**United
        States**
 **Securities
        and Exchange Commission**
 **Washington,
        D.C. 20549**
 
 **Form
        10-KSB**
 
 x 
              Annual Report pursuant to Section 13 or 15(d) of The
        Securities Exchange Act of 1934:
 **For
        the fiscal year ended: December 31, 200****7**
 
 x 
              Transition report pursuant to Section 13 or 15(d) of
        The Securities Exchange Act of 1934:
 **For
        the transition period from:**
 000-50081
 (Commission
        File Number)
  **Invisa,
        Inc.**
 (Exact
        name of small business issuer as specified in its charter)
 
 **Nevada**
 (State
        or
        other jurisdiction of incorporation or organization)
 
 **65-1005398**
 (I.R.S.
        employer identification number)
 
 **290
        Cocoanut Avenue, Suite 1A**
 **Sarasota,
        Florida 34236**
 (Address
        of principal executive offices)
 
 **(941)
        870-3950**
 (Issuer’s
        telephone number)
 
 Securities
        to be registered pursuant to Section 12(b) of the Exchange Act:
        NONE
 Securities
        to be registered pursuant to Section 12(g) of the Exchange Act:
 Common
        Stock, Par Value $.001 per share
   (Title
        of
        Class)
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days. x Yes  ̈ No
 
 Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of registrant’s knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this Form 10-KSB or any
        amendment to this Form 10-KSB.  x Yes    ̈
        No
 
 Indicate
        by a check mark whether issuer is a shell Company (as defined in Rule 12b-2
        of
        the Exchange Act).  ̈ Yes x
        No
 
 The
        Issuer’s revenues for its most recent fiscal year were $124,986.
 
 Indicate
        by check mark whether Invisa is an accelerated filer as defined in the Exchange
        Act Rule 126-2.  ̈
        Yes x
        No
 
 The
        aggregate market value of the Issuer’s voting stock held as of December 31, 2007
        by non-affiliates of the Issuer based upon the closing bid and asked price
        of
        the Issuer’s Common Stock on that date is $0.02 The Issuer does not have any
        non-voting stock.
 
 On
        December 31, 2007, 25,066,126 shares of Invisa Common Stock, $0.001 par value,
        were outstanding.
  1
  
 **TABLE
        OF CONTENTS**
  **Page****Part
                  I**Item
                  1
              Description
                  of Business
              3Item
                  2
              Description
                  of Property
              5Item
                  3
              Legal
                  Proceedings
              5Item
                  4
              Submission
                  of Matters to Vote of Security Holders
              5**Part
                  II**Item
                  5
              Market
                  for Common Equity and Related Stockholder Matters
              5Item
                  6
              Managements
                  Discussion and Analysis or Plan of Operations
              6Item
                  7
              Financial
                  Statements
              10Item
                  8
              Changes
                  in and Disagreements with Accountants on Accounting
              10Item
                  8a
              Controls
                  and Procedures
              10Item
                  8b
              Other
                  Information
              10**Part
                  III**
              11Item
                  9
              Directors
                  and Executive Officers of the Registrant
              12Item
                  10
              Executive
                  Compensation
              14Item
                  11
              Security
                  Ownership of Certain Beneficial Owners and Management
              19Item
                  12
              Certain
                  Relationships and Related Transactions
              20Item
                  13
              Principal
                  Accountant Fees and Services
              20Item
                  14
              Exhibits
                    and Financial Statements Schedule
              21**Financial
                  Statements**Report
                  of Aidman, Piser & Company, P.A.
              F-1Balance
                  Sheet at December 31, 2007
              F-2Statements
                  of Operations for the years ended December 31, 2006 and
                  2007.
              F-3Statements
                  of Stockholders’ Equity for the years ended  December 31, 2006 and
                  2007
              F-4Statements
                  of Cash Flows for the years ended December 31, 2006 and
                  2007.
              F-5Notes
                  to Financial Statements.
              F-6**Signature
                  Page**
              24**Index
                  to Exhibits**
              21
  
    2
  **PART
        I**
 
 Note
        regarding forward-looking statements. Except for statements of historical
        fact,
        certain information contained herein constitutes forward-looking statements
        including, without limitation, statements containing the words believes,
        anticipates, intends, expects, and words of similar import, as well as all
        projections of future results. Such forward-looking statements involve known
        and
        unknown risks, uncertainties and other factors which may cause the actual
        results or achievements of Invisa, Inc. to be materially different from any
        future results or achievements expressed or implied by such forward-looking
        statements. Such factors include, but are not limited to, the following:
        risks
        involved in our implementing our business strategy; our ability to obtain
        financing on acceptable terms; competition; our ability to manage growth;
        risks
        of technological change; our dependence on key personnel; and our ability
        to
        protect our intellectual property rights; risks of new technology and new
        products; and government regulation.
 
 **Item
        1 - Description of Business**
 
 **History**
 
 Invisa,
        Inc. is a development stage company that is commercializing patented
        presence-sensing technology under the InvisaShieldTM trade name. The Company was
        incorporated in Nevada in 1998. In 2000, we acquired SmartGate, L.C.
        (“SmartGate”), before it had achieved any significant revenues. SmartGate had
        developed presence-sensing technology for safety applications in the powered
        closure market, such as powered overhead doors and parking barrier gates.
        Subsequently, at the end of 2004, it was merged into Invisa. From an accounting
        perspective, SmartGate was the acquirer in this transaction and the accompanying
        Financial Statements reflect the operations of SmartGate from
        inception.
  In
          February
          of 2002, the Company purchased 100% of the outstanding capital stock of
          Radio
          Metrix Inc. (“RMI”), a company owned by the principal shareholders of Invisa.
          RMI had virtually no operations since its inception and, therefore, the
          Company
          determined that by acquiring RMI, the Company acquired an asset (a patent)
          and
          not a business. RMI, formed to commercialize InvisaShield security sensors
          for
          applications such as zone and perimeter protection, was merged into Invisa
          at
          the end of 2004. With that merger, Invisa now owns the patent and patent
          applications, as well as the sole rights to the InvisaShield technology
          in all
          markets worldwide
 In
          April
          2003, the RMI Purchase Agreement was amended whereby the Company agreed
          to issue
          3,250,000 shares of its Common Stock for full satisfaction of the future
          contingent consideration. In November 2003, the RMI Purchase Agreement
          was
          further amended whereby the $1,300,000 notes payable were forgiven. In
          August
          2004, we negotiated the cancellation of the 7% royalty agreement in exchange
          for
          400,000 warrants to purchase Common Stock. As a part of this latter amendment,
          certain compensation owed to affiliated parties was forgiven.
 Our
          offices
          are located at 290 Cocoanut Avenue, Suite 1A, Sarasota, FL 34236, telephone
          (941) 870-3950.
 **Overview**
  Invisa
          manufactures and sells sensors that use the Company’s patented InvisaShield
          presence-sensing design and technology.   In the past the Company
          engaged in development activities as well as efforts to license the
          technology.  Presence-sensing is the reliable, repeatable detection of
          people and conductive objects. InvisaShield technology detects objects
          at a
          distance of typically less than one meter.
  Today,
        the
        InvisaShield technology is used in the safety market*.*In the
        past, the Company engaged in preliminary development, market testing and market
        analysis regarding the use of the InvisaShield technology in
        the**security market*.*While the Company
        believes the InvisaShield technology has market opportunity in the Security
        Market, the Company’s efforts in the Security Market have been, at least
        temporarily, terminated due to the Company’s cash
        constraints.
 In
          the
          safety market, the Company sells a line of SmartGate ® brand
          safety
          sensors. These sensors are life and property safety devices used in or
          with
          powered closures - mechanisms such as parking gates, slide gates, and overhead
          doors.  To date, our revenues have been derived mostly from the sale
          of SmartGate safety sensors which are incorporated into powered parking
          gates.  Parking gates are motorized barriers used to control the flow
          of vehicular traffic, such as parking facilities, vehicle storage facilities,
          toll booths, and metered entry points for highways.
  In
        the
        security market, the Company has installed first generation security
** sensors at a major New England museum. These devices created
        invisible presence-sensing fields around displays and exhibits. The InvisaShield
        sensors were used to detect any person who tries to enter the monitored zone,
        preventing vandalism or inadvertent damage. This installation has been in
        operation at the museum since the summer of 2003.  We believe that the
        security market may offer significant promise and, depending on the availability
        of financing for such use, we anticipate additional efforts to further develop
        sensors for museum exhibit/display and other security-related
        applications.
 
 
 **Applications**
 
 *Safety
        Market* - Many safety devices and safety functions depend upon
        presence-sensing technology. While we have historically been developing a
        range
        of presence-sensing devices for the safety market under our brand name
        SmartGate, we are currently primarily focused on safety products used in
        the
        parking gate market. We
        believe that our safety sensors offer potential operational and maintenance
        benefits for the powered closure industry. Today, we sell SmartGate safety
        sensors for use with powered parking gates.
 
 We
        also
        have developed pre-production versions of presence-sensing devices for use
        in
        powered slide-gates, commercial overhead doors, powered industrial doors
        (which
        are used in commercial, manufacturing and industrial facilities) and residential
        garage doors; however we do not currently sell these products.  We
        believe that there may be other applications for our presence-sensing technology
        in the safety market. Ultimately, based on availability of financing, we
        plan to
        offer safety sensors based upon our InvisaShield technology to be used with
        a
        broad range of powered closure products manufactured by other
        companies.
  In
        2006
        and 2007, all revenue has been derived from the sale of SmartGate safety
        sensors
        used with powered parking barrier gates. These gates are commonly used for
        traffic control and typically have a power-operated barrier arm made of metal,
        wood or PVC. This arm moves vertically between an open and a closed position.
        Our device places an invisible presence-sensing field that proceeds and moves
        with the potentially dangerous barrier arm to detect people and vehicles
        in its
        path. Our device signals the powered gate to trigger a predetermined response,
        such as stopping and reversing the barrier arm.
 Another
          potential application of InvisaShield technology is with vertical powered
          doors.
          These doors are frequently used in manufacturing and industrial environments
          where air-conditioned, cooler, and freezer areas are separated within warehouses
          and other buildings. In July 2002, we granted Rytec Corporation a license
          to use
          our safety devices as original equipment on high-speed industrial doors
          in North
          America. In 2005, the license agreement was converted into a joint development
          agreement. Due to cash constraints, we are not currently able to conduct
          any
          development of this product and no sales of this product were made in 2006
          or
          2007.  We anticipate that in the future we may explore this or other
          opportunities in the high-speed industrial door market.
  Our
          selling price for InvisaShield safety sensors allows us an acceptable gross
          profit margin and we expect that our cost of goods will continue to decline
          as
          we realize economies of scale.
 
 *Security
        Market* - Security systems and security equipment generally rely, to varying
        degrees, on presence-sensing technologies to detect the presence of potential
        intruders and trespassers, or to provide surveillance of valuable objects.
        In
        addition to museum applications, in preliminary pre-marketing situations
        we have
        demonstrated prototypes of InvisaShield security sensors for retail, industrial,
        commercial, defense and government applications. As with our museum security
        sensors, these devices place a monitoring field around objects needing
        protection. Examples of applications that we have demonstrated include safes,
        locking cabinets, display cases, objects of art and jewelry and or exposed
        perimeters (doors, windows, fences etc.). When the detection field is entered,
        the InvisaShield sensor signals the security system. The security system
        then
        responds with a warning or alarm.
 
 We
        have
        tested a limited number of security sensors under field evaluation and based
        on
        availability of financing we anticipate that we may engage further development
        for the security market. Due to cash constraints, we are not currently able
        to
        conduct any development of this product and no sales of this product were
        made
        in 2006 or 2007.
 
 
 **Marketing**
 
 We
        sell
        our safety products to manufacturers, distributors, dealers and, in some
        instances, to selected end-users.  Due to cash constraints, we are
        currently unable to conduct any significant marketing efforts. Our current
        sales
        effort is primarily limited to filling unsolicited orders for our safety
        product
        for powered parking gates and in some cases contacting existing
        customers.
  3
  **Sales**
 
 During
        2006 and 2007, Magnetic Automation Corp. was our largest customer, comprising
        approximately 11% and 29%, respectively, of our product revenues in both
        years.
 
 **Technology**
 
 The
        InvisaShield technology uses electronic circuitry that emits, controls, and
        monitors changes in an invisible energy field. The field is based, in part,
        upon
        low energy radio waves oscillating within a controlled frequency range. The
        field that is monitored can be varied in sensitivity from a distance of
        approximately one meter to a centimeter or less, depending upon the selected
        application. Circuitry constantly checks the field to test for the presence
        of
        people, vehicles or other conductive objects (objects that conduct electricity)
        that would disturb the monitored field.
 
 We
        believe that the InvisaShield technology is a novel and proprietary way to
        provide presence-sensing. At the core of the technology is the ability to
        project a field or zone capable of detecting most conductive objects that
        enter
        the field. The field is projected from a metallic substance, referred to
        as an
        antenna, which may consist of wire, self-adhesive metallic tape or other
        metallic items. The technology allows flexibility in designing and locating
        the
        antenna. This may offer unique opportunities to place presence-sensing fields
        where they can be used more efficiently or effectively. This adaptability
        may
        mean that the InvisaShield technology can perform non-contact presence-sensing
        tasks not currently possible with competing technologies and/or it may perform
        presence-sensing tasks similar to those performed by competing technologies,
        but
        in a more efficient, effective, and reliable manner.
 
 We
        believe that the InvisaShield technology has a number of operational advantages.
        The technology does not depend upon lenses, beams or reflectors which may
        require replacement, cleaning and aligning. The non-intrusive, non-contact
        presence-sensing capability of our technology is generally not disrupted
        by its
        operating environment, including electronic noise, mechanical noise,
        temperature, dust, frost, snow, ice or other operating conditions. We believe
        that the InvisaShield technology may have greater capability, flexibility
        and
        benefits than other non-contact sensing technologies.
 
 *Competing
        Technologies* - The presence-sensing business is highly competitive,
        consisting of numerous manufacturers of presence-sensing products based on
        various technologies, including infrared, ultrasonic, laser, microwave, and
        similar technologies. For the most part, these technologies have been in
        use for
        a number of years and, in many cases, may not be proprietary.
 
 Our
        competitors provide a variety of presence-sensing and other safety and security
        alternatives such as motion detectors, CCTV-based movement detection systems,
        infrared and visible light beam detectors, light curtains, on/off switching
        mats
        and pads, tape switches, contact edges, as well as others.
 
 In
        the
        safety and/or security sectors we compete with many companies, including
        MillerEdge, Stanley, Optex, Napco, Pelco, and DMP, along with other large
        and
        well-established firms such as Honeywell, Tyco, General Electric, Bosch,
        and
        Siemens.
 
 Many
        of
        our competitors have substantially greater development, technical, marketing,
        sales and financial capabilities than we have. As a result of these factors,
        competitors and potential competitors may be able to respond more quickly
        to new
        or emerging technologies and changes in customer requirements and/or to devote
        greater resources to the development, promotion and sale of their products
        and
        services than we can. We believe that our ability to successfully compete
        depends, to a large degree, upon the performance of our technology, our current
        and planned presence-sensing products and our ability to finance our
        development, marketing and distribution efforts.
  *Patents
        and Trademarks* - We own five Patents issued by the U.S. Patent Office,
        three of which were issued in the year 2006 or the first quarter of 2007:
        Patent
        No. 5,337,039 issued on August 9, 1994, Patent No. 6,819,242 issued on November
        16, 2004, Patent No. 7,023,222,B2 issued on April 4, 2006; Patent No. 7,167,093
        B2 issued on January 23, 2007 and Patent No. 7,187,282 issued on March 6,
        2007.
        In addition, we have filed for two patents (as PCT, or Patent Cooperation
        Treaty
        filings), one provisional patent application and have one application pending,
        all of which cover improvements to the InvisaShield technology.
 
 We
        have a
        trademark on the trade name “SmartGate” which we use in our safety products
        category. We have filed trademark applications for the following: “Invisa”,
“InvisaShield” and the tagline “Safe. Secure. No Question.” We believe that our
        patent and trademark position will be useful in our efforts to protect our
        perceived competitive advantages.
 
  4
  **Materials
        and Manufacturing**
 
 We
        believe that the materials required and the sources of such materials will
        be
        similar for our various existing and planned product categories. All components
        and parts are modified or manufactured by third parties to our specifications
        or
        are otherwise generally available as off-the-shelf materials. Our products
        have
        a number of components including proprietary electronic circuitry manufactured
        to our specifications by third party manufacturers and a standard power supply
        available in the marketplace. The antenna is standard wire, tape or other
        metallic materials, which can generally be purchased in bulk. Whenever possible,
        we use fixed price manufacturing for our electronic circuitry, placing the
        responsibility for component supply on the manufacturer. We believe that
        there
        are multiple manufacturers and suppliers for each component and that adequate
        components and materials will be available to support our planned growth.
        We
        perform some final assembly and predetermined quality control procedures
        in our
        facility.
 
 **Government
        Regulation**
 
 The
        use
        of radio frequency or “RF”, such as that used by our safety products, is
        regulated by the Federal Communications Commission. RMI submitted its patented
        technology for required FCC testing and, in August of 1993, it received FCC
        Certification. We will endeavor to continue satisfying all requirements of
        the
        FCC.
 
 On
        March
        1, 2001, a new safety standard was implemented by Underwriters Laboratory
        (UL)
        for the powered gate, door and window industry. This rule, UL-325, while
        not a
        governmental regulation, is considered an indication of reasonable safety
        for
        powered gates, doors and windows, and is a requirement for UL certification
        for
        certain powered gate, door and window operators. Gate and operator manufacturers
        that rely upon UL certification or consider UL certification important for
        components most likely will require that our products be UL certified before
        incorporating our products as original equipment. We do not have a UL
        certification and  the absence of UL certification for our products
        may represent a sales or marketing barrier in certain market categories and
        to
        certain customers.
 
 **Warranty**
 
 Our
        safety products are sold with a 90-day (upgradeable to one year) limited
        warranty. We anticipate that our security products will carry a warranty
        that is
        generally in line with industry suppliers’ practice. We have had no significant
        claims expensed under the warranty in 2006 or 2007.
 
 **Employees**
 
 We
        have continued to reduce our
        staff, and at December 31, 2007 we had no full time employees.  Our
        CFO, who also serves as our Acting President,  serves in such a
        capacity, on a part-time basis.  We support operations by using
        consultants as required.
 
 **Research
        and Development**
 
 During
          the years ended December 31, 2006 and 2007, research and development expenses
          totaled $119,937 and $0.00, respectively.  The decrease was due
          principally to our decision to temporarily hold ongoing research and development
          activities in abeyance due to cash constraints.
 **Item
        2 - Description of Property**
 
 As
        of
        December 31, 2007 we lease approximately 1,500 square feet of office shop
        space
        at 290 Cocoanut Plaza in Sarasota, Florida, on a month-to-month
        basis.  Monthly rent is approximately $1,000. We rent the facilities
        from a non-affiliated party. No zoning or other governmental requirements
        are
        needed for the continued use of our facilities.
  We
        have
        adopted a policy, pursuant to which, we do not invest in real estate or maintain
        an interest in real estate, real estate mortgages or securities issued that
        are
        based upon real estate activities.
  **Item
        3 - Legal Proceedings**
 
 None.
 
 **Item
        4 - Submission of Matters to a Vote of Security Holders**
 
 No
        matter
        was submitted during the fourth quarter of the fiscal year covered by this
        report to a vote of the Company’s security holders.
 
 **PART
        II**
 
 **Item
        5 - Market for Common Equity and Related Stockholder
        Matters**
 
 **Market
        Information**
 
 From
        July
        7, 2003 to date, our Common Stock has traded on the NASD OTC BB which is
        the
        principal market for our Common Stock under the symbol INSA.OB. The following
        table sets forth the range of high and low bids to purchase our Common Stock
        during the last two fiscal years. Such prices represent quotations between
        dealers, without dealer markup, markdown, or commissions, and may not represent
        actual transactions.
 
 As
        of
        December 31, 2007 there were 375 stockholders of record of Invisa Common
        Stock.
 **Quarter**
              **High
                  Bid**
              **Low
                  Bid**First
                  Quarter 2006
              0.23
              0.10Second
                  Quarter 2006
              0.30
              0.13Third
                  Quarter 2006
              0.23
              0.05Fourth
                  Quarter 2006
              0.10
              0.03First
                  Quarter 2007
              0.04
              0.04Second
                  Quarter 2007
              0.03
              0.03Third
                  Quarter 2007
              0.10
              0.10Fourth
                  Quarter 2007
              0.02
              0.02
 
 On
        March
        11, 2008, the closing bid and closing ask prices for shares of our Common
        Stock
        in the over-the-counter market, as reported by NASD OTC BB was $0.01 per
        share.
 
