U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2002
--------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number: 1-15087
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I.D. SYSTEMS, INC.
------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 22-3270799
-------- ----------
(State or other jurisdiction or (I.R.S. Employer Identification No)
incorporation or organization)
ONE UNIVERSITY PLAZA, HACKENSACK, NEW JERSEY 07601
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(201) 670-9000
--------------
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
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 issuer was required to file such reports, and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the Registrant's Common Stock, $0.01 par
value, as of the close of business on November 1, 2002 was 6,798,722.
A
INDEX
I.D. SYSTEMS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS. Page
----
Condensed Balance Sheets as of December 31, 2001
and September 30, 2002 (unaudited) 1
Condensed Statements of Operations (unaudited)
for the three months and nine months ended September 30, 2001 and 2002 2
Condensed Statements of Cash Flows (unaudited)
for the nine months ended September 30, 2001 and 2002 3
Notes to Condensed Financial Statements 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5
ITEM 3. CONTROLS AND PROCEDURES 8
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
Signatures 9
B
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
I.D. SYSTEMS, INC.
CONDENSED BALANCE SHEETS
DECEMBER 31,2001 SEPTEMBER 30,2002
(UNAUDITED)
----------------- -----------------
ASSETS
Cash and cash equivalents $ 2,426,000 $ 3,771,000
Investments 3,039,000 2,792,000
Accounts receivable 234,000 1,411,000
Inventory 844,000 1,167,000
Investment in sales type leases 158,000
Prepaid expenses and other current assets 111,000 215,000
----------------- -----------------
Total current assets 6,654,000 9,514,000
Investments 1,806,000
Fixed assets, net 540,000 708,000
Investment in sales type leases 547,000
Other assets 117,000 151,000
----------------- -----------------
$ 7,311,000 $ 12,726,000
================= =================
LIABILITIES
Accounts payable and accrued expenses $ 574,000 $ 605,000
Line of credit 137,000
Deferred revenue 117,000
Capital lease obligations 10,000 1,000
Other current liabilities 100,000 350,000
----------------- -----------------
Total current liabilities 684,000 1,210,000
Deferred rent 42,000 60,000
Other liabilities 100,000 50,000
----------------- -----------------
826,000 1,320,000
----------------- -----------------
STOCKHOLDERS' EQUITY
Preferred Stock; authorized 5,000,000 shares,
$0.01 par value; none issued
Common Stock, authorized 15,000,000 shares,
$0.01 par value; issued and outstanding
5,866,000 shares and 6,799,000 shares, respectively 59,000 68,000
Additional paid in capital 15,739,000 22,042,000
Treasury stock; 40,178 shares at cost (113,000) (113,000)
Accumulated deficit (9,200,000) (10,591,000)
----------------- -----------------
6,485,000 11,406,000
----------------- -----------------
$ 7,311,000 $ 12,726,000
================= =================
See accompanying notes
1
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2002 2001 2002
------------ -------------- ------------- -------------
Revenues $ 188,000 $ 1,532,000 $ 612,000 $ 3,541,000
Cost of Revenues 100,000 617,000 345,000 1,585,000
------------ -------------- ------------- -------------
Gross Profit 88,000 915,000 267,000 1,956,000
Selling, general and administrative expenses 860,000 1,104,000 2,396,000 2,801,000
Research and development expenses 185,000 261,000 772,000 812,000
------------ -------------- ------------- -------------
Loss from operations (957,000) (450,000) (2,901,000) (1,657,000)
Interest income 69,000 123,000 266,000 269,000
Interest expense (1,000) (2,000) (3,000) (3,000)
------------ -------------- ------------- -------------
NET LOSS $ (889,000) $ (329,000) $ (2,638,000) $ (1,391,000)
============ ============== ============= =============
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.15) $ (0.05) $ (0.45) $ (0.21)
============ ============== ============= =============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED LOSS PER
SHARE 5,845,000 6,799,000 5,834,000 6,682,000
============ ============== ============= =============
See accompanying notes
2
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
2001 2002
