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: JUNE 30, 2003
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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
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No)
ONE UNIVERSITY PLAZA, HACKENSACK, NEW JERSEY 07601
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(Address of principal executive offices) (Zip Code)
(201) 996-9000
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(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since
last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS 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 Issuer's Common Stock, $0.01 par
value, as of the close of business on August 11, 2003 was 6,871,253.
Transitional Small Business Disclosure Format (check one):
Yes No X
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INDEX
I.D. SYSTEMS, INC.
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS.....................................................................1
Condensed Balance Sheets as of December 31, 2002 and June 30, 2003 (unaudited).......................1
Condensed Statements of Operations (unaudited) for the three months and six months ended
June 30, 2002 and 2003...........................................................................2
Condensed Statements of Cash Flows (unaudited) for the six months ended June 30, 2002 and
2003.............................................................................................3
Notes to Condensed Financial Statements..............................................................4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.............................................................6
ITEM 3. CONTROLS AND PROCEDURES..........................................................................9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................10
SIGNATURES.................................................................................................11
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
I.D. SYSTEMS, INC.
CONDENSED BALANCE SHEETS
JUNE 30, 2003
December 31, 2002 (UNAUDITED)
------------------- ------------------
ASSETS
Cash and cash equivalents $ 3,758,000 $ 3,264,000
Investments 3,031,000 2,991,000
Accounts receivable, net 1,114,000 1,833,000
Unbilled receivables -- 449,000
Inventory 1,471,000 911,000
Investment in sales type leases 159,000 34,000
Interest receivable 73,000 104,000
Officer loan 10,000 10,000
Prepaid expenses and other current assets 147,000 206,000
--------------- ---------------
Total current assets 9,763,000 9,802,000
Investments 968,000 2,072,000
Fixed assets, net 679,000 656,000
Investment in sales type leases 522,000 77,000
Installment receivable - non-current portion 867,000 785,000
Officer loan 41,000 36,000
Deferred contract costs -- 121,000
Other assets 107,000 108,000
--------------- ---------------
$ 12,947,000 $ 13,657,000
=============== ===============
LIABILITIES
Accounts payable and accrued expenses $ 1,205,000 $ 1,265,000
Long term debt - current portion -- 199,000
Line of credit 137,000 137,000
Deferred revenue 26,000 46,000
Other current liabilities 100,000 50,000
--------------- ---------------
Total current liabilities 1,468,000 1,697,000
Long term debt -- 727,000
Deferred revenue -- 156,000
Deferred rent 66,000 77,000
--------------- ---------------
1,534,000 2,657,000
--------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock; authorized 5,000,000 shares, $.01 par value; none issued
Common stock; authorized 15,000,000 shares, $.01 par value; issued and
outstanding 6,799,000 shares and 6,863,000 shares 68,000 69,000
Additional paid-in capital 22,042,000 22,226,000
Treasury stock; 40,000 shares at cost (113,000) (113,000)
Accumulated deficit (10,584,000) (11,182,000)
--------------- ---------------
11,413,000 11,000,000
--------------- ---------------
$ 12,947,000 $ 13,657,000
=============== ===============
See accompanying notes
1
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2002 2003 2002 2003
-------------- -------------- -------------- --------------
Revenues $ 1,178,000 $ 2,125,000 $ 2,009,000 $ 3,734,000
Cost of Revenues 593,000 1,076,000 968,000 1,831,000
-------------- -------------- -------------- --------------
Gross Profit 585,000 1,049,000 1,041,000 1,903,000
Selling, general and administrative expenses 814,000 1,105,000 1,697,000 2,188,000
Research and development expenses 271,000 219,000 551,000 451,000
-------------- -------------- -------------- --------------
Loss from operations (500,000) (275,000) (1,207,000) (736,000)
Interest income 95,000 79,000 146,000 165,000
Interest expense -- (15,000) (1,000) (25,000)
-------------- -------------- -------------- --------------
NET LOSS $ (405,000) $ (211,000) $ (1,062,000) $ (596,000)
============== ============== ============== ==============
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.06) $ (0.03) $ (0.16) $ (0.09)
============= ============= ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC
AND DILUTED LOSS PER SHARE 6,797,000 6,833,000 6,622,000 6,819,000
============== ============== ============== ==============
See accompanying notes
2
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
2002 2003
------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,062,000) $ (596,000)
Adjustments to reconcile net loss to cash used in operating
activities:
Depreciation and amortization 91,000 59,000
Deferred rent expense 12,000 11,000
Deferred revenue -- 176,000
Bad debt expense -- 2,000
Deferred contract costs -- (121,000)
Changes in:
Accounts receivable (388,000) (721,000)
Unbilled receivables -- (449,000)
Inventory (192,000) 560,000
Prepaid expenses and other assets (154,000) (62,000)
Investment in sales type leases (290,000) 570,000
Installment receivable - non-current portion -- 82,000
Other liabilities (50,000) (50,000)
Accounts payable and accrued expenses 198,000 60,000
-------------- --------------
Net cash used in operating activities (1,835,000) (479,000)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (127,000) (36,000)
Purchase of investments (4,702,000) (2,582,000)
Increase in interest receivable (87,000) (31,000)
Maturities of investments 3,039,000 1,424,000
Amortization of (discount) premium on investments (34,000) 94,000
Collection of officer loan -- 5,000
-------------- --------------
Net cash used in investing activities (1,911,000) (1,126,000)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of lease obligations (6,000) --
Proceeds from term loan, net of repayment -- 926,000
Proceeds from exercise of stock options 169,000 185,000
Net proceeds from private placement 6,143,000 --
-------------- --------------
Net cash provided by financing activities 6,306,000 1,111,000
-------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,560,000 (494,000)
Cash and cash equivalents - beginning of period 2,426,000 3,758,000
-------------- --------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 4,986,000 $ 3,264,000
============== ==============
See accompanying notes
3
I.D. SYSTEMS, INC.
