SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB/A

(Amendment No. 2)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended July 31, 2007

Commission File Number: 000-13176

NON-INVASIVE MONITORING

SYSTEMS, INC.

(name of small business issuer as specified in its charter)

Florida	59-2007840
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1666 Kennedy Causeway Avenue, Suite 308, North Bay Village Florida 33141

(Address of principal executive offices) (Zip Code)

(305) 861-0075

(Company’s telephone number)

(Former name or former address, if changed since last report)

Securities Registered Under Section 12(b) of the Exchange Act:

None

Securities Registered Under Section 12(g) of the Exchange Act:

Common Stock, $0.01

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation SB contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10KSB or any amendment to this Form 10KSB. Yes ¨ No x

State issuer’s revenues for its most recent fiscal year: $310,314

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant held as of October 23, 2007, was approximately $29,524,729

Solely for purposes of the foregoing calculation, all of the registrant’s directors and officers are deemed to be affiliates.

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the registrant’s Common Stock, par value $.01 per share (the “Common Stock”), as of October 29, 2007, was 67,455,399.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ¨ No x

Transitional Small Business Disclosure Format: Yes ¨ No x

NON-INVASIVE MONITORING SYSTEMS, INC.

Report on Form 10-KSB/A

Amendment No. 2

For the Fiscal Year Ended July 31, 2007

TABLE OF CONTENTS

		Page
PART II.
Item 7.	Financial Statements.	4
Item 8A(T).	Controls and Procedures.	4
PART III.
Item 9.	Directors, Executive Officers, Promoters and Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act.	5
Item 10.	Executive Compensation.	7
Item 11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	9
Item 12.	Certain Relationships and Related Transactions and Director Independence.	11
Item 13.	Exhibits	13
Signatures		14

Forward-Looking Statements

This Report contains, in addition to historical information, forward-looking statements regarding Non-Invasive Monitoring Systems, Inc. (the “Company” or “NIMS”), which represent the Company’s expectations or beliefs including, but not limited to, statements concerning the Company’s operations, performance, financial condition, business strategies, and other information and that involve substantial risks and uncertainties. The Company’s actual results of operations, some of which are beyond the Company’s control, could differ materially. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Factors that could cause or contribute to such difference include, but are not limited to, history of operating losses and accumulated deficit; need for additional financing; dependence on future sales of the “Exer-Rest,” the home and clinic version of the AT-101 motion platform; competition; dependence on management; risks related to proprietary rights; government regulation; and other factors discussed herein and in the Company’s other filings with the Securities and Exchange Commission.

Explanatory Note

This Amendment No. 2 to the Annual Report on Form 10-K for the fiscal year ended July 31, 2007 of the Company is being filed to amend Item 7 (to correct the number of outstanding options in Note 10 thereof, to update certain information regarding our relationship with VivoMetrics in Note 11 thereof, and to add Note 14 to quantify the corrections to Note 10) and Item 8A(T) of Part II (in which we have reconsidered the effectiveness of our controls and procedures), Item 9 (in which we updated certain biographies and revised our disclosure concerning reporting under section 16(a) of the Exchange Act), Item 10 (in which we have added a previously omitted table regarding compensation and otherwise updated our discussion concerning compensation), Item 11 (in which we have corrected certain errors in our beneficial ownership table), Item 12 (in which we have added a discussion of director independence and updated certain related transactions) and Item 13 (in which we have added previously omitted exhibits) of Part III as set forth on the Form 10-K filed on October 29, 2007 (the “Original Filing”). The Original Filing was amended by Amendment No. 1 filed on November 2, 2007 (as amended, the “Amended Filing”).

2

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. 2 amends the aforementioned items in their entirety and contains new certifications pursuant to Rules 13a-14 and 15d-14 under the Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002. Other than as set forth above and the inclusion of new certifications pursuant to Rules 13a-14 and 15d-14 under the Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002, no other changes or amendments to the Amended Filing are being made.

This Amendment No. 2 contains only the sections and exhibits to the Amended Filing that are being amended, and those unaffected parts or exhibits are not included herein. This Amendment No. 2 continues to speak as of the date of the Original Filing and the Company has not updated the disclosure contained herein to reflect events that have occurred since the date of the Original Filing.  Accordingly, this Amendment No. 2 should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission, and is subject to updating and supplementing as provided in the periodic reports that the Company has filed and will file after the date of the Original Filing with the Securities and Exchange Commission.

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PART II

ITEM 7. FINANCIAL STATEMENTS.

The financial statements required by this Item, the accompanying notes thereto and the reports of independent accountants are included as part of this Form 10-KSB/A immediately following the signature page, beginning at page F-1.

ITEM8A(T). CONTROLS AND PROCEDURES.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of July 31, 2007 were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. This was based on the following;

In reviewing our 10-KSB after its filing, it was determined that certain information required to be included in the Form 10-KSB was omitted or in error including disclosure concerning reporting under Section 16(a) of the Exchange Act, certain missing information regarding compensation, some errors in our beneficial ownership table, and certain missing exhibits.

In reviewing the financial statements for the quarter ended January 31, 2008, we uncovered an error relating to the number of outstanding options as of July 31, 2006 and July 31, 2007 as reported in our reports on Form 10-KSB for the periods ended as of such dates.

The net effect of the error is that there were 247,001 additional options outstanding as of July 31, 2006 and July 31, 2007, than were disclosed in Footnote 10 of the Annual Report on Form 10-KSB for the periods ended July 31, 2006 and July 31, 2007, respectively. These options had been reported in earlier SEC filings but erroneously had been left off current lists of outstanding options. The error has no impact on the financial position, results of operations, or cash flows of the Company as of and for the years ended July 31, 2007 and 2006.

Subsequently, we also discovered an error in the Form 10-QSB for the quarter ended October 31, 2007 relating to the amortization of the amount of stock based compensation expense for options granted in October 2007. The net effect of this was to increase the operating expenses and net loss by $108,257 and thus the net loss increased to $329,813 for the quarter ended October 31, 2007.

As of the date of this Amendment we have adopted more stringent procedures and controls to assure outstanding options will be properly reported in the future. These include instituting and maintaining a subsidiary ledger that will be balanced at each month end and referenced to the minutes of the Board giving authorization for the options. In addition we have implemented certain more stringent review of our quarterly and annual reports to assure compliance with disclosure requirements, including the use of outside professionals to assist us with compliance.

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PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGEACT.

The following table sets forth the name, age, and position of each executive officer and director who has served during the fiscal year ended July 31, 2007.

Name	Age	Position
Marvin A. Sackner, M.D.	75	Chairman of the Board
Taffy Gould	65	Director and Vice Chairman of the Board
Morton J. Robinson, M.D.	75	Director and Secretary
Gerard Kaiser, M.D.	75	Director
Leila Kight	61	Director
John G. Clawson	79	Director
Gary W. Macleod	44	Director and Chief Executive Officer
Gary Wetstein	70	Senior Vice President and Chief Financial Officer

Our Articles of Incorporation provide that we are permitted up to eight directors consisting of two directors in Class One, two directors in Class Two, and four directors in Class Three. Class One Directors were elected in 2002 to serve initially for two years and for periods of six years. Gerard Kaiser, M.D. was elected as a Class One Director. Class Two Directors were elected in 2002 to serve initially for four years and then for periods of six years. Leila Kight and John G. Clawson were elected in 2002 as Class Two Directors. Class Three Directors were elected in 2002 to serve initially for six years and then for periods of six years. Marvin A. Sackner, M.D., Taffy Gould, and Morton J. Robinson, M.D. were elected as Class Three Directors.

Except as provided below, all of our Directors currently hold their offices until the next annual meeting of the Company’s shareholders or until their successors have been duly elected and qualified or until their earlier resignation, removal from office or death. Class Three Directors hold office no later than May 7, 2008, or until their successors have been duly elected and qualified.

