SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
(Mark One)

(X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                   For the Fiscal Year Ended November 30, 2008
    OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                           Commission File No. - None

                      SECURITY DEVICES INTERNATIONAL, INC.
              -------------- -------------------------------------
                 (Name of Small Business Issuer in its charter)

          Delaware                                  Applied For
--------------------------------        ------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)

      2171 Avenue Rd., Suite 103
         Toronto, Ontario Canada                                   M5M 4B4
   ---------------------------------------                        --------
   (Address of Principal Executive Office)                        Zip Code

Registrant's telephone number, including Area Code: (416) 787-1871
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]

Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [  ]                     Accelerated filer  [ ]

Non-accelerated filer  [  ]                       Smaller reporting company  [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act):   [ ] Yes    [X] No

The aggregate market value of the voting stock held by non-affiliates of the
Company (9,901,050 shares) on May 31, 2008 was approximately $24,751,000.

As of February 25, 2009, the Company had 14,447,050 issued and outstanding
shares of common stock.

Documents incorporated by reference:      None



<PAGE>


ITEM 1.  BUSINESS
-----------------

     Security Devices International, Inc. is currently in the advanced stages of
developing  LEKTROX,  a unique line of wireless  electric  ammunition for use in
military, homeland security, law enforcement, and professional and home security
situations.

     SDI's LEKTROX system was developed by Elad  Engineering,  Israel,  assisted
by:

     o    Dr. Yoav Paz, a heart and chest  surgery  specialist  at the  Hadassah
          Medical  Center,   Jerusalem,   member  of  the  European  Society  of
          Cardiology; and

     o    Emanuel  Mendes,  an electrical  engineer at the forefront of Israel's
          R&D for almost 50 years.

     SDI's  strategic  collaboration  with Elad  resulted in the patent  pending
LEKTROX system.  Featuring the unique  extended range Wireless  Electro-Muscular
Disruption Technology,  (or "W-EMDT"), SDI's first products, the LEKTROX 37/38mm
and 40mm round  ammunition is expected to be ready for the market in 2009 with a
12-guage version to be introduced later.

     LEKTROX has been specially  designed for use with standards issue riot guns
and M203 grenade launchers.  This will allow military,  law enforcement agencies
etc. to quickly deploy LEKTROX  without the need for lengthy,  complex  training
methods or significant functional adjustments to vehicles or personal equipment.
Simplicity of use is also a key benefit for the home security  market where most
users have little or no specialized training.

     LEKTROX is a third generation electric solution. First generation solutions
were electric  batons and hand-held stun guns which had a range of arm's length.
Second generation were the wired electric charge solutions. Third generation are
the wireless  electric  bullets.  Currently,  there is still no third generation
wireless electric bullet on the market.

     LEKTROX is being specifically  developed to achieve the highest operational
success at the greatest  distance of those known to be currently in development.
Causing instant target  incapacitation  up to distances of 60 yards,  the LEKTOX
will give maximum  field  superiority  to military  personnel,  law  enforcement
officers and other  security  operatives in situations  that do not call for the
use of lethal ammunition.

     The LEKTROX  Electric  Bullet is totally  safe in storage,  transportation,
handling  and  loading.  Locked in safe mode  until its  internal  electric  and
mechanical systems are activated by contact with the target,  LEKTROX eliminates
any possibility of the round's accidental charging.

     Exploiting  proven  technologies,  the LEKTROX  Electric  Bullet  maintains
excellent  stability  for the highest  possible  accuracy.  In addition  LEKTROX
achieves  distances  way beyond  those  reached by  previous  generation,  wired
electric ammunition systems.

     In addition to achieving a greater range,  the LEKTROX  delivers new levels
of effectiveness and safety through the use of


                                       1
<PAGE>


     o    Unique mechanisms that reduce the projectile's kinetic energy
     o    W-EMDT that instantly incapacitates the target without causing serious
          injury or lethality.

     To reduce  kinetic  energy  levels,  the  bullet's  head is  composed  of a
collapsible  material that enlarges the contact  surface and absorbs part of the
impact. Additional energy is transferred to other absorption mechanisms that use
the energy to release the  Multiple  Mini-Harpoon  mechanism  and  activate  the
built-in electrical system.

     When released, the mini-harpoons fix the bullet irremovably to the target's
clothing or body. At the same time, the bullet's  electrical  system  releases a
W-EMDT charge that imitates the electro-neural  impulses used by the human body.
Sending out a control signal to the muscles, this high voltage low current pulse
safely  overrides the target's  nervous system  inducing a harmless muscle spasm
that causes them to fall to the ground helpless.

     Operating at lower than critical  cardio-fibrillation  levels,  the LEKTROX
W-EMDT  electric  output  has  been  designed  in line  with  stringent  medical
equipment  standards that protect patients from permanent injury.  Enabling full
recovery with no clinical after effects,  LEKTROX helps decreases  liability for
wrongful injury or death.

     When  introduced,  the Short Range LEKTROX will have a safe firing range of
2-10 yards and will be fired from a proprietary  system powered by a pressurized
air cartridge.  Simple to operate,  this  laser-aiming  system will be point and
fire exactly as they would with a standard pistol  trigger.  The round will fire
with low recoil enabling a quick firing of a second or third round if necessary.

      The cost of manufacturing a LEKTROX electrical round is estimated to be
between $20 and $30. SDI anticipates that its electric round will sell at a
retail price of approximately $100 per round. In comparison, rubber, smoke or
stun rounds typically sell for $20 to $28. A cartridge for the TASER(R) sells
for approximately $60.

     As of  February  25,  2009 SDI has  completed  the  following  steps in the
development of the LEKTROX:

     o    Design and testing of ballistic rounds.
     o    Production of various ballistic rounds.
     o    Design of `electrical arms' to adhere to clothing or skin.
     o    Design of safety/armed mechanism.
     o    Production of mechanical systems.
     o    Design of electrical system.
     o    Production of electrical system.
     o    Integration and assembly of mechanical and electrical  sub-systems for
          electrical rounds.
     o    Testing of different ballistic rounds


                                       2
<PAGE>

     o    Powder loading testing
     o    Testing of complete electrical rounds
     o    Adjustment of electrical rounds based on test results
     o    Two clinical studies in European clinics.
     o    Production of completed rounds.
     o    Testing  with  military  and law  enforcement  organization  of  fully
          operational Long Range LEKTROX for production.
     o    Completed the tooling and moulds for the 40MM LEKTROX
     o    Developed a fully operational Long Range LEKTROX prototype (37-38MM)
     o    Developed a fully operational Long Range LEKTROX prototype (40MM)

     During the year ending  November 30, 2009 SDI plans to complete the tooling
and moulds for the 37-38MM LEXTROX.

     See Item 6 of this  report  for  information  regarding  the  timing of the
remaining steps in the development of the LEKTROX.

     The  mechanical  development  of the  LEKTROX  is being  completed  by Elad
Engineering  Ltd., an Israeli company which has designed weapons for the Israeli
Military.

     SDI  does  not have  written  agreements  with  Elad  Engineering  for work
relating to the development of the LEKTROX.

     As of  February  25,  2008 SDI has not  entered  into any joint  venture or
licensing agreements.

     SDI currently plans to manufacture  market and sell all products on its own
behalf.

Competition

     The primary  competitive factors in the market for non-lethal weapons are a
weapon's cost, effectiveness, and ease of use.

     In the military market a wide variety of weapon systems are used. Conducted
energy devices, such as the LEKTROX, have gained increased acceptance during the
last two years as a result of the increased  role of military  personnel in Iraq
and Afghanistan.  Conducted energy weapons have gained limited acceptance in the
private citizen market for non-lethal weapons.

     SDI's primary  competitors  will be Taser  International,  Inc. and Stinger
Systems,  Inc. The LEKTROX will also compete  indirectly with a variety of other
non-lethal  alternatives,  including  pepper  spray and impact  weapons  sold by
companies such as Armor Holdings, Inc. and Jaycor, Inc.

     SDI  believes  that its  competitive  advantage  will be the ability of the
LEKTROX to  effectively  incapacitate  offenders  from a  distance  as far as 75
meters without a trail of wires leading back to the launcher. Stun Gun operators
must be in direct  physical  contact  with  combatants  while the TASER(R) has a


                                       3
<PAGE>

range of less than seven  meters.  In contrast,  the LEKTROX will be designed to
have a range  which is over  four  times  farther  that  TASER(R),  providing  a
significant safety advantage for enforcement officers and security personnel.

Patents

     Four patent applications,  one for the electrical mechanism and other three
for the  mechanical  mechanism of the  LEKTROX,  have been filed by SDI with the
U.S. Patent Office.

     SDI also holds several foreign patents.

     SDI's  patents may not protect its  proprietary  technology.  In  addition,
other  companies  may develop  products  similar to the LEKTROX or avoid patents
held by SDI.  Disputes  may  arise  between  SDI and  others as to the scope and
validity of its patents.  Any defense of its patents could prove costly and time
consuming and SDI may not be in a position, or may not consider it advisable, to
carry on such a  defense.  In  addition,  others may  acquire  or  independently
develop the same or similar unpatented proprietary technology used by SDI.

Government Regulation

     Under  current  regulations  the LEKTROX will be considered a crime control
product  by the  United  States  Department  of  Commerce  and the export of the
LEKTROX will be regulated under export administration  regulations. As a result,
export  licenses  from the  Department  of  Commerce  will be  required  for all
shipments to foreign countries other than Canada. In addition, the Department of
Commerce has regulations which may restrict the export of technology used in the
LEKTROX.

     The LEKTROX will be controlled, restricted or its use prohibited by several
state and local governments.  In many cases, the law enforcement and corrections
market is subject to different regulations than the private citizen market. Many
states have  regulations  restricting  the sale of stun guns and hand-held shock
devices, such as the LEKTROX, to private citizens or security personnel.

     Foreign regulations pertaining to non-lethal weapons are numerous and often
unclear  and a number of  countries  prohibit  devices  similar to the  LEKTROX.
Employees

     The LEXTROX will be controlled, restricted or its use prohibited by several
state and local governments.  In many cases, the law enforcement and corrections
market is subject to different regulations than the private citizen market. Many
states have  regulations  restricting  the sale of stun guns and hand-held shock
devices, such as the LEXTROX, to private citizens or security personnel.



                                       4
<PAGE>

General

     As of February 25, 2009 SDI did not have any full-time employees.

     SDI's offices are located at 2171 Avenue Rd., Suite 103, Toronto,  Ontario,
Canada  M5M 4B4.  SDI's  rental  costs on this  space  for each of the two years
ending  November 30, 2010,  excluding  SDI's share of operating  and common area
expenses,  will be $9,812.  SDI's  offices  are  expected to be adequate to meet
SDI's foreseeable future needs.

     SDI's website is www.lektrox.com.

ITEM 2.  DESCRIPTION OF PROPERTY
         -----------------------

     See Item 1 of this report.

