-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BUjHSp+DvBsjru7v0qJB8LF5IRf6c3NFQExOx9TtFzis9MiQliuEG7y+RPHZdx6M 5NgPsg9Fqm2kfD2buDe65Q== 0000910680-02-000095.txt : 20020414 0000910680-02-000095.hdr.sgml : 20020414 ACCESSION NUMBER: 0000910680-02-000095 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20020205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ID SYSTEMS INC CENTRAL INDEX KEY: 0000049615 IRS NUMBER: 223270799 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-15087 FILM NUMBER: 02526678 BUSINESS ADDRESS: STREET 1: ONE UNIVERSITY PLAZA CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 2016709000 MAIL ADDRESS: STREET 1: ID SYSTEMS INC STREET 2: ONE UNIVERSITY PLAZA CITY: HACKENSACK STATE: NJ ZIP: 07601 10QSB/A 1 f760194.txt FORM 10QSB - 09/30/01
U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A (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, 2001 ------------------ 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 ------- I.D. SYSTEMS, INC. ------------------ (Exact name of small business issuer as specified in its charter) DELAWARE 22-3270799 -------- ---------- (State or other jurisdiction or incorporation or organization) (I.R.S. Employer Identification No) 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, 2001 was 5,853,625.
A INDEX I.D. SYSTEMS, INC. PART I - FINANCIAL INFORMATION ITEM 1. CONDENSED FINANCIAL STATEMENTS. Page ---- Condensed Balance Sheets as of December 31, 2000 and September 30, 2001 (unaudited) 1 Condensed Statements of Operations (unaudited) for the three months and nine months ended September 30, 2000 and 2001 2 Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2000 and 2001 3 Notes to Condensed Financial Statements 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 8 Signatures 9 B PART I - FINANCIAL INFORMATION ITEM 1. CONDENSED FINANCIAL STATEMENTS I.D. SYSTEMS, INC. CONDENSED BALANCE SHEETS
DECEMBER 31, 2000 SEPTEMBER 30,2001 (UNAUDITED) ----------------------- ----------------------- ASSETS Cash and cash equivalents $ 3,085,000 $ 470,000 Investments 5,588,000 5,665,000 Accounts receivable (net of allowance of $48,000) 297,000 292,000 Unbilled receivables 349,000 Inventory 748,000 925,000 Income taxes receivable 111,000 Prepaid expenses and other assets 125,000 119,000 ----------------------- ----------------------- Total current assets 10,303,000 7,471,000 Fixed assets, net 632,000 519,000 Other assets 146,000 117,000 ----------------------- ----------------------- $ 11,081,000 $ 8,107,000 ======================= ======================= LIABILITIES Accounts payable $ 699,000 $ 333,000 Capital lease obligations 14,000 12,000 Income taxes payable 8,000 ----------------------- ----------------------- Total current liabilities 721,000 345,000 Capital lease obligations 18,000 9,000 Deferred rent 19,000 37,000 ----------------------- ----------------------- 758,000 391,000 ----------------------- ----------------------- CONTINGENCY 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 5,720,000 shares and 5,845,000 shares, respectively 57,000 58,000 Additional paid in capital 15,558,000 15,701,000 Accumulated deficit (5,292,000) (7,930,000) Treasury stock; 40,178 shares at cost (113,000) ----------------------- ----------------------- 10,323,000 7,716,000 ----------------------- ----------------------- $ 11,081,000 $ 8,107,000 ======================= ======================= SEE ACCOMPANYING NOTES.
1
I.D. SYSTEMS, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2000 2001 2000 2001 ----------------- ------------------ ------------------- ----------------- Revenues $ 231,000 $ 188,000 $ 850,000 $ 612,000 Cost of Revenues 107,000 100,000 421,000 345,000 ----------------- ------------------ ------------------- ----------------- Gross Profit 124,000 88,000 429,000 267,000 Selling, general and administrative expenses 1,118,000 860,000 2,690,000 2,396,000 Research and development expenses 489,000 185,000 1,091,000 772,000 ----------------- ------------------ ------------------- ----------------- Loss from operations (1,483,000) (957,000) (3,352,000) (2,901,000) Interest income 185,000 69,000 557,000 266,000 Interest expense (1,000) (1,000) (4,000) (3,000) ----------------- ------------------ ------------------- ----------------- NET LOSS $ (1,299,000) $ (889,000) $ (2,799,000) $ (2,638,000) ================= ================== =================== ================= NET LOSS PER SHARE - BASIC AND DILUTED $ (0.23) $ (0.15) $ (0.49) $ (0.45) ================= ================== =================== ================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED LOSS PER SHARE 5,720,000 5,845,000 5,720,000 5,834,000 ================= ================== =================== =================
SEE ACCOMPANYING NOTES 2
I.D. SYSTEMS, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) NINE MONTHS ENDED SEPTEMBER 30, 2000 2001 ------------------- ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,799,000) $ (2,638,000) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 83,000 120,000 Deferred taxes 18,000 Deferred rent expense (29,000) 18,000 Changes in: Accounts receivable 579,000 5,000 Unbilled receivables 199,000 349,000 Inventory (826,000) (177,000) Prepaid expenses and other assets 166,000 35,000 Income taxes receivable 111,000 Income taxes payable (51,000) (8,000) Accounts payable 99,000 (366,000) ------------------- ------------------ Net cash used in operating activities (2,561,000) (2,551,000) ------------------- ------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets (404,000) (7,000) Purchase of investments (6,195,000) (8,747,000) Maturities and sales of investments 7,097,000 8,729,000 Amortization of debt discount (78,000) (59,000) ------------------- ------------------ Net cash provided by (used in) investing activities 420,000 (84,000) ------------------- ------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Payment of lease obligations (10,000) (11,000) Proceeds from exercise of stock options 4,000 31,000 ------------------- ------------------ Net cash (used in) provided by financing activities (6,000) 20,000 ------------------- ------------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (2,147,000) (2,615,000) Cash and cash equivalents - beginning of period 7,021,000 3,085,000 ------------------- ------------------ CASH AND CASH EQUIVALENTS - END OF PERIOD $4,874,000 $470,000 =================== ================== SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES Treasury shares received as payment for exercise of stock options $ 113,000 See accompanying notes
