6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

September, 2007

Commission File Number 0-26005

MICROMEM TECHNOLOGIES INC.

 777 Bay Street, Suite 1910, Toronto, ON  M5G 2C8

[Indicate by checkmark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.]

Form 20-F      X         Form 40-F             

             [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

Yes                  No    X      

[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with rule 12g3-2(b):        N/A

This report on Form 6-K is hereby incorporated by reference in the registration statement on Form F-3 (Registration No. 333-134309) of Micromem Technologies Inc. and in the prospectus contained therein, and this report on Form 6-K shall be deemed a part of such registration statement from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished by Micromem Technologies Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MICROMEM TECHNOLOGIES INC.
	By:             /s/ Joseph Fuda
Date: September 28, 2007	Name: Joseph Fuda
	Title:   Chief Executive Officer

Exhibit Index

Exhibit
Number	Exhibit Description
1	Interim Financials for period ended July 31, 2007
2	Interim MD&A for period ended July 31, 2007
3	Interim Certificates for period ended July 31, 2007

EX-1

MICROMEM TECHNOLOGIES INC.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT JULY 31, 2007

AND FOR THE THREE AND NINE MONTHS THEN ENDED

(Unaudited – See Notice to Reader)

MICROMEM TECHNOLOGIES INC. ("the Company")

Notice to Reader

The management of Micromem Technologies Inc. ("the Company") is responsible for the preparation of the accompanying interim financial statements. The interim financial statements as at July 31, 2007 and for the quarter then ended have been prepared in accordance with accounting principles generally accepted in Canada and are considered by management to represent fairly the financial position, operating results and cash flow of the Company.

These interim financial statements have not been reviewed by an auditor. These interim financial statements are unaudited and include all adjustments, consisting of normal and recurring items, that management considers necessary for a fair presentation of the consolidated financial position, results of operations and cash flows.

"Joseph Fuda"
(Signed) Joseph Fuda, President and CEO

"Dan Amadori"
(signed) Dan Amadori, Chief Financial Officer

September 27, 2007

Consolidated Balance Sheet
(Expressed in United States dollars)
(See Note 2 - Going Concern)
As at	July 31, 2007	July 31, 2006
	(Unaudited)	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$4,326	$418,904
Term deposits	-	141,693
Deposits and other receivables (Note 5)	84,005	37,884
	88,331	598,481
Property and equipment (Note 6)	-	-
Patents and trademarks (Note 7)	-	-
Royalty rights (Note 4 and Note 10)	-	-
	88,331	598,481
Liabilities and Shareholders' Equity (Deficiency)
Current liabilities:
Accounts payable and accrued liabilities (Note 5)	1,053,169	712,618
Shareholders' equity (deficiency):
Share capital: (Note 8)
Authorized:
2,000,000 special preference shares, redeemable, voting
Unlimited common shares without par value
Issued and outstanding:
71,268,799 common shares ( 2006: 68,491,299)	36,601,615	35,720,615
Contributed surplus (Notes 8 (b) and 9)	23,843,785	20,283,898
Deficit accumulated during the development stage	(61,410,238)	(56,118,650)
	(964,837)	(114,137)
	$88,331	$598,481

Commitments (Note 13)

Contingencies (Note 14)

"Joseph Fuda" (Signed)                        

Joseph Fuda, Director

"David Sharpless" (Signed)                  

David Sharpless, Director

See accompanying notes to the consolidated financial statements.

3

Consolidated Statements of Operations, Comprehensive loss and Deficit
(Expressed in United States dollars)
For the three month period ended July 31, 2007 (with comparative data)
					Period from
					September 3, 1997
	July 31, 2007	July 31, 2007	July 31, 2006	July 31, 2006	to July 31, 2007
	(3 mos)	(9 mos)	(3 mos)	(9 mos)
Interest and other income	$0	$2,586	$1,025	$2,244	$552,603
Costs and expenses (income):
Administration	99,266	155,051	106,583	258,646	2,893,714
Professional, Management and consulting fees (Notes 8 (b) and 12 (c))	229,822	564,261	224,206	582,052	6,040,728
Wages and salaries (Note 12 (b))	26,986	79,297	69,671	175,846	9,773,268
Research and development (Notes 6 and 13)	121,202	295,900	39,267	316,262	7,421,702
Travel and entertainment	27,066	88,464	82,136	138,638	1,521,390
Amortization of property and equipment (Note 6)	-	-	-	-	344,466
Stock compensation expense (Note 8(b))	33,644	139,587	-	143,786	21,759,368
Unrealized foreign exchange loss (gain)	6,843	6,527	9,532	(14,366)	(49,940)
Amortization of patents and trademarks	-	-	-	-	67,596
Operating leases	-	-	-	-	109,412
Loss on sale of investment	-	-	-	-	54,606
Write-down of investment	-	-	-	-	61,020
Write-down of royalty rights (Note 10)	-	-	-	-	10,000,000
Write-down of patents and trademarks (Note 7)	-	-	-	-	299,820
Interest expense	-	-	-	-	75,027
Loss on sale of property and equipment	-	-	-	-	65,460
Price adjustment on outstanding warrants (Note 8)	115,845	1,505,526			1,505,526
	660,675	2,834,614	531,395	1,600,864	61,943,164
Loss before income taxes	(660,675)	(2,832,028)	(530,370)	(1,598,620)	(61,390,561)
Provision for income taxes (Note 11)	-		-	-	19,677
Net loss and comprehensive loss for the period	(660,675)	(2,832,028)	(530,370)	(1,598,620)	(61,410,238)
Deficit accumulated during the development stage, beginning of period	(60,749,563)	(58,578,210)	(55,588,280)	(54,520,030)	-
Deficit accumulated during the development stage, end of period	($61,410,238)	($61,410,238)	($56,118,650)	($56,118,650)	($61,410,238)
Loss per share - basic and diluted	(0.01)	(0.04)	(0.01)	(0.03)	(1.24)
Weighted average number of shares	70,007,215	70,007,215	48,585,644	48,585,644	49,364,601
See accompanying notes to the consolidated financial statements.

4

Consolidated Statement of Cash Flows
(Expressed in United States dollars)
For the three month period ended July 31, 2007 (with comparative data)
					Period from
					September 03, 1997
	July 31, 2007	July 31, 2007	July 31, 2006	July 31, 2006	to July 31, 2007
	(3 mos)	(9 mos)	(3 mos)	(9 mos)
Cash flows from operating activities:
Net loss and comprehensive loss for the period	($660,675)	($2,832,028)	($530,370)	($1,598,620)	($61,410,238)
Adjustments to reconcile loss for the period to net cash used in operating activities:
Amortization of patents and trademarks	-		-	-	67,596
Amortization of property and equipment	-		-	-	529,686
Stock option and warrant repricing expense	149,489	1,645,113	-	143,786	23,264,894
Loss on sale of investment	-		-	-	54,606
Write down of investment	-		-	-	61,020
Loss on disposal of property and equipment	-		-	-	65,460
Write-down of royalty rights	-		-	-	10,000,000
Write-down of patents and trademarks	-		-	-	299,820
Share compensation expense				-	7,285,696
Non-cash wages and salaries	-		-	-	34,000
Decrease (increase) in deposits and other receivables	(11,873)	(25,267)	1,627	47,688	(75,408)
Increase (decrease) in accounts payable and accrued liabilities	301,822	138,805	(127,704)	(90,588)	942,328
Net cash used in operating activities	(221,237)	(1,073,377)	(656,447)	(1,497,734)	(18,880,540)
Cash flows from investing activities:
Purchase of property and equipment	-	-	-	-	(729,604)
Proceeds on disposal of property and equipment	-	-	-	-	134,458
Patents and trademarks	-	-	-	-	(367,416)
Sale of available-for-sale Investment	-	-	-	-	260,641
Royalty rights	-	-	-	-	(2,000,000)
Term deposits	-	-	(141,693)	(141,693)	-
Net cash proceeded by (used in) investing activities	-	-	(141,693)	(141,693)	(2,701,921)
Cash flows from financing activities:
Issue of common shares	24,000	671,000	890,528	1,415,528	21,006,061
Net proceeds from shareholder's Loan	-		-	-	544,891
Loan proceeds from Avanticorp International Inc.	-		-	-	112,031
Rights issue costs	-		-	-	(76,197)
Net cash provided by financing activities	24,000	671,000	890,528	1,415,528	21,586,786
Increase (decrease) in cash and cash equivalents	(197,237)	(402,377)	92,388	(223,899)	4,326
Cash and cash equivalents, beginning of period	201,563	406,703	326,516	642,803	-
					-
Cash and cash equivalents, end of period	$4,326	$4,326	$418,904	$418,904	$4,326
Supplemental cash flow information:
Interest paid	-		-	-	76,987
Income taxes paid	-		-	-	66,722

See accompanying notes to the consolidated financial statements.

