made no determination regarding a maximum or minimum number of shares of common stock which he may hold at any point in time.

(b)

Mr. August does not have any present plans or proposals which would result in: an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries; a sale or transfer of a material amount of the assets of the Company or any of its subsidiaries; any change in the present Board of Directors of management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; any material change in the present capitalization or dividend policy of the Company; any other material change in the Company’s business or corporate structure; any changes in the Company’s charter or bylaws or other actions that may impede the acquisition of control of the Company by any person; causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association; causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or any other action similar to any of those enumerated above.

Item 5.

Interest in Securities of the Issuer

(a)

Mr. August beneficially owns 368,900 shares of the Company’s common stock, which represents beneficial ownership of approximately 6.3% of the Company’s outstanding common stock.  This amount includes 260,000 shares of common stock issuable upon the exercise of options which are currently exercisable at prices ranging from $1.20 to $6.35.  This amount excludes 3,000 shares of common stock held by Mr. August’s wife, over which she exercises exclusive investment and dispositive authority.

(b)

Mr. August has sole power to vote and dispose of the shares of common stock, including the common stock issuable upon the exercise of options.

(c)

Mr. August effected the following transactions during the past sixty days:

On February 9, 2007, Mr. August exercised options to purchase 85,000 shares of common stock, at an exercise price of $2.59 per share.  On February 15, 2007, Mr. August exercised options to purchase 40,000 shares of common stock, at an exercise price of $2.59 per share.  On February 20, 2007, Mr. August sold 200,000 shares of common stock that he had acquired upon the exercise of options in a private transaction at a price of $6.50 per share.

(d)

Except as disclosed herein, no person other than Mr. August has any voting or dispositive power over the securities reported upon or the right to receive or direct the payment of any dividends or proceeds form the sale of such securities.