ITEM 3.  LEGAL PROCEEDINGS.
         -----------------

     SDI is not involved in any legal  proceedings  and SDI does not know of any
legal proceedings which are threatened or contemplated.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
         ---------------------------------------------------

     Not Applicable

ITEM 5.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
         --------------------------------------------------------------------
         OTHER SHAREHOLDER MATTERS.
         ---------------------------

     On August 28, 2006 SDI's common stock was listed on the OTC Bulletin  Board
under the symbol "SDEV". The following shows the high and low closing prices for
SDI's common stock for the periods indicated:

      Three Months Ended              High       Low
      ------------------              ----       ---

      November 2006                  $2.65      $0.15

      February 2007                  $3.80      $1.75
      May 2007                       $3.25      $2.65
      August 2007                    $3.20      $2.00
      November 2007                  $1.95      $1.20

      February 2008                  $2.10      $1.09
      May 2008                       $2.50      $1.10
      August 2008                    $2.51      $1.15
      November 2008                  $1.25      $0.31


                                       5
<PAGE>

     As of  February  25,  2008  SDI  had  approximately  200  shareholders  and
14,447,050 outstanding shares of common stock.

     Holders  of common  stock  are  entitled  to  receive  dividends  as may be
declared by the Board of Directors.  SDI's Board of Directors is not  restricted
from  paying  any  dividends  but is not  obligated  to declare a  dividend.  No
dividends have ever been declared and it is not anticipated  that dividends will
ever be paid.

     SDI's Articles of  Incorporation  authorize its Board of Directors to issue
up to 5,000,000  shares of preferred  stock.  The  provisions in the Articles of
Incorporation  relating to the  preferred  stock allow SDI's  directors to issue
preferred  stock with multiple  votes per share and dividend  rights which would
have  priority  over any  dividends  paid with  respect to the  holders of SDI's
common  stock.  The issuance of  preferred  stock with these rights may make the
removal  of  management  difficult  even  if the  removal  would  be  considered
beneficial  to  shareholders  generally,  and will have the  effect of  limiting
shareholder  participation  in  certain  transactions  such as mergers or tender
offers if these transactions are not favored by SDI's management.

ITEM 6.  SELECTED FINANCIAL DATA
         -----------------------

     Not applicable.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
         -----------------------------------------------------------------------
         OPERATION
         ---------

     Securities  Devices  International,  Inc. was incorporated on March 1, 2005
and as of November 30, 2008 has not yet generated any revenue.  SDI is a defense
technology  company  which is  developing  LEKTROX,  a unique  line of  wireless
electric ammunition for use in military, homeland security, law enforcement, and
professional and home security situations.

     During the year ended  November  30, 2008  substantially  all of SDI's cash
expenses were related to the development of its LEKTROX technology.

     During the year ended November 30, 2008:

     o    general and administrative  expenses decreased  primarily due to lower
          expenses for the year  ($1,231,056),  which did not require the use of
          cash,  associated  with the  issuance of options to  compensate  SDI's
          directors and consultants for services provided to SDI.

     o    SDI spent more on research and product  development  since the LEKTROX
          37/38mm and 40mm rounds are nearing completion. The final steps in the
          development of the LEXTROX rounds requires the design,  production and
          testing of moulds,  dies,  assembly  equipment,  testing equipment and
          prototypes;

     During the period from inception  (March 1, 2005) through November 30, 2008
SDI's operations used $5,621,952 in cash. During this period SDI:


                                       6
<PAGE>

     o    purchased $36,699 of equipment,
     o    raised $7,719,650 from the sale of shares of its common stock,
     o    raised  $106,700  from three of its  officers and  directors  upon the
          exercise of options to purchase 1,067,000 shares of common stock.

     SDI did not have any material future contractual obligations or off balance
sheet arrangements as of November 30, 2008.

     As of November 30, 2008 SDI had:

     o    completed the tooling and moulds for the 40MM LEKTROX
     o    developed a fully operational Long Range LEKTROX prototype (37-38MM)
     o    developed a fully operational Long Range LEKTROX prototype (40MM)

     During the year ending  November 30, 2009 SDI plans to complete the tooling
and moulds for the 37-38MM LEKTROX.

     SDI anticipates that its capital  requirements for the twelve-month  period
ending November 30, 2009 will be:

      Research and Development                  $  1,900,000
      General and Administrative Expenses            450,000
                                              --------------
           Total                                $  2,350,000
                                              ==============

     SDI does not  anticipate  that it will need to hire any employees  prior to
November  30,  2009.  SDI  expects  that it will  need  to  raise  approximately
$1,000,000 in additional capital prior to December 31, 2009.

     SDI does not have any  commitments  or  arrangements  from any  persons  to
provide SDI with any additional capital it may need.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
         ---------------------------------------------------------

     Not applicable.

ITEM 8   FINANCIAL STATEMENTS
         --------------------

     See the financial statements included with this report.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
            ---------------------------------------------

     Not applicable.


                                       7
<PAGE>


ITEM 9A. and 9A(T).  CONTROLS AND PROCEDURES
                     -----------------------

     Under the direction and with the  participation  of SDI's  management,  SDI
carried out an  evaluation of the  effectiveness  of the design and operation of
its  disclosure  controls and  procedures as of November 30, 2008. SDI maintains
disclosure  controls and procedures that are designed to ensure that information
required  to be  disclosed  in its  periodic  reports  with the  Securities  and
Exchange Commission is recorded,  processed,  summarized and reported within the
time  periods  specified  in the  SEC's  rules  and  regulations,  and that such
information is accumulated and communicated to SDI's  management,  including its
principal executive officer and principal financial officer, as appropriate,  to
allow timely decisions regarding required disclosure.  SDI's disclosure controls
and  procedures  are  designed to provide a  reasonable  level of  assurance  of
reaching its desired disclosure control objectives.

Management's Report on Internal Control Over Financial Reporting

     SDI's management is responsible for  establishing and maintaining  adequate
internal  control  over  financial  reporting  and  for  the  assessment  of the
effectiveness  of internal control over financial  reporting.  As defined by the
Securities and Exchange Commission, internal control over financial reporting is
a process  designed by, or under the  supervision of SDI's  principal  executive
officer  and  principal  financial  officer  and  implemented  by SDI's Board of
Directors,  management  and other  personnel,  to provide  reasonable  assurance
regarding the  reliability of financial  reporting and the  preparation of SDI's
financial  statements  in accordance  with U.S.  generally  accepted  accounting
principles.

     Because  of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

      SDI's management evaluated the effectiveness of its internal control over
financial reporting as of November 30, 2008 based on criteria established in
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or the COSO Framework. Management's
assessment included an evaluation of the design of SDI's internal control over
financial reporting and testing of the operational effectiveness of those
controls.

     Inherent  in  any  small  business  is  the  pervasive   problem  involving
segregation of duties. Since SDI has a small accounting department,  segregation
of duties  cannot be  completely  accomplished  at this  stage in its  corporate
lifecycle.  Accordingly,  SDI's  management has added  compensating  controls to
reduce and  minimize  the risk of a material  misstatement  in SDI's  annual and
interim financial statements.

     Based on this evaluation,  SDI's  management  concluded that SDI's internal
control over financial reporting was effective as of November 30, 2008.


                                       8
<PAGE>

     There was no change in SDI's internal control over financial reporting that
occurred  during  the  quarter  ended  November  30,  2008  that has  materially
affected,  or is reasonably likely to materially affect,  SDI's internal control
over financial reporting.

     This  report does not include an  attestation  report of SDI's  independent
registered  public  accounting  firm regarding  internal  control over financial
reporting.   Management's  report  was  not  subject  to  attestation  by  SDI's
independent registered public accounting firm pursuant to temporary rules of the
SEC that permit SDI to provide only  management's  report on internal control in
this report.

ITEM 9B. OTHER INFORMATION
         -----------------

     Not applicable.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL  PERSONS
         -------------------------------------------------------------

    Name                     Age    Position
    ----                     ---    --------

    Sheldon Kales             52    Chief Executive Officer and a Director
    Boaz Dor                  54    Secretary and a Director
    Rakesh Malhotra           52    Chief Financial Officer
    Gregory Sullivan          42    Director

     The  directors  of  SDI  serve  until  the  first  annual  meeting  of  its
shareholders  and until their  successors  have been duly elected and qualified.
The officers serve at the discretion of SDI's directors.

Sheldon  Kales has been an officer and  director of SDI since March 2005.  Since
February  2004 Mr.  Kales has been  working on the  development  of the LEKTROX.
Between  January 2000 and February  2004 Mr. Kales was the  President of Yangtze
Telecom,  a company which provides messaging and related services for cell phone
users in China.  Mr. Kales  founded,  and between 1985 and 2001,  operated Argus
Investigation Services.

Boaz Dor has been a director  of SDI since  April 2005 and its  Secretary  since
March 15, 2006. Mr. Dor served in the Israeli  Defense Forces from 1972 to 1975.
Recruited  by  the  Israeli  Secret  Services,  Mr.  Dor  was  assigned  to  the
International   Security   Division  for  Aviation   Security  for  the  Israeli
Government, eventually assuming the position of Head of Security for the Embassy
of Israel and El Al Israel Airlines in Cairo,  Egypt,  and later, as Vice-Consul
and Head of Security for the Israeli Consulate in Toronto and Western Canada and
El Al Israel Airlines.  In 1989, Mr. Dor resigned from the public sector to open
a security  consulting  firm. In 1991, he was  appointed  executive  director of
security for the Seabeco Group of Companies where Mr. Dor oversaw  international
operations in Switzerland, Belgium, Russia, New York and Toronto. Since 2000 Mr.
Dor has owned and  operated  Ozone  Water  Systems  Inc.,  a water  purification
company.


                                       9
<PAGE>

Rakesh  Malhotra has been SDI's Chief  Financial  Officer since January 7, 2007.
Mr. Malhotra is a United States Certified Public Accountant (CPA) and a Canadian
Chartered  Accountant  (CA).  Mr.  Malhotra  graduated with Bachelor of Commerce
(Honors) degree from the University of Delhi (India) and worked for A.F Ferguson
& Co. (the Indian  correspondent  for KPMG) and obtained his CA  designation  in
India.  Having  practiced as an accountant for over ten years in New Delhi,  Mr.
Malhotra  moved  to  the  Middle  East  and  worked  for  five  years  with  the
International  Bahwan Group in a senior finance position.  During 2000 and 2001,
Mr. Malhotra worked as a chartered  accountant with a mid-sized  accounting firm
in Toronto  performing audits of public  companies.  Since 2005 Mr. Malhotra has
been a consultant to a number of public companies. Mr. Malhotra has more than 20
years experience in accounting and financing.

Gregory  Sullivan has been a director of SDI since April 2005. Mr.  Sullivan has
been a law enforcement officer for the past 20 years. During his law enforcement
career,  Mr. Sullivan has trained with federal,  state and municipal agencies in
the United States,  Canada and the Caribbean and has gained extensive experience
in the use of lethal and  non-lethal  weapons.  Mr.  Sullivan  has also  trained
personnel  employed by both public and private  agencies in the use of force and
firearms. Mr. Sullivan served four years with the military reserves in Canada.

