and Computer  Engineering  from the University of Michigan,
Ann Arbor in 1980 and Masters Degree in Computer  Science from the University of
Michigan, Ann Arbor in 1980.

      Gerald W. Rice has served as our Chief  Financial  Officer  and  Secretary
since August  1994.  From  November  1993 to June 1996,  he owned  Comprehensive
Business Services,  a financial  services company franchise.  From April 1992 to
April 1993,  Mr. Rice served as Controller at Surface  Sciences  Instruments,  a
manufacturer of capital equipment for surface chemical analysis.  From June 1990
to April 1992,  Mr. Rice was Vice  President of Finance and Secretary of Applied
Dielectrics,  a manufacturer of microwave  circuit boards.  Mr. Rice received an
A.A. from Ohlone College in 1969 and a B.A. in Accounting from California  State
College of Stanislaus in 1971.

      Rhonda  Chicone has served as our Vice  President  of Product  Development
since July 2001.  From  October  2000 to July 2001,  Ms.  Chicone  served as our
Director of Engineering and from October 1999 to October 2000, she served as our
Engineering  Manager.  From January 1999 to October 1999,  Ms. Chicone served as
one of our senior software  engineers.  From September 1996 to January 1999, she
served as President of  Tech-Xpress  Enterprises,  Inc. Ms.  Chicone  received a
Science  degree in Computer  Science from  Youngstown  University  in 1985 and a
Masters of Science in Technology from Kent University in 2002.

      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 September
2002 to present,  Mr. Brewer has served as President and Chief Executive Officer
of PriaVision,  Inc., a private company  developing  advanced  technologies  for
ophthalmic surgeons

      Mark Frappier has served as one of our directors since October 2007. Since
1994, Mr. Frappier has provided technical  consulting to law firms and high tech
corporations  involved in complex patent litigation.  Prior to that he served as
Director of  Technical  Services at Rational  Software  from 1993 until 1994 and
Director of Customer  Service at  Cooperative  Solutions,  Inc.  from 1989 until
1993.  Mr.  Frappier  began his career as an  engineer  designing  computers  at
Rational Machines, Inc., Wang, and Data General. He graduated with a Bachelor of
Science degree in Engineering from Northeastern University in 1978


                                       17
<PAGE>

      As previously  reported in our Current Report on Form 8-K filed on May 31,
2007,  Andrew Plevin  resigned as one of our directors on May 31, 2007. We would
like to thank Mr. Plevin for his service as a director.

      As previously reported in our Current Report on Form 8-K filed on June 14,
2006,  Michael Acks  resigned as one of our directors on June 12, 2006. We would
like to thank Mr. Acks for his service as a director.

      As previously  reported in our Current Report on Form 8-K filed on October
10, 2007, Inder Tallur, David Kvederis and Neil Lichtman each resigned as one of
our  directors  on  October  2, 2007.  We would  like to thank  Messrs.  Tallur,
Kvederis and Lichtman for their service as directors.

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

Section 16(a) Beneficial Ownership Reporting Compliance

      Section  16(a) of the Exchange Act  requires  our  executive  officers and
directors and persons who own more than ten percent of a registered class of our
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 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 us with copies of all Section 16(a) forms they file. Based solely on our
review of copies of such forms received by us, or written  representations  from
certain reporting  persons,  we believe that, except as noted below,  during the
fiscal year ended September 30, 2007 all filing  requirements  applicable to our
officers, directors and ten percent shareholders were fulfilled.

      ComVest Venture  Partners was delinquent in the filing of a Form 4 related
to the sale of  stock.  Mr.  Brewer  was  delinquent  in the  filing of a Form 4
related to the sale of stock.

      Messrs.  Acks, Lichtman and Frappier were each delinquent in the filing of
a Form 3 related to their appointment to the board of directors.

Code of Ethics

      We have  adopted  the  Notify  Technology  Corporation  Code of Ethics for
Principal and Executive and Senior  Financial  Officers ("Code of Ethics").  The
Code of  Ethics  applies  to our  principal  executive  officer,  our  principal
financial officer, our principal  accounting officer or controller,  and persons
performing similar functions and responsibilities who shall be identified by our
audit committee from time to time.

      The  Code  of   Ethics   is   available   at  or   website,   located   at
http://www.notifycorp.com.

      We intend to satisfy the  disclosure  requirement  under Item 5.05 of Form
8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics
by posting such information on our website, at the address specified above.

Audit Committee

      We  have  a  separately-designated   standing  audit  committee  that  was
established in accordance with Section  3(a)(58)(A) of the Exchange Act. Messrs.
Brewer and  Frappier  currently  serve as members  of the audit  committee.  Mr.
Frappier  is  "independent"  as  defined  under  the  National   Association  of
Securities  Dealers'  listing  standards.  The board of directors has determined
that Mr.  Brewer is an "audit  committee  financial  expert"  as defined in Item
407(d) of Regulation S-B promulgated by the Securities and Exchange  Commission.
Mr.  Brewer  is  not  "independent"  by  virtue  of  his  affiliation  with  21X
Investments, LLC, our largest shareholder.


                                       18
<PAGE>

ITEM 10. Executive Compensation

                           Summary Compensation Table

      The  following  table sets  forth  information  for the two most  recently
completed  fiscal years  concerning the  compensation of (i) the Chief Executive
Officer and (ii) in the two other most highly  compensated  officers  during the
fiscal year ended September 30, 2007 (together the "Named Executive Officers").


                              Annual Compensation
                           ---------------------------   All Other
         Name and                   Salary     Bonus    Compensation    Total
    Principal Position     Year      ($)        ($)        ($)(1)         ($)
------------------------   ----    --------   --------    --------    --------
Paul F. DePond.........    2007    $242,308   $      0    $ 30,159    $272,467
   Chief Executive         2006     242,182     39,750      29,590     311,522
   Officer
Gerald W. Rice.........    2007    $183,077   $      0    $ 31,627    $214,704
   Chief Financial         2006     185,772     12,950      30,916     229,638
   Officer
Rhonda Chicone.........    2007    $120,769   $      0    $  7,924    $128,693
   Vice President of       2006     110,185     11,900       4,520     126,605
   Product Development

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


                  Outstanding Equity Awards at Fiscal Year End

      The following table sets forth certain information for the Named Executive
Officers with respect to securities underlying unexercised options at the end of
fiscal 2007.

                                            Option Awards
                      ----------------------------------------------------------
                      Number of       Number of
                      Securities      Securities
                      Underlying      Underlying
                     Unexcercised     Unexercised      Option          Option
                      Options(#)       Options(#)     Exercise       Expiration
Name                 Exercisable     Unexercisable     Price($)         Date

Paul F. DePond          50,000(3)              --   $       8.813     2/23/2010
                        50,000(2)              --   $       2.750    11/29/2010
                       100,000(1)              --   $       1.600     6/28/2011
                       500,000(3)              --   $       1.600     6/28/2011
                       150,000(3)              --   $       0.320    10/10/2011
                       400,000(3)              --   $       0.250      8/5/2013
                       250,000(3)              --   $       0.260     11/8/2014

Gerald W. Rice          50,000(3)              --   $       8.813     2/23/2010
                        10,000(2)              --   $       2.750    11/29/2010
                        50,000(1)              --   $       1.600     6/28/2011
                       100,000(3)              --   $       1.600     6/28/2011
                        50,000(3)              --   $       0.320    10/10/2011
                       125,000(3)              --   $       0.250      8/5/2013
                        75,000(3)              --   $       0.260     11/8/2014

Rhonda Chicone           5,000(4)              --   $       0.906     6/11/2008
                         5,000(4)              --   $       3.781     2/24/2009
                         5,000(4)              --   $       6.375     11/9/2009
                        20,000(3)              --   $       8.813     2/23/2010
                        10,000(4)              --   $       3.875     7/17/2010
                       150,000(3)              --   $       1.600     6/28/2011
                        50,000(3)              --   $       0.320    10/10/2011
                       150,000(3)              --   $       0.250      8/5/2013
                        75,000(3)              --   $       0.260     11/8/2014

(1) Options vested upon date of grant
(2) Options vested in equal monthly installments over a 25 month period
(3) Options vested in equal monthly installments over a 36 month period
(4) Options vested in equal monthly installments over a 48 month period

                                       19
<PAGE>

      Director Compensation

      Our directors do not currently  receive any cash  compensation for service
on the board of directors or any committee  thereof.  Directors are eligible for
option  grants under our 1997 Stock Plan.  During  fiscal 2007, no option grants
were made to our directors.

      Employment Agreements and Change-in-Control Arrangements

      In October  2007,  we  entered  into an amended  and  restated  employment
agreement  with Mr. DePond.  The agreement  provides for a base annual salary of
$255,000.  Under the  agreement,  Mr. DePond is also eligible to receive  annual
bonuses based upon targets approved by our board of directors.

      In the event that Mr.  DePond's  employment with the Company is terminated
without cause within twenty-four (24) months following a change of control or at
any time 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
eighteen  (18) months.  Mr.  DePond will also be paid the maximum  amount of his
bonus for the fiscal  year in which such  involuntary  termination  occurs  that
could have been received had he satisfied all conditions  necessary to earn such
maximum  amount of the bonus  during  the  remainder  of such  fiscal  year.  In
addition,  Mr. DePond is entitled to receive 100%  Company-paid  dental and life
insurance  coverage and  reimbursement for all premium payments paid under COBRA
for  continuing  health  insurance  coverage as  provided to Mr.  DePond and his
dependents  immediately  prior to such  termination  until  the  earlier  of (i)
eighteen (18) months  following  such  termination,  or (ii) the date Mr. DePond
becomes covered under another employer's dental,  life or health insurance plan.
In lieu of such reimbursements,  Mr. DePond may, at his sole election, receive a
one-time  cash payment  equal to the total  amount of such premium  payments Mr.
DePond  would be  required  to make for  eighteen  (18)  months  following  such
termination.  Mr. DePond is also entitled to receive outplacement services for a
period  of up to six  (6)  months  following  such  termination  with a  maximum
obligation  to the  Company  of  $9,000  for such  services.  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 the event of a termination due to Mr. DePond's death, Mr. DePond is
entitled to receive a one-time  cash payment  equal to Mr.  DePond's base annual
salary minus the amount Mr. DePond is entitled to receive under the Company-paid
life insurance policy.

