**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**




**FORM
      10-K/A**


**(Amendment
      No. 1)**


(Mark
      One)




x  **ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934** for the
      fiscal year ended December 31, 2007.





o  **TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934** for the
      transition period from _______ to _______.





Commission
      File Number: **1-15087**





**I.D.
      SYSTEMS, INC.**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **22-3270799**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (IRS
                Employer
              identification
                No.)





**One
                University Plaza, Hackensack, New Jersey**
            
            **07601**(Address of principal executive offices)
            
            (Zip
                Code)





**(201)
      996-9000**


(Registrant's
      telephone number, including area code)




Securities
      registered pursuant to Section 12(b) of the Act: **None**





Securities
      registered pursuant to Section 12(g) of the Act:





**Common
      Stock, par value $0.01 per share**


(Title
      of
      class)





Indicate
      by checkmark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act of 1933. Yes o or No x





Indicate
      by checkmark if the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o or No x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.


Yes x or No o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer or a smaller reporting company.
      See
      definition of “accelerated filer”, “large accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Securities Exchange Act of
      1934.





Large
                accelerated filer o
            Accelerated
                filer xNon-accelerated
                filer o(Do not check if a
                smaller reporting company)
            Smaller
                reporting company o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Securities Exchange Act of 1934).  Yes o or No x





The
      aggregate market value of the registrant’s common stock, par value $0.01 per
      share (“Common Stock”), held by non-affiliates is $133.4 million, computed by
      reference to the price at which the Common Stock was last sold on June 29,
      2007,
      as reported on the Nasdaq National Market.




The
      number of shares of Common Stock outstanding as of April 28, 2008 was 10,692,009
      shares.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None





**EXPLANATORY
      NOTE**





This
      Amendment No. 1 on Form 10-K/A (the "Form 10/KA") to the Annual Report on Form
      10-K (the "Annual Report") of I.D. Systems, Inc. (the "Company") for the fiscal
      year ended December 31, 2007, filed with the Securities and Exchange Commission
      (the "SEC") on March 14, 2008, is filed solely for the purpose of including
      information that was to be incorporated by reference from the Company's
      definitive proxy statement pursuant to Regulation 14A of the Securities Exchange
      Act of 1934. The Company will not file its proxy statement for its annual
      meeting of stockholders within 120 days of its fiscal year ended December 31,
      2007 and is therefore, amending and restating in their entirety Items 10, 11,
      12, 13 and 14 of Part III of the Annual Report. In addition, pursuant to Rule
      13a-14(a) under the Securities Exchange Act of 1934, the Company is including
      with this Form 10-K/A certain currently dated certifications. Except as
      described above, no other amendments are being made to the Annual Report. This
      Form 10-K/A does not reflect events occurring after the filing of the Annual
      Report on March 14, 2008 or modify or update the disclosure contained in the
      Annual Report in any way other than as required to reflect the amendments
      discussed above and reflected below.





**TABLE
      OF CONTENTS**




Item
            
            PagePart
                III
            10.
            Directors,
                Executive Officers and Corporate Governance
            111.
            Executive
                Compensation
            512.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            1413.
            Certain
                Relationships and Related Transactions and DirectorIndependence
            1714.
            Principal
                Accountant Fees and Services
            17Part
                IV
            15.
            Exhibits
                and Financial Statements
            18Signatures
            19Exhibit
                Index
            20


(i)


**PART
      III.**





**Item
      10.**   **Directors,
      Executive Officers and Corporate Governance**





**DIRECTORS**




Set
      forth
      below are the names, ages and titles of all of the directors of the Company
      as
      of April 28, 2008, and the years in which such directors became directors of
      the
      Company. All directors hold office until the next annual meeting of stockholders
      or until their respective successors are elected and qualified.




**Name**
            **Age**
            **Title**
            **Director Since**Jeffrey M.
                Jagid
            39
            Chairman
                and Chief Executive Officer
            1995Kenneth
                S. Ehrman
            38
            President,
                Chief Operating Officer and Director
            1993Lawrence
                Burstein (1)(2)(3)(4)
            65
            Director
            1999Michael
                Monaco (1)(2)(3)(4)
            60
            Director
            2001Beatrice
                Yormark (1)(2)(3)(4)
            63
            Director
            2001


______________________________________


(1)
            Member
                of the Compensation Committee


(2)
            Member
                of the Audit Committee


(3)
            Member
                of the Nominating Committee


(4)
            This
                director is an independent director within the meaning of Rule 4200(a)(15)
                of the National Association ofSecurities
                Dealers’ Marketplace Rules.




The
      only
      familial relationship between or among any of the Company’s executive officers
      or directors are as follows: (i) Mr. Kenneth S. Ehrman and Mr. Michael L.
      Ehrman, the Company’s Executive Vice President of Engineering, are brothers; and
      (ii) Ms. Beatrice Yormark is Mr. Jeffrey M. Jagid’s aunt.


Ms.
        Yormark recently suffered a cerebral hemorrhage. While her condition is still
        being evaluated, we are hopeful that she will make a full recovery.


The
      biographies of each of the Company’s directors are set forth below.




**Jeffrey
      M. Jagid** has been
      the Company’s Chairman of the Board since June 2001 and the Company’s Chief
      Executive Officer since June 2000. Prior thereto, he served as the Company’s
      Chief Operating Officer. Since he joined the Company in 1995, Mr. Jagid also
      has
      served as a director as well as the Company’s General Counsel. Mr. Jagid
      received a Bachelor of Business Administration from Emory University in 1991
      and
      a Juris Doctor degree from the Benjamin N. Cardozo School of Law in 1994. Prior
      to joining the Company, Mr. Jagid was a corporate litigation associate at the
      law firm of Tannenbaum Helpern Syracuse & Hirschtritt LLP in New York City.
      He is a member of the Bar of the States of New York and New Jersey. Mr. Jagid
      is
      also a director of International Fight League, Inc., a publicly traded company
      that organizes, hosts and promotes live and televised mixed martial arts, and
      a
      director of Coining Technologies, Inc., a privately held company that
      manufactures and engineers metal components.




**Kenneth
      S. Ehrman** is one
      of the Company’s founders and has been the Company’s Chief Operating Officer
      since June 2000. Mr. Ehrman also has served as a director as well as the
      Company’s President since the Company’s inception in 1993. He graduated from
      Stanford University in 1991 with a Bachelor of Science in Industrial
      Engineering. Upon his graduation, and until the Company’s inception, Mr. Ehrman
      worked as a production manager with Echelon Corporation. Mr. Ehrman is the
      brother of Michael L. Ehrman, the Company’s Executive Vice President of
      Engineering.




**Lawrence
      Burstein** has
      served as a director since June 1999. Since March 1996, Mr. Burstein has served
      as President and a director of Unity Venture Capital Associates, Ltd., a private
      investment company. From January 1982 to March 1996, Mr. Burstein was Chairman
      of the Board and a principal stockholder of Trinity Capital Corporation, a
      private investment company. Mr. Burstein is also a director of THQ, Inc., CAS
      Medical Systems, Inc., New Motion, Inc., American Telecom Services Inc. and
      Millennium India Acquisition Corp. Mr. Burstein received a Bachelor of Arts
      in
      Economics from the University of Wisconsin and received his law degree from
      Columbia Law School.


-1-


**Michael
      Monaco** has
      served as a director since June 2001. Mr. Monaco is a Senior Managing Director
      at Conway DelGenio Gries & Co., LLC, a New York based firm specializing in
      restructurings, mergers and acquisitions and crisis and turnaround management.
      He served as Chairman and Chief Executive Officer of Accelerator, LLC, a
      provider of outsource services from 2000 to 2001. He served as a Vice Chairman
      of Cendant Corporation from 1996 to 2000 and as Chief Executive Officer of
      the
      Direct Marketing Division of Cendant from 1998 to 2000. Mr. Monaco served as
      the
      Executive Vice President and Chief Financial Officer of the American Express
      Company from 1990 to 1996. Mr. Monaco received a Bachelor of Science degree
      in
      Accounting from Villanova University and a Master of Business Administration
      degree from Fairleigh Dickinson University. Mr. Monaco is also a Certified
      Public Accountant.




**Beatrice
      Yormark** has
      served as a director since June 2001. Ms. Yormark is the President and Chief
      Operating Officer of Echelon Corporation. Ms. Yormark has been with Echelon
      since 1990. Prior to becoming the President and Chief Operating Officer in
      September 2001, she held the position of Vice President of Worldwide Marketing
      and Sales. Before joining Echelon, she was the Chief Operating Officer of
      Connect, Inc., an on line information services company. Before joining Connect,
      Ms. Yormark held a variety of positions, including executive director of systems
      engineering for Telaction Corporation, director in the role of partner at
      Coopers & Lybrand, vice president of sales at INTERACTIVE Systems
      Corporation, and various staff positions at the Rand Corporation. Ms. Yormark
      received a Masters of Science in Computer Science from Purdue University in
      1968, after which she spent one year teaching computer science at Purdue. In
      addition to her graduate degree, Ms. Yormark has a Bachelor of Science in
      Mathematics from City College of New York. Ms. Yormark is the aunt of Mr.
      Jeffrey M. Jagid, the Company’s Chairman and Chief Executive
      Officer.