 We
        believe that there are presently approximately 13 market makers for our Common
        Stock. When stock is traded in the public market, characteristics of depth,
        liquidity and orderliness of the market may depend upon the existence of
        market
        makers as well as the presence of willing buyers and sellers. We do not know
        if
        these or other market makers will continue to make a market in our Common
        Stock.
        Further, the trading volume in our Common Stock has historically been both
        sporadic and light.
 
 **Dividend
        Policy**
 
 The
        payment by the Company of dividends, if any, in the future, rests within
        the
        sole discretion of its Board of Directors. The payment of dividends will
        depend
        upon our earnings, our capital requirements and our financial condition,
        as well
        as other relevant factors. The Company has not declared any cash dividends
        since
        its inception, and has no present intention of paying any cash dividends
        on its
        Common Stock in the foreseeable future.
 
 **Transfer
        Agent**
 
 The
        Transfer Agent for the Common Stock of the Company is Continental Stock Transfer
        and Trust Company 17 Battery Place, New York, NY 10004.
 
 **Recent
        Sales of Unregistered Securities**
  We
          issued
          20,000,000 shares of our Common Stock in September of 2007 and an
          additional 13,333,333 in the first quarter of 2008 to collateralize several
          notes totaling $250,000.00 evidencing loans made to the Company by a third
          party lender. The shares were deposited in an escrow account and will only
          be delivered to such lender in the event of a default under or non payment
          of
 the notes. Upon full repayment of the notes, said shares will be returned
          to the Company. The shares delivered to the escrow agent as security for
          the notes are not being treated as outstanding and will only be considered
          as
          being issued and outstanding if and when the shares are released by the
          escrow
          agent and delivered to the lender as a result of a default under the promissory
          notes and related security agreement.
  5
 **Item
        6 - Management’s Discussion and Analysis or Plan of
        Operations**
 
 The
        following discussion and analysis of our financial condition and plan of
        operations should be read in conjunction with our financial statements and
        related notes appearing elsewhere in this filing. This discussion and analysis
        contains forward-looking statements including information about possible
        or
        assumed results of our financial conditions, operations, plans, objectives
        and
        performance that involve risk, uncertainties and assumptions. The actual
        results
        may differ materially from those anticipated in such forward-looking statements.
        For example, when we indicate that we expect to increase our product sales
        and
        potentially establish additional license relationships, these are
        forward-looking statements. The words expect, anticipate, estimate or similar
        expressions are also used to indicate forward-looking statements. The cautionary
        statements made herein should be read as being applicable to all related
        forward-looking statements in this Annual Report on Form 10-KSB.
 
 **Background
        of our Company**
 
 We
        are a
        development-stage company, and we expect to continue the commercialization
        of
        our InvisaShield technology. For the year ended December 31, 2007, we had
        revenue from product sales of $124,986, principally representing sales of
        our
        product for powered parking gates. In addition to limited revenue, these
        sales
        have been a vehicle for receiving customer feedback on the reliability, ease
        of
        installation, and determining the market’s acceptance of our safety
        product.
 
 Financing
        for our operations in 2007 was derived from limited sales and short-term
        debt
        financing. We are working to increase our sales of product, further reduce
        operating costs and obtain financing including through business combinations
        and
        licensing relationships and transactions. In the future based on available
        financing, we may develop additional safety and security products and bring
        them
        to market.
 
 In
        February 2002 Invisa acquired Radio Metrix, Inc. (“RMI”) thereby obtaining
        ownership of the patent held by RMI. Prior to acquiring ownership of the
        patent,
        Invisa was selling safety sensors for gates (principally, automobile parking
        facility gates) under a sub-licensing arrangement with RMI for safety products
        only. Acquiring RMI, and thus the patent, was a business decision as it enabled
        Invisa to gain access to universal use of the patent technology, including
        not
        only safety but security and other products.
 
 Through
        October 2003, we planned to develop, manufacture and sell sensor devices
        for use
        not only in parking facility gates, where we already had developed commercial
        products but in other safety and security devices. In October 2003, we
        hired a new CEO who, shortly after his employment, revised our strategy to
        focus
        more on selling licenses rather than manufacturing and selling devices. Because
        of the constraints on our finances, we did not believe that we had the available
        resources to market, manufacture and sell closure, security and other devices.
        The licensing of our technology, although reducing our ability to enjoy the
        full
        value of the patent, was to provide us with an inflow of funds without our
        having to expend significant resources. In April 2005 the CEO’s employment was
        terminated and we have reinstated our original sales strategy. In addition
        to
        continuing to sell our precuts to manufacturers, dealers, distributors and
        customers, we plan to continue to seek to have manufacturers (OEM’s) in embedded
        our patented sensors in their closure devices and to develop cooperative
        marketing and sales programs with the OEM’s.
 
 We
        have continued to attempt to enhance our patent position.  In 2006 and
        early 2007, we received notification of the issuance of three new patents
        all of
        which were issued in 2007.
 
 Invisa
        generated sales of parking automated sensors in 2006 and 2007 of $136,980
        and
        $124,986, respectively
 
 **Limited
        Operating History**
 
 We
        have
        had a limited history of operations and anticipate that our quarterly results
        of
        operations will fluctuate significantly for the foreseeable future. We believe
        that period-to-period comparisons of our operating results should not be
        relied
        upon as predictive of future performance. The information in this Form 10-KSB
        must be considered in light of the risks, expenses and difficulties encountered
        by companies at an early stage of development, particularly companies
        commercializing new and evolving technologies such as InvisaShield.
 
 **Year
        Ended December 31, 2006 Compared to the Year Ended December 31,
        2007**
 
 *Net
        Sales*- During the years ended December 31, 2006 and 2007, product sales
        totaled $136,980 and $124,986, respectively. The Company's sales to date
        have continued to be limited and constrained by lack of capital and have
        been
        largely limited to filling orders as the Company lacks any formal sales
        effort.  We had a gross profit of $42,782 for the year ended December 31,
        2006 and gross profit of $51,036 for the year ended December 31, 2007. Gross
        margin was 31and 41 percent during 2006 and 2007,
        respectively.
  6
  *Research
        and Development Expenses* - During the years ended December 31, 2006 and
        2007, research and development expenses totaled $119,937 and $0.00,
        respectively. The decrease was due principally to our decision to temporarily
        hold ongoing research and development activities in abeyance due to cash
        constraints. In the fourth Quarter of 2006, employment of our in-house engineer
        and his assistant was terminated. These former employees are currently
        considered outside consulting resources on an as requested/as available basis.
        To date, we have not requested significant access to this consulting resource
        and accordingly have experienced a reduction in research and development
        expenses.
 
 *Selling,
        General and Administrative Expenses* - During the years 2006 and 2007,
        selling, general and administrative expenses totaled $1,420,743 and $581,993,
        respectively. .  The decrease principally resulted from a
        reduction in rent, staffing, compensation and related payroll
        expenses.   Marketing activities have been severely limited due
        to cash constraints with ongoing marketing activities largely limited to
        filling
        unsolicited orders.
 
 *Amortization
        and Impairment of Patent -* During the year 2003, the Company decreased the
        carrying amount of its patent costs of $12,217,808 by $5,517,808 to $6,700,000
        to reflect the fair value as determined by the Company’s management. In 2003 the
        Company revised its strategy to focus more on selling licenses rather than
        manufacturing and selling devices. The patent impairment resulted principally
        from the Company’s forecast of reduced expected discounted future cash flows
        associated with the licensing business model. Realization of the patent’s
        carrying value would require substantial annual revenue growth through 2012,
        which was consistent with the Company’s then current internal budgets and
        projections over that period.
 
 The
        Company subsequently determined that the licensing business model was no
        longer
        suitable and the Company adopted a product sales model with potential customers
        including end-users, dealers, distributors and manufacturers.  While
        product sales have remained low and operating losses have continued, management
        continues to believe that the potential market for its existing technology
        is
        viable.  Management further believes that market viability was to some
        degree exhibited by the continued sales of our safety product for parking
        gates
        in 2007 notwithstanding the lack of formal sales effort, adequate financial
        resources or appropriate staffing.  In the recent nation-wide cash
        liquidity environment, our access to funding to finance a formal sales and
        marketing effort, finalize development of the contemplated additional products
        and launch their commercialization which we consider to be critical to our
        ability to recover the patent costs in the foreseeable future is very
        uncertain.  This uncertainty has caused us to continue to review the
        likelihood of the recoverability of our deferred patent cost.  Because
        of our limited financing resources, our inability to obtain long-term financing,
        our belief that the capital markets may be further deteriorating for companies
        in positions similar to ours, and our continued uncertainty regarding access
        to
        additional long-term funding, coupled with our continuing low level of product
        sales, continuing operating losses, current reduced level of staffing and
        technical capability which cannot be increased without funding, we have
        concluded that recovery of the deferred patent cost over the foreseeable
        future
        is unlikely.  Additionally, the pledge of  our patents as
        security for certain our short-term notes creates additional uncertainty
        as we
        believe that such pledge might interfere with future efforts to sell a license,
        sell the patents or otherwise use the patents as a basis  to obtain
        required financing.  As a result of our review, we have written off
        the remaining patent cost as of December 31, 2007 in the amount of
        $3,547,059.
 
 *Interest
        (expense) and other, Net* - During 2006 interest income totaled $2,585 which
        was offset by $27,703 interest expense. The expense during 2007 relates
        primarily to interest of  $45,685 and a charge of$60,000 related to
        the modification of a warrant and the loss on abandonment of furniture,
        equipment and leasehold improvements, net of a disposition gain totaling
        $23,817.
 
 *Net
        Loss applicable to Common Stockholders and Net Loss Per Share applicable
        to
        Common Stockholders* - The Company’s net loss applicable to Common
        Stockholders and net loss per share applicable to Common Stockholders for
        these
        periods increased from $2,400,949 and $0.10 in 2006 to $5,083,587 and $0.20
        in 2007respectively, as a result of the matters described above.
 
 **Plan
        of Development and Operations**
 
 We
        obtained funding
        of $231,300, in the form of short-term debt financing in 2007, which together
        with our limited cash from sales supported our operations at a low level.
        Due to
        the limited amount of financing available to us in 2007, we reduced our staff
        to
        one part-time person who is supported by consultants, hired on an as needed
        basis. During 2007 we relocated our offices and reduced our leased space
        to
        approximately 1,500 feet. Unless we obtain additional financing, we plan
        to
        continue to operate at this reduced level.  Additional financing or
        increased cash from sales will be necessary to continue our operations at
        their
        current level . We do not plan to engage in additional technology or product
        development until we are able to secure sufficient financing to conduct our
        operations and fund such research and
        development.  .
 We
          limited our focus to the parking facility gate market in 2007 and we expect
          to
          continue to limit our efforts to this market for the foreseeable future. 
As part of our continuing efforts to cut costs and to work within our available
          financial resources,  Mr. Carl Parks, our President was terminated as
          an employee in late 2006.  The Company continued to engage Mr. Parks
          as a consultant (retaining the title of President, on an as requested and
          available basis through the fourth quarter 2006).  In January 2007,
          Mr. Parks was rehired as an employee and served as such until March 31,
          2007
          where he was again terminated.  We continued to work with Mr. Parks on
          a consulting basis through December 31, 2007..  As part of additional
          staff reductions, our in-house engineer and his assistant were also terminated
          in 2006.  We consider our former employees outside consulting
          resources on an as requested/as available basis and may engage such persons
          from
          time to time as consultants.  At December 31, 2007, we had no full time
          employees and our CFO, who also serves as our Acting President, serves
          on a
          part-time basis.
 
 Recommencing
          the the Company's plan of development and operations will require additional
          funding.  Accordingly, the Company is pursuing additional funding which may
          include debt or equity financing.  Additionally, the Company is considering
          the potential for establishing business relationships or transactions,
          such as a
          business combination or joint venture/strategic  partnerships, which
          may improve the Company's access to additional capital and/or funding and
          also
          potentially support its current and future operations.  In the event the
          Company is not able to access sufficient funding to support its operations
          its
          business operations will be effected adversely.
  **Liquidity
          and Capital Resources**
 
 From
          inception through December 31, 2007 we raised cash of approximately $16.1
          million net of issuance costs, principally through private placements of
          short
          term debt and common and preferred stock financings. At December 31, 2007,
          we
          had cash and cash equivalents totaling $2,281.
  In
          August
          2005, we entered into a Preferred Stock placement whereby we received $878,000,
          net of transaction expenses. In 2006 we raised additional capital through
          the
          sale of 716,670 shares of Common Stock for cash totaling $68,250, net of
          transaction expenses. Further in 2006, we raised $30,500 through the issuance
          of
          unsecured short term debt and in the fourth quarter of 2006, we entered
          into
          three credit facility agreements to borrow up to $135,446 under secured
          notes to
          use for corporate expenses of which $128,337 was borrowed through December
          31,
          2007 (the “2006 Financing”). In connection with the issuance of these secured
          notes, the Company issued to an advisor warrants to purchase 150,000 shares
          of
          the Company’s common stock at an exercise price of $0.04 per share. The warrants
          have a 10-year term.  The 2006 Financing was secured by a first
          priority security interest in all of the assets of the Company.  The
          2006 financing has matured; however the lender has extended the maturity
          date
          until May 31, 2008.
  On
          February 28, 2007, the 2006 Financing was subordinated to the security
          interest
          granted by the Company pursuant to the terms of a Senior Secured Promissory
          Note pursuant to which the Company may borrow up to $150,000  (the
“$150,000 Note”).  The $150,000 Note bears interest at a rate of 10% per
          annum and matured on August 28, 2007.  In addition to having a first
          security interest in all of the Company’s assets as set forth in a General
          Security Agreement (the “Security Agreement”), the $150,000 Note is further
          secured by twenty million shares of newly issued  common stock of the
          Company which was deposited into an escrow account for such
          purposes  . Through December 31, 2007, $150,000 had been borrowed
          under the $150,000 Note and remains outstanding.
  On
        July
        25, 2007 the Company executed a subsequent senior secured promissory note,
        payable to the same lender to borrow up to $50,000 (the “2nd
        Note”).  The 2nd Note
        has similar
        terms as the $150,000 Note,  bears interest at the same rate and also
        matured on August 28, 2007.  The 2nd Note
        is secured by
        the assets of the Company as set forth in the Security Agreement  plus
        a security interest in 6,666,666 shares of new common stock of the Company
        which were  deposited into the escrow account holding the initial 20
        million shares.  Through December 31, 2007, the Company has borrowed
        $50,000 under the 2nd Note.
  On
          July 27, 2007
          the Company entered into a Forebearance Agreement  with the lender
          whereby the lender agreed to forebear declaring any event of default on
          the
          $150,000 Note and the 2nd Note
          until on or
          after October 15, 2007.  As consideration for lender’s
          forebearance, the Company paid and extension fee of $2,000 and all accrued
          interest to date on each of the notes.
  On
            October 23rd,
            2007, the Company executed a third note with the same lender to borrow up
            to an additional $50,000 (the “3rd Note”),
            of which
            $32,300 had been borrowed at December 31, 2007.. The 3rd Note
            has similar
            terms to the $150,000 Note, bears interest at the same rate and matured
            on
            December 31, 2007.  The 3rd Note is secured by the assets of the
            Company as set forth in the Security Agreement  plus a security
            interest in an additional 6,666,666 shares of new common stock of the
            Company
            which were deposited into the escrow account holding the
            approximately  26.6 million shares securing the prior
            notes.   The aggregate amount borrowed at December 31, 2007 from this
            lender under the $150,000 Note, the 2nd Note
            and the
            3rd
            Note was $231,300.  The Company also entered into a
            subsequent forebearance agreement  with the lender whereby the lender
            agreed to forebear declaring any event of default on the $150,000 Note
            and  the 2nd Note
            until on or
            after December 31, 2007.  As consideration for lender’s
            forebearance,  the Company paid and extension fee of $2,000 and all
            accrued interest to date on each of the notes.
  Subsequent
              to December 31, 2007, the Company obtained additional financing from
              the lender
              by executing an additional note to borrow up to an additional $150,000
              (the
“4th
              Note”).
              The 4th
              Note
              has similar terms to the $150,000 Note, bears interest at the same
              rate and
              matures on May 31, 2008 (the “4th
              Note”). The 4th
              Note is secured by
              the assets of the Company as set forth in the Security Agreement plus
              a security
              interest in an additional 20 million shares of new common stock of the
              Company which the Company is required to deposit into the escrow account
              holding
              the additional shares securing the $150,000 Note, the 2nd
              Note and the
              3rd
              Note. 
All of the shares collateralizing these four notes were deposited in
              an escrow
              account and will only be delivered to such lender in the event of a
              default
              under or non payment of  the notes. Upon full repayment of the notes, said
              shares will be returned to the Company.   The shares delivered to the
              escrow agent as security for the notes are not being treated as outstanding
              and
              will only be considered as being issued and outstanding if and when
              the shares
              are released by the escrow agent and delivered to the lender as a result
              of a
              default under the promissory notes and related security agreement.  In
              addition, the Company entered into another forebearance agreement whereby
              the
              lender agreed to forebear declaring any event of default on the $150,000
              Note
              2nd
              Note and
              3rd
              Note until
              on or after May 31,  2007.  As consideration for lender’s
              forebearance, the Company paid an extension fee of $6,000 and all accrued
              interest to date on each of the notes.
 From
                inception (February 12, 1997) through December 31, 2007, we were
                largely focused
                on technology and product development. The estimated dollar amount
                spent during
                this period on company-sponsored research and development was
                $3,471,292. The direct research and development expenses that we incurred
                from inception have been directed principally toward our InvisaShield
                technology
                and safety products, and to a lesser extent, our security products.
                Management
                estimates that sixty (60%) percent was expended toward the development
                of our
                core presence-sensing technology, twenty (20%) percent was expended
                in the
                miniaturization of our circuitry, fifteen (15%) percent was expended
                in the
                design and development of safety products, and five (5%) percent
                was expended in
                the design and development of additional products for the security
                sector of our
                business. Because of the Company’s net losses (which aggregate $32,844,074 from
                inception through December 31, 2007), limited capital, and ongoing
                product
                development expenses, the Company’s consolidated financial statements report
                that substantial doubt exists regarding the Company’s ability to continue as a
                going concern.
  The
        Company
        had negative working capital at December 31, 2007, totaling $1,245,031. At
        December 31, 2007 the Company had $2,281 in cash and cash equivalents to
        fund
        its operations. To finance planned operations through at least the next 12
        months the Company will continue to depend upon its existing current assets,
        which are limited, together with any proceeds from sales of products and
        net proceeds from financing arrangements which may include, additional
        borrowing, private placements of equity or debt, and potential license fees
        or
        similar arrangements.  Management is uncertain as to the source of
        additional cash that is anticipated to be required to maintain the Company’s
        current level of operations.   Management's plan is to access all
        additional cash required from a variety of potential  sources,
        including:  short term debt, private equity financing, licenses, joint
        ventures, partnership or other business relationships  and from the
        potential sale of Company's technology or interest therein.  As an
        additional way to access to potential capital, the Company is also exploring
        the
        potential for corporate mergers or other forms of business combinations or
        sale
        transactions.  There can be no assurances that these plans will be
        successful.  Failure to secure additional financing in a timely manner and
        on favorable terms when needed will have a material adverse effect on the
        Company's ability to continue as a going concern.
  **Risk
        Factors**
  You
        should carefully consider the risks and uncertainties described below and
        the
        other information in this filing before deciding to purchase our common stock.
        If any of these risks or uncertainties occurs, our business, financial condition
        or operating results could be materially harmed. In that case the trading
        price
        of our common stock could decline and you could lose all or part of your
        investment. The risks and uncertainties described below are not the only
        ones we
        may face. Risks related to our business we have historically incurred losses
        and
        losses are expected to continue in the future, which means that we may not
        be
        able to continue operations unless we obtain additional funding. Our auditors
        have qualified their audit opinion with regard to our ability to continue
        as a
        going concern.
 