     None of SDI's  directors are independent as that term is defined in section
121(A) of the listing standards of the American Stock Exchange.

     SDI does not have a compensation  committee or an audit  committee.  Rakesh
Malhotra is SDI's financial expert.  However,  since he is an officer of SDI Mr.
Malhotra is not independent as that term is defined in 803 of the NYSE Alternext
U.S. Company Guide.

     SDI has not adopted a Code of Ethics applicable to its principal executive,
financial, and accounting officers and persons performing similar functions. SDI
does not believe a Code of Ethics is needed at this time since SDI has only four
officers.

ITEM 11. EXECUTIVE COMPENSATION
         ----------------------

     The following table shows the compensation for the years ended November 30,
2008 and 2007 paid or accrued, to Sheldon Kales, the Principal Executive Officer
of SDI. None of the executive officers of SDI received compensation in excess of
$100,000 during this period.

                                                               All
                                                              Other
                                                              Annual
                                             Stock   Option   Compen-
Name and Principal  Fiscal  Salary   Bonus   Awards  Awards   sation
 Position            Year    (1)      (2)     (3)     (4)       (5)     Total
------------------  -----   ------   -----   ------  ------   -------   -----

Sheldon Kales,      2008                            $155,948    --    $155,948
 President          2007      --      --        --  $886,948    --    $886,948

(1)  The dollar value of base salary (cash and non-cash) received.


                                       10
<PAGE>

(2)  The dollar value of bonus (cash and non-cash) received.
(3)  The fair value of stock issued for services computed in accordance with FAS
     123R on the date of grant.
(4)  The fair value of options and warrants  granted computed in accordance with
     FAS 123R on the date of grant.
(5)  All other  compensation  received that SDI could not properly report in any
     other column of the table.

     SDI does not have an employment agreement with any of its officers.

     On February 4, 2009 SDI's  directors  approved  consulting  agreements with
three  of  it's  officers.  The  consulting  agreements,   which  are  effective
retroactive to January 1, 2009,  provide that the officers will consult with SDI
in the areas of corporate operations and product  development.  The terms of the
consulting  agreements are shown below. The consulting  agreements  terminate on
December 31, 2009.

                                                  Monthly
                                 Monthly        Automobile
Name of Officer               Consulting Fee     Allowance
---------------               --------------    ----------

Sheldon Kales                   $10,000           $1,500
Boaz Dor                        $ 6,250           $1,000
Greg Sullivan                   $ 3,125           $1,000

     The  following  shows  the  amounts  which  SDI  expects  to pay in cash as
consulting  fees to its officers  during the twelve month period ending November
30, 2009, and the time these persons plan to devote to SDI's business.

                                Proposed           Time to be Devoted to the
      Name                    Compensation             Business of SDI
      ----                    ------------         -------------------------

      Sheldon Kales            $110,000                      80%
      Boaz Dor                 $ 68,750                      80%
      Rakesh Malhotra          $ 22,000                      10%
      Gregory Sullivan         $ 34,375                      25%

     There are no sales, net income,  or other thresholds which are required for
SDI's directors to increase the compensation  which in the future may be paid to
SDI's  officers.  SDI may also issue  shares of its  common  stock or options to
compensate its officers and directors for services provided to SDI.

Long-Term  Incentive  Plans. SDI does not provide its officers or employees with
pension,  stock appreciation rights,  long-term incentive or other plans and has
no intention of implementing any of these plans for the foreseeable future.


                                       11
<PAGE>

Employee Pension,  Profit Sharing or other Retirement Plans. SDI does not have a
defined benefit, pension plan, profit sharing or other retirement plan, although
it may adopt one or more of such plans in the future.

Compensation of Directors During Year Ended November 30, 2008

                                                              Awards of Options
      Name                 Paid in Cash    Stock Awards (1)     or Warrants (2)
      ----                 ------------    ---------------- -------------------

      Boaz Dor                  --              --              $168,943
      Gregory Sullivan          --              --                    --

(1)  The fair value of stock issued for services computed in accordance with FAS
     123R on the date of grant.
(2)  The fair value of options or warrants granted computed in accordance with
     FAS 123R on the date of grant.

Stock Option and Bonus Plans
----------------------------

     SDI has adopted stock option and stock bonus plans.  A summary  description
of these plans follows.  In some cases these Plans are collectively  referred to
as the "Plans".

     Incentive  Stock Option Plan.  SDI's Incentive Stock Option Plan authorizes
the issuance of shares of SDI's Common  Stock to persons that  exercise  options
granted pursuant to the Plan. Only SDI employees may be granted options pursuant
to the Incentive  Stock Option Plan. The option  exercise price is determined by
SDI's  directors  but cannot be less than the market price of SDI's common stock
on the date the option is granted.

     Non-Qualified  Stock Option  Plan.  SDI's  Non-Qualified  Stock Option Plan
authorizes the issuance of shares of SDI's Common Stock to persons that exercise
options granted  pursuant to the Plans.  SDI's employees,  directors,  officers,
consultants  and  advisors are  eligible to be granted  options  pursuant to the
Plans,  provided  however  that  bona fide  services  must be  rendered  by such
consultants  or advisors and such services  must not be in  connection  with the
offer or sale of securities in a capital-raising transaction.

     Stock Bonus Plan.  SDI's Stock Bonus Plan allows for the issuance of shares
of  common  stock  to  it's  employees,  directors,  officers,  consultants  and
advisors.  However bona fide  services  must be rendered by the  consultants  or
advisors and such services  must not be in connection  with the offer or sale of
securities in a capital-raising transaction.

     Summary.  The following lists, as of February 25, 2009, the options granted
pursuant to the Plans. Each option represents the right to purchase one share of
SDI's common stock.


                                       12
<PAGE>


                          Total        Shares
                          Shares     Reserved for    Shares        Remaining
                         Reserved    Outstanding    Issued as   Options/Shares
Name of Plan            Under Plans    Options     Stock Bonus     Under Plans
------------            -----------  ------------  -----------  --------------

Incentive Stock
 Option Plan             1,000,000           --          N/A        1,000,000
Non-Qualified Stock
 Option Plan             5,000,000    3,498,000          N/A          435,000
Stock Bonus Plan           150,000          N/A           --          150,000

     The  following  tables show all  options  granted  and  exercised  by SDI's
officers and directors since the inception of SDI and through February 25, 2009,
and the options  held by the  officers and  directors  named  below.  All of the
options listed below were granted pursuant to SDI's  Non-Qualified  Stock Option
Plan.

                            Options Granted/Exercised
                            -------------------------
<TABLE>
<S>                  <C>        <C>        <C>       <C>        <C>           <C>

                                                               Shares
                    Grant     Options   Exercise Expiration  Acquired on      Value
Name                 Date   Granted (#)   Price     Date     Exercise (1)  Realized (2)
----                ------  ----------- -------- ----------  ------------  ------------


Sheldon Kales      10/29/05    550,000    $0.10    10/29/11     550,000     $275,000
Sheldon Kales      10/29/05    100,000    $0.25    10/29/11
Boaz Dor           10/29/05    200,000    $0.10    10/29/11     200,000     $100,000
Boaz Dor           10/29/05    100,000    $0.25    10/29/11
Gregory Sullivan   10/29/05    200,000    $0.10    10/29/11     200,000     $100,000
Gregory Sullivan   10/29/05    100,000    $0.25    10/29/11
Rakesh Malhotra     1/07/07    125,000    $1.50    01/07/12
Sheldon Kales      10/12/07    675,000    $1.20    10/12/12
Boaz Dor           10/12/07    300,000    $1.20    10/12/12
Rakesh Malhotra    10/12/07    175,000    $1.20    10/12/12
Gregory Sullivan   10/12/07    175,000    $1.20    10/12/12
Sheldon Kales       1/24/08    108,000    $0.10    01/24/13
Boaz Dor            1/24/08    117,000    $0.10    01/24/13     117,000    $  25,740

</TABLE>

(1) The number of shares received upon exercise of options.

(2) With respect to options exercised, the dollar value of the difference
between the option exercise price and the market value of the option shares
purchased on the date of the exercise of the options.

                             Shares underlying
                        unexercised options which are:
                        -----------------------------     Exercise    Expiration
    Name                Exercisable      Unexercisable     Price         Date
    ----                -----------      -------------    --------    ----------

    Sheldon Kales         100,000 (1)            --        $0.25       10-29-11
    Boaz Dor              100,000 (1)            --        $0.25       10-29-11
    Gregory Sullivan      100,000 (1)            --        $0.25       10-29-11
    Rakesh Malhotra       125,000                --        $1.50 (2)    1-17-12


                                       13
<PAGE>

    Sheldon Kales         675,000                --        $1.20 (2)   10-12-12
    Boaz Dor              300,000                --        $1.20 (2)   10-12-12
    Rakesh Malhotra       175,000                --        $1.20 (2)   10-12-12
    Gregory Sullivan      175,000                --        $1.20 (2)   10-12-12
    Sheldon Kales         108,000                --        $0.10        1-24-13

(1) These options will expire on the first to occur of the following: (i) the
    expiration date of the option, (ii) the date the option holder is removed
    from office for cause, or (iii) the date the option holder resigns as an
    officer of the Company.
(2) On December 17, 2008, SDI's directors approved the reduction of the exercise
    price of these options to $0.50 per share.

      For the purpose of these options "Cause" means any action by the Option
Holder or any inaction by the Option Holder which constitutes:

      (i)  fraud, embezzlement, misappropriation, dishonesty or breach of trust;

      (ii) a willful or knowing failure or refusal by the Option Holder to
           perform any or all of his material duties and responsibilities as an
           officer of SDI, other than as the result of the Option Holder's death
           or Disability; or

      (iii) gross negligence by the Option Holder in the performance of any or
           all of his material duties and responsibilities as an officer of SDI,
           other than as a result of the Option Holder's death or Disability;

      For purposes of these options "Disability" means any mental or physical
illness, condition, disability or incapacity which prevents the Option Holder
from reasonably discharging his duties and responsibilities as an officer of SDI
for a minimum of twenty hours per week.

      The following table shows the weighted average exercise price of the
outstanding options granted pursuant to SDI's stock option plans as of November
30, 2008, SDI's most recent fiscal year end. SDI's stock option plans have not
been approved by its shareholders.

<TABLE>
<S>                                  <C>                <C>                   <C>

                                                                      Number of Securities
                                    Number                            Remaining Available
                                 of Securities                        For Future Issuance
                                 to be Issued    Weighted-Average         Under Equity
                                Upon Exercise    Exercise Price of    Compensation Plans,
                                of Outstanding    of Outstanding      Excluding Securities
Plan category                     Options (a)        Options         Reflected in Column (a)
-------------                   --------------   -----------------   -----------------------

Incentive Stock Option Plan                --                --              1,000,000
Non-Qualified Stock Option Plan     3,498,000             $1.26                435,000

</TABLE>



                                       14
<PAGE>


Warrants
--------

     In addition to the options described above, SDI has granted warrants to its
officers and directors upon the terms shown below.