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,638,000) $(1,391,000)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization 120,000 148,000
Deferred rent expense 18,000 18,000
Deferred revenue 117,000
Changes in:
Accounts receivable 5,000 (1,177,000)
Unbilled receivables 349,000
Inventory (177,000) (323,000)
Prepaid expenses and other assets 35,000 (138,000)
Investment in sales type leases (705,000)
Other liabilities 200,000
Income taxes receivable 111,000
Income taxes payable (8,000)
Accounts payable and accrued expenses (366,000) 31,000
------------ -------------
Net cash used in operating activities (2,551,000) (3,220,000)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (7,000) (316,000)
Purchase of investments (8,747,000) (4,827,000)
Maturities of investments 8,729,000 3,364,000
Accrued interest receivable (130,000)
Amortization of (discount) premium on investments (59,000) 34,000
------------ -------------
Net cash used in investing activities (84,000) (1,875,000)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of lease obligations (11,000) (9,000)
Proceeds from exercise of stock options 31,000 169,000
Proceeds from line of credit 137,000
Proceeds from private placement 6,143,000
------------ -------------
Net cash provided by financing activities 20,000 6,440,000
------------ -------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (2,615,000) 1,345,000
Cash and cash equivalents - beginning of period 3,085,000 2,426,000
------------ -------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 470,000 $ 3,771,000
============ =============
See accompanying notes
3
I.D. SYSTEMS, INC.
Notes to Condensed Financial Statements
September 30, 2002
NOTE A - BASIS OF REPORTING
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, such
statements include all adjustments (consisting only of normal recurring items)
which are considered necessary for a fair presentation of the financial position
of I.D. Systems, Inc. (the "Company") as of September 30, 2002, the results of
its operations for the three-month and nine-month periods ended September 30,
2001 and 2002 and cash flows for the nine-month periods ended September 30, 2001
and 2002. The results of operations for the three - month and nine - month
periods ended September 30, 2002 are not necessarily indicative of the operating
results for the full year. It is suggested that these financial statements be
read in conjunction with the financial statements and related disclosures for
the year ended December 31, 2001 included in the Company's Annual Report.
NOTE B - NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic income (loss) per share is based on the weighted average number of common
shares outstanding during each period. Diluted income (loss) per share reflects
the potential dilution assuming common shares were issued upon the exercise of
outstanding options and warrants and the proceeds thereof were used to purchase
outstanding common shares. For the three-month and nine-month periods ended
September 30, 2002 and 2001 the basic and diluted weighted average shares
outstanding are the same since the effect from the potential exercise of
outstanding stock options would have been anti-dilutive.
NOTE C - PRIVATE PLACEMENT
In January 2002, the Company sold 821,250 shares of common stock and received
net proceeds of approximately $6,143,000.
Warrants to purchase 107,125 shares of common stock were issued to the placement
agent and a finder. The warrants are exercisable for a period of five years,
commencing in January 2002, at a price of $9.58 per share.
NOTE D - SALES TYPE LEASES
During 2002 the Company began deriving revenues under leasing arrangements.
Such arrangements provide for monthly payments covering the product cost,
maintenance and interest. These arrangements meet the criteria to be accounted
for as sales-type leases pursuant to Statement of Financial Accounting Standards
No. 13, "Accounting for Leases". Accordingly, revenue for the product cost is
recognized when products are shipped, and if required by contract, implemented.
Upon the recognition of revenue, an asset is established for the "investment in
sales-type leases". Maintenance revenue and interest income are recognized
monthly over the lease term. The Company recognized $515,000 and $805,000 of
product revenues during the three-month and nine-months period ended September
30, 2002 pursuant to such arrangements.