5

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statements of Shareholders’ Equity
(Expressed in United States dollars)
July 31, 2007
					Deficit
	Number of Shares	Share Capital	Contributed	Deferred Share	Accumulated
			Surplus	Compensation	During Development
Micromem share capital, October 31, 1998	3,490,643	$ -	$ -	$ -	$ -
Exercise of director’s stock options	490,000	-	-	-	-
Pageant share capital, October 31, 1998	-	1	-	-	-
Net loss for the year	-	-	-	-	(500,992)
Common shares of Pageant, December 4, 1998	-	4,999	-	-	-
Assigned fair value of net assets (Note 3(c) (iv))	32,000,000	549,140	-	-	-
Micromem share capital, September 11, 1999	35,980,643	554,140	-	-	(500,992)
Exercise of common share purchase warrants for cash	120,676	164,053	-	-	-
Private placement of common shares for cash, May 17, 1999	350,000	1,050,000	-	-	-
Shareholder loan forgiven (Note 9)	-	-	544,891	-	-
Exercise of stock options for cash	100,000	300,000	-	-	-
Net loss for the year	-	-	-	-	(5,207,787)
Balance, October 31, 1999	36,551,319	2,068,193	544,891	-	(5,708,779)
Exercise of common share purchase warrants for cash	182,087	274,717	-	-	-
Exercise of stock options for cash	100,000	300,000	-	-	-
Deferred share compensation (Note 12)	-	-	2,711,881	(453,219)	-
Private placement of common shares for cash, February 10, 2000	2,000,000	5,000,000	-	-
Common shares issued pursuant to compensation agreements, March 15, 2000	901,110	4,206,447	-	-	-
Stock options issued to directors/consultants			9681257		-
Net loss for the year	-	-	-	-	(16,940,613)
Balance, October 31, 2000	39,734,516	11,849,357	12,938,029	-453,219	(22,649,392)
Exercise of common share purchase warrants for cash	362,450	554,655	-	-	-
Common shares issued under rights offering November 20, 2000	304,674	1,119,058	-	-	-
Exercise of stock options for cash	800,000	2,400,000	-	-	-
Deferred share compensation (Note 12)	-	-	(453,219)	453,219	-
Stock-based compensation	-	-	34,000	-	-
Exercise of director’s stock options for cash, January 17, 2001	714,686	71,469	-	-	-
Common shares issued pursuant to compensatory stock options, at January 17, 2001 (Note 12 (a))	-	1,581,242	(1,581,242)	-	-
Adjustment-share compensation expenses (Note 12)	-	-	(677,420)	-	-
Common shares issued pursuant to compensation agreement, January 23, 2001(Note 12 (a))	11,192	66,461	-	-	-
Private placement of common shares for cash, March 21, 2001	2,000,000	4,000,000	-	-	-
Common shares issued under asset purchase agreement to Estancia Limited, March 14, 2001	2,007,831	8,000,000	-	-	-
Compensation shares due but not issued (Note 12)	-	-	1,431,545	-	-
Stock options issued to directors/consultants			4,627,752
Net loss for the year	-	-	-	-	(9,187,377)
Balance, October 31, 2001	45,935,349	29,642,242	16,319,445	0	(31,836,769)
Stock options issued to directors/consultants			1832500
Shares issued pursuant to compensatory agreement, March 26, 2002 (Note 12)	765,588	1,431,545	(1,431,545)	-	-
Net loss for the year	-	-	-	-	(14,565,515)
Balance, October 31, 2002	46,700,937	31,073,787	16,720,400	0	(46,402,284)
Private placement of common shares for cash, August 13, 2003 (Note 8(d))	2,031,250	162,500	-	-	-
Net loss for the year	-	-	-	-	(1,767,965)
Stock options issued to directors/consultants			318000
Balance, October 31, 2003	48,732,187	31,236,287	17,038,400	0	(48,170,249)
Private Placement of common shares for cash, December 2003 (Note 8 (e) ii)	500,000	40,000	-	-	-
Private Placement of common shares for cash, December 2003 (Note 8 (e) i)	300,000	33,000	-	-	-
Exercise of common share purchase warrants for cash (Note 8(d), August 2004	2,031,250	162,500	-	-	-
Exercise of common share purchase warrants for cash (Note 8 (e) ii), June-September 2004	1,000,000	80,000	-	-	-
Exercise of common share purchase warrants for cash (Note 8 (e) i), October 2004	200,000	22,000	-	-	-
Exercise of options for cash	5,300,000	530,000	-	-	-
Stock options issued to consultant	-	-	1,379,970	-	-
Net loss for the year	-	-	-	-	(2,314,298)
Balance, October 31, 2004	58,063,437	32,103,787	18,418,370	0	(50,484,547)

6

MICROMEM TECHNOLOGIES INC.

(A DEVELOPMENT STAGE COMPANY)

Consolidated Statements of Shareholders’ Equity

(Expressed in United States dollars)

Exercise of common share purchase warrants for cash (Note 8(e)), December – January 2005	400,000	44,000	-	-	-
Private placement of common shares for cash	1,028,334	617,000	-	-	-
Net loss for the quarter	-	-	-	-	(453,523)
Stock options issued to consultants/employers	-	-	202,203	-
Balance at January 31, 2005	59,491,771	32,764,787	18,620,573	0	(50,938,070)
Exercise of common shares purchase warrants for cash (Note 8(d)), February, 2005	1,406,250	112,500	-	-	-
Private Placement of common shares for cash, March, 2005	1,300,000	845,000	-	-	-
Private Placement of common shares for cash, February, 2005	14,000	10,500	-	-	-
Legal expenses relating to private placements	-	(75,000)	-	-	-
Net loss for the quarter	-	-	-	-	(474,227)
Balance at April 30, 2005	62,212,021	33,657,787	18,620,573	-	(51,412,297)
Exercise of stock options (Note 8(b)), June, 2005	1,820,000	553,600
Settlement of accounts payable for common shares.	62,428	43,700
Stock options issued to consultants/employees			903,040
Net loss for the quarter					(1,726,931)
Balance at July 31, 2005	64,094,449	$ 34,255,087	$ 19,523,613	$ -	(53,139,228)
Exercise of common shares purchase warrants for cash September, 2005	625,000	50,000	-
Stock options issued to consultants			616,499
Net loss for the quarter					(1,380,802)
Balance at October 31, 2005	64,719,449	$ 34,305,087	$ 20,140,112	$ -	(54,520,030)
Exercise of stock options (Note 8(b))	150,000	45,000
Stock options issued to consultants/employees			143,786
Net loss for the quarter					(734,482)
Balance at January 31, 2006	64,869,449	34,350,087	20,283,898	-	(55,254,512)
Exercise of stock options (Note 8(b))	1,600,000	480,000
Net loss for the quarter					(333,768)
Balance at April 30, 2006	66,469,449	34,830,087	20,283,898	-	(55,588,280)
Private placement of common shares for cash May 2006	150,000	75,000
Exercise of stock options (Note 8(b))	1,100,000	329,980
Exercise of common share purchase warrants for cash (Note 8(d))	771,850	485,548
Net loss for the quarter					(530,370)
Balance as at July 31, 2006	68,491,299	35,720,615	20,283,898	-	(56,118,650)
Exercise of stock options (Note 8(b))	700,000	210,000
Stock options issued to consultants/emplopyees			1,914,774
Net loss for the quarter					(2,459,560)
Balance at October 31, 2006	69,191,299	35,930,615	22,198,672	-	(58,578,210)
Exercise of stock options (Note 8(b))	1,000,000	300,000
Price adjustment on outstanding warrants (Note 8)			542,000
Net loss for the quarter					(844,766)
Balance at January 31, 2007	70,191,299	36,230,615	22,740,672	-	(59,422,976)
Exercise of stock options (Note 8(b))	600,000	180,000
Exercise of warrants for cash	417,500	167,000
Price adjustment on outstanding warrants (Note 8)			847,681
Stock options issued to consultants/employee			105,943
Net loss for the quarter					(1,326,587)
Balance at April 30, 2007	71,208,799	36,577,615	23,694,296	-	(60,749,563)
Exercise of warrants for cash	60,000	24,000
Price adjustment on outstanding warrants (Note 8)			115,845
Stock options issued to consultants/employee			33,644
Net loss for the quarter					(660,675)
Balance at July 31, 2007	71,268,799	36,601,615	23,843,785	-	(61,410,238)

See accompanying notes to the consolidated financial statements.

7

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

1.

Nature of business:

Micromem Technologies Inc. ("Micromem" or the "Company") is a corporation incorporated under the laws of the Province of Ontario, Canada. By Articles of Amendment dated January 14, 1999, the Company changed its name from Avanticorp International Inc. to Micromem Technologies Inc. On January 11, 1999, the Company acquired all of the outstanding shares of Pageant Technologies Inc. ("Pageant"), a company subsisting under the laws of Barbados. This acquisition was recorded as a reverse takeover under Canadian generally accepted accounting principles ("Canadian GAAP") which, in the case of the Company, conforms with United States generally accepted accounting principles ("U.S. GAAP").

The Company currently operates in a single segment as a developer of non-volatile magnetic memory technology. The Company has not generated significant revenue through January 31, 2007, has no planned principal operations and is devoting substantially all of its efforts to the development of its technology. Accordingly, for financial reporting purposes, the Company is a development stage enterprise.

On January 11, 1999, the Company issued 32,000,000 common shares and 1,000,000 warrants to acquire all of the issued and outstanding shares of Pageant. On that date, the total number of the Company shares outstanding was 35,980,643 shares. As a result of this transaction, the shareholders of Pageant owned 88.9% of the outstanding common shares of the Company and, accordingly, the purchase of Pageant was accounted for as a reverse takeover transaction. The transaction was accounted for by the purchase method with the results of operations included in the consolidated financial statements from the date of acquisition.

2.

Going concern:

These consolidated financial statements have been prepared on the "going concern" basis, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

The Company has incurred substantial losses to date. It will be necessary to raise additional funds for the continuing development, testing and commercial exploitation of its technology. The sources of these funds have not yet been identified and there can be no certainty that sources will be available in the future.

2

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

Certain principal conditions and events are prevalent which indicate that there is substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. These include:

a.

Recurring operating losses

b.

Stockholders’ deficiency

c.

Working Capital deficiency

Management has initiated certain plans, which it believes will mitigate and alleviate these conditions and events including: exploring alternative sources of financing as to be able to continue its research and development and implementation of cost-cutting measures.

The Company continues to pursue its research initiatives as outlined in Note 13 in order to develop its technology for commercial applications and continues to raise financing for operations as outlined in Note 8.

The Company’s ability to continue as a going concern is in substantial doubt and it is dependent upon completing the development of its technology for a particular application, achieving profitable operations, obtaining additional financing and successfully bringing its technology to the market. The outcome of these matters cannot be predicted at this time. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classifications of the assets and liabilities that might be necessary should the Company be unable to continue in business. If the "going concern" assumption were not appropriate for these consolidated financial statements then adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

3.

Summary of significant account policies:

These consolidated financial statements have been prepared in accordance with Canadia n GAAP and are stated in United States dollars. These principles are also in conformity in all material respects with U.S. GAAP. The most significant accounting policies are as follows:

9

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

a.

Principles of consolidation:

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Memtech International Inc., Memtech International (U.S.A.) Inc., Pageant Technologies Inc. and Pageant Technologies (U.S.A.) Inc. During the fiscal year ending October 31, 2003, two of the Company’s subsidiaries, Micromem Technologies B.V. and Micromem Technologies S.p.A. were wound up. All significant intercompany balances and transactions have been eliminated upon consolidation.

b.

Use of estimates:

The preparation of consolidated financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Examples of where estimates are used include the computation of stock option expense calculated in accordance with the Black Scholes option-pricing model and in calculating the provision for doubtful accounts.

c.

Cash and cash equivalents:

Cash and cash equivalents consist of all bank accounts and all highly liquid investments with original maturities of three months or less at the date of purchase.

d.

Property and equipment:

Property and equipment are recorded at cost less accumulated amortization. Amortization is provided on property and equipment on a straight- line basis for a period of up to three years. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When circumstances dictate, an impairment loss is calculated as equal to the excess of the carrying value of the assets over their undiscounted estimated future net cash flow.

10

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

e.

Patents and trademarks:

Patents and trademarks are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When circumstances dictate, an impairment loss is calculated as equal to the excess of the carrying value of the assets over their undiscounted estimated future net cash flow (Note 7).

f.

Research and development expenses:

Research costs are expensed in the period incurred. Development expenses are expensed as incurred unless they meet the criteria for deferral and amortization under Canadian GAAP which is the translation of research findings or other knowledge into a plan for the technology prior to commercial production or use. The Company has determined that no development costs have met these criteria at the financial reporting date.

g.

Stock-based compensation:

The Company has a stock-based compensation plan, which is described in Note 8. Stock-based compensation is recognized using the fair value method. Under this method, the Black Scholes option-pricing model is used to determine periodic stock option expense. Any compensatory benefit recorded is recognized initially as deferred share compensation in the consolidated statements of stockholders’ equity and then charged against income over the contractual or vesting period.