                                       Shares Issuable
                           Grant        Upon Exercise   Exercise  Expiration
    Name                    Date         of Options       Price       Date
    ----                   -----       ---------------  --------   ------------

    Boaz Dor              9-06-07          17,000         $0.50     5-31-17
    Sheldon Kales        10-05-07         250,000         $0.50    10-05-14
    Gregory Sullivan     10-05-07          50,000         $0.50    10-05-14

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDERS MATTERS

     The  following  table  shows  the  ownership  of SDI's  common  stock as of
February 25, 2009 by each shareholder known by SDI to be the beneficial owner of
more than 5% of SDI's  outstanding  shares,  each director and executive officer
and all  directors  and  executive  officers  as a group.  Except  as  otherwise
indicated, each shareholder has sole voting and investment power with respect to
the shares they beneficially own.

                                     Number
     Name                          of Shares (1)        Percent of Class
     ----                          -------------        ----------------

     Sheldon Kales                   2,540,910               17.6%

     Boaz Dor                        1,020,000                7.1%

     Rakesh Malhotra                        --                  --

     Gregory Sullivan                  400,000                2.8%

     Dror Shachar (2)                1,200,000                8.3%

     All Officers and Directors      3,960,910               27.5%
        as a group (four persons)

(1)  Does not reflect shares issuable upon the exercise of options.

(2)  Dror  Shachar  holds  these  shares  for the  benefit of his  father,  Mark
     Shachar.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         ----------------------------------------------

     The following lists all shares of SDI's common stock which have been issued
since its incorporation:



                                       15
<PAGE>

<TABLE>
   <S>                           <C>           <C>           <C>

                                                         Consideration
Shareholder                  Date of Sale Shares Issued  Paid for Shares
-----------                  ------------ -------------  ---------------

Sheldon Kales                   3-03-05      2,300,000    Services rendered, valued at $23,000
Sheldon Kales                   3-04-05        200,000    Services rendered, valued at $2,000
Boaz Dor                        3-03-05        900,000    Services rendered, valued at $9,000
Gregory Sullivan                3-03-05         40,000    Services rendered, valued at $400
Gregory Sullivan                3-04-05        200,000    Services rendered, valued at $2,000
Alexander Blaunshtein (1)       3-03-05     1,560,000     Services rendered, valued at $15,600
Consultant                      3-03-05      1,200,000    Services rendered, valued at $12,000
Consultants                     3-04-05        125,000    Services rendered, valued $1,250
Private Investors               4-15-05        397,880    $     99,470
Private Investors              12-31-05        486,000    $     48,600
Private Investors               1-31-06        470,000    $     47,000
Private Investors               3-08-06        286,000    $     50,050
Consultant                      3-08-06         50,000    Services rendered, valued at $8,750
Public Investors              5-06/7-06      2,000,000    $    400,000
Sheldon Kales                     11-06        550,000    $     55,000 (2)
Boaz Dor                          11-06        200,000    $     20,000 (2)
Gregory Sullivan                  11-06        200,000    $     20,000 (2)
Private Investors                 12-06      2,536,170    $  2,536,170
Consultant                      3-12-07         50,000    Services rendered, valued at $155,000
Private Investors             4-07/5-07      2,139,000    $  4,812,750
Boaz Dor                          11-08        117,000    $     11,700 (2)

</TABLE>

(1)   Alexander Blaunshtein is the son of Natan Blaunstein, who was a former
      director of SDI. In March 2007 these shares were purchased by SDI for
      $50,000, cancelled, and returned to the status of authorized but unissued
      shares.
(2)   Shares were issued upon the exercise of stock options.

     With the  exception of the shares issued upon the exercise of shares issued
upon the exercise of options,  SDI relied upon the exemption provided by Section
4(2) of the  Securities  Act of 1933 in  connection  with the  issuance of these
shares.

      Sheldon Kales, Natan Blaunstein, Boaz Dor and Gregory Sullivan are the
promoters and parents of SDI.


                                       16
<PAGE>

      The services relating to the shares issued in March 2005 were provided for
the development of the LEKTROX and were valued at $0.01 per share. The 50,000
shares issued in March 2006 to a consultant were issued as compensation for
introducing investors to SDI and were valued at $0.175 per share which is the
price, per share, received by SDI for the shares sold for cash in March 2006.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
         --------------------------------------

     Schwartz  Levitsky  Feldman,   LLP  ("Schwartz   Levitsky")  audited  SDI's
financial statements for the years ended November 30, 2008 and 2007.

     The  following  table shows the  aggregate  fees billed and billable to SDI
during the years ended November 30, 2008 and 2007 by Schwartz Levitsky.

                                           2008           2007
                                           ----           ----

Audit Fees                              $15,000        $17,000
Audit-Related Fees                      $ 8,600        $39,900
Financial Information Systems                --             --
Design and Implementation Fees               --             --
Tax Fees                                     --             --
All Other Fees                               --             --

     Audit fees represent amounts billed for professional  services rendered for
the audit of SDI's annual  financial  statements.  Audit-Related  fees represent
amounts billed for the services related to the reviews of SDI's 10-Q reports and
reviews  of SDI's  registration  statements  on Form SB-2 and Form  S-8.  Before
Schwartz Levitsky was engaged by Security Devices to render audit services,  the
engagement was approved by Security Device's Directors.

ITEM 15. EXHIBITS
         --------

Exhibit
Number   Description of Exhibit
-------  ----------------------

  3.1    Articles of Incorporation        (Incorporated by reference to the same
                                          exhibit filed with the Company's
                                          registration statement on Form SB-2
                                          (File No. 333-12456).

  3.2    Bylaws                           (Incorporated by reference to the same
                                          exhibit filed with the Company's
                                          registration statement on Form SB-2
                                          (File No. 333-132456).

   31    Rule 13a-14(a) Certifications         *


                                       17
<PAGE>




   32    Section 1350 Certifications           *



* Filed with this report.





                                       18
<PAGE>



                      SECURITY DEVICES INTERNATIONAL, INC.
                        (A Development Stage Enterprise)

                              FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 2008 AND 2007

      Together with Report of Independent Registered Public Accounting Firm

                        (Amounts expressed in US Dollars)



<PAGE>

                      SECURITY DEVICES INTERNATIONAL, INC.
                        (A Development Stage Enterprise)

                              FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 2008 AND 2007
                        (Amounts expressed in US Dollars)


                                TABLE OF CONTENTS

                                                                        Page No

Report of Independent Registered Public Accounting Firm                      1

Balance Sheets as at November 30, 2008 and November 30, 2007                 2

Statements of Operations and Comprehensive loss for the years ended
 November 30, 2008 and November 30, 2007 and the period from
 inception (March 1, 2005) to November 30, 2008                              3

Statements of Cash Flows for the years ended November 30, 2008 and
 November 30, 2007 and the period from inception (March 1, 2005) to
 November 30, 2008                                                           4

Statements of Stockholders' Equity for the years ended November 30, 2008
 and November 30, 2007 and the period from inception (March 1, 2005) to
 November 30, 2008                                                           5

Notes to Financial Statements                                             6-28


<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


       To the Board of Directors and Stockholders of
       Security Devices International, Inc.
       (A Development Stage Enterprise)


       We have audited the accompanying balance sheets of Security Devices
       International, Inc. (the "Company") as at November 30, 2008 and 2007 and
       the related statements of operations and comprehensive loss, cash flows
       and stockholders' equity for the years ended November 30, 2008 and 2007
       and the period from inception (March 1, 2005) to November 30, 2008. These
       financial statements are the responsibility of the Company's management.
       Our responsibility is to express an opinion on these financial statements
       based on our audits.

       We conducted our audits in accordance with the standards of the Public
       Company Accounting Oversight Board (United States). Those standards
       require that we plan and perform the audits 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.

       The company is not required to have, nor were we engaged to perform, an
       audit of its internal control over financial reporting. Our audit
       included consideration of internal control over financial reporting as a
       basis for designing audit procedures that are appropriate in the
       circumstances, but not for the purpose of expressing an opinion on the
       effectiveness of the company's internal controls over financial
       reporting. Accordingly, we express no such opinion.


       In our opinion, the financial statements referred to above present
       fairly, in all material respects, the financial position of the Company
       as of November 30, 2008 and 2007, and the results of its operations and
       its cash flows for the years ended November 30, 2008 and 2007 and the
       period from inception (March 1, 2005) to November 30, 2008 in accordance
       with generally accepted accounting principles in the United States of
       America.


                                                   Schwartz Levitsky Feldman LLP
       Toronto, Ontario, Canada                            Chartered Accountants
       February 18, 2009                             Licensed Public Accountants

<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Balance Sheets
As at November 30, 2008 and 2007
(Amounts expressed in US Dollars)


                                                         2008           2007
                                ASSETS                     $              $

CURRENT
   Cash and cash equivalents                          2,167,699       5,293,176
   Prepaid expenses and other                            45,984          36,788
                                                    ------------    ------------

Total Current Assets                                  2,213,683       5,329,964
Plant and Equipment, net (Note 9)                        25,450          23,960
                                                    ------------    ------------
TOTAL ASSETS                                          2,239,133       5,353,924
                                                    ------------    ------------

                                   LIABILITIES

CURRENT LIABILITIES
Accounts payable and accrued liabilities (Note 4)       219,081         174,842
                                                    ------------    ------------
Total Current Liabilities                               219,081         174,842
                                                    ------------    ------------
Related Party Transactions (Note 8)
Commitments (Note 11)
                              STOCKHOLDERS' EQUITY


Capital Stock (Note 5)                                   14,447          14,330
Additional Paid-In Capital                           13,084,826      11,842,187
Deficit Accumulated During the Development Stage    (11,079,221)     (6,677,435)
                                                    ------------    ------------

Total Stockholders' Equity                            2,020,052       5,179,082
                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            2,239,133       5,353,924
                                                    ------------    ------------


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



                                       2

<PAGE>


SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Statements of Operations and Comprehensive loss
Years Ended November 30, 2008 and 2007 and
the Period from Inception (March 1, 2005) to November 30, 2008
(Amounts expressed in US Dollars)

                                        Cumulative
                                      since inception     2008         2007
                                      ---------------     ----         ----
EXPENSES:

  Research and Product Development   $  4,515,043   $  2,632,548  $  1,344,195
  Amortization                             11,249          8,652         2,597
  General and administration            6,817,710      1,834,237     3,672,275
                                     -------------  ------------- -------------

TOTAL OPERATING EXPENSES               11,344,002      4,475,437     5,019,067
                                     -------------  ------------- -------------

LOSS FROM OPERATIONS                  (11,344,002)    (4,475,437)   (5,019,067)

  Other Income-Interest                   264,781         73,651       191,130
                                     -------------  ------------- -------------
LOSS BEFORE INCOME TAXES              (11,079,221)    (4,401,786)   (4,827,937)