NOTE E- LINE OF CREDIT
See accompanying notes
4
During 2002, the Company secured a working capital line of credit, with maximum
borrowings of $500,000. Interest is payable at the LIBOR Market Index Rate plus
1.75%. At September 30, 2002, the Company owed $137,000 under this line of
credit.
NOTE F- CONTINGENCY
In September 2002, the Company was notified by a non-core supplier that they
have been charging the wrong prices to the Company and that they are requesting
reimbursement in the amount of approximately $386,000. The Company is
evaluating the request and reviewing the legal merits with counsel. The Company
believes the outcome will not have a material adverse effect on its financial
position and results of operations. At September 30, 2002, the Company has
accrued $250,000 in connection with this matter, which is included in other
current liabilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the condensed financial
statements and notes thereto appearing elsewhere herein.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve a number of risks
and uncertainties. The following are among the factors that could cause actual
results to differ materially from the forward-looking statements: business
conditions and growth in the wireless tracking industries, general economic
conditions, lower than expected customer orders or variations in customer order
patterns, competitive factors including increased competition, changes in
product and service mix, and resource constraints encountered in developing new
products. The forward-looking statements regarding industry trends, product
development and liquidity and future business activities should be considered in
light of these factors.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
information expressed as a percentage of revenue:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2002 2001 2002
-------- ------- -------- --------
Revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of Revenues 53.2 40.3 56.4 44.8
-------- ------- -------- --------
Gross Profit 46.8 59.7 43.6 55.2
Selling, general and administrative expenses 457.4 72.1 391.5 79.1
Research and development expenses 98.4 17.0 126.1 22.9
-------- ------- -------- --------
Loss from operations (509.0) (29.4) (474.0) (46.8)
Net interest income 36.2 7.9 43.0 7.5
-------- ------- -------- --------
NET LOSS (472.8)% (21.5)% (431.0) % (39.3) %
-------- ------- -------- --------
5
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2001
REVENUES. Revenues were $1,532,000 in the three months ended September 30, 2002
as compared to $188,000 in the three months ended September 30, 2001. The
increase in revenues in the three-month period is due to customers beginning to
transition from successful pilot programs of the Company's fleet tracking and
management system to larger production-scale orders. On October 31, 2002, the
Company had order backlog of approximately $3,900,000.
COST OF REVENUES. Cost of revenues were $617,000 in the three months ended
September 30, 2002 as compared to $100,000 in the three months ended September
30, 2001. As a percentage of revenues, cost of revenues were 40.3% in the three
months ended September 30, 2002 as compared to 53.2% in the three months ended
September 30, 2001. This percentage decrease was primarily attributable to
certain fixed production costs incurred in 2001 and lower revenues in that year,
the sale of certain higher margin services during the three-month period ended
September 30, 2002 and the reduction in product cost during 2002. The Company
began fully outsourcing its production in 2002. Gross profit was $915,000 in
the three months ended September 30, 2002 compared to $88,000 in the three
months ended September 30, 2001. As a percentage of revenues, gross profit
increased to 59.7% in the three months ended September 30, 2002 from 46.8% in
the three months ended September 30, 2001.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $1,104,000 in the three months ended September 30,
2002 as compared to $860,000 in the three months ended September 30, 2001. This
increase was attributable to the charge of $250,000, resulting from the
notification received from a non-core supplier as disclosed in Note E to the
financial statements. As a percentage of revenues, selling, general and
administrative expenses decreased to 72.1% in the three months ended September
30, 2002 from 457.4% in the three months ended September 30, 2001.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses, which
relate to product improvement and cost reduction, were $261,000 in the three
months ended September 30, 2002 as compared to $185,000 in the three months,
ended September 30, 2001. As a percentage of revenues, research and development
expenses decreased to 17.0% in the three months ended September 30, 2002 from
98.4% in the three months ended September 30, 2001.
NET INTEREST INCOME AND EXPENSE.