**BOARD
      AND COMMITTEE MEETINGS**




The
      Board
      of Directors is responsible for the management and direction of the Company
      and
      for establishing broad corporate policies. Members of the Board of Directors
      are
      kept informed of the Company’s business through various documents and reports
      provided by the Chief Executive Officer and other corporate officers, and by
      participating in Board of Directors and committee meetings. Each director has
      access to all books, records and reports of the Company, and members of
      management are available at all times to answer their questions. The Board
      of
      Directors held five meetings during its fiscal year ended December 31, 2007.
      All
      of such meetings were attended, either in person or telephonically, by all
      of
      the members of the Board of Directors. Actions were also taken during such
      year
      by the unanimous written consent of the directors. The Company has adopted
      a
      policy of encouraging, but not requiring, its members of the Board of Directors
      to attend annual meetings of stockholders. All of the members of the Board
      of
      Directors attended the Company’s annual meeting of stockholders last
      year.




**Committees
      of the Board of Directors**




The
      standing committees of the Board of Directors include an Audit Committee, a
      Compensation Committee and a Nominating Committee.




***Audit
      Committee***




The
      Audit
      Committee, which is a separately designated standing audit committee established
      in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
      as amended (the “Exchange Act”), is composed of Messrs. Burstein and Monaco and
      Ms. Yormark, each of whom is independent within the meaning of Rule 4200(a)(15)
      of the National Association of Securities Dealers’ Marketplace Rules and under
      Rule 10A-3 of the Exchange Act. Mr. Monaco serves as the Chairman of the Audit
      Committee. The Audit Committee held six meetings during the fiscal year ended
      December 31, 2007. All of such meetings were attended, either in person or
      telephonically, by all of the members of the Audit Committee, with the exception
      of one meeting at which one member was unable to attend.




The
      Board
      of Directors has determined that it has at least one audit committee financial
      expert serving on the Audit Committee. Mr. Monaco serves as the audit committee
      financial expert. The Board of Directors has adopted a written charter for
      the
      Audit Committee, a copy of which is publicly available on the Company’s website
      at www.id-systems.com. The Audit Committee’s charter sets forth the
      responsibilities, authority and specific duties of the Audit Committee and
      is
      reviewed and reassessed annually. The charter specifies, among other things,
      the
      structure and membership requirements of the Audit Committee, as well as the
      relationship of the Audit Committee to the Company’s independent registered
      public accounting firm and management.


-2-


In
      accordance with its written charter, the Audit Committee assists the Board
      of
      Directors in monitoring (1) the integrity of the Company’s financial reporting
      process including its internal controls regarding financial reporting, (2)
      the
      Company’s compliance with legal and regulatory requirements and (3) the
      independence and performance of the Company’s internal and external auditors,
      and serves as an avenue of communication among the independent registered public
      accounting firm, management and the Board of Directors.




***Compensation
      Committee***




The
      Compensation Committee is composed of Messrs. Burstein and Monaco and Ms.
      Yormark, each of whom is independent within the meaning of Rule 4200(a)(15)
      of
      the National Association of Securities Dealers’ Marketplace Rules. Mr. Burstein
      serves as the Chairman of the Audit Committee. The Compensation Committee sets
      executives’ annual compensation and long-term incentives, reviews management’s
      performance, development and compensation, determines option grants and
      administers the Company’s incentive plans. The Compensation Committee held three
      meetings during the fiscal year ended December 31, 2007. All of such meetings
      were attended, either in person or telephonically, by all of the members of
      the
      Compensation Committee. Actions were also taken during the fiscal year ended
      December 31, 2007 by the unanimous written consent of the members of the
      Compensation Committee. The report of the Compensation Committee, “Compensation
      Committee Report,” is set forth in Item 11 of this Part III of this Form
      10-K/A.




The
      Board
      of Directors has adopted a written charter for the Compensation Committee,
      a
      copy of which is publicly available on the Company’s website at
      www.id-systems.com. The Compensation Committee’s charter sets forth the
      responsibilities, authority and specific duties of the Compensation Committee
      and is reviewed and reassessed annually. The charter specifies that the
      Compensation Committee has overall responsibility for evaluating and approving
      the director and officer compensation plans, policies and programs of the
      Company and for producing an annual report on executive compensation for
      inclusion in the Company’s annual report on Form 10-K or annual proxy statement,
      in accordance with applicable rules and regulations.




***Nominating
      Committee***




The
      Nominating Committee is composed of Messrs. Burstein and Monaco and Ms. Yormark,
      each of whom is independent within the meaning of Rule 4200(a)(15) of the
      National Association of Securities Dealers’ Marketplace Rules. Ms. Yormark
      serves as the Chairman of the Nominating Committee. The Nominating Committee
      held one meeting during the fiscal year ended December 31, 2007, which was
      attended, either in person or telephonically, by all of the members of the
      Nominating Committee




The
      Board
      of Directors has adopted a written charter for the Nominating Committee, which
      is publicly available on the Company’s website at www.id-systems.com. The
      Nominating Committee’s charter authorizes the committee to develop certain
      procedures and guidelines addressing certain nominating matters, such as
      procedures for considering nominations made by stockholders, minimum
      qualifications for nominees and identification and evaluation of candidates
      for
      the Board of Directors, and the Nominating Committee has adopted procedures
      addressing the foregoing.




**Process
      for Sending Communications to the Board of Directors**




The
      Board
      of Directors has established a procedure that enables stockholders to
      communicate in writing with members of the Board of Directors. Any such
      communication should be addressed to the Company’s Secretary and should be sent
      to such individual c/o One University Plaza, Hackensack, New Jersey 07601.
      Any
      such communication must state, in a conspicuous manner, that it is intended
      for
      distribution to the entire Board of Directors. Under the procedures established
      by the Board of Directors, upon the Secretary’s receipt of such a communication,
      the Company’s Secretary will send a copy of such communication to each member of
      the Board of Directors, identifying it as a communication received from a
      stockholder. Absent unusual circumstances, at the next regularly scheduled
      meeting of the Board of Directors held more than two days after such
      communication has been distributed, the Board of Directors will consider the
      substance of any such communication.


-3-




**Code
      of Ethics**




The
      Company has a code of ethics that applies to its Chief Executive Officer, Chief
      Financial Officer and Controller and other persons who perform similar
      functions. A copy of the Company’s code of ethics can be found on its website at
      www.id-systems.com. The Company’s code of ethics is intended to be a
      codification of the business and ethical principles that guide it, and to deter
      wrongdoing, to promote honest and ethical conduct, to avoid conflicts of
      interest, and to foster full, fair, accurate, timely and understandable
      disclosures, compliance with applicable governmental laws, rules and
      regulations, the prompt internal reporting of violations and accountability
      for
      adherence to this code.





**EXECUTIVE
      OFFICERS**





Set
      forth
      below are the names, ages and titles of all of the executive officers of the
      Company as of April 28, 2008, and the years in which such executive officers
      became executive officers of the Company. All executive officers serve at the
      discretion of the Board of Directors with no fixed term.




**Name**
            **Age**
            **Title**
            **Executive**
              **Officer Since**Jeffrey M. Jagid
            39
            Chairman
                and Chief Executive Officer
            1995Kenneth
                S. Ehrman
            38
            President,
                Chief Operating Officer and Director
            1993Ned
                Mavrommatis
            37
            Chief
                Financial Officer, Treasurer and Corporate Secretary
            1999Peter
                Fausel
            48
            Executive
                Vice President - Sales, Marketing and Customer Support
            2007Michael
                L. Ehrman
            35
            Executive
                Vice President of Engineering
            1995




**Jeffrey
      M. Jagid** ,
      the
      Company’s Chairman of the Board, has served as the Company’s Chief Executive
      Officer since 2001. See Mr. Jagid’s biographical information on page 1 of this
      Form 10-K/A.




**Kenneth
      S. Ehrman** is one
      of the Company’s founders and has been the Company’s Chief Operating Officer
      since June 2000. Mr. Ehrman also has served as the Company’s President since the
      Company’s inception in 1993. See Mr. Ehrman’s biographical information on page 1
      of this Form 10-K/A.




**Ned
      Mavrommatis** has
      served as the Company’s Chief Financial Officer since joining the Company in
      August 1999, as the Company’s Treasurer since June 2001 and as the Company’s
      Corporate Secretary since November 2003. Prior to joining the Company, he was
      a
      Senior Manager at the accounting firm of Eisner LLP. Mr. Mavrommatis received
      a
      Master of Business Administration in finance from New York University’s Leonard
      Stern School of Business and a Bachelor of Business Administration in accounting
      from Bernard M. Baruch College, The City University of New York. Mr. Mavrommatis
      is also a Certified Public Accountant.




