Delaware
|
22-3270799
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer
identification
No.)
|
One
University Plaza, Hackensack, New Jersey
|
07601
|
|
(Address of principal executive offices)
|
(Zip
Code)
|
Document
|
Part
of Form 10-K
|
|
Proxy
Statement For 2008 Annual Meeting of Stockholders
|
Part
III
|
Page
|
||
PART
I.
|
||
Item
1.
|
Business
|
4
|
Item
1A.
|
Risk
Factors
|
13
|
Item
1B.
|
Unresolved
Staff Comments
|
22
|
Item
2.
|
Properties
|
22
|
Item
3.
|
Legal
Proceedings
|
22
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
22
|
PART
II.
|
||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
23
|
Item
6.
|
Selected
Financial Data
|
25
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
26
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
35
|
Item
8.
|
Financial
Statement and Supplementary Data
|
36
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
56
|
Item
9A.
|
Controls
and Procedures
|
56
|
Item
9B.
|
Other
Information
|
57
|
PART
III.
|
||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
58
|
Item
11.
|
Executive
Compensation
|
58
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
58
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
59
|
Item
14.
|
Principal
Accountant Fees and Services
|
59
|
PART
IV.
|
||
Item
15.
|
Exhibits,
Financial Statement Schedules
|
60
|
|
·
|
U.S.
Postal Service; and
|
|
|
|
·
|
Wal-Mart
Stores, Inc.
|
|
·
|
miniature wireless programmable
computers attached to
assets;
|
|
|
|
·
|
fixed-position communication
infrastructure consisting of network computers with two-way RF
capabilities, RF-based location-emitting beacons and application-specific
network servers; and
|
|
|
|
·
|
proprietary software, which is a
user-friendly, Windows-based and browser-based graphical user interface
that provides visibility and control of the system
database.
|
|
·
|
wirelessly uploading usage data
from each vehicle;
|
|
|
|
·
|
automatically prioritizing
maintenance events based on weighted, user-defined
variables;
|
|
|
|
·
|
automatically sending reminders
to individual vehicles or operators via the system’s text messaging
module;
|
|
|
|
·
|
enabling remote lock-out of
vehicles overdue for maintenance;
and
|
|
|
|
·
|
allowing maintenance personnel to
locate and retrieve vehicles due for service via the system’s graphical
viewer software.
|
|
·
|
compatibility with a variety of
technologies that verify driver
identity;
|
|
|
|
·
|
wireless vehicle access control
to ensure that only trained and authorized personnel use equipment as
required by the Occupational Safety and Health Administration, or
OSHA;
|
|
|
|
·
|
electronic vehicle inspection
checklists for paperless proof of OSHA
compliance;
|
|
|
|
·
|
automatic reporting of emerging
vehicle safety issues;
|
|
|
|
·
|
automatic on-vehicle
intervention, such as alarms and the disabling of equipment, in response
to user-definable safety and security
parameters;
|
|
|
|
·
|
remote vehicle deactivation
capabilities, allowing a vehicle to be shut down manually or automatically
under defined conditions;
|
|
|
|
·
|
impact sensing to assign
responsibility for abusive
driving;
|
|
|
|
·
|
geo-fencing to restrict vehicles
from operating in prohibited areas or issue alerts upon unauthorized entry
to such areas; and
|
|
|
|
·
|
a graphical, icon-based view of
vehicle safety/security/operational status on a facility map, filterable
by a variety of conditions, both historically and in real
time.
|
|
·
|
maintaining a sales and marketing
team that is focused on identifying, seizing and managing revenue
opportunities, with the primary goal of expanding our customer base and
achieving wider market
penetration;
|
|
|
|
·
|
utilizing a performance services
team to (a) shorten our initial sales cycles by helping prospective
customers identify and quantify benefits expected from our system, (b)
accelerate transitions from initial implementation to roll-out programs by
helping customers achieve and prove expected system benefits, and (c)
build service revenue through long-term consultative engagements that help
customers use our system to attain continuous improvements in their
operations;
|
|
|
|
·
|
utilizing a business development
team to establish and manage value-added channel partners that provide (a)
new sales, marketing, distribution and support networks, (b) opportunities
for system integration and development of unique, integrated value
propositions, and (c) software development opportunities to expand our
product and application
offerings;
|
|
|
|
·
|
utilizing a strategic markets
team to identify opportunities for and expand sales in key vertical
markets—such as automotive, aviation, civilian government, defense, and
rental cars—where our solutions can be effectively branded and marketed
with specific functionality and subject matter expertise;
and
|
|
·
|
expanding our resources and
activities internationally, especially in Europe, where re-packaging,
promoting and supporting our products represents a large, untapped growth
opportunity.