      In October  2007,  we  entered  into an amended  and  restated  employment
agreement  with Mr. Rice that  provides  for a base annual  salary of  $185,000.
Under the  agreement,  Mr. Rice is also eligible to receive annual bonuses based
upon targets approved by our board of directors.


                                       20
<PAGE>

      In the event that Mr.  Rice's  employment  with the Company is  terminated
without cause within twenty-four (24) months following a change of control or at
any time apart from a change of  control,  Mr.  Rice will be entitled to receive
severance  compensation  equal to a  continuation  of his salary for a period of
twelve (12) months.  Mr. Rice will also be paid the maximum  amount of his bonus
for the fiscal year in which such involuntary termination occurs that could have
been  received had he satisfied  all  conditions  necessary to earn such maximum
amount of the bonus during the remainder of such fiscal year.  In addition,  Mr.
Rice is entitled to receive 100% Company-paid dental and life insurance coverage
and  reimbursement  for all premium  payments  paid under  COBRA for  continuing
health insurance coverage as provided to Mr. Rice and his dependents immediately
prior to such termination  until the earlier of (i) twelve (12) months following
such  termination,  or (ii) the date Mr.  Rice  becomes  covered  under  another
employer's   dental,   life  or  health   insurance   plan.   In  lieu  of  such
reimbursements,  Mr. Rice may,  at his sole  election,  receive a one-time  cash
payment  equal to the total  amount of such  premium  payments Mr. Rice would be
required to make for twelve (12) months following such termination.  Mr. Rice is
also  entitled to receive  outplacement  services  for a period of up to six (6)
months following such  termination  with a maximum  obligation to the Company of
$9,000 for such services.  Mr. Rice 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.  Rice 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  the  event  of  a
termination due to Mr. Rice's death,  Mr. Rice is entitled to receive a one-time
cash payment equal to Mr. Rice's base annual salary minus the amount Mr. Rice is
entitled to receive under the Company-paid life insurance policy.

      In  October  2007 we  entered  into an  amended  and  restated  employment
agreement  with Ms.  Chicone that provides for a base annual salary of $135,000.
Under the  agreement,  Ms.  Chicone is also eligible to receive  annual  bonuses
based on targets approved by our board of directors.

      In the event that Ms. Chicone's  employment with the Company is terminated
without cause within twenty-four (24) months following a change of control or at
any time apart from a change of control, Ms. Chicone will be entitled to receive
severance  compensation  equal to a  continuation  of her salary for a period of
twelve (12)  months.  Ms.  Chicone  will also be paid the maximum  amount of her
bonus for the fiscal  year in which such  involuntary  termination  occurs  that
could have been received had she satisfied all conditions necessary to earn such
maximum  amount of the bonus  during  the  remainder  of such  fiscal  year.  In
addition,  Ms. Chicone is entitled to receive 100% Company-paid  dental and life
insurance  coverage and  reimbursement for all premium payments paid under COBRA
for  continuing  health  insurance  coverage as provided to Ms.  Chicone and her
dependents immediately prior to such termination until the earlier of (i) twelve
(12) months  following such  termination,  or (ii) the date Ms. Chicone  becomes
covered under another employer's dental,  life or health insurance plan. In lieu
of such  reimbursements,  Ms.  Chicone  may,  at her sole  election,  receive  a
one-time  cash payment  equal to the total  amount of such premium  payments Ms.
Chicone  would be  required  to make  for  twelve  (12)  months  following  such
termination. Ms. Chicone is also entitled to receive outplacement services for a
period  of up to six  (6)  months  following  such  termination  with a  maximum
obligation  to the  Company  of $9,000  for such  services.  Ms.  Chicone 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 death or disability,
Ms. Chicone 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  of  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,  a sale of all
or substantially all of our assets, or a liquidation;  provided, however, that a
public offering of our common stock does not constitute a change of 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;  and  willful and gross  misconduct  injurious  to us. 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 and
         Related Stockholder Matters

      The following table sets forth certain  information  regarding  beneficial
ownership  of our common  stock and Series A preferred  stock as of December 15,
2007, 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 Named Executive  Officers,  and (iv) all directors
and executive officers as a group.


                                       21
<PAGE>

         The table is based on information provided to us or filed with the
Securities and Exchange Commission ("SEC") by our directors, executive officers
and principal shareholders. Beneficial ownership is determined in accordance
with the rules of the SEC, and includes voting and investment power with respect
to shares. Shares of common stock and Series A preferred stock, as indicated in
the table, issuable upon exercise of options or warrants that are currently
exercisable or are exercisable within 60 days after December 15, 2007, are
deemed outstanding for purposes of computing the percentage ownership of the
person holding such options or warrants, but are not deemed outstanding for
computing the percentage of any other shareholder. Unless otherwise indicated,
the address for each shareholder listed in the following table is c/o Notify
Technology Corporation, 1054 S. De Anza Blvd., Suite 105, San Jose, California
95129.


                                       22
<PAGE>
<TABLE>
<CAPTION>
                                                                          Shares of Series A
                                                                               Preferred             Shares of Common Stock
                                                                       Stock Beneficially Owned         Beneficially Owned
                                            Shares of Common Stock       (Underlying Preferred         (Assuming Preferred
                                              Beneficially Owned                Units)                   Stock Conversion)
                                          --------------------------   -------------------------   --------------------------
                                             Number      Percentage      Number      Percentage      Number       Percentage
Name and Address of Beneficial Owner           (1)          (1)            (2)           (2)           (3)            (3)
------------------------------------      ------------   -----------   -----------   -----------   -----------    -----------
<S>                                       <C>           <C>            <C>           <C>           <C>            <C>
21X Investments LLC (3)                     8,197,779          52.5        75,965          82.0     8,957,429          54.7
   c/o 21X Investments LLC
   1080 Telegraph St B11
   Reno NV 89502
Entities and persons affiliated with        1,174,512           8.3            --            --     1,174,512           8.3
   Strategic Turnaround Equity
   Partners, LLC (4)
   c/o 720 Fifth Avenue
   New York, NY 10019
David A. Brewer (5)                         9,439,379          60.1        75,965          82.0    10,199,029          62.0
Mark Frappier                                      --            --            --            --            --            --
Paul F. DePond (6)                          1,647,615          10.6            --             *     1,647,615          10.6
Gerald W. Rice (7)                            485,203           3.3            --             *       485,203           3.3
Rhonda Chicone (8)                            481,000           3.3            --             *       481,000           3.3
All directors and executive officers as
   a group (5  persons)                    12,053,197          66.5        75,965          82.0    12,812,847          67.8
</TABLE>

--------------
 *     less than 1%
(1)    Applicable percentage of ownership is based on 14,075,662 shares of our
       common stock outstanding as of December 14, 2007, together with
       applicable options and warrants for such shareholder.
(2)    Applicable percentage of ownership is based on options to purchase 9.2685
       units outstanding as of December 14, 2007, in which each unit consists of
       10,000 shares of Series A preferred stock and a warrant to purchase
       35,000 shares of common stock (a "Preferred Unit").
(3)    Includes (i), 75,965 shares of Series A preferred stock issuable to 21X
       Investments LLC ("21X") upon exercise of options to purchase 7.596541
       Preferred Units, (ii) 265,878 shares of common stock issuable to 21X upon
       exercise of warrants issuable upon exercise of options to purchase
       7.596541 Preferred Units, and (iii) 1,281,901 shares of common stock
       issuable to 21X upon exercise of warrants. David Brewer, one of our
       directors, is the sole member and manager of 21X. Information with
       respect to the number of shares beneficially owned is based solely on the
       Schedule 13G filed with the SEC by 21X on June 8, 2007.
(4)    Includes (i) 743,571 shares held by Strategic Turnaround Equity Partners,
       LLC ("STEP"), (ii) 120,000 shares held by Finvest Yankee, LP, for which
       Bruce Galloway and Gary Herman have the power to vote and dispose, (iii)
       219,941 shares held by Mr. Galloway's Individual Retirement Account, (iv)
       21,000 shares held by Mr. Galloway's son, for whom Mr. Galloway has the
       power to vote and dispose, and (v) 70,000 shares held by RexonGalloway
       Capital Growth, LLC, for which Mr. Galloway has the power to vote and
       dispose. Mr. Galloway and Mr. Herman are the managing members of Galloway
       Capital Management, LLC ("GCM"), the general partner of STEP and share
       the power to vote and dispose the shares owned by STEP. As a result, Mr.
       Galloway and Mr. Herman may be deemed to indirectly beneficially own the
       shares held by STEP. Mr. Galloway and Mr. Herman disclaim beneficial
       ownership of the shares held by STEP, except to the extent of their
       indirect interests by virtue of their being managing members of GCM, and
       with respect to Mr. Herman, by virtue of his being a limited partner in
       STEP. Information with respect to the number of shares beneficially owned
       is based solely on the Schedule 13G/A filed with the SEC by entities and
       persons affiliated with STEP on September 5, 2007.
(5)    Includes (i) 80,000 shares of common stock issuable to Mr. Brewer upon
       exercise of options, (ii) 75,965 shares of Series A preferred stock
       issuable to 21X upon exercise of options to purchase 7.596541 Preferred
       Units, (iii) 265,878 shares of common stock issuable to 21X upon exercise
       of warrants issuable upon exercise of options to purchase 7.596541
       Preferred Units, and (iv) 1,281,901 shares of common stock issuable to
       21X upon exercise of warrants. Mr. Brewer is the sole member and manager
       of 21X.
(6)    Includes 1,500,000 shares issuable upon exercise of options
(7)    Includes 460,000 shares issuable upon exercise of options.
(8)    Includes 470,000 shares issuable upon exercise of options.