Notes to Condensed Financial Statements
June 30, 2003
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 June 30, 2003, the results of its
operations for the three-month and six-month periods ended June 30, 2002 and
2003 and cash flows for the six-month periods ended June 30, 2002 and 2003. The
results of operations for the three-month and six-month periods ended June 30,
2003 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,
2002 included in the Company's Annual Report to Stockholders.
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 of 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 six-month periods
ended June 30, 2002 and 2003 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 - REVENUE RECOGNITION
The Company's revenues are derived from contracts with multiple element
arrangements, which include the Company's system, training and technical
support. Revenues are recognized as each element is earned based on the relative
fair value of each element and when there are no undelivered elements that are
essential to the functionality of the delivered elements. The Company's system
is typically implemented by the customer or a third party and, as a result,
revenue is recognized when title passes to the customer, which usually is upon
delivery of the system, provided all other revenue recognition criteria are met.
Training and technical support revenues are generally recognized at time of
performance.
The Company also enters into post-contract maintenance and support agreements.
Revenue is recognized over the service period and the cost of providing these
services is expensed as incurred.
The Company also derives revenues under leasing arrangements. Such arrangements
provide for monthly payments covering the system sale, 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, the system sale is recognized upon delivery of the system,
provided all other revenue recognition criteria are met. 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 $552,000 of
4
system sales during the six months ended June 30, 2003 pursuant to such
arrangements. These arrangements provide for sixty equal monthly payments and
interest has been imputed at approximately 6%.
The Company recognized $1,536,000 of system sales in 2002 in connection with an
installment sale. The arrangement provided for a $470,000 upfront payment and
equal monthly payments of approximately $26,000 through November 2007, which
include principal, imputed interest at approximately 7% and approximately $5,000
of maintenance, which is recognized as revenue monthly. $175,000 of the system
sales is classified as accounts receivable and $785,000 is classified as
"installment receivable - noncurrent portion" at June 30, 2003 in the
accompanying financial statements.
NOTE D - ASSIGNMENT OF SALES TYPE LEASES
In June 2003 the Company received approximately $1,231,000 in connection with
the assignment of certain sales type leases to a third party leasing company. Of
the proceeds, $176,000 relates to maintenance revenue which will be earned over
the remaining terms of the related maintenance arrangements and is included in
deferred revenue as of June 30, 2003.
NOTE E - STOCK-BASED COMPENSATION
The Company accounts for stock-based employee compensation under Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations. The Company has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure", which was
released in December 2002 as an amendment of SFAS No. 123. The following table
illustrates the effect on net income (loss) and earnings (loss) per share if the
fair value based method had been applied to all awards.
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------- ----------------------------
2002 2003 2002 2003
---------- ---------- ------------ ------------
Reported net loss $ (405,000) $ (211,000) $ (1,062,000) $ (596,000)
Stock-based employee compensation determined under the
fair value based method, net of related tax effects (242,000) (209,000) (470,000) (443,000)
---------- ---------- ------------ ------------
Pro forma net loss $ (647,000) $ (420,000) $ (1,532,000) $ (1,039,000)
========== ========== ============ ============
Loss per share (basic and diluted):
As reported $ (0.06) $ (0.03) $ (0.16) $ (0.09)
========== ========== ============ ============
Pro forma $ (0.10) $ (0.06) $ (0.23) $ (0.15)
========== ========== ============ ============
NOTE F - LONG TERM DEBT
In January 2003, the Company closed on a five-year term loan for $1,000,000 with
a financial institution. Interest at the 30 day LIBOR plus 1.75% and principal
are payable monthly. To hedge the loan's floating interest expense, the Company
entered into an interest rate swap contemporaneously with the closing of the
loan and fixed the rate of interest at 5.28% for the five year term. The loan is
secured by all the assets of the Company.