The following is a brief description of the business experience of our executive officers, directors and significant employees:

MARVIN A. SACKNER, M.D. was elected as our Chairman of the Board, Chief Executive Officer and Director in November 1989 and has remained as Chairman of the Board and Director to the present time. He resigned as CEO in 2002, but has remained an employee through the date hereof. Dr. Sackner co-founded a predecessor to the Registrant Respitrace Corporation in 1977 and was the Chairman of its Board from 1981 until October 1989. From 1974 until October 1991, Dr. Sackner was the Director of Medical Services at Mount Sinai in Miami Beach, Florida. From 1973-1996, he served as Professor of Medicine, University of Miami at Mount Sinai. Since 2004, he has been Voluntary Professor of Medicine, Leonard Miller Medical School of University of Miami. From 1979 to 1980, Dr. Sackner was the President of the American Thoracic Society. Dr. Sackner was the Chairman of the Pulmonary Disease Subspecialty Examining Board of the American Board of Internal Medicine from 1977 to 1980. Town & Country Magazine selected him as one of the Best Doctors in America in 1979, 1984, and 1989. Good Housekeeping Magazine in 1991 selected him as one of the Best 400 Doctors in America. In 2007, he was awarded an Honorary Doctorate Degree for "outstanding work in the entire field of pulmonology and sleep disorders," by the University of Zurich (Switzerland). He holds 31 United States Patents. He has written 221 scientific papers and four books. With his Ruth, he founded the Sackner Archive of Concrete and Visual Poetry and they have been recognized in 1990, 1991, 1992, 2002, and 2007 as one of the top 100 American collectors by Art & Antiques magazine and in 2007 by Lifestyles magazine.

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TAFFY GOULD was elected a Director of the Company in December, 2000 and Vice Chairman of the Board of Directors in April, 2002. Since 1977 she has been the President of Housing Engineers of Florida, Inc., a Florida real estate management company. From December, 2000 to present she has been the managing member of GlobalTechnologyAgents.com, LLC, a Florida limited liability company which advised technology companies and end-users in the business, academic, and medical spheres, worldwide. Since December, 2002 she has served as the managing member of e-Medical Education, LLC, a company founded in 2002 that creates and delivers online medical education and administers the Oceania University of Medicine.

MORTON J. ROBINSON, M.D. was elected a Director of the Company in November 1989. Dr. Robinson was appointed Secretary of the Board in August 2001. From 1987 until December 2004, Dr. Robinson served as Director and Chairman of the Department of Pathology and Laboratory Medicine at Mount Sinai Medical Center, Miami Beach and Dr. Robinson has served as Chairman Emeritus of that department since January 2005.

GERARD KAISER, M.D. was elected a Director of the Company in November 1989. Since 1971, he has been affiliated with the University of Miami School of Medicine. Dr. Kaiser has served as Executive Vice President, Chief Medical Officer of the Jackson Health System Public Health Trust in Miami Florida since 1989.

LEILA KIGHT was elected as a director in May, 2002. From January 1, 1975, Ms. Kight was the owner and chief executive officer of Washington Researchers, Ltd, a District of Columbia corporation. Since January, 1999, Ms. Kight has been semi-retired.

JOHN G. CLAWSON was elected as a director in May, 2002. From 1975 to 1993, Mr. Clawson served as Chief Executive Officer of Hill Rom, Inc. From 1994 to the date hereof, Mr. Clawson has served as the Chairman of the Boards of Endocyte, Inc., a privately held biotechnology company, Magic Tilt, Inc. a boat trailer manufacturing company and Miss Eaton, Inc. a furniture manufacturer.

GARY W. MACLEOD was elected Chief Executive Officer on August 22, 2005. Mr. Macleod was President and Chief Executive Officer of V-Mobile, Inc. from 2003 to 2005. From 2000 to 2003, Mr. Macleod was President and Chief Executive Officer of Unplugin, Inc. Mr. Macleod served as President and Chief Executive Officer of Courtroom Technologies, Inc. from 1991 to 2000. Mr. Macleod is a business graduate of Franklin Pierce College in New Hampshire, graduating in 1985.

GARY WETSTEIN was appointed our Senior Vice President and Chief Financial Officer in January 2007. From December 2003 to December 2006, Mr. Wetstein consulted with small to medium sized businesses. From January 1999 to November, 2003, Mr. Wetstein was the Chief Executive Officer of a human resources outsourcing company. For several years prior to 1998, Mr. Wetstein was the Chairman of BDO Seidman, an accounting firm. Mr. Wetstein serves on the Advisory Board of the Bank of Auburn Hills, a subsidiary of Capital Bancorp Limited.

We have an Executive Committee consisting of Dr. Sackner, Dr. Robinson and Ms. Gould. The Executive Committee acts as the Audit and Legal Committee as well as the Compensation and Stock Option Review Committee. There are no other committees of the Board of Directors.

One of the principal functions of the Executive Committee acting as our Audit and Legal Committee is to recommend the annual appointment of the Company’s independent auditors, to consult and review with the Company’s auditors concerning the scope of the audit and the results of their examination, to review and approve any material accounting policy changes affecting our operating results and to review our internal control procedures. The Board of Directors has determined that we do not have an audit committee financial expert on our Executive Committee as defined by the Securities Exchange Commission in Item 407 of Regulation S-B. The Board believes a financial expert is not necessary at this time because of the limited scope of the Company’s operations. As the Company’s organizational structure and commercial and financial operations become more complex, the Board will reconsider whether to have a financial expert on the Executive Committee or the Audit Committee, at such time as one is formed.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past five years, none of the following occurred with respect to any of our directors, executive officers or control persons: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodities Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (“Section 16(a)”, requires our executive officers, directors and persons who own more than 10% of a registered class of our equity securities (the “Section 16(a) Filers”) to file certain reports with the SEC regarding ownership of, and transactions in, our securities. Such Section 16(a) Filers are also required by the SEC to furnish us with all Section 16(a) forms that they file.

Section 16(a) requires the Section16(a) Filers to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Form 3 (Initial Statement of Beneficial Ownership), Form 4 (Statement of Changes of Beneficial Ownership of Securities) and Form 5 (Annual Statement of Beneficial Ownership of Securities). Except as otherwise set forth herein, based solely on review of the copies of such forms furnished to us, written representations that no reports were required, or with respect to transactions known to the Company occurring in such fiscal year, the following persons filed late or did not file the required Forms: Marvin Sackner, John Clawson, Taffy Gould, Leila Kight and Morton Robinson did not file Forms 4 relating to their exercise of options pursuant to the Offer described in Item 12 under “Certain Relationships And Related Transactions and Director Independence.” Gary Macleod did not file a Form 3 and failed to file a Form 4 for two subsequent transactions. Mr. Macleod filed a Form 5 in lieu of the missed Form 3 and Form 4 filings.

Code of Ethics

We have adopted a code of business conduct and ethics that applies to its directors, officers, and employees, including its principal executive officers, principal financial officer, principal accounting officer, controller or persons performing similar functions. The Code of Business Conduct is filed as Exhibit 14.1 to this Annual Report on Form 10-KSB for July 31, 2007.

ITEM 10. EXECUTIVE COMPENSATION.

Executive Compensation

The following tables set forth certain summary information concerning the compensation paid or accrued during our fiscal year ended July 31, 2007 to our principal executive officer and Marvin Sackner, the only employees who received compensation in excess of $100,000 during such period:

SUMMARY COMPENSATION TABLE

Name and Principal Position (a)	Year (b)		Salary ($) (c)		Bonus ($) (d)		Option Awards ($) (f)			All Other Compensation ($) (i)			Total ($) (j)
Gary Macleod – CEO		2007	$	117,692		—		92,024	(1)	$	13,488	(2)	$	223,204
Marvin Sackner		2007	$	52,000		—		—		$	148,750	(3)	$	200,750

(1) Represents the amount expensed for the vesting of Mr. Macleod’s options as reported on our financial statements.

(2) Represents health insurance premiums paid for Mr. Macleod and not available to other employees.

(3) Represents compensation expense recorded for issuance of 212,500 bonus shares, including bonus shares issued for exercise of options acquired upon investment, but excludes 10,666 bonus shares upon exercise of options issued for loan guarantees.

There were no grants of stock options to the named executive officers during the fiscal year ended July 31, 2007.

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The following table sets forth the outstanding equity awards at July 31, 2007 to Gary Macleod, our principal executive officer. Dr. Sackner had no outstanding options.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date
(a)	(b)		(c)		(e)		(f)
Gary Macleod, CEO		1,000,000		500,000	$	0.30		November 11, 2010

Employment Agreement and Termination Benefits.