Equity Compensation Plan Information

      The Notify  Corporation 1997 Stock Plan (the "Stock Plan") was established
in  January  1997.  The Stock  Plan had a ten year life that  expired in January
2007.  At the time of expiration  options to purchase up to 3,650,000  shares of
our common stock had been authorized,  options to purchase 175,338 shares of our
common stock had been  exercised and options to purchase up to 2,928,000  shares
of our common stock were  outstanding.  The remaining  546,662 shares authorized
under the Stock  Plan  expired  with the  termination  of the  Stock  Plan.  The
following  table sets  forth  information  with  respect to our Stock Plan as of
September 30, 2007.

<TABLE>
<CAPTION>
                                                        (a)                   (b)                    (c)
                                                -------------------    -------------------    -------------------
                                                                                              Number of Securities
                                                                                              Remaining Available
                                                     Number of                                or Future Issuance
                                                  Securities to be                               under Equity
                                                    Issued upon         Weighted-Average      Compensation Plans
                                                    Exercise of         Exercise Price of         (Excluding
                                                    Outstanding           Outstanding            Securities
                                                 Warrants, Warrants     Options, Warrants        Reflected in
                                                     and Rights            and Rights             Column (a))
                                                -------------------    -------------------    -------------------
<S>                                             <C>                    <C>                    <C>
Equity compensation plans approved
  by security holders........................          2,928,000           $      1.196                   N/A
                                                    ------------           ------------          ------------

Total........................................          2,928,000           $      1.196                   N/A
                                                    ============           ============          ============
</TABLE>


                                       23
<PAGE>

ITEM 12. Certain Relationships and Related Transactions

Related Party Transactions

      During the last two years,  we have not been a party to any related  party
transactions  described  in  Item  404  of  Regulation  S-B  promulgated  by the
Securities and Exchange Commission.

Director Independence

      Mr.  Frappier is the only current member of our board of directors that is
"independent" as defined under the National  Association of Securities  Dealers'
listing standards.  During fiscal 2007, our former director, Mr. Plevin was also
"independent" as defined under the National  Association of Securities  Dealers'
listing standards.

                                       24
<PAGE>

ITEM 13. Exhibits.

(a)   Exhibits

3.1.1       Amended and Restated  Articles of  Incorporation  of  Registrant  as
            filed with the  Secretary  of State of  California  on  September 2,
            1997.  (incorporated  herein by  reference  to Exhibit  (3.2) to the
            Registrant's   Registration   Statement  on  Form  SB-2,   Reg.  No.
            333-23369, filed on March 14, 1997)

3.1.2       Certificate   of   Amendment   to  the   Registrant's   Articles  of
            Incorporation  as filed with the Secretary of State of California on
            March 3, 1998.  (incorporated herein by reference to Exhibit (3.1.1)
            to  the  Registrant's  Quarterly  Report  on  Form  10-QSB  for  the
            quarterly period ended June 30, 2001, filed on August 14, 2001)

3.1.3       Certificate   of   Amendment   to  the   Registrant's   Articles  of
            Incorporation  as filed with the Secretary of State of California on
            July 12, 2001.  (incorporated herein by reference to Exhibit (3.1.2)
            to  the  Registrant's  Quarterly  Report  on  Form  10-QSB  for  the
            quarterly period ended June 30, 2001, filed on August 14, 2001)

3.1.4       Certificate  of  Determination,  Preferences  and Rights of Series A
            Preferred  Stock as filed with the  Secretary of State of California
            on July 13, 2001. (incorporated herein by reference to Exhibit (3.1)
            to the  Registrant's  Current  Report on Form 8-K, filed on July 23,
            2001)

3.2         Amended and Restated Bylaws of Registrant.  (incorporated  herein by
            reference to Exhibit (3.2) to the  Registrant's  Quarterly Report on
            Form 10-QSB for the quarterly  period ended June 30, 2001,  filed on
            August 14, 2001)

3.2.1       Certificate  of  Amendment  to the  Bylaws  (incorporated  herein by
            reference to Exhibit (3.2.1) to the Registrant's Quarterly Report on
            Form 10-QSB, filed on May 15, 2007)

3.2.2       Certificate  of  Amendment  to the  Bylaws  (incorporated  herein by
            reference to Exhibit (3.2.2) to the  Registrant's  Current Report on
            Form 8-K, filed on June 22, 2007)

4.1         Form of  warrant  issued  to  subscribers  in  connection  with  the
            Registrant's July 2001 private  placement.  (incorporated  herein by
            reference to Exhibit  (4.1) to the  Registrant's  Current  Report on
            Form 8-K, filed on July 23, 2001)

4.2         Form of option issued to the placement  agent in connection with the
            Registrant's July 2001 private  placement.  (incorporated  herein by
            reference to Exhibit  (4.2) to the  Registrant's  Current  Report on
            Form 8-K, filed on July 23, 2001)

4.3         Form of warrant  underlying the option issued to the placement agent
            in connection  with the  Registrant's  July 2001 private  placement.
            (incorporated   herein  by  reference   to  Exhibit   (4.3)  to  the
            Registrant's Current Report on Form 8-K, filed on July 23, 2001)

10.5(1)     Form of Indemnification Agreement. (incorporated herein by reference
            to Exhibit (10.5) to the Registrant's Registration Statement on Form
            SB-2, Reg. No. 333-23369, filed on March 14, 1997)

10.6(1)     Registrant's  1997 Stock Plan, as amended  effective March 26, 2003,
            and form of stock option  agreement.  (incorporated  by reference to
            Exhibit (4.1) to the Registrant's Registration Statement on Form S-8
            Reg. No 333-108868, filed on September 17, 2003)

10.12.1     Voice Mail Services Agreement,  dated as of February 8, 2002, by and
            between  the  Registrant  and AT&T  Corp.  (incorporated  herein  by
            reference to Exhibit (10.1) to the Registrant's  Quarterly Report on
            Form 10-QSB for the quarterly  period ended March 30, 2002, filed on
            May 15, 2002)

10.12.2     First  Amendment to the Voice Mail Services  Agreement,  dated as of
            February  8, 2003,  by and  between  the  Registrant  and AT&T Corp.
            (incorporated   herein  by  reference  to  Exhibit   (10.1)  to  the
            Registrant's  Quarterly  Report  on Form  10-QSB  for the  quarterly
            period ended March 31, 2003, filed on May 14, 2003)

10.16(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007 between  Registrant  and Paul DePond.  (incorporated  herein by
            reference to Exhibit (10.16) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)


                                       25
<PAGE>

10.17(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007 between  Registrant  and Gerald Rice.  (incorporated  herein by
            reference to Exhibit (10.17) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)

10.18(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007 between Registrant and Rhonda  Chicone.(incorporated  herein by
            reference to Exhibit (10.18) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)

10.24       Nonexclusive Technology License Agreement,  dated as of November 24,
            2003, by and between  Registrant and NCR Corporation.  (incorporated
            herein by reference to Exhibit  (10.24) to the  Registrant's  Annual
            Report on Form 10-KSB for the fiscal year ended  September 30, 2004,
            filed on December 22, 2004)

10.25       Patent  Purchase  Agreement  dated  March 22,  2006,  by and between
            Notify  Technology  Corporation  and  Sunshine  Data  Ventures  LLC.
            (incorporated   herein  by  reference  to  Exhibit  (10.25)  to  the
            Registrant's Currant Report 8-K, filed on March 24, 2006)

10.26       Amendment   to  Series  A  Warrants   dated   September   12,   2006
            (incorporated   herein  by  reference  to  Exhibit  (10.26)  to  the
            Registrant's  Current  Report on Form 8-K,  filed on  September  12,
            2006)

10.27       Amendment to ComVest  Commitment  Warrant  dated  September 12, 2006
            (incorporated   herein  by  reference  to  Exhibit  (10.27)  to  the
            Registrant's  Current  Report on Form 8-K,  filed on  September  12,
            2006)

10.28       Amendment  to Unit  Purchase  Option dated  September  12, 2006 with
            Commonwealth  Associates,  L.P. (incorporated herein by reference to
            Exhibit  (10.28)  to the  Registrant's  Current  Report on Form 8-K,
            filed on September 12, 2006)

10.29       Lease,  dated as of September 22, 2006 by and between Registrant and
            Colbur  Tech,  LLC.  (incorporated  herein by  reference  to Exhibit
            (10.29) to the Registrant's  Current Report on Form 10-KSB, filed on
            December 22, 2006)

10.30       Lease,  dated as of February 27, 2006 by and among  Registrant,  and
            Ching C. Poon and Jenny M. Poon.  (incorporated  herein by reference
            to Exhibit (10.30) to the Registrant's Annual Report on Form 10-KSB,
            filed on December 22, 2006)

10.32       Lease addendum  dated  February 22, 2007 between  Notify  Technology
            Corporation  and  Pecten  Court  Mountain  View   Associates,   LLC.
            (incorporated   herein  by  reference  to  Exhibit  (10.32)  to  the
            Registrant's Current Report on Form 8-K, filed on February 22, 2007)

14.1        Code of Ethics for Principal Executive and Senior Financial Officers
            (incorporated   herein  by  reference  to  Exhibit   (14.1)  to  the
            Registrant's  Annual Report on Form 10-KSB for the fiscal year ended
            September 30, 2003, filed on December 29, 2003)

24.1        Power of Attorney (see page 29).

31.1        Certification of Chief Executive  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

31.2        Certification of Chief Financial  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

32.1        Certification of Chief Executive Officer and Chief Financial Officer
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)   Management compensation plan/contract


                                       26
<PAGE>

ITEM 14. Principal Accountant Fees and Services

      Summary of Fees

      The following table summarizes the approximate aggregate fees billed to us
or expected to be billed to us by our independent auditors for our 2006 and 2005
fiscal years:

Type of Fees                           Fiscal Year 2007       Fiscal Year 2006
----------------                       ----------------       ----------------
Audit Fees.........................     $   56,688 (1)         $   45,400 (1)
Audit-Related Fees.................             --                     --
Tax Fees...........................          7,500 (2)             15,000 (2)
All Other Fees.....................             --                     --
                                        ----------             ----------
Total Fees.........................     $   64,188             $   60,400
                                        ==========             ==========

------------
(1)   Includes audit fees billed to us by L.L. Bradford & Company, LLC.
(2)   Includes fees for fiscal 2006 income tax preparation  billed to us by L.L.
      Bradford & Company, LLC.