Until October 31, 2004 for all awards of employee stock-based compensation granted after January 1, 2002, the Company recognized employee stock-based compensation costs under the intrinsic value-based method and provided pro forma disclosure of net income and earnings per share as if the fair value-based method had been applied.

Effective November 1, 2004 the Company has adopted the fair value method of accounting for employee stock-based compensation costs. Accordingly the financial statements for the years ending October 31, 2000 - 2004 and the cumulative financial statements for the period from September 3, 1997 to October 31, 2004 have been restated to reflect the stock-based compensation costs that the Company has incurred in each period which expense previously was disclosed on a proforma basis.

11

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

The stock-based compensation expense for options granted since November 1, 2004 have been reflected as an expense in the consolidated statement of operations for the periods then ended.

h.

Income taxes:

The Company accounts for income taxes by the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted tax rates and laws that are expected to apply when the asset is realized or the liability settled. To the extent that it is not considered to be more likely than not that a future income tax asset will be realized, a valuation allowance is provided.

i.

Long-Lived Assets

The Company records the value of the long-term assets acquired at cost. Such rights are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable when circumstances dictate an impairment loss is calculated as equal to the excess of the carrying value of the assets over their undiscounted estimated future net cash flows. Management used its best estimate of the undiscounted cash flows to evaluate the carrying amount and has determined that no impairment has occurred.

j.

Foreign currency translation:

The functional and reporting currency of the Company is the United States dollar. The Company’s wholly-owned subsidiaries are integrated foreign operations and therefore, the Company uses the temporal method whereby monetary assets and liabilities are translated into United States dollars at the rate of exchange in effect at the consolidated balance sheet dates. Non- monetary assets and liabilities are translated at historical rates. Income and expenses are translated using the average monthly rate of exchange per quarter, which rate approximates the rate of exchange prevailing at the transaction dates. Gains or losses resulting from translation are included in the determination of net loss for the period.

12

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

k.

Earnings or Loss Per Share:

Basic earnings (loss) per share are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants.

l.

Other:

On November 1, 2006 the Company adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855, Financial Instruments – Recognition and Measurement; Section 1530, Comprehensive Income, Section 3251, Equity, Section 3861, Financial Instruments – Disclosure and Presentation and Section 3865, Hedges. The principal cha nges in the accounting for financial instruments due to the adoption of these accounting standards are described below. These standards have been adopted prospectively and comparative amounts for the prior periods have not been restated.

Financial Assets and Financial Liabilities

Under the new standards, financial assets and financial liabilites are initially recognized at fair value and are subsequently accounted for based on their classification as described below. The classification depends on the purpose of which the financial instruments were acquired and their characteristics. Except in very limited circumstances, the classification is not changed subsequent to initial recognition.

Held For Trading

Financial assets that are purchased and incurred with the intention of generating profits in the near term are classified as held for trading. These instruments are accounted for at fair value with the change in the fair value recognized in net income during the period. Cash and cash equivalents were classified as held for trading on November 1, 2006.

13

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

Available for Sale

Financial assets classified as available for sale are carried at fair value with the changes in fair value recorded in other comprehensive income. When a decline in fair value is determined to be other than temporary, the cumulative loss included in accumulated other comprehensive income is removed and recognized in net income. Gains and losses realized on disposal of available for sale securities are recognized in other income. No investments were classified as available for sale on November 1, 2006.

Held to Maturity

Securities that have a fixed maturity date and which the Company has positive intention and the ability to hold to maturity are classified as held to maturity and accounted for at amortized cost using the effective interest rate method. No investments were classified as held to maturity on November 1, 2006.

Loans and Receivables

Trade and other receivables are classified as loans and receivables, which are measured at amortized cost.

Other Financial Liabilities

Accounts payable and accrued liabilites are classified as other financial liabilities, which are measured at amortized cost using the effective interest rate method.

Embedded Derivatives

Derivatives may be embedded in other financial and non- financial instruments (the "host instrument"). Under the new standards, embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not clearly and closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a standalone derivative, and the combined contract is not held for trading or designated at fair value. These embedded derivatives are measured at fair va lue with subsequent changes recognized in the Statement of Operations, Comprehensive Income and Deficit as an element of general and administrative expenses.

14

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

The change in accounting policy related to embedded derivatives had no impact to the opening deficit at the date of adoption, or any impact during the period.

Determination of Fair Value

The fair value of a financial instrument on initial recognition is the transaction price, which is the fair value of the consideration given or received. Subseque nt to initial recognition, fair value is determined by using valuation techniques which refer to observable market data.

Comprehensive Income

Comprehensive income is composed of the Company’s net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available for sale securities, net of income taxes. The components of comprehensive income are disclosed in the Consolidated Statement of Operations, Comprehensive Income and Deficit. The Company does not currently have any other comprehensive income.

Hedge Accounting

Section 3865, hedges, sets out standards specifying when and how an entity can use hedge accounting. The adoption of this new standard is optional. This section offers entities the possib ility of applying different reporting options than those set out in Section 3855, Financial Instruments – Recognition and Measurement, to qualifying transactions that they elect to designate as hedges for accounting purposes. There was no impact on the Company as a result of adopting Section 3865.

4.

Acquisition of royalty rights and remaining interest in technology from Estancia Limited:

On December 9, 2000, the Company and its subsidiary, Pageant, entered into an Asset Purchase Agreement (the "Agreement") with Estancia Limited ("Estancia") and Richard Lienau ("Lienau") to purchase the remaining 50% interests in the patents which the Company did not own and a 40% gross profit royalty ("Estancia Royalty"),

15

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

in respect of certain ferromagnetic memory technology known as VEMRAM (previously known as MAGRAM) and covered by U.S. Patent #5,295,097 and the related patent applications (the "Vemram Patents") described in the Agreement and all rights (the "Technology") held by Estancia and Lienau under the Joint Ownership and Licensing Agreement dated September 17, 1997 among Estancia, Lienau and Pageant. Under the terms of the Agreement, the Company was required to pay a maximum purchase price of $50,000,000 to Estancia as follows:

a.

$10,000,000 was paid on closing (after receipt of regulatory approvals), in the form of $8,000,000 in common shares of the Company ("Micromem Shares") (based on the price on the closing date) and $2,000,000 in cash;

b.

$20,000,000 if and when either (i) certification is received from Honeywell Federal Manufacturing & Technologies ("Honeywell") that fully integrated, randomly addressable memory matrices of the Technology have met certain stipulated performance standards, or (ii) the Company or any of its affiliates executes a definitive agreement for the sale or licensing of the Technology to an arm’s length third party for any commercial purposes other than testing or evaluation of the Technology; payable in the form of cash and Micromem Shares to be determined by Pageant provided that a minimum of 50% of the $20,000,000 shall be paid in Micromem Shares valued at the close of trading on the date of receipt of such certification, sale or licensing; and

c.

$20,000,000 if and when the Company or any of its affiliates executes a definitive agreement for the sale or licensing with respect to any technology (including the Technology) owned by the Company to an arm’s length third party for any commercial purposes other than testing or evaluation of the technology, payable in the form of cash and Micromem Shares to be determined by Pageant provided that a minimum of 50% of the $20,000,000 shall be paid in Micromem Shares valued at the close of trading on the date of execution of such sale or licensing.

During fiscal 2001, the Company paid $2,000,000 in cash and issued 2,007,831 shares, being the equivalent of $8,000,000, the first installment payable under the terms described above, on approval by its shareholders in the annual shareholder meeting held on March 14, 2001. The $10,000,000 paid was init ially recorded as royalty rights in fiscal 2001 and was written-down to nil in fiscal 2002 (Note 10).

On March 9, 2004 the third anniversary of the closing date, the requirements set out in terms (b) and (c) above were not met and, in accordance with the terms of the Agreement,

16

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

the Company’s obligations to pay these amounts terminated. The Company thus has had to revert to Estancia:

1.

a 40% interest in the Vemram Patents;

2.

a 32% interest in the gross profit, less expenses agreed to by the parties, for each license of the Vemram Patents sold or otherwise transferred by Pageant; and

3.

a 32% interest of any unit royalties received by Pageant as a result of the license or sale of the Vemram Patents less reasonable expenses directly related to the obtaining of said royalties.

5.

Non-cash working capital balances:

A.

Deposits and other receivables

		7/30/07		7/30/06
GST tax recoverable	$	36,155	$	11,717
Other receivables		1,874		1,771
Receivables from companies where senior officers and directors of the Company exercise significant influence (Note 12(b)) and employee advances		34,113		12,385
Prepaid insurance		11,863		12,011
	$	84,005	$	37,884

B.

Accounts payable and accrued liabilities

		7/30/07		7/30/06
Deferred compensation to Chairman (Note 12(a) ii) and to senior officers (Note 12(c))	$	$270,000	$	300,000
Accrual of costs under technology development agreement (Note 13(b)		289,863		289,863
Accounts payable		493,306		122,755
	$	1,053,169	$	712,618

17

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

6.

Property and equipment:

		7/31/06	Additions		7/31/07
Cost:
Computers and equipment	$	41,348	-	$	41,348
	$	41,348	-	$	41,348
		7/31/06	Amortization		7/31/07
			Expense
Accumulated amortization:
Computers and equipment	$	41,348	-	$	41,348
	$	41,348	-	$	41,348
		7/31/06			7/31/07
Net book value:
Computers and equipment	$	-		$	-
	$	-		$	-

During fiscal 2003, the Company contributed equipment and supplies with a net book value of $58,302 under the "Equipment Transfer Agreement" to the University of Toronto ("U of T") (Note 13a(4)). The net book value of the contributed equipment has been charged to the period as a research and development expense.

7.

Patents and trademarks:

In 2003 the Company discontinued a number of patent and trademark applications primarily outside the United States and the net book value of $130,839 relating to these applications was written off in 2003. The Company has also assessed the remaining amounts for patents and trademark applications registered in Canada and United States and expensed the residual net book value of $168,981 in 2003 to reflect the uncertain nature of future events.

The Company continues to actively pursue and protect its patents and trademarks registered in Canada and the United States.

18

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

8.

Share Capital:

a.

Authorized:

2,000,000 special preference shares, redeemable, voting, none of which are issued and outstanding Unlimited common shares without par value.

b.

Stock option plan:

The Company has a fixed stock option plan. Under the Company’s Stock Option Plan (the "Plan"), the Company may grant options for up to 15,000,000 shares of common stock to directors, officers, employees or consultants of the Company and its subsidiaries. The exercise price of each option is equal to or greater than the market price of the Company’s shares on the date of grant unless otherwise permitted by applicable securities regulations. An option’s maximum term under the Plan is 10 years.

A summary of the status of the Company’s fixed stock option plan as at July 31, 2007 and changes during the periods ended on those dates is as follows:

	7 –31-2007 (6 Months)
	Options in	Weighted Average
	Thousands	exercise price
Outstanding, beginning of period	11,550	.50
Granted	550	.41
Cancelled/expired	(300)	.80
Exercised	(1,600)	.30
Outstanding end of period	10,200	.52

Cash proceeds realized during the quarter ending July 31, 2007 by the Company upon the exercise of stock options by directors was nil (2006: $330,000).