|
|
·
|
pursuing opportunities to
integrate our system with computer hardware and software vendors,
including original equipment
manufacturers;
|
|
·
|
establishing relationships with
global distributors to market and sell our system internationally;
and
|
|
·
|
pursuing acquisitions of
companies that we believe will enhance the functionality and broaden the
applicability of our
solutions.
|
|
·
|
contains an integrated computer,
programmed with a product-specific application, and an advanced
wireless transceiver with a communication range of up to one-half
mile;
|
|
·
|
controls equipment access with a
variety of electronic interface
options;
|
|
|
|
·
|
is compatible with most existing
facility access security
systems;
|
|
·
|
generates paperless electronic
safety checklists via a built-in display and
keypad;
|
|
·
|
wirelessly and automatically
uploads and downloads data to and from other system
components;
|
|
·
|
performs monitoring and control
functions at all times, independent of RF or network connectivity;
and
|
|
·
|
incorporates a multi-voltage
power supply designed to control electrical
anomalies.
|
|
·
|
incorporates an integrated
computer, programmed with a product specific application, and an
advanced wireless transceiver with a communication range of up to one-half
mile;
|
|
·
|
accommodates an unlimited number
of on-asset hardware
devices;
|
|
·
|
automatically uploads and
downloads data to and from other system
components;
|
|
·
|
employs built-in self-diagnostic
capabilities; and
|
|
·
|
is configurable to achieve a wide
range of asset management
goals.
|
|
·
|
is a set of Windows
services;
|
|
·
|
automatically processes data
between our devices and system
databases;
|
|
·
|
actively polls Wireless Asset
Managers to retrieve data on
demand;
|
|
·
|
passively listens to allow remote
systems to initiate data communications for data
download;
|
|
·
|
automates event scheduling,
including data downloads, database archiving and diagnostic
notifications;
|
|
·
|
interfaces with certain existing
external systems, including maintenance and training
systems;
|
|
·
|
supports remote
control/management of event
processes;
|
|
·
|
automatically performs
diagnostics on system components;
and
|
|
·
|
automatically e-mails event
alerts and customizable
reports.
|
|
·
|
shows the location, status and
inventory of vehicles - in real time and historically - in each area of a
facility;
|
|
·
|
allows real-time, two-way text
communications, including broadcast text paging to all operators
simultaneously;
|
|
·
|
searches, sorts and analyzes
assets by drive time, idle time, location, status, group, maintenance
condition and other
parameters;
|
|
·
|
displays and prints predefined
and ad hoc reports; and
|
|
·
|
allows remote access by
management, customers and vendors through the
Internet.
|
|
·
|
tracks vehicle operator
compliance with battery charging
requirements;
|
|
·
|
enforces critical equalization
charging schedules;
|
|
·
|
monitors data necessary for
battery warranty compliance;
and
|
|
·
|
simplifies battery life
management.
|
|
·
|
has been designated as capable of
performing the work
requested;
|
|
·
|
is available for work at the
moment of request; and
|
|
|
|
·
|
is physically closest to the site
where the work must be
performed.
|
|
·
|
Ford initially implemented our
system at one plant in 1999, which led to a blanket purchase order to
deploy our system across its North American operations. As of December 31,
2008, we had deployed our system at 38 Ford
facilities.
|
|
·
|
Walgreens initially deployed our
system at a single distribution center in 2003.As of December 31, 2008, we
had deployed our system at 12 distribution
centers.
|
|
·
|
The U.S. Postal Service used the
implementation of our system at one of its facilities to form the basis of
a solicitation for competitive bids for a powered vehicle management
system. Based on our proposal for that program, the U.S. Postal Service
awarded us a national contract in 2004 to deploy our system at up to 460
U.S. Postal Service facilities nationwide. As of December 31, 2008, we had
deployed our system at 113
facilities.
|
|
·
|
Beginning in 2003, Target
utilized our system on a limited number of vehicles at one of its
facilities. As of December 31, 2008, we had deployed our system at 31
facilities.
|
|
·
|
Wal-Mart initially deployed our
system at a single distribution center in 2005. After testing our system,
Wal-Mart ordered our system to be deployed in 50 facilities as of December
31, 2008.
|
|
·
|
enhancing productivity by
continuing to add to the functionality and reduce the costs of our
system;
|
|
·
|
expanding our system to meet the
needs of potential markets and to provide new solutions to our customers;
and
|
|
·
|
improving our core products by
utilizing continuing advances in
technology.