      Pre-Approval of Independent Auditor Services and Fees

      Our audit committee reviewed and pre-approved all audit and non-audit fees
for services  provided by L.L.  Bradford & Company,  LLC and has determined that
the provision of such  services to us during fiscal 2007 is compatible  with and
did not impair  L.L.  Bradford & Company  LLC's  independence.  L.L.  Bradford &
Company,  LLC was engaged to perform the 2006 fiscal  year-end  audit and fiscal
2007 audit  services.  It is the practice of the audit committee to consider and
approve in advance all auditing and non-auditing  services provided to us by our
independent  auditors in  accordance  with the  applicable  requirements  of the
Securities and Exchange Commission.


                                       27
<PAGE>

                                   SIGNATURES

      In accordance  with 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, thereunto duly authorized.

                                       NOTIFY TECHNOLOGY CORPORATION


Dated: December 17, 2007               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 Annual 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 on the behalf of the
registrant in the capacities indicated below and on the dates stated.

         Signature                       Title                       Date
         ---------                       -----                       ----

     /S/ PAUL F. DEPOND         President, Chief Executive     December 17, 2007
---------------------------     Officer and Chairman
       Paul F. DePond           (Principal Executive Officer)

     /S/ GERALD W. RICE         Chief Financial Officer        December 17, 2007
---------------------------     (Principal Financial and
       Gerald W. Rice           Accounting Officer)

    /S/ DAVID A. BREWER         Director                       December 17, 2007
---------------------------
      David A. Brewer

     /S/ MARK FRAPPIER          Director                       December 18, 2007
---------------------------
       Mark Frappier


                                       28
<PAGE>

                          Notify Technology Corporation
                              Financial Statements
                     Years ended September 30, 2007 and 2006


                                    Contents

      Report of Independent Registered Public Accounting Firm..............  F-2

      Audited Financial Statements:

      Balance Sheet........................................................  F-3
      Statements of Operations.............................................  F-4
      Statements of Shareholders' Equity (Deficit).........................  F-5
      Statements of Cash Flows.............................................  F-6
      Notes to Financial Statements........................................  F-7


                                      F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Notify Technology Corporation

We have audited the accompanying balance sheet of Notify Technology  Corporation
as  of  September  30,  2007,   and  the  related   statements  of   operations,
shareholders' deficit, and cash flows for the years ended September 30, 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 audit.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the 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,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Notify Technology  Corporation
at September 30, 2007,  and the results of its operations and its cash flows for
the years ended  September  30, 2007 and 2006,  in  conformity  with  accounting
principles generally accepted in the United States of America.


/s/ L.L. BRADFORD & COMPANY, LLC

Las Vegas, Nevada
December 7, 2007


                                      F-2
<PAGE>

                          Notify Technology Corporation
                                  Balance Sheet
                               September 30, 2007


Assets
Current assets:
   Cash and cash equivalents                                     $      839,775
   Accounts receivable, net of allowance for
     doubtful accounts of $30,000                                       588,295
   Other current assets                                                  51,692
                                                                 --------------
Total current assets                                                  1,479,762

Property and equipment, net                                              98,983
                                                                 --------------
Total assets                                                     $    1,578,745
                                                                 ==============

Liabilities and Shareholders' Deficit
Current liabilities:
   Current portion of capital lease obligations                  $        7,243
   Accounts payable                                                      31,915
   Accrued payroll and related liabilities                              260,216
   Deferred revenue                                                   2,126,518
   Other accrued liabilities                                            143,189
                                                                 --------------
Total current liabilities                                             2,569,081

Long term portion of capital lease obligations                           15,519
                                                                 --------------
Total liabilities                                                     2,584,600
                                                                 --------------

Commitments and contingencies (Note 8)
Shareholders' deficit:
   Preferred stock, $0.001 par value,
     5,000,000 shares authorized                                             --
   Common stock, $0.001 par value,
     30,000,000 shares authorized,
     13,968,995 shares issued and
     outstanding at September 30, 2006                                   13,969
   Additional paid-in capital                                        23,354,759
   Accumulated deficit                                              (24,374,583)
                                                                 --------------
Total shareholders' deficit                                          (1,005,855)
                                                                 --------------
Total liabilities and shareholders' deficit                      $    1,578,745
                                                                 ==============

The accompanying notes are an integral part of these financial statements.


                                      F-3
<PAGE>

                          Notify Technology Corporation
                            Statements of Operations


                                                   Years Ended September 30,
                                                    2007              2006
                                               --------------    --------------
   Revenues:
     Product revenue                           $    3,709,404    $    3,105,463
     Service revenue                                  237,991         1,250,899
                                               --------------    --------------
   Total revenue                                    3,947,395         4,356,362
                                               --------------    --------------

   Cost of revenues:
     Product cost                                     120,824           541,041
     Service cost                                          --            15,375
                                               --------------    --------------
   Total cost of revenues                             120,824           556,416
                                               --------------    --------------
   Gross profit                                     3,826,571         3,799,946
                                               --------------    --------------

   Operating costs and expenses:
     Research and development                       1,308,428           975,611
     Sales and marketing                            1,612,915         1,634,729
     General and administrative                     1,287,246         1,286,191
                                               --------------    --------------
   Total operating costs and expenses               4,208,589         3,896,531
                                               --------------    --------------
   Loss from operations                              (382,018)          (96,585)

   Other (income) expenses
     Gain from sale of patents                             --          (250,000)
     Loss on fair value of warrants                        --           470,073
     Other (income) expense, net                          130            (1,766)
     Option vesting expense                            43,856                --
                                               --------------    --------------
   Total other (income) expense, net                   43,986           218,307

Net loss                                       $     (426,004)   $     (314,892)
                                               ==============    ==============

   Basic and diluted net loss per share        $        (0.03)   $        (0.02)

   Weighted-average shares used in computing
     net loss per share                            13,968,995        13,968,995

The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>

                          Notify Technology Corporation
                  Statements of Shareholders' Equity (Deficit)

<TABLE>
<CAPTION>
                              Convertible Redeemable                                                                     Total
                                 Preferred Stock                Common Stock           Additional                     Shareholders'
                           ---------------------------   ---------------------------     Paid-In      Accumulated        Equity
                              Shares         Amount         Shares         Amount        Capital        Deficit         (Deficit)
                           ------------   ------------   ------------   ------------   ------------   ------------    ------------
<S>                        <C>            <C>            <C>            <C>            <C>            <C>             <C>
Balance at
  September 30, 2005                 --   $         --     13,968,995   $     13,969   $ 22,840,830    (23,633,687)       (260,185)
Reclassification of
  warrant value                      --             --             --             --        470,073             --         470,073
Net loss and
  comprehensive net loss             --             --             --             --             --       (314,892)       (314,892)
                           ------------   ------------   ------------   ------------   ------------   ------------    ------------
Balance at
  September 30, 2006                 --             --     13,968,995         13,969     23,310,903   $(23,948,579)       (623,707)
Option vesting expense               --             --             --             --         43,856             --          43,856
Net loss and
  comprehensive net loss             --             --             --             --             --       (426,004)       (426,004)
                           ------------   ------------   ------------   ------------   ------------   ------------    ------------
Balance at
  September 30, 2007                 --             --   $ 13,968,995   $     13,969   $ 23,354,759   $(24,374,583)     (1,005,855)
                           ============   ============   ============   ============   ============   ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                      F-5
<PAGE>

                          Notify Technology Corporation
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                         Years Ended September 30,
                                                       ----------------------------
                                                           2007            2006
                                                       ------------    ------------
<S>                                                    <C>             <C>
Operating activities
Net loss                                               $   (426,004)   $   (314,892)
Adjustments  to reconcile  net loss to net
  cash  provided by (used in) operating
  activities:
     Depreciation and amortization                           54,148          66,321
     (Gain) loss from sale of fixed assets                    1,848          (1,981)
     Option vesting expense                                  43,856
     Reclassification of warrant liability                       --         470,073
     Changes in operating assets and liabilities:
       Accounts receivable, net                            (151,786)         36,433
       Other current assets                                   1,442           5,616
       Accounts payable                                      (5,807)         (9,928)
       Accrued liabilities                                   49,773        (144,426)
       Deferred revenue                                     502,912         335,740
                                                       ------------    ------------
Net cash provided by (used in) operating activities          70,382         442,956
                                                       ------------    ------------

Investing activities
Expenditures for property and equipment                     (44,794)        (16,497)
Proceeds from sale of fixed assets                            3,000           1,600
                                                       ------------    ------------
Net cash used in investing activities                       (41,794)        (14,897)
                                                       ------------    ------------

Financing activities
Proceeds from exercise of warrants                               --              --
Payments on capital leases                                  (18,219)        (22,881)
                                                       ------------    ------------
Net cash provided by (used in) financing activities         (18,219)        (22,881)
                                                       ------------    ------------

Net increase (decrease) in cash and cash equivalents         10,369         405,178
Cash and cash equivalents at beginning of year              829,406         424,228
                                                       ------------    ------------
Cash and cash equivalents at end of year               $    839,775    $    829,406
                                                       ============    ============

Supplemental disclosure of non-cash transactions:
         Equipment purchased under capital lease       $     15,000    $      6,157
Supplemental disclosure of cash flow information:
         Cash paid for interest                        $      1,381    $      2,389
         Cash paid for income taxes                    $      1,080    $      1,175
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements
                               September 30, 2006


1. Business and Basis of Presentation

Notify  Technology   Corporation  (the  Company  or  Notify),   incorporated  in
California in 1994, is a software developer of enterprise mobility solutions for
most wireless handheld devices including the RIM BlackBerry, Palm based products
and Windows  Mobile  based  products on a variety of email  platforms  including
various IMAP4 solutions as well as Novell GroupWise and Microsoft Exchange.