   Income taxes (Note 10)                       -              -             -
                                     -------------  ------------- -------------

NET LOSS AND COMPREHENSIVE LOSS      $(11,079,221)   $(4,401,786) $(4,827,937)
                                     -------------  ------------- -------------

  Loss per share - basic and diluted $      (0.31)   $    (0. 35)
                                     -------------  -------------

  Weighted average common shares
    outstanding                      $ 14,335,179    $13,815,317
                                     -------------  -------------


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


                                       3

<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
Years Ended November 30, 2008 and 2007 and
the Period from Inception (March 1, 2005) to
November 30, 2008
(Amounts expressed in US Dollars)

<TABLE>
<S>                                                 <C>             <C>            <C>

                                                Cumulative
                                              since inception       2008          2007
                                              ---------------       ----          ----

CASH FLOWS FROM OPERATING ACTIVITIES
       Net loss for the period                 $(11,079,221)  $ (4,401,786)  $ (4,827,937)
   Items not requiring an outlay of cash:
     Issue of shares for professional services      154,000              -         80,000
     Stock based compensation (included in
      general and administration expenses)        4,727,429      1,231,056      2,446,433
     Compensation expense for warrants issued
      (included in general and administration
      expenses)                                     357,094              -        357,094
     Loss on cancellation of common stock            34,400              -         34,400
     Amortization                                    11,249          8,652          2,597
     Changes in non-cash working capital:
     Prepaid expenses and other                     (45,984)        (9,196)       (32,336)
     Accounts payable and accrued liabilities       219,081         44,239         70,831
                                              -------------- -------------- --------------
NET CASH USED IN OPERATING ACTIVITIES            (5,621,952)    (3,127,035)    (1,868,918)
                                              -------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES

        Acquisition of Plant and Equipment          (36,699)       (10,142)       (26,557)
                                              -------------- -------------- --------------
NET CASH USED IN INVESTING ACTIVITIES               (36,699)       (10,142)       (26,557)
                                              -------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Loans/ (Repayments) from directors/shareholders         -              -         (4,227)
  Net Proceeds from issuance of common shares     7,769,650              -      5,779,045
  Cancellation of common stock                      (50,000)             -        (50,000)
  Exercise of stock options                         106,700         11,700              -
                                              -------------- -------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES         7,826,350         11,700      5,724,818
                                              -------------- -------------- --------------
 NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS FOR THE PERIOD                    2,167,699     (3,125,477)     3,829,343
   Cash and cash equivalents, beginning
    of period                                             -      5,293,176      1,463,833
                                              -------------- -------------- --------------
   CASH AND CASH EQUIVALENTS, END OF PERIOD       2,167,699      2,167,699      5,293,176
                                              ============== ============== ==============
   INCOME TAXES PAID                                      -              -              -
                                              ============== ============== ==============
   INTEREST PAID                                          -              -              -
                                              ============== ============== ==============
</TABLE>


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



                                       4

<PAGE>


SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Equity
For the years ended November 30, 2008 and 2007 and
the period from inception (March 1, 2005) to November 30, 2008.
(Amounts expressed in US Dollars)

<TABLE>
<S>                                   <C>         <C>          <C>          <C>         <C>

                                   Number of     Common    Additional
                                    Common       Shares     Paid-in      Deficit
                                    Shares       amount     Capital    Accumulated     Total
                                   ---------     -------   ----------  -----------     -----


Balance as of March 1, 2005        $       -           -   $       -    $       -   $       -

Issuance of Common shares
 for professional services         6,525,000       6,525      58,725            -      65,250
Issuance of common shares
 for cash                            397,880         398      99,072            -      99,470
  Net loss for the period                  -           -           -     (188,699)   (188,699)
                                  ----------- ----------- -----------  ----------- -----------

Balance as of November 30, 2005    6,922,880       6,923     157,797     (188,699)    (23,979)

Issuance of common shares
 for cash                            956,000         956      94,644            -      95,600

Issuance of common shares
 for cash                            286,000         286      49,764            -      50,050

Issuance of common shares
 to consultant for services           50,000          50       8,700            -       8,750
Issuance of common shares
 for cash                          2,000,000       2,000     398,000            -     400,000
Exercise of stock options            950,000         950      94,050            -      95,000
Issuance of common shares
 for cash (net of agent
 commission)                         200,000         200     179,785            -     179,985
Stock subscriptions received                               1,165,500            -   1,165,500
Stock based compensation                   -           -   1,049,940            -   1,049,940
  Net loss for the year                    -           -           -   (1,660,799) (1,660,799)
                                  ----------- ----------- -----------  ----------- -----------

Balance as of November 30, 200   611,364,880      11,365   3,198,180   (1,849,498)  1,360,047

Issuance of common shares for
 stock subscriptions received
 in prior year                     1,165,500       1,165      (1,165)           -           -
Issuance of common shares
 for cash                          1,170,670       1,171   1,169,499                1,170,670
Issuance of common shares
 for cash and services                50,000          50     154,950                  155,000
Issuance of common shares
 for cash (net of expenses)        2,139,000       2,139   4,531,236                4,533,375
Cancellation of stock             (1,560,000)     (1,560)    (14,040)                 (15,600)
Stock based compensation                                   2,446,433                2,446,433
Issue of warrants                                            357,094                  357,094
  Net loss for the year
   ended November 30, 2007                 -           -           -   (4,827,937) (4,827,937)
                                  ----------- ----------- -----------  ----------- -----------

Balance as of November 30, 2007   14,330,050      14,330  11,842,187   (6,677,435)  5,179,082

Exercise of stock options            117,000         117      11,583                   11,700
Stock based compensation                   -           -   1,231,056            -   1,231,056
Net loss for the period                    -           -           -   (4,401,786) (4,401,786)
                                  ----------- ----------- -----------  ----------- -----------
Balance as of November 30, 2008  $14,447,050  $   14,447  $13,084,826 $(11,079,221) $2,020,052
                                  ----------- ----------- -----------  ----------- -----------
</TABLE>


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


                                       5

<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


1. BASIS OF PRESENTATION

The financial statements which include the accounts of Security Devices
International Inc. (the "Company") were prepared in accordance with US GAAP. The
Company was incorporated under the laws of the state of Delaware on March 1,
2005.

2. NATURE OF OPERATIONS

The Company is currently in the advanced stages of developing LEKTROX, a unique
line of wireless electric ammunition for use in military, homeland security, law
enforcement, and professional and home security scenarios. LEKTROX has been
specially designed for use with standards issue riot guns, M203 grenade
launchers and regular 12-guage shotguns. This will allow military, law
enforcement agencies etc. to quickly deploy LEKTROX without the need for
lengthy, complex training methods or significant functional adjustments to
vehicles or personal equipment. Simplicity of use is also a key benefit for the
home security market where most users have little or no specialized training.
LEKTROX is a 3rd generation electric solution. First generation solutions were
electric batons and hand-held stun guns which had a range of arm's length. 2nd
generations were the wired electric charge solutions. 3rd generations are the
wireless electric bullets. Currently, there is still no 3rd generation wireless
electric bullet on the market.

The Company is in the development stage and has not yet realized revenues from
its planned operations. The Company has incurred a loss of $ 4,401,786 during
the year ended November 30, 2008 which includes a non-cash stock based
compensation cost of $1,231,056 . At November 30, 2008, the Company had an
accumulated deficit during the development stage of $11,079,221 which includes a
non- cash stock based compensation expense of $4,727,429. The Company has funded
operations through the issuance of capital stock. During the first quarter of
2007, the company raised $1,170,670 through issue of common stock. During the
second quarter of 2007, the Company raised an additional $4,688,375 (net of
expenses of $279,375) through the issue of Common stock. Further, during the
last quarter of 2008, the Company received $11,700 due to the exercise of stock
options.

The Company has a working capital of $ 1,994,602 and stockholders' equity of
2,020,052 as at November 30, 2008. Management's plan is to continue raising
additional funds through future equity or debt financing until it achieves
profitable operations.




                                       6
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of Estimates

These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America. As the precise
determination of assets and liabilities, and correspondingly revenues and
expenses, depends on future events, the preparation of financial statements for
any period necessarily involves the use of estimates. Actual amounts may differ
from these estimates. Significant estimates include accruals, valuation
allowance for deferred tax assets, estimates for calculation of stock based
compensation and estimating the useful life of its plant and equipment.

b) Income Taxes

The Company accounts for income taxes under the provisions of SFAS No. 109,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred income taxes are provided using
the liability method. Under the liability method, deferred income taxes are
recognized for all significant temporary differences between the tax and
financial statement bases of assets and liabilities.

Current income tax expense (recovery) is the amount of income taxes expected to
be payable (recoverable) for the current period. A deferred tax asset and/or
liability is computed for both the expected future impact of differences between
the financial statement and tax bases of assets and liabilities and for the
expected future tax benefit to be derived from tax losses. Valuation allowances
are established when necessary to reduce deferred tax asset to the amount
expected to be "more likely than not" realized in future tax returns. Tax law
and rate changes are reflected in income in the period such changes are enacted.
Due to valuation allowance for deferred tax assets, no deferred tax benefits or
expenses were recorded for the years ended November 30, 2008 and 2007.

c) Revenue Recognition

The Company's revenue recognition policies are expected to follow common
practice in the manufacturing industry.

d) Loss per Share

The Company has adopted FAS No. 128, "Earnings per Share", which requires
disclosure on the financial statements of "basic" and "diluted" loss per share.
Basic loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding for the year. Diluted loss per share is
computed by dividing net loss by the weighted average number of common shares
outstanding plus common stock equivalents (if dilutive) related to stock options



                                       7
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

and warrants for each year. There were no common equivalent shares outstanding
at November 30, 2008 and 2007 that have been included in dilutive loss per share
calculation as the effects would have been anti-dilutive. At November 30, 2008,
there were 3,768,000 options and 423,950 warrants outstanding, which were
convertible into equal number of common shares of the Company. At November 30,
2007, there were 2,890,000 options and 423,950 warrants outstanding, which were
convertible into equal number of common shares of the Company.

e) Fair Values

The Company's financial instruments as defined by SFAS No. 107, "Disclosures
about Fair Value of Financial Instruments", includes cash and accounts payable
and accrued liabilities. All instruments are accounted for on a historical cost
basis, which, due to the short maturity of these financial instruments,
approximates fair value.

f) Research and Product Development

Research and Product Development costs, other than capital expenditures but
including acquired research and product development costs, are charged against
income in the period incurred.

g) Stock-Based Compensation

In December 2004, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 123 (Revised 2004), "Share-Based
Payment" (SFAS 123 (R)). SFAS 123 (R) requires companies to recognize
compensation cost for employee and non-employee services received in exchange
for an award of equity instruments based on the grant-date fair value of the
award. All awards granted to employees and non-employees are valued at fair
value in accordance with the provisions of SFAS 123 (R) by using the
Black-Scholes option pricing model and recognized on a straight-line basis over
the service periods of each award.