|
|
·
|
obtain licenses to continue
offering such products without substantial
reengineering;
|
|
·
|
reengineer our products
successfully to avoid
infringement;
|
|
·
|
obtain licenses on commercially
reasonable terms, if at all;
or
|
|
·
|
litigate an alleged infringement
successfully or settle without substantial expense and damage
awards.
|
|
·
|
retain existing
personnel;
|
|
·
|
hire, train, manage and retain
additional qualified personnel, including sales and marketing and research
and development personnel;
|
|
·
|
implement additional operational
controls, reporting and financial systems and procedures;
and
|
|
·
|
effectively
manage and expand our relationships with customers, subcontractors and
other third parties responsible for manufacturing and delivering our
products.
|
|
·
|
pay substantial damages to the
party making such claim;
|
|
·
|
stop selling, making, having made
or using products or services that incorporate the challenged intellectual
property;
|
|
·
|
obtain from the holder of the
infringed intellectual property right a license to sell, make or use the
relevant technology, which license may not be available on commercially
reasonable terms, or at all;
or
|
|
·
|
redesign those products or
services that incorporate such intellectual
property.
|
|
·
|
unavailability of materials and
interruptions in delivery of components and raw materials from our
suppliers, which could result in manufacturing delays;
and
|
|
·
|
fluctuations in the quality and
price of components and raw
materials.
|
|
·
|
advances in
technology;
|
|
·
|
new product
introductions;
|
|
·
|
evolving industry
standards;
|
|
·
|
product
improvements;
|
|
·
|
rapidly changing customer
needs;
|
|
·
|
intellectual property invention
and protection;
|
|
·
|
marketing and distribution
capabilities;
|
|
·
|
ability to attract highly skilled
professionals;
|
|
·
|
competition from highly
capitalized companies;
|
|
·
|
entrance of new
competitors;
|
|
·
|
ability of customers to invest in
information technology; and
|
|
·
|
price
competition.
|
|
·
|
our insurance will provide
adequate coverage against potential liabilities if our products cause harm
or fail to perform as promised;
or
|
|
·
|
adequate product liability
insurance will continue to be available to us in the future on
commercially reasonable terms or at
all.
|
|
·
|
unexpected legal or regulatory
changes;
|
|
·
|
unfavorable political or economic
factors;
|
|
·
|
less developed
infrastructure;
|
|
·
|
difficulties in recruiting and
retaining personnel, and managing international
operations;
|
|
·
|
fluctuations in foreign currency
exchange rates;
|
|
·
|
lack of sufficient protection for
intellectual property rights;
and
|
|
·
|
potentially adverse tax
consequences.
|
|
·
|
issue stock that would dilute our
current stockholders’ percentage
ownership;
|
|
·
|
incur
debt;
|
|
·
|
assume
liabilities;
|
|
·
|
incur expenses related to the
impairment of goodwill; or
|
|
·
|
incur large and immediate
write-offs.
|
|
·
|
problems combining the acquired
operations, technologies or
products;
|
|
·
|
unanticipated
costs;
|
|
·
|
diversion of management’s time
and attention from our core
business;
|
|
·
|
adverse effects on existing
business relationships with suppliers and
customers;
|
|
·
|
risks associated with entering
markets in which we have no or limited prior experience;
and
|
|
·
|
potential loss of key employees,
particularly those of acquired
companies.
|
|
·
|
the election of
directors;
|
|
·
|
adoption of stock option
plans;
|
|
·
|
the amendment of our
organizational documents;
and
|
|
·
|
the approval of certain mergers
and other significant corporate transactions, including a sale of
substantially all of our
assets.
|
|
·
|
variations in the sales of our
products to our significant
customers;
|
|
·
|
variations in the mix of products
and services provided by us;
|
|
·
|
the timing and completion of
initial programs and larger or enterprise-wide purchases of our products
by our customers;
|
|
·
|
the length and variability of the
sales cycle for our
products;
|
|
·
|
the timing and size of
sales;
|
|
·
|
changes in market and economic
conditions, including fluctuations in demand for our products;
and
|
|
·
|
announcements of new products by
our competitors.
|
|
·
|
permit our board of directors to
issue, without further action by our stockholders, up to 5,000,000 shares
of preferred stock, with any rights, preferences and privileges as they
may designate, including the right to approve an acquisition or other
change in control;
|
|
·
|
provide
that special meetings of stockholders may be called only by (i) our board
of directors pursuant to a resolution adopted by a majority of the entire
board of directors, either upon motion of a director or upon written
request by the holders of at least 50% of the voting power of all the
shares of our capital stock entitled to vote in the election of directors,
voting as a single class, or (ii) our Chairman of the Board or President;
and
|
|
·
|
require the affirmative vote of
at least 75% of the voting power of all the shares of our capital stock
entitled to vote in the election of directors, voting as a single class,
to amend or repeal the provisions dealing with meetings of
stockholders.