**Peter
      Fausel** has
      served as the Company’s Executive Vice President - Sales, Marketing and Customer
      Support since March 2007. From 2003 until February 2007, Mr. Fausel served
      as
      Senior Vice President of Sales and Marketing for LXE, Inc., a manufacturer
      of
      wireless mobile computing solutions. Prior to his tenure with LXE, Mr. Fausel
      served as President of Jacada, Inc., an enterprise application software company,
      from 2001 to 2002. He has also previously served as Senior Vice President of
      Sales and Marketing for Ross Systems, an enterprise resource planning software
      provider, and Vice President of Global Accounts and Industry Marketing for
      Invensys PLC, production technology and energy management company. Mr. Fausel
      received a Bachelor of Science degree in Business Administration-Finance from
      the University of Florida.


-4-


**Michael
      L. Ehrman** has
      served as the Company’s Executive Vice President of Engineering since August
      1999. Prior to that, he served as the Company’s Executive Vice President of
      Software Development since joining the Company in 1995. Mr. Ehrman graduated
      from Stanford University in 1994 with a Master of Science in Engineering -
      Economics Systems as well as a Bachelor of Science in Computer Systems
      Engineering. Upon his graduation in 1994, Mr. Ehrman was employed as a
      consultant for Andersen Consulting in New York. Mr. Ehrman is the brother of
      Kenneth S. Ehrman, the Company’s Chief Operating Officer.




**Section
      16(a) Beneficial Ownership Reporting Compliance.**





Section
      16(a) of the Exchange Act requires the Company’s executive officers, directors
      and persons who own more than 10% of a registered class of the Company’s equity
      securities to file statements on Form 3, Form 4 and Form 5 of ownership and
      changes in ownership with the Securities and Exchange Commission. Officers,
      directors and greater than 10% stockholders are required by the regulation
      to
      furnish the Company with copies of all Section 16(a) reports that they
      file.





Based
      solely upon a review of Forms 3 and 4 and amendments to these forms furnished
      to
      the Company, all parties subject to the reporting requirements of Section 16(a)
      filed all such required reports during and with respect to the fiscal year
      ended
      December 31, 2007, except that Mr. Jagid filed a Form 4 with respect to his
      exercise of options pursuant to a previously adopted Rule 10b5-1 trading plan
      two business days following the date such Form 4 was due, and each of Messrs.
      Jagid, Mavrommatis and Ehrman filed a Form 4 with respect to shares that were
      withheld by the Company pursuant to the terms of the Company's 1999 Stock Option
      Plan to satisfy tax withholding obligations one business day following the
      date
      such Form 4 was due.





**Item
      11.**   **Executive
      Compensation**





**Compensation
      Committee Report**




*Under
      the rules of the Securities and Exchange Commission, this Compensation Committee
      Report is not deemed to be incorporated by reference by any general statement
      incorporating this Form 10-K/A by reference into any filings with the Securities
      and Exchange Commission.*




The
      Compensation Committee has reviewed and discussed with management the following
      Compensation Discussion and Analysis. Based on such review and discussions,
      the
      Compensation Committee recommended to our Board of Directors that the following
      Compensation Discussion and Analysis be included in this Form
      10-K/A.




*Submitted
      by the Compensation Committee*


Lawrence
      Burstein (Chairman)


Michael
      Monaco


Beatrice
      Yormark




**Compensation
      Discussion and Analysis**




Introduction




This
      discussion presents the principles underlying our executive officer compensation
      program. Our goal in this discussion is to provide the reasons why we award
      compensation as we do and to place in perspective the data presented in the
      tables that follow this discussion. The focus is primarily on compensation
      of
      our executive officers for the fiscal year ended December 31, 2007, but some
      historical and forward-looking information is also provided to put such year’s
      compensation information in context. The information presented herein relates
      to
      Jeffrey M. Jagid, our chief executive officer, Ned Mavrommatis, our chief
      financial officer, and our three other most highly compensated executive
      officers, who are sometimes referred to in this Form 10-K/A as our “named
      executive officers.”


-5-




Compensation
      Philosophy and Objectives




We
      attempt to apply a consistent philosophy to compensation for all employees,
      including senior management. This philosophy is based on the premises that
      our
      success is dependent upon the efforts of each employee and that a cooperative,
      team-oriented environment is an essential part of our culture. We believe in
      the
      importance of rewarding our employees for our successes, which is why we
      emphasize pay-for-performance incentive compensation. Particular emphasis is
      placed on broad employee equity participation through the use of stock options
      and restricted stock awards, as well as on annual cash bonuses linked to
      achievement of our corporate performance goals.




Our
      compensation programs for our named executive officers are designed to achieve
      a
      variety of goals, including:




•
            attracting
                and retaining talented and experienced
                executives;




•
            motivating
                and rewarding executives whose knowledge, skills and performance
                are
                critical to our success;




•
            aligning
                the interests of our executives and stockholders by motivating executives
                to increase stockholder value in a sustained manner;
                and




•
            providing
                a competitive compensation package which rewards achievement of our
                goals.




Elements
      of Executive Officer Compensation




**Overview** .
      Total
      compensation paid to our executive officers is influenced significantly by
      the
      need to attract and retain management employees with a high level of expertise
      and to motivate and retain key executives for our long-term success. Some of
      the
      components of compensation, such as salary, are generally fixed and do not
      vary
      based on our financial and other performance. Some components, such as bonus,
      stock options and stock award grants, are dependent upon the achievement of
      certain goals jointly agreed upon by our management and the Compensation
      Committee. Furthermore, the value of certain of these components, such as stock
      options and restricted stock, is dependent upon our future stock
      price.




We
      compensate our executive officers in these different ways in order to achieve
      different goals. Cash compensation, for example, provides executive officers
      a
      minimum base salary. Incentive bonus compensation is generally linked to the
      achievement of financial and business goals, and is intended to reward executive
      officers for our overall performance in reaching annual goals that are agreed
      to
      in advance by management and the Compensation Committee. Stock options and
      grants of restricted stock are intended to link our executive officers’
longer-term compensation with the performance of our stock and to build
      executive ownership positions in our stock. This encourages our executive
      officers to remain with us, to act in ways intended to maximize stockholder
      value, and to penalize them if we and/or our stock fails to perform to
      expectations.




We
      view
      the three components of our executive officer compensation as related but
      distinct. Although the Compensation Committee does review total compensation,
      it
      does not believe that compensation derived from one component of compensation
      necessarily should negate or reduce compensation from other components. We
      determine the appropriate level for each compensation component based in part,
      but not exclusively, on its historical practices with the individual and our
      view of individual performance and other information we deem relevant. The
      Compensation Committee has not adopted any formal or informal policies or
      guidelines for allocating compensation between long-term and currently paid
      out
      compensation, between cash and non-cash compensation, or among different forms
      of compensation. We have not reviewed wealth and retirement accumulation as
      a
      result of employment with us, and have only focused on fair compensation for
      the
      year in question.




The
      Compensation Committee utilized reports from Equilar, Inc., a market leader
      for
      benchmarking executive compensation. The Compensation Committee realizes that
      benchmarking our compensation against the compensation earned at comparable
      companies may not always be appropriate, but believes that engaging in a
      comparative analysis of compensation practices is useful.


-6-


**Base
      Salary** .
      We pay
      our executive officers a base salary, which we review and determine annually.
      We
      believe that a competitive base salary is a necessary element of any
      compensation program. We believe that attractive base salaries can motivate
      and
      reward executives for their overall performance. Base salaries are established
      in part based on the individual position, responsibility, experience, skills
      and
      expected contributions during the coming year of the executive and their
      performance during the prior year. We also have sought to align base
      compensation levels comparable to our competitors and other companies in similar
      stages of development. We do not view base salaries as primarily serving our
      objective of paying for performance, but in attracting and retaining the most
      qualified executives necessary to run our business.




Based
      on
      all of the factors described above, including base salary, company performance
      and individual performance reviews, in January 2007, effective as of January
      1,
      2007, we granted our Chief Executive Officer a base salary increase of 22.5%,
      each of our Chief Financial Officer and our President and Chief Operating
      Officer a base salary increase of 14.5% and our Executive Vice President of
      Engineering a base salary increase of 18%. Based on all of the factors described
      above, in February 2008, effective as of January 1, 2008, we granted our Chief
      Executive Officer and each of the other named executive officers received,
      on
      average, a base salary increase of 4%.