The Company accounts for equity instruments issued in exchange for the receipt
of goods or services from other than employees in accordance with SFAS No. 123
and the conclusions reached by the Emerging Issues Task Force ("EITF") in Issue
No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring or in Conjunction with Selling Goods or Services". Costs
are measured at the estimated fair market value of the consideration received or
the estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration
other than employee services is determined on the earlier of a performance
commitment or completion of performance by the provider of goods or services as
defined by EITF No. 96-18.



                                       8
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

h) Foreign Currency

The  Company  maintains  its books,  records and  banking  transactions  in U.S.
dollars which is its functional and reporting currency.

i) Comprehensive Income

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." This
statement establishes standards for reporting comprehensive income and its
components in a financial statement. Comprehensive income as defined includes
all changes in equity (net assets) during a period from non-owner sources.
Examples of items to be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustments and unrealized
gains and losses on available-for-sale securities.

j) Impairment of Long-lived Assets

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", long-lived
assets to be held and used are analyzed for impairment whenever events or
changes in circumstances indicate that the related carrying amounts may not be
recoverable. The Company evaluates at each balance sheet date whether events and
circumstances have occurred that indicate possible impairment. If there are
indications of impairment, the Company uses future undiscounted cash flows of
the related asset or asset grouping over the remaining life in measuring whether
the assets are recoverable. In the event such cash flows are not expected to be
sufficient to recover the recorded asset values, the assets are written down to
their estimated fair value. Long-lived assets to be disposed of are reported at
the lower of carrying amount or fair value of asset less cost to sell.

k) Asset Retirement Obligation

The Company accounts for asset retirement obligations in accordance with
Financial Accounting Standards Board ("FASB") Statement No. 143, "Accounting for
Asset Retirement Obligations" ("Statement 143"), which requires that the fair
value of an asset retirement obligation be recorded as a liability in the period
in which a company incurs the obligation.

l) Concentration of Credit Risk

SFAS No. 105, "Disclosure of Information about Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentration of Credit
Risk", requires disclosure of any significant off-balance sheet risk and credit
risk concentration. The Company does not have significant off-balance sheet risk
or credit concentration.


                                       9
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

m)   Cash and Cash Equivalents

Cash consists of cash and cash equivalents, which are short-term, highly liquid
investments with original terms to maturity of 90 days or less.

n) Intellectual Property with Respect to Pending Patent Applications

Four patent applications, one for the electrical mechanism and the other three
for the mechanical mechanism of the LEKTROX, have been filed by the Company with
the U.S. Patent Office. Expenditures for patent applications as a result of
research activity are not capitalized due to the uncertain value of the benefits
that may accrue.

o) Plant and Equipment

Plant and equipment are recorded at cost less accumulated depreciation.
Depreciation is provided commencing in the month following acquisition using the
following annual rate and method:


      Computer equipment      30%      declining balance method
      Furniture and fixtures  30%      declining balance method


p) Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations". This
Statement replaces SFAS No. 141, Business Combinations.

This Statement retains the fundamental requirements in Statement 141 that the
acquisition method of accounting (which Statement 141 called the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business combination. This Statement also establishes
principles and requirements for how the acquirer: a) recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree; b) recognizes and
measures the goodwill acquired in the business combination or a gain from a
bargain purchase and c) determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects of the
business combination. SFAS No. 141(R) will apply prospectively to business
combinations for which the acquisition date is on or after Company's fiscal year
beginning May 1, 2009. The Company is currently assessing the impact of FAS
141(R).



                                       10
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements". This Statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the fiscal years beginning
May 1, 2009. The Company is currently assessing the impact of FAS 160.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities--an amendment of FASB Statement No. 133"
("FAS 161"). FAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. The guidance in FAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. This Statement encourages,
but does not require, comparative disclosures for earlier periods at initial
adoption. The Company is currently assessing the impact of FAS 161.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS 162"). SFAS 162 is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. GAAP for nongovernmental entities. SFAS 162 is
effective 60 days following the Securities and Exchange Commission's approval of
the Public Company Accounting Oversight Board auditing amendments to AU Section
411, "The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles." The Company does not expect SFAS 162 to have a material
effect on its consolidated financial statements.

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 163
("SFAS 163"), "Accounting for Financial Guarantee Insurance Contracts - an
interpretation of FASB Statement No. 60." SFAS 163 prescribes accounting for
insures of financial obligations, bringing consistency to recognizing and
recording premiums and to loss recognition. SFAS 163 also requires expanded
disclosures about financial guarantee insurance contracts. Except for some
disclosures, SFAS 163 is effective for financial statements issued for fiscal
years beginning after December 15, 2008. The adoption of SFAS 163 will not have
an impact on the results of operations or financial position of the Company.


                                       11
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

In May 2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies
that convertible debt instruments that may be settled in cash upon either
mandatory or optional conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants." Additionally, FSP APB 14-1
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity's
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of APB 14-1 will not have an impact on the
results of operations or financial position of the Company.

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

                                                   2008           2007
                                                   -----          ----
   Accounts payable and accrued liabilities
   are comprised of the following:

         Trade payables                       $     2,950     $   17,973
         Accrued liabilities                      216,131        156,869
                                               ----------     ----------
                                                $ 219,081      $ 174,842
                                                ---------      ---------

Accrued liabilities relate primarily to research and development and legal and
accounting expenses.

5. CAPITAL STOCK

      a) Authorized

      50,000,000 Common shares, $0.001 par value

      And

      5,000,000 Preferred shares, $0.001 par value

The Company's Articles of Incorporation authorize its Board of Directors to
issue up to 5,000,000 shares of preferred stock. The provisions in the Articles
of Incorporation relating to the preferred stock allow the directors to issue
preferred stock with multiple votes per share and


                                       12
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


5. CAPITAL STOCK (Cont'd)

dividend rights which would have priority over any dividends paid with respect
to the holders of SDI's common stock.

   b) Issued

      14,447,050 Common shares (2007: 14,330,050 Common shares)

   c) Changes to Issued Share Capital

Year ended November 30, 2007
----------------------------

On December 12, 2006 the Company completed the sale of 2,536,170 shares of its
common stock to a group of private investors. The shares were sold in the
private offering at a price of $1.00 per share and are restricted securities as
that term is defined in Rule 144 of the Securities and Exchange Commission.

The Company had already issued 200,000 common shares on November 29, 2006 and it
issued the balance 2,336,170 shares on December 12, 2006. The Company relied
upon the exemption provided by Section 4(2) of the Securities Act of 1933 for
the sale of these shares.

On March 12, 2007, the Company authorized the issuance of 50,000 common shares
at $1.50 per share for a total cash consideration of $75,000 to a consultant who
rendered investor relation services to the Company during the quarter ended May
31, 2007.

The market price of the total stock on the date of issuance was $155,000. The
difference of $80,000 between the market price of the total stock ($155,000) and
the issued price ($75,000) represents the estimated fair value of the
consultant's services. The par value of the shares in the amount of $50 was
credited to share capital and the balance of $154,950 credited to additional
paid-in capital and shown as issuance of common shares for cash and services in
the statement of changes in stockholder's equity.

The Company had entered into an amended agreement in February 2007, with a
director regarding development of its "Electrical Shocker" ("ES") technology.
Pursuant to the original agreement executed in November 2006, the director was
paid a total of $38,000 which included $22,000 during the last quarter of 2006
and an additional $16,000 in January 2007. The Company has expensed this payment
of $22,000 as Research and Product Development during 2006 and also expensed the
balance $16,000 to Research and Product Development in the first quarter of
2007. In addition, the director was paid $62,000 in February, 2007 upon signing
the amended agreement. The Company expensed this payment of $62,000 to Research
and Product Development in the first quarter of 2007. The director in return had
released the Company from a prior obligation to pay royalty from the sale of any
product developed using this technology.


                                       13
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


5. CAPITAL STOCK (Cont'd)

In the absence of acceptance of the ES technology by the Company, the Company
cancelled 1,560,000 shares and the director was paid $50,000 on March 12, 2007
in accordance with the amended agreement. The Company accounted for this
transaction under the constructive retirement method in the second quarter of
2007. The cancelled shares reverted to authorized but unissued status. The stock
and additional paid-in-capital amounts were reduced with a total of $15,600 and
the Company recognized a loss of $34,400, being the excess of purchase cost over
the original issuance.

On April 25, 2007 the Company sold 1,998,500 shares of its common stock to a
group of private investors. As part of this same financing the Company sold an
additional 140,500 shares to private investors on May 4, 2007. The shares were
sold at a price of $2.25 per share and are restricted securities as that term is
defined in Rule 144 of the Securities and Exchange Commission. In connection
with the sale of these 2,139,000 shares, the Company paid a commission of
$240,638 to the sales agent for the offering and incurred legal and other
expenditure of $38,737.

The sales agent also received 106,950 warrants which allow them to purchase
106,950 shares of the Company's Common stock at a price of $2.81 per share. The
warrants expire in 2009.

The Company agreed to file a registration statement with the Securities and
Exchange Commission registering the resale of the shares sold to the investors,
as well as the shares issuable upon the exercise of the warrants issued to the
sales agent. The registration statement was declared effective on September 20,
2007.

The Company relied upon the exemption provided by Section 4(2) of the Securities
Act of 1933 for the sale of these securities.

Year ended November 30, 2008
----------------------------

The Company  received  $11,700 and issued  117,000  common shares on exercise of
stock options by a director of the Company.

6. STOCK BASED COMPENSATION

Per SEC Staff Accounting Bulletin 107, Topic 14.F, "Classification of
Compensation Expense Associated with Share-Based Payment Arrangements" stock
based compensation expense is being presented in the same line as cash
compensation paid.

Effective October 31, 2006 the Company adopted the following stock option and
stock bonus plans.


                                       14
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (cont'd)

Incentive Stock Option Plan. The Company's Incentive Stock Option Plan
authorizes the issuance of shares of its Common Stock to persons that exercise
options granted pursuant to the Plan. Only employees may be granted options
pursuant to the Incentive Stock Option Plan. The option exercise price is
determined by its directors but cannot be less than the market price of its
common stock on the date the option is granted. The Company has reserved
1,000,000 common shares under this plan. No options have been issued under this
plan as at November 30, 2008.

Non-Qualified Stock Option Plan. SDI's Non-Qualified Stock Option Plan
authorizes the issuance of shares of its Common Stock to persons that exercise
options granted pursuant to the Plans. SDI's employees, directors, officers,
consultants and advisors are eligible to be granted options pursuant to the
Plans, provided however that bona fide services must be rendered by such
consultants or advisors and such services must not be in connection with the
offer or sale of securities in a capital-raising transaction. By a resolution of
the Board of Directors, the Company amended this plan to increase the number of
common shares available under this plan from 2,250,000 to 4,500,000 effective
October 10, 2007. The Company further amended its Non-Qualified Stock Option
Plan to increase the number of Common Shares available under this plan to
5,000,000 and filed an S-8 registration statement on April 10, 2008.