|
|
·
|
future economic and business
conditions;
|
|
·
|
the loss of any of our key
customers or reduction in the purchase of our products by any such
customers;
|
|
·
|
the failure of the market for our
products to continue to
develop;
|
|
·
|
our inability to protect our
intellectual property;
|
|
·
|
our inability to manage our
growth;
|
|
·
|
the effects of competition from a
wide variety of local, regional, national and other providers of wireless
solutions;
|
|
·
|
changes in laws and regulations,
including tax and securities laws and regulations and interstate and
regulations promulgated by the
FCC;
|
|
·
|
changes in accounting policies,
rules and practices;
|
|
·
|
changes in technology or
products, which may be more difficult or costly, or less effective than
anticipated; and
|
|
·
|
the other factors listed under
this Item 1A - “Risk
Factors.”
|
Name
|
Votes For
|
Votes Withheld
|
||||||
Jeffrey
Jagid
|
9,411,178 | 410,967 | ||||||
Kenneth
S. Ehrman
|
9,240,796 | 581,349 | ||||||
Harold
D. Copperman
|
9,394,074 | 428,071 | ||||||
Lawrence
Burstein
|
9,203,406 | 618,739 | ||||||
Michael
Monaco
|
9,394,274 | 427,871 |
Quarter Ending
|
High
|
Low
|
||||||
2007
|
||||||||
March
31, 2007
|
$ | 18.90 | $ | 11.82 | ||||
June
30, 2007
|
14.85 | 11.13 | ||||||
September
30, 2007
|
13.09 | 8.96 | ||||||
December
31, 2007
|
14.75 | 11.89 | ||||||
2008
|
||||||||
March
31, 2008
|
$ | 12.94 | $ | 5.94 | ||||
June
30, 2008
|
9.60 | 6.22 | ||||||
September
30, 2008
|
9.31 | 5.50 | ||||||
December
31, 2008
|
8.75 | 2.78 |
Fiscal Year Ending
|
||||||||||||||||||||||||
COMPANY/INDEX/MARKET
|
12/31/2003
|
12/31/2004
|
12/30/2005
|
12/29/2006
|
12/31/2007
|
12/31/2008
|
||||||||||||||||||
I.D.
Systems Inc
|
100.00 | 266.95 | 341.20 | 269.24 | 178.25 | 57.94 | ||||||||||||||||||
Communication
Equipment
|
100.00 | 121.50 | 136.99 | 146.49 | 158.22 | 86.05 | ||||||||||||||||||
NASDAQ
Market Index
|
100.00 | 108.41 | 110.79 | 122.16 | 134.29 | 79.25 |
Period
|
Total number of
shares (or unit)
purchased
|
Average price
paid per share (or
unit)
|
Total number of
shares (or units)
purchased as part of
publicly announced
plans or programs
|
Maximum number (or
approximate dollar
value) of shares (or
units) that may yet be
purchased under the
plans or programs
|
||||||||||||
10/1/08
through 10/31/08
|
45,546 | 6.45 | 45,546 | $ | 30,305 | |||||||||||
11/1/08
through 11/30/08
|
- | - | - | $ | 30,305 | |||||||||||
12/1/08
through 12/31/08
|
- | - | - | $ | 30,305 | |||||||||||
Total
|
45,546 | 6.45 | 45,546 | $ | 30,305 |
Year Ended December 31,
|
||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||||||
Revenues
|
$ | 13,741,000 | $ | 19,004,000 | $ | 24,740,000 | $ | 17,083,000 | $ | 27,046,000 | ||||||||||
Cost
of revenues
|
6,509,000 | 9,708,000 | 13,701,000 | 8,929,000 | 13,466,000 | |||||||||||||||
Gross
profit
|
7,232,000 | 9,296,000 | 11,039,000 | 8,154,000 | 13,580,000 | |||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
Selling,
general and administrative expenses
|
5,879,000 | 7,140,000 | 12,943,000 | 15,963,000 | 16,760,000 | |||||||||||||||
Research
and development expenses
|