**Cash
      Incentive Bonuses.** Consistent with our emphasis on pay-for-performance incentive compensation
      programs, each of our executives are eligible to receive up to 100% of his
      salary as an annual cash incentive bonus based upon meeting predetermined
      company financial and in the case of our Executive Vice President of Sales,
      Marketing & Customer Support, other measures established by us. The
      financial goals for the fiscal year ended December 31, 2007, included target
      measures for revenue, gross margins and operating income (before equity
      compensation) and in the case of our Executive Vice President of Sales,
      Marketing & Customer Support, additional performance objectives. The primary
      objective of our annual cash incentive bonuses is to motivate and reward our
      employees, including our named executive officers, for meeting our short-term
      objectives using a pay-for-performance program with objectively determinable
      performance goals. For the fiscal year ended December 31, 2007, our Chief
      Executive Officer and our other named executive officers other than our
      Executive Vice President of Sales, Marketing & Customer Support earned 12.5%
      of their base salaries based on our meeting certain of our financial objectives,
      and our Executive Vice President of Sales, Marketing & Customer Support
      earned 28.4% of his base salary for the period from March 5, 2007 through
      December 31, 2007, based on our meeting certain of our financial objectives
      and
      certain other predetermined objectives.




**Equity
      Compensation** .
      We
      believe that stock options and restricted stock awards are an important
      long-term incentive for our executive officers and employees and that our stock
      option and restricted stock award program has been effective in aligning officer
      and employee interests with that of our stockholders. We review our equity
      compensation plans annually. Employees are eligible for annual stock option
      and
      restricted stock award grants based on targeted levels. These options and grants
      are intended to produce value for each executive officer if (i) our stockholders
      derive significant sustained value; and (ii) the executive officer remains
      with
      us.




At
      its
      January 19, 2007 meeting, the Compensation Committee, considered equity grants
      to be made for the fiscal year ended December 31, 2007. The number of restricted
      stock units granted to and held by our executive officers are reflected in
      the
“Summary Compensation Table” and the “Grants of Plan-Based Awards” table
      below.




We
      do not
      have any program, plan or obligation that requires us to grant equity
      compensation to any executive officer on specified dates. The authority to
      make
      equity grants to executive officers rests with the Compensation Committee,
      although, as noted above, the Compensation Committee does consider the
      recommendations of our Chairman and Chief Executive Officer in setting the
      compensation of our other executive officers.




***Severance
      and Change-in-Control Benefits.***




Except
      for the severance and change-in-control benefits described below, we do not
      provide to any of our executive officers any severance or change in control
      benefits in the event of termination or retirement, whether following a
      change-in-control or otherwise.


-7-


If
      we
      terminate Peter Fausel, our Executive Vice President - Sales, Marketing and
      Customer Support, other than for cause (as defined below) prior to March 5,
      2010, Mr. Fausel will receive a continuation of his salary for a period of
      six
      months plus all earned but unpaid bonus as of the date of such termination.
      For
      this purpose, the term “cause” is defined by us and includes, but is not limited
      to, any willful or grossly negligent breach of Mr. Fausel’s duties as an
      employee and termination for fraud, embezzlement or any other similar dishonest
      conduct or for violation of our rules of conduct. If Mr. Fausel had been
      terminated other than for cause as of December 31, 2007, Mr. Fausel would have
      been entitled to receive severance payments through June 30, 2008 in the
      aggregate amount of $130,000.




Our
      1999
      Stock Option Plan provides that all outstanding stock options, including stock
      options held by our executive officers, will become immediately exercisable,
      and
      the restrictions with respect to outstanding restricted shares will lapse,
      upon
      the occurrence of a “change in control event.” For this purpose, a “change in
      control event” shall be deemed to occur if any of the following events occur:
      (a) the consummation of any merger of our company with any other company unless
      the combined voting power of our voting securities outstanding immediately
      prior
      thereto continue to represent (either by remaining outstanding or by being
      converted into voting securities of the surviving entity) more than 70% of
      the
      combined voting power of the voting securities of our company or such surviving
      entity outstanding immediately after such merger or consolidation; (b) the
      consummation of any sale or other disposition of all or substantially all of
      our
      assets; (c) approval by our stockholders of a plan of liquidation of our
      company; (d) any action pursuant to which any person or group (as defined in
      Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934) shall become
      the beneficial owner of 20% or more of our outstanding voting securities; or
      (e)
      the individuals who were members of our Board of Directors on May 14, 1999
      (the
      date on which our 1999 Stock Option Plan was initially adopted by the Board),
      including any individuals who became or become directors after that date and
      whose election or nomination for election was approved by at least two-thirds
      of
      the directors of our Board, cease to constitute a majority of the members of
      our
      Board of Directors.




Our
      2007
      Equity Compensation Plan provides that, in the event of a consolidation or
      merger in which, after any such transaction our prior shareholder owns less
      than
      50% of the voting shares of the continuing or surviving entity, or in the event
      of the sale or transfer of substantially all of our assets, all outstanding
      options will become exercisable and all restrictions and/or forfeitures with
      respect to restricted stock awards and restricted stock units will
      lapse.




**Benefits** .
      The
      executive officers participate in all of our employee benefit plans, such as
      medical and 401(k) plan, on the same basis as our other employees, except that
      we pay 100% of the premiums for health and dental insurance of our executive
      officers and 75% of the premiums for health and dental insurance of our other
      employees.




**Perquisites** .
      Our
      Chief Executive Officer and our other named executive officers receive an
      allowance for automobile and related expenses. Our use of perquisites as an
      element of compensation is very limited. We do not view perquisites as a
      significant element of our comprehensive compensation structure.




The
      Compensation Committee Process




Compensation
      Committee meetings typically involve a preliminary discussion with our Chairman
      and Chief Executive Officer prior to the Compensation Committee deliberating
      without any members of management present. For compensation decisions, including
      decisions regarding the grant of equity compensation relating to executive
      officers (other than our Chairman and Chief Executive Officer), the Compensation
      Committee considers the recommendations of our Chairman and Chief Executive
      Officer and includes him in its discussions.




Regulatory
      Considerations




We
      account for the equity compensation expense for our employees under the rules
      of
      SFAS 123R, which requires us to estimate and record an expense for each award
      of
      equity compensation over the service period of the award. Accounting rules
      also
      require us to record cash compensation as an expense at the time the obligation
      is accrued.


-8-


**Cash
      and Other Compensation**




The
      following table, which should be read in conjunction with the explanations
      provided above, provides certain compensation information concerning our named
      executive officers for the fiscal year ended December 31, 2007.




**Summary
      Compensation Table**




Name and
              Principal Position
            
            Year
            
            Salary
            
            Stock
              Awards(1)
            
            Option
              Awards(1)
            
            Non-equity
              Incentive Plan
              Compensation
              ($)(2)
            
            All Other
              Compensation
              ($)(3)
            
            Total ($)Jeffrey M.
                Jagid
              Chairman
                and Chief
              Executive
                Officer
            
            
            2007
              2006
              2005
            
            $
              $
              $
            300,000
              245,000
              226,500
            
            $
              $
              $
            94,450
              230,141
              -
            (4)
                (5)
            $
              $
              $
            126,316
              171,197
              170,778
            
            $
              $
              $
            37,500
              30,625
              67,950
            
            $
              $
              $
            16,853
              18,485
              18,742
            
            $
              $
              $
            575,119
              695,448
              483,970Ned
                Mavrommatis
              Chief
                Financial Officer,
              Treasurer
                and CorporateSecretary
            
            
            2007
              2006
              2005
            
            $
              $
              $
            245,000
              214,000
              181,000
            
            $
              $
              $
            94,450
              194,722
              -
            (4)
              (5)
            $
              $
              $
            96,578
              134,554
              141,910
            
            $
              $
              $
            30,625
              26,750
              54,300
            
            $
              $
              $
            17,274
              10,145
              9,497
            
            $
              $
              $
            483,927
              580,171
              386,707Kenneth
                S. Ehrman
              President
                and Chief
              Operating
                Officer
            
            
            2007
              2006
              2005
            
            $
              $
              $
            245,000
              214,000
              200,000
            
            $
              $
            94,450
              123,885
            (4)
              (5)
            $
              $
              $
            108,642
              139,714
              136,705
            
            $
              $
              $
            30,625
              26,750
              60,000
            
            $
              $
              $
            20,325
              14,246
              14,687
            
            $
              $
              $
            499,042
              518,595
              411,392Michael
                L. Ehrman
              Executive
                Vice President,
              Engineering
            
            
            2007
              2006
              2005
            
            $
              $
              $
            230,000
              195,000
              175,000
            
            $
              $
              $
            94,450
              194,722
              -
            (4)
                (5)
            $
              $
              $
            106,627
              148,056
              147,601
            
            $
              $
              $
            28,750
              24,375
              52,500
            
            $
              $
              $
            19,859
              17,258
              16,511
            
            $
              $
              $
            479,687
              579,411
              391,612Peter
                Fausel
              Executive
                Vice President,
              Sales,
                Marketing &Customer
                Support(6)
            
            
            2007
              2006
              2005
            
            $
              $
              $
            214,833
              -
              -
            
            $
              $
              $
            114,215
              -
              -
            (7)
            $
              $
              $
            117,044
              -
              -
            
            $
              $
              $
            61,060
              -
              -
            
            $
              $
              $
            7,900
              -
              -
            
            $
              $
              $
            515,052
              -
              -





(1)
            Represents
                the expense to the Company pursuant to FAS 123(R) for the respective
                year
                for restricted stock or stock options granted as long-term incentives
                pursuant to the Company’s 1999 Stock Option Plan. See Note B (13) of the
                Company’s Financial Statements for the fiscal years ended December 31,
                2007, 2006 and 2005 for the assumptions used for valuing the expense
                under
                FAS 123(R).