The Company has incurred net losses since inception and may incur net losses and
negative cash flow from  operations for at least the next one or two years.  The
Company  incurred losses of $426,004,  $314,892 and $557,452 for the years ended
September 30, 2007, 2006 and 2005, respectively.  The Company has an accumulated
deficit of $24.4  million as of September  30,  2007.  During  fiscal 2007,  the
Company  financed its  operations  through the sale of its products and existing
cash balances.

The Company chose to replace its historical wireline products starting in fiscal
2001 and  although  it still  received  some  revenue  from its legacy  wireline
business in fiscal 2007,  it  currently  focuses all its efforts on its wireless
software  products by researching  and  developing  new products,  enhancing its
existing  NotifyLink  product  family and marketing  and selling the  NotifyLink
product line. To date, the NotifyLink  product line has not provided  sufficient
revenue to completely replace the wireline product revenue.  Since the Company's
wireline  revenues  terminated  in fiscal 2007, it needs to improve the sales of
NotifyLink to compensate.  The success of the Company's business operations will
depend upon a significant  favorable market acceptance for its wireless software
products.  If the Company is unable to achieve  profitable  operations  from its
software  wireless products or obtain further  financing,  then its business may
fail.

If  additional  funds  are  raised  through  the  issuance  of  equity  or  debt
securities,  these  securities  could have  rights  that are senior to  existing
shareholders  and could contain  covenants that would restrict  operations.  Any
additional  financing may not be available in amounts or on terms  acceptable to
the Company, if at all.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates and assumptions  that affect the amounts  reported in the accompanying
financial  statements and notes thereto.  Actual results could differ from those
estimates.


                                      F-7
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Cash and Cash Equivalents

The Company considers all highly liquid,  temporary investments with an original
maturity of three months or less when purchased to be cash equivalents. Cash and
cash  equivalents are deposited in demand and money market accounts in financial
institutions in the United States.

Accounts Receivable/ Allowance for Doubtful Accounts

Accounts   receivable  are  stated  at  net  realizable   value.   Uncollectible
receivables  are  recorded as bad debt  expense when all efforts to collect them
have been  exhausted  and  recoveries  are  recognized  when they are  received.
Historically,  the bad debts have been  insignificant  and the allowance for bad
debt approximates the average bad debt expense.

Inventories

The Company's  current business does not require  inventory and it no longer has
any remaining  inventory of its legacy  products.  If inventories  were present,
they  would be stated at the  lower of cost or market on a  first-in,  first-out
basis. At September 30, 2007, the value of inventory was zero.

Property and Equipment

Property and equipment are stated at cost, net of accumulated  depreciation  and
amortization.  Depreciation is computed using the straight-line  method over the
following  estimated  useful lives of the assets:  five years for  furniture and
office equipment and three years for software and computer equipment.  Leasehold
improvements and assets under capital leases are amortized by the  straight-line
method over the shorter of the lease term or the estimated  useful lives of such
assets. Upon retirement or sale, the cost and related  accumulated  depreciation
are removed  from the  accounts and any related gain or loss is reflected in the
statement of operations. Repairs and maintenance are expensed as incurred.

Long-Lived Assets

The Company monitors the  recoverability of long-lived assets based on estimated
use  factors  such as future  asset  utilization,  business  climate  and future
undiscounted cash flows expected to result from the use of the related assets or
realized  upon sale.  The  Company's  policy is to write down  assets to its net
recoverable  amount,  which is determined based on either  discounted future net
cash flows or appraised  values,  in the period when it is  determined  that the
carrying amount of the asset is not likely to be recoverable.


                                      F-8
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Income Taxes

The Company accounts for income taxes under the liability method.  The estimated
future tax effect of differences between the basis in assets and liabilities for
tax and  accounting  purposes is accounted  for as deferred  taxes.  A valuation
allowance  has been  established  to reduce  deferred  tax  assets as it is more
likely than not that all, or some portion, of such deferred tax assets would not
be realized. A full allowance against deferred tax assets is provided.

Advertising Costs

Advertising costs are expensed as incurred.  Advertising costs were zero for the
year ended September 30, 2007 and $1,010 for the year ended September 30, 2006.

Revenue Recognition

The Company  recognizes  revenue in  accordance  with the American  Institute of
Certified  Public  Accountants  Statement of Position  ("SOP")  97-2,  "Software
Revenue  Recognition,"  and SEC Staff  Accounting  Bulletin  No.  104,  "Revenue
Recognition" ("SAB 104").

Under  SOP  97-2,  the  Company  recognizes  software  license  agreements  when
persuasive  evidence  of an  agreement  exists,  delivery  of  the  product  has
occurred,  the license fee is fixed or determinable  and collection is probable.
The Company's  license  agreements  generally  have a fixed term and the license
revenue is recognized ratably over the term of each license.

Under SAB 104,  the Company  recognizes  revenue when the title and risk of loss
have passed to the  customer,  there is persuasive  evidence of an  arrangement,
delivery of the product has occurred or services have been  rendered,  the sales
price  is  fixed  or  determinable  and  collection  is  probable.  The  Company
recognizes  revenues at time of shipment of its  products and sales are recorded
net of discounts and returns.

Service  income is  recognized on a  straight-line  basis over the period of the
service agreement.


                                      F-9
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Deferred  revenue  relates to products  where a sales contract has been executed
and payment has been received but the  obligation  to provide  services is being
recognized over the contractual term of the license.

Research and Development

Based on the Company's software development process, the time period between the
development of new software features and the release of the product is short and
capitalization of internal development costs has not been material to date.

Concentration of Credit Risk

Financial  instruments that potentially  expose the Company to concentrations of
credit risk consist  principally of cash and cash equivalents and trade accounts
receivable.  Cash and cash  equivalents  held with  financial  institutions  may
exceed the amount of insurance  provided on such  deposits.  The Company has not
experienced any losses on its deposits of cash and cash equivalents.

The Company  performs  ongoing  credit  evaluations  and  generally  requires no
collateral.  The Company maintains  reserves for credit losses,  and such losses
have been within  management's  expectations.  As of  September  30,  2007,  one
customer  accounted  for  15%  of  accounts   receivable.   No  other  customers
represented  more than 10% of accounts  receivable and most  considerably  less.
Revenue from one customer  accounted for 6% and 29% of total revenues for fiscal
years ended September 30, 2007 and 2006, respectively.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company's  financial  instruments,  including
cash and cash  equivalents,  accounts  receivable,  accounts payable and accrued
liabilities  approximate fair value due to their  relatively  short  maturities.
Based upon borrowing rates currently available to the Company for capital leases
with  similar  terms,  the  carrying  value  of its  capital  lease  obligations
approximate fair value.

Stock-Based Compensation

Statement of Financial Accounting Standards No. 148 (SFAS 148),  "Accounting for
Stock-Based  Compensation--Transition  and  Disclosure,  an  Amendment  of  FASB
Statement No.123," amends the disclosure  requirements of Statement of Financial
Accounting   Standards  No.  123  (SFAS  123),   "Accounting   for   Stock-Based
Compensation," to require more prominent  disclosures in both annual and interim
financial statements regarding the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.


                                      F-10
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance  with provisions of Accounting  Principles  Board Opinion No. 25 (APB
25),  "Accounting  for Stock Issued to Employees"  and related  interpretations.
Under APB 25,  compensation  expense is based on the difference,  if any, on the
date of the  grant,  between  the fair  value  of the  Company's  stock  and the
exercise price.

The Company  recognized  stock based  employee  compensation  in fiscal 2007 and
recorded a non-cash  expense of $43,856.  No options were issued in fiscal 2007.
The  Company's  option  plan  expired in January  2007 and the  Company  did not
approve a replacement stock-based plan in fiscal 2007.

The Company recognized no compensation  expense in fiscal 2007 or in fiscal 2006
related to the grant of options to non-employees.

Net Loss Per Share

Net loss per common share is computed by dividing  net loss  available to common
stockholders  by the weighted  average number of shares  outstanding  during the
period.

Options to purchase  2,928,000 and 3,225,000 shares of common stock and warrants
to purchase  1,871,651 and 1,871,651  shares of common stock were outstanding at
September  30,  2007  and  2006,  respectively,  but were  not  included  in the
computation of diluted net loss per share as the effect would be antidilutive.

Recent Accounting Pronouncements

In June 2006, the FASB issued Interpretation No. 48 ("FIN 48"),  "Accounting for
Uncertainty in Income Taxes," which  clarifies the accounting for uncertainty in
income taxes  recognized  in the financial  statements  in accordance  with FASB
Statement No. 109, " Accounting for Income Taxes".  FIN 48 provides  guidance on
the financial  statement  recognition and measurement of a tax position taken or
expected  to be  taken  in a tax  return.  FIN  48  also  provides  guidance  on
derecognition,  classification,  interest and  penalties,  accounting in interim
periods,  disclosures,  and  transition.  FIN 48 is  effective  for fiscal years
beginning  after  December 15, 2006.  The Company is  currently  evaluating  the
impact of this standard on the consolidated financial statements.