 **We
        have historically incurred losses.**
 
 From
        inception through December 31, 2007, we have sustained aggregate net losses
        of
        $32.8 million. In the twelve months ended December 31, 2007, we sustained
        a net
        loss of $4.99 million which of consisted of a loss of $1,446,528 from operations
        and a non-cash accounting entry of $3,547,059 which we made to reflect the
        write-off of patent cost as of December 31, 2007. (See **Year Ended
        December 31, 2006 Compared to the Year Ended December 31, 2007-***Amortization and Impairment of Patent.)*
 
 Future
        losses are expected to continue. Accordingly, we will experience significant
        liquidity and cash flow problems if we are not able to raise additional capital
        as needed and on acceptable terms. No assurances can be given that we will
        be
        successful in reaching or maintaining profitable operations. Our ability
        to
        generate revenue and achieve profitability depends upon our ability to
        manufacture and sell our products in sufficient volume to cover our fixed
        and
        variable costs of operations. Because of our ongoing losses and our very
        limited
        financial resources, our auditors have included an explanatory paragraph
        in
        their audit report with regard to our ability to continue as a going
        concern.
 
  7
  **We
        will need to raise additional financing to continue our operations or we
        may be
        unable to fund our operations, promote our products or develop our
        technology.**
 
 Our
        operations have relied almost entirely on external financing to fund our
        operations. In the past, s uch
        financing has primarily come from the sale of stock to third parties and to
        a lesser degree from borrowings and revenue from product sales and license
        fees.   During 2007 we funded our operations with a funds
        borrowed under short term notes which, for the most part, were secured with
        the
        Company’s assets.  We anticipate, based on our current proposed plans
        and assumptions relating to our operations, that we will need additional
        debt or
        equity funding to continue to operate our business. We may seek to access
        required capital through potential strategic or business relationships or
        business combinations which may be dilutive to our current stockholders.
        We will
        need to raise additional capital to fund our anticipated operating expenses
        and
        future expansion. Among other things, external financing will be required
        to
        cover our operating costs. We cannot assure you that financing whether from
        external sources or related parties will be available if needed or on favorable
        terms. If additional financing is not available when required or is not
        available on acceptable terms, we may be unable to support our secured debt,
        fund our operations and planned growth, develop or enhance our technology,
        take
        advantage of business opportunities or respond to competitive market pressures,
        any of which could raise doubt as to the Company’s ability to continue as a
        going concern. Any reduction in our operations may result in a lower stock
        price.
 
 **Our
        financing requirements could result in dilution to existing
        stockholders.**
 
 The
        additional financings we will require may be obtained through one or more
        transactions which effectively dilute the ownership interests of our
        stockholders. Further, we may not be able to secure such additional financing
        on
        terms acceptable to us, if at all. We have the authority to issue additional
        shares of common stock, as well as additional classes or series of ownership
        interests or debt obligations which may be convertible into any one or more
        classes or series of ownership interests. We are authorized to issue 95,000,000
        shares of common stock and 5,000,000 shares of preferred stock. Such securities
        may be issued without the approval or other consent of our
        stockholders.
 
 **We
        are a development stage company and have had limited
        revenue.**
 
 Our
        operating history has resulted only limited revenue. We are a development
        stage
        company, and accordingly, we anticipate that we will encounter many difficulties
        and risks associated with our early stage of development which includes,
        but is
        not limited to, the introduction of new products, the search for and hiring
        of
        new personnel, access to required capital, management issues, ramping up
        manufacturing capacity, and other important business aspects.
 
 **We
        will be required to compete with larger and well-established companies which
        are
        better financed.**
 
 There
        are
        a number of well-established companies which are well known in the manufacture
        and/or distribution of products for the security and life-safety markets.
        Such
        companies include Honeywell, Tyco, General Electric, Bosch, Siemens and others.
        Accordingly, we are subject to the difficult challenge of introducing and
        commercializing our new technology and products in a market place in a strong
        competitive environment. Additionally, our technology and products based
        thereon
        will have to compete with other technologies such as passive infrared and
        various types of motion detection which are well known and well
        accepted.
 
 **We
        are commercializing a new technology which will involve uncertainty and risks
        related to market acceptance.**
 
 We
        are
        commercializing a new technology with which we seek to gain market acceptance
        and to demonstrate competitive advantages. Our success is dependent, to a
        large
        degree, upon our ability to fully develop and commercialize our technology
        and
        gain industry acceptance of our products, based upon this new technology
        and its
        perceived competitive advantages. Accordingly, our prospects must be considered
        in light of the risks, expenses and difficulties frequently encountered in
        connection with the establishment of a new business in a highly competitive
        industry, characterized by frequent new product introductions. We anticipate
        that we will incur substantial operating expenses in connection with the
        development and testing of our proposed products and expect these expenses
        to
        result in continuing and significant operating losses until such time, if
        ever,
        that we are able to achieve adequate levels of sales or license revenues.
        We may
        not be able to raise additional financing, increase revenues significantly,
        or
        achieve profitable operations.
  **Management
        and founders of the Company control a significant amount of our common stock
        and
        such concentration of ownership may have the effect of delaying or preventing
        a
        change of control of our Company.**
 
 As
        a
        result, these stockholders will have significant influence in matters requiring
        stockholder approval, including the election and removal of directors, the
        approval of significant corporate transactions, such as any merger,
        consolidation or sale of all or substantially all of the our assets, and
        the
        control of our management and affairs. Accordingly, such concentration of
        ownership may have the effect of delaying, deferring or preventing a change
        in
        our control, impeding a merger, consolidation, takeover or other business
        combination involving us or discouraging a potential acquirer from attempting
        to
        obtain control of our Company.
  8
  **The
        limits of our of product liability insurance coverage may affect our
        Business.**
 
 We
        may be
        exposed to potential product liability claims by consumers. Although we maintain
        product liability insurance, there can be no assurance that such insurance
        will
        be sufficient to cover all possible liabilities to which we may be exposed.
        Any
        product liability claim, even one that was not in excess of our insurance
        coverage or one that is meritless and/or unsuccessful, could adversely affect
        our cash available for other purposes, such as research and development.
        In
        addition, the existence of a product liability claim could affect the market
        price of our common stock. In addition, certain vendors may require minimum
        product liability insurance coverage as a condition precedent to purchasing
        or
        accepting products for retail distribution. Product liability insurance coverage
        includes various deductibles, limitations and exclusions from coverage, and
        in
        any event might not fully cover any potential claims. Failure to satisfy
        such
        insurance requirements could impede the ability of us or our distributors
        or
        licensees to achieve broad retail distribution of our proposed products,
        which
        could have a material adverse effect on us.
 
 **We
        may not be able to effectively protect our intellectual property rights,
        the
        foundation of our business, which could harm our business by making it easier
        for our competitors to duplicate our services.**
 
 We
        regard
        certain aspects of our products, processes, services and technology as
        proprietary. We have taken steps to protect them with patents, copyrights,
        trademarks, restrictions on disclosure and other methods. Despite these
        precautions, we cannot be certain that third parties will not infringe or
        misappropriate our proprietary rights or that third parties will not
        independently develop similar products, services and technology. Any
        infringement, misappropriation or independent development could cause us
        to
        cease operations.
 
 We
        have
        issued patents and have filed patent applications with respect to various
        aspects of our technology. The pending patent applications may not be issued
        to
        us, and if issued, may not protect our intellectual property from competition
        which could seek to design around or invalidate these patents. Our failure
        to
        adequately protect our proprietary rights in our products, services and
        technology could harm our business by making it easier for our competitors
        to
        duplicate our services. We may have to resort to litigation to enforce our
        intellectual property rights, protect our trade secrets, determine the validity
        and scope of the proprietary rights of others, or defend ourselves from claims
        of infringement, invalidity or unenforceability. Litigation may be expensive
        and
        divert resources even if we win. This could adversely affect our business,
        financial condition and operating results such that it could cause us to
        reduce
        or cease operations.
  **We
        do not expect we will be able to recover the costs invested in our patents
        and
        we have written off our patent costs as of December 31,
        2007.**
 
 .  Because
        of our limited financing resources, our inability to obtain long-term financing,
        our belief that the capital markets may be further deteriorating for companies
        in positions similar to ours, and our continued uncertainty regarding access
        to
        additional long-term funding, coupled with our current level of staffing
        and
        technical capability which cannot be increased without funding, we have
        concluded that recovery of the deferred patent cost over the foreseeable
        future
        is unlikely.  Additionally, since the technology is pledged as
        security for our short-term loan obligations, it would interfere with our
        attempting to sell it separately to raise capital as well our ability to
        comply
        with our loan obligation.  As a result, we have written off our patent
        cost as of December 31, 2007 in the amount of $3,547,059.
 
 **Other
        parties may assert that our technology infringes on their Intellectual property
        rights, which could divert management time and resources and possibly force
        our
        Company to redesign our technology.**
 
 Technology-based
        companies, such as ours, have the potential to be involved in litigation
        related
        to allegations of patent infringement. Although we have no knowledge of any
        such
        claims, from time to time, third parties may assert patent, copyright and
        other
        intellectual property rights to technologies that are important to us. While
        there currently are no outstanding infringement claims pending by or against
        us,
        we cannot assure you that third parties will not assert infringement claims
        against us in the future, that assertion by such parties will not result
        in
        costly litigation, or that they will not prevail in any such litigation.
        In
        addition, we cannot assure you that we will be able to license any valid
        and
        infringed patents from third parties on commercially reasonable terms or,
        alternatively, be able to redesign products on a cost-effective basis to
        avoid
        infringement. Any infringement claim or other litigation against or by us
        could
        have a material adverse effect on us and could cause us to reduce or cease
        operations.
 
 **We
        may not be able to keep up with rapid technological changes, which could
        render
        our products less competitive or obsolete.**
 
 Changes
        in technology, changes in customer requirements and preferences, introduction
        of
        products and services embodying new or different technologies and the emergence
        of new industry standards and practices could render our existing technology
        and
        products less competitive or obsolete. Our future success will depend on
        our
        ability to enhance and improve the responsiveness, functionality, accessibility
        and features of our technology and products. We expect that our marketplace
        will
        require extensive technological upgrades and enhancements to accommodate
        many of
        the new products and services that we anticipate will be added to our
        marketplace. We cannot assure you that we will be able to expand and upgrade
        our
        technology and systems, or successfully integrate new technologies or systems
        we
        develop in the future, to accommodate such increases in a timely
        manner.
  9
  **We
        may not be able to increase sales or if we succeed in increasing sales and
        revenue to effectively manage the growth necessary to execute our business
        plan,
        which could adversely affect the quality of our operations and our
        costs.**
 
 In
        order
        to successfully execute our business plan, we must significantly increase
        our
        sales and revenue. Additionally, we will need to increase the number of
        strategic partners, manufactures, dealers, distributors and customers that
        use
        our products. Lack of growth in sales and revenue will require that we continue
        to access financing which will subject us to the risks attendant thereto.
        On the
        other hand, if we succeed in increasing sales and revenue, the resulting
        growth
        will place significant strain on our personnel, systems and
        resources.  In the event of growth, we may not be able to maintain the
        quality of our operations, control our costs, continue complying with all
        applicable regulations and expand our internal management, technical information
        and accounting systems in order to support our desired growth. We cannot
        be sure
        that we will manage our growth effectively, and our failure to do so could
        cause
        us to reduce or cease operations.
 
 **We
        are thinly staffed.**
 
 We
        have
        no full time employees.  Our CFO, which is a Part time employee, also
        serves as Acting President and Acting COO. Unless additional employees are
        hired, the limited size of our staff restricts the level or nature of our
        business operations.
 
 **We
        have promissory notes payable that are secured by all of our assets and default
        under these notes could result in the loss of our assets**.
 
 In
        order to fund our operations, we
        have entered into promissory notes payable that are secured by all of our
        assets
        and in some instances by shares of our common stock that were issued to secure
        the promissory notes. The promissory notes are short term obligations and
        we
        currently do not have the available cash or other financing resources to
        pay the
        interest or principal there under. Default under these promissory notes could
        result in the loss of all of our assets and business opportunity.
  **Item
        7 - Financial Statements**
 
 The
        Financial Statements of the Company and the accompanying notes thereto, and
        the
        Report of Independent Registered Public Accounting Firm is included as part
        of
        this Form 10-KSB beginning on Page F-1.
 
 **Item
        8 - Changes in and Disagreements with Accountants on Accounting and Financial
        Disclosure**
 
 None.
 
 **Item
        8a - Controls and Procedures**
  **Evaluation
        of Disclosure Controls and Procedures**
   The
        Company maintains “disclosure controls and procedures” as defined in
        Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
        amended (the “Exchange Act”), that are designed to ensure that information
        required to be disclosed by us in reports we file or submit under the Exchange
        Act is recorded, processed, summarized and reported within the time periods
        specified in the SEC’s rules and forms, and that such information is accumulated
        and communicated to our management, including our President,  Chief
        Financial Officer, and Board of Directors, as appropriate, to allow timely
        decisions regarding required disclosure. In designing and evaluating our
        disclosure controls and procedures, management recognizes that disclosure
        controls and procedures, no matter how well conceived and operated, can provide
        only reasonable assurance of achieving the desired objectives, and we
        necessarily are required to apply our judgment in evaluating the cost-benefit
        relationship of possible disclosure controls and procedures.
   Our
        management, including our President and Chief Financial Officer, evaluated
        the
        effectiveness of the design and operation of our disclosure controls and
        procedures as of December 31, 2007 and concluded that our disclosure
        controls and procedures were effective as of December 31,
        2007.
   10
   **Management’s
        Annual Report on Internal Control over Financial Reporting**
   Our
        management is responsible for establishing and maintaining internal control
        over
        financial reporting, as such term is defined in Rules 13a-15(f) and
        15d-15(f) of the Exchange Act. The Company’s internal control system is designed
        to provide reasonable assurance regarding the reliability of financial reporting
        and the preparation of financial statements for external purposes, in accordance
        with generally accepted accounting principles. Because of inherent limitations,
        a system of internal control over financial reporting may not prevent or
        detect
        misstatements. Also, projections of any evaluation of effectiveness to future
        periods are subject to the risk that controls may become inadequate due to
        change in conditions, or that the degree of compliance with the policies
        or
        procedures may deteriorate.
   Our
        management, including our President
        and Chief Financial Officer, conducted an evaluation of the effectiveness
        of our
        internal control over financial reporting using the criteria set forth by
        the
        Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
        Internal Control-Integrated Framework. Based on its evaluation, our management
        concluded that our internal control over financial reporting was effective
        as of
        December 31, 2007.
   This
        Form 10-KSB does not include an
        attestation report of the Company’s registered public accounting firm regarding
        internal control over financial reporting. Management’s report was not subject
        to attestation by the Company’s registered public accounting firm pursuant to
        temporary rules of the SEC that permit the Company to provide only management’s
        report in this annual report.
   **Changes
        in Internal Controls over Financial Reporting**
   During
        the quarter ended December 31, 2007, there were no changes in the Company’s
        internal control over financial reporting (as defined in Rule 13a-15(f) and
        15d–15(f) under the Exchange Act) that has materially affected, or is reasonably
        likely to materially affect, the Company’s internal control over financial
        reporting.
  **Item
        8b - Other Information**
  None.
 
  11
  **PART
        III**
 
 **Item
        9 - Directors and Executive Officers of the Registrant**
 
 The
        Company’s Directors are elected at the Annual Meeting of Stockholders and hold
        office until their successors are elected and qualified. The Company’s officers
        are appointed annually by the Board of Directors and serve at the pleasure
        of
        the Board. There are no family relationships between any of the officers,
        directors or significant employees of the Company.
 
 The
        directors, executive officers, and significant employees of the Company at
        December 31, 2007 are as follows:
 
 Positions
                  and Offices PresentlyName
              
              Age
              
              Held
                  with the CompanyEdmund
                  C. King
              
              73
              
              Director,
                  Acting President, COO, Chief Financial Officer,
                  TreasurerGregory
                  J. Newell
              
              58
              
              DirectorJohn
                  E. Scates
              
              50
              
              Director
  EDMUND
        C.
        KING has served as our Chief Financial Officer and Director since February
        9,
        2000. In 2007, Mr. King began serving as our Acting President and Acting
        COO.  Until October 1, 1991, Mr. King was a partner in Ernst &
Young, an international accounting and consulting firm. While at Ernst &
Young, Mr. King was that firm’s Southern California senior healthcare partner
        and prior to that directed the Southern California healthcare practice for
        Arthur Young & Company, one of the predecessor firms of Ernst & Young.
        During his 30 years with Ernst & Young, Mr. King counseled clients in
        structuring acquisitions and divestitures; advised on the development of
        strategic plans; directed the preparation of feasibility studies; assisted
        with
        operational and financial restructuring; directed and supervised audits of
        client financial statements; and provided expert witness testimony and technical
        SEC consultation. Commencing in 1999, Mr. King became a financial consultant
        to
        SmartGate, L.C. that we acquired in February 2000. Mr. King has served as
        Chief
        Financial Officer and Director of SmartPlug, Inc. since November 2000 and
        Chief
        Financial Officer and Director of FlashPoint International, Inc. since October
        2001. From January 1992, Mr. King has been a general partner of Trouver,
        an
        investment banking and financial consulting partnership. Mr. King is also
        a
        member of the Board of Directors of LTC Properties, Inc., an NYSE listed
        real
        estate investment trust. Mr. King is a graduate of Brigham Young University,
        having served on the National Advisory Council of that school’s Marriott School
        of Management, and has completed a Harvard University management course
        sponsored by Ernst & Young. Mr. King also has served as Chairman of the
        HFMA’s Long-Term Care Committee (Los Angeles Chapter) and is a past member of
        the National Association of Corporate Directors. He holds CPA certificate
        in the
        state of California.
 
 Ambassador
        GREGORY J. NEWELL has served as a Director of the Company since June 13,
        2002.
        Ambassador Newell is an international business development strategist and
        former: U.S. Ambassador; U. S. Assistant Secretary of State; and White House
        Commissioned Officer, having served under four U.S. Presidents. From 1992
        to the
        present, Ambassador Newell has served as President of International Commerce
        Development Corporation in Provo, Utah, an international business-consulting
        firm. From 1989 to 1991, Ambassador Newell served as President and International
        Development Strategist of Dow, Lohnes & Albertson International, a
        subsidiary of one of Washington, D.C.’s oldest and largest law firms. Ambassador
        Newell was U.S. Ambassador to Sweden from 1985 to 1989. Prior to that he
        was
        U.S. Assistant Secretary of State for International Organizational Affairs
        serving as the senior U.S. government official responsible for the formulation
        and execution of U.S. multilateral foreign policy in 96 international
        organizations including the United Nations, where he served as senior advisor
        to
        the 37th, 38th, 39th and 40th United Nations General Assemblies. He served
        as
        Director of Presidential Appointments and Scheduling and Special Assistant
        to
        President Ronald Reagan and Staff Assistant to President Gerald R. Ford.
        Ambassador Newell has also served on the boards of the Landmark Legal
        Foundation, Sutherland Institute and the Swedish-American Chamber of
        Commerce.
 
 JOHN
        E.
        SCATES, a garage door industry engineer and consultant, was appointed to
        the
        Company’s Board of Directors on June 27, 2002. From June 1997 to the present,
        Mr. Scates has been President and Owner of Scates, Inc., a product design
        and
        failure analysis consultancy in Carrollton, Texas. From May 1993 to May 1997,
        Mr. Scates served as Manager of Research and Development for Windsor Door,
        Little Rock, Arkansas. From February 1985 to May 1993, Mr. Scates served
        as
        Manager of Structures at Overhead Door R & D/engineering, Dallas, Texas. Mr.
        Scates earned a BS Degree in Mechanical Engineering, Summa Cum Laude from
        Texas
        A & M University in 1979. Mr. Scates is licensed as a Professional Engineer
        in Texas, Florida and North Carolina.
 
 **Significant
        Employees**
 
 At
        December 31, 2007 we had no full time employees.  Our CFO, who also serves
        as our Acting President and COO, is employed on a part-time basis.  We
        support operations by using consultants as we can afford or as
        required.
  12
  **Compensation
        Committee and Compensation of Directors**
 
 Messrs.,
        Newell and Scates serve on the Compensation Committee, which determines the
        compensation amounts to be paid to our directors, officers and
        employees.
 