1,234,000 | 1,625,000 | 2,639,000 | 2,849,000 | 2,883,000 | |||||||||||||||
Income
(loss) from operations
|
(119,000 | ) | 531,000 | (4,543,000 | ) | (10,658,000 | ) | (6,063,000 | ) | |||||||||||
Interest
income
|
195,000 | 222,000 | 2,801,000 | 3,238,000 | 2,226,000 | |||||||||||||||
Interest
expense
|
(63,000 | ) | (53,000 | ) | (29,000 | ) | (10,000 | ) | - | |||||||||||
Other
income (loss)
|
147,000 | 151,000 | 155,000 | 89,000 | (338,000 | ) | ||||||||||||||
Net
income (loss)
|
$ | 398,000 | $ | 851,000 | $ | (1,616,000 | ) | $ | (7,341,000 | ) | $ | (4,175,000 | ) | |||||||
Net
income (loss) per share - basic
|
$ | 0.05 | $ | 0.11 | $ | (0.15 | ) | $ | (0.66 | ) | $ | (0.38 | ) | |||||||
Net
income (loss) per share - diluted
|
$ | 0.05 | $ | 0.09 | $ | (0.15 | ) | $ | (0.66 | ) | $ | (0.38 | ) | |||||||
Weighted
average common shares outstanding - basic
|
7,455,000 | 7,771,000 | 10,501,000 | 11,205,000 | 10,887,000 | |||||||||||||||
Weighted
average common shares outstanding - diluted
|
8,783,000 | 9,332,000 | 10,501,000 | 11,205,000 | 10,887,000 | |||||||||||||||
Balance
Sheet Data (at end of period):
|
||||||||||||||||||||
Cash
and cash equivalents
|
8,440,000 | 2,138,000 | 9,644,000 | 5,103,000 | 12,558,000 | |||||||||||||||
Investments
|
3,195,000 | 5,463,000 | 60,716,000 | 59,900,000 | 43,461,000 | |||||||||||||||
Total
assets
|
17,159,000 | 19,840,000 | 84,905,000 | 74,796,000 | 69,948,000 | |||||||||||||||
Long-term
debt
|
648,000 | 449,000 | 240,000 | 19,000 | - | |||||||||||||||
Total
stockholders’ equity
|
13,572,000 | 15,166,000 | 81,284,000 | 71,670,000 | 67,085,000 |
|
·
|
Ford initially implemented our
system at one plant in 1999, which led to a blanket purchase order to
deploy our system across its North American operations. As of December 31,
2008, we had deployed our system at 38 Ford
facilities.
|
|
·
|
Walgreens initially deployed our
system at a single distribution center in 2003.As of December 31, 2008, we
had deployed our system at 12 distribution
centers.
|
|
·
|
The U.S. Postal Service used the
implementation of our system at one of its facilities to form the basis of
a solicitation for competitive bids for a powered vehicle management
system. Based on our proposal for that program, the U.S. Postal Service
awarded us a national contract in 2004 to deploy our system at up to 460
U.S. Postal Service facilities nationwide. As of December 31, 2008, we had
deployed our system at 113
facilities.
|
|
·
|
Beginning in 2003, Target
utilized our system on a limited number of vehicles at one of its
facilities As of December 31, 2008, we had deployed our system at 31
facilities.
|
|
·
|
Wal-Mart initially deployed our
system at a single distribution center in 2005. After testing our system,
Wal-Mart ordered our system to be deployed in 50 facilities as of December
31, 2008.
|
|
·
|
increase sales of products and
services to our existing
customers;
|
|
·
|
convert our initial programs into
larger or enterprise-wide purchases by our
customers;
|
|
·
|
increase market acceptance and
penetration of our products;
and
|
|
·
|
develop and commercialize new
products and
technologies.