In September 2006, the FASB issued Statement of Financial  Accounting  Standards
(SFAS) No. 157,  "Fair  Value  Measurements".  SFAS No. 157 defines  fair value,
establishes a framework for measuring fair value and expands  disclosures  about
fair value.  SFAS No. 157 is effective for fiscal years beginning after November
15, 2007. The Company is currently evaluating the impact of this standard on the
consolidated financial statements.

In February 2007, the FASB issued  Statement of Financial  Accounting  Standards
(SFAS) No.  159,  "The Fair  Value  Option for  Financial  Assets and  Financial
Liabilities",  SFAS No.  159  provides  an option to report  selected  financial
assets and  financial  liabilities  using fair value.  The standard  establishes
required  presentation and disclosures to facilitate  comparisons with companies
that use different measurements for similar assets and liabilities. SFAS No. 159
is effective  for fiscal years  beginning  after  November 15, 2007,  with early
adoption allowed only if SFAS No. 157 is also adopted.  The Company is currently
evaluating the impact of this standard on the consolidated financial statements.


                                      F-11
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


3. Emerging Issues Task Force (EITF) Issue No. 00-19

In  accordance  with The  Emerging  Issues Task Force  (EITF)  Issue No.  00-19,
"Accounting  for Derivative  Financial  Instruments  Indexed to, and Potentially
Settled in a Company's  Stock," the original terms of warrants for Common shares
issued in  connection  with the Series A Preferred  offering  issued on July 20,
2001,  qualified for treatment as a liability on the balance sheet at their fair
value  until  September  12,  2006 when the  holders of the  warrants  signed an
amendment changing those terms that made the warrants subject to EITF 00-19.

The terms contained within the original  Warrant  Agreement that qualified these
warrants  under EITF 00-19 was the  penalty  clause  that  granted  the  warrant
holders a 5% issuance of additional warrants for each month the Company was late
in filing reports required by the SEC. Since the terms in the Warrant  Agreement
did not limit the number of times the penalty  clause  could be  triggered,  and
because the EITF  declared  that a Company is not in control of when its filings
are effective,  the EITF 00-19 guidelines required that the fair market value of
the warrants be recognized as a liability on the Company's balance sheet.

The fair value of the warrants was estimated as of March 31, 2006, June 30, 2006
and September 12, 2006 using the Black-Scholes  option-pricing model assuming no
dividends and the following assumptions:

      --------------------------------------------------------------------
                         March 2006    June 2006    Sept. 2006    Total
      --------------------------------------------------------------------
      Number of           1,871,151    1,871,151    1,871,151
      warrants
      --------------------------------------------------------------------
      Risk-free
      (10-year
      Treasury yield)
      interest rate         4.76%        5.16%        4.56%
      --------------------------------------------------------------------
      Remaining
      contractual life     2.3096       2.0603        1.8082
      --------------------------------------------------------------------
      Volatility factor    166.16%      180.46%      198.91%
      --------------------------------------------------------------------
      Resulting
      warrant value       $145,252     $457,919      $470,073    $470,073
      --------------------------------------------------------------------
      Loss on FV of
      warrants            $145,252     $312,667      $12,154     $470,073
      --------------------------------------------------------------------


                                      F-12
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


This change in value  reflects  the  increase in market  price of the  Company's
stock in the year ended  September 12, 2006.  The fair value of the warrants was
recorded  as "Loss on fair value of  warrants"  in the  Company's  statement  of
operations,  and included in "Warranty liability" on the Company's balance sheet
until September 12, 2006 when the warrant value was reclassified to Equity.

4. Sale of Patents

On February  13, 2006,  an agreement  was  announced to assign  certain  patents
related to the Company's legacy products that were no longer in production for a
one-time payment of $250,000.  The assignment was completed in June 2006 and the
gain was  reported as Other  income in the fiscal  quarter  ended June 30, 2006.
This assignment was a one-time event and the patents  involved were not required
for any current or proposed products.

5. Property and Equipment

Property and equipment consist of the following:

                                                     September 30,
                                                         2007
                                                      -----------
          Furniture and office equipment              $   376,588
          Software                                         45,515
          Leasehold improvements                            2,246
                                                      -----------
                                                          424,349
          Less accumulated depreciation
            and amortization                             (325,366)
                                                      -----------
                                                      $    98,983
                                                      ===========

Property and equipment  includes $66,117 of office equipment under capital lease
with accumulated amortization of $43,560 at September 30, 2007.

Depreciation  and  amortization  expense  was  $54,148 and $66,321 for the years
ended September 30, 2007 and 2006, respectively.

6. Capital Lease Obligations

During the year ended  September 30, 2005, the Company  entered into one capital
lease for office  equipment  totaling $37,705 with principal and interest (6.0%)
due monthly.  During the year ended September 30, 2006, the Company entered into
one  capital  lease for office  equipment  totaling  $6,157 with  principal  and
interest  (5.8%) due monthly.  During the year ended  September  30,  2007,  the
Company  entered into one capital  lease  totaling  $15,000 with  principal  and
interest (5.0%) due monthly.


                                      F-13
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Future minimum lease payments under the lease are as follows:

         For  the year ending September 30,
                      2008                               $     8,762
                      2009                                     5,256
                      2010                                     4,664
                      2011                                     3,480
                      2012                                     3,480
                                                         -----------
         Total minimum lease payments                         25,642
         Less: amount representing interest                   (2,880)
                                                         -----------
         Present value of net minimum lease payments          22,762
         Less: current portion                                (7,243)
                                                         -----------
                                                         $    15,519
                                                         ===========

7. Guarantees

Indemnification Agreements

The Company enters into standard  indemnification  arrangements  in the ordinary
course of business.  Pursuant to these  arrangements,  the Company  indemnifies,
holds  harmless,  and agrees to  reimburse  the  indemnified  parties for losses
suffered or incurred by the indemnified party, generally their business partners
or customers,  in  connection  with any U.S.  patent,  or any copyright or other
intellectual  property infringement claim by any third party with respect to the
Company's products.  The term of these  indemnification  agreements is generally
perpetual  anytime after the execution of the agreement.  The maximum  potential
amount of future  payments  the  Company  could be  required to make under these
agreements is unlimited. The Company has never incurred costs to defend lawsuits
or settle claims related to these indemnification  agreements.  As a result, the
Company believes the estimated fair value of these agreements is minimal.

The Company has entered into  indemnification  agreements with its directors and
officers  that may require the Company:  to indemnify its directors and officers
against  liabilities  that may  arise by reason of their  status or  service  as
directors or officers, other than liabilities arising from willful misconduct of
a  culpable  nature;  to  advance  their  expenses  incurred  as a result of any
proceeding  against  them as to which they could be  indemnified;  and to obtain
directors' and officers'  insurance if available on reasonable terms,  which the
Company currently has in place.


                                      F-14
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Product Warranty

The  Company  warrants  its  products  to current  paid-up  customers  and makes
available for download  service update releases that contain the most up-to-date
version of the  Company's  products.  These  software  updates  are  continually
maintained and released when available. As such, the Company does not maintain a
separate  warranty  reserve  but  expenses  the  cost to  create  and  post  any
maintenance release as a part of normal operations.

8. Commitments and Contingencies

The Company currently  occupies two facilities under operating  leases.  The San
Jose,  California  facility  lease expires in March 2009 and the Canfield,  Ohio
facility lease expires in October 2008.

      Future minimum lease payments are approximately as follows:

            Year ending September 30, 2008              $   137,944
            Year ending September 30, 2009                   37,942
                                                        -----------
                                                        $   175,886
                                                        ===========

Facility rent expense totaled approximately  $145,000 and $161,000 for the years
ended September 30, 2007 and 2006, respectively.

In November 2003, NCR Corporation and Notify Technology Corporation entered into
a  non-exclusive  license  agreement  that allows the  Company to offer  certain
product  features  on its  Enterprise  Mobility  Solution  that are covered by a
patent held by NCR. This  agreement  requires that a royalty  payment be made to
NCR based on the revenue from any NotifyLink  product that is sold that uses the
technology  covered by the patent.  Payments  under this agreement were $103,342
and $80,229 during the fiscal years 2007 and 2006, respectively.

9. Shareholders' Equity (Deficit)

Preferred Stock

The Board of Directors has the authority,  without any further vote or action by
the  shareholders,  to provide for the issuance of 4,100,000 shares of preferred
stock in one or more  series with such  designation,  rights,  preferences,  and
limitations as the Board of Directors may determine, including the consideration
to be received,  the number of shares  comprising  each series,  dividend rates,
redemption provisions, liquidation preferences,  redemption and fund provisions,
conversion rights, and voting rights, all without the approval of the holders of
common stock.


                                      F-15
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Convertible Redeemable Preferred Stock

In July 2001, the Company's shareholders authorized and the Company completed an
offering of Series A convertible  redeemable preferred stock (Series A preferred
stock) to a group of private  investors.  In connection  with the offering,  the
Company issued  501,000 shares of Series A preferred  stock at $10 per share and
issued warrants to purchase  1,753,000 shares of common stock for  consideration
of $4.2 million,  net of issuance  costs.  The Company has designated a total of
900,000 shares as Series A preferred stock.