Gary Macleod is a party with us to an employment agreement dated November 11, 2005 for a three year term. His salary was initially $90,000 and he is entitled to a salary increase of 40% of the salary then in effect upon each round of third party financing that exceeds $1,000,000. He is eligible to receive an annual bonus of a minimum of 25% of base salary at the discretion of the Board upon achievement of goals determined by the Board. He did not receive a bonus for fiscal 2007. He is eligible for benefits provided by us to peer executives and for additional payments for life insurance and disability insurance. Upon commencement of employment he received options to purchase 1,500,000 shares of stock at an exercise price of $0.30 vesting as to 25% of the underlying shares on the first anniversary of grant and in 36 equal monthly installments thereafter as long as he is employed by us. Such options have a cashless exercise feature and expire five years after issuance. He has agreed that for one year after employment not to participate in a business which provides products or services directly competitive with us. If Mr. Macleod is terminated by us without cause (as defined) or he terminates his employment for Good Reason he is entitled to a lump sum payment of one year’s salary and pro-rata portion of bonus; pay for continued company health benefits to which he may have been previously entitled, for himself and dependents for 12 months he was and any unvested stock options vest in full. To the extent these payments are subject to excise tax as “parachute payments” we must also pay a gross up sufficient to compensate the executive for payment of this tax.

Marvin Sackner is not covered by an employment agreement.

Compensation of Directors

The following table sets forth director compensation for the fiscal year ended July 31, 2007.

DIRECTOR COMPENSATION (1)(2)

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(3)		Total ($)
(a)	(b)		(c)		(h)
Taffy Gould		—	$	55,534	$	55,534
Gerard Kaiser, MD		—	$	13,300	$	13,300
Morton J. Robinson MD		—	$	40,250	$	40,250
Leila Kight		—		—		—
John Clawson		—	$	8,750	$	8,750

(1) Compensation of Gary Macleod and Marvin Sackner is reported in the Summary Compensation table.

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(2) At July 31, 2007, Taffy Gould, Gerard Kaiser, Morton Robinson, Leila Kight and John Clawson, held options for 270,332, 65,000, 0, 98,332 and 70,000 shares, respectively, issued to them for services to us, except that in the case of Ms. Kight the total includes 53,332 options for guaranteeing our loans.

(3) Taffy Gould, Gerard Kaiser, Morton Robinson and John Clawson received “bonus” shares of our common stock for exercising stock options pursuant to an offer extended to warrantholders and optionholders to induce them to exercise options and warrants. Compensation expense for Taffy Gould includes 79,334 bonus shares, including 50,000 bonus shares issued for exercising options acquired in a previous investment, but excludes 10,666 bonus shares for exercising options issued in connection with loan guarantees. Compensation expense for Gerard Kaiser includes 19,000 bonus shares. Compensation expense for Morton Robinson includes 57,500 bonus shares, including 12,500 bonus shares issued for exercising options acquired in a previous investment, but excludes 10,666 bonus shares for exercising options issued in connection with loan guarantees. Compensation expense for John Clawson includes 12,500 bonus shares acquired from exercising options acquired in a previous investment.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners

The following table sets forth certain information regarding beneficial ownership of the common stock as of July 31, 2007, by (i) each person who is known by the Company to own beneficially more than 5% of the any classes of outstanding Stock, (ii) each director of the Company, (iii) each of the Chief Executive Officers and the four (4) most highly compensated executive officers who earned in excess of $100,000 for all services in all capacities (collectively, the “Named Executive Officers”) and (iv) all directors and executive officers of the Company as a group.

The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. We believe that each individual or entity named has sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted.

Name of Directors and Officers Names and Addresses of 5% Beneficial Owners	No. of Shares of Common Stock Beneficially Owned (1)			Percentage of Beneficial Ownership (2)			No. of Shares of Series C Convertible Preferred Stock Beneficially Owned			Percentage of Class (3)
Marvin A. Sackner, M.D., Director1666 Kennedy Causeway, Suite 308 North Bay Village Florida 32341		13,763,842	(4)		20.2	%		36,855.98	(4)		59.4	%
Taffy Gould, Director		1,476,998	(5)		2.2	%		-0-			*
Morton J. Robinson, M.D., Director		1,020,320	(6)		1.5	%		1,073.19	(6)		1.7	%
Gerard Kaiser, M.D., Director		323,541	(7)		*			75	(7)		*
Leila Kight, Director		1,098,332	(8)		1.6	%		-0-			*
John G. Clawson, Director		395,000	(9)		*			-0-			*
Gary Macleod, CEO and Director		1,462,500	(10)		2.1	%		-0-			*
All executive officers and directors as a group (7 persons)		19,540,533	(11)		28.0	%		38,004.17			61.2	%
Frost Gamma Investments Trust(12)4400 Biscayne BlvdMiami, FL 33137		11,413,125	(13)		17.0	%		525			*

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*	Less than 1%
(1)	A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon exercise of option and warrants. Each beneficial owner’s percentage ownership is determined by assuming that option and warrants that are held by such person (but not those held by any other person) and that are exercisable within 60 days from the date hereof have been exercised.
(2)	Based on 67,293,734 shares of Common Stock, issued and outstanding as July 31, 2007.
(3)	Based on 62,048 shares of Series C Convertible Preferred Stock issued and outstanding, as of July 31, 2007. Each share of Series C convertible Preferred Stock converts into 25 shares of Common Stock upon payment of a $4.20 per share of common stock conversion premium,
(4)	Common Stock holdings include 324,096 shares of Common Stock held by Ruth Sackner, Dr. Sackner’s spouse, 895,774 shares of Common Stock which may be acquired by Dr. Sackner upon conversion of 35,830.98 shares of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock and 25,625 shares of Common Stock which may be acquired by Ruth Sackner upon conversion of 1,025 shares of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock. Preferred Stock holdings include 1,025 shares of Series C Convertible Preferred Stock held by Ruth Sackner.
(5)	Includes options to purchase 270,332 shares of Common Stock. Includes securities held by the Taffy Gould Revocable Trust of which Ms. Gould is trustee, sole beneficiary and over which she has power to revoke. Does not include shares of Common Stock and options to purchase Common Stock held by family members.
(6)	Includes 186,159 shares held jointly with spouse and 26,250 shares owned by spouse. Includes 26,829 shares of Common Stock which may be acquired upon conversion of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock.
(7)	Includes shares of Common Stock held by Dr. Kaiser’s spouse, options to purchase 65,000 shares of Common Stock, and 1,875 shares of Common Stock which may be acquired upon conversion of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock.
(8)	Includes securities held by Leila Kight’s and includes options to purchase 98,332 shares of Common Stock
(9)	Includes options to purchase 70,000 Shares of Common Stock and 250,000 shares of Common Stock held in a trust established by Mr. Clawson for his children, of which he is neither the trustee nor a beneficiary.
(10)	Includes 400,000 shares of Common Stock held by Mr. Macleod’s spouse and includes options to purchase 1,062,500 shares of Common Stock exercisable within 60 days of July 31, 2007.
(11)	Includes 950,103 shares of Common Stock which may be acquired upon conversion of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock and options to purchase 1,566,164 shares of Common Stock exercisable within 60 days of July 31, 2007.
(12)	Frost Gamma Investments Trust. Frost Gamma Investments Trust is controlled by Dr. Phillip Frost
(13)	Includes 13,125 shares of Common Stock that may be acquired upon conversion of Series C Convertible Preferred Stock upon payment of a conversion premium of $4.20 per share of common stock.

Securities Authorized for Issuance under Equity Compensation Plans

The following table includes information as of December 31, 2007 relating to our 2000 Stock Option Plan and for stock equity compensation plans not approved by our security holders. The table provides the number of securities to be issued upon the exercise of outstanding options under such plans, the weighted-average exercise price of outstanding options and the number of securities remaining available for future issuance under such equity compensation plans:

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Equity Compensation Plan Information

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans  (Excluding Securities Reflected in Column (a))
	(a)		(b)		(c)
Stock Option Equity Compensation Plans Approved by Security Holders		50,000	$	0.500		1,900,000
Stock Option Equity Compensation Plans Not Approved by Security Holders		2,836,161	$	0.374		N/A
Total		2,886,161	$	0.376		1,900,000

See Note 10 to our Financial Statements for a description of the 2000 Stock Option Plan. We have in the past issued options outside of the 2000 Stock Option Plan. These options generally provide for transfer and cashless exercise. Options issued for services as director or employee may vest immediately or over time and generally expire anywhere from five to ten years after issuance. At July 31, 2007, only Mr. Macleod held unvested options. See “Executive Compensation-Employment Agreement and Termination Benefits” for a description of Mr. Macleod’s options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Applying American Stock Exchange independence standards, we believe that all of our directors except Gary Macleod and Marvin Sackner are independent.