|
Year Ended December 31,
|
||||||||
2006
|
2007
|
2008
|
||||||
Revenues:
|
||||||||
Products
|
65.5
|
%
|
64.6
|
%
|
74.2
|
%
|
||
Services
|
34.5
|
35.4
|
25.8
|
|||||
100.0
|
100.0
|
100.0
|
||||||
Cost
of Revenues:
|
||||||||
Products
|
33.3
|
34.3
|
37.0
|
|||||
Services
|
22.1
|
18.0
|
12.8
|
|||||
Total
Gross Profit
|
44.6
|
47.7
|
50.2
|
|||||
Selling,
general and administrative expenses
|
52.3
|
93.4
|
62.0
|
|||||
Research
and development expenses
|
10.7
|
16.7
|
10.7
|
|||||
Loss
from operations
|
(18.4
|
)
|
(62.4
|
)
|
(22.4
|
)
|
||
Interest
income
|
11.3
|
19.0
|
8.2
|
|||||
Interest
expense
|
(0.1
|
)
|
(0.1
|
)
|
||||
Other
income (loss)
|
0.6
|
0.5
|
(1.2)
|
|||||
Net
loss
|
(6.5)
|
%
|
(43.0)
|
%
|
(15.4)
|
%
|
Payment due by
Period
|
||||||||||||||||||||
Total
|
Less than
one year
|
1 to 3 years
|
3 to 5 years
|
After 5
years
|
||||||||||||||||
Operating
Leases
|
563,000 | 455,000 | 108,000 | — | — | |||||||||||||||
Total
Contractual Cash Obligations
|
$ | 563,000 | $ | 455,000 | $ | 108,000 | $ | — | $ | — |
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
36
|
Balance
Sheets at December 31, 2007 and 2008
|
38
|
Statements
of Operations for the Years
|
|
Ended
December 31, 2006, 2007 and 2008
|
39
|
Statements
of Changes in Stockholders' Equity for the Years
|
|
Ended
December 31, 2006, 2007 and 2008
|
40
|
Statements
of Cash Flows for the Years
|
|
Ended
December 31, 2006, 2007 and 2008
|
41
|
Notes
to the Financial Statements
|
42
|
As of December 31,
|
||||||||
2007
|
2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 5,103,000 | $ | 12,558,000 | ||||
Restricted
cash
|
— | 230,000 | ||||||
Investments –
short term
|
21,385,000 | 8,550,000 | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $239,000 in 2007 and
2008
|
2,875,000 | 8,245,000 | ||||||
Unbilled
receivables
|
580,000 | 168,000 | ||||||
Inventory,
net
|
4,420,000 | 3,273,000 | ||||||
Interest
receivable
|
142,000 | 217,000 | ||||||
Prepaid
expenses and other current assets
|
291,000 | 261,000 | ||||||
Total
current assets
|
34,796,000 | 33,502,000 | ||||||
Investments –long
term
|
38,515,000 | 34,911,000 | ||||||
Fixed
assets, net
|
1,398,000 | 1,050,000 | ||||||
Goodwill
|
— | 200,000 | ||||||
Other
intangible assets
|
— | 178,000 | ||||||
Other
assets
|
87,000 | 107,000 | ||||||
$ | 74,796,000 | $ | 69,948,000 | |||||
LIABILITIES
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 2,594,000 | $ | 2,175,000 | ||||
Current
portion of long term debt
|
19,000 | — | ||||||
Deferred
revenue
|
291,000 | 424,000 | ||||||
Total
current liabilities
|
2,904,000 | 2,599,000 | ||||||
Deferred
revenue
|
167,000 | 231,000 | ||||||
Deferred
rent
|
55,000 | 33,000 | ||||||
3,126,000 | 2,863,000 | |||||||
Commitments
and Contingencies (Note J)
|
||||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Preferred
stock; authorized 5,000,000 shares, $0.01 par value; none
issued
|
— | — | ||||||
Common
stock; authorized 50,000,000 shares, $.01 par value; 11,561,000 and
12,082,000 shares issued at December 31, 2007 and 2008, respectively,
shares outstanding, 11,015,000 and 10,893,000 at December 31, 2007 and
2008, respectively
|
115,000 | 120,000 | ||||||
Additional
paid-in capital
|
97,076,000 | 101,437,000 | ||||||
Accumulated
deficit
|
(19,492,000 | ) | (23,667,000 | ) | ||||
Accumulated
other comprehensive income
|
11,000 | 46,000 | ||||||
77,710,000 | 77,936,000 | |||||||
Treasury
stock; 546,000 shares and 1,189,000 shares at cost at December 31, 2007
and 2008, respectively
|
(6,040,000 | ) | (10,851,000 | ) | ||||
Total
stockholders’ equity
|
71,670,000 | 67,085,000 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 74,796,000 | $ | 69,948,000 |