Holders of our outstanding Series A preferred stock had the right to require the
Company 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 was $10.00 plus any accrued dividends. The holders of
Series A preferred stock had the option to receive the redemption  price in cash
or in shares of our common  stock,  but the Company was not obligated to pay the
redemption in cash unless the Company's board of directors  unanimously approved
such payment in cash.  If all holders of  outstanding  Series A preferred  stock
elected to redeem in cash,  the  aggregate  redemption  price would have totaled
$4,610,000.  The  holders of the  Company's  Series A  preferred  stock chose to
exercise their right of redemption in the form of common shares. The outstanding
Series A preferred  shares were  redeemed at an  effective  rate of 20 shares of
common stock for each share of Series A preferred stock. The redemption date was
July 20, 2004 at which time 461,000 Series A preferred shares were presented for
redemption  and  9,220,000  shares of common stock were  subsequently  issued on
August 31, 2004.

In connection with the offering of Series A preferred  stock, the Company issued
options  to  purchase  9.2685  units  at a price  per  unit of  $100,000  to the
placement agent. Each unit consists of 10,000 shares of Series A preferred stock
convertible  into an aggregate of 100,000  shares of common stock with a warrant
to purchase 35,000 shares of common stock.  The option to purchase units expires
in July 2008.  The warrant is  exercisable  at any time  through  July 2008 at a
price of $1.00 per common  stock.  The  preferred  stock was valued at $1.45 per
share while the warrants were valued at $1.38 per share.  At September 30, 2006,
all of these options were outstanding.

Additionally,  the Company also issued a seven year warrant to purchase  118,151
shares of common stock at an exercise  price of $1.00 per share to an investment
fund in connection  with the investment  funds  commitment to purchase  Series A
preferred  stock for the amount of the  difference  between  $5 million  and the
aggregate amount of money invested by all other investors in the financing.

During fiscal 2003,  5,000 shares of Series A preferred  stock were converted to
50,000 shares of common stock.


                                      F-16
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Common Stock

The  following  table  summarizes  shares of common  stock  reserved  for future
issuance by the Company:

                                                September 30,
                                                    2007
                                               --------------

               1997 Stock Option Plan               2,928,000
               Warrant agreements                   1,871,651
                                               --------------
                                                    4,799,651
                                               ==============

Warrants to Purchase Common Stock

At September 30, 2006, the Company had the following warrants outstanding:

      o     Warrants to purchase 1,753,500 and 118,151 shares of common stock at
            an exercise  price of $1.00 were issued in connection  with the July
            2001 private  placement  to the  placement  agent and an  investment
            fund,  respectively.  The  warrant to purchase  1,753,500  shares of
            common  stock  expires  in July  2008 and the  warrant  to  purchase
            118,151  shares of common stock  expires in May 2008.  In connection
            with the  private  placement,  the  Company  also  agreed that if it
            issues additional equity  instruments at a price per share less than
            $1.00,  then the price and number of warrants shall be adjusted on a
            weighted-average basis.

On September  12, 2006,  the Company  entered into an amendment  (the  "Warrants
Amendment") to the Warrants to Purchase  Shares of Common Stock dated as of July
20, 2001 (the "Warrants") with Commonwealth  Associates,  L.P.  ("Commonwealth")
and other holders of Warrants holding in the aggregate  fifty-four percent (54%)
of the outstanding Series A Warrants (as defined in the Warrants).

The  Warrants  Amendment  amended the terms of the Warrants to limit the maximum
number of  additional  Warrant  Shares (as defined in the  Warrants)  subject to
issuance as a result of penalties provided for in Section 10 of the Warrants for
certain  defaults by the Company  described in Section 10 of the Warrants to the
number of additional  Warrant Shares  determined if the Company  remained,  with
respect to its first default,  in such default for five consecutive  thirty (30)
day  periods.  The  original  terms of the  Warrants did not limit the number of
additional  Warrant Shares that could be subject to issuance as a result of such
defaults  and  could  have  theoretically  resulted  in an  infinite  number  of
additional  Warrant  Shares being  subject to issuance for such  defaults.  This
provision subjected the Company to adverse accounting  treatment with respect to
the Warrants  under Emerging  Issues Task Force guidance EITF 00-19  "Accounting
for Derivative  Financial  Instruments Indexed to, and Potentially Settled in, A
Company's Own Stock" ("EITF 00-19").


                                      F-17
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


The  Warrants  Amendment  is intended to amend the terms that made the  Warrants
subject  to EITF 00-19 and allow  them to be  reclassified  as equity at a value
calculated  using the  Black-Scholes  option-pricing  model as of September  12,
2006.

In addition, on September 12, 2006, the Company entered into a similar amendment
(the  "Commitment  Warrant  Amendment")  to the  Commitment  Warrant to Purchase
118,151 Shares  (Subject to Adjustment) of Common Stock dated as of May 16, 2001
(the "Commitment Warrant") with ComVest Venture Partners,  L.P. ("ComVest").  On
September 12, 2006,  ComVest held one hundred  percent (100%) of the outstanding
Warrants  (as defined in the  Commitment  Warrant).  ComVest is an  affiliate of
Commonwealth.

In addition,  on September 12, 2006, the Company  entered into an amendment (the
"Option  Amendment")  to one of the Unit Purchase  Options  issued in connection
with the July 2001  Preferred  Stock Offering of the Company (the "Unit Purchase
Options") with Commonwealth.

The  Option  Amendment  amends  the form of Warrant  attached  as  Appendix A to
Commonwealth's  Unit Purchase  Options (the "Option  Warrant") in order to limit
the  maximum  number of  additional  Warrant  Shares  (as  defined in the Option
Warrant) subject to issuance as a result of penalties provided for in Section 10
of the Option Warrant for certain  defaults by the Company  described in Section
10 of the Option Warrant to the number of additional  Warrant Shares  determined
if the Company remained,  with respect to its first default, in such default for
five  consecutive  thirty (30) day  periods.  The  original  terms of the Option
Warrant  did not limit the number of  additional  Warrant  Shares  that could be
subject to issuance as a result of such  defaults  and could have  theoretically
resulted in an infinite  number of  additional  Warrant  Shares being subject to
issuance for such  defaults,  which would have  subjected the Company to adverse
accounting treatment with respect to the Option Warrant under EITF 00-19 if such
Option Warrant was ever issued.

The Option  Amendment was intended to amend the terms that would  otherwise make
the Option  Warrant  subject to EITF  00-19 and allow it to be  reclassified  as
equity at a value calculated using the Black-Scholes option-pricing model in the
event it is ever issued.

In order to amend each of the outstanding Unit Purchase  Options,  the holder of
each such Unit  Purchase  Option  is  required  to  execute  a  separate  Option
Amendment with the Company.  The Unit Purchases Option,  held by Commonwealth on
September 12, 2006, represented approximately  thirty-seven percent (37%) of the
outstanding  Unit Purchase  Options.  This Unit Purchase  Option was sold to 21X
Investments  LLC (a company  controlled by David A, Brewer) on May 17, 2007. All
remaining outstanding Unit Purchase Options, other than the Unit Purchase Option
held by  Commonwealth  on September 12, 2006,  remain  subject to their original
terms. None of the Option Warrants are presently  outstanding and will be issued
only upon  exercise  of the Unit  Purchase  Options.  Because  all of the Option
Warrants  were not  amended as a result of the Option  Amendments,  the  Company
could be  required  in the future to  recognize  additional  charges  under EITF
00-19, which would have an adverse effect on its future operating results.


                                      F-18
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


1997 Stock Option Plan

In January  1997,  the Company  adopted  the 1997 Stock Plan (the  Plan),  which
provided for the granting of stock options to employees, officers,  consultants,
and directors of the Company.  The Plan expired in January  2007.  Stock options
were  granted at fair market  value on the date of grant with terms of up to ten
years. Under the Plan, a total of 3,474,662 shares of the Company's common stock
were reserved for issuance.  Under the terms of these option grants, the options
commence  vesting  upon the  first  anniversary  of the date of  employment  and
continue to vest ratably over the  remainder of the  four-year  vesting  period.
Certain  grants of options to  employees  after the initial  grant of options to
employees  vest over three  years.  Certain  grants to members of the  Company's
Board of Directors in  compensation  for their  services vest over their current
term of  office  of one  year.  The  following  table  summarizes  stock  option
activity:


                                                      Options Outstanding
                                                -------------------------------
                                   Shares                           Weighted-
                                  Available       Number of          Average
                                  for Grant         Shares            Price
                               --------------   --------------   --------------
Balance at September 30, 2005         140,995        3,333,667           $1.181
   Granted                           (100,000)         100,000           $0.200
   Cancelled                          208,667         (208,667)          $1.119
                               --------------   --------------   --------------
Balance at September 30, 2006         249,662        3,225,000           $1.154
                               --------------   --------------   --------------
   Granted                                 --               --              N/A
   Cancelled                          297,000         (297,000)          $0.336
   Expired with plan                 (546,662)              --              N/A
                               --------------   --------------   --------------
Balance at September 30, 2007              --        2,928,000           $1.196
                               ==============   ==============   ==============


                                      F-19
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


The following table summarizes  outstanding and exercisable options at September
30, 2007:

<TABLE>
<CAPTION>
                                     Options Outstanding                       Options Exercisable
                    ----------------------------------------------------------------------------------
                                        Weighted-          Weighted-                         Weighted-
                       Number of         Average            Average         Number of         Average
   Exercise             Options         Remaining          Exercise          Options         Exercise
    Prices            Outstanding     Life in Years         Prices         Exercisable        Prices
------------------------------------------------------------------------------------------------------
<S>                     <C>               <C>               <C>             <C>               <C>
$0.200 - $0.260         1,370,000         6.40              $0.249          1,340,729         $0.249
$0.320 - $0.490           398,000         4.03              $0.330            398,000         $0.330
$0.800 - $0.906            10,000         0.85              $0.906             10,000         $0.906
$1.600 - $2.375           903,000         3.70              $1.603            903,000         $1.603
$2.750 - $3.875            99,000         2.92              $3.127             99,000         $3.127
$6.125 - $7.656            18,000         2.07              $6.603             18,000         $6.603
    $8.813                130,000         2.40              $8.813            130,000         $8.813
                    -----------------                                   -----------------
                        2,928,000         4.70              $1.196          2,898,729         $1.228
                    =================                                   =================
</TABLE>

10. Income Taxes

Due to  operating  losses,  there is no  provision  for income taxes for 2007 or
2006.  The expected  statutory  tax benefit of 34% is offset by the inability to
recognize an income tax benefit from the net operating losses.