3 I.D. SYSTEMS, INC. Notes to Condensed Financial Statements September 30, 2001 NOTE A - BASIS OF REPORTING The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles 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, 2001, the results of its operations for the three-month and nine-month periods ended September 30, 2000 and 2001 and cash flows for the nine-month periods ended September 30, 2000 and 2001. The results of operations for the three- month and nine - month periods ended September 30, 2001 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, 2000 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 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 nine-month periods ended September 30, 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 - CONTINGENCY In October 2001, the Company received notification of a claim brought against it in the amount of $569,000. The Company, while evaluating the claim from a business viewpoint and with consultation from counsel regarding the legal merits, believes that the outcome will not have a material adverse effect on its financial position and results of operations. No provision has been made for the period ended September 30, 2001, regarding the ultimate outcome of this matter. See Note D. NOTE D - Subsequent Events In December 2001, the claim referred to in Note C was settled for $250,000, $50,000 of which was paid upon signing, and payments of $50,000 are due every six months from June 1, 2002 through December 1, 2003. In connection therewith the Company recorded a $250,000 charge in the fourth quarter of 2001. 4 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. The Company was incorporated in August 1993 and began to derive revenues from its initial line of products in March 1995. Revenues are generated from design and engineering fees, as well as sales of its system. 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, 2000 2001 2000 2001 ---------- ---------- -------- -------- Revenues 100.0 % 100.0 % 100.0 % 100.0 % Cost of Revenues 46.3 53.2 49.5 56.4 ---------- ---------- -------- -------- Gross Profit 53.7 46.8 50.5 43.6 Selling, general and administrative expenses 483.9 457.4 316.5 391.5 Research and development expenses 211.7 98.4 128.3 126.1 ---------- ---------- -------- -------- Loss from operations (641.9) (509.0) (394.3) (474.0) Net interest income 79.6 36.2 65.1 43.0 ---------- ---------- -------- -------- NET LOSS (562.3)% (472.8)% (329.2)% (431.0)% ---------- ---------- -------- --------
5 THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2000 REVENUES. Revenues were $188,000 in the three months ended September 30, 2001 as compared to $231,000 in the three months ended September 30, 2000. Revenues in the quarter ended September 30, 2001 were derived from the delivery and implementation of the Company's fleet tracking and management system pursuant to on-going pilot programs. COST OF REVENUES. Cost of revenues were $100,000 in the three months ended September 30, 2001 as compared to $107,000 in the three months ended September 30, 2000. As a percentage of revenues, cost of revenues were 53.2% in the three months ended September 30, 2001 as compared to 46.3% in the three months ended September 30, 2000. Gross profit was $88,000 in the three months ended September 30, 2001 compared to $124,000 in the three months ended September 30, 2000. As a percentage of revenues, gross profit decreased to 46.8% in the three months ended September 30, 2001 from 53.7% in the three months ended September 30, 2000. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses were $860,000 in the three months ended September 30, 2001 as compared to $1,118,000 in the three months ended September 30, 2000. This decrease was attributable to a decrease in payroll expenses resulting from cost cutting efforts instituted during the first quarter of 2001. As a percentage of revenues, selling, general and administrative expenses decreased to 457.4% in the three months ended September 30, 2001 from 483.9% in the three months ended September 30, 2000. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were $185,000 in the three months ended September 30, 2001 as compared to $489,000 in the three months ended September 30, 2000. This decrease was attributable to the completion of commercializing the new "universal system" of hardware and software for tracking and managing fleet of industrial vehicles during the first quarter of 2001. As a percentage of revenues, research and development expenses decreased to 98.4% in the three months ended September 30, 2001 from 211.7% in the three months ended September 30, 2000. NET INTEREST INCOME AND EXPENSE. Interest income was $69,000 in the three months ended September 30, 2001 as compared to $185,000 in the three months ended September 30, 2000. This decrease was attributable to lower average cash, cash equivalents and short-term investment balances in the three months ended September 30, 2001 as compared to the three months ended September 30, 2000. Interest expense was $1,000 in the three months ended September 30, 2001 and 2000. NET LOSS. Net loss was $889,000 in the three months ended September 30, 2001 as compared to net loss of $1,299,000 in the three-month period ended September 30, 2000. This was due primarily to the reasons described above. NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2000 REVENUES. Revenues were $612,000 in the nine months ended September 30, 2001 as compared to $850,000 in the nine months ended September 30, 2000. Revenues in the nine-month period ended September 30, 2001 were derived from the delivery and implementation of the Company's fleet tracking and management system pursuant to on-going pilot programs. COST OF REVENUES. Cost of revenues were $345,000 in the nine months ended September 30, 2001 as compared to $421,000 in the nine months ended September 30, 2000. As a percentage of revenues, cost of 6 revenues were 56.4% in the nine months ended September 30, 2001 as compared to 49.5% in the nine months ended September 30, 2000. Gross profit was $267,000 in the nine months ended September 30, 2001 compared to $429,000 in the nine months ended September 30, 2000. As a percentage of revenues, gross profit decreased to 43.6% in the nine months ended September 30, 2001 from 50.5% in the nine months ended September 30, 2000. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses were $2,396,000 in the nine months ended September 30, 2001 as compared to $2,690,000 in the nine months ended September 30, 2000. This decrease was attributable to a decrease in payroll expenses resulting from cost cutting efforts instituted during the first quarter of 2001. As a percentage of revenues, selling, general and administrative expenses increased to 391.5% in the nine months ended September 30, 2001 from 316.5% in the nine months ended September 30, 2000. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were $772,000 in the nine months ended September 30, 2001 as compared to $1,091,000 in the nine months ended September 30, 2000. This decrease was attributable to the completion of commercializing the new "universal system" of hardware and software for tracking and managing a fleet of industrial vehicles during the first quarter of 2001. As a percentage of revenues, research and development expenses decreased to 126.1% in the nine months ended September 30, 2001 from 128.3% in the nine months ended September 30, 2000. NET INTEREST INCOME AND EXPENSES). Interest income was $266,000 in the nine months ended September 30, 2001 as compared to $557,000 in the nine months ended September 30, 2000. This decrease was attributable to lower average cash, cash equivalents and short-term investment balances in the nine months ended September 30, 2001 as compared to the nine months ended September 30, 2000. Interest expense was $3,000 in the nine months ended September 30, 2001 as compared to $4,000 in the nine months ended September 30, 2000. NET LOSS. Net loss was $2,638,000 in the nine months ended September 30, 2001 as compared to net loss of $2,799,000 in the nine-month period ended September 30, 2000. This was due primarily to the reasons described above. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2001, the Company had $6,135,000 of cash, cash equivalents and short-term investments and $7,126,000 of working capital as compared to $8,673,000 and $9,582,000, respectively, at December 31, 2000. Net cash used in operating activities was $2,551,000 for the nine months ended September 30, 2001 as compared to net cash used in operating activities of $2,561,000 for the nine months ended September 30, 2000. 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 and the collection of income taxes receivable of $111,000. Net cash used in operating activities for the nine months ended September 30, 2000 was primarily due to the net loss of $2,799,000 and an increase in inventory of $826,000, partially offset by a decrease in accounts receivable of $579,000, a decrease in unbilled receivables of $199,000 and a decrease of prepaid expenses and other assets of $166,000. Net cash used in investing activities for the nine months ended September 30, 2001 was $84,000 as compared to cash provided by investing activities of $420,000 for the nine months ended September 30, 7 2000. The cash used in investing activities in the nine months ended September 30, 2001 was primarily from the purchase of investments of $8,747,000 substantially offset by maturities of short-term investments of $8,729,000. The cash provided by investing activities in the nine months ended September 30, 2000 was primarily from maturities of short-term investments of $7,097,000, substantially offset by the purchase of investments of $6,195,000 and the purchase of fixed assets of $404,000. Net cash provided by financing activities for the nine months ended September 30, 2001 was $20,000 as compared to cash used in financing activities of $6,000 for the nine months ended September 30, 2000. The net cash provided by financing activities of $20,000 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 cash used in financing activities for the nine months ended September 30, 2000 was from payment of lease obligations of $10,000 offset by proceeds from exercise of employee stock options of $4,000. 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. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None (b) Reports on Form 8-K: There were no reports on Form 8-K filed during the quarter ended September 30, 2001. 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized. I.D. Systems, Inc. Dated: February 4, 2002 By: /s/ Jeffrey M. Jagid ------------------------------------------- Jeffrey M. Jagid Chief Executive Officer (Principal Executive Officer) Dated: February 4, 2002 By: /s/ Ned Mavrommatis ------------------------------------------- Ned Mavrommatis Chief Financial Officer (Principal Accounting Officer) 9 -----END PRIVACY-ENHANCED MESSAGE-----