19

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

The following stock options have been awarded since October 31, 2006:

a.

350,000 options were awarded to an outside director in April 2007 pertaining to technical and marketing services provided. These options have a strike price of $0.36 per share and expire in April 2012 if unexercised.

b.

 150,000 options were awarded to an arm’s length engineering consulting firm in June 2007 who has provided services to the Company. These options have a strike price of $0.70 per share and expire in May 31, 2008 if unexercised.

c.

 50,000 options were awarded to an employee in June 2007. These options have a strike price of $0.50 per share and expire on May 31, 2012 if unexercised.

The following options have been granted, after October 31, 2004 and are outstanding at July 31, 2007:

Date	Optionee	Number of	Exercise Price	Expiry
		Options		Date
January 31, 2005	Employee	50,000	.91	June 17, 2009
January 31, 2005	Officer	50,000	.91	June 17, 2009
May 27, 2005	Officer	400,000	.72	May 27, 2010
May 27, 2005	Director	300,000	.72	May 27, 2010
May 27, 2005	Director	1,800,000	.72	May 27, 2010
August 1, 2005	Chairman	1,800,000	.65	June 16, 2009
November 25, 2005	Director	300,000	.60	November 24, 2009
November 20, 2005	Employee	50,000	.63	December 20, 2010
January 15, 2006	Officer	100,000	.68	January 15, 2011
August 9, 2006	Chairman	1,000,000	.80	July 6, 2011
August 9, 2006	Outside Directors	1,500,000	.80	July 6, 2011
August 9, 2006	Officers	1,600,000	.80	July 6, 2011
August 9, 2006	Employees	500,000	.80	July 6, 2011
April 15, 2007	Outside Director	350,000	.36	April 15, 2012
June 6, 2007	Outside Consultant	150,000	.70	May 31, 2008
June 6, 2007	Employee	50,000	.50	May 31, 2012

At October 31, 2004 the cumulative stock compensation expense for stock options granted to employees has been calculated using the Black Scholes option-price model as $17,829,459 which expense has previously not been reflected in the consolidated statement of operations and deficit. Effective November 1, 2004, the Company adopted the fair value method of accounting for stock compensation expense and accordingly has restated the prior year financial statements as appropriate.

20

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

A reconciliation of the restatement of the prior year financial statements is as below:

		2004		2003			Period from September 3, 1997 to October 31, 2005
Stock compensation expense as originally reported	$	10,020	$	-			$ 10,020
Restatement– expense using fair value method		1,369,950		318,000			19,551,201
Restated stock compensation expense	$	1,379,970	$	318,000		$	19,561,221
Net loss as originally reported	$	(944,348)	$	(1,449,965)		$	(36,690,571)
Restatement – expense using fair value method		1,369,950		318,000			(17,829,459)
Restated net loss	$	(2,314,298)	$	(1,767,965)		$	(54,520,030)
Closing deficit as originally reported	$	(32,655,088)	$	(31,710,740)		$	(36,690,571)
Restatement, expense using fair value method		(17,829,459)		(16,459,509)			(17,829,459)
Restated closing deficit	$	(50,484,547)	$	(48,170,249)		$	(54,520,030)
Basic and fully diluted loss per share as originally reported	$	(0.02)	$	(0.03)	$		(0.75)
Restatement – impact on loss per share using fair value method		(0.02)		(0.01)			(0.38)
Revised basic and fully diluted loss per share		$ (0.04)	$	(0.04)	$		(1.13)

The fair value of each option used for the purpose of estimating the stock compensation cost is based on the grant date using the Black Scholes pricing model. The unexpended stock based compensation deferred over the vesting period is nil.

21

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

The fair value of all options granted sinc e 2005 were estimated as of the date of grant using the Black Scholes option-pricing model with the following assumptions:

	2007	2006	2005
Expected dividends	-	-	-
Volatility factor	100%	99% -111%	97% - 142%
Risk free interest rate	4.5%	3.25% – 4.5%	3.25%
Weighted average expected life	1.5 years	1.5 years	1.5 years

The current stock compensation expense as reflected in the financial statements is summarized as:

Quarter Ending	Expense
January 31, 2005	$      202,203
April 30, 2005	-
July 31, 2005	903,040
October 31, 2005	616,499
January 31, 2006	143,786
April 30, 2006	-
July 31, 2006	-
October 31, 2006	1,914,774
January 31, 2007	-
April 30, 2007	105,943
July 31, 2007	33,644

The following table summarizes information about fixed options outstanding as at July 31, 2007 (Note 17):

Options Outstanding				Options exercisable
			Weighted average	Weighted
			remaining	Average			Weighted
	Actual exercise	Number	contractual life (in	exercise	Number		Average
	price	outstanding	years)	price	Exercisable		exercise price
$	0.30	200,000	2.5 years	$0.30	800,000	$	0.30
	0.68	100,000	2.7 years	0.68	100,000		0.68
	0.91	100,000	2.75 years	0.91	100,000		0.91
	0.72	2,500,000	3.5 years	0.72	2,500,000		0.72
	0.65	1,800,000	3.5 years	0.65	1,800,000		0.65
	0.60	300,000	3.5 years	0.60	300,000		0.60

22

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

0.80	4,600,000	4.7 years	0.80	4,600,000	0.80
0.63	50,000	3.1 years	0.63	50,000	0.63
0.36	350,000	4.5 years	0.36	350,000	0.36
0.70	150,000	.75 years	0.70	150,000	0.70
0.50	50,000	4.75 years	0.50	50,000	0.50

c.

Loss per share

Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the dilution that would occur if outstanding stock options and share purchase warrants were exercised or converted into common shares using the treasury stock method and is calculated by dividing net loss applicable to common shares by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued.

The inclusion of the Company’s stock options and share purchase warrants in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and they are therefore excluded from the computation. Consequently, there is no difference between basic loss per share and diluted loss per share.

d.

Warrants

On August 13, 2003, the Company issued 2,031,250 First Units at $0.08 each. Each First Unit provides the holder with one common share and a warrant for one Second Unit at $0.08 each, exercisable for one year. Each Second Unit provides the holder with one common share and a warrant for one common share at $0.08 each, exercisable for one year.

A portion of the First Unit could be allocated into separate elements within stakeholders’ equity as the First Units contain two equity elements arising from the common share and warrants attached. The Company has allocated the closing trading value of its shares as at August 13, 2003 to the common shares. Since the net proceeds received from the issuance of the common shares attached to the First Units equaled the closing trading value at the date authorized by the Board of Directors, the warrants were allocated a nil value.

23

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

In August 2004, the holders of the First Units exercised the First Unit warrants and the Company thus issued 2,031,250 common shares and the warrants for the Second Units and realized proceeds of $162,500.

In February 2005, the holders of the Second Units exercised 1,406,250 Second Unit warrants and the Company thus issued 1,406,250 common shares and realized proceeds of $112,500.

In August 2005, the holders of the Second Units exercised 625,000 Second Units warrants and the Company thus issued 625,000 common shares and realize proceeds of $50,000.

e.

Private Placements

i)

In December 2003, the Company completed Unit private placements to two Canadian private investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placements, the Company received $33,000 as subscription proceeds for the sale and issue of 300,000 Units. Each Unit consists of one Common Share and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one Common Share and one Series B Warrant for $0.11 until expiry 12 months from the date of issue. Each Series B Warrant entitles the holder to purchase one additional Common Share for $0.11 until expiry 12 months from the date of issue.

In October 2004 the private investors exercised 200,000 Series A warrants and the Company thus issued 200,000 common shares and 200,000 Series B warrants and realized proceeds of $22,000.

In the q uarter ended January 31, 2005 the private investors exercised the remaining Series A warrants and the Company thus issued 100,000 additional common shares and 100,000 Series B warrants and realized proceeds of $11,000.

The investors then exercised 300,000 Series B warrants and the Company thus issued 300,000 common shares and realized proceeds of $33,000.

ii)

In December 2003, the Company completed a Unit private placement to one Canadian private investor pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placement, the Company received $40,000 as subscription proceeds for the sale and issue of 500,000 Units.

24

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

Each unit consists of one Common Share and one Series A. Warrant. Each Series A Warrant entitles the holder to purchase one Common Share and one Series B Warrant for $0.08 until expiry 12 months from the date of issue. Each Series B Warrant entitles the holder to purchase one additional Common Share for $0.08 until expiry 12 months from the date of issue.

In June 2004, the private investor exercised the Series A warrants and the Company thus issued 500,000 common shares and 500,000 Series B warrants and realized proceeds of $40,000.

In September 2004, the private investor exercised the Series B warrants and the Company thus issued 500,000 common shares and realized proceeds of $40,000.

iii)

In December 2004 the Company completed a Unit private placement to several U.S. investors pursuant to prospectus and registrations exemptions set forth in applicable securities laws. Under the private placement, the Company received $617,000 as subscription proceeds for the sale and issue of 1,028,344 Units. Each Unit consisted of one Common Share and one Series A Warrant. Each series A Warrant entitled the holder to purchase one Common Share and one Series B warrant for $.60 until expiry 12 months from the date of issue. Each Series B Warrant entitled the holder to purchase one additional Common Share for $.60 until expiry 12 months from the date of issue.

iv)

In February 2005, the Company arranged a Unit private placement to several investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under this private placement, the Company received $845,000 as of April 30, 2005 as subscription proceeds for the sale of 1,300,000 Units. Each unit consisted of one Common Share and one Series A Warrant. Each Series A Warrant entitled the holder to purchase one Common Share and one Series B Warrant for $.65 until expiry 12 months from the issue date. Each

Series B warrant entitled the holder to purchase one Common Share for $.65 until expiry 12 months from the issue date.

v)

In February 2005, the Company completed a Unit private placement to two Canadian investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placement, the Company received $10,500 as subscription proceeds for the sale and issue of 14,000 Units. Each Unit consisted of one Common Share and one Series A Warrant. Each Series A Warrant entitled the investor to purchase one Common Share and one Series B Warrant for $.75 until expiry 12 months from the date of issue. Each Series B

25

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

Warrant entitled the holder to purchase one additional common share for $.75 until expiry 12 months from the date of issue.

vi)

In December 2005 the Company revised the terms of the Unit private placements outlined in Note 8(e) (iii) (iv) and (v). In each case the Unit was revised to consist of one Common Share, one Series A warrant expiring on June 30, 2006 and one Series B warrant expiring on December 31, 2006. In June 2006 the Series A warrants were extended to September 30, 2006 and, concurrently, 771,883 warrants were exercised and the Company realized $485,548 of net proceeds. The remaining terms of the Series A and Series B warrants were unchanged.