(2)
            Represents
                bonus earned for such fiscal year.





(3)
            The
                dollar amounts shown under the heading “All other compensation” represent
                the incremental cost of all perquisites and other personal benefits
                to our
                named executive officers, for automobile allowance and related
                expenses.





(4)
            Represents
                restricted shares issued under the 1999 Stock Option Plan in 2006.
                Fifty
                percent (50%) of the restricted shares vested on the first annual
                anniversary date of the date of grant and the remaining fifty percent
                (50%) of the restricted shares vest on the second anniversary date
                of the
                date of grant provided that the awardee is an employee of the Company
                on
                such anniversary.





(5)
            Represents
                restricted shares and restricted stock units issued under the 1999
                Stock
                Option Plan in 2006. Fifty percent (50%) of the restricted shares
                vested
                on the first annual anniversary date of the date of grant and the
                remaining fifty percent (50%) of the restricted shares vest on the
                second
                anniversary date of the date of grant provided that the awardee is
                an
                employee of the Company on such anniversary. The issuance of shares
                of
                Common Stock underlying restricted stock units were subject to the
                achievement of revenue and gross margin levels during 2007 and 2006.


-9-


(6)
            Peter
                Fausel was appointed to serve as our Executive Vice President - Sales,
                Marketing and Customer Support, effective as of March 5,
                2007.





(7)
            Represents
                restricted shares issued under the 1999 Stock Option Plan in 2007.
                Fifty
                percent (50%) of the restricted shares vest on each annual anniversary
                date of the date of grant provided that the awardee is an employee
                of the
                Company on such anniversary.




**Plan-Based
      Awards**




**Option
      and Stock Award Grants in 2007**




The
      following table provides certain information with respect to restricted stock
      awards and options granted to our named executive officers during the fiscal
      year ended December 31, 2007.




**Grants
      of Plan-Based Awards**




**Estimated
                Future Payouts**
              **Under Non-Equity Incentive******
              **Plan Awards ($)****(1)**
            
            **Estimated Future Payouts**
              **Under Equity Incentive****Plan**
              **Awards(#)****(2)**
            
            **All Other**
              **Stock**
              **Awards:**
              **Number of**
              **Shares of**
              **Stock or**
              **Units**
            
            **All Other**
              **Option**
              **Awards:**
              **Number of**
              **Securities**
              **Underlying**
              **Options**
            
            **Exercise**
              **or Base**
              **Price of**
              **Option**
              **Awards**
            
            **Grant**
              **Date Fair**
              **Value of**
              **Stock and**
              **Option**
              **Awards****Name**
            
            **Grant Date**
            
            **Threshold**
            
            **Target**
            
            **Maximum**
            
            **Threshold**
            
            **Target**
            
            **Maximum**
            
            **(#)****(3)**
            
            **(#)****(4)**
            
            **($/Sh)******
            
            **($)****(5)**Jeffrey
                M. Jagid
            
            
            1/19/2007
            
            
            37,500
            
            
            150,000
            
            
            300,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -1/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            6,250
            
            
            12,500
            
            
            21,875
            
            
            -
            
            
            -
            
            
            -
            
            
            193,6251/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            6,250
            
            
            12,500
            
            
            21,875
            
            
            -
            
            
            -
            
            
            -
            
            
            193,625Ned
                Mavrommatis
            
            
            1/19/2007
            
            
            30,625
            
            
            122,500
            
            
            245,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -1/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,8121/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,812Kenneth
                S. Ehrman
            
            
            1/19/2007
            
            
            30,625
            
            
            122,500
            
            
            245,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -1/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,8121/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,812Michael
                L. Ehrman
            
            
            1/19/2007
            
            
            28,750
            
            
            115,000
            
            
            230,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -1/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,8121/19/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            3,125
            
            
            6,250
            
            
            10,937
            
            
            -
            
            
            -
            
            
            -
            
            
            96,812Peter
                Fausel(6)
            
            
            3/5/2007
            
            
            14,190
            
            
            107,500
            
            
            215,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -3/5/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            69,2503/5/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            69,2503/5/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            20,000
            
            
            
            
            
            
            
            
            277,0003/5/2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            100,000
            
            
            13.85
            
            
            794,400


__________________





(1)  The
      information under “Estimated Future Payouts Under Non-Equity Incentive Plan
      Awards” relates to cash bonuses for the fiscal year ended December 31, 2007
      payable to our named executive officers based on the achievement of revenue,
      gross margins and income from operation (before equity compensation)
      goals, and in the case of Peter Fausel, additional performance
      goals, during 2007. In February 2008, based on the achievement of such
      goals, each named executive officer other than Peter Fausel received a dollar
      amount equal to 12.5% of his base salary for the fiscal year ended December
      31,
      2007, and Peter Fausel received a dollar amount equal to 28.4% of his base
      salary for the period from March 5, 2007 through December 31, 2007.




(2)  The
      information under “Estimated Future Payouts Under Equity Incentive Plan Awards”
relates to restricted stock units issued under the 1999 Stock Option Plan.
      The
      first line with respect to each named executive officer represents threshold,
      target and maximum numbers, or in the case of Peter Fausel, target number,
      of
      shares of our common stock payable under restricted stock units based on the
      achievement of revenue and gross margin levels during 2007. For the year ended
      December 31, 2007, the performance criteria were not met and the performance
      shares did not vest and were automatically returned to the 1999 Stock Option
      Plan. The second line with respect to each such named executive officer
      represents threshold, target, and maximum numbers, or in the case of Peter
      Fausel, the target number, of shares of our common stock payable under
      restricted stock units based on the achievement of revenue and gross margin
      levels during 2008.


-10-




(3)  Represents
      restricted shares issued under our 1999 Stock Option Plan. Fifty percent (50%)
      of the restricted shares vest on each annual anniversary date of the date of
      grant provided that the awardee is an employee of our company on such
      anniversary.




(4)  The
      information under “All Other Option Awards: Number of Securities Underlying
      Options” relates to options to purchase shares of our common stock issued under
      the 1999 Stock Option Plan.




(5)  Calculated
      based on $15.49 per share, the closing price of our common stock, as reported
      on
      the NASDAQ Global Market on January 19, 2007 or in the case of Mr. Fausel,
      $13.85 per share, the closing price of our common stock as reported on the
      NASDAQ Global Market on March 5, 2007, and with respect to equity incentive
      awards, the target number of shares of our common stock issuable upon
      achievement of revenue and margin levels.




(6)  Peter
      Fausel was appointed to serve as our Executive Vice President - Sales, Marketing
      and Customer Support, effective as of March 5, 2007.




**Stock
      Option Exercises and Vesting of Restricted Stock Awards**




The
      following table provides certain information with respect to option exercises
      and stock vested for each of our named executive officers during the fiscal
      year
      ended December 31, 2007.




**Option
      Exercises and Stock Vested**





Option Awards
            
            Stock AwardsName
            
            Number of
              Shares
              Acquired on
              Exercise (#)
            
            Value Realized
              on
              Exercise($)(1)
            
            Number of Shares
              Acquired on
              Vesting(#)
            
            Value Realizedon
              Vesting($)(2)Jeffrrey M. Jagid
            
            
            54,391
            
            
            490,063
            
            
            14,375
            
            
            223,187Ned
                Mavrommatis
            
            
            -
            
            
            -
            
            
            12,500
            
            
            192,700Kenneth
                S. Ehrman
            
            
            50,000
            
            
            519,500
            
            
            8,750
            
            
            131,725Michael
                L. Ehrman
            
            
            50,000
            
            
            425,000
            
            
            12,500
            
            
            192,700Peter
                Fausel(3)
            
            
            -
            
            
            -
            
            
            -
            
            
            -





(1)
            Represents
                the difference between the market price of the underlying securities
                at
                exercise of the option and the exercise price of the
                option.




(2)
            Represents
                the aggregate dollar value of the shares on the vesting
                date.




(3)
            Peter
                Fausel was appointed to serve as our Executive Vice President - Sales,
                Marketing and Customer Support, effective as of March 5,
                2007.