5
NOTE G- LINE OF CREDIT
In April 2003, the Company renewed a working capital line of credit, with
maximum borrowings of $500,000. Interest at the 30 day LIBOR Market Index Rate
plus 1.75% is payable monthly. At June 30, 2003, the Company owed $137,000 under
this line of credit. Outstanding principal amounts are payable by May 1, 2004.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the Company's financial condition and
results of operations of I.D. Systems should be read in conjunction with I.D.
Systems' 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 contained in this MD&A 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
2002 2003 2002 2003
------------- ------------- ------------ -------------
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of Revenues 50.3 50.6 48.2 49.0
-------- -------- -------- --------
Gross Profit 49.7 49.4 51.8 51.0
Selling, general and administrative expenses 69.1 52.0 84.5 58.6
Research and development expenses 23.0 10.3 27.4 12.1
-------- -------- -------- --------
Loss from operations (42.4) (12.9) (60.1) (19.7)
Net interest income 8.0 3.0 7.2 3.7
-------- -------- -------- --------
NET LOSS (34.4)% (9.9)% (52.9)% (16.0)%
-------- -------- -------- --------
THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002
REVENUES. Revenues were $2,125,000 in the three months ended June 30, 2003
compared to $1,178,000 in the three months ended June 30, 2002. The increase in
revenues in the three-month period is attributable to increased sales of the
Company's Wireless Asset Net system for tracking and managing fleets of
industrial equipment. The Company's customers include Archer Daniels Midland,
DaimlerChrysler, Deere & Co., Ford Motor Company, Hallmark Cards, Price Chopper
Stores, Target
6
Corporation, Toyota Motor Company, Walgreens, the U.S. Department of Homeland
Security, the U.S. Navy, and the U.S. Postal Service, among others.
COST OF REVENUES. Cost of revenues were $1,076,000 in the three months ended
June 30, 2003 compared to $593,000 in the three months ended June 30, 2002. As a
percentage of revenues, cost of revenues were 50.6% in the three months ended
June 30, 2003 compared to 50.3% in the three months ended June 30, 2002. Gross
profit was $1,049,000 in the three months ended June 30, 2003 compared to
$585,000 in the three months ended June 30, 2002. As a percentage of revenues,
gross profit decreased to 49.4% in the three months ended June 30, 2003 from
49.7% in the three months ended June 30, 2002.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $1,105,000 in the three months ended June 30, 2003
compared to $814,000 in the three months ended June 30, 2002. This increase was
primarily attributable to increased payroll expenses associated with sales and
marketing and an increase in insurance premiums for the Company's director and
officer liability policy. As a percentage of revenues, selling, general and
administrative expenses decreased to 52.0% in the three months ended June 30,
2003 from 69.1% in the three months ended June 30, 2002.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
$219,000 in the three months ended June 30, 2003 compared to $271,000 in the
three months ended June 30, 2002. This decrease was attributable to the
completion of the Company's "universal system" of software and hardware for
tracking and managing fleets of industrial vehicles. As a percentage of
revenues, research and development expenses decreased to 10.3% in the three
months ended June 30, 2003 from 23.0% in the three months ended June 30, 2002.
NET INTEREST INCOME AND EXPENSE.
Interest income was $79,000 in the three months ended June 30, 2003 compared to
$95,000 in the three months ended June 30, 2002. This decrease was attributable
to the reduction in interest rates. The Company invests in commercial paper and
corporate bonds, which are classified as held to maturity.
Interest expense was $15,000 in the three months ended June 30, 2003 compared to
$0 in the three months ended June 30, 2002. This increase is attributable to the
Company's working capital line of credit and its five year term loan.
NET LOSS. Net loss was $211,000 in the three months ended June 30, 2003 compared
to net loss of $405,000 in the three-months ended June 30, 2002. This was due
primarily to the reasons described above.
SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002
REVENUES. Revenues were $3,734,000 in the six months ended June 30, 2003
compared to $2,009,000 in the six months ended June 30, 2002. The increase in
revenues in the six-month period is attributable to increased sales of the
Company's Wireless Asset Net system for tracking and managing fleets of
industrial equipment.