Dr. Sackner, a 10% holder of our common stock and a Director also leases to us office space used by us in North Bay Village Florida. Under an arrangement with us, we reimburse Dr. Sackner for the cost of the space on a month to month basis. The amount reimbursed was $20,369 and $19,649 for the years ended July 31, 2007 and 2006 respectively.

Pursuant to an Agreement Regarding Assignment of Patents and Related Intellectual Property dated August 14, 2000, we assigned all of our rights title and interest in certain patents and intellectual property, as well as a non-exclusive, worldwide license under these items to VivoMetrics, Inc. (“VivoMetrics”) for a royalty of 3% of VivoMetrics’ gross revenues from sales of certain products for so long as VivoMetrics sells such products . Pursuant to a related license agreement with VivoMetrics, VivoMetrics granted us the non-exclusive, worldwide right and license to use certain patents and software. We hold an approximately 2% undiluted interest in VivoMetrics. Dr. Sackner’s son-in-law is the Chief Operating Officer of VivoMetrics. Dr. Sackner served as a member of the Scientific Advisory Board of VivoMetrics until 2004, and is currently a less than 1% shareholder of VivoMetrics. In fiscal 2006 and 2007 we recorded $89,365 and $124,355 of royalties from VivoMetrics.

In fiscal 2007, Gary Macleod, our Chief Executive Officer, sold to us office furniture and equipment valued at $11,650.

Directors Marvin Sackner, Taffy Gould, Morton Robinson and Leila Kight were among the guarantors of a loan from Gibraltar Bank to us. Taffy Gould’s sister and son-in-law also guaranteed said loan. For such guarantee each of the guarantors received options to purchase 13,333 shares for each of 2003, 2004, 2005 and 2006 (total of 53,333 each) at an exercise price of $0.15.

In the fiscal year ended July 31, 2007, pursuant to an to an offer (the “Offer”) by us to certain optionholders and warrantholders to grant exercising optionholders and warrantholders upon exercise an additional number of shares of Common Stock equal to 20% of the shares received upon exercise (“Bonus Shares”), several directors exercised options and warrants and received Bonus Shares. The Bonus Shares were valued at $0.70.

11

Pursuant to the Offer, Directors Marvin Sackner, Taffy Gould, Morton Robinson, Gerard Kaiser and John Clawson exercised options to purchase 1,115,832, 450,000, 340,832, 95,000 and 62,500 shares and received 223,166, 90,000, 68,166, 19,000 and 12,500 Bonus Shares respectively. Aggregate consideration paid by Marvin Sackner, Taffy Gould, Morton Robinson, Gerard Kaiser and John Clawson for such exercise was $255,500, $155,834, $103,500, $33,500 and $25,000, respectively. Dr. Sackner’s consideration included cancellation of notes in the aggregate principal amounts of $165,000.

Also pursuant to the Offer, Dr. Sackner’s wife exercised options to purchase 62,500 shares and received 12,500 Bonus Shares, Dr. Sackner’s brother exercised options to purchase 50,000 shares and received 10,000 Bonus Shares, Taffy Gould’s mother exercised options to purchase 125,000 shares and received 25,000 Bonus Shares, Taffy Gould’s sister exercised options to purchase 26,670 shares and received 5,334 Bonus Shares, Taffy Gould’s son exercised options to purchase 62,500 shares and received 12,500 Bonus Shares, and John Clawson’s son exercised options to purchase 62,500 shares and received 12,500 Bonus Shares.

Also as part of the Offer, Gary Macleod’s spouse exercised warrants to purchase 125,000 shares and received 25,000 Bonus Shares, and the Frost Gamma Investments Trust (the “Trust”), a 10% beneficial owner, exercised warrants to purchase 3,250,000 shares and received 650,000 Bonus Shares. Mrs. Macleod and the Trust acquired the warrants, which were exercised at a price of $0.15 per share, in August 2005 in connection with the purchase of 250,000 and 7,500,000 shares of common stock, respectively, for aggregate consideration of $12,500 and $350,000, respectively. The Trust’s consideration consisted of the conversion of two promissory notes and cash from its working capital.

12

ITEM 13. EXHIBITS.

Exhibit No.	Description of Exhibits
3.1	Articles of Incorporation, as amended (Incorporated by Reference from Exhibit 3.1 to the Form 8-K filed on April 8, 2008, includes amendment of April 2, 2008, which was not in effect at July 31, 2007)
3.2	By-Laws (Incorporated by reference from Exhibit 3(b) to the Company’s Registration Statement on Form S-1 Filed May 15, 1999 (File No. 33-14451))
10.1	* License Agreement dated as of May 22, 1996 between the Company and SensorMedics Corporation
10.2	* Letter of Agreement dated April 21, 1999 between the Company and SensorMedics Corporation
10.3	* Agreement Regarding Assignment of Patents and Intellectual Property dated August 14, 2000 between the Company and LifeShirt.com, Inc.
10.4	* Amendment to Agreement Regarding Assignment of Patents and Intellectual Property dated December 23, 2000 between the Company and LifeShirt.com, Inc.
10.5	Form of Stock Purchase Agreement dated as of August 1, 2005 between the Company and various Investors (Incorporated By Reference to Exhibit 4.1 to Form 8-K filed on August 18, 2005)
10.6	Product Development and Supply Agreement executed September 4, 2007 between Sing Lin Technologies Ltd and the Company (Incorporated By Reference to Exhibit 10.1 to the Form 10-QSB/A Filed on April 22, 2008 (Confidentiality Treatment has Been Requested for Portions of this Exhibit)
10.7	2000 Stock Option Plan (Incorporated by Reference to the Company’s Information Statement on Schedule 14C filed April 5, 2001)(SEC Accession No. 0000950170-01-000484)
10.8	Employment Agreement dated November 10, 2005 between the Registrant and Gary Macleod.(Incorporated By Reference to Exhibit 10.2 to the Form 8-K filed March 4, 2008).
14.1	Code of Ethics (Incorporated By reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended July 31, 2005 and incorporated herein by reference)
21	* Subsidiaries of the Company
31.1	* Certification of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
31.2	* Certification of Periodic Report by Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
32.1	* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed Herewith

13

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NON-INVASIVE MONITORING SYSTEMS, INC.
Dated: April 22, 2008	By:	/s/ Marvin Sackner
		Marvin Sackner
		Chief Executive Officer
Dated: April 22, 2008	By:	/s/ Gary Wetstein
		Gary Wetstein
		Chief Financial Officer and Senior Vice President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Marvin A. Sackner	Chairman of the Board, Director and Chief Executive	April 22, 2008
MARVIN A. SACKNER, M.D.	Officer (Principal Executive Officer)
/s/ Taffy Gould	Vice Chairman of the Board and Director	April 22, 2008
TAFFY GOULD
/s/ Morton J. Robinson	Secretary and Director	April 22, 2008
MORTON J. ROBINSON, M.D.
/s/ Gerard Kaiser	Director	April 22, 2008
GERARD KAISER, M.D.
/s/ John G. Clawson	Director	April 22, 2008
JOHN G. CLAWSON
/s/ Leila Kight	Director	April 22, 2008
LEILA KIGHT

14

NON-INVASIVE MONITORING SYSTEMS, INC.

JULY 31, 2007

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Balance Sheet at July 31, 2007	F-3
Statements of Operations for the Years Ended July 31, 2007 and 2006	F-4
Statements of Changes in Shareholders' Equity for the Years Ended July 31, 2007 and 2006	F-5
Statements of Cash Flows for the Years Ended July 31, 2007 and 2006	F-6
Notes to Financial Statements	F-7
Exhibit index

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Non-Invasive Monitoring Systems, Inc.