**Outstanding
      Equity Awards at Fiscal Year End**




The
      following table provides certain information concerning outstanding equity
      awards held by each of our named executive officers at December 31,
      2007.


-11-




**Outstanding
      Equity Awards at Fiscal Year-End**





Option Awards
            
            Stock AwardsName
            
            Number of
              Securities
              Underlying
              Unexercised
              Options (#)
              Exercisable
            
            Number of
              Securities
              Underlying
              Unexercised
              Options (#)
              Unexercisable
            
            Option
              Exercise
              Price ($)
            
            Option
              Expiration
              Date
            
            Number of
              Shares or
              Units of
              Stock That
              Have Not
              Vested (#)(1)
            
            Market
              Value of
              Shares or
              Units of
              Stock That
              Have Not
              Vested ($)(2)
            
            Equity
              Incentive Plan
              Awards:
              Number of
              Unearned
              Shares,Units or
              Other Rights
              That HaveNot
              Vested (#)(3)
            
            Equity
              Incentive Plan
              Awards:
              Market Value
              ofUnearned
              Shares, Units or
              Other Rights
              That Have Not
              Vested ($)(2)Jeffrey
                M. Jagid
            
            
            90,625
            
            
            -
            
            
            1.20
            
            
            9/1/2008
            
            
            5,000
            
            
            62,300
            
            
            12,500
            
            
            155,75075,000
            
            
            -
            
            
            7.56
            
            
            1/19/2010
            
            
            -
            
            
            -
            
            
            -
            
            
            -65,000
            
            
            -
            
            
            5.67
            
            
            11/1/2011
            
            
            -
            
            
            -
            
            
            -
            
            
            -48,000
            
            
            32,000
            
            
            6.65
            
            
            2/6/2014
            
            
            -
            
            
            -
            
            
            -
            
            
            -24,000
            
            
            36,000
            
            
            11.35
            
            
            3/3/2015
            
            
            -
            
            
            -
            
            
            -
            
            
            -Ned
                Mavrommatis
            
            
            20,000
            
            
            -
            
            
            7.56
            
            
            1/19/2010
            
            
            5,000
            
            
            62,300
            
            
            6,250
            
            
            77,87543,000
            
            
            -
            
            
            5.67
            
            
            11/1/2011
            
            
            -
            
            
            -
            
            
            -
            
            
            -33,000
            
            
            22,000
            
            
            6.65
            
            
            2/6/2014
            
            
            -
            
            
            -
            
            
            -
            
            
            -19,600
            
            
            29,400
            
            
            11.35
            
            
            3/3/2015
            
            
            -
            
            
            -
            
            
            -
            
            
            -Kenneth
                S. Ehrman
            
            
            56,250
            
            
            -
            
            
            1.20
            
            
            9/1/2008
            
            
            5,000
            
            
            62,300
            
            
            6,250
            
            
            77,87537,500
            
            
            -
            
            
            7.56
            
            
            1/19/2010
            
            
            -
            
            
            -
            
            
            -
            
            
            -45,000
            
            
            -
            
            
            5.67
            
            
            11/1/2011
            
            
            -
            
            
            -
            
            
            -
            
            
            -42,000
            
            
            28,000
            
            
            6.65
            
            
            2/6/2014
            
            
            -
            
            
            -
            
            
            -
            
            
            -20,400
            
            
            30,600
            
            
            11.35
            
            
            3/3/2015
            
            
            -
            
            
            -
            
            
            -
            
            
            -Michael
                L. Ehrman
            
            
            90,625
            
            
            -
            
            
            1.20
            
            
            9/1/2008
            
            
            5,000
            
            
            62,300
            
            
            6,250
            
            
            77,87575,000
            
            
            -
            
            
            7.56
            
            
            1/19/2010
            
            
            -
            
            
            -
            
            
            -
            
            
            -60,000
            
            
            -
            
            
            5.67
            
            
            11/1/2011
            
            
            -
            
            
            -
            
            
            -
            
            
            -33,000
            
            
            22,000
            
            
            6.65
            
            
            2/6/2014
            
            
            -
            
            
            -
            
            
            -
            
            
            -22,800
            
            
            34,200
            
            
            11.35
            
            
            3/3/2015
            
            
            -
            
            
            -
            
            
            -
            
            
            -Peter
                Fausel(4)
            
            
            -
            
            
            100,000
            
            
            13.85
            
            
            3/5/2017
            
            
            20,000
            
            
            249,200
            
            
            5,000
            
            
            62,300-
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -





(1)
            Represents
                restricted shares issued under the 1999 Stock Option Plan. Fifty
                percent
                (50%) of the restricted shares vest on each annual anniversary date
                of the
                date of grant provided that the awardee is an employee of the Company
                on
                such anniversary.





(2)
            Calculated
                based on $12.46 per share, the closing price per share of the Common
                Stock, as reported on the NASDAQ Global Market, on December 31,
                2007.





(3)
            The
                information under “Equity Incentive Plan Awards: Number of Unearned
                Shares, Units or Other Rights That Have Not Vested” relates to restricted
                stock units granted under the 1999 Stock Option Plan. The amount
                with
                respect to each named executive officer represents the target numbers
                of
                shares of Common Stock payable under restricted stock units based
                on the
                achievement of revenue and gross margin levels during
                2008.


-12-





(4)
            Peter
                Fausel was appointed to serve as our Executive Vice President - Sales,
                Marketing and Customer Support, effective as of March 5,
                2007.





**Compensation
      of Directors**




We
      reimburse our directors for reasonable travel expenses incurred in connection
      with their activities on our behalf. Non-employee directors also receive $2,500
      per board meeting, $250 per telephonic board meeting, $5,000 per year for
      serving on the Audit Committee and $1,000 per year for serving on the
      Compensation Committee.




Non-employee
      directors are entitled to participate in our 1999 Director Option Plan. A total
      of 600,000 shares of our common stock have been reserved for issuance under
      such
      plan. The plan provides for the automatic grant of an option to purchase 15,000
      shares to each non-employee director at the time he or she is first elected
      to
      our Board of Directors and an automatic grant of an option to purchase 5,000
      shares on the first day of each fiscal quarter, if on such date he or she has
      served on our Board of Directors for at least six months. Each option grant
      under the plan has a term of 10 years and vests on a cumulative monthly basis
      over a four-year period. The exercise price of all options equals the fair
      market value of our common stock on the date of grant. During the fiscal year
      ended December 31, 2007, each of our non-employee directors received options
      to
      purchase 5,000 shares of our common stock on each of January 3, 2007, April
      2,
      2007, July 2, 2007 and October 1, 2007 at a per share exercise price of $18.28,
      $11.61, $12.86 and $12.24, respectively.




Employee
      directors are entitled to participate in our 1999 Stock Option Plan. As of
      April
      28, 2008, a total of 2,812,500 shares of our common stock have been reserved
      for
      issuance under the plan. The plan provides for grants of incentive stock
      options, non-qualified stock options and restricted stock awards. Options can
      be
      granted under the plan on terms and at prices as determined by our Board of
      Directors, or the Compensation Committee, except that the exercise price of
      incentive options will not be less than the fair market value of our common
      stock on the date of grant. In the case of an incentive stock option granted
      to
      an employee who owns more than 10% of the total combined voting power of all
      classes of our common stock, the per share exercise price will not be less
      than
      110% of the fair market value on the date of grant. The aggregate fair market
      value, determined on the date of grant, of the shares covered by incentive
      stock
      options granted under the plan that become exercisable by a grantee for the
      first time in any calendar year is subject to a $100,000 limit. Restricted
      stock
      units can be granted under the plan, with such shares subject to a risk of
      forfeiture or other restrictions that will lapse upon the achievement of one
      or
      more conditions relating to completion of service by the participant, or
      achievement of performance goals or such other objectives, as established and
      determined by our Board of Directors, or the Compensation Committee. At the
      time
      a grant of a restricted stock unit is made, our Board of Directors, or the
      Compensation Committee, shall establish a period of time applicable to the
      shares of our common stock that are the subject of such restricted stock unit.
      Each grant of restricted shares may be subject to a different restricted
      period.