Stock Bonus Plan. SDI's Stock Bonus Plan allows for the issuance of shares of
common stock to its employees, directors, officers, consultants and advisors.
However bona fide services must be rendered by the consultants or advisors and
such services must not be in connection with the offer or sale of securities in
a capital-raising transaction. The Company has reserved 150,000 common shares
under this plan. No options have been issued under this plan as at November 30,
2008.

Year ended November 30, 2007
----------------------------

Effective January 7, 2007 the company granted stock options to one officer to
acquire 125,000 common shares under its Non-Qualified Stock Option Plan. The
exercise price for the options was set at $1.50 per share. These options vested
immediately and expire on January 17, 2012. The stock based compensation cost of
$204,986 has been expensed to general and administration.

Effective April 23, 2007, the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     1. Options to two  consultants  to acquire  150,000 common share each for a
total of 300,000 shares. The exercise price for 300,000 options was set at $2.75
per share.  These options vest  immediately and expire on April 23, 2012.  Stock
based   compensation   cost  of  $622,074  has  been  expensed  to  general  and
administration expense.


                                       15
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (cont'd)

     2. Options to two  consultants  to acquire  20,000  common share each for a
total of 40,000  shares.  The exercise price for 40,000 options was set at $3.60
per share.  These options vest immediately and expire on January 29, 2012. Stock
based   compensation   cost  of  $78,224  has  been   expensed  to  general  and
administration expense.

Effective October 12, 2007 the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     1. Options to one director to acquire  675,000 common shares.  The exercise
price was set at $1.20 per share.

     2. Options to one director to acquire  300,000 common shares.  The exercise
price was set at $1.20 per share.

     3. Options to one director to acquire  175,000 common shares.  The exercise
price was set at $1.20 per share.

     4. Options to one officer to acquire  175,000 common  shares.  The exercise
price was set at $1.20 per share.

     5. Options to two  consultants to acquire  125,000 common shares each for a
total of 250,000 options. The exercise price was set at $1.20 per share.

All of the above options vest immediately and have an expiry date of October 12,
2012. Stock based compensation cost of $1,436,275 has been expensed to general
and administration expense.

Effective October 25, 2007, the board of directors granted under its
Non-Qualified Stock Option Plan, options to a consultant to acquire 150,000
common shares. The exercise price was set at $1.20 per share. These options vest
immediately and have an expiry date of January 31, 2010. Stock based
compensation cost of $104,874 has been expensed to general and administration
expense. The contract with the consultant was subsequently amended on April 10,
2008 whereby these options were reduced to 120,000 options exercisable at $1.20
per share and expire January 31, 2010. The company and the consultant agreed
that no further options would be issued by the company.



                                       16
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (cont'd)

The  fair  value of each  grant  was  estimated  at the  grant  date  using  the
Black-Scholes  option-pricing  model.  The  Black-Scholes  option  pricing model
requires the use of certain  assumptions,  including  expected  terms,  expected
volatility, expected dividends and risk-free interest rate to calculate the fair
value of stock-based payment awards. The expected term calculation is based upon
the  expected  term  the  option  is to be held,  which is the full  term of the
option.  The risk-free  interest rate is based upon the U.S.  Treasury  yield in
effect  at  the  time  of  grant  for an  instrument  with a  maturity  that  is
commensurate with the expected term of the stock options.  The dividend yield of
zero is based on the fact that the Company has never paid cash  dividends on its
common stock and has no present  intention to pay cash  dividends.  The expected
forfeiture rate of 0% is based on immediate vesting of options.

For the year  ended  November  30,  2007,  the  Company  has  recognized  in the
financial  statements,  stock-based  compensation  costs  as per  the  following
details.  The fair value of each option used for the purpose of  estimating  the
stock  compensation  is based on the grant date using the  Black-Scholes  option
pricing model with the following weighted average assumptions:

<TABLE>
<S>                                     <C>        <C>          <C>          <C>        <C>

 Date of grant                         7-Jan      23-Apr       12-Oct      25-Oct
                                        2007       2007         2007        2007       Total
                                    --------------------------------------------------------

 Risk free interest rate               3.50%        4.25%          5%          5%
 Volatility factor                   122.84%      106.04%      98.76%     102.37%
 Expected dividends                       0%           0%          0%          0%
 Forfeiture rate                          0%           0%          0%          0%
 Expected life                       5 years      5 years     5 years   2.3 years
 Exercise price                        $1.50   $2.75-3.60       $1.20       $1.20
 Total number of options granted     125,000      340,000   1,575,000     150,000    2,190,000
 Grant date fair value of options      $1.64        $1.96       $0.91       $0.70
 Weighted  average  grant date fair
 value of  options  granted  during
 the year
 Market price of  Company's  common
 stock on date of grant                $1.90        $2.65       $1.20       $1.20        $1.10




                                       17
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (cont'd)

Stock-based compensation
cost expensed during the
year ended November 30, 2007        $204,986     $700,298  $1,436,275    $104,874   $2,446,433

Unexpended Stock -based
compensation cost deferred
over the vesting period                 $nil         $nil        $nil        $nil         $nil
</TABLE>

Year ended November 30, 2008
----------------------------

Effective January 24, 2008 the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     1. Options to one director to acquire  108,000 common shares.  The exercise
price was set at $0.10 per share.

     2. Options to one director to acquire  117,000 common shares.  The exercise
price was set at $0.10 per share.

All of the above options vest immediately and have an expiry date of January 24,
2013. Stock based compensation cost of $324,891 has been expensed to general and
administration expense.

Effective April 11, 2008 the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     1. Options to two  consultants to each acquire  300,000 common shares for a
total of 600,000 common shares. The exercise price was set at $1.50 per share.

     2. Options to one consultant to acquire 150,000 common shares. The exercise
price was set at $1.50 per share

All of the above options vest immediately and have an expiry date of April 11,
2013. Stock based compensation cost of $850,067 has been expensed to general and
administration expense.

Effective May 21, 2008, the board of directors granted options to an Investor
Relation consultant to acquire 50,000 common shares at an exercise price of
$2.25 per share. All of these options vested immediately and have an expiry of
May 21, 2010. Stock based compensation cost of $56,098 has been expensed to
general and administration expense.



                                       18
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (Cont'd)

The fair value of each grant was estimated at the grant date using the
Black-Scholes option-pricing model. The Black-Scholes option pricing model
requires the use of certain assumptions, including expected terms, expected
volatility, expected dividends and risk-free interest rate to calculate the fair
value of stock-based payment awards.

The expected term calculation is based upon the expected term the option is to
be held, which is the full term of the option. The risk-free interest rate is
based upon the U.S. Treasury yield in effect at the time of grant for an
instrument with a maturity that is commensurate with the expected term of the
stock options. The dividend yield of zero is based on the fact that we have
never paid cash dividends on our common stock and we have no present intention
to pay cash dividends. The expected forfeiture rate of 0% is based on immediate
vesting of options.

<TABLE>
<S>                                         <C>             <C>            <C>            <C>

Date of grant                            January 24,     April 11,       May 21,
                                            2008           2008           2008           Total
                                         -----------    -----------    -----------    -----------

Risk free rate                                   5%             5%             5%
Volatility factor                           101.27%         97.80%        100.15%
Expected dividends                               0%             0%             0%
Forfeiture rate                                  0%             0%             0%
Expected life                              5 years        5 years        2 years
Exercise price                              $ 0.10        $  1.50        $  2.25
Total number of options granted            225,000        750,000         50,000       1,025,000

Grant date fair value of options            $ 1.44        $  1.13        $  1.12
Weighted average grant date fair value
 of options granted during the year                                                      $  1.20
Market price of Company's common
 stock on date of grant                    $  1.50        $  1.50        $  2.12

Stock-based compensation cost
 expensed during the year ended
 November 30, 2008 and credited
 to Additional Paid in Capital            $324,891       $850,067        $56,098      $1,231,056

Unexpended Stock-based
 compensation cost deferred
 over the vesting period                  $    nil       $    nil       $    nil      $      nil

</TABLE>



                                       19
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


6. STOCK BASED COMPENSATION (Cont'd)

As of November 30, 2008 there was $Nil of unrecognized expense related to
non-vested stock-based compensation arrangements granted.

The following table summarizes the options outstanding under its Non-Qualified
Stock Option Plan:

                                                      Number of shares
                                                 -------------------------
                                                 2008                 2007
                                                 ----                 ----

      Outstanding, beginning of year          2,890,000              700,000
      Granted                                 1,025,000            2,190,000
      Expired                                         -                    -
      Exercised                               (117,000)
      Cancelled                                (30,000)                    -
                                            -----------           -----------
      Outstanding, end of year               3,768,000             2,890,000
                                            -----------           -----------
        Exercisable, end of year             3,768,000             2,890,000
                                            -----------           -----------


      Number of shares               Option price
      Expiry date                      per share         2008           2007
      -----------                    ------------        ----           ----

      January 31, 2010                  $1.20          120,000        150,000
      May 21, 2010                      $2.25           50,000             --
      October 29, 2011                  $0.25          300,000        300,000
      October 29, 2011                  $0.50          300,000        300,000
      November 14, 2011                 $1.00          100,000        100,000
      January 7, 2012                   $1.50          125,000        125,000
      January 29, 2012                  $3.60           40,000         40,000
      April 23, 2012                    $2.75          300,000        300,000
      October 12, 2012                  $1.20        1,575,000      1,575,000
      January 24, 2013                  $0.10          108,000             --
      April 11, 2013                    $1.50          750,000             --
                                                   ------------   ------------
                 TOTAL                               3,768,000      2,890,000
                                                   ------------   ------------
      Weighted average exercise price :
         Options outstanding at end of year         $1.27        1.22
         Options granted during the year            $1.23        1.47
         Options exercised during the year          $0.10           -
         Options cancelled during the year          $1.20           -


                                       20
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


The weighted average remaining contractual term of the total outstanding, and
the total exercisable options under the Non-Qualified Stock Option Plan were as
follows:

                                                        2008        2007
                                                       -------     -------
                                                       (Years)     (Years)

      Total outstanding options                          3.7         4.4
      Total exercisable options                          3.7         4.4

7. STOCK PURCHASE WARRANTS

Year ended November 30, 2007
----------------------------

During the year ended November 30, 2007 the Company granted the following stock
purchase warrants:

Effective September 6, 2007, the Company issued 17,000 common share purchase
warrants to a director. Each warrant is exercisable into one common share of the
Company at the price of $0.50 until May 31, 2017. These warrants vest
immediately (Refer to note 8-related party transactions)

The fair value of the warrant was estimated on the grant date using the
Black-Scholes option-pricing model. For the year ended November 30, 2007, the
Company expensed $31,411 as compensation expense on issue of warrants. The fair
value of the warrant was calculated using the following weighted average
assumptions:

Risk free rate of 5%, volatility factor 96.85%, expected dividends 0% and
forfeiture rate 0%. The grant date fair value of each warrant was $ 1.85.