 **Report
        of the Audit Committee**
  The
        Audit
        Committee is composed of two independent directors and operates under a written
        charter adopted by the Board of Directors. A copy of the Audit Committee
        Charter
        (as amended) is filed herewith as exhibit 10.58.  As described above,
        the Audit Committee is responsible for appointing and replacing our independent
        accountants; reviewing the results and scope of the independent accountants’
audit and the services provided by the independent accountants; reviewing
        compliance with legal and regulatory requirements; evaluating our audit and
        internal control functions; and ensuring the integrity of our financial
        statements. In fulfilling its oversight responsibilities, the Audit Committee
        reviewed the audited financial statements in the Annual Report with management,
        including a discussion of the quality, not just the acceptability, of the
        accounting principles, the reasonableness of significant judgments, and the
        clarity of disclosures in the financial statements.
  The
        Audit
        Committee reviewed with the independent auditors, who are responsible for
        expressing an opinion on the conformity of those audited financial statements
        with generally accepted accounting principles, their judgments as to the
        quality, not just the acceptability, of our accounting principles, and such
        other matters as are required to be discussed with the Committee in accordance
        with the standards of the Public Company Accounting Oversight Board (United
        States). In addition, the Audit Committee has discussed with the independent
        auditors the auditors’ independence from management and the Company, including
        the matters in the written disclosures required by the Independence Standards
        Board and considered compatibility of non-audit services with the auditors’
independence.
  The
        Audit
        Committee discussed with our independent auditors the overall scope and plans
        for their audit. The Committee meets with the independent auditors, with
        and
        without management present, to discuss the results of their examination,
        and the
        overall quality of our financial reporting. The Audit Committee held
        4 meetings during 2007.
  In
        reliance on the reviews and discussions referred to above, the Audit Committee
        recommended to our Board of Directors, and the Board approved, that the audited
        financial statements be included in our Annual Report on Form 10-K for the
        2007
        fiscal year for filing with the Securities and Exchange Commission. The Audit
        Committee and the Board of Directors have also recommended the selection
        of our
        independent auditors.
  THE
                  AUDIT COMMITTEEGregory
                  Newell, ChairmanJohn
                  Scates
  **Board
        Meetings and Independence**
  During
        the year ended December 31, 2007, the Board of Directors of the Company held
        15
        telephonic meetings.   Each director attended at least 75% of the
        aggregate of (1)the
        total number of meetings of the Board (held during the period for which he
        has
        been a director) and (2) the total number of
        meetings held by all committees of the Board on which he served (during the
        periods that he served).
  **Compliance
        with Section 16(a) of the Exchange Act**
 
  Section
        16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
        directors and executive officers to send reports of their ownership of the
        equity securities of the Company and of changes in such ownership to the
        SEC.
        SEC regulations also require the Company to identify in this Annual Report
        on
        Form 10-KSB any person subject to this requirement who failed to file any
        such
        report on a timely basis.  Mr. Stephen A. Michael was not timely in
        filing certain Form 4 reports, but such filings were completed prior to December
        31, 2007.
 
 **Code
        of Ethics**
 
 Our
        board
        of directors has adopted a Code of Business Conduct and Ethics and Compliance
        Program which is applicable to Invisa, Inc. and to all our directors, officers
        and employees, including Invisa, Inc.’s principal executive officer and
        principal financial officer, principal accounting officer or comptroller,
        or
        other persons performing similar functions.
  A
        copy of
        the Company’s Code of Ethics may be obtained free of charge by making the
        request to the Company in writing.
  13
  **Director
        Compensation**
 
 We
        do not
        have a formal plan for compensating our directors and during the 2007 fiscal
        year our Directors were paid no compensation.
  Our
        bylaws provide for us to indemnify our directors and officers to the extent
        permitted by Nevada law, with respect to actions taken by them on our behalf.
        We
        maintain a policy of directors’ and officers’ liability insurance for this
        purpose.
  **Compensation
        Committee Interlocks and Insider Participation**
  We
        have
        no interlocking director relationships. None of our executive officers is
        a
        member of the Compensation Committee of any company in which any director
        or
        executive officer is a member of our board of directors.
  **Item 10.**
              **EXECUTIVE
                  COMPENSATION**
  **Compensation
        Discussion & Analysis**
  **Overview.**
  This
        Compensation Discussion and Analysis is intended to describe the material
        factors underlying the compensation policies and decisions of the Company
        with
        regard to compensation paid to our executive officers in FY 2007. The
        Compensation Committee oversees the Company’s executive compensation in
        accordance with its Charter and recommends to the Board of Directors
        compensation for the named executive officers. The Compensation Committee
        receives input and recommendations when requested from our executive
        officers.
  While
        we
        have historically used executive compensation as a tool to retain and motivate
        our executive officers, however, during , our financial condition prevented
        the
        Company from paying usual and customary compensation. Our only named executive
        officer at the end of fiscal 2007, Mr. Edmund King, does not have a written
        employment agreement and works on a part-time basis for the Company. Mr.
        King
        received no salary or other cash compensation during fiscal 2007; however,
        during fiscal 2007 Mr. King was granted options under our Incentive Stock
        Option
        Plan to purchase up to 500,000 shares of our common stock. From January 1,
        2007,
        through August 2007, Mr. Carl Parks served as our President. Mr. Parks was
        paid
        a salary of $10,000 per month from January 1, 2007 through March 31, 2007
        when
        he was terminated as an employee. Under Mr. Parks’ employment agreement, as a
        result of his termination, we have accrued a severance payment of
        $30,000.  This amount at December 31, 2007, was accrued and unpaid. On
        April 1, 2007 Mr. Parks was engaged as a consultant for the Company and during
        this period Mr. Parks was paid an aggregate of $ 45,450 as consulting
        compensation. Additionally, during fiscal 2007 Mr. Parks was granted an option
        under our Incentive Stock Option Plant to purchase up to 300,000 shares of
        our
        common stock.
  Compensation
        paid to our named executive officers in fiscal 2007 consisted of:
  •
              Base
                  salary;
  •
              Long-term
                  equity incentive in the form of stock options under the Company’s
                  Incentive Stock Option Plan;
  •
              Special
                  benefits and perquisites; and
  •
              Severance
                  compensation.
  Our
        compensation philosophy for our executive officers has been shaped by our
        lack
        of long-term financing and our sever shortage of operating capital. Accordingly,
        our compensation decisions and particularly our approach to allocating
        compensation between cash and non-cash elements of the compensation package
        reflect our goal to preserve cash whenever possible. In fiscal 2007 our
        compensation decisions for our executive officers emphasized option grants
        which
        we believe supports our goals with regard to both retention and motivation
        of
        our executive officers. In making our compensation decisions, we strive to
        be
        aware of the level of compensation which is paid to executive officers of
        various companies that we consider to be comparable to us in size. Our goal
        is
        for the compensation paid to our named executive officers to be at or below
        the
        fiftieth percentile of the companies that we have identified as being comparable
        companies.
  **Base
        Salaries**.
  Mr.
        King
        did not receive any base salary in fiscal 2007. Mr. Parks had, during his
        employment term, a base salary of $10,000 per month ($120,000 per annum);
        however, Mr. Parks was an employee for only approximately three months during
        fiscal 2007 and was paid an aggregate base salary of $28,000 in fiscal 2007.
        Mr.
        Parks’s base salary was established by his employment agreement which existed
        prior to fiscal 2007. Also during part of fiscal 2007, Mr. Parks served as
        a
        non-employee president and consultant under a month to month arrangement.
        The
        consulting fees ranged between $1,000 and $10,000 per month and during fiscal
        2007 Mr. Parks was paid aggregate consulting fees of $45,450. During fiscal
        2007, we did not establish specific performance objectives for these executives
        and our decisions were based on their overall performances. In establishing
        the
        base compensation for Mr. Parks, the Compensation Committee considered Mr.
        Parks’ experience and capability and sought to establish a base salary which
        would retain and incent him.
  14
   **Option
        Grants.**
  ****In
        2007, we granted 500,000 options under our Incentive Stock Option Plan to
        Mr.
        King and 300,000 options to Mr. Parks. The option grant had an exercise price
        that was equal to at least 100% of the closing market price for our common
        stock
        on the date of the option grant. Our decision to grant options was based
        primarily on the recommendation of our Compensation Committee and our desire
        to
        retain and motivate our executive employees.
  **Perquisites**.
  Consistent
        with our philosophy to preserve cash, we have sought to limit perquisites.
        Perquisites paid to our named executive officers are discussed as footnotes
        to
        the following Summary Compensation Table. Our policy for paying medical and
        dental insurance is to pay 100% of the insurance premium. Our policy is not
        to
        pay for life insurance, long-term and short-term disability insurances and
        accidental death and dismemberment insurance. Our policy with regard to unused
        vacation for our executive group is to pay at the base salary rate for vacation
        not used during the calendar year of termination.
  **Change
        in Control Severance Policy.**
  Prior
        to
        fiscal 2007**,**Mr. Parks entered into written employment
        agreements with the Company. As a result of the termination of Mr. Parks
        employment agreement we have accrued but have not paid a severance payment
        of
        $30,000.
  **REPORT
        OF COMPENSATION COMMITTEE**
  The
        Compensation Committee of the Board of Directors has reviewed the Compensation
        Discussion and Analysis required by Item 402(b) of Regulation S-K and
        discussed it with the Company’s management. Based on the Compensation
        Committee’s review and discussions with management, the Compensation Committee
        recommends to the Board of Directors that the Compensation Discussion and
        Analysis be included in the Company’s Annual Report on Form 10-K for fiscal
        2007.
  John
                  Scates, Chairman
  **SUMMARY
        COMPENSATION TABLE YEAR ENDED 2007**
  **Name
                  and principal position**
              **Year**
              **Salary**
                **($)**
              **Bonus**
                **($)**
              **Stock**
                **Awards**
                **($)**
              **Option**
                **Awards**
                **($)**
              **Non-Equity**
                **Incentive
                  Plan**
                **Compensation**
                **($)**
              **Nonqualified**
                **Deferred**
                **Compensation**
                **Earnings
                  ($)**
              **All
                  Other**
                **Compensation**
                **($)**
              **Total
                  ($)**Carl  Parks
                  – President and COO (2)
              2007
              28,000
              ----
              ----
              12,000
              ----
              ----
              75,450(1)
              115,450Edmund
                  C. King – CFO and Acting President (3)
              2007
              ----
              ----
              ----
              20,000
              ----
              ----
              ----
              20,000
 (1)$30,000
                  has been accrued for
                  severance of employment agreement but not paid as of December 31,
                  2007.
                  Additionally, Mr. Parks was paid $45,450 in consulting
                  fees.
 (2)Mr.
                  Parks
                  was terminated as an employee effective March 31, 2007; he was
                  then
                  engaged as a consultant and continued as President and COO until
                  August
                  2007 at which time he was terminated as President but continued
                  as a
                  consultant. (3)Mr.
                King was appointed Acting President in August 2007; he continues
                to serve
                as CFO.
 **GRANTS
          OF PLAN-BASED AWARDS**
 **FOR
          YEAR ENDED DECEMBER 31, 2007**
 
 **Name**
                  **Grant
                      Date**
                  **All Other Option**
                    **Awards: Number**
                    **of
                      Securities**
                    **Underlying**
                    **Options
                      (#)**
                  **Exercise or**
                    **Base
                      Price of**
                    **Option**
                    **Awards ($/Sh)**
                  **Grant Date**
                    **Fair
                      Value**
                    **of
                      Stock**
                    **and
                      Option**
                    **Awards
                      ($)**Edmund
                      C. King – CFO (2)
                  01/24/2007
                  500,000
                  $0.04
                  20,000Carl
                    Parks - President (1)
                  01/24/2007
                  300,000
                  $0.04
                  12,000
 (1)Mr.
                  Parks was terminated as an
                  employee effective March 31, 2007; he was then engaged as a consultant
                  and
                  continued as President and COO until August 2007 at which time he was
                  terminated as President but continued as a
                  consultant.
 (2)
        Mr. King was
        appointed Acting President in August 2007; he continues to serve as
        CFO.
 
 
  15
  
  **OUTSTANDING
        EQUITY AWARDS AT YEAR-ENDED DECEMBER 31, 2007**
  **OPTION
                  AWARDS****Name**
              
              **Number
                  of**
                **Securities**
                **Underlying**
                **Unexercised**
                **Options**
                **(#)**
                **Exercisable**
              
              
              **Number
                  of**
                **Securities**
                **Underlying**
                **Unexercised**
                **Options**
                **(#)**
                **Unexercisable**
              
              
              **Option**
                **Exercise**
                **Price**
                **($)**
              
              **Option**
                **Expiration**
                **Date**King,
                  Edmund C., Acting President, CFO and Director
              
              
              1,050,000
              
              
              
              ----
              
              
              $
              0.085
              
              06/15/15King,
                  Edmund C., Acting President, CFO and Director
              
              
              300,000
              
              
              
              ----
              
              
              
              0.16
              
              08/25/15King,
                  Edmund C., Acting President, CFO and Director
              
              
              500,000
              
              
              
              ----
              
              
              
              0.042
              
              01/27/17King,
                  Edmund C., Acting President, CFO and Director
              
              
              50,000
              
              
              
              50,000
              
              
              
              0.15
              
              01/12/16Newell,
                  Gregory, Director
              
              
              250,000
              
              
              
              ----
              
              
              
              0.085
              
              06/15/15Newell,
                  Gregory, Director
              
              
              60,000
              
              
              
              ----
              
              
              
              0.16
              
              08/25/15Newell,
                  Gregory, Director
              
              
              50,000
              
              
              
              50,000
              
              
              
              0.15
              
              01/12/16Scates,
                  John, Director
              
              
              250,000
              
              
              
              ----
              
              
              
              0.085
              
              06/15/15Scates,
                  John, Director
              
              
              60,000
              
              
              
              ----
              
              
              
              0.16
              
              08/25/15Scates,
                  John, Director
              
              
              50,000
              
              
              
              50,000
              
              
              $
              0.15
              
              01/12/16
  **OPTION
        EXERCISES AND STOCK VESTED**
 **FOR
        YEAR ENDED DECEMBER 31, 2007**
  **OPTION
                  AWARDS**
              **STOCK
                  AWARDS****Name**
              **Number of**
                **Shares**
                **Acquired**
                **on Exercise**
                **(#)**
              **Value**
                **Realized**
                **on**
                **Exercise**
                **($)**
              **Number of**
                **Shares**
                **Acquired**
                **on**
                **Vesting**
                **(#)**
              **Value**
                **Realized**
                **on**
                **Vesting**
                **($)**Carl  Parks
                  – President  (1)
              ----
              ----
              ----
              ----Edmund
                  C. King – CFO  (2)
              ----
              ----
              ----
              ----
  (1)Mr.
        Parks was terminated as an employee
        effective March 31, 2007; he was then engaged as a consultant and continued
        as
        President and COO until August 2007 at which time he was terminated as President
        but continued as a consultant.
 (2)
        Mr. King was
        appointed Acting President in August 2007; he continues to serve as
        CFO.
  **PENSION
        BENEFITS**
 **FOR
        YEAR ENDED DECEMBER 31, 2007**
  **Name**
              **Plan**
                **Name**
              **Number**
                **of**
                **Years**
                **Credited**
                **Service**
                **(#)**
              **Present**
                **Value
                  of**
                **Accumulated**
                **Benefit**
                **($)**
              **Payments**
                **During**
                **2007**
                **($)**Carl  Parks
                  – President  (1)
              ----
              ----
              ----
              ----Edmund
                  C. King – CFO  (2)
              ----
              ----
              ----
              ----
 (1)Mr.
        Parks was terminated as an employee
        effective March 31, 2007; he was then engaged as a consultant and continued
        as
        President and COO until August 2007 at which time he was terminated as President
        but continued as a consultant.
 (2)
        Mr. King was
        appointed Acting President in August 2007; he continues to serve as
        CFO.
  
 
 
 
  16
  **NON-QUALIFIED
        DEFERRED COMPENSATION**
 **FOR
        YEAR ENDED DECEMBER 31, 2007**
  **Name**
              **Executive**
                **Contributions**
                **in
                  Last FY**
                **($)**
              **Registrant**
                **Contributions**
                **in
                  Last FY**
                **($)**
              **Aggregate**
                **Earnings**
                **in Last FY**
                **($)**
              **Aggregate**
                **Withdrawals/**
                **Distributions**
                **($)**
              **Aggregate**
                **Balance**
                **at Last FYE**
                **($)**Carl  Parks
                  – President  (1)
              ----
              ----
              ----
              ----
              ----Edmund
                  C. King – CFO  (2)
              ----
              ----
              ----
              ----
              ----
 (1)Mr.
        Parks was terminated as an employee
        effective March 31, 2007; he was then engaged as a consultant and continued
        as
        President and COO until August 2007 at which time he was terminated as President
        but continued as a consultant.
 (2)
        Mr. King was
        appointed Acting President in August 2007; he continues to serve as
        CFO.
   **DIRECTOR
        COMPENSATION**
 **FOR
        YEAR ENDED DECEMBER 31, 2007**
  **Name**
              **Fees**
                **Earned**
                **or**
                **Paid
                  in**
                **Cash**
                **($)**
              **Stock**
                **Awards**
                **($)**
              **Option**
                **Awards**
                **($)**
              **Non-Equity**
                **Incentive**
                **Plan**
                **Compensation**
                **($)**
              **Change
                  in**
                **Pension**
                **Value and**
                **Non
                  Qualified**
                **Deferred**
                **Compensation**
                **Earnings**
                **($)**
              **All**
                **Other**
                **Compensation**
                **($)**
              **Total**
                **($)**Edmund
                  C. King
              ----
              ----
              20,000
              ----
              ----
              ----
              20,000Stephen
                  Michael(1)
              ----
              ----
              ----
              ----
              ----
              ----
              ----Greg
                  Newell
              ----
              ----
              ----
              ----
              ----
              ----
              ----John
                  Scates
              ----
              ----
              ----
              ----
              ----
              ----
              ----
 (1)Resigned
        from the Board of Directors effective September 19, 2007.
  
 **Employment
        Agreements with Executives**
  We
        have
        no written employment agreements*.*
 
 **Equity
        Incentive Plans**
  We
        have
        five stock plans as listed below:
  
 **Plan**
              **Shares
                  Authorized for Issuance**2000
                  Plan
              1,200,0002002
                  Plan
              1,500,0002003
                  Plan
              1,500,0002003A
                  Plan
              3,500,0002006
                  Plan
              2,500,00010,200,000
  