We have audited the accompanying balance sheet of Non-Invasive Monitoring Systems, Inc. as of July 31, 2007 and the related statements of operations, changes in shareholders’ equity and cash flows for each of the years in the two year period ended July 31, 2007. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Non-Invasive Monitoring Systems, Inc. as of July 31, 2007 and the results of its operations and its cash flows for each of the years in the two year period ended July 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the Note 1 to the financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 2, effective August 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R) “Share-Based Payment.”

/s/ Eisner, LLP

Eisner, LLP

New York, New York

October 29, 2007 (April 18, 2008 with respect to Note 10, information regarding VivoMetrics in Note 11, and Note 14)

F-2

NON-INVASIVE MONITORING SYSTEMS, INC.

BALANCE SHEET

July 31, 2007

ASSETS
Current assets
Cash	$	1,156,337
Restricted cash		400,000
Royalties receivable		48,756
Prepaid expenses, deposits, and other current assets		29,803
Total current assets		1,634,896
Furniture and equipment, net		19,624
Other assets, net		401
Total assets	$	1,654,921
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Note payable - bank	$	500,000
Note payable - other		20,600
Accounts payable and accrued expenses		217,677
Deferred warranty income		3,900
Total current liabilities		742,177
Deferred warranty income		2,475
Total liabilities		744,652
Shareholders' equity
Series B Preferred Stock, par value $1.00 per share;
100 shares authorized, issued and outstanding		100
Series C Preferred Stock, par value $1.00 per share;
62,048 shares authorized, issued and outstanding		62,048
Common Stock, par value $0 .01 per share; 100,000,000 shares authorized;
67,293,734 shares issued and outstanding		672,937
Additional paid in capital		16,374,180
Accumulated deficit		(16,198,996	)
Total shareholders' equity		910,269
Total liabilities and shareholders' equity	$	1,654,921

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

F-3

NON-INVASIVE MONITORING SYSTEMS, INC.

STATEMENTS OF OPERATIONS

Years ended July 31, 2007 and 2006

	2007			2006
Revenues
Product sales, net	$	40,949		$	5,151
Royalties		265,080			223,127
Research, consulting and warranty		4,285			112,319
Total revenues		310,314			340,597
Operating expenses
Cost of revenues		10,490			71,839
Selling, general and administrative		1,389,506			601,705
Research and development		282,304			212,472
Total operating expenses		1,682,300			886,016
Operating loss	$	(1,371,986	)	$	(545,419	)
Interest income (expense), net		13,294			(67,641	)
Net loss	$	(1,358,692	)	$	(613,060	)
Weighted average number of common
shares outstanding - Basic and diluted		64,093,238			51,295,259
Basic and diluted loss per common share	$	(0.02	)	$	(0.01	)

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

F-4

NON-INVASIVE MONITORING SYSTEMS, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Years ended July 31, 2007 and 2006

	Preferred Stock												Additional
	Series B				Series C				Common Stock				Paid-in-		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance at July 31, 2005		100	$	100		62,048	$	62,048		31,221,971	$	312,220	$	12,921,955	$	(14,227,244	)	$	(930,921	)
Common stock issued for cash and converted bridge loans		-		-		-		-		21,000,000		210,000		782,500		-			992,500
Common stock issued for legal settlement		-		-		-		-		93,750		938		29,062		-			30,000
Options issued to bank debt guarantors		-		-		-		-		-		-		37,426		-			37,426
Net loss		-		-		-		-		-		-		-		(613,060	)		(613,060	)
Balance at July 31, 2006		100	$	100		62,048	$	62,048		52,315,721	$	523,158	$	13,770,943	$	(14,840,304	)	$	(484,055	)
Common stock issued for cash, converted stock holder loan and cashless options exercised		-		-		-		-		14,554,512		145,544		2,218,997		-			2,364,541
Fair market value for Bonus Shares issued to directors and guarantors		-		-		-		-		423,501		4,235		292,216		-			296,451
SFAS 123R Expense		-		-		-		-		-		-		92,024		-			92,024
Net loss		-		-		-		-		-		-		-		(1,358,692	)		(1,358,692	)
Balance at July 31, 2007		100	$	100		62,048	$	62,048		67,293,734	$	672,937	$	16,374,180	$	(16,198,996	)	$	910,269

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

F-5

NON-INVASIVE MONITORING SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

Years ended July 31, 2007 and 2006

	2007			2006
Operating Activities
Net loss	$	(1,358,692	)	$	(613,060	)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred warranty income		(3,900	)		(3,900	)
Depreciation and amortization		18,821			11,718
Stock based compensation expense		92,024			–
Fair value of bonus shares issued to directors and bank debt guarantors		296,451			–
Common stock issued for legal settlement		–			30,000
Options issued to bank debt guarantors		–			37,426
Provision for inventory obsolescence		–			26,225
Changes in operating assets and liabilities
Accounts and royalties receivable		(25,152	)		28,443
Inventories		10,490			–
Prepaid expenses and other assets		11,471			(9,686	)
Accounts payable and accrued expenses		10,072			93,063
Deferred research and consulting revenues		–			(5,000	)
Net cash used in operating activities		(948,415	)		(404,771	)
Investing Activities
Fixed asset purchases		(18,602	)		–
Restricted cash		(400,000	)		–
Net cash used in investing activities		(418,602	)		–
Financing activities
Net proceeds from issuance of common stock and exercise of options and warrants		2,199,541			892,500
Net proceeds from bank loan		500,000			–
Repayments of note payable		(580,563	)		(85,095	)
Net cash provided by financing activities		2,118,978			807,405
Net (decrease) increase in cash		751,961			402,634
Cash, beginning of year		404,376			1,742
Cash, end of year	$	1,156,337		$	404,376
Supplemental disclosure
Cash paid for income taxes	$	–		$	647
Cash paid for interest	$	63,723		$	38,878
Supplemental schedule of non-cash financing activities
Notes converted to common stock or used in option exercises	$	165,000		$	100,000
Insurance premiums financed by notes payable.	$	38,758		$	–

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

F-6

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization. Non-Invasive Monitoring Systems, Inc. (the “Company”), a Florida corporation, has licensed its rights to its computer-aided continuous monitoring devices to detect abnormal respiratory and cardiac events using sensors placed on the body’s surface to the SensorMedics Division of ViaSys (“SensorMedics”) and to LifeShirt.com, Inc. (now known as VivoMetrics, Inc.) (“VivoMetrics”). The Company also concentrated on developing, marketing and selling a motion platform, therapeutic vibrator device designated the AT-101. In addition, the Company performs consultative research of diagnostic monitoring devices. The Company is now concentrating on the “Exer-Rest,” a home and clinic version of its AT-101 and seeking FDA approval to market the “Exer-Rest” for sales in the United States.

Basis of Presentation. The Company’s financial statements have been prepared and presented on a basis assuming it will continue as a going concern. As reflected in the accompanying financial statements the Company had a net loss in the amount of $1,358,692 and $613,060 for the years ended July 31, 2007 and 2006 respectively, and has an accumulated deficit of $16,198,996 as of July 31, 2007. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will need to raise additional capital during fiscal year 2008. Additional debt or equity financing will be required for the Company to continue its business activities, which are currently focused on the development, marketing and production of the Exer-Rest. It is management’s intention to obtain the required additional capital needed to continue its business activities through new debt or equity financing, but there can be no assurance that it will be successful in this regard. The accompanying financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such items include input variables for stock based compensation. Actual results could differ from these estimates.

Inventories. Inventories are stated at lower of cost or market using the first-in, first-out method.

Furniture and Equipment. Furniture and equipment are stated at cost and depreciated using the straight-line method, over the five-year estimated useful life of the assets.

Long-lived Assets. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In performing the review for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the assets, an impairment loss is recognized as the difference between the fair value and the carrying amount of the asset. Management reviewed its long-lived assets and determined that no reduction should be recorded as of July 31, 2007 and 2006, respectively.

Income Taxes. The Company provides for income taxes in accordance with Statement of Financial Accounting Standard, No. 109, Accounting for Income Taxes, (“SFAS No. 109”) and related interpretations using an asset and liability based approach. Deferred income tax assets and liabilities are recorded to reflect the tax consequences in future years of temporary differences between the carrying amounts of assets and liabilities for financial statement and income tax purposes.

As of July 31, 2007 the Company had a net operating loss carryforward of approximately $14,800,000 available to offset future taxable income for federal and state income tax purposes. The net operating loss carryforwards may be subject to limitation due to change of ownership provisions under Section 382 of the Internal Revenue Code and similar state provisions.