Employee
      directors are also entitled to participate in our 2007 Equity Compensation
      Plan.
      As of April 28, 2008, a total of 2,000,000 shares of our common stock have
      been
      reserved for issuance under the plan. The plan provides for grants of incentive
      stock options, nonstatutory stock options, restricted or unrestricted stock
      awards, and restricted stock units. Options can be granted under the plan on
      terms and at prices as determined by our Board of Directors, or the Compensation
      Committee, except that the exercise price of options will not be less than
      the
      fair market value of our common stock on the date of grant. In the case of
      an
      incentive stock option granted to an employee who owns more than 10% of the
      total combined voting power of all classes of our common stock, the per share
      exercise price will not be less than 110% of the fair market value on the date
      of grant. No option may be exercisable for more than ten years (five years
      in
      the case of an incentive option granted to a ten-percent stockholder) from
      the
      date of grant. Options issued under the plan will be exercisable at such time
      or
      times as the Compensation Committee prescribes at the time of grant. The Board
      of Directors, or the Compensation Committee, also may grant a restricted stock
      award and/or a restricted stock unit award to any eligible employee director.
      Under a restricted stock award, shares of our common stock that are the subject
      of the award are generally subject to restrictions on transfer to the extent
      that the recipient terminates service with us prior to the award having vested.
      The Board of Directors, or the Compensation Committee, shall determine the
      restrictions and vesting terms of each stock award. Unless otherwise determined
      by the Board of Directors, or Compensation Committee, holders of restricted
      shares will have the right to vote such shares and to receive any cash dividends
      with respect thereto during the restriction period. Any stock dividends will
      be
      subject to the same restrictions as the underlying shares of restricted stock.
      The recipient of a restricted stock unit award will be entitled to receive
      a
      number of shares of our common stock that is equal to the number of units
      granted if and when the units vest. The Board of Directors, or the Compensation
      Committee, may grant unrestricted stock awards to any eligible employee
      director. Unrestricted shares do not require any payment by the recipient and
      are not subject to forfeiture or transfer restrictions (except to the extent
      imposed by law).


-13-


The
      following table provides certain information with respect to the compensation
      paid to our non-employee directors during the fiscal year ended December 31,
      2007.




**Directors
      Compensation**




Name
            
            Fees earned
              or paid in
              cash ($)
            
            Option Awards ($)(1)
            
            Total ($)Lawrence
                Burstein(2)
            
            $
            16,000
            
            $
            157,407
            
            $
            173,407Michael
                Monaco(2)
            
            $
            16,000
            
            $
            157,407
            
            $
            173,407Beatrice
                Yormark(2)
            
            $
            16,000
            
            $
            157,407
            
            $
            173,407







(1)
            Represents
                the expense to the Company pursuant to FAS 123(R) for the respective
                year
                for stock options granted as long-term incentives pursuant to the
                Company’s 1999 Direction Option Plan. See Note B (13) of the Company’s
                Financial Statements for the fiscal years ended December 31, 2007,
                2006
                and 2005 for the assumptions used for valuing the expense under FAS
                123(R).





(2)
            At
                December 31, 2007, Lawrence Burstein had options to purchase 105,000
                shares; Michael Monaco had options to purchase 131,800 shares; and
                Beatrice Yormark had options to purchase 132,708
                shares.




**Compensation
      Committee Interlocks and Insider Participation**




The
      Compensation Committee is composed of Messrs. Burstein and Monaco and Ms.
      Yormark, all of whom served as members of the Compensation Committee during
      the
      fiscal year ended December 31, 2007. No member of the Compensation Committee
      is
      or has been an executive officer of our company or had any relationships
      requiring disclosure by us under the Securities and Exchange Commission’s rules
      requiring disclosure of certain relationships and related-party transactions.
      None of our executive officers served as a director or a member of a
      compensation committee (or other committee serving an equivalent function)
      of
      any other entity, the executive officers of which served as a director or member
      of the Compensation Committee during the fiscal year ended December 31,
      2007.





**Item
      12.**   **Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters**





The
      following table sets forth information regarding ownership of shares of our
      common stock, as of March 31, 2008:




•
            by
                each person known by us to be the beneficial owner of 5% or more
                of our
                common stock;




•
            by
                each of our directors and executive officers;
                and




•
            by
                all of our directors and executive officers as a
                group.




-14-




Except
      as
      otherwise indicated, each person and each group shown in the table below has
      sole voting and investment power with respect to the shares of common stock
      indicated. For purposes of the table below, in accordance with Rule 13d-3 under
      the Exchange Act, a person is deemed to be the beneficial owner of any shares
      of
      our common stock over which he or she has or shares, directly or indirectly,
      voting or investment power or of which he or she has the right to acquire
      beneficial ownership at any time within 60 days. As used in this Form 10-K/A,
      “voting power” is the power to vote or direct the voting of shares and
“investment power” includes the power to dispose or direct the disposition of
      shares. Common stock beneficially owned and percentage ownership as of March
      31,
      2008 were based on 10,736,909 shares outstanding.




**Officers
                and Directors(1)**
            
            **Shares
                Beneficially Owned****Number**
            
            **%**Jeffrey
                M. Jagid(2)
            
            
            639,619
            
            
            5.78
            %Kenneth
                S. Ehrman(3)
            
            
            708,313
            
            
            6.46
            %Michael
                L. Ehrman(4)
            
            
            492,277
            
            
            4.46
            %Ned
                Mavrommatis(5)
            
            
            153,577
            
            
            1.41
            %Peter
                Fausel(6)
            
            
            44,000
            
            
            *Lawrence
                Burstein(7)
            
            
            79,338
            
            
            *Michael
                Monaco(8)
            
            
            102,638
            
            
            *Beatrice
                Yormark(9)
            
            
            105,838
            
            
            *MFC
                Global Investment Management, LLC(10)
            
            
            1,102,705
            
            
            10.27
            %Artis
                Capital Management LP(11)
            
            
            2,203,896
            
            
            20.52
            %Empire
                Capital Partners, L.P. (12)
            
            
            965,481
            
            
            8.99
            %Independence
                Investments LLC.(13)
            
            
            560.909
            
            
            5.22
            %All
                Directors and Executive Officers as a group (8
                persons)(14)
            
            
            2,325600
            
            
            19.32
            %




*
      Less than one percent




(1)
            Unless
                otherwise indicated, the address for each named individual or group
                is c/o
                I.D. Systems, Inc., One University Plaza, 6th Floor, Hackensack,
                NJ
                07601.





(2)
            Includes
                (i) 330,625 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008, (ii) 5,000 restricted
                shares
                which vest on June 9, 2008 and (iii) 5,000 restricted shares issued
                on
                February 27, 2008, 50% of which vest on the first anniversary of
                the date
                of grant and 50% of which vest on the second anniversary of the date
                of
                grant provided that the awardee is an employee of the Company on
                such
                anniversary.





(3)
            Includes
                (i) 225,350 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008, (ii) 5,000 restricted
                shares
                which vest on June 9, 2008 and (iii) 4,000 restricted shares issued
                on
                February 27, 2008, 50% of which vest on the first anniversary of
                the date
                of grant and 50% of which vest on the second anniversary of the date
                of
                grant provided that the awardee is an employee of the Company on
                such
                anniversary.





(4)
            Includes
                (i) 303,825 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008, (ii) 5,000 restricted
                shares
                which vest on June 9, 2008 and (iii) 4,000 restricted shares issued
                on
                February 27, 2008, 50% of which vest on the first anniversary of
                the date
                of grant and 50% of which vest on the second anniversary of the date
                of
                grant provided that the awardee is an employee of the Company on
                such
                anniversary.





(5)
            Includes
                (i) 136,400 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008, (ii) 5,000 restricted
                shares
                which vest on June 9, 2008 and (iii) 4,000 restricted shares issued
                on
                February 27, 2008, 50% of which vest on the first anniversary of
                the date
                of grant and 50% of which vest on the second anniversary of the date
                of
                grant provided that the awardee is an employee of the Company on
                such
                anniversary.


-15-





(6)
            Includes
                (i) 20,000 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008, (ii) 10,000 restricted
                shares which vest on March 5, 2009 and (iii) 4,000 restricted shares
                issued on February 27, 2008, 50% of which vest on the first anniversary
                of
                the date of grant and 50% of which vest on the second anniversary
                of the
                date of grant provided that the awardee is an employee of the Company
                on
                such anniversary.





(7)
            Includes
                (i) 75,838 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31, 2008 and (ii) 3,500 shares
                of
                Common Stock held by Mr. Burstein's IRA
                account.





(8)
            Includes
                102,638 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31,
                2008.





(9)
            Includes
                103,546 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31,
                2008.





(10)
            Includes
                shares held by MFC Global Investment Management (U.S.), LLC (“MFC Global
                (U.S.)”, an indirect wholly-owned subsidiary of Manulife Financial
                Corporation ("MFC"). MFC Global (U.S.) has beneficial ownership of
                1,102,705 shares of common stock. Through its parent-subsidiary
                relationship to MFC Global (U.S.), MFC may be deemed to have beneficial
                ownership of these same shares. The principal business offices of
                MFC are
                located at 200 Bloor Street, East, Toronto, Ontario, Canada, M4W
                1E5; MFC
                Global (U.S.) is located at 101 Huntington Street, Boston, Massachusetts
                02199. The foregoing information is derived from a Schedule 13G/A
                filed on
                behalf of the reporting persons on February 8,
                2008.