COST OF REVENUES. Cost of revenues were $1,831,000 in the six months ended June
30, 2003 compared to $968,000 in the six months ended June 30, 2002. As a
percentage of revenues, cost of revenues were 49.0% in the six months ended June
30, 2003 as compared to 48.2% in the six months ended June 30, 2002. Gross
profit was $1,903,000 in the six months ended June 30, 2003 compared to
$1,041,000 in the six months ended June 30, 2002. As a percentage of revenues,
gross profit
7
decreased to 51.0% in the six months ended June 30, 2003 from 51.8% in the six
months ended June 30, 2002.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $2,188,000 in the six months ended June 30, 2003
compared to $1,697,000 in the six months ended June 30, 2002. This increase was
primarily attributable to increased payroll expenses associated with sales and
marketing and an increase in insurance premiums for the Company's director and
officer liability policy. As a percentage of revenues, selling, general and
administrative expenses decreased to 58.6% in the six months ended June 30, 2003
from 84.5% in the six months ended June 30, 2002.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
$451,000 in the six months ended June 30, 2003 compared to $551,000 in the six
months ended June 30, 2002. This decrease was attributable to the completion of
the Company's "universal system" of software and hardware for tracking and
managing fleets of industrial vehicles. As a percentage of revenues, research
and development expenses decreased to 12.1% in the six months ended June 30,
2003 from 27.4% in the six months ended June 30, 2002.
NET INTEREST INCOME AND EXPENSE.
Interest income was $165,000 in the six months ended June 30, 2003 compared to
$146,000 in the six months ended June 30, 2002. This increase was attributable
to interest income earned in connection with sales type lease arrangements,
partially offset by lower interest rates. The Company invests in commercial
paper and corporate bonds, which are classified as held to maturity.
Interest expense was $25,000 in the six months ended June 30, 2003 compared to
$1,000 in the six months ended June 30, 2002. This increase is attributable to
the Company's working capital line of credit and its five year term loan.
NET LOSS. Net loss was $596,000 in the six months ended June 30, 2003 compared
to net loss of $1,062,000 in the six-months ended June 30, 2002. This was due
primarily to the reasons described above.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2003, the Company had $8,327,000 of cash, cash equivalents and
investments and $8,105,000 of working capital as compared to $7,757,000 and
$8,295,000, respectively, at December 31, 2002.
Net cash used in operating activities was $479,000 for the six months ended June
30, 2003 compared to net cash used in operating activities of $1,835,000 for the
six months ended June 30, 2002. Net cash used in operating activities in the six
months ended June 30, 2003 was primarily due to the net loss of $596,000, an
increase in accounts receivable of $721,000, an increase in unbilled receivables
of $449,000 and an increase in deferred contract costs of $121,000, partially
offset by a decrease in inventory of $560,000, a decrease in investment in sales
type leases of $570,000 resulting from the proceeds from the assignment of
certain sales type leases to a third party and an increase in deferred revenue
of $176,000. Net cash used in operating activities in the six months ended June
30, 2002 was primarily due to the net loss of $1,062,000, an increase in
accounts receivable of $388,000, an increase in investments in sales type leases
of $290,000 an increase in inventory of $192,000 and an increase in prepaid
expenses and other assets of $154,000, partially offset by an increase in
accounts payable of $198,000.
Net cash used in investing activities for the six months ended June 30, 2003 was
$1,126,000 compared to net cash used in investing activities of $1,911,000 for
the six months ended June 30,
8
2002. Net cash used in investing activities in the six months ended June 30,
2003 was primarily for the purchase of investments of $2,582,000, offset by
maturities of investments of $1,424,000. Net cash used in investing activities
in the six months ended June 30, 2002 was for the purchase of investments of
$4,702,000 and the purchase of fixed assets of $127,000, offset by maturities of
investments of $3,039,000.
Net cash provided by financing activities for the six months ended June 30, 2003
was $1,111,000 compared to net cash provided by financing activities of
$6,306,000 in the six months ended June 30, 2002. Net cash provided by financing
activities for the six months ended June 30, 2003 was from the proceeds, net of
repayment of $926,000, received in connection with obtaining a five year term
loan and $185,000 from proceeds received in connection with exercise of employee
stock options. Net cash provided by financing activities in the six months ended
June 30, 2002 was from the proceeds of $6,143,000 received in connection with
the sale of 821,250 shares of common stock and $169,000 received in connection
with exercise of employee stock options, offset by $6,000 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 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 significant 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
9
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
31 Certifications of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certifications of the 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 June 30,
2003.
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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: August 14, 2003 By: /s/ Jeffrey M. Jagid
-----------------------------
Jeffrey M. Jagid
Chief Executive Officer
(Principal Executive Officer)
Dated: August 14, 2003 By: /s/ Ned Mavrommatis
-----------------------------
Ned Mavrommatis
Chief Financial Officer
(Principal Financial Officer)
11