Interest income was $123,000 in the three months ended September 30, 2002 as
compared to $69,000 in the three months ended September 30, 2001. This increase
was attributable to larger average cash, cash equivalents and short-term
investment balances in the three months ended September 30, 2002 as compared to
the three months ended September 30, 2001. In addition, the Company earned
interest income in connection with sales type lease arrangements in the three
months ended September 30, 2002.
Interest expense was $2,000 in the three months ended September 30, 2002 and
$1,000 in the three months ended September 30, 2001.
NET LOSS. Net loss was $329,000 in the three months ended September 30, 2002 as
compared to net loss of $889,000 in the three months ended September 30, 2001.
This was due primarily to the reasons described above.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001
REVENUES. Revenues were $3,541,000 in the nine months ended September 30, 2002
as compared to $612,000 in the nine months ended September 30, 2001. The
6
increase in revenues in the nine-month period is due to customers beginning to
transition from successful pilot programs of the Company's fleet tracking and
management system to larger production-scale orders. On October 31, 2002, the
Company had order backlog of approximately $3,900,000.
COST OF REVENUES. Cost of revenues were $1,585,000 in the nine months ended
September 30, 2002 as compared to $345,000 in the nine months ended September
30, 2001. As a percentage of revenues, cost of revenues were 44.8% in the nine
months ended September 30, 2002 as compared to 56.4% in the nine months ended
September 30, 2001. This percentage decrease was primarily attributable to
certain fixed production costs incurred in 2001 and lower revenues in that year,
the sale of certain higher margin services during the nine-month period ended
September 30, 2002 and the reduction in product cost in 2002. The Company began
fully outsourcing its production in 2002. Gross profit was $1,956,000 in the
nine months ended September 30, 2002 compared to $267,000 in the nine months
ended September 30, 2001. As a percentage of revenues, gross profit increased
to 55.2% in the nine months ended September 30, 2002 from 43.6% in the nine
months ended September 30, 2001.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $2,801,000 in the nine months ended September 30,
2002 as compared to $2,396,000 in the nine months ended September 30, 2001.
This increase was attributable to the charge of $250,000, resulting from the
notification received from a non-core supplier as disclosed in Note E to the
financial statements and increased payroll expenses associated with sales and
marketing. As a percentage of revenues, selling, general and administrative
expenses decreased to 79.1% in the nine months ended September 30, 2002 from
391.5% in the nine months ended September 30, 2001.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses, which
relate to product improvement and cost reduction, were $812,000 in the nine
months ended September 30, 2002 as compared to $772,000 in the nine months,
ended September 30, 2001. As a percentage of revenues, research and development
expenses decreased to 22.9% in the nine months ended September 30, 2002 from
126.1% in the nine months ended September 30, 2001.
NET INTEREST INCOME AND EXPENSE.
Interest income was $269,000 in the nine months ended September 30, 2002 as
compared to $266,000 in the nine months ended September 30, 2001. This increase
was attributable to larger average cash, cash equivalents and short-term
investment balances in the nine months ended September 30, 2002 as compared to
the nine months ended September 30, 2001, offset by a reduction in interest
rates in the nine-month period ended September 30, 2002 as compared to the
nine-month period ended September 30, 2001. In addition, the Company earned
interest income in connection with sales type lease arrangements in the nine
months ended September 30, 2002.
Interest expense was $3,000 in the nine months ended September 30, 2002 and
2001.
NET LOSS. Net loss was $1,391,000 in the nine months ended September 30, 2002
as compared to net loss of $2,638,000 in the nine months ended September 30,
2001. This was due primarily to the reasons described above.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2002, the Company had $8,369,000 of cash, cash equivalents
and investments and $8,304,000 of working capital as compared to $5,465,000 and
$5,970,000, respectively, at December 31, 2001.