Effective October 5, 2007, the Company issued 250,000 common share purchase
warrants to one director and another 50,000 common share purchase warrants to
another director. Each warrant is exercisable into one common share of the
Company at the price of $0.50 until October 5, 2014. These warrants vest
immediately. The fair value of the warrant was estimated on the grant date using
the Black-Scholes option-pricing model. For the year ended November 30, 2007,
the Company expensed $325,683 as compensation expense on issue of warrants.
(Refer to note 8-related party transactions) The fair value of the warrant was
calculated using the following weighted average assumptions:

Risk free rate of 5%, volatility factor 100.56%, expected dividends 0% and
forfeiture rate 0%. The grant date fair value of each warrant was $ 1.09.


                                       21
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


7. STOCK PURCHASE WARRANTS (cont'd)

On April 25, 2007 the Company sold 1,998,500 shares of its common stock to a
group of private investors. As part of this same financing the Company sold an
additional 140,500 shares to private investors on May 4, 2007. In connection
with the sale of these 2,139,000 shares, the Company paid a commission of
$240,638 to the sales agent for the offering and incurred legal and other
expenditure of $38,737. The sales agent also received 106,950 warrants which
allow them to purchase 106,950 shares of the Company's Common stock at a price
of $2.81 per share. The warrants expire in 2009.

Year ended November 30, 2008
----------------------------

The Company did not issue any warrants during the year ended November 30, 2008

                                            Number of
                                             Warrants      Exercise      Expiry
                                             Granted        Prices        Date
                                            ---------      --------      -------

   Outstanding at November 30, 2006 and
            average exercise price                  -            -             -
   Granted in year 2007                        17,000          0.5     5/31/2017
   Granted in year 2007                       250,000          0.5     10/5/2014
   Granted in year 2007                        50,000          0.5     10/5/2014
   Granted in year 2007                       106,950         2.81     4/25/2009
   Exercised                                       -            -
   Forfeited                                       -            -
   Cancelled                                       -            -
   Outstanding at November 30, 2007          423,950         1.08
    and weighted average exercise price
   Weighted average exercise price of
    options granted during the year 2007                     1.08
   Granted in year 2008                            -            -
   Exercised                                       -            -
   Forfeited                                       -            -
   Cancelled                                       -            -
                                           ----------   ----------
   Outstanding at November 30, 2008 and
    weighted average exercise price          423,950         1.08
                                           ----------   ----------

   Exercisable at November 30, 2008          423,950
   Exercisable at November 30, 2007          423,950


                                       22
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


7. STOCK PURCHASE WARRANTS (cont'd)

The weighted average remaining  contractual term of the total  outstanding,  and
the total exercisable warrants were as follows:

                                                            2008       2007
                                                          --------   --------
                                                           (Years)    (Years)

      Total outstanding options                               4.7        5.7
      Total exercisable options                               4.7        5.7

8. RELATED PARTY TRANSACTIONS

The following transactions are in the normal course of operations and are
measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.

        During the years ended November 30, 2008 and 2007, no director was paid
any compensation in cash. All out of pocket expenses of directors/promoters were
expensed. During the year ended November 30, 2008 and November 30, 2007, the
Directors were issued stock options and warrants (Refer to note 6 and 7).

Year ended November 30, 2007
----------------------------

Effective January 7, 2007 the company granted stock options to one officer to
acquire 125,000 common shares under its Non-Qualified Stock Option Plan. The
exercise price for the options was set at $1.50 per share. These options vest
immediately and expire on January 17, 2012. The stock based compensation cost of
$204,986 has been expensed to general and administration.

Effective October 12, 2007 the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     1. Options to one director to acquire  675,000 common shares.  The exercise
price was set at $1.20 per share.

     2. Options to one director to acquire  300,000 common shares.  The exercise
price was set at $1.20 per share.

     3. Options to one director to acquire  175,000 common shares.  The exercise
price was set at $1.20 per share.

     4. Options to one officer to acquire  175,000 common  shares.  The exercise
price was set at $1.20 per share.



                                       23
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


8. RELATED PARTY TRANSACTIONS-Cont'd

All of the above options vest immediately and have an expiry date of October 12,
2012. Stock based compensation cost of $1,208,295 has been expensed to general
and administration expense.

Effective September 6, 2007, the Company issued 17,000 common share purchase
warrants to a director. Each warrant is exercisable into one common share of the
Company at the price of $0.50 until May 31, 2017. These warrants vest
immediately.

The fair value of the warrant was estimated on the grant date using the
Black-Scholes option-pricing model. For the year ended November 30, 2007, the
Company expensed $31,411 as compensation expense on issue of warrants.

Effective October 5, 2007, the Company issued 250,000 common share purchase
warrants to one director and another 50,000 common share purchase warrants to
another director. Each warrant is exercisable into one common share of the
Company at the price of $0.50 until October 5, 2014. These warrants vest
immediately. The fair value of the warrant was estimated on the grant date using
the Black-Scholes option-pricing model. For the year ended November 30, 2007,
the Company expensed $325,683 as compensation expense on issue of warrants.

A Director has charged the Company a total amount of $1,500 for providing office
space during the year.

A company controlled by a 13.7% (as of November 30, 2006) shareholder, who is
also the son of a director (since resigned) was paid $16,000 during the year
ended November 30, 2007 for research and development.

The Company expensed $ 24,300 being cost for services rendered by the CFO for
the year ended November 30, 2007.

Year ended November 30, 2008
----------------------------

Effective January 24, 2008 the board of directors granted the following options
under its Non-Qualified Stock Option Plan:

     3. Options to one director to acquire  108,000 common shares.  The exercise
price was set at $0.10 per share.

     4. Options to one director to acquire  117,000 common shares.  The exercise
price was set at $0.10 per share.


                                       24
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


All of the above options vest immediately and have an expiry date of January 24,
2013. Stock based compensation cost of $324,891 has been expensed to general and
administration expense.

A Director has charged the Company a total amount of $6,000 for providing office
space during the year ended November 30, 2008.

The Company expensed $ 20,850 being cost for services rendered by the CFO for
the year ended November 30, 2008.

9. PLANT AND EQUIPMENT, NET

Plant  and  equipment  are  recorded  at  cost  less  accumulated  depreciation.
Depreciation is provided commencing in the month following acquisition using the
following annual rate and method:

                Computer equipment          30%   declining balance method

                Furniture and Fixtures      30%   declining balance method

                                     Nov 30,2008             Nov 30, 2007
                                           Accumulated             Accumulated
                                  Cost    Amortization    Cost    Amortization
                                   $            $           $           $
                                  --------------------------------------------

        Computer equipment       22,958       8,102       18,387       2,597
        Furniture and fixtures   13,741       3,147        8,170           -
                                 ------       -----       ------
                                 36,699      11,249       26,557       2,597
                                 ------      ------       -------     ------

             Net carrying amount      $25,450                  $23,960
                                      -------                  -------

         Amortization expense         $ 8,652                  $ 2,597
                                      -------                  -------

10. INCOME TAXES

        The Company has certain non-capital losses of approximately $5,700,710
        (2007: $2,823,968) available, which can be applied against future
        taxable income and which expire as follows:

        2025 $   188,494
        2026 $   609,991
        2027 $ 1,731,495
        2028 $ 3,170,730
             $ 5,700,710


                                       25
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


     Reconciliation of statutory tax rate to the effective income tax rate is as
follows:

        Federal statutory income tax rate                          (34.0) %
                                                                   --------
        Deferred tax asset valuation allowance                     (34.0) %
                                                                   --------
        Effective rate                                              (0.0) %

10. INCOME TAXES-Cont'd

     Deferred  tax asset  components  as of  November  30,  2008 and 2007 are as
follows:

                                                              2008       2007
           Operating losses available to offset future
               income-taxes                              $5,700,710  $2,529,980
                                                         ----------  ----------

           Expected Income tax recovery at statutory
               rate of 34.0%                            ($1,938,241)  ($860,193)
           Valuation Allowance                           $1,938,241    $860,193
                                                        -----------  ----------
           Net deferred tax assets                                -           -
                                                        -----------  ----------

As the company is in the development stage and has not yet earned any revenue,
it has provided a 100 per cent valuation allowance on the net deferred tax asset
as of November 30, 2008 and 2007.

11. COMMITMENTS

The company has commitments for leasing office premises in Toronto,Ontario,
Canada to November 30, 2010. The annual commitments, excluding proportionate
realty and maintenance costs and taxes are as follows:

        Year ended November 30,
        2009    $ 9,812
        2010    $ 9,812
                -------
                $19,624

12. SEGMENT DISCLOSURES

The Company, after reviewing its reporting systems, has determined that it has
one reportable segment and geographic segment. The Company's operations are all
related to the research and product development for its wireless electric
ammunition. All assets of the business are located in Canada.


                                       26
<PAGE>

SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
November 30, 2008 and 2007
(Amounts expressed in US Dollars)


13. SUBSEQUENT EVENTS

On December 17, 2008, the Company approved the reduction of the exercise price
of 2,940,000 outstanding options which had earlier been issued at prices ranging
from $1.00 to $3.60 to a new option price of $0.50 per share, with all other
terms of the original grant remaining the same. The Company will expense this
additional non-cash stock based compensation expense relating to this
modification for $ 114,688 in the first quarter of 2009.

On February 4, 2009 the Company's directors approved consulting agreements with
three of the Company's officers. The consulting agreements, which are effective
retroactive to January 1, 2009, provide that the officers will consult with the
Company in the areas of corporate operations and product development. The terms
of the consulting agreements are shown below. The consulting agreements
terminate on December 31, 2009.

                                                Monthly
                               Monthly         Automobile
        Name of Officer     Consulting Fee     Allowance
        ---------------     --------------     ----------

        Sheldon Kales          $10,000           $1,500
        Boaz Dor               $ 6,250           $1,000
        Greg Sullivan          $ 3,125           $1,000





                                       27
<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned,  thereunto
duly authorized on the 20 day of February 2009.

                                  SECURITY DEVICES INTERNATIONAL INC.


February 20, 2009                     By   /s/ Sheldon Kales
                                           ------------------------------------
                                           Sheldon Kales, President and Chief
                                           Executive Officer


February 27, 2009                     By   /s/ Rakesh Malhotra
                                           ------------------------------------
                                           Rakesh Malhotra, Principal Financial
                                           and Accounting Officer

     Pursuant to the requirements of the Securities Act of l934, this Report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.

                                     Title                    Date
                                     -----                    ----
/s/ Sheoldon Kales
-------------------------
Sheldon Kales                       Director             February 20, 2009


/s/ Boaz Dor
-------------------------
Boaz Dor                            Director             February 20, 2009


/s/ Gregory Sullivan
-------------------------
Gregory Sullivan                    Director             February 20, 2009


<PAGE>


                      SECURITY DEVICES INTERNATIONAL, INC.

                           ANNUAL REPORT ON FORM 10-K


                                    EXHIBITS


<PAGE>