  17
   All
        of
        the Plans have been approved by the Board of Directors and all, except for
        the
        2006 Plan have been approved by the Shareholders.  All of the plans
        authorize awards of incentive stock options or non-qualified stock options
        to
        employees, directors, and consultants of our company and affiliates. The
        purposes of the Plan are to encourage and enable employees, directors, and
        consultants to acquire a proprietary interest in the growth and performance
        of
        our company, to generate an increased incentive for key employees and directors
        to contribute to our future success and prosperity, thus enhancing the value
        of
        our company for the benefit of our stockholders, and to enhance the ability
        of
        our company to attract and retain key employees and directors who are essential
        to progress, growth, and profitability.
  The
        Plans
        are administered by the Compensation Committee of our Board (the
“Administrator”). All members of our Compensation Committee are non-employee
        directors and outside directors, as defined in the Plans. Subject to the
        limitations set forth in the Plans, the administrator has the authority to
        grant
        options and to determine the purchase price of the shares of our common stock
        covered by each option, the term of each option, the number of shares of
        our
        common stock to be covered by each option, to establish vesting schedules,
        to
        designate options as incentive stock options or non-qualified stock options,
        and
        to determine the persons to whom grants are to be made.
  The
        Administrator establishes the option exercise price, which in the case of
        incentive stock options, must be at least the market price (as such term
        is
        defined in the Plans) of our common stock on the date of the grant or, with
        respect to optionees who own at least 10% of the total combined voting power
        of
        all classes of our stock (a “10% Stockholder”), 110% of the market price on the
        date of the grant.
  Options
        granted under the Plans are generally not transferable by the optionee except
        by
        will or the laws of descent and distribution, or pursuant to written agreement
        approved by the administrator relating to any non-qualified stock options
        in any
        manner authorized under applicable law. Except as provided in the applicable
        stock option agreement, options must be exercised within 90 days of termination
        for any reason other than disability, retirement, or death, within one year
        of
        termination by disability or retirement, or by a designated beneficiary within
        two years of death.
  Except
        as
        provided to the contrary, in the option agreement options granted under the
        Plans vest in one-third annual increments, beginning on the grant date of
        the
        option. In no event may an incentive stock option be granted more than 10
        years
        from the effective date of the plan, be exercised after the expiration of
        10
        years from the grant date, or five years from the grant date in the case
        of a
        10% Stockholder.
  Incentive
        stock options may not vest for the first time with the respect to any optionee
        in a calendar year with a market price exceeding $100,000. Any option grants
        that exceed that amount shall be automatically treated as non-statutory stock
        options.
  The
        Plans
        may be suspended, terminated, modified, or amended by our board, but no such
        suspension, termination, modification, or amendment may adversely affect
        the
        terms of any option previously granted without the consent of the affected
        optionee, and any amendment will be subject to stockholder approval to the
        extent required by applicable law, rules, or regulations.
  We,
        from
        time to time, grant to our directors, executive officers and employees options
        to purchase our common stock under the Plans. As of December 31, 2007, Invisa
        had options to purchase shares of common stock outstanding and exercisable
        at a
        weighted average price of $0.14 per share.
  **401(k)
        Savings Plan**
  We
        do not
        have a 401(k) savings plan.
  **Limitation
        of Liability and Indemnification of Officers and Directors;
        Insurance**
  Our
        Officers and Directors are indemnified to the fullest extent provided by
        Nevada
        law.
  We
        maintain a policy of directors’ and officers’ liability insurance to indemnify
        our directors and officers with respect to actions taken by them on our
        behalf.
  Insofar
        as indemnification for liabilities arising under the Securities Act of 1933
        may
        be permitted to directors, officers, or persons controlling our company pursuant
        to the foregoing provisions, we have been informed that, in the opinion of
        the
        Securities and Exchange Commission, such indemnification is against public
        policy as expressed in such Act and is therefore unenforceable.
  18
   **Item
                  11**
              **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS.**
  The
        following table sets forth the beneficial ownership of shares of our common
        stock as of December 31, 2007 for:
  •
              each
                  person (or group of affiliated persons) known by us to beneficially
                  own
                  more than 5% of our common stock;
  •
              each
                  of our directors;
  •
              each
                  named executive officer; and
  •
              all
                  of our directors and executive officers as a
                  group.
  Information
        with respect to beneficial ownership has been furnished by each director,
        officer or beneficial owner of more than 5% of our common stock. Beneficial
        ownership is determined in accordance with the rules of the SEC and generally
        requires that such person have voting or investment power with respect to
        securities. In computing the number of shares beneficially owned by a person
        listed below and the percentage ownership of such person, shares of common
        stock
        underlying options, warrants or convertible securities held by each such
        person
        that are exercisable or convertible within 60 days of December 31, 2007 are
        deemed outstanding, but are not deemed outstanding for computing the percentage
        ownership of any other person.
  Except
        as
        otherwise noted below, and subject to applicable community property laws,
        the
        persons named have sole voting and investment power with respect to all shares
        of common stock shown as beneficially owned by them.
  **Name
                  and Address of Beneficial Owner (1)**
              **Reporting Status**
              **Aggregate**
                **Number of Shares**
                **Beneficially**
                **Owned
                  (2)**
              **Percentage**
                **of
                  Shares**
                **Beneficially**
                **Owned**Michael
                  R. Ries (Trustee)
              5%
                  Stockholder
              1,864,584
              6.86 %Kenneth
                  D. Doer (Trustee)
              5%
                  Stockholder
              1,864,584
              6.86M.A.G.
                  Capital LLC and Affiliates (4)
              5%
                  Stockholder
              2,779,878  (1)
              9.99Asset
                  Manager International Ltd  (5)
              5%
                  Stockholder
              2,778,878  (1)
              9.99Stephen
                  A. Michael  (6)
              5%
                  Stockholder
              3,510,928
              12.37Edmund
                  C. King  (7)
              Acting
                  President, CFO, Director
              2,345,542  (2)
              8.48Gregory
                  J. Newell  (8)
              Director
              417,732  (2)
              1.51John
                  E. Scates  (9)
              Director
              417,732  (2)
              1.51Christopher
                  Maggiore
              5%
                  Stockholder
              2,090,001
              7.63All
                  officers and directors as a group
              
              3,181,006
              7.66 %
 
 (1)
              Unless
                  otherwise provided herein all addresses are c/o Invisa, Inc., 290
                  Cocoanut
                  Avenue Suite 1A, Sarasota, FL 34236. The address for Mr. Ries is
                  4837
                  Swift Road, Suite 210, Sarasota, Florida 34231; for Mr. Doerr is
                  240 South
                  Pineapple Avenue, Sarasota, Florida 34230; for Asset Managers
                  International, Ltd. and for M.A.G. Capital and affiliates is 555
                  South
                  Flower Street, Suite 4500, Los Angeles, California
                  90071.
 
 (2)
              The
                  percentage calculations are based on 25,066,126 shares that were
                  outstanding as of December 31, 2007 plus the respective
                  beneficial  shares owned by each selling stockholder. Beneficial
                  ownership is determined in accordance with rules of the Securities
                  and
                  Exchange Commission and includes voting power and/or investment
                  power with
                  respect to securities. Shares of common stock subject to options
                  or
                  warrants currently exercisable or exercisable within 60 days of
                  December
                  31, 2007 are deemed outstanding for computing the number, and the
                  percentage of outstanding shares beneficially owned by the person
                  holding
                  such options, but are not deemed outstanding for computing the
                  percentage
                  beneficially owned by any other
                  person.
 
 (4)       Includes M.A.G.
                  Capital, LLC; Mercator Momentum Fund, L.P.; Monarch Pointe Fund,
                  Ltd and
                  Mercator Momentum Fund III, L.P.  David F. Firestone is the
                  managing member of M.A.G. Capital LLC and as such he has beneficial
                  ownership of shares owned by M.A.G. Capital LLC and its affiliated
                  funds.
                  The following table presents the total number of shares held by
                  the
                  respective Funds:
  19
  
 PreferredCommon
              A
              B
              WarrantsMonarch
                  Point Fund, Ltd.
              535,474
              9,715
              2,000
              1,501,364Mercator
                  Momentum Fund III, LP
              ----
              ----
              1,000
              247,500Mercator
                  Momentum Fund, LP
              263,953
              4,785
              ----
              501,136799,427
              14,500
              3,000
              2,250,000
 
 (*)Each
        share of Series A Preferred Stock and Series B Preferred Stock may be converted
        by the holder into that number of shares of common stock as is determined
        by
        dividing 100 by .12. The documentation governing the terms of the Series
        A
        Preferred Stock, the Series B Preferred Stock and the warrants contains
        provisions prohibiting any conversion of the Series A Preferred Stock or
        the
        Series B Preferred Stock or exercise of the warrants that would result in
        M.A.G.
        Capital, LLC, Mercator Momentum Fund, LP, Monarch Pointe Fund, Ltd., Mercator
        Momentum Fund III, LP and their affiliates, collectively beneficially owning
        more than 9.99% of the outstanding shares of our common stock as determined
        under Rule 13d-3 of the Securities Exchange Act of 1934. As a result of these
        provisions, none of such entities hold beneficial ownership of more than
        9.99%
        of the outstanding shares of our common stock..
 
 (5
                  )       Asset Managers
                  International, Ltd. has 5,833,333 shares of common stock that may
                  be
                  acquired upon the conversion of outstanding Series B Preferred
                  Stock (at
                  an assumed conversion price of $0.12 per share) and 1,750,000 shares
                  of
                  common stock that may be acquired upon the exercise of the immediately
                  exercisable warrants at $0.30 per share. The documentation governing
                  the
                  terms of the Series B Preferred Stock and warrants contains provisions
                  prohibiting any conversion of the Series B Preferred Stock or exercise
                  of
                  the warrants that would result in Asset Managers International,
                  Ltd. and
                  its affiliates collectively beneficially owning more than 9.99%
                  of the
                  outstanding shares of our common stock as determined under Rule
                  13d-3 of
                  the Securities Exchange Act of 1934. As a result of these provisions,
                  none
                  of such entities hold beneficial ownership of more than 9.99% of
                  the
                  outstanding shares of our common stock. The natural persons who
                  beneficially own the securities held by Asset Managers International
                  Ltd.
                  are the directors of Asset Managers International Ltd, which are
                  Oskar
                  Lewnowski and William Maycock.
 
 (6)        Includes
                  2,280,928 shares owned by Mr. Michael and options to purchase 1,230,000
                  shares. Of the 1,230,000 currently vested options: 400,000 were
                  granted to
                  Mr. Michael in 2005 with an exercise price of $0.09 per share and
                  an
                  expiration date of June 15, 2015; and 480,000 were granted to Mr.
                  Michael
                  in 2005 with an exercise price of $0.10 per share and an expiration
                  date
                  of August 25, 2015. Mr. Michael also has options to purchase additional
                  250,000 and 100,000 shares, with the exercise prices of $0.09 and
                  $0.15
                  and expiration dates of June 15, 2015 and January 12, 2016
                  respectively.
 
 (7)
              Includes
                  395,542 shares held in Mr. King’s name, 5,000 shares held in the name of
                  the King Family Trust, and Mr. King’s options to purchase 1,950,000
                  shares.
 
 (8)Includes
        options to purchase 410,000 shares.
 
 (9)Includes
        options to purchase 410,000 shares.
  **ITEM 12**
              **CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                  INDEPENDENCE**
  Other
        than the compensation discussed herein, we had no items to disclose hereunder
        for 2007 except Mr. King loaned an aggregate of $20,123 to the Company during
        2007. The loans were not secured and are interest free; they remain outstanding
        and unpaid at December 31, 2007 and on the date hereof. In December 2007
        Mr.
        King also returned to the Company 197,040 shares of common stock that he
        had
        acquired with a Non Recourse Promissory Note, which had been classified as
        an
        offset to equity in the Company’s financial statements.  Under the
        terms of the Note Mr. King could elect to return the shares to satisfy the
        Note
        of $298,904, which includes accrued interest.
  **ITEM 13**
              **PRINCIPAL
                  ACCOUNTANT FEES AND
                  SERVICES**
  During
        2007 and 2006, annual fees approved for the year-end audit and interim reviews
        aggregated approximately $73,000 and $64,000 respectively.  In
        addition, during 2007 and 2006 tax-related fees for compliance aggregated,
        approximately, $4,000 and $9,075, respectively.
  20
   The
        Audit
        Committee has established its pre-approval policies and procedures, pursuant
        to
        which the Audit Committee approved the foregoing audit services provided
        by
        Aidman, Piser & Company, P.A. in 2007 and 2006. Consistent with the
        Audit Committee’s responsibility for engaging the Company’s independent
        auditors, all audit and permitted non-audit services require pre-approval
        by the
        Audit Committee. The full Audit Committee approves proposed services and
        fee
        estimates for these services. The Audit Committee chairperson or their designee
        has been designated by the Audit Committee to approve any services arising
        during the year that were not pre-approved by the Audit Committee. Services
        approved by the Audit Committee chairperson are communicated to the full
        Audit
        Committee at its next regular meeting and the Audit Committee reviews services
        and fees for the year at each such meeting. Pursuant to these procedures,
        the
        Audit Committee approved the foregoing audit services provided by Aidman,
        Piser & Company, P.A. The audit committee pre-approved audit,
        audit-related and tax fees for 2007 and 2006.
 **PART
        IV**
  **ITEM 14**
              **EXHIBITS
                  AND FINANCIAL STATEMENT
                  SCHEDULES**
  (a)
        The
        following documents are filed as part of this Report:
  Exhibits
  The
        following exhibits are filed as part of, or incorporated by reference into,
        this
        amendment to annual report on Form 10-K/A:
  
 **INDEX
        TO EXHIBITS**
 
 ITEM
                  NO.
              DESCRIPTION2.1
                  1
              Agreement
                  of Merger and Plan of Reorganization dated 2/25/02 by and among
                  SmartGate
                  Inc., SmartGate/RadioMetrix Acquisition Corp. and Radio Metrix
                  Inc.,
                  Letter of Clarification, and Amendment dated as of April 24,
                  200310.1
                  1
              Quarterly
                  Revenue Based Payment Agreement by and among the Company and Stephen
                  A.
                  Michael, Spencer Charles Duffey Irrevocable Trust u/a/ d July 29,
                  1998,
                  Elizabeth Rosemary Duffey Irrevocable Trust u/a/d July 29, 1998,
                  Robert T.
                  Roth, William W. Dolan dated as of February 25, 2002; and Amendment
                  dated
                  as of April 24, 200310.2
                  1
              Promissory
                  Note, Security Agreement, and Escrow Agreement - Re: Daimler Capital
                  Partners, Ltd. - loan and stock options; Stock Option Agreement
                  with
                  Daimler Capital Partners, Ltd. - October 28, 2002; Stock Option
                  Agreement
                  with Daimler Capital Partners, Ltd. - February 28, 200310.3
                  1
              Form
                  of Plan 2003 Option Agreement with Joseph F. Movizzo - May 13,
                  2003
                  (including form of Letter of Investment Intent)10.4
                  1
              Consulting
                  Agreement - March 2003 between Crescent Fund, Inc. and the
                  Company10.5
                  1
              Agreement
                  dated as of April 24, 2003 between Alan A. Feldman and the
                  Company10.6
                  1
              Financing
                  Agreement dated as of May 9, 2003 between BarBell Group, Inc. and
                  the
                  Company10.7
                  1
              Series
                  2003A 7% Convertible Note Due June 9, 2004, dated May 9, 2003 from
                  the
                  Company to BarBell Group, Inc.10.8
                  1
              Investment
                  Agreement dated as of May 9, 2003 between BarBell Group, Inc. and
                  the
                  Company10.9
                  1
              Warrant
                  to Purchase Shares of Common Stock dated as of May 9, 2003, issued
                  by the
                  Company to BarBell Group, Inc.10.10
                  1
              Registration
                  Rights Agreement dated as of May 9, 2003 between the Company and
                  BarBell
                  Group, Inc.10.11
                  1
              Broker-Dealer
                  Placement Agent Selling Agreement - May 2003 between Capstone Partners
                  LC
                  and the Company10.12
                  2
              Amended
                  and Restated Regulation S Subscription Agreement - July 22, 2003
                  between
                  Capstone Partners LC and the Company10.13
                  2
              Amended
                  and Restated Regulation S Subscription Agreement - July 22, 2003
                  executed
                  by Nautilus Technologies, Ltd. - subscribing for 125,000
                  Units
  21
 10.14
                  2
              Amended
                  and Restated Regulation S Subscription Agreement - July 22, 2003
                  executed
                  by GM Capital Partners, Ltd. - subscribing for 50,500
                  Units10.15
                  2
              Amended
                  and Restated Regulation S Subscription Agreement - July 22, 2003
                  executed
                  by Kallur Enterprises, Ltd. - subscribing for 50,000
                  Units10.16
                  2
              Publicity
                  Agreement - July 2003 between Capital Financial Media, Inc. and
                  the
                  Company
  10.17
                  2
              Consulting
                  Agreement - July 2003 between National Financial Communications
                  Corp. and
                  the Company10.18
                  2
              Agreement
                  - July 2003 between Brooks Houghton & Company, Inc. and the
                  Company10.19
                  2
              Non-Exclusive
                  Financial Advisor Agreement - July 2003 between Source Capital
                  Group, Inc.
                  and the Company10.20
                  2
              Consulting
                  Agreement - July 2003 between Patrick W.H. Garrard d/b/a The Garrard
                  Group
                  of West Redding, CT and the Company10.21
                  2
              Investment
                  Agreement Modification I dated as of July 21, 2003 by and among
                  Invisa,
                  Inc. and BarBell Group, Inc.10.22
                  2
              Joint
                  Development Agreement - July 2003 between Dominator International
                  Ltd. And
                  SmartGate, L.C.10.23
                  3
              Engagement
                  Agreement dated September 9, 2003 between G.M. Capital Partners,
                  Ltd and
                  Invisa, Inc.10.24
                  4
              Employment
                  Agreement dated November 6, 2003 between Herb Lustig and Invisa,
                  Inc.10.25
                  4
              Severance
                  Agreement dated November 13, 2003 between Samuel S. Duffey and
                  Invisa,
                  Inc.10.26
                  4
              Agreement
                  dated November 13, 2003 between Invisa, Inc. and the Duffey related
                  shareholders10.27
                  5
              SDR
                  Metro Inc. letter extension agreement10.28
                  5
              SDR
                  Metro Inc. confirmation letter agreement10.29
                  5
              Severance
                  Agreement dated January 26, 2004 between Stephen A. Michael and
                  Invisa,
                  Inc.10.30
                  5
              Consulting
                  Agreement dated January 26, 2004 between Stephen A. Michael and
                  Invisa,
                  Inc.10.31
                  5
              Severance
                  Agreement dated December 31, 2003 between William W. Dolan and
                  Invisa,
                  Inc.10.32
                  5
              Agreement
                  dated February 11, 2004 between The Video Agency, Inc. and Invisa,
                  Inc.10.33
                  5
              Employment
                  Agreement dated March 2004 between Charles Yanak and Invisa,
                  Inc.10.34
                  5
              2003-A
                  Employee, Director, Consultant and Advisor Stock Compensation
                  Plan.10.35
                  5
              First
                  Amendment to Invisa, Inc., 2003 Incentive Plan Date As of November
                  6,
                  200310.36
                  5
              Stock
                  Option Agreement for Herb M. Lustig dated November 6,
                  200310.37
                  6
              Subscription
                  Agreement for issuance of 22,000 shares of Series A Convertible
                  Preferred
                  Stock and Common Stock Warrants10.38
                  6
              Registration
                  Rights Agreement
  22
  
 10.39
                  6
              Warrants
                  to Purchase Common Stock (Mercator Momentum Fund, LP, Mercator
                  Advisory
                  Group, LLC, and Monarch Pointe Fund, Ltd.)10.406
              Certificate
                  of Designations of Preferences and Rights of Series A Convertible
                  Preferred Stock.10.41
                  7
              Marketing
                  Agreement between Aurelius Consulting Group and Invisa,
                  Inc.10.42
                  7
              Lease
                  Agreement among HAR-WAL ASSOCIATES, INC. and WR-I ASSOCIATES, LTD.
                  and
                  Invisa, Inc. dated September dated September 23, 200410.43
                  11
              Business
                  consulting agreement10.44
                  11
              Opinion
                  of counsel regarding legality of Common Stock10.45
              Consent
                  of Aidman, Piser and Company, PA10.46
                  11
              Consent
                  of Legal Counsel10.47
                  11
              Power
                  of Attorney relating to subsequent amendments10.48
                  9
              Promissory
                  note agreements dated October 10, 2006 by and between Invisa, Inc.
                  and
                  M.A.G. Capital, LLC; Mercator Momentum Fund III, LP and Monarch
                  Pointe
                  Fund, Ltd. Borrowing Certificates and Forms of
                  Assignments10.499
              Warrant
                  Agreement dated October 10, 2006 by and between Invisa, Inc. and
                  Ocean
                  Park Advisors, LLP10.50
                  9
              UCC
                  Financing Statements10.51
                  9
              Schedule
                  of Advances: Permitted Payments10.52
                  10
              Business
                  Consulting Agreement dated August 14, 2006 between Invisa, Inc.
                  and John
                  Anderson10.53
                  8
              Carl
                  A. Parks Employment agreement10.54
                  13
              Forbearance
                  and Modification agreement dated July 27, 200710.55
                  14
              Promissory
                  Note dated July 25, 200710.56
                  15
              Promissory
                  Note dated March 6, 200710.57
                  16
              Forbearance
                  and Modification Agreement10.58
                  8
              Audit
                  Committee Charter10.59
                  8
              Senior
                  Secured Promissory Note date March 28, 200810.60
                  8
              Forbearance
                  and Modification Agreement dated March 28, 200810.61
                  8
              Extension
                  of Promissory Note dated April 11, 200831.1
                  8
              Chief
                  Executive Officer Certification Pursuant to Securities Exchange
                  Act Rules
                  13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the
                  Sarbanes-Oxley Act of 2002.31.2
                  8
              Chief
                  Financial Officer Certification Pursuant to Securities Exchange
                  Act Rules
                  13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the
                  Sarbanes-Oxley Act of 2002.32.1
                  8
              Certification
                  Pursuant to 18 U.S.C. Section 1350.32.2
                  8
              Certification
                  Pursuant to 18 U.S.C. Section 1350.1
              Previously
                  filed on June 23, 2003 with Invisa’s Form 10-KSB for the year ended
                  December 31, 2002 and are incorporated by reference.
 
  23
  
 2
              Previously
                  filed on August 1, 2003 with Invisa’s Form 10-QSB for the quarter period
                  ended June 30, 2003 and are incorporated by
                  reference.
 
 3
              Previously
                  filed on September 17, 2003 with Invisa’s Form 8-KA (Amendment No. 1)
                  dated September 9, 2003 and is incorporated by
                  reference.
 
 4
              Previously
                  filed on November 14, 2003 with Invisa’s Form 8-K dated November 6, 2003
                  and are incorporated by reference.
 
 5
              Previously
                  filed on April 14, 2004 with Invisa Form 10-KSB for the year ended
                  December 31, 2003 and incorporated herein by
                  reference.
 
 6
              Previously
                  filed on August 18, 2004 with Invisa Form 10-QSB and incorporated
                  herein
                  by reference.
 
 7
              Previously
                  filed on February 7, 2005 with Invisa Form 10-KSB for the year
                  ended
                  December 31, 2004 and incorporated herein by
                  reference.
 