Year Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Revenues:
|
||||||||||||
Products
|
$ | 16,205,000 | $ | 11,037,000 | $ | 20,072,000 | ||||||
Services
|
8,535,000 | 6,046,000 | 6,974,000 | |||||||||
24,740,000 | 17,083,000 | 27,046,000 | ||||||||||
Cost
of Revenues:
|
||||||||||||
Cost
of products
|
8,229,000 | 5,859,000 | 9,996,000 | |||||||||
Cost
of services
|
5,472,000 | 3,070,000 | 3,470,000 | |||||||||
13,701,000 | 8,929,000 | 13,466,000 | ||||||||||
Gross
Profit
|
11,039,000 | 8,154,000 | 13,580,000 | |||||||||
Operating
expenses:
|
||||||||||||
Selling,
general and administrative expenses
|
12,943,000 | 15,963,000 | 16,760,000 | |||||||||
Research
and development expenses
|
2,639,000 | 2,849,000 | 2,883,000 | |||||||||
15,582,000 | 18,812,000 | 19,643,000 | ||||||||||
Loss
from operations
|
(4,543,000 | ) | (10,658,000 | ) | (6,063,000 | ) | ||||||
Interest
income
|
2,801,000 | 3,238,000 | 2,226,000 | |||||||||
Interest
expense
|
(29,000 | ) | (10,000 | ) | — | |||||||
Other
income (loss)
|
155,000 | 89,000 | (338,000 | ) | ||||||||
Net
loss
|
$ | (1,616,000 | ) | $ | (7,341,000 | ) | $ | (4,175,000 | ) | |||
Net
loss per share – basic and diluted
|
$ | (0.15 | ) | $ | (0.66 | ) | $ | (0.38 | ) | |||
Weighted
average common shares outstanding – basic and diluted
|
10,501,000 | 11,205,000 | 10,887,000 |
Accumulated
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Other
|
||||||||||||||||||||||||||
Number of
|
Paid-in
|
Accumulated
|
Comprehensive
|
Treasury
|
Stockholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Income
|
Stock
|
Equity
|
||||||||||||||||||||||
Balance
at January 1, 2006
|
7,851,000 | $ | 79,000 | $ | 25,735,000 | $ | (10,535,000 | ) | — | $ | (113,000 | ) | $ | 15,166,000 | ||||||||||||||
Net
loss
|
(1,616,000 | ) | (1,616,000 | ) | ||||||||||||||||||||||||
Comprehensive
income - unrealized gain on investments
|
12,000 | 12,000 | ||||||||||||||||||||||||||
Total
comprehensive loss
|
(1,604,000 | ) | ||||||||||||||||||||||||||
Shares
issued pursuant to exercise of stock options
|
200,000 | 2,000 | 784,000 | 786,000 | ||||||||||||||||||||||||
Shares
issued pursuant to a public offering
|
2,750,000 | 28,000 | 55,500,000 | 55,528,000 | ||||||||||||||||||||||||
Shares
issued pursuant to exercise of overallotment options related to
public offering
|
413,000 | 4,000 | 8,429,000 | 8,433,000 | ||||||||||||||||||||||||
Issuance
of restricted stock
|
91,000 | 478,000 | 478,000 | |||||||||||||||||||||||||
Issuance
of performance shares
|
32,000 | 602,000 | 602,000 | |||||||||||||||||||||||||
Stock
based compensation - options
|
1,895,000 | 1,895,000 | ||||||||||||||||||||||||||
Balance
at December 31, 2006
|
11,337,000 | $ | 113,000 | $ | 93,423,000 | $ | (12,151,000 | ) | $ | 12,000 | $ | (113,000 | ) | $ | 81,284,000 | |||||||||||||
Net
loss
|
(7,341,000 | ) | (7,341,000 | ) | ||||||||||||||||||||||||
Comprehensive
loss - unrealized loss on investments
|
(1,000 | ) | (1,000 | ) | ||||||||||||||||||||||||
Total
comprehensive loss
|
(7,342,000 | ) | ||||||||||||||||||||||||||
Shares
issued pursuant to exercise of stock options
|
205,000 | 2,000 | 365,000 | 367,000 | ||||||||||||||||||||||||
Shares
repurchased
|
(5,583,000 | ) | (5,583,000 | ) | ||||||||||||||||||||||||
Shares
withheld pursuant to stock issuances
|
(344,000 | ) | (344,000 | ) | ||||||||||||||||||||||||
Issuance
of restricted stock
|
19,000 | |||||||||||||||||||||||||||
Stock
based compensation – restricted stock
|
941,000 | 941,000 | ||||||||||||||||||||||||||
Stock
based compensation - options
|
2,347,000 | 2,347,000 | ||||||||||||||||||||||||||
Balance
at December 31, 2007
|
11,561,000 | $ | 115,000 | $ | 97,076,000 | $ | (19,492,000 | ) | $ | 11,000 | $ | (6,040,000 | ) | $ | 71,670,000 | |||||||||||||