F-7

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

SFAS No. 109 requires the Company to recognize income tax benefits for loss carryforwards that have not previously been recorded. The tax benefits recognized must be reduced by a valuation allowance if it is more likely than not that loss carryforwards will expire before the Company is able to realize their benefit, or that future deductibility is uncertain. For financial statement purposes, the deferred tax asset for loss carryforwards has been fully offset by a valuation allowance since it is uncertain whether any future benefit will be realized.

Revenue Recognition. Revenue from product sales is recognized when persuasive evidence of an arrangement exists, the goods are shipped and title has transferred, the price is fixed or determinable, and the collection of the sales proceeds is reasonably assured. The Company recognizes royalties as they are earned, based on reports from licensee(s). Research and consulting revenue and warranty income on extended AT-101 warranties outstanding are recognized over the term of the respective agreements.

Advertising Costs. The Company expenses all costs of advertising as incurred. There were no advertising costs incurred for the years ended July 31, 2007 and 2006.

Research and Development Costs. Research and development costs are expensed as incurred.

Warranties. The Company’s standard warranties are one-year on all products sold and are accrued based on management’s estimates and the history of warranty costs incurred. There were no warranty costs incurred during the fiscal years ended July 31, 2007 and 2006, respectively.

Earnings (Loss) Per Share. Basic net loss per common share is computed using the weighted average number of common shares outstanding during the year. Diluted net loss per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the year. No dilution resulted from outstanding securities during the years ended July 31, 2007 and 2006 due to the net losses incurred for such years:

	2007		2006
Stock Options		2,886,161		7,503,659
Warrants		325,000		9,500,000
Common stock issuable on conversion of Series C Preferred Stock		1,551,200		1,551,200

Fair Value of Financial Instruments. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2007. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include royalties receivable, notes payable, accounts payable and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand, or bear current interest rates.

Stock Based Compensation. Effective August 1, 2006 the Company adopted SFAS No. 123R, “Share Based Payment,” which requires public companies to measure the cost of employee, officer and director services received in exchange for stock-based awards at the fair value of the award of the date of grant. SFAS No. 123R supersedes the Company’s previous accounting under SFAS No. 123, “Accounting for Stock-Based Compensation,” which permitted the Company to account for such compensation under Accounting Principles Board Opinion No. 25. “Accounting for Stock Issued to Employees.” In accordance with APB No. 25 and related interpretations, no compensation cost had been recognized in connection with the issuance of stock options, as all options granted under the Company’s stock option plan had an exercise price equal to or greater than the market value of the underlying common stock on the date of the grant.

The Company applied the modified prospective transition method upon adoption of SFAS No. 123R. Under the modified prospective transition method, compensation cost is required to be recorded as earned for all unvested stock options outstanding at beginning of the first year of adoption of SFAS No. 123R based upon the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimated in accordance with the provisions of SFAS No. 123R. The Company’s financial statements as of and for the year ended July 31, 2007 reflect the impact of SFAS No. 123R but, in accordance with the modified prospective transition method, the Company’s financial statements for the prior periods have not been restated to reflect, and do not include, the impact of SFAS No. 123R.

F-8

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

For the year ended July 31, 2007, share-based compensation for options attributable to employees and officers was $92,024, and has been included in the Company’s 2007 statement of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of July 31, 2007 the Company had $122,700 of unrecognized compensation cost related to granted stock options that remained to be recognized over vesting periods. These costs are expected to be recognized over a weighted average period of 1.33 years.

If compensation expense had been determined based on the fair value at the date of the grant for awards under the stock option plan, consistent with the method described in SFAS No. 123, as amended, the Company’s net loss and basic diluted loss per common share, on a pro forma basis, would have been as follows:

	2006
Net loss as reported	$	(613,060	)
Add: Total stock based compensation included in reported net loss
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards		(153,375	)
Proforma net loss	$	(766,435	)
Net loss per share attributable to common stockholders
Basic & Diluted - as reported	$	(0.012	)
Basic & Diluted - pro forma	$	(0.015	)

Recent Accounting Pronouncements.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – An interpretation of FASB Statement No. 109,” or FIN 48, which clarifies the accounting and disclosure requirements for uncertainty in tax positions, as defined. The Company does not believe adoption will have a material effect on its financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements”, SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value. SFAS No. 157 is effective for the Company’s fiscal year beginning August 1, 2008. The Company is currently evaluating the impact of this standard on the financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 provides an option to report selected financial assets and financial liabilities using fair value. The standard establishes required presentation and disclosures to facilitate comparisons with companies that use different measurements for similar assets and liabilities. SFAS No. 159 is effective for the Company’s fiscal year beginning August 1, 2008, with early adoption allowed if SFAF No. 157 is also adopted. The Company is currently evaluating the impact of this standard on the financial statements.

3. ROYALTIES RECEIVABLE

The Company is a party to two licensing agreements and receives royalty income from the sale of its diagnostic monitoring hardware and software from SensorMedics and VivoMetrics (Note 11).

F-9

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

Royalty income from these licenses amounted to $265,080 and $223,127 for the years ended July 31, 2007 and 2006, respectively. Royalties from SensorMedics amounted to $140,725 for the year ended July 31, 2007 and $133,762 in 2006. Royalties from VivoMetrics amounted to $124,355 year ended July 31, 2007 and $89,365 in 2006. Royalties receivable at July 31, 2007 were $48,756.

Cost of sales includes cost of product sales, and costs of royalties, research and consulting and warranty income. A component of cost of sales for the year ended July 31, 2006, is a provision for inventory obsolescence in the amount of $26,225 related to the mark down of the Company AT-101 inventory.

4. FURNITURE AND EQUIPMENT, NET

Furniture and equipment, net of accumulated depreciation, consists of the following at July 31, 2007:

Computer equipment and software	$	27,825
Furniture, fixtures and office equipment		9,512
		37,337
Less accumulated depreciation		17,713
Furniture and equipment, net	$	19,624

Depreciation expense was $6,005 and $9,682 during the fiscal years ended July 31, 2007 and 2006, respectively.

5. OTHER ASSETS, NET

Other assets, net at July 31, 2007 consist of patents. Amortization expense was $12,816 and $2,036, during the fiscal years ended July 31, 2007 and 2006, respectively.

6. NOTES PAYABLE – RELATED PARTY

The Company refinanced its then existing bank debt in February 2007, at another bank by securing a $500,000 line of credit, which expires in February 2008. The debt is secured by certificates of deposit in the amount of $400,000, and bears interest at 1% per annum below prime rate.

Notes payable – other were issued to finance insurance premiums and are payable in ten monthly installments through December, 2007, with interest at 12.73 percent per annum.

At July 31, 2006, two demand notes payable to the Company’s Chairman of the Board and shareholder totaled $165,000. A $100,000 note bore interest at the prime rate plus 2% and a $65,000 note was non-interest bearing.  

The notes totaling $165,000 plus cash of $10,000 were used by the Chairman in exercising his options to purchase 562,500 common shares plus 112,500 bonus common shares in the October, 2006 Private Placement. (See Note 9).

7. DEFERRED EXTENDED WARRANTY INCOME

The Company has three extended warranties outstanding as of July 31, 2007 on prior sales of its AT -101. The Company amortizes the revenue from the sale of these extended warranties over the life of the agreements, which are generally three to four years. The Company recognized revenue in the amounts of $3,900 and $3,500, respectively for the years ended July 31, 2007 and 2006. Deferred warranty income totaled $6,375 as of July 31, 2007. Warranty costs were negligible for the years ended July 31, 2007 and 2006.

8. INCOME TAXES

At July 31, 2007 and 2006, the Company has available net operating loss carry forwards of approximately $14,800,000 and $13,600,000 respectively which expire in various years through 2027. The net operating loss carry forwards may be subject to limitation due to change of ownership provisions under section 382 of the Internal Revenue Code and similar state provisions.

F-10

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant component of the Company’s deferred income tax assets would result from the net operating losses and amounted to approximately $5,900,000 and $5,300,000 at July 31, 2007 and 2006, respectively.

A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full $5,900,000 valuation allowance at July 31, 2007 ($5,300,000 at July 31, 2006) was necessary. The increases in the valuation allowance for the years ended July 31, 2007 and 2006 was $600,000 and $300,000, respectively.