During the quarter ending January 31, 2007 the Company further extended the expiry date of the Series A and Series B warrants referred to in (iii) – (vi) above to June 30, 2007 and has revised the subscription price in each case to $0.50. The Company reported an expense of $542,000 during the 3 months ended January 31, 2007 with respect to the repricing of these warrants. This expense has been calculated in accordance with the Black Scholes option-pricing model. The Company records this non-cash expense in the Statement of Income with an offsetting charge to Contributed Surplus. In April 2007 the Company again revised the terms of these warrants – the term was extended to June 2008 and the strike price was reduced from $0.50 per warrant to $0.40 per warrant. The Company reported an expense of $847,681 with respect to the repricing of these warrants, calculated in accordance with the Black Scholes option-pricing model.

vii)

On June 8, 2005 the Company entered into a financial advisory services agreement with an arms length entity and, as consideration issued 1,000,000 purchase warrants. Each warrant entitles the holder to purchase and subscribe for one common share at $.70 per share. These warrants expired unexercised in June 2006.

a.

The Company entered into a second financial advisory services agreement on June 22, 2005 with an arms length entity and, as consideration issued 800,000 purchase warrants. Each warrant entitles the holder to purchase and subscribe for one common share at $.70 per share on or before June 30, 2007. The Company repriced the 800,000 warrants from $0.70 per warrant to $0.40 per warrant in June 2007. The cost associated with this repricing calculated using the Black Scholes model is $115,845. Additionally the term of these warrants was extended to June 2008.

26

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

b.

In May 2006 the Company completed a Unit private placement financing with two investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placement the Company received $75,000 as subscription proceeds for the sale and issue of 150,000 Units. Each Unit consists of one common share and one Series A warrant. Each Series A warrant entitled the investor to purchase one common share for $.50 until expiry in April 2007; these warrants have now expired.

f.

Warrants

Cash proceeds realized by the Company upon the exercise of warrants to acquire common shares are summarized as below:

Date	Financing	Number	Proceeds
February 2005	Aug 2003 (Note 8(d))	1,406,250	$112,500
August 2005	Aug 2003 (Note 8(d))	625,000	50,000
January 2005	Dec 2003 (Note 8(e)(i))	100,000	11,000
January 2005	Dec 2003 (Note 8(e) (i))	300,000	33,000
June 2005	Dec 2004-Feb 2005 (Note 8 (e)(vi))	771,850	485,548
April 2007	December 2004 – February 2005
	(Note 8 (e) (vi))	417,500	167,000
May 2007	December 2004 – February 2005
	(Note 8 (e) (vi))	60,000	24,000
		3,755,600	$883,048

The outstanding warrants to acquire common shares are summarized as below:

Financing	Warrants	Number	Exercise Price
December 2004 (Note 8(e)(ii)	A	211,317	$.40
December 2004 (Note 8(e) (ii)	B	1,028,344	$.40
February 2005 (Note 8(e)(iv)	A	870,000	$.40
February 2005 (Note 8(e)(iv)	B	1,300,000	$.40
February 2005 (Note 8(e)(v)	A	4,667	$.40
February 2005 (Note 8 (e)(v)	B	7,000	$.40
		3,421,328

In addition 800,000 warrants to acquire common shares at a strike price of $.40 per share are outstanding under the terms of a financial advisory services agreement (Note 8(e)(viii).

27

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

9.

Contributed Surplus :

Contributed surplus arises as a result of the application of the Black Scholes option-price model with respect to stock options issued by the Company as outlined in Note 8 (b). Also included in contributed surplus at January 31, 2007 is an amount of $544,891 representing forgiveness of Pageant indebtedness during fiscal 1999 by Ataraxia Corp, the former parent company of Pageant. This forgiven debt was treated as contributed surplus as this balance was between related parties.

10.

Restructuring and write-down of royalty rights:

On July 29, 2002, the Company restructured its operations by closing its research and development facility and adopted a plan to focus its current resources to outsource its research and development activities as described in Note 13(a). No major costs were associated with this restructuring.

As a result of the restructuring, the Company determined that there was significant uncertainty that any amounts would be payable to Estancia in the foreseeable future in respect of the Estancia Royalty as described in Note 4, and accordingly, the Estancia Royalty rights acquired in the amount of $10,000,000 were written off in fiscal 2002.

11.

Income Taxes:    

Once the Company has completed all its income tax return filings it will have non-capital losses of approximately $9,581,000 available to reduce future taxable income, the benefit of which has not been recognized in these consolidated financial statements. As at July 31, 2007, the tax losses expire as follows:

	Canada	Other Foreign		Total
2007	$ 1,632,000	$	-	$ 1,632,000
2008	1,363,000		-	1,363,000
2009	1,062,000		-	1,062,000
2010	932,000		265,000	1,197,000
2011	-		208,000	208,000
2014	746,000		-	746,000
2015	2,249,000		-	2,249,000
2016	1,996,000		-	1,996,000
2017	676,000		-	676,000
2023	-		73,000	73,000

28

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

2024	-	173,000	173,000
2025	-	20,000	20,000
Total losses	$ 10,656,000	$739,000	$11,375,000

12.

Management compensation and related party transactions:

a.

(i)

Between 1999 and 2002, the Company entered into stock-based management compensation arrangements with the Chairman as reported in prior years’ audited financial statements.

(ii)

On May 29, 2005, the Company entered into a new employment agreement with the Chairman for a period from January 1, 2005 through September 30, 2009. Under the terms of the agreement, the Chairman has been retained to provide certain management services to the Company. The Company has agreed to provide compensation based on a percentage of the increase of the market capitalization on a year-over year basis commencing as of December 31, 2005 subject to a minimum annual compensation amount of $150,000 Canadian funds ($141,000 U.S. funds at current exchange rates). At the Company’s option it can pay cash or issue common shares as compensation providing that the cumulative maximum number of shares that it can issue under the agreement is 2 million common shares. The Company determined that the compensation expense in fiscal 2006 was $150,000 Canadian funds ($133,600 U.S. funds at the then current exchange rates) under this agreement.

The total compensation paid to the Chairman during the quarter is summarized as follows:

	Cash Compensation		Stock Option Expense
2007	$	-	$	-
2006 (9 months)	$	150,000	$	659,000

b.

In the normal course of business, the Company has entered into cost sharing arrangements with companies where certain senior officers and directors exercise significant influence. These transactions, which were measured at the exchange amount on the date of the transaction, relate to salaries, rent and other expenses. For the three months ended July 31, 2007, the Company paid exp enses of approximately $27,000 in rent (2006: $29,000) and $46,000 in salaries (2006: $56,000) prior to recovery of a portion of these costs from such other companies.

29

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

c.

Included in professional fees as reported are management and consulting fees paid or payable to individuals (or companies controlled by such individuals) who served as officers and directors of the Company. The total compensation paid to such parties during the three months ended July 31, 2007 is summarized as follows:

	Cash Compensation		Stock Option Expense
2007	$	115,000	$	-
2006	$	115,000	$	-

13.

Commitments:

A.

Research Collaboration and Infrastructure Agreements

1.

Materials and Manufacturing Ontario:

On October 24, 2002, Micromem entered into a two year Research Collaboration Agreement with Material and Manufacturing Ontario ("MMO"), a not- for-profit organization funded by the provincial government, the University of Toronto ("U of T") and a researcher employed by U of T to fund the research on Magnetic Structure development for Hall effect memory devices.

Under the terms of the agreement, the Company committed to contribute $87,432 (Cdn $136,175) and $18,000 (Cdn $28,000) in cash and in-kind contribution, respectively, per year to fund the research. The Company has met all of its obligations under this agreement.

On November 12, 2003, Micromem entered into a second research collaboration agreement with MMO and the U of T for research and development associated with magnetic memory devices. Under the second agreement, in the first year and upon renewal in the second year, MMO granted $58,900 (equivalent to Cdn. $85,000) in cash funding and Micromem contributed $56,130 (equivalent to Cdn. $81,000 in cash funding and additionally made $30,770 (equivalent to Cdn. $44,400) of in-kind contributions, all towards the research collaboration, each year. The Company has met all of its obligations under the agreement. Micromem obtained sublicensing rights for the use of any new technology developed ("Technology Developed") under this research subject to payment of an annual royalty payable in perpetuity to MMO based on a percentage of revenues from the sale of products incorporating the Technology Developed.

30

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

2.

University of Toronto:

On November 1, 2002, the Company entered into an Infrastructure Agreement with U of T to fund the assembly of a magnetic memory facility ("MMF") for research, development and fabrication of magnetic memory. U of T has agreed to use the MMF in connection with, among other things, research to be conducted pursuant to collaborations between Micromem and U of T.

The terms of the agreement provided that Micromem was to contribute $249,463 (equivalent to Cdn. $360,000) in cash to fund the direct costs of the MMF. The contribution has been made in fiscal 2002-2003 by Micromem and included as a research and development expense in the consolidated statements of operations and deficit.

3.

Communications and Information Technology Ontario:

On December 10, 2002, Micromem entered into a two year Collaborative Research Agreement with Communications and Information Technology Ontario ("CITO") U of T and Dr. Harry Ruda. For the first year, CITO provided funding of $106,715 (equivalent to Cdn. $154,000) and Micromem contributed $31,875 (equivalent to Cdn. $46,000). For the second year, CITO provide funding of $107,715 (equivalent to Cdn. $154,000) and Micromem provided funding of $31,875 (equivalent to Cdn. $46,000). Micromem has further provided $67,632 (equivalent to Cdn $97,600) of in-kind contributions to the research collaboration.

4.

Revised License Agreement:

In June 2005 the Company signed a license agreement ("the License Agreement") with the U of T and the Ontario Centres of Excellence (including MMO and CITO) (collectively "OCE") whereby:

?

OCE released the Company and the University from the commercialization obligations set forth in all prior research collaboration agreements.

?

The Company acquired exclusive worldwide rights to the Technology and Developed Technology and Patent Rights related to the MRAM technology developed at the UofT.

31

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

?

The Company has agreed to royalties and payments under the terms of the License Agreement as follows:

?

In consideration for the rights and licenses granted herein, the Company shall pay to the UofT:

i.

4% of Net Sales unt il such time as the UofT has received from the Company an aggregate amount of five hundred thousand Canadian dollars (CDN$500,000);

ii.

1% of Net Sales thereafter.   

?

If the Company sublicenses any rights granted herein to any non-Affiliate:

i.

in combination or association with the Micromem Intellectual Property, the UofT shall receive 10% of any Net Fees and/or Net Royalties that shall be received by the Company in respect of any licenses involving both the rights granted herein and such Micromem Intellectual Property;

ii.

For all other sublicenses of the rights granted herein to any non-Affiliate, the UofT shall receive 20% of any Net Fees and/or Net Royalties that shall be received by the Company in respect of such sublicenses.

iii.

Net Fees and/or Net Royalties shall be received from the Company until such time as the UofT has received from the Company an aggregate amount of five hundred thousand Canadian dollars (CDN$500,000); thereafter the Company shall pay half of the amounts as otherwise noted above.

?