7
Net cash used in operating activities was $3,220,000 for the nine months ended
September 30, 2002 as compared to net cash used in operating activities of
$2,551,000 for the nine months ended September 30, 2001. Net cash used in
operating activities in the nine months ended September 30, 2002 was primarily
due to the net loss of $1,391,000, an increase in accounts receivable of
$1,177,000, an increase in investments in sales type leases of $705,000, an
increase in inventory of $323,000, and an increase in prepaid expenses and other
assets of $138,000, partially offset by an increase in other liabilities of
$200,000, an increase in deferred revenue of $117,000 and depreciation and
amortization of $148,000. Net cash used in operating activities in the nine
months ended September 30, 2001 was primarily due to the net loss of $2,638,000
a decrease in accounts payable of $366,000 and an increase in inventory of
$177,000, partially offset by a decrease in unbilled receivables of $349,000,
the collection of income taxes receivable of $111,000 and depreciation and
amortization of $120,000.
Net cash used in investing activities for the nine months ended September 30,
2002 was $1,875,000 as compared to net cash used in investing activities of
$84,000 for the nine months ended September 30, 2001. The cash used in
investing activities in the nine months ended September 30, 2002 was for the
purchase of investments of $4,827,000 and the purchase of fixed assets of
$316,000, offset by maturities of investments of $3,364,000. The cash used in
investing activities in the nine months ended September 30, 2001 was for the
purchase of investments of $8,747,000, offset by maturities of investments of
$8,729,000.
Net cash provided by financing activities for the nine months ended September
30, 2002 was $6,440,000 as compared to cash provided by financing activities of
$20,000 for the nine months ended September 30, 2001. The net cash provided by
financing activities for the nine months ended September 30, 2002, resulted from
the proceeds of $6,143,000 received in connection with the sale of 821,250
shares of common stock, $169,000 of proceeds received from exercise of employee
stock options, and $137,000 of borrowings under a line of credit. The net cash
provided by financing activities for the nine months ended September 30, 2001,
resulted from $31,000 of proceeds received from exercise of employee stock
options, offset by $11,000 paid for capital lease obligations.
The Company believes it has sufficient cash, cash equivalents and investments
for the next twelve months of operations.
The Company believes its operations have not been and, in the foreseeable
future, will not be materially adversely affected by inflation or changing
prices.
RECENTLY ISSUED FINANCIAL STANDARDS
The Company believes that recently issued financial standards will not have a
significant impact on our results of operations, financial position or cash
flows.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures:
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in the reports
filed under the Exchange Act is accumulated and communicated to management,
including the Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
Within the 90 days prior to the filing of this
8
report, the Company carried out an evaluation, under the supervision and
with the participation of the Company's management, including the Company's
Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of the Company's disclosure controls and
procedures. Based upon and as of the date of that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports the Company files and submits under
the Exchange Act is recorded, processed, summarized and reported as and
when required.
(b) Changes in Internal Controls:
There were no changes in the Company's internal controls or in other
factors that could have significantly affected those controls subsequent to
the date of the Company's most recent evaluation.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99 Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended
September 30, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
I.D. Systems, Inc.
Dated: November 1, 2002 By: /s/ Jeffrey M. Jagid
-------------------------------
Jeffrey M. Jagid
Chief Executive Officer
(Principal Executive Officer)
Dated: November 1, 2002 By: /s/ Ned Mavrommatis
-------------------------------
Ned Mavrommatis
Chief Financial Officer
(Principal Accounting Officer)
9
CERTIFICATIONS
I, Jeffrey M. Jagid, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of I.D. Systems, Inc.;
2) Based on my knowledge, this quarterly 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 quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 1, 2002 By: /s/ Jeffrey Jagid
---------------------------
Jeffrey M. Jagid
Chairman and Chief Executive Officer
10
CERTIFICATIONS
I, Ned Mavrommatis, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of I.D. Systems, Inc.;
2) Based on my knowledge, this quarterly 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 quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 1, 2002 By: /s/ Ned Mavrommatis
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Ned Mavrommatis
Chief Financial Officer
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