(11)
            Includes
                shares held by Artis Capital Management, LP (“Artis”), Artis Capital
                Management, Inc. (“Artis Inc.”), Stuart L. Peterson and Artis Partners 2X
                Ltd. (“2X"). Artis is a registered investment adviser and is the
                investment adviser of 2X. Artis Inc. is the general partner of Artis.
                Mr.
                Peterson is the president of Artis Inc. and the controlling owner
                of Artis
                and Artis Inc. Each of Artis, Artis Inc. and Mr. Peterson disclaims
                beneficial ownership of the Common Stock, except to the extent of
                its or
                his pecuniary interest therein. Artis’ clients have the right to receive
                or the power to direct the receipt of dividends from, or the proceeds
                from
                the sale of, the Common Stock. No individual client, other than 2X
                holds
                more than five percent of the outstanding Common Stock, and 2X disclaims
                beneficial ownership of any of the Common Stock. The address of the
                business office of each of Artis, Artis Inc. and Mr. Peterson is
                One
                Market Plaza, Spear Street Tower, Suite 1700, San Francisco, CA 94105,
                and
                the address of the business office of 2X is c/o Goldman Sachs
                Administration Services, Gardenia Court, Suite 3307, 45 Market Street,
                Camana Bay, P.O. Box 896, KY1-1103, Cayman Islands. The foregoing
                information is derived from a Schedule 13G/A filed on behalf of the
                reporting persons on February 14,
                2008.





(12)
            Includes
                439,730 shares directly owned by Empire Capital Partners, L.P. (“Empire
                Capital”), and 525,751 shares directly owned by Empire Capital Partners,
                Ltd. (the “Overseas Fund”), Charter Oak Partners, L.P., Charter Oak Master
                Fund, L.P. and Charter Oak Partners II, L.P. (collectively, the “Charter
                Oak Funds”). Empire GP, L.L.C., the general partner of Empire Capital
                (“Empire GP”), has the power to direct the affairs of Empire Capital,
                including decisions respecting the disposition of the proceeds from
                the
                sale of the Common Stock. Empire Capital Management, L.L.C. (“Empire
                Management”), the investment manager of the Empire Overseas Fund, has the
                power to direct the affairs of the Empire Overseas Fund, including
                decisions respecting the disposition of the proceeds from the sale
                of the
                Common Stock. Empire Management, pursuant to investment management
                agreements with the Charter Oak Funds, has the power to dispose of
                the
                proceeds from the sale of the Common Stock with respect to those
                assets of
                the Charter Oak Funds under its discretion. Scott A. Fine and Peter
                J.
                Richards are members of Empire GP and Empire Management, and in such
                capacities direct the operations of Empire GP and Empire Management.
                The
                foregoing information is derived from a Schedule 13G/A filed on behalf
                of
                the reporting persons on February 14,
                2008.


-16-


(13)
            Represents
                shares held by Independence Investments LLC. The address of the business
                office of Independence Investments LLC is 160 Federal Street, Boston,
                MA
                02110. The foregoing information is derived from a Schedule 13G filed
                on
                behalf of Independence Investments LLC on January 27,
                2008.





(14)
            Includes
                1,298,222 shares of Common Stock issuable upon exercise of options
                exercisable within 60 days of March 31,
                2008.





**Equity
      Compensation Plan Information.**




The
      following table provides information about our common stock that may be issued
      upon the exercise of options under our 1995 Employee Stock Option Plan, 1999
      Stock Option Plan, 1999 Director Option Plan and the 2007 Equity Compensation
      Plan as of December 31, 2007. These plans were our only equity compensation
      plans in existence as of December 31, 2007. Our 1995 Employee Stock Option
      Plan
      terminated in accordance with its terms as of July 8, 2005, and no additional
      awards were, or may be, granted thereunder after such date.





**Plan
                Category**
            
            **Number of securities to**
              **be issued upon exercise**
              **of outstanding options,**
              **warrants and rights**
              **(a)**
            
            **Weighted average**
              **exercise price of**
              **outstanding options,**
              **warrants and rights**
              **(b)**
            
            **Number of**
              **securities**
              **remaining**
              **available for future**
              **issuance (excluding**
              **securities reflected**
              **under column (a))**
              **(c)**Equity compensation plans
                approved by security holders
            
            
            2,761,000
            
            $
            9.57
            
            
            2,125,010Equity
                compensation plans not approved by security holders
            
            
            —
            
            
            —
            
            
            —Total
            
            
            2,761,000
            
            
            9.57
            
            
            2,125,010




**Item
      13.**   **Certain
      Relationships and Related Transactions and Director
      Independence**





In
      accordance with the charter of the Audit Committee, the Audit Committee is
      responsible for annually reviewing all transactions or series of similar
      transactions to which we are or were a party and in which any director,
      executive officer or beneficial holder of more than 5% of any class of Common
      Stock or members of such person’s immediate family had or will have a direct or
      indirect material interest. Since January 2007, there has not been, nor is
      there
      currently proposed, any transaction or series of similar transactions to which
      we are or were a party in which the amount involved exceeds $120,000 and in
      which any director, executive officer or beneficial holder of more than 5%
      of
      any class of our common stock or members of such person’s immediate family had
      or will have a direct or indirect material interest.




**Item
      14.**   **Principal
      Accountant Fees and Services**





*Audit
      Fees*




The
      aggregate fees billed by Eisner LLP, the Company's independent registered public
      accounting firm, for professional services rendered for the audit of the
      Company’s annual financial statements for the fiscal years ended December 31,
      2007 and 2006, and for the review of the financial statements included in the
      Company’s Quarterly Reports on Form 10-Q for the fiscal years ended December 31,
      2007 and 2006 were $228,000 and $201,000, respectively.




-17-




*Audit-Related
      Fees*




Other
      than the fees described under the caption “Audit Fees” above, Eisner LLP did not
      bill any fees for services rendered to the Company during fiscal years ended
      December 31, 2007 and 2006 for assurance and related services in connection
      with
      the audit or review of the Company’s financial statements.




*Tax
      Fees*




There
      were no fees billed by Eisner LLP for professional services rendered for tax
      compliance, tax advice or tax planning during fiscal years ended December 31,
      2007 and 2006.




*All
      Other Fees*




The
      aggregate fees billed by Eisner LLP for products or professional services
      rendered, other than services described under the caption “Audit Fees” above
      during fiscal years ended December 31, 2007 and 2006, were $3,500 and $0
      respectively. The aggregate fees billed by Eisner LLP during the fiscal year
      ended December 31, 2007 were attributable to due diligence services in
      connection with the Company's recent acquisition of substantially all of the
      assets of International Electronics, Inc.'s POWERKEY® division.




*Audit
      Committee’s Pre-Approval Policies and Procedures*




The
      Audit
      Committee pre-approves all services, including both audit and non-audit
      services, provided by the Company’s independent accountants. For audit services,
      each year the independent registered public accounting firm provides the Audit
      Committee with an engagement letter outlining the scope of the audit services
      proposed to be performed during the year, which must be formally accepted by
      the
      Audit Committee before the audit commences. The independent registered public
      accounting firm also submits an audit services fee proposal, which also must
      be
      approved by the Audit Committee before the audit commences.





**PART
      IV.**





**Item
      15.**  **Exhibits,
      Financial Statement Schedules**




(a)(3)




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




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




-18-




**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, as amended, the Registrant has duly caused this Amendment No. 1 on Form
      10-K/A to the Registrant's Annual Report on Form 10-K to be signed on its behalf
      by the undersigned thereunto duly authorized.




Date:
      April 29, 2008




I.D.
                SYSTEMS, INC.By:
            /s/
                Jeffrey M. JagidJeffrey
                M. JagidChief
                Executive Officer(Principal
                Executive Officer)By:
            /s/
                Ned MavrommatisNed
                MavrommatisChief
                Financial Officer(Principal
                Financial and Accounting Officer)





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





**Signature**
            
            **Title**
            
            **Date**/s/
                Jeffrey M. JagidJeffrey
                M. Jagid
            
            Chief
                Executive Officer and Director
            
            April
                29, 2008(Principal
                Executive Officer)/s/
                Kenneth S. EhrmanKenneth
                S. Ehrman
            
            President,
                Chief Operating Office and Director
            
            April
                29, 2008/s/
                Ned MavrommatisNed
                Mavrommatis
            
            Chief Financial Officer (Principal Financial
            
            April 29, 2008and
                Accounting Officer)/s/
                Lawrence BursteinLawrence
                Burstein
            
            Director
            
            April
                29, 2008/s/
                Michael Monaco
            
            Director
            
            April
                29, 2008Michael
                MonacoDirectorBeatrice
                Yormark


-19-


**EXHIBIT
      INDEX**





31.1
            Certification
                of the Chief Executive Officer as required by Rule 13a-14(a), as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.





31.2
            Certification
                of Chief Financial Officer as required by Rule 13a-14(a), as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.


-20-