At any point after which the Company has paid the UofT five hundred thousand Canadian dollars (CDN$500,000), the Company may at its option buy out the obligation to pay royalties under the License Agreement by paying to the UofT a single lump sum payment equaling the greater of five hundred thousand Canadian dollars (CDN$500,000) and an amount equal to the total amount of royalties paid by the Company to the UofT in the preceding twenty- four months. The Company shall be entitled to exercise such option by providing written notice to the UofT along with the required payment, after which time the Company’s obligation to pay royalties as otherwise calculated shall be waived by the UofT.

32

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

?

As a condition to entering the License Agreement the Company has agreed to a further Research Agreement with a funding commitment of no less than five hundred thousand Canadian dollars (CDN $500,000), to continue the further research and development of the Inventions and Micromem Intellectual Property. In August 2005 the Company made an initial payment of CDN $250,000 (approximately $200,000 U.S. funds at the then prevailing exchange rates) and, in November 2005, the Company made the second payment of CDN $250,000 (approximately $200,000 U.S. funds at the then prevailing exchange rates) under the terms of this Research Agreement.

?

The Company believes that there are substantial market opportunities available for it to commercialize its technology in conjunction with strategic partners and it is currently pursuing such opportunities. The Company plans to complete its research initiatives and enter into agreements with strategic partners so as to commercialize its technology under licensing and other arrangements.

B.

Technology Development Agreement:

On March 14, 2001, the Company’s subsidiary, Pageant, entered into a three- year technology development agreement with Estancia and Lienau to continue the development of the Technology. Under the terms of the agreement, Pageant committed to pay Estancia $215,000 per year, payable on a monthly basis in arrears, and committed to incur expenditures in connection with the development expenses of up to a maximum of $500,000 per agreement year.

On April 23, 2002, the technology development agreement was amended to extend its term for an additional eight- month period through November 2004. The go- forward payments were renegotiated as $62,707 between May – October 2002, $197,086 during fiscal 2003 and $143,330 during fiscal 2004.

The development efforts under this agreement ceased in July 2002. The Company reports approximately $289,000 in accounts payable and accrued liabilities with respect to this agreement as of January 31, 2007 (at January 31, 2005: $289,000).

33

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

C.

Operating Leases:

The Company has operating lease commitments which expire in 2010 in respect of its head office. The future minimum annual lease payments are approximately as follows:

2007-2010 (annually)

$103,000

D.

Other contracts:

In January 2005 the Company entered into a consulting contract with an arm’s length individual for her services as Chief Technology Officer of the Company. The agreement extends for 2 years with a cancellation clause which can be executed by the Company at any time with 4 months notice provided. The base remuneration stipulated in the contract is $260,000 per year.

In October 2006, the Company extended the consulting contract for 2 more years commencing in January 2007 on the same terms, conditions and cancellation clauses.

On May 28, 2007 the Company executed an agreement with an arms- length independent financial agent to secure up to $8.5 million of equity financing for the Company. Subject to completion of the financing, the fees payable by the Company will equal 12% in cash based on the gross proceeds raised and one million warrants to acquire common shares at a price of $0.45 per common share at any time for two years following the closing date of the financing.

14.

Contingencies:

The Company has agreed to indemnify its directors and officers and certain of its employees in accordance with the Company’s by- laws. The Company maintains insurance policies that may provide coverage against certain claims.

As outlined in Note 4, certain interests under the Agreement with Estancia reverted to Estancia on March 9, 2004. On this basis, to the extent that future revenues are generated by the Company relating directly and specifically to the Vemram Patents, the Company is obligated to pay Estancia 32% of the gross profit realized less expenses agreed to by the parties and 32% of any unit royalties realized less direct expenses.

34

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

15.

Financial instruments:

a.

Fair values

The fair values for all financial assets and liabilities are considered to approximate their carrying values due to their short-term nature.

b.

Foreign items

The consolidated financial statements include balances/transactions that are denominated in Canadian dollars as follows:

		7/31/07		7/31/06
Assets	$	90,770	$	240,000
Liabilities		416,509		136,000
Other Income		-		-
Expenses		310,000		1,230,000

16.

Reconciliation between Canadian GAAP and U.S. GAAP:

The Company’s consolidated financial statements have been prepared in accordance with Canadian GAAP which, in the case of the Company, conform in all material respects with U.S. GAAP.

a.

Stock-Based compensation:

Until October 31, 2004 the Company chose to account for employee stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. Under this method, compensation expense is recorded if the market value exceeds the exercise price at the date of grant. The compensation expense, if any, is recognized at the date of option grants or when the option shares are earned, when future performance is required, in the consolidated statements of operations and deficit.

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), "Share-Based Payments". SFAS No. 123(R) would require the Company to measure all emp loyee stock-based compensation awards using a fair-

35

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

value method and record such expense in its consolidated financial statements. SFAS No. 123(R) is effective beginning in the quarter ending January 31, 2005.

The Company has adopted the fair value method to measure all employee stock-based compensation effective November 1, 2004 and accordingly has restated the prior year financial statements to reflect this change, as outlined in Note 8(b).

b.

Consolidated statement of comprehensive income (loss):

Comprehensive income (loss) includes all changes in equity during the periods presented except shareholder transactions. For the purpose of reporting under U.S. GAAP, the components of comprehensive income and total comprehensive income are reported in the consolidated statements of changes in shareholders’ equity, below net loss in the consolidated statements of operations and deficit and in a separate consolidated statement of comprehensive income. For the periods presented, accumulated other comprehensive loss equals net loss.

c.

Research and development expenditures

Under U.S. GAAP all research and development expenditures are expensed as incurred. In that the Company has not deferred any research and development expenditures it is in compliance with U.S. GAAP.

d.

Other recent accounting pronouncements

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments. SFAS is an amendment to SFAS No. 133 and 140. SFAS No. 155 improves financial reporting by eliminating the exception from applying SFAS No. 133 to interest in securitized financial assets so similar instruments are accounted for similarly regardless of the form of instruments. SFAS No 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of SFAS No. 155 to have an impact on its financial position or results of operation. Also, SFAS No. 156 "accounting for Servicing of Final Assets" was recently issued but has no current applicability to the Company and has no effect on the consolidated financial statements.

In March 2006, the FASB issued SFAS No. 156. This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and

36

MICROMEM TECHNOLOGIES INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States dollars)

July 31, 2007

Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement is effective as of the beginning of its first fiscal year that begins after September 15, 2006.

An entity should apply the requirements for recognition and initial measurement of servicing assets and servicing liabilities prospectively to all transactions after the effective date of this Statement.

In September 2006, the FASB issued SFAS No. 157 and No. 158. Statement No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does no t require any new fair value measurements. However, for some entities, the application of this Statement will change current practice.

The Company believes that implementation of the above standards do not have a material impact on its financial position or on the results of operations.

17.

Subsequent Events :

The following subsequent events after July 31, 2007 are noted:

a.

On September 2007, the Company arranged a short-term bridge loan of $525,000 from an arms- length party. Under the terms of the bridge loan, a flat fee of $25,000 is payable and the lender was provided 250,000 warrants to acquire common shares at a price of $0.50 per share. These warrants expire in September 2008 if unexercised.

b.

On September 17, the Company announced that it has engaged a U.S.-based fabricator to provide foundry services. The initial financial commitment of the Company over the next 6 months is estimated at approximately $350,000.

c.

On September 20, 2007 an officer exercised 100,000 options and the Company realized $72,000 of proceeds.

************************************************

37

EX-2

MICROMEM TECHNOLOGIES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
CONSOLIDATED FINANCIAL STATEMENTS
AS AT JULY 31, 2007
PREPARED AS OF SEPTEMBER 27, 2007

Introduction

The following sets out the Management’s Discussion and Analysis ("MD&A") of the financial position and results of operations for the three months ended July 31, 2007 of Micromem Technologies Inc. (the "Company", "our" and "we"). The MD&A should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes for the fiscal quarters ending July 31, 2007 which are prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). Additional information regarding the Company is available on the SEDAR website at www.sedar.com.

Certain information provided by the Company in this MD&A and in other documents publicly filed throughout the year that are not recitation of historical facts may constitute forward- looking statements. The words "may", "would", "could", "will", "likely", "estimate", "believe", "expect", "forecast" and similar expressions are intended to identify forward-looking statements.

Readers are cautioned that such statements are only predictions and the actual events or results may differ materially. In evaluating such forward- looking statements, readers should specifically consider the various factors that could cause actual events or results to differ materially from those indicated by such forward- looking statements.

This MD&A contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward- looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of The Company to be materially different from those expressed or implied by such forward- looking statements, including but not limited to: risks related to the nature of the business activity that it is involved with which is affected by numerous factors beyond the Company’s control; the existence of present and possible future government regulation; the significant and increasing competition that exists in the Company’s several business sectors , uncertainty of revenues, markets and profitability, as well as those factors discussed in the Company’s MD&A for the period ended July 31, 2006 contained herein.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward- looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward- looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

1

MICROMEM TECHNOLOGIES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE 3 MONTHS ENDED JULY 31, 2007
TABLE OF CONTENTS

I.	Overview
II.	Going Concern
III.	Operations Results and Financial Position
IV.	Unaudited Quarterly Financial Information
V.	Liquidity and Capital Resources
VI.	Critical Accounting Policies
VII.	Commitments and Contingencies
VIII.	Disclosure Controls
IX.	Financial Instruments
X.	Off Balance Sheet Arrangements
XI.	Transactions with Related Parties
XII.	Share Capital
XIII.	Subsequent Events
Tables
1.	Selected Information from Statement of Operations and Deficit
2.	Selected Balance Sheet Information
3.	Unaudited quarterly financial statements
4.	Financing raised
5.	Outstanding stock options and warrants

2

MICROMEM TECHNOLGIES INC.
CONSOLIDATED FINANCIAL STATMEENTS
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE 3 MONTHS ENDED JULY 31, 2007
PREPARED AS OF SEPTEMBER 27, 2007

I.

OVERVIEW:

The Company: The Company has previously reported on its technology developments during the 2005 – 2006 fiscal years. Reference should be made to the Management Discussion and Analysis filed as of October 31, 2006 for additional details.

During the 3- month and 9 month periods ended July 31, 2007, the Company continued with a number of initiatives that are in progress:

a.

It has been negotiating with a U.S.-based fabrication plant for the development of a commercial grade prototype of its memory technology. These discussions continue and the Company announced subsequent to July 31,2007 that the initial phase of this work has been agreed upon and has now commenced.

b.

It continues to pursue and is in active discussions with a potential strategic development partner in the United States to develop a prototype for a specific vertical market application.

c.

It has commenced similar discussions with a foreign technology company. Initial meetings which were initially scheduled for July 2007 have been delayed but remain pending.

d.

We continue to work with our research team at the University of Toronto. In May 2007 the Company announced certain positive test results at the University of Toronto.

e.

The Company participated in a one-day trade show in April 2007 at the invitation of Lockheed Martin, a potential strategic partner.

f.