9. SHAREHOLDERS’ EQUITY

August, 2005 Equity Financing

Effective August 18, 2005 the Company closed on a financing transaction with a group of private investors for $1,000,000. The financing consisted of the sale of two components: (a) an aggregate of 21,000,000 shares of the Company’s common stock; and (b) Warrants to receive an aggregate of 9,500,000 shares of common stock, with an exercise price of $0.15 and an expiration date February 18, 2007.

The shares of the Company’s common stock underlying the securities sold in this transaction may be registered for resale on a registration statement to be filed by the Company if the investors holding at least 50% of the securities request such registration. That right expires when the common stock becomes eligible for resale pursuant to Rule 144(k) under the Securities Act of 1933. In addition, for a period of five years, the investors shall have unlimited “piggy-back” rights for the shares of common stock in the Company’s registration statements which permit the sale of securities to the public (excepting Form S-8).

The total financing of $1,000,000 included the conversion to common stock, of $100,000 bridge loans from shareholders outstanding as of July 31, 2005. One bridge loan in the amount of $50,000 was converted at $.05 per share and the other bridge loan for $50,000 was converted $.025 for a total of 3,000,000 shares.

October, 2006 Equity Financing

Effective October 16, 2006 the Company accepted $2,199,541 for the exercise of outstanding options and warrants held by Board members and private investors. In addition, the Chairman of the Board utilized outstanding notes totaling $165,000 to purchase common stock. As a result of the exercise, 14,616,005 shares of the Company’s common stock, 0.01 par value (“Common Stock”) were issued to the exercising optionholders and warrantholders.

The Options and warrants were issued pursuant to an offer by the Company to certain optionholders and warrantholders to grant exercising optionholders and warrantholders upon exercise an additional number of common stock equal to 20% of the shares received upon exercise (“Bonus Shares”).

Options to purchase 3,105,004 shares of common stock were exercised at exercise prices ranging from $0.145 to $0.50 and warrants to purchase 9,175,000 shares of common stock were exercised at an exercise price of $0.15. An additional 601,001 Bonus Shares were issued to exercising optionholders and an additional 1,835,000 Bonus Shares were issued to exercising warrantholders.

The exercised warrants were issued pursuant to Stock Purchase Agreement dated August 1, 2005 between the Company and various private investors. The exercised options were issued to directors and others in connection with, among other things, a private placement in 2002, options to Directors in lieu of salary and certain guarantors of the Company’s debt. The Company recorded $296,451 of compensation and interest expense for the year ended July 31, 2007 for the fair value of bonus shares issued to directors and guarantors of the Company’s indebtednesss.

F-11

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

Directors including a director holding more than 10% of the outstanding common stock a (“10% Holder”) exercised in the aggregate, options to purchase 2,189,164 shares of common stock and received 437,833 Bonus Shares for payment of $592,084. A 10% Holder exercised warrants to purchase 3,250,000 shares of common stock and received 650,000 Bonus Shares for payment of $487,500. Warrants to purchase 125,000 shares that may be deemed to be beneficially owned by an officer of the Company were exercised for the payment of $18,750 and 25,000 Bonus Shares were issued on account of such exercise.

Pursuant to the offer, the company also accepted an additional $25,000 from an exercising optionholder for the exercise of options to purchase 62,500 shares of Common Stock and the issuance of 12,500 Bonus Shares.

During the third quarter ended April 30, 2007, the Company also accepted an additional $25,000 from an exercising optionholder, for the exercise options to purchase 62,500 shares of common Stock.

A former employee of the Company exercised 50,000 options in a cashless transaction and received 44,057 shares of the Company’s common stock during 2007.

10. STOCK OPTIONS

Stock Options

The following table summarizes the transactions of the Company’s stock options for the two-year period ended July 31, 2007:

	Number of Shares			Weighted Average Exercise Price
Options outstanding, July 31, 2005		6, 371,161		$	0.411
Options granted		1,593,331			0.291
Options exercised		-			-
Options forfeited		(460,833	)		0.335
Options outstanding, July 31, 2006		7,503,659			0.390
Options granted		-			-
Options exercised		(3,217,504	)		0.399
Options forfeited		(1,399,994	)		0.400
Options outstanding, July 31, 2007		2,886,161		$	0.376

The following table sets forth the range of exercise prices, number of shares, weighted average exercise price, and remaining contractual lives by groups of similar price as of July 31, 2007:

Options Outstanding					Weighted		Options Exercisable
Range of Exercise Prices	Number of Shares		Weighted Average Exercise Price		Average Contractual Life (years)		Number of Shares		Weighted Average Price
14.5¢ - 20¢		326,996	$	0.174		3.250		326,996	$	0.174
30¢ - 40¢		1,537,500	$	0.302		2.266		1,037,500	$	0.304
50¢ - 75¢		1,021,665	$	0.551		3.828		1,021,665	$	0.551
Total		2,886,161	$	0.376		3.504		2,386,161	$	0.392

F-12

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

The Company estimates the fair value of stock options using a Black-Scholes valuation model consistent with provisions of SFAS No. 123(R), Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 107 and the Company’s prior period pro forma disclosures of net loss, including the fair value of stock-based compensation. Key input assumptions used to estimate the fair value of stock options include the expected term until exercise of the option, expected volatility of the Company’s stock, the risk free interest rate, option forfeiture rates and dividends, if any. The expected term of the option is based on a historical weighted average of exercised options. The expected volatility is derived from historical volatility of the Company’s stock on the U.S. Over the Counter market for a period that matches the expected term of the option. The risk-free interest rate is the yield from a treasury bond or note corresponding to the expected term of the option. The Company has not paid dividends and does not expect to pay dividends in the future.

Compensation costs for the stock options with graded vesting are recognized over the vesting period. As of July 31, 2007, there was $122,700 of unrecognized costs related to granted options. These costs are expected to be recognized over a weighted average period of 1.33 years.

No options were granted during the year ended July 31, 2007. There were 3,217,504 options exercised during the year ended July 31, 2007. The total intrinsic value of stock options exercised for the year ended July 31, 2007 was $1,586,827.

The Company’s 2000 Stock Plan (the “plan”), as amended, provides for a total of 2,000,000 shares of Common Stock, of which a total of 1,900,000 shares remain available at July 31, 2007. The Plan allows the issuance of incentive stock options, stock appreciation rights and restricted stock awards. The exercise price of the options is determined by the compensation committee of the Company’s Board of Directors, but incentive stock options must be granted at an exercise price not less than the fair market value of the Company’s Common Stock as of the grant date or an exercise price of not less than 110% of the fair value for the a 10% shareholder. Options expire ten years from the date of the grant and are exercisable according to the terms of the individual options agreement.

Warrants

The Company has 325,000 warrants outstanding at July 31, 2007. The warrants have an expiration date of August 17, 2009 and are exercisable at $0.15. The warrants were all issued as part of the August, 2005 equity financing.

Common Shares Reserved

The following is a summary of the Company’s reserved Common Stock shares as of July 31, 2007.

Options issued and Outstanding	2,886,161
Options available under the 2000 Stock Plan	1,900,000
Warrants	325,000
Conversion of Class C Preferred Shares	1,551,200
	6,662,361

Legal Settlement. During the year ended July 31, 2006, the Company settled a severance pay dispute with a former employee for $10,000 in cash and 93,750 shares of the Company’s Common Stock with a fair market value of $30,000.

F-13

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

PREFERRED STOCK

Holders of Series B Preferred Stock and Series C Preferred Stock are entitled to vote with the holders of common stock as a single class on all matters.

Series B Preferred Stock is not redeemable by the Company, and is not redeemable by the Company, and has a liquidation value of $100.00 per share, plus declared and unpaid dividends, if any. Dividends are non cumulative, and are at the rate of $10.00 per share, if declared.

Series C Preferred Stock is redeemable by the Company at a price of $.10 per share upon 30 days prior written notice. This series has a liquidation value of $1.00 per share, plus declared and unpaid dividends, if any. Dividends are non-cumulative, and are at the rate of $.10 per share, if declared. Each share of Series C Preferred Stock is convertible into 25 shares of the Company’s common stock upon payment of a conversion premium of $4.20 per share of common stock. The conversion rate and the conversion premium are subject to adjustments in the event of stock splits, stock dividends, reverse stock splits and other events, as defined.