 8
              Filed
                  herewith.9
              Previously
                  filed on October 10, 2006 with Invisa Form 8-K/A dated October
                  10, 2006
                  and are incorporated by reference.10
              Previously
                  filed on August 17, 2006 with Invisa Form 8-K dated August 14,
                  2006 and
                  are incorporated by reference.11
              Previously
                  filed on August 14, 2006 with Invisa Form S-8 dated August 14,
                  2006 and
                  are incorporated by reference12
              Previously
                  filed on April 14, 2007 with Invisa For 10-KSB and incorporated
                  herein by
                  reference.13
              Previously
                  filed on August 1, 2007 with Invisa’s Form 8-K and incorporated
                  herein.14
              Previously
                  filed on July 26, 2007 with Invisa’s Form 8-K and incorporated
                  herein.141
              Code
                  of Business Conduct and Ethics and Compliance Program15
              Previously
                  filed on March 6, 2007 with Invisa’s Form 8-K and incorporated
                  herein.16
              Previously
                  filed on November 9, 2007 with Invisa Form 10-QSB and incorporated
                  herein
                  by reference.
 
  24
  **SIGNATURES**
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report to be signed on its behalf by the undersigned, thereonto duly
        authorized.
  **INVISA,
                  INC.**Dated:  April
                  14, 2008
              By:
              /s/ Edmund
                  C. KingEdmund
                  C. KingActing
                  President and Acting Chief Operating OfficerDated:  April
                  14, 2008
              By:
              /s/ Edmund
                  C KingEdmund
                  C KingChief
                  Financial Officer
 
  25
  **NOW
        ALL PERSONS BY THESE PRESENTS** , that each of the undersigned hereby
        constitutes and appoints Edmund C. King as his true and lawful attorney-in-fact
        and agent, with full power of substitution and resubstitution, for him and
        on
        his behalf to sign, execute and file this annual report on Form 10-KSB and
        any
        or all amendments without limitation to this annual report, and to file the
        same, with all exhibits thereto and any and all documents required to be
        filed
        with respect therewith, with the Securities and Exchange Commission or any
        regulatory authority, granting unto such attorney-in-fact and agent full
        power
        and authority to do and perform each and every act and thing requisite and
        necessary to be done in connection therewith and about the premises in order
        to
        effectuate the same as fully to all intents and purposes as he might or could
        do
        if personally present, hereby ratifying and confirming all that such
        attorney-in-fact and agent, or his substitute or substitutes, may lawfully
        do or
        cause to be done.
 
 In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the registrant and in the capacities and on
        the
        dates indicated.
 
 
 Dated:  April
                  14, 2008
              /s/
                  Edmund C. KingEdmund
                  C. King, Acting President and Acting Chief Operating
                  OfficerDated:  April
                  14, 2008
              /s/
                  Edmund C. KingEdmund
                  C. King, Chief Financial Officer, DirectorDated:  April
                  14, 2008
              /s/
                  Gregory J. NewellGregory
                  J. Newell, DirectorDated:  April
                  14, 2008
              /s/
                  John E. ScatesJohn
                  E. Scates, Director
 
   26
  
 **Report
        of Independent Registered Certified Public Accounting
        Firm**
 
 
 Board
        of
        Directors and Stockholders
 Invisa,
        Inc.
 
 We
        have
        audited the accompanying balance sheet of Invisa, Inc. (the “Company”) as of
        December 31, 2007 and the related statements of operations, stockholders’ equity
        (deficit) , and cash flows for each of the years in the two-year period then
        ended, and for the period from February 12, 1997 (inception) through December
        31, 2007. These financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these financial
        statements based on our audits.
 
 We
        conducted our audits in accordance with standards of the Public Company
        Accounting Oversight Board (United States of America). Those standards require
        that we plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement. The Company is
        not
        required to have, nor were we engaged to perform, an audit of its internal
        control over financial reporting. Our audit included consideration of internal
        control over financial reporting as a basis for designing audit procedures
        that
        are appropriate in the circumstances, but not for the purpose of expressing
        an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit includes examining,
        on a test basis, evidence supporting the amounts and disclosures in the
        financial statements, assessing the accounting principles used and significant
        estimates made by management, as well as evaluating the overall financial
        statement presentation. We believe that our audits provide a reasonable basis
        for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Invisa, Inc. as of December
        31,
        2007 and the results of its operations and its cash flows for each of the
        years
        in the two-year period then ended, and for the period from February 12, 1997
        (inception) through December 31, 2007, in conformity with accounting principles
        generally accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note B to the financial
        statements, the Company has incurred significant losses and used cash in
        operating activities during the years ended December 31, 2007 and 2006 and
        expects that additional capital will be required in order to continue operations
        in 2008. These factors, among others, as discussed in Note B, raise substantial
        doubt about the Company’s ability to continue as a going concern. Management’s
        plans in regard to these matters are also described in Note B. The financial
        statements do not include any adjustments that might result from the outcome
        of
        this uncertainty.
 
 /s*/*Aidman*,*Piser *&*Company*,
                  P.A.*
 Tampa,
        Florida
 April
        14,
        2008
  
  F-1
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 BALANCE
        SHEET
 
 
 **December
                  31,****2007**ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              2,281Accounts
                  receivable
              
              
              19,324Inventories
              
              
              20,678Prepaids
                  and other assets
              
              
              4,298Total
                  current assets
              
              
              46,581Furniture,
                  fixtures and equipment, net of $39,286 accumulated
                  depreciation
              
              
              3,212Total
                  assets
              
              $
              49,793LIABILITIES
                  AND STOCKHOLDERS’ DEFICITCurrent
                  liabilities:Accounts
                  payable, trade
              
              $
              291,085Accrued
                  expenses
              
              
              205,926Due
                  to stockholders and officers
              
              
              364,551Notes
                  Payable
              
              
              231,300Preferred
                  dividends payable
              
              
              198,750Total
                  current liabilities
              
              
              1,291,612Commitment
                  (Note I)
              
              
              -----Stockholders’
                  DeficitConvertible
                  Preferred Stock, 5 million shares authorized ($0.001 par
                  value):Series
                  A, 14,500 shares issued and outstanding
              
              
              1,277,000Series
                  B, 10,000 shares issued and outstanding
              
              
              1,000,000Common
                  Stock; 95,000,000 shares authorized ($.001 par value), 25,066,126
                  shares
                  issued and outstanding
              
              
              25,066Additional
                  paid-in capital
              
              
              31,797,807Deficit
                  accumulated during the development stage
              
              
              (35,341,692
              )Total
                  stockholders’ deficit
              
              
              (1,241,819
              )Total
                  liabilities and stockholders’ equity
              
              $
              49,793
 
  See
        notes
        to financial statements.
   F-2
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 STATEMENTS
        OF OPERATIONS
 **February
                  12, 1997****(Date
                  of inception)****Years
                  Ended December 31,**
              
              **Through****2006**
              
              **2007**
              
              **December
                  31, 2007**Net
                  sales
              
              $
              136,980
              
              $
              124,986
              
              $
              1,459,317Other
                  operating revenues
              
              
              ----
              
              
              ----
              
              
              300,000Costs
                  and expenses:Cost
                  of goods sold (exclusive of patent amortization shown separately
                  below)
              
              
              94,197
              
              
              73,992
              
              
              1,022,316Research
                  and development costs
              
              
              119,937
              
              
              ---
              
              
              3,471,292Selling,
                  general and administrative expenses
              
              
              1,420,442
              
              
              581,993
              
              
              15,782,351Patent
                  amortization
              
              
              788,235
              
              
              788,235
              
              
              4,646,599Impairment
                  of patent
              
              
              ----
              
              
              3,547,059
              
              
              9,064,867Loss
                  from operations
              
              
              (2,285,831
              )
              (
              4,866,293
              )
              
              (32,231,108
              )Other
                  income (expense):Interest
                  (expense)and other, net
              
              
              (25,118
              )
              (
              129,402
              )
              
              (975,074
              )Debt
                  extinguishment gain
              
              ----
              
              
              ----
              
              
              360,000(25,118
              
              (
              129,402)
              
              
              (615,074
              )Loss
                  before income
                  tax
              
              
              (2,310,949
              )
              (
              4,995,695
              )
              
              (32,846,182
              )Income
                  tax
              
              
              ----
              
              
              ----
              
              
              -----Net
                  loss
              
              
              (2,310,949
              )
              (
              4,995,695
              )
              
              (32,846,182
              )Non-cash
                  constructive dividend related to Convertible Preferred
                Stock
                  accretions
              
              
              ----
              
              
              ----
              
              
              (2,296,640
              )Preferred
                  Stock dividends
              
              
              (90,000
              )
              (
              90,000
              )
              
              (198,750
              )Net
                  loss applicable to Common Stockholders
              
              $
              (2,400,949
              )
              $
              (5,085,695
              )
              $
              (35,341,572
              )Net
                  loss per share applicable to Common Stockholders:Basic
                  and diluted
              
              $
              (0.10
              )
              $
              (0.20
              )Weighted
                  average Common Stock shares outstanding:
                Basic
                  and diluted
              
              
              24,529,553
              
              
              25,355,659
 
 
 See
        notes
        to financial statements.
  F-3
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 STATEMENTS
        OF STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
 **Convertible
                  Preferred Stock**
              
              
              **Common
                  Stock**
              
              
              **Additional
                  paid – in capital**
              
              
              **Stock
                  Subscriptions Receivable**
              
              
              **Deficit
                  Accumulated During the Development Stage**
              
              
              **Total****Shares**
              
              
              **Amount**
              
              
              **Shares**
              
              
              **Amount**FEBRUARY
                  12, 1997 (INCEPTION)
              
              
              ----
              
              
              $
              ----
              
              
              
              ----
              
              
              $
              ----
              
              
              
              ----
              
              
              $
              ----
              
              
              $
              ----
              
              
              $
              ----Summary
                  of transactions from February 12, 1997Through
                  December 31, 2004:Issuance
                  of Common Stock to founders
              
              
              ----
              
              
              
              ----
              
              
              
              6,105,128
              
              
              
              5,980
              
              
              
              (5,980
              )
              
              
              ----
              
              
              
              ----
              
              
              
              ----Issuance
                  of Common Stock for cash
              
              
              
              
              
              
              
              
              
              
              4,257,350
              
              
              
              4,257
              
              
              
              9,031,704
              
              
              
              ----
              
              
              
              ----
              
              
              
              9,035,961Exercise
                  of stock options
              
              
              ----
              
              
              
              ----
              
              
              
              1,027,964
              
              
              
              1,027
              
              
              
              1,316,160
              
              
              
              (985,000
              )
              
              
              ----
              
              
              
              332,187Offering
                  Costs
              
              
              ----
              
              
              
              ----
              
              
              
              500,000
              
              
              
              500
              
              
              
              637,436
              
              
              
              ----
              
              
              
              ----
              
              
              
              637,936Conversion
                  of notes payable
              
              
              ----
              
              
              
              ----
              
              
              
              635,022
              
              
              
              635
              
              
              
              449,365
              
              
              
              ----
              
              
              
              ----
              
              
              
              450,000Original
                  issue discount on notes payable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              201,519
              
              
              
              ----
              
              
              
              ----
              
              
              
              201,519Common
                  Stock issuable for rent
              
              
              ----
              
              
              
              ----
              
              
              
              164,799
              
              
              
              290
              
              
              
              88,084
              
              
              
              ----
              
              
              
              ----
              
              
              
              88,374Issuance
                  of Common Stock for services
              
              
              ----
              
              
              
              ----
              
              
              
              606,144
              
              
              
              607
              
              
              
              1,254,355
              
              
              
              ----
              
              
              
              ----
              
              
              
              1,254,962Issuance
                  of Common Stock options for services
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              550,987
              
              
              
              ----
              
              
              
              ----
              
              
              
              550,987Original
                  issue discount
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              144,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              144,000Issuance
                  of Common Stock related to reorganization
              
              
              ----
              
              
              
              ----
              
              
              
              2,009,000
              
              
              
              2,009
              
              
              
              227,991
              
              
              
              ----
              
              
              
              ----
              
              
              
              230,000Issuance
                  accrued on notes related to Radio Metric merger
              
              
              ----
              
              
              
              ----
              
              
              
              3,685,000
              
              
              
              3,685
              
              
              
              11,268,815
              
              
              
              ----
              
              
              
              ----
              
              
              
              11,272,500Interest
                  accrued on notes related to stock subscriptions receivable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              248,836
              
              
              
              (248,836
              )
              
              
              ----
              
              
              
              -----Settlement
                  of accounts in connection with severance agreements
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              544,090
              
              
              
              923,432
              
              
              
              ----
              
              
              
              1,467,522Exercise
                  of Stock Warrants
              
              
              ----
              
              
              
              ----
              
              
              
              602,000
              
              
              
              602
              
              
              
              1,138,143
              
              
              
              ----
              
              
              
              ----
              
              
              
              1,138,745Issuance
                  of Convertible Preferred Stock and detachable Warrants for cash,
                  net of
                  costs paid in the form of common stock
              
              
              22,000
              
              
              
              640,360
              
              
              
              162,500
              
              
              
              163
              
              
              
              1,296,477
              
              
              
              ----
              
              
              
              ----
              
              
              
              1,937,000Non-cash
                  constructive dividend related to beneficial conversion features
                  of
                  Convertible Preferred Stock
              
              
              ----
              
              
              
              1,296,640
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (1,296,640
              )
              
              
              ----Conversion
                  of Convertible Preferred Stock into Common Stock
              
              
              (7,500
              )
              
              
              (660,000
              )
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              658,500
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----Issuance
                  of Common Stock for settlement of cash advances
              
              
              ----
              
              
              
              ----
              
              
              
              80,925
              
              
              
              81
              
              
              
              80,844
              
              
              
              ----
              
              
              
              ----
              
              
              
              80,925Issuable
                  Common Stock for settlement of related party accrued
                  compensation
              
              
              ----
              
              
              
              ----
              
              
              
              300,000
              
              
              
              300
              
              
              
              194,700
              
              
              
              ----
              
              
              
              ----
              
              
              
              195,000Gain
                  on related party accrued compensation extinguishment
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              581,132
              
              
              
              ----
              
              
              
              ----
              
              
              
              581,132Issuance
                  of Common Stock Warrants for settlement of royalty
                  contract
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              91,400
              
              
              
              ----
              
              
              
              ----
              
              
              
              91,400Collections
                  of stock subscriptions receivable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              36,500
              
              
              
              ----
              
              
              
              36,500Adjustment
                  of stock subscriptions
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (20,000
              )
              
              
              20,000
              
              
              
              ----
              
              
              
              ----Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (23,868,740
              )
              
              
              (23,768,740
              )BALANCE
                  AT DECEMBER 31, 2004
              
              
              14,500
              
              
              $
              1,277,000
              
              
              
              21,635,832
              
              
              $
              21,636
              
              
              
              29,978,558
              
              
              $
              (253,904
              )
              
              $
              (25,065,380
              )
              
              $
              5,957,910Issuance
                  of Convertible Preferred Stock and
                detachable
                  Warrants for cash, net of costs paid
              
              
              10,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              878,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              878,000Non-cash
                  constructive dividend related to
                Convertible
                  Preferred Stock accretions
              
              
              ----
              
              
              
              1,000,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (1,000,000
              )
              
              
              ----Issuance
                  of Common Stock for cash
              
              
              ----
              
              
              
              ----
              
              
              
              1,066,662
              
              
              
              1,066
              
              
              
              78,934
              
              
              
              ----
              
              
              
              ----
              
              
              
              80,000Issuance
                  of Common Stock for services
              
              
              ----
              
              
              
              ----
              
              
              
              1,096,774
              
              
              
              1,097
              
              
              
              103,903
              
              
              
              ----
              
              
              
              ----
              
              
              
              105,000Issuance
                  of Common Stock options for services
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              33,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              33,000Interest
                  accrued on notes related to stock
                subscriptions
                  receivable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              15,000
              
              
              
              (15,000
              )
              
              
              ----
              
              
              
              ----Preferred
                  Stock Series B dividend
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (18,750
              )
              
              
              (18,750
              )Net
                  loss
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (1,770,918
              )
              
              
              (1,770,918
              )BALANCE
                  AT DECEMBER 31, 2005
              
              
              24,500
              
              
              $
              2,277,000
              
              
              
              23,799,268
              
              
              $
              23,799
              
              
              
              31,087,395
              
              
              $
              (268,904
              )
              
              $
              (27,855,048
              )
              
              $
              5,264,242Issuance
                  of Common Stock for cash
              
              
              ----
              
              
              
              ----
              
              
              
              400,000
              
              
              
              400
              
              
              
              43,600
              
              
              
              ----
              
              
              
              ----
              
              
              
              44,000Stock
                  options exercised
              
              
              ----
              
              
              
              ----
              
              
              
              316,670
              
              
              
              317
              
              
              
              23,933
              
              
              
              ----
              
              
              
              ----
              
              
              
              24,250Issuance
                  of Common Stock for services
              
              
              ----
              
              
              
              ----
              
              
              
              981,800
              
              
              
              982
              
              
              
              132,652
              
              
              
              ----
              
              
              
              ----
              
              
              
              133,634Employee
                  share-based compensation
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              198,089
              
              
              
              ----
              
              
              
              ----
              
              
              
              198,089Issuance
                  of Common Stock options for services
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              133,390
              
              
              
              ----
              
              
              
              ----
              
              
              
              133,390Interest
                  accrued on notes related to stock subscriptions receivable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              15,000
              
              
              
              (15,000
              )
              
              
              ----
              
              
              
              ----Preferred
                  Stock Series B dividend
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (90,000
              )
              
              
              (90,000
              )Net
                  loss
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (2,310,949
              )
              
              
              (2,310,949
              )BALANCE
                  AT DECEMBER 31, 2006
              
              
              24,500
              
              
              $
              2,277,000
              
              
              
              25,497,738
              
              
              $
              25,498
              
              
              
              31,634,059
              
              
              $
              (283,904
              )
              
              $
              (30,255,997
              )
              
              $
              3,396,656Employee
                  share-based compensation
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              165,410
              
              
              
              ----
              
              
              
              ----
              
              
              
              165,410Warrant
                  Modification
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              60,000
              
              
              
              ----
              
              
              
              ----
              
              
              
              60,000Interest
                  accrued on notes related to stocksubscriptions
                  receivable
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              15,000
              
              
              
              (15,000
              )
              
              
              ----
              
              
              
              ----Preferred
                  Stock Series B dividend
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (90,000
              )
              
              
              (90,000
              )Stock
                  Redeemed
              
              
              ----
              
              
              
              ----
              
              
              
              (431,612
              )
              
              
              (432
              )
              
              
              (298,472
              )
              
              
              298,904
              
              
              
              ----
              
              
              
              ----Related
                  party forgiveness of debt
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              221,810
              
              
              
              ----
              
              
              
              ----
              
              
              
              221,810Net
                  loss
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              ----
              
              
              
              (4,995,695
              )
              
              
              (4,995,695
              )BALANCE
                  AT DECEMBER 31, 2007
              
              
              24,500
              
              
              $
              2,277,000
              
              
              
              25,066,126
              
              
              $
              25,066
              
              
              
              31,797,807
              
              
              $
              ----
              
              
              $
              (35,341,692
              
              
              $
              (1,241,819
              )
 
 
 See
        notes
        to financial statements.
 