The Company has formed a strategic committee consisting of two outside directors and an independent consultant to evaluate all of the Company’s go forward technical plans and to prioritize these over the next 4 quarters.

Operations : We have a small staff compliment of 8 people including the President, Chief Technology Officer and Chief Financial Officer. The bulk of the research being completed is through our research partners as described above.

Financial: We continue to raise capital to fund our current obligations. The Company raised $24,000 of financing in the quarter ending July 31, 2007 and $671,000 year-to-date through the exercise of outstanding stock options and common share purchase warrants; (for the quarter ending July 31, 2006: $815,528). The Company announced that it has engaged a financial intermediary to secure up to $8.5 million of equity financing on a best efforts basis. Subsequent to July 31, 2007 it secured a $525,000 bridge loan.

3

The Company reports the following losses for the quarter and year-to-date:

	7/31/07		7/31/06
	3 Months	9 Months	3 Months	9 Months
Operating loss	606,675	2,832,028	530,370	1,598,620
Stock compensation expense	33,644	139,587	-	143,786
Price adjustment on warrants	115,845	1,505,526	-	-

The Company reports a shareholders’ deficit of $964,837 at July 31, 2007 (2006: $114,137). Its working capital deficiency is $964,838 (2006: $114,137).

II.

GOING CONCERN:

The consolidated financial statements have been prepared on the "going concern" basis, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future.

The consolidated financial statements do not include any adjustments to the amounts and classifications of the assets and liabilities that might be necessary should we be unable to continue in business. If the "going concern" assumption was not appropriate for these consolidated financial statements, then adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

We have incurred substantial losses to date. It will be necessary for us to raise additional funds in order to continue to develop, test and commercially explore our technologies. There is no certainty that such financing will be available in the future.

Our ability to continue, as a going concern is dependent upon completing the development of our technology for particular applications, successfully bringing our technology to market, achieving profitable operations and obtaining additional financing. The outcome of these matters cannot be predicted at this time.

III.

OPERATING RESULTS AND FINANCIAL POSITION:

Table 1 sets forth selected information from the consolidated statements of operations and deficit for the fiscal years ending October 31, 2001-2006 and the quarterly information through July 31, 2007. Table 2 sets forth selected information from the consolidated balance sheets for the fiscal years ending October 31, 2001-2006 and for the quarters through July 31, 2007.

Three Months Ending April 30, 2007 Compared to Three Months Ending April 30, 2006:

Our General and Administration costs were $99,266 for the quarter (2006: $106,583) and totalled $155,051 for the 9- month ended July 31, 2007 (2006: $258,646).

4

The significant expenses during the quarter included approximately $58,000 pertaining to the Annual General Meeting, approximately $10,000 with respect to insurance with the balance pertaining to office-related expenses.

Professional, management and consultant fees totalled $229,822 for the quarter (2006: $224,206) and $564,261 for the 9 months ending July 31, 2007 (2006: $582,052). Our costs for the quarter included approximately $80,000 with respect to patent-related filings, approximately $20,000 with respect to consulting fees paid to third party contractors with respect to the current financing plan, $66,000 in consulting fees paid to our Chief Technology Officer, other consulting fees of approximately $40,000 and additional legal costs pertaining to the company’s Annual Meeting and other matters.

Research and Development expenses totalled $121,200 for the quarter (2006: $39,267) and $295,900 for the 9 months ended July 31, 2007 (2006: $316,262). In 2007, we engaged the services of Strategic Solutions, an engineering consulting firm that is providing assistance in our commercialization efforts and our transition from lab to a fabrication plant. We paid approximately $50,000 of fees to Strategic Solutions during the quarter. Additionally, we accrued approximately $70,000 of costs associated with ongoing research initiatives at the University of Toronto during the quarter. During the 9 months ended July 31, 2006, the Company paid $250,000 Canadian funds (approximately $222,000 U.S. at the then prevailing exchange rates) to the University of Toronto as a lump sum R&D-related payment.

We reported $27,066 in travel and entertainment during the quarter (2006: $82,136) and $88,464 for the 9 months ended July 31, 2007 (2006: $138,638). Travel expenses have been significantly curtailed during the 2007 fiscal year.

We repriced 800,000 warrants previously issued to an independent consultant during the quarter. Initially these warrants were priced at $0.70 per common share and have now been repriced to $0.40 per common share. The cost calculated in accordance with the Black Scholes option-pricing model relating to this repricing was $115,845 (2006: nil). Additionally we issued we issued 200,000 common share purchase options to outside consultants and to an employee during the quarter and the related stock compensation expense was $33,644 (2006: nil) during the quarter.

The exercise of stock options by directors, officers and employees continues to be an important source of financing for the Company. Total options exercised during the quarter were nil (2006: $553,600); for the 9 months ending July 31, 2007 the proceeds realized by the Company on the exercise of stock options was $480,000 (2006: $553,600). Additionally a total of 60,000 warrants were exercised during the quarter for proceeds of $24,000 (2006: 771,850 warrants for proceeds of $485,548): for the 9 months ended July 31, 2007 a total of 477,500 warrants were exercised for proceeds of $191,000 (2006: 771,850 warrants exercised for proceeds of $485,548).

IV.

UNAUDITED QUARTERLY FINANCIAL INFORMATION:

Table 3 presents certain quarterly information for the 2005-2006 fiscal years and for the quarters through July 31, 2007.

5

V.

LIQUIDITY AND CAPITAL RESOURCES:

Liquidity

Table 4 provides a summary of the financing raised by us in 2005-2006 and through the quarter ended July 31, 2007.

We currently have no cash flow from operations and will have none until we are in a position to either license or directly produce and sell products utilizing our memory technologies. As at July 31, 2007, our working capital deficiency was $964,838 (2006: $114,137). We must obtain financing to continue funding future research and development. We continue to pursue sources of financing to meet our working capital requirements.

We currently have no lines of credit in place and must obtain financing from investors and from investors who hold outstanding options and warrants in order to meet our cash flow needs until we generate revenues.

We have granted to our directors, officers and other employees options to purchase shares at prices that are at or above market price on the date of grant. A summary of the outstanding options and warrants are provided in Table 5.

Capital Resources

We have no commitments for capital expenditures as of July 31, 2007.

VI.

CRITICAL ACCOUNTING POLICIES:

a.

Principles of consolidation:

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Memtech International Inc., Memtech International (U.S.A.) Inc., Pageant Technologies Inc. and Pageant Technologies (U.S.A.) Inc.

During the fiscal year ending October 31, 2003, two of the Company’s subsidiaries, Micromem Technologies B.V. and Micromem Technologies S.p.A. were wound up. All significant intercompany balances and transactions have been eliminated upon consolidation.

b.

Use of estimates:

The preparation of consolidated financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Examples of where estimates are used include the computation of stock option expense calculated in accordance with the Black Scholes option-pricing model and in calculating the provision for doubtful accounts.

6

c.

Patents and trademarks:

Patents and trademarks are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When circumstances dictate, an impairment loss is calculated as equal to the excess of the carrying value of the assets over their undiscounted estimated future net cash flow (Note 7).

d.

Research and development expenses:

Research costs are expensed in the period incurred. Development expenses are expensed as incurred unless they meet the criteria for deferral and amortization under Canadian GAAP which is the translation of research findings or other knowledge into a plan for the technology prior to commercial production or use. The Company has determined that no development costs have met these criteria at the financial reporting date.

e.

Stock-based compensation:

Stock-based compensation is recognized using the fair value method. Under this method, the Black Scholes option-pricing model is used to determine periodic stock option expense. Any compensatory benefit recorded is recognized initially as deferred share compensation in the consolidated statements of stockholders’ equity and then charged against income over the contractual or vesting period.

f.

Long-Lived Assets

The Company records the value of the long-term assets acquired at cost. Such rights are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable when circumstances dictate an impairment loss is calculated as equal to the excess of the carrying value of the assets over their undiscounted estimated future net cash flows. Management used its best estimate of the undiscounted cash flows to eva luate the carrying amount and has determined that no impairment has occurred.

g.

Foreign currency translation:

The functional and reporting currency of the Company is the United States dollar. The Company’s wholly-owned subsidiaries are integrated foreign operations and therefore, the Company uses the temporal method whereby monetary assets and liabilities are translated into United States dollars at the rate of exchange in effect at the consolidated balance sheet dates. Non- monetary assets and liabilities are translated at historical rates. Income and expenses are translated using the average monthly rate of exchange per quarter, which rate approximates the rate of exchange prevailing at the transaction dates. Gains or losses resulting from translation are included in the determination of net loss for the period.

7

h.

Other:

On November 1, 2006 the Company adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855, Financial Instruments – Recognition and Measurement; Section 1530, Comprehensive Income, Section 3251, Equity, Section 3861, Financial Instruments – Disclosure and Presentation and Section 3865, Hedges. The principal changes in the accounting for financial instruments due to the adoption of these accounting standards are described below. These standards have been adopted prospectively and comparative amounts for the prior periods have not been restated.

Determination of Fair Value

The fair value of a financial instrument on initial recognition is the transaction price, which is the fair value of the consideration given or received. Subsequent to initial recognition, fair value is determined by using valuation techniques which refer to observable market data.

Comprehensive Income

Comprehensive income is composed of the Company’s net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available for sale securities, net of income taxes. The components of comprehensive income are disclosed in the Consolidated Statement of Operations, Comprehensive Income and Deficit. The Company does not currently have any other comprehensive income.

i.

Reconciliation between Canadian GAAP and U.S. GAAP: The Company’s consolidated financial statements have been prepared in accordance with Canadian GAAP which, in the case of the Company, conform in all material respects with U.S. GAAP.

VII.

COMMITMENTS AND CONTINGENCIES:

a.

Technology development agreement with Estancia:

To the extent that revenues are generated by us relating directly and specifically to the VENRAM Patents, we are obligated to pay Estancia 32% of the gross profit realized less expenses agreed to by the parties and 32% of any unit royalties realized less direct expenses. To date no revenues have been generated.

b.

Operating leases:

We have operating lease commitments which expire in 2010 with respect to our head office. The future annual minimum annual lease payments are approximately as between 2007 – 2010 are $103,000 per annum.

8

c.

Legal matters:

There are currently no outstanding legal matters to which the Company is a party. We have agreed to indemnify our directors and officers and certain of our employees in accordance with our by- laws. We maintain insurance policies that may provide coverage against certain claims.

d.

Royalties:

The Company has obligations under the terms of the License Agreement signed in June 2005. To date no royalty obligations have been incurred, as the Company has not generated any revenues.

e.

Contracts:

In January 2005, we entered into an employment contract with Dr. Cynthia Kuper for her services as our Chief Technology Officer. The agreement extended for 2 years with a cancellation clause which can be executed by us at any time with 4 months notice provided. The base remuneration stipulated in the contract is $260,000 per year. In September 2006 with an effective date of January 2007, this contract was extended for an additional 2 years under the same terms, conditions and cancellation clauses.