No preferred stock dividends have been declared as of July 31, 2007.

11. RELATED PARTY TRANSACTIONS

The Company has an approximately 2% nondiluted and 1.1% fully diluted interest in VivoMetrics, a related entity. The son-in-law of Dr. Marvin A. Sackner (the Chairman of the Board and 10% shareholder in the Company) is the Chief Operating Officer and a founder of VivoMetrics. Dr. Sackner served as a member of the Scientific Advisory Board of VivoMetrics until 2004, and is a less than 1% shareholder of VivoMetrics. The Company’s interest in VivoMetrics is carried at a zero valuation.

Pursuant to an Agreement Regarding Assignment of Patents and Related Intellectual Property dated August 14, 2000, the Company assigned all of its rights, title and interest in certain patents and intellectual property as well as a non-exclusive, worldwide license under these items to VivoMetrics in consideration for a royalty of 3% of VivoMetrics’ gross revenues from sales of certain products for so long as VivoMetrics sells such products. In fiscal 2006 and 2007 the Company recorded $89,365 and $124,355 of royalties from VivoMetrics.

Pursuant to a related license agreement with VivoMetrics, VivoMetrics granted to the Company the non-exclusive, worldwide right and license to use certain patents and software. The Company is not currently active in this regard.

Dr. Sackner also personally leases office space used by the Company for business on a month-to-month basis in North Bay Village Florida. Under an arrangement with the Company, the Company reimburses Dr. Sackner for the cost of the space on a month to month basis. The amount reimbursed was $20,369 and $19,649 for the years ended July 31, 2007 and 2006 respectively.

12. COMMITMENTS AND CONTINGENCIES

Leases.

Company leases office space in Sarasota, Florida. The lease expires in November 2008. The minimum future rental payments are $2,608 per month through November 2008 ($41,728 in aggregate).

Rent expense was approximately $50,986 and $35,430 for the years ended July 31, 2007 and 2006, respectively.

13. SUBSEQUENT EVENTS

On September 4, 2007, the Company executed a Product Development and Supply Agreement with Sing Lin Technologies Co. Ltd., a company based in Taichung, Taiwan ("Sing Lin").

Pursuant to the Agreement, the Company consigned to Sing Lin the development and design of the second generation Exer-Rest™ and “Somno-Ease” devices. Sing Lin will manufacture the Company’s patented Exer-Rest™ motorized platform. This motion platform has the appearance and functionality of either a cot or twin bed in standard and extra-long dimensions.

F-14

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

The Exer-Rest™ will be marketed and sold in the Canada, UK, Europe, Latin America and India by the Company and in the Far East by Sing Lin. The Company will receive a royalty on each device sold by Sing Lin.

The Company must pay Sing Lin $150,000 upon execution of the Agreement; $150,000 upon final approval by the Company of the product prototypes and $100,000 upon delivery of the product sample. These amounts are to be applied toward tooling development and other tooling costs.

Under the Agreement, the Company grants Sing Lin for the term of the agreement, the exclusive distribution rights, for the Products in certain countries in the Far East, including, Taiwan, China, Japan, South Korea, Malaysia, Indonesia and certain other countries. Sing Lin has agreed not to sell the Products outside its geographic areas in the Far East.

The Agreement commences as of September 3, 2007 and has a term that extends three years from the acceptance of the first-run of production units by NIMS. Thereafter, the Agreement automatically renews for successive one year terms unless either party sends the other a notice of non-renewal.

In the event of termination or expiration of the Agreement, Sing Lin has agreed to sell certain hardware and software to NIMS, so that NIMS can continue to sell the Products to its customers.

The Company has committed to purchase approximately $2.2 million of Exer-Rest^TM and “Somno-Ease” units, within one year of acceptance of the final product. The Company expects final approval of the products in the third quarter of fiscal 2008. Additionally, the Company has agreed to purchase $3.5 million and $7.5 million of these products in 2009 and 2010 respectively.

14. REVISIONS TO PREVIOUSLY ISSUED FINANCIAL STATEMENTS AS OF AND FOR THE TWO YEARS ENDED JULY 31, 2007

In connection with the Company’s review of the financial statements for the quarter ended January 31, 2008, Management uncovered an error relating to the number of outstanding options as of July 31, 2006 and July 31, 2007 as reported in reports on Form 10-KSB for the periods ending as of such dates. The following tables summarize the adjustments to the Company’s financial statements for the year ended July 31, 2007.

Summary of adjustments to the Company’s reported stock option activity for the two years ended July 31, 2007:

	As Previously Reported			Adjustment		As Restated
Options outstanding, July 31, 2005		6,124,160			247,001		6,371,161
Options granted		1,593,331			-		1,593,331
Options exercised		-			-		-
Options forfeited		(460,833	)		-		(460,833	)
Options outstanding, July 31, 2006		7,256,658			247,001		7,503,659
Options granted		-			-		-
Options exercised		(3,217,504	)		-		(3,217,504	)
Options forfeited		(1,399,994	)		-		(1,399,994	)
Options Outstanding, July 31, 2007		2,639,160			247,001		2,886,161

F-15

NON-INVASIVE MONITORING SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2007

Summary of adjustments to the Company’s reported stock option information as of July 31, 2007:

	As Previously Reported		Adjustment			As Restated
Options Outstanding
Exercise prices from 14.5¢ to 15¢		266,660		60,336			326,996
Exercise prices from 30¢ to 40¢		1,662,500		(125,000	)		1,537,500
Exercise prices from 50¢ to 75¢		710,000		311,665			1,021,665
Total options outstanding, July 31, 2007		2,639,160		247,001			2,886,161
Weighted average exercise price	$	0.390	$	(0.014	)	$	0.376
Weighted average contractual life (years)		3.337		0.167			3.504
Options Exercisable
Exercise prices from 14.5¢ to 15¢		266,660		60,336			326,996
Exercise prices from 30¢ to 40¢		1,162,500		(125,000	)		1,037,500
Exercise prices from 50¢ to 75¢		710,000		311,665			1,021,665
Total options exercisable, July 31, 2007		2,139,160		247,001			2,386,161
Weighted average exercise price	$	0.372	$	0.020		$	0.392

F-16

Exhibit Index

Exhibit No.		Description of Exhibits
3.1		Articles of Incorporation, as amended (Incorporated by Reference from Exhibit 3.1 to the Form 8-K filed on April 8, 2008, includes amendment of April 2, 2008, which was not in effect at July 31, 2007)
3.2		By-Laws (Incorporated by reference from Exhibit 3(b) to the Company’s Registration Statement on Form S-1 Filed May 15, 1999 (File No. 33-14451))
10.1	*	License Agreement dated as of May 22, 1996 between the Company and Sensormedics Corporation
10.2	*	Letter of Agreement dated April 21, 1999 between the Company and Sensormedics Corporation
10.3	*	Agreement Regarding Assignment of Patents and Intellectual Property dated August 14, 2000 between the Company and LifeShirt.com, Inc.
10.4	*	Amendment to Agreement Regarding Assignment of Patents and Intellectual Property dated December 23, 2000 between the Company and LifeShirt.com, Inc.
10.5		Form of Stock Purchase Agreement dated as of August 1, 2005 between the Company and various Investors (Incorporated By Reference to Exhibit 4.1 to Form 8-K filed on August 18, 2005)
10.6		Product Development and Supply Agreement executed September 4, 2007 between Sing Lin Technologies Ltd and the Company (Incorporated By Reference to Exhibit 10.1 to the Form 10-QSB/A Filed on April 22, 2008 (Confidentiality Treatment has Been Requested for Portions of this Exhibit)
10.7		2000 Stock Option Plan (Incorporated by Reference to the Company’s Information Statement on Schedule 14C filed April 5, 2001)(SEC Accession No. 0000950170-01-000484)
10.8		Employment Agreement dated November 10, 2005 between the Registrant and Gary Macleod. (Incorporated By Reference to Exhibit 10.2 to the Form 8-K filed March 4, 2008).
14.1		Code of Ethics (Incorporated By reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended July 31, 2005 and incorporated herein by reference)
21	*	Subsidiaries of the Company
31.1	*	Certification of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
31.2	*	Certification of Periodic Report by Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
32.1	*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed Herewith