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
the  Company's  deferred  tax assets for federal and state  income  taxes are as
follows:

                                                      Year Ended
                                                     September 30,
                                                         2007
                                                    --------------

          Deferred tax assets:
            Net operating loss carryforwards        $    6,640,000
            Research credit carryforwards                  361,000
            Other temporary differences                     13,000
                                                    --------------
            Total deferred tax assets                    7,014,000

          Valuation allowance                           (7,014,000)
                                                    --------------
          Net deferred tax assets                   $           --
                                                    ==============


                                      F-20
<PAGE>

                          Notify Technology Corporation
                          Notes to Financial Statements


Realization of deferred tax assets is dependent on future earnings,  if any, the
timing and amount of which are uncertain.  Accordingly, a valuation allowance in
an amount equal to the net deferred  tax asset has been  established  to reflect
these uncertainties.

As of September 30, 2007,  the Company had net operating loss  carryforwards  of
approximately   $19,500,000  and  $3,300,000  for  Federal  and  California  tax
purposes,  which will expire in the years 2016 through 2025. As of September 30,
2007, the Company also had research and development tax credit carryforwards for
federal and  California  tax purposes of  approximately  $361,000 and  $296,000,
respectively.  The credits  will expire in the years 2016 through  2025,  if not
utilized.  Utilization of the net operating losses and tax credit  carryforwards
may be subject to a substantial  annual  limitation due to the ownership  change
limitations  provided by the  Internal  Revenue  Code of 1986,  as amended,  and
similar state provisions.  The annual limitation may result in the expiration of
net operating losses and tax credit carryforwards before full utilization.

11. Industry Segment, Customer, and Geographic Information

The Company has one operating segment by which management evaluates performance.
The Company sells its products  primarily within the United States and Canada to
business customers with limited sales in other countries.

All of the Company's long-lived assets are located in the United States.


                                      F-21
<PAGE>

                                  EXHIBIT INDEX


3.1.1       Amended and Restated  Articles of  Incorporation  of  Registrant  as
            filed with the  Secretary  of State of  California  on  September 2,
            1997.  (incorporated  herein by  reference  to Exhibit  (3.2) to the
            Registrant's   Registration   Statement  on  Form  SB-2,   Reg.  No.
            333-23369, filed on March 14, 1997)

3.1.2       Certificate   of   Amendment   to  the   Registrant's   Articles  of
            Incorporation  as filed with the Secretary of State of California on
            March 3, 1998.  (incorporated herein by reference to Exhibit (3.1.1)
            to  the  Registrant's  Quarterly  Report  on  Form  10-QSB  for  the
            quarterly period ended June 30, 2001, filed on August 14, 2001)

3.1.3       Certificate   of   Amendment   to  the   Registrant's   Articles  of
            Incorporation  as filed with the Secretary of State of California on
            July 12, 2001.  (incorporated herein by reference to Exhibit (3.1.2)
            to  the  Registrant's  Quarterly  Report  on  Form  10-QSB  for  the
            quarterly period ended June 30, 2001, filed on August 14, 2001)

3.1.4       Certificate  of  Determination,  Preferences  and Rights of Series A
            Preferred  Stock as filed with the  Secretary of State of California
            on July 13, 2001. (incorporated herein by reference to Exhibit (3.1)
            to the  Registrant's  Current  Report on Form 8-K, filed on July 23,
            2001)

3.2         Amended and Restated Bylaws of Registrant.  (incorporated  herein by
            reference to Exhibit (3.2) to the  Registrant's  Quarterly Report on
            Form 10-QSB for the quarterly  period ended June 30, 2001,  filed on
            August 14, 2001)

3.2.1       Certificate  of  Amendment  to the  Bylaws  (incorporated  herein by
            reference to Exhibit (3.2.1) to the Registrant's Quarterly Report on
            Form 10-QSB, filed on May 15, 2007)

3.2.2       Certificate  of  Amendment  to the  Bylaws  (incorporated  herein by
            reference to Exhibit (3.2.2) to the  Registrant's  Current Report on
            Form 8-K, filed on June 22, 2007)

4.1         Form of  warrant  issued  to  subscribers  in  connection  with  the
            Registrant's July 2001 private  placement.  (incorporated  herein by
            reference to Exhibit  (4.1) to the  Registrant's  Current  Report on
            Form 8-K, filed on July 23, 2001)

4.2         Form of option issued to the placement  agent in connection with the
            Registrant's July 2001 private  placement.  (incorporated  herein by
            reference to Exhibit  (4.2) to the  Registrant's  Current  Report on
            Form 8-K, filed on July 23, 2001)

4.3         Form of warrant  underlying the option issued to the placement agent
            in connection  with the  Registrant's  July 2001 private  placement.
            (incorporated   herein  by  reference   to  Exhibit   (4.3)  to  the
            Registrant's Current Report on Form 8-K, filed on July 23, 2001)

10.5(1)     Form of Indemnification Agreement. (incorporated herein by reference
            to Exhibit (10.5) to the Registrant's Registration Statement on Form
            SB-2, Reg. No. 333-23369, filed on March 14, 1997)

10.6(1)     Registrant's  1997 Stock Plan, as amended  effective March 26, 2003,
            and form of stock option  agreement.  (incorporated  by reference to
            Exhibit (4.1) to the Registrant's Registration Statement on Form S-8
            Reg. No. 333-108868, filed on September 17, 2003)

10.12.1     Voice Mail Services Agreement,  dated as of February 8, 2002, by and
            between the Registrant and AT&T Corp.  (incorporated by reference to
            Exhibit (10.1) to the  Registrant's  Quarterly Report on Form 10-QSB
            for the  quarterly  period  ended March 30,  2002,  filed on May 15,
            2002)

10.12.2     First  Amendment to the Voice Mail Services  Agreement,  dated as of
            February  8, 2003,  by and  between  the  Registrant  and AT&T Corp.
            (incorporated   herein  by  reference  to  Exhibit   (10.1)  to  the
            Registrant's  Quarterly  Report  on Form  10-QSB  for the  quarterly
            period ended March 31, 2003, filed on May 14, 2003)

10.16(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007  between  Registrant  and Paul  DePond.(incorporated  herein by
            reference to Exhibit (10.16) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)

10.17(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007 between  Registrant  and Gerald Rice.  (incorporated  herein by
            reference to Exhibit (10.17) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)

10.18(1)    Amended and Restated  Employment  Agreement  dated as of October 31,
            2007 between Registrant and Rhonda Chicone.  (incorporated herein by
            reference to Exhibit (10.18) to the  registrant's  Current Report on
            Form 8-K filed on December 21, 2007)


<PAGE>

10.24       Nonexclusive Technology License Agreement,  dated as of November 24,
            2003, by and between  Registrant and NCR Corporation.  (incorporated
            herein by reference to Exhibit  (10.24) to the  Registrant's  Annual
            Report on Form 10-KSB for the fiscal year ended  September 30, 2004,
            filed on December 22, 2004)

10.25       Patent  Purchase  Agreement  dated  March 22,  2006,  by and between
            Notify  Technology  Corporation  and  Sunshine  Data  Ventures  LLC.
            (incorporated   herein  by  reference  to  Exhibit  (10.25)  to  the
            Registrant's Currant Report 8-K, filed on March 24, 2006)

10.26       Amendment   to  Series  A  Warrants   dated   September   12,   2006
            (incorporated   herein  by  reference  to  Exhibit  (10.26)  to  the
            Registrant's  Current  Report on Form 8-K,  filed on  September  12,
            2006)

10.27       Amendment to ComVest  Commitment  Warrant  dated  September 12, 2006
            (incorporated   herein  by  reference  to  Exhibit  (10.27)  to  the
            Registrant's  Current  Report on Form 8-K,  filed on  September  12,
            2006)

10.28       Amendment  to Unit  Purchase  Option dated  September  12, 2006 with
            Commonwealth  Associates,  L.P. (incorporated herein by reference to
            Exhibit  (10.28)  to the  Registrant's  Current  Report on Form 8-K,
            filed on September 12, 2006)

10.29       Lease,  dated as of September 22, 2006 by and between Registrant and
            Colbur  Tech,  LLC.  (incorporated  herein by  reference  to Exhibit
            (10.29) to the Registrant's  Current Report on Form 10-KSB, filed on
            December 22, 2006)

10.30       Lease,  dated as of February 27, 2006 by and among  Registrant,  and
            Ching C. Poon and Jenny M. Poon.  (incorporated  herein by reference
            to Exhibit (10.30) to the Registrant's Annual Report on Form 10-KSB,
            filed on December 22, 2006)

10.32       Lease addendum  dated  February 22, 2007 between  Notify  Technology
            Corporation  and  Pecten  Court  Mountain  View   Associates,   LLC.
            (incorporated   herein  by  reference  to  Exhibit  (10.32)  to  the
            Registrant's Current Report on Form 8-K, filed on February 22, 2007)

14.1        Code of Ethics for Principal Executive and Senior Financial Officers
            (incorporated   herein  by  reference  to  Exhibit   (14.1)  to  the
            Registrant's  Annual Report on Form 10-KSB for the fiscal year ended
            September 30, 2003, filed on December 29, 2003)

24.1        Power of Attorney (see page 29).

31.1        Certification of Chief Executive  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

31.2        Certification of Chief Financial  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

32.1        Certification of Chief Executive Officer and Chief Financial Officer
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

------------
(1)   Management compensation plan/contract