On May 29, 2005, we entered into a new employment agreement with our Chairman of the Board of Directors, Salvatore Fuda (the "Chairman"), for a period from January 1, 2005 through September 30, 2009. Under the terms of the agreement, the Chairman has been retained to provide certain management services to us. We have agreed to provide compensation based on a percentage of the increase of the market capitalization on a year-over- year basis commencing as at December 31, 2005 subject to a minimum annual compensation amount of $150,000 in Canadian funds. At our option we can pay cash or issue common shares as compensation providing that the cumulative maximum number of shares that we can issue under the agreement is 2 million common shares.

For each of the 2005 and 2006 fiscal years the Company has accrued $150,000 Canadian (approximately $133,600 U.S. funds at current exchange rates) as due under this contract.

VIII.

DISCLOSURE CONTROLS:

The Company’s management maintains appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete, accurate, reliable and timely. The disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in its various reports are recorded, processed, summarized and reported accurately.

The Chief Executive Officer and the Chief Financial Officer of the company have evaluated, or caused the evaluation of under direct supervision, the effectiveness of the Company’s disclosure controls and procedures (as defined in Multilateral instrument 52-109 Certification of disclosure in issuer’s annual and interim filings) as at July 31, 2007 and have concluded that such disclosure controls and procedures were designed and operating effectively.

9

As a result of its periodic self-assessment, the Company has introduced several enhancements to its disclosure regime. These include clarifying aspects of the Disclosure Policy and assigning additional supervision over some elements of the disclosure process.

In spite of its evaluation, management does recognize that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance and not absolute assurance of achieving the desired control objectives. In the unforeseen event that lapses in the disclosure controls and procedures occur and/or mistakes happen, the Company intends to take whatever steps necessary to minimize the consequence thereof.

IX.

FINANCIAL INSTRUMENTS:

It is Management’s opinion that the Company is not exposed to significant interest rate and credit risks arising from the financial instruments and the fair value of financial instruments approximates the carrying value.

X.

OFF-BALANCE SHEET ARRANGEMENTS:

The Company has no off-balance sheet financial commitments and does not anticipate entering into any contracts of such nature other than the addition of new operating leases for equipment and premises as may be required in the normal course of business.

XI.

TRANSACTIONS WITH RELATED PARTIES:

Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount, which is the consideration established and agreed to by respective parties. These transactions relate to office salaries, rent and other expenses.

The Company has paid cash and non-cash compensation to its officers and directors during the quarter as follows:

			Cash	Non-Cash
		Compensation		Compensation
Chairman	2007	$	-	$	-
	2006		150,000		659,000
Officers & Directors	2007		115,000		-
	2006		115,000		-

XII.SHARE CAPITAL:

At July 31, 2007 the Company reports 71,268,799 common shares outstanding (2006: 68,491,299). Additionally the Company has 10,200,000 stock options outstanding with a

10

weighted average exercise price of $.52 (2006: 8,750,000 options outstanding with a weighted average exercise price of $.53) and a total of 4,221,328 outstanding warrants to acquire common shares with a weighted average exercise price of $.40 (2006: 4,142,344 outstanding warrants with a weighted average exe rcise price of $.66).

XIII.

SUBSEQUENT EVENTS:

The following subsequent events after July 31, 2007 are noted:

a.

In September 2007, the Company arranged a short-term bridge loan of $525,000 from an arms- length party. Under the terms of the bridge loan, a flat fee of $25,000 is payable and the lender was provided 250,000 warrants to acquire common shares at a price of $0.50 per share. These warrants expire in September 2008 if unexercised.

b.

On September 17 the Company announced that it has engaged a U.S.-based fabricator to provide foundry services. The initial financial commitment of the Company over the next 6 months is estimated at approximately $350,000.

c.

On September 20, 2007 an officer exercised 100,000 options and the Company realized $72,000 of proceeds.

****************************************

11

Table 1

Micromem Technologies Inc

Management Discussion and Analysis

July 31, 2007

Selected statement of Operations and Deficit information (all amounts in United States dollars)

Fiscal year	Interest and		Loss per share
ending October 31,	other Income	Net Loss	(basic and fully diluted)
2006	9,930	(4,058,180)	(0.06)
2005	8,703	(4,035,483)	(0.07)
2004	4,746	(2,314,298)	(.043)
2003	20,121	(1,767,965)	(.038)
2002	165,892	(14,565,515)	(.300)
2001	185,590	(9,187,377)	(.210)
Quarter ending:
January 31, 2007	2,166	(844,766)	(0.01)
April 30, 2007	420	(1,326,587)	(0.02)
July 31, 2007	-	(660,675)	(0.01)

12

Table 2

Micromem Technologies Inc

Management Discussion and Analysis

July 31, 2007

Selected Balance Sheet Information (all amounts in United States dollars)

Fiscal year	Working capital	Capital assets			Shareholders equity
ending October 31,	(deficiency)	at NBV	Other Assets	Total Assets	(deficit)
2006	(448,923)	-	-	465,440	(448,923)
2005	(74,831)	-	-	728,375	(74,831)
2004	34,685	2,925	-	474,234	37,610
2003	100,670	3,768	-	350,138	104,438
2002	1,368,589	98,654	307,698	1,583,422	1,391,903
2001	3,455,108	336,839	10,332,971	14,454,470	14,124,918
Quarter ending:
January 31, 2007	(451,689)	-	-	299,877	(451,689)
April 30, 2007	(477,651)	-	-	273,695	(477,651)
July 31, 2007	(964,838)	-	-	88,331	(964,837)

13

Table 3

Micromem Technologies Inc

Management Discussion and Analysis

July 31, 2007

Unaudited quarterly financial information (all amounts in United States dollars)

Quarter ending	Revenues	Loss for the quarter	Basic and fully diluted
October 31, 2004	117	429,289	0.01
July 31, 2004	450	1,621,839	0.03
April 30, 2004	3,658	70,876	0.00
January 31, 2004	521	192,294	0.00
	4,746	2,314,298	0.04
October 31, 2005	7,070	(1,380,802)	0.025
July 31, 2005	1,043	(1,726,931)	0.035
April 30, 2005	301	(474,227)	0.005
January 31, 2005	289	(453,523)	0.005
	8,703	(4,035,483)	0.07
October 31, 2006	7,686	($2,459,560)	0.04
July 31, 2006	1025	(530,370)	0.01
April 30, 2006	-	(333,768)	0.005
January 31, 2006	1,219	(734,482)	0.005
	9,930	(4,058,180)	0.06
January 31, 2007	2,166	(844,766)	0.01
April 30, 2007	420	(1,326,587)	0.02
July 31, 2007	-	(660,675)	0.01

14

Table 4

Micromem Technologies Inc

Management Discussion and Analysis

July 31, 2007

Financing raised by the Company

Date of financing		2006			2005
	Shares	Price/share	$	Shares	Price/share	$
Private placement
December 2004				1,028,334	0.60	617,000
March 2005				1,300,000	0.65	845,000
March 2005				14,000	0.75	10,500
May 2006	150,000	0.50	75,000
Exercise of warrants
Aug - Oct 2004				2,031,250	0.08	162,500
June - Sept 2004
October 2004				400,000	0.11	44,000
June 2006	771,850	mixed	485,548
Exercise of options
June 2005	-	-	-	1,820,000	0.30	553,600
January 2006	150,000	0.30	45,000
February-March 2006	1,600,000	0.30	480,000
May-July 2006	1,100,000	0.30	329,980
August-October 2006	700,000	0.30	210,000
	4,471,850		1,625,528	6,593,584		2,232,600
		2007
Exercise of options
January 2007	1,000,000	0.30	300,000
March 2007	600,000	0.30	180,000
Exercise of warrants
April 2007	417,500	0.40	167,000
July 2007	60,000	0.40	24,000

15

Table 5

Micromem Technologies Inc

Management Discussion and Analysis

July 31, 2007

Number of options	Strike price	Expiry date
350,000	0.36	4/15/2012
100,000	0.68	3/15/2009
50,000	0.63	11/15/2009
300,000	0.60	3/22/2010
100,000	0.91	6/17/2009
200,000	0.30	7/18/2009
1,800,000	0.65	6/16/2009
2,500,000	0.72	5/27/2010
4,600,000	0.80	7/13/2011
150,000	0.70	5/31/2008
50,000	0.50	5/31/2012
10,200,000	0.72	(average)
	Total proceeds if all options exercised	$7,336,500
Outstanding Warrants
211,317	0.40	6/30/2008
1,028,344	0.40	6/30/2008
870,000	0.40	6/30/2008
1,300,000	0.40	6/30/2008
4,667	0.40	6/30/2008
7,000	0.40	6/30/2008
800,000	0.40	6/30/2008
4,221,328	0.40
	Total proceeds if all warrants exercised	$1,688,530

16

EX-3

OFFICER'S CERTIFICATE

I, Joseph Fuda, Chief Executive Officer of Micromem Technologies Inc. (the "Issuer") certify that:

1.    

I have reviewed the quarterly filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings) of the Company for the quarter ending July 31, 2007;

2.    

Based on my knowledge, the quarterly filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the quarterly filings; and

3.    

Based on my knowledge, the quarterly financial statements together with the other financial information included in the interim filings fairly represent in all material respects the financial condition, results of operations and cash flows of the Company, as of the date and for the periods presented in the quarterly filings.

4.    

The Issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the Issuer, and we have:

a.    

Designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

b.    

Designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financing reporting and the preparation of financial statements for external purposes in accordance with the Issuer's GAAP; and

5.    

I have caused the Issuer to disclosure in the interim MD&A any change in the Issuer's internal control over financial reporting that occurred during the Issuer's most recent interim period that has materially affected, or is reasonably likely to materially affect, the Issuer's internal control over financial reporting.

DATED: September 27, 2007

"Joseph Fuda"                           
Joseph Fuda
Chief Executive Officer
Micromem Technologies Inc.

OFFICER'S CERTIFICATE

I, Dan Amadori, Chief Financial Officer of Micromem Technologies Inc. (the "Issuer") certify that:

1.    

I have reviewed the quarterly filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings) of the Company for the quarter ending July 31, 2007;

2.    

Based on my knowledge, the quarterly filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the quarterly filings; and

3.    

Based on my knowledge, the quarterly financial statements together with the other financial information included in the interim filings fairly represent in all material respects the financial condition, results of operations and cash flows of the Company, as of the date and for the periods presented in the annual filings.

4.    

The Issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the Issuer, and we have:

(a)  

Designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

(b)  

Designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financing reporting and the preparation of financial statements for external purposes in accordance with the Issuer's GAAP; and

5.    

I have caused the Issuer to disclosure in the interim MD&A any change in the Issuer's internal control over financial reporting that occurred during the Issuer's most recent interim period that has materially affected, or is reasonably likely to materially affect, the Issuer's internal control over financial reporting.

DATED: September 27, 2007

"Dan Amadori"                         
Dan Amadori
Chief Financial Officer
Micromem Technologies Inc.