  F-4
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 STATEMENTS
        OF CASH FLOWS
 **Years
                  Ended December 31,**
              
              **February
                  12, 1997 (date of inception) Through****2006**
              
              **2007**
              
              **December
                  31, 2007**Cash
                  flows from operating activities:Net
                  loss
              
              $
              (2,310,949
              )
              $
              (4,995,695
              )
              $
              (32,846,182
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Patent
                  impairment
              
              
              -----
              
              
              3,547,059
              
              
              9,064,867Depreciation
                  and amortization
              
              
              804,670
              
              
              791,168
              
              
              5,203,442Modification
                  of Warrants
              
              
              ----
              
              
              60,000
              
              
              60,000Common
                  Stock and options exchanged for services/settlements
              
              
              465,113
              
              
              -----
              
              
              3,028,164Share
                  Based Compensation
              
              
              -----
              
              
              165,410
              
              
              363,499Abandonment
                  loss on furniture equipment and leaseholds, net of disposition
                  gain
              
              
              -----
              
              
              23,817
              
              
              23,817Debt
                  extinguishment gain
              
              
              ----
              
              
              -----
              
              
              (360,000
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              15,618
              
              
              (7,674
              )
              
              (166,038
              )Inventories
              
              
              (24,364
              )
              
              51,161
              
              
              (20,678
              )Prepaids
                  and other assets
              
              
              (6,874
              
              
              15,935
              
              
              (4,299
              )Accounts
                  payable, trade
              
              
              224,573
              )
              
              22,962
              
              
              291,085Accrued
                  expenses
              
              
              22,563
              
              
              60,414
              
              
              155,918Net
                  cash used in operating activities
              
              
              (809,650
              )
              
              (265,443
              )
              
              (15,206,405
              )Cash
                  flows from investing activities:Patent
                  acquisition
              
              
              ----
              
              
              -----
              
              
              (550,000
              )Transaction
                  costs in connection with RMI business combination
              
              
              ----
              
              
              -----
              
              
              (121,475
              )Purchases
                  of furniture, fixtures and equipment
              
              
              ----
              
              
              -----
              
              
              (238,846
              )Net
                  cash used in investing activities
              
              
              ----
              
              
              -----
              
              
              (910,321
              )Cash
                  flows from financing activities:Proceeds
                  from notes payable
              
              
              128,337
              
              
              231,300
              
              
              409,637Proceeds
                  from notes payable and redeemable Common Stock
              
              
              ----
              
              
              -----
              
              
              908,000Payment
                  of notes payable
              
              
              ----
              
              
              -----
              
              
              (520,800
              )Collection
                  of stock subscriptions
              
              
              ----
              
              
              ----
              
              
              36,500Stockholder
                  Advances
              
              
              30,500
              
              
              33,524
              
              
              1,585,007Proceeds
                  from sale of convertible Preferred Stock
              
              
              ----
              
              
              ----
              
              
              2,815,000Proceeds
                  from sale of Common Stock
              
              
              68,250
              
              
              ----
              
              
              10,631,413Proceeds
                  from the exercise of stock options`
              
              
              ----
              
              
              ----
              
              
              24,250Cash
                  received with combination transaction
              
              
              `---
              
              
              ----
              
              
              230,000Net
                  cash provided by financing activities
              
              
              227,087
              
              
              264,824
              
              
              16,119,007
  See
        notes
        to financial statements.
   F-5
   Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 STATEMENTS
        OF CASH FLOWS (CONTINUED)
 
 Net
                  (decrease) increase in cash
              
              
              (582,563
              )
              
              (619)
              
              
              2,281Cash
                  at beginning of period
              
              
              585,463
              
              
              2,900
              
              
              ----Cash
                  at end of period
              
              $
              2,900
              
              $
              2,281
              
              $
              2,281
  See
        notes
        to financial statements.
 (Continues)
  F-6
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 STATEMENTS
        OF CASH FLOWS - CONTINUED
 
 
 **February
                  12,****1997
                  (Date of****inception)****Through****Year
                  Ended December 31,**
              
              **December
                  31,****2006**
              
              **2007**
              
              **2007**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATIONCash
                  paid during the period for interest
              
              $
              -----
              
              $
              42,534
              
              $
              271,696Non-cash
                  financing and investing activities:Notes
                  payable incurred in connection with
                  merger transactions
              
              $
              -----
              
              $
              -----
              
              $
              1,300,000Notes
                  payable canceled in connection with merger transaction
              
              $
              -----
              
              $
              -----
              
              $
              337,489Common
                  Stock issued in connection with merger transaction (3,685,000
                  shares)
              
              $
              -----
              
              $
              -----
              
              $
              11,272,500Due
                  to employees in connection with merger transaction
              
              $
              ----
              
              $
              ----
              
              $
              175,000Accrued
                  expenses assumed in connection with merger transaction
              
              $
              ----
              
              $
              ----
              
              $
              50,000Exchange
                  of liabilities for Common Stock
              
              $
              ----
              
              $
              ----
              
              $
              857,057Common
                  Stock issued representing stock offering commitment (200,000
                  shares)
              
              $
              -----
              
              $
              -----
              
              $
              554,000Preferred
                  dividends accrued as liabilities
              
              $
              90,000
              
              $
              90,000
              
              $
              198,750Non-cash
                  preferred stock accretions
              
              $
              ----
              
              $
              ----
              
              $
              2,296,640Subscription
                  receivable redeemed for stock originally issued
              
              $
              -----
              
              $
              298,904
              
              $
              298,904Stockholder
                  forgiveness of debt
              
              $
              -----
              
              $
              221,810
              
              $
              221,810
  
 
 See
        notes
        to financial statements.
  F-7
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        A -
        DESCRIPTION OF ORGANIZATION AND BUSINESS
 
 Invisa,
        Inc., (the “Company” or “Invisa”) is a development stage enterprise that
        incorporates safety system technology and products into automated closure
        devices, such as parking gates, sliding gates, overhead garage doors and
        commercial overhead doors. Invisa has also demonstrated production-ready
        prototypes of security products for the museum and other markets. The Company
        has not fully implemented its sales and marketing plan and has, therefore,
        not
        emerged from the development stage. The Company, however, is currently
        manufacturing and selling powered closure safety devices for certain gates.
        The
        Company acquired a license to use the core technology used in the powered
        closure safety devices in 1992.
 
 NOTE
        B -
        LIQUIDITY AND MANAGEMENT’S PLANS
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. For the year ended December 31, 2007 and
        since
        the date of inception, the Company has had net losses applicable to Common
        Shareholders of $5.1 million and $35.3 million, respectively. As of December
        31,
        2007, the Company has not emerged from the development stage and has negative
        working capital of $1.3 million. Since inception, the Company has financed
        its
        operations principally from the sale of equity securities and, to a lesser
        extent, debt, as the Company has not generated significant revenues from
        the
        sales of its products. Continuation of the Company as a going concern is
        dependent upon additional external funding and, ultimately, a substantial
        increase in sales volume and achievement of profitable operations. The Company
        has substantially reduced its operations because of a current lack of available
        external funding.  The Company intends to finance its future
        development activities and its working capital needs largely from additional
        debt and the issuance of equity securities with some additional funding from
        other traditional financing sources, including term notes and proceeds from
        licensing agreements until such time that funds provided by operations are
        sufficient to fund working capital requirements. There can be no assurance
        in
        that such financing will be available at acceptable terms, if at all. The
        financial statements do not include any adjustments that might result from
        the
        outcome of this uncertainty.   Continuation of the company as a
        going concern is dependent upon additional external funding and, ultimately,
        a
        substantial increase in sales volume and achievement of profitable
        operations.
  NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use
        of
        Estimates
 
 In
        preparing the financial statements in conformity with accounting principles
        generally accepted in the United States of America, management makes estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosures of contingent assets and liabilities at the date of the financial
        statements, as well as the reported amounts of revenues and expense during
        the
        reporting period. Actual results could differ from those
        estimates.
  F-8
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 **Cash
        and Cash
        Equivalents**
 
 The
        Company considers all highly liquid investments with a maturity of three
        months
        or less when purchased to be cash equivalents. The Company maintains its
        cash
        and cash equivalents at a major commercial bank. Such amounts are occasionally
        in excess of the maximum federally insured amounts.
 
 
 
 **Accounts
        Receivable, Major Customer Information and Export Sales**
 
 Accounts
        receivable are due primarily from companies in the gate manufacturing industry
        located throughout the United States and the United Kingdom. Credit is extended
        based on an evaluation of the customers’ financial condition and, generally,
        collateral is not required. Account balances are evaluated for collectibility
        based on the condition of the customers’ credit including repayment history and
        trends and relative economic and business conditions. Bad debts have not
        been
        significant.  During 2006, Magnetic Automation Corp. was our largest
        customer, comprising approximately 11% of our product revenues. During 2007,
        Magnetic Automation Corp. was again our largest customer, comprising
        approximately 29% of our product revenues.
 
 **Inventories**
 
 Inventories
        are stated at the lower of cost or market. Cost is determined using a method
        with approximates the first-in, first-out method.
 
 **Furniture,
        Fixtures and Equipment**
 
 Furniture,
        fixtures, and equipment are stated at cost and are depreciated on a
        straight-line basis over their estimated useful lives, principally five years.
        Leasehold improvements are amortized over the term of the lease or the estimated
        useful lives, whichever is shorter.   Depreciation expense was
        $15,621 and $2,933for 2006and 2007 respectively.
 
 **Patent**
 
 The
        patent for the Company’s underlying technology was amortized on a straight-line
        method over 10 years, which represented the remaining useful life of the
        patent.
        At December 31, 2003, the Company recorded an impairment charge of $5,517,808
        that was included in the statement of operations to reflect the fair value
        as
        determined by the Company’s management. The 2003 patent impairment resulted
        principally from perceived shifts in markets and our approach to such markets
        requiring more reliance on our patents applied for and less on the original
        patent.
 
 At
        December 31, 2007 the remaining balance of the deferred patent costs totaling
        $3,547,659 was determined to be impaired and written off (See Note C –
Impairment of Long-Lived Assets.)
  **Revenue**
 
 Product
        sales under fixed price arrangements are recognized as revenue upon shipment
        of
        product (when title transfers to the purchaser) and collectability is assured.
        Other operating revenues relate to services and are recorded as
        earned.
 
 **Licensing
        agreement**
 
 In
        July
        2002 Invisa entered into an Original and Independent Distribution License
        Agreement with Rytec Corporation (the Agreement) and received $300,000 cash
        representing an advance on the first 3000 units purchased by Rytec. In February
        2005, because of extended development efforts by Invisa, the Agreement was
        revised to recharacterize the $300,000 deposit as compensation to the Company
        for engineering expenditures and efforts expended by Invisa during 2005.
        Price
        reductions reflected in the original Agreement were also
        discontinued.
  F-9
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 **Shipping
        costs**
 
 Shipping
        and handling costs are included in cost of sales in the accompanying statements
        of operations.
 
 **Research
        and Development Costs**
 
 Research
        and development costs consist of direct costs that are associated with the
        development of the Company’s technology. These costs are expensed as
        incurred.
 
 **Advertising
        Costs**
 
 The
        Company’s policy is to expense advertising costs as incurred.
 
 **Warranty
        Costs**
 
 The
        Company warrants its products for ninety days. Estimated warranty costs are
        recognized in the period product is shipped. However, there have been no
        significant warranty costs incurred through December 31, 2007, nor are any
        significant amounts expected to occur subsequently. Accordingly, no warranty
        liability has been recognized for any period presented.
 
 **Income
        Taxes**
 
 Deferred
        income tax assets and liabilities are computed annually for differences between
        the financial statements and income tax bases of assets and liabilities that
        will result in taxable or deductible amounts in the future, based on enacted
        tax
        laws and rates applicable to the periods in which the differences are expected
        to affect taxable income. Valuation allowances are established when necessary
        to
        reduce deferred tax assets to the amount expected to be realized.
 
 **Financial
        Instruments**
 
 The
        Company’s financial instruments include cash and cash equivalents, accounts
        receivable, accounts payable and due to stockholders. The carrying amounts
        of
        these financial instruments approximate their fair value, due to the short-term
        nature of these items and the use of market rates of interest.
 
 **Derivative
        Financial Instruments**
 
 The
        Company generally does not use derivative financial instruments to hedge
        exposures to cash-flow risks or market-risk that may affect the fair values
        of
        its financial instruments. However, certain other financial instruments,
        such as
        warrants and embedded conversion features that are indexed to the Company’s
        common stock, are classified as liabilities when either (a) the holder possesses
        rights to net cash settlement or (b) physical or net-share settlement is
        not
        within the control of the Company. In such instances, net-cash settlement
        is
        assumed for financial accounting and reporting, even when the terms of the
        underlying contracts do not provide for net-cash settlement. Such financial
        instruments are initially recorded at fair value and subsequently adjusted
        to
        fair value at the close of each reporting period.
 
  F-10
  **Impairment
        of Long-Lived Assets**
 
 The
        Company evaluates the recoverability of its long-lived assets or asset groups,
        including patents, annually; or whenever adverse events or changes in business
        climate indicate that the expected undiscounted future cash flows from the
        related asset may be less than previously anticipated. If the net book value
        of
        the related asset exceeds the undiscounted future cash flows of the asset,
        the
        carrying amount would be reduced to the present value of its expected future
        cash flows and an impairment loss would be recognized.
 
 The
        Company’s management performed a valuation of the patent in connection with its
        acquisition in February 2002. In doing this valuation we considered several
        factors, including the size of the total applicable safely market, our estimates
        of penetration into this market and a valuation. This market is large and
        growing, principally as a result of increased emphasis on safety by governmental
        agencies and others plus increased concerns for security, principally as
        a
        result of the September 11, 2001 terrorist event and all that has followed
        relative to terrorism.
 
 During
        the fourth quarter of 2003 the Company expensed $5,517,808 to reflect an
        impairment of its patent. Our original cost of the patent totaled $13,711,000
        which we paid in February 2002 and April 2003. The 2003 patent impairment
        resulted principally from the Company’s reduced forecast of expected discounted
        future cash flows associated with the licensing business model being pursued
        by
        the Company in 2003.
 
 The
        Company subsequently determined that the licensing business model was no
        longer
        suitable and the Company adopted a product sales model with potential customers
        including end-users, dealers, distributors and manufacturers.  While
        product sales have remained low and operating loses have continued, management
        continues to believe that the potential market for its existing technology
        is
        viable.  Management further believes that market viability was to some
        degree exhibited by the continued sales of our safety product for parking
        gates
        in 2007 notwithstanding the lack of formal sales effort, adequate financial
        resources or appropriate staffing.  In the recent nation-wide cash
        liquidity environment, our access to funding to finance a formal sales and
        marketing effort, finalize development of the contemplated additional products
        and launch their commercialization which we consider to be critical to our
        ability to recover the patent costs in the foreseeable future is
        uncertain.  This uncertainty has caused us to continue to review the
        likelihood of the short term recoverability of our deferred patent
        cost.  Because of our limited financing resources, our inability to
        obtain long-term financing, our belief that the capital markets may be further
        deteriorating for companies in positions similar to ours, and our continued
        uncertainty regarding access to additional long-term funding, coupled with
        our
        continuing low level of product sales, continuing operating losses, current
        reduced level of staffing and technical capability which cannot be increased
        without funding, we have concluded that recovery of the deferred patent cost
        over the foreseeable future is unlikely.  Additionally, the pledge of
        our patents as security for certain of our short-term notes creates additional
        uncertainty as we believe that such pledge might interfere with future efforts
        to sell a license, sell the patents or otherwise use the patents as a basis
        to
        obtain required financing.  As a result of our review, we have written
        off the remaining patent cost as of December 31, 2007 in the amount of
        $3,547,059.
 
 **Earnings
        per Common Share**
 
 Basic
        and
        diluted earnings per share are computed based on the weighted average number
        of
        Common Stock outstanding during the period. Common Stock equivalents are
        not
        considered in the calculation of diluted earnings per share for the periods
        presented because their effect would be anti-dilutive.
 
  F-11
  
 Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 
 New
        Accounting Pronouncements
  In
        September 2006, the FASB issued Statements of
        Financial Accounting Standards No. 157, *Fair Value Measurements*(“FAS
        157”). This Standard defines fair value, establishes a framework for measuring
        fair value in generally accepted accounting principles and expand disclosures
        about fair value measurements. FAS 157 is effective for financial statements
        issued for years beginning after November 15, 2007 and interim periods within
        those years. The adoption of FAS 157 is not expected to have a material impact
        on the Company’s financial position, results or operations or cash
        flows.  FASB Staff Position (FAS 157-2) *Effective Date of FASB
        Statement No. 157* delays the effective date of FAS 157 for nonfinancial
        assets and nonfinancial liabilities.
 
 The
        Financial Accounting Standards Board (“FASB”) has recently announced a new
        interpretation, FASB Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes” (FIN 48), which will be effective for years beginning after
        December 15, 2006. FIN 48 clarifies the accounting for uncertainty in income
        taxes recognized in a enterprise’s financial statements in accordance with FASB
        Statement No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a
        recognition threshold and measurement attribute for the financial statement
        and
        measurement of a tax position taken or expected to be taken in a tax return.
        FIN
        48 also provides guidance on derecognition , classification, interest and
        penalties, accounting in interim periods, disclosure and transition. The
        adoption of FIN 48 did not have any impact on the Company’s financial position,
        results of operations or cash flows in 2007.
 
 In
        February 2007, the Financial Accounting Standards Board issued FASB Statement
        No. 159, *The Fair Value Option for Financial Assets and Financial
        Liabilities*(FAS 159), which includes an amendment to FASB Statement No.
        115. The Statement permits entities to choose, at specific election dates,
        to
        measure eligible financial assets and financial liabilities at fair value
        (referred to as the “fair value option”) and report associated unrealized gains
        and losses in earnings. Statement 159 is effective for years beginning after
        November 15, 2007. As of December 31, 2006 the Company has not determined
        the
        effect that the fair value option, if elected, will have on the financial
        position or results of operations.
 
  F-12
  
 Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        D -
        INVENTORIES
 
 
 Inventories
        consist of the following at December 31, 2007:
 
 Finished
                  goods
              
              $
              1,879Raw
                  materials
              
              
              18,799$
              20,678
 NOTE
        E -
        ACCRUED EXPENSES
 
 Accrued
        expenses consist of the following at December 31, 2007
 
 Interest
                  Expense
              
              $
              34,881Derivative
                  liability
              
              
              15,000Accrued
                  compensation, severance and related taxes
              
              
              156,045$
              205,926
 
 NOTE
        F -
        LOSS PER SHARE
 
 The
        following table sets forth the computation of basic and diluted net loss
        per
        share:
 
 **December
                  31,****2006**
              
              **2007**Numerator:Net
                  loss applicable to Common Stockholders
              
              $
              (2,400,949
              )
              $
              (5,085,695
              )Denominator:For
                  basic loss per share - weighted average shares
              
              
              24,529,553
              
              
              25,355,659Effect
                  of dilutive securities - stock options
              
              
              -----
              
              
              -----For
                  diluted loss per share
              
              
              24,529,553
              
              
              25,355,659Net
                  loss per share - applicable to Common Stockholders basic and
                  diluted
              
              $
              (0.10
              )
              $
              (.20
              )
 
 Options
        and warrants to purchase 14,536,042 and 12,989,167 shares of Common Stock
        as of
        December 31, 2006 and 2007, respectively, are not considered in the calculation
        of diluted loss per share because the effect would be
        anti-dilutive.  At December 31, 2007 the preferred stock was
        convertible into 12,733,333 shares of common stock, which has also not been
        considered in the calculation of diluted loss per share since the effect
        would
        be anti-dilutive.
 
  F-13
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        G -
        COMMON AND PREFERRED STOCK
 
 In
        September 2004, the Company issued 22,000 shares of Series A Convertible
        Preferred Stock in the face amount of $2,200,000 for $1,937,000 (net of $263,000
        transaction expenses) which was paid in the respective amounts of $1,158,200
        and
        $778,800 at closing. Additionally, the transaction included:
 
 ·
              Issuance
                  of Detachable Warrants to acquire up to 1,500,000 shares of the
                  Company’s
                  Common Stock at $1.00 per share. The Warrants expire on August
                  16,
                  2007.  The terms of these Warrants were revised in August 2007
                  to extend the expiration date to August
                  2010.
 
 ·
              In
                  addition to the transaction costs referred to above, the Company
                  granted
                  162,500 shares of Common Stock and Detachable Warrants to acquire
                  up to
                  162,500 shares of the Company’s Common Stock at $1.00 per share to a
                  broker. The term of the Warrants is three
                  years.
 
 ·
              The
                  Preferred Stock is non-voting, entitled to dividends only when,
                  or if,
                  declared by the Board of Directors and has preference over the
                  Common
                  Stock in the event of the Company’s liquidation. The Preferred Stock is
                  convertible into Common Stock at the option of the holder. The
                  conversion
                  price is equal to 80% of the market price at the time of conversion,
                  subject to a floor of $0.50 per share and a ceiling of $1.17 per
                  share.
                  During 2005, the floor was modified to $0.12 per share as an inducement
                  to
                  execute the Series B Convertible Preferred Stock transaction discussed
                  below.
 
 The
        Company accounted for the host instrument as equity under the guidance of
        SFAS
        No. 150, *Accounting for Certain Financial Instruments with
        Characteristics of both Liabilities and Equity,* and under provisions of
        EITF 00-19, *Accounting for Derivative Financial Instruments Indexed to,
        and Potentially Settled in, a Company’s Own Stock,* and accounted for
        both the beneficial conversion feature and the warrants as equity as
        well.
 