Net
loss
|
(4,175,000 | ) | (4,175,000 | ) | ||||||||||||||||||||||||
Comprehensive
loss – unrealized gain on investments
|
35,000 | 35,000 | ||||||||||||||||||||||||||
Total
comprehensive loss
|
(4,140,000 | ) | ||||||||||||||||||||||||||
Shares
issued pursuant to exercise of stock options
|
505,000 | 5,000 | 1,372,000 | 1,377,000 | ||||||||||||||||||||||||
Shares
repurchased
|
(4,387,000 | ) | (4,387,000 | ) | ||||||||||||||||||||||||
Shares
withheld pursuant to stock issuances
|
(424,000 | ) | (424,000 | ) | ||||||||||||||||||||||||
Issuance
of restricted stock
|
16,000 | |||||||||||||||||||||||||||
Stock
based compensation – restricted stock
|
513,000 | 513,000 | ||||||||||||||||||||||||||
Stock
based compensation – performance shares
|
292,000 | 292,000 | ||||||||||||||||||||||||||
Stock
based compensation - options
|
2,184,000 | 2,184,000 | ||||||||||||||||||||||||||
Balance
at December 31, 2008
|
12,082,000 | $ | 120,000 | $ | 101,437,000 | $ | (23,667,000 | ) | $ | 46,000 | $ | (10,851,000 | ) | $ | 67,085,000 |
Year Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (1,616,000 | ) | $ | (7,341,000 | ) | $ | (4,175,000 | ) | |||
Adjustments
to reconcile net loss to cash (used in) provided by operating
activities:
|
||||||||||||
Inventory
reserve
|
100,000 | 517,000 | 126,000 | |||||||||
Accrued
interest income
|
(153,000 | ) | 20,000 | (75,000 | ) | |||||||
Stock
based compensation
|
2,975,000 | 3,288,000 | 2,989,000 | |||||||||
Depreciation
and amortization
|
468,000 | 544,000 | 540,000 | |||||||||
Deferred
rent expense
|
(22,000 | ) | (22,000 | ) | (22,000 | ) | ||||||
Deferred
revenue
|
109,000 | 104,000 | 197,000 | |||||||||
Provision
for uncollectible accounts
|
211,000 | — | — | |||||||||
Change
in fair value of investments
|
__
|
__
|
338,000 | |||||||||
Deferred
contract costs
|
20,000 | 33,000 | ||||||||||
Changes
in:
|
||||||||||||
Restricted
cash
|
— | — | (230,000 | ) | ||||||||
Accounts
receivable
|
756,000 | 2,226,000 | (5,370,000 | ) | ||||||||
Unbilled
receivables
|
251,000 | 462,000 | 412,000 | |||||||||
Inventory
|
(3,578,000 | ) | 1,493,000 | 1,212,000 | ||||||||
Prepaid
expenses and other assets
|
(130,000 | ) | (20,000 | ) | 10,000 | |||||||
Investment
in sales type leases
|
467,000 | — | — | |||||||||
Accounts
payable and accrued expenses
|
(931,000 | ) | (700,000 | ) | (843,000 | ) | ||||||
Net
cash (used in) provided by operating activities
|
(1,073,000 | ) | 604,000 | (4,891,000 | ) | |||||||
Cash
flows from investing activities:
|
||||||||||||
Purchase
of fixed assets
|
(703,000 | ) | (548,000 | ) | (188,000 | ) | ||||||
Business
acquisition
|
— | — | (573,000 | ) | ||||||||
Purchase
of investments
|
(68,481,000 | ) | (15,691,000 | ) | (28,513,000 | ) | ||||||
Maturities
of investments
|
13,214,000 | 16,523,000 | 44,649,000 | |||||||||
Net
cash (used in) provided by investing activities
|
(55,970,000 | ) | 284,000 | 15,375,000 | ||||||||
Cash
flows from financing activities:
|
||||||||||||
Repayment
of term loan
|
(209,000 | ) | (221,000 | ) | (19,000 | ) | ||||||
Proceeds
from exercise of stock options
|
786,000 | 367,000 | 1,377,000 | |||||||||
Net
proceeds from public offering
|
63,961,000 | — | — | |||||||||
Collection
of officer loan
|
11,000 | 8,000 | — | |||||||||
Purchase
of treasury shares
|
— | (5,583,000 | ) | (4,387,000 | ) | |||||||
Net
cash provided by (used in) financing activities
|
64,549,000 | (5,429,000 | ) | (3,029,000 | ) | |||||||
Net
increase (decrease) in cash and cash equivalents
|
7,506,000 | (4,541,000 | ) | 7,455,000 | ||||||||
Cash
and cash equivalents - beginning of period
|
2,138,000 | 9,644,000 | 5,103,000 | |||||||||
Cash and cash
equivalents - end of
period
|