 In
        August
        2005, the Company issued 10,000 shares of Series B Convertible Preferred
        Stock
        in the face amount of $1,000,000 for $878,000 (net of $122,000 transaction
        expenses) which was paid in the respective amounts of $378,000 and $500,000
        at
        closing. Additionally, the transaction included:
 
 ·
              Detachable
                  warrants to acquire up to 2,500,000 shares of the Company’s Common Stock
                  at $0.30 per share. The warrants expire on August 31, 2010 and
                  are subject
                  to call by the Company upon the Common Stock trading at a price
                  of $0.60,
                  a minimum trading volume of 60,000 shares for 20 consecutive days
                  and the
                  registration statement being effective.·
              In
                  addition to the transaction costs referred to above, the Company
                  granted
                  warrants to acquire up to 666,667 shares of the Company’s Common Stock at
                  $0.16 per share to a broker. The term of the warrants is three
                  years.·
              The
                  Preferred Stock is non-voting and is entitled to receive dividends
                  at an
                  annual rate equal to the lower of the Prime Rate plus 3.5% or 9%.
                  The
                  dividend may either be paid in cash or registered shares of the
                  Company’s
                  Common Stock, subject to certain limitations. The Preferred Stock
                  is
                  convertible into Common Stock at the option of the holder. The
                  conversion
                  price is equal to 80% of the market price at the time of conversion,
                  subject to a floor of $0.12 per share and a ceiling of $0.275 per
                  share.
  The
        Series B Preferred Stock and Series A Preferred Stock as amended permit the
        Company, in its discretion, to redeem part or all of the outstanding Preferred
        A
        and B Stock at 125 percent of par value per share until August 2007 and
        thereafter at 150 percent of par value, plus any accrued dividends.
 
 The
        Company accounted for the host instrument as equity under the guidance of
        SFAS No. 150, *Accounting for Certain Financial Instruments with
        Characteristics of both Liabilities and Equity,* and under provisions of
        EITF 00-19, *Accounting for Derivative Financial Instruments Indexed to,
        and Potentially Settled in, a Company’s Own Stock,* and accounted
        for both the beneficial conversion feature and the warrants as equity as
        well.
 
  F-14
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
   NOTE
        G -
        COMMON AND PREFERRED STOCK - Continued
 
 In
        2006
        the Company issued 400,000 shares of common stock for cash of $44,000 and
        issued
        316,670 shares of common stock in connection with the exercise of options
        for
        cash of $24,250. The Company also issued 981,800 shares of common stock for
        services totaling $133,634.
 
 In
        2006
        Warrants were issued to financial advisors that included registration right
        obligations that the Company has determined are not within its control. The
        warrants were fair valued on the date of grant and secured as a liability.
        The
        change in fair value at each reporting date is recorded as an expense in
        the
        accompanying statement of operations. The derivative liability at December
        31,
        2007 is included in accrued expenses in the accompanying balance
        sheet.
 
 In
        2007,
        the Company redeemed 431,612 shares of the Company’s issued and outstanding
        common stock in cancellation of  an aggregate of $298,904 in stock
        subscription notes receivable.
 
 In
        2007,  20 million shares of the Company’s authorized but unissued
        common stock were delivered by the Company to an escrow agent to hold as
        security for certain short term note obligations of the Company. The 20 million
        shares are not be treated as outstanding and will only be considered as being
        issued and outstanding if and when the shares are released by the escrow
        agent
        and delivered to the lender as a result of a default under the promissory
        notes
        and related security agreement.
 
 NOTE
        H-
        STOCK OPTION AND WARRANT ACTIVITY
 
 The
        Company has five stock-based compensation plans which provides for the granting
        of options to purchase the Company’s Common Stock to employees, directors,
        consultants and advisors. The options granted are subject to a vesting schedule
        as set forth in each individual option agreement.
 
 **Maximum
                  Shares****of
                  Common Stock****Plan**
              **which
                  can be issued**2000
                  Plan
              1,200,0002002
                  Plan
              1,500,0002003
                  Plan
              1,500,0002003A
                  Plan
              3,500,0002006
                  Plan
              2,500,00010,200,000
 
  F-15
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        H-
        STOCK OPTION AND WARRANT ACTIVITY (Continued)
 
 Activity
        with respect to the stock-based compensation plans is summarized as
        follows:
 Shares
              
              Range
                  of Exercise
                Prices
              
              Weighted-average
                  Option price per shareOutstanding
                  at December 31, 2005
              
              
              6,971,834
              
              
              
              
              $
              0.85Options granted
              
              
              1,300,000
              
              $
              0.15-0.26
              
              $
              0.23Options exercised
              
              
              (50,000
              )
              $
              0.09
              
              $
              0.09Options canceled/expired
              
              
              (1,221,834
              )
              $
              0.00
              
              $
              1.39Outstanding
                  at December 31, 2006
              
              
              7,000,000
              
              
              
              
              
              0.65Options
                  Granted
              
              
              800,000
              
              
              0.04
              
              
              0.04Options
                canceled/expired
              
              
              1,960,000
              
              
              0.26-3.85
              
              
              0.26Outstanding
                at December 31, 2007
              
              
              5,840,000
              
              
              
              
              
              0.11Options
                exercisable at December 31, 2007
              
              
              5,640,000
              
              
              
              
              
              0.11
 
 Aggregate
        intrinsic value of options outstanding at December 31, 2007 is $0.00 as market
        value was less than option price.
 
 The
        total
        intrinsic value of options exercised during 2006 and 2007 was $765 and $0.00,
        respectively.
 
 Activity
          with respect to warrants for common stock is as follows:
  Shares
              
              Range
                  of Exercise
                Prices
              
              Weighted-average
                  Option price per shareOutstanding
                  at December 31, 2005
              
              
              6,102,712
              
              
              
              
              $
              0.74Warrants
                  granted
              
              
              2,150,000
              
              $
              0.010-0.70
              
              $
              0.42Warrants
                  exercised
              
              
              (266,670
              )
              $
              0.08
              
              $
              0.08Warrants
                  canceled/expired
              
              
              (
                  450,000
              )
              $
              1.00-$4.50
              
              $
              1.61Outstanding
                  at December 31, 2006
              
              
              7,536,042
              
              
              
              
              
              0.62Warrants
                  canceled/expired
              
              
              (386,875
              )
              
              0.10-5.50
              
              
              0.68Outstanding
                  at December 31, 2007
              
              
              7,149,167
              
              
              
              
              
              0.62Warrants
                  exercisable
              
              
              7,149,167
              
              
              
              
              
              0.62
  F-16
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE
        H-
        STOCK OPTION AND WARRANT ACTIVITY (Continued)
 
 The
        fair
        value of the options granted in 2007 and 2006 was estimated on the date of
        grant
        using the Black-Scholes option-pricing model with the following weighted
        average
        assumptions for the above years:
 
 **2006**
              **2007**Dividend
                  yield
              0.0%
              0.00%Expected
                  volatility
              209%-228%
              161%-228%Risk
                  free interest rates
              2.00%
              4.04%-5.03%Expected
                  lives
              3
                        years
              3
                  -
                  10 years
 
 The
        weighted-average grant date fair value for options granted during 2006 and
        2007
        was approximately $0.12 and $0.04, respectively.
 
 As
        of
        December 31, 2007, there was unrecognized compensation cost related to
        non-vested share-based compensation arrangements granted under the
        Plans.
 
 NOTE
        I -
        COMMITMENT
 
 Operating
        Leases
 
 For
        the
        previous two years, the Company has occupied space in a building in Sarasota,
        Florida under a lease with a five year term expiring December, 2009 and annual
        lease payments of approximately $50,000. In the second quarter of 2007, the
        Company has assigned this lease to a new tenant and moved to space with less
        square footage (1,500 square feet) and occupancy costs in the same business
        center which is occupied on a month to month basis.  Rent expense for the
        years ended December 31, 2006 and 2005 was $52,625 and $33,294,
        respectively.
  NOTE
        J -
        DUE TO STOCKHOLDERS AND OFFICERS
 
 Due
        to
        stockholders and officers consists of the following at December 31,
        2007:
 
 M.A.G.
                    Capital, LLC and Affiliates1
                
                $
                128,337Friday
                    Harbour, LLC2
                
                
                39,091Stephen
                    A. Michael3
                
                
                157,000John
                    E. Scates4
                
                
                10,000Gregory
                    J. Newell4
                
                
                10,000Edmund
                    C. King5
                
                
                20,123Total
                
                $
                364,551
 
  (1)
              During
                  2006 the stockholders advanced $128,337 to the Company.  It was
                  due May 15, 2008 and bears 10% interest which totals $15,717 and
                  is
                  included in Accrued expense in the accompanying balance
                  sheet.  Interest expense related to this advance was $2,884 and
                  $12,883 in 2006 and 2007,
                  respectively.
 (2)
              During
                  2005, 2006 and 2007 a stockholder advanced $110,900 (under an agreement
                  whereby up to $150,000 could be advanced) to the Company.  The
                  advance can be converted into shares of common stock at a conversion
                  price
                  of $0.075.  During 2007 $71,810 was forgiven by the stockholder
                  and has been recorded as a capital contribution.  The note is
                  currently due and bears 10% interest which totals $19,164 and is
                  included
                  in Accrued expense in the accompanying balance sheet.  Interest
                  expense related to this advance was $8,758 and $10,406 in 2006
                  and 2007,
                  respectively.
 (3)
              Relates
                  to accrued compensation from 2004.  The Company has agreed to
                  pay certain tax liabilities, if any, which may be incurred in connection
                  with this transaction.
 (4)
              Unpaid
                  director fees.
 (5)
              Advances
                  made to the Company and currently
                  due.
 
 During
        2007 a stockholder forgave $150,000 related to compensation from 2004 that
        had
        previously been accrued.  This transaction has been recorded as a
        capital contribution.
  NOTE
        K -
        LINES OF CREDIT
 
 The
        Company has three lines of credit with a private investor.  The credit
        facilities allow for advances up to $250,000, bear interest at 10% and have
        a
        first security interest in all of the Company’s assets.  Additionally
        the credit facilities are secured by a security interest in 26,666,666 shares
        of
        the Company’s common stock which are held in escrow.  Because the
        credit facilities are not in default the shares are not treated as issued
        and
        outstanding.  At December 31, 2007, $231,300 is outstanding and due
        May 15, 2008.
 
 
 NOTE L
        - INCOME TAXES
 
 Deferred
        taxes are recorded for all the tax effects of existing temporary differences
        in
        the Company’s assets and liabilities for income tax and financial reporting
        purposes. Due to the valuation allowance for deferred tax assets, as noted
        below, there was no net deferred tax benefit or expense for the years ended
        December 31, 2006 or 2007.
 
 Reconciliation
        of the federal statutory income tax rate of 34.0% to the effective income
        tax
        rate is as follows at December 31:
 **2006**
              
              **2007**Federal
                  statutory income tax rate
              
              
              (34.0)
              %
              
              (34.0)
              %State
                  income taxes, net of federal tax benefit
              
              
              (
                  3.5)
              %
              
              (
                  3.5)
              %Deferred
                  tax asset valuation allowance
              
              
              37.5
              %
              
              37.5
              %-0-
              %
              
              -0-
              %
 
 Deferred
        tax asset and liability components were as follows:
 **2006**
              
              **2007**Deferred
                  tax assets:Compensation
                  payable
              
              $
              16,527
              
              $
              46,939Net
                  operating loss
              
              
              6,186,778
              
              
              6,445,630Patent
              
              
              ----
              
              
              569,595Other
              
              
              253,749
              
              
              305,0746,457,054
              
              
              7,367,238Patent
              
              
              1,056,054
              
              
              ----Basis
                  difference in assets
              
              
              2,287
              
              
              1,204Net
                  deferred tax assets
              
              
              5,398,713
              
              
              7,366,034Less
                  valuation allowance
              
              
              (5,398,713
              )
              
              (7,366,034
              )Net
                  deferred tax asset
              
              $
              -----
              
              $
              ----
  SFAS
        No.
        109 *Accounting for Income Taxes* requires that a deferred tax asset be
        reduced by a valuation allowance if, based on the weight of available evidence
        it is more likely than not (a likelihood of more than 50 percent) that some
        portion or all of the deferred tax assets will not be realized. The valuation
        allowance should be sufficient to reduce the deferred tax asset to the amount
        that is more likely than not to be realized. As a result the Company recorded
        a
        valuation allowance with respect to all the Company’s deferred tax
        assets.
  F-17
  Invisa,
        Inc.
 (A
        Development Stage Enterprise)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOTE L
        - INCOME TAXES- CONTINUED
 
 The
        Company has a federal net operating loss carryforward of approximately $16.9
        million as of December 31, 2007. Under Section 382 and 383 of the Internal
        Revenue Code, if an ownership change occurs with respect to a “loss
        corporation”, as defined, there are annual limitations on the amount of the net
        operating loss and other deductions which are available to the Company. The
        Company has not determined the impact of these limitations at this
        time.
 
 NOTE M
        - SUBSEQUENT EVENTS
  Subsequent
        to December 31, 2007, the Company entered into a promissory note permitting
        the
        Company to borrow up to an additional $150,000 at an interest rate of 10%
        per
        annum and maturing on May 31, 2008. The promissory note is secured by all
        of the
        Company’s assets plus a security interest in 20 million shares of new
        common stock of the Company which the Company is required to deposit into
        an
        escrow arrangement. The shares delivered to the escrow agent as security
        for the
        promissory note are not being treated as outstanding and will only be considered
        as being issued and outstanding if and when the shares are released by the
        escrow agent and delivered to the lender as a result of a default under the
        promissory note. In March 2008, Mr. Michael exchanged amounts due him (see
        Note J) for 1,308,333 shares of Invisa common stock.
  F-18
 **EXHIBIT
        31.1**
 **CERTIFICATIONS**
 
 I,
        Edmund
        C. King, certify that:
 
 1.
            I have reviewed this Annual Report on Form 10-KSB of Invisa,
        Inc.;
 
 2.
             Based on my knowledge, this report does not contain any
        untrue statement of a material fact or omit to state a material fact necessary
        to make the statements made, in light of the circumstances under which such
        statements were made, not misleading with respect to the period covered by
        this
        annual report;
 
 3.
             Based on my knowledge, the financial statements, and other
        financial information included in this report, fairly present in all material
        respects the financial condition, results of operations and cash flows of
        the
        small business issuer as of and for the periods presented in this
        report;
 
 4.
             The small business issuer’s other certifying officer(s)
        and I are responsible for establishing and maintaining disclosure controls
        and
        procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
        internal control over financial reporting (as defined in Exchange Act Rules
        13a-15(f) and 15d-15(f)) for the small business issuer and have:
 
 (a)   Designed
        such disclosure controls and procedures, or caused such disclosure controls
        and
        procedures to be designed under our supervision, to ensure that material
        information relating to the small business issuer, including its subsidiaries,
        is made known to us by others within those entities, particularly during
        the
        period in which this report is being prepared;
 
 (b)  Designed
        such internal control over financial reporting, or caused such internal control
        over financial reporting to be designed under our supervision, to provide
        reasonable assurance regarding the reliability of financial reporting and
        the
        preparation of financial statements for external purposes in accordance with
        generally accepted accounting principles;
 
 (c)  Evaluated
        the effectiveness of the small business issuer’s disclosure controls and
        procedures and presented in this report our conclusions about the effectiveness
        of the disclosure controls and procedures as of the end of the period covered
        by
        this report based on such evaluation; and
 
 (d)  Disclosed
        in this report any change in the small business issuer’s internal control over
        financial reporting that occurred during the small business issuer’s most recent
        quarter (the small business issuer’s fourth quarter in the case of an annual
        report) that has materially affected, or is reasonably likely to materially
        affect, the small business issuer’s internal control over financial
        reporting.
 
 5.
           The small business issuer’s other certifying officer(s) and I have
        disclosed, based on our most recent evaluation of internal control over
        financial reporting, to the small business issuer’s auditors and the audit
        committee of the small business issuer’s board of directors (or persons
        performing the equivalent functions):
 
 (a)
          All significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which are reasonably
        likely to adversely affect the small business issuer’s ability to record,
        process, summarize and report financial information; and
 
 (b)
           Any fraud, whether or not material, that involves management or
        other employees who have a significant role in the small business issuer’s
        internal control over financial reporting; and
 
 
 Dated:  April
                  14, 2008
              
              /s/*Edmund
                  C. King*Acting
                  President and Acting Chief Operating
                  Officer
 
  F-19
  
 **EXHIBIT
        31.2**
 **CERTIFICATIONS**
 
 I,
        Edmund
        C. King, Chief Financial Officer, certify that:
 
 1.
            I have reviewed this Annual Report on Form 10-KSB of Invisa,
        Inc.;
 
 2.
             Based on my knowledge, this report does not contain any
        untrue statement of a material fact or omit to state a material fact necessary
        to make the statements made, in light of the circumstances under which such
        statements were made, not misleading with respect to the period covered by
        this
        annual report;
 
 3.
           Based on my knowledge, the financial
        statements, and other financial information included in this report, fairly
        present in all material respects the financial condition, results of operations
        and cash flows of the small business issuer as of and for the periods presented
        in this report;
 
 4.
             The small business issuer’s other certifying officer(s)
        and I are responsible for establishing and maintaining disclosure controls
        and
        procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
        internal control over financial reporting (as defined in Exchange Act Rules
        13a-15(f) and 15d-15(f)) for the small business issuer and have:
 
 (a)   Designed
        such disclosure controls and procedures, or caused such disclosure controls
        and
        procedures to be designed under our supervision, to ensure that material
        information relating to the small business issuer, including its subsidiaries,
        is made known to us by others within those entities, particularly during
        the
        period in which this report is being prepared;
 
 (b)  Designed
        such internal control over financial reporting, or caused such internal control
        over financial reporting to be designed under our supervision, to provide
        reasonable assurance regarding the reliability of financial reporting and
        the
        preparation of financial statements for external purposes in accordance with
        generally accepted accounting principles;
 
 (c)  Evaluated
        the effectiveness of the small business issuer’s disclosure controls and
        procedures and presented in this report our conclusions about the effectiveness
        of the disclosure controls and procedures as of the end of the period covered
        by
        this report based on such evaluation; and
 
 (d)  Disclosed
        in this report any change in the small business issuer’s internal control over
        financial reporting that occurred during the small business issuer’s most recent
        quarter (the small business issuer’s fourth quarter in the case of an annual
        report) that has materially affected, or is reasonably likely to materially
        affect, the small business issuer’s internal control over financial
        reporting.
 
 5.
           The small business issuer’s other certifying officer(s) and I have
        disclosed, based on our most recent evaluation of internal control over
        financial reporting, to the small business issuer’s auditors and the audit
        committee of the small business issuer’s board of directors (or persons
        performing the equivalent functions):
 
 (a)
          All significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which are reasonably
        likely to adversely affect the small business issuer’s ability to record,
        process, summarize and report financial information; and
 
 (b)
           Any fraud, whether or not material, that involves management or
        other employees who have a significant role in the small business issuer’s
        internal control over financial reporting; and
 Dated:  April
                  14, 2008
              
              /s/
                  *Edmund C. King*
 **Edmund
        C. King, Chief Financial Officer**
 
   F-20
  **EXHIBIT
        32.1**
 
 **INVISA,
        INC.**
 **CERTIFICATION
        PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
        THE
        SARBANES-OXLEY ACT OF 2002**
 
 
 In
        connection with the Annual Report of Invisa, Inc. (the “Company”) on Form 10-KSB
        for the period ending December 31, 2006 as filed with the Securities and
        Exchange Commission on the date hereof (the “Report”), I, Edmund C. King, Acting
        President and Acting Chief Operating Officer of the Company, certify, pursuant
        to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002, that to my knowledge:
 
 1.    The
        Report fully complies with the requirements of section 13(a) or 15(d) of
        the
        Securities Exchange Act of 1934; and
 
 2.    The
        information contained in the Report fairly presents, in all material respects,
        the financial condition and results of operations of the Company.
 
 
 */s/*Edmund
        C. King
 ________________________________
 Edmund
        C.
        King
 Acting
        President and Acting Chief Operating Officer
 April
        14, 2008
  F-21
 **EXHIBIT
        32.2**
 
 **INVISA,
        INC.**
 **CERTIFICATION
        PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
        THE
        SARBANES-OXLEY ACT OF 2002**
 
 
 In
        connection with the Annual Report of Invisa, Inc. (the “Company”) on Form 10-KSB
        for the period ending December 31, 2007 as filed with the Securities and
        Exchange Commission on the date hereof (the “Report”), I, Edmund C. King, Chief
        Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350,
        as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to
        my
        knowledge:
 
 1.    The
        Report fully complies with the requirements of section 13(a) or 15(d) of
        the
        Securities Exchange Act of 1934; and
 
 2.    The
        information contained in the Report fairly presents, in all material respects,
        the financial condition and result of operations of the Company.
 
 
 */s/
        Edmund C. King*
 __________________________________
 Edmund
        C.
        King
 Chief
        Financial Officer
 April
        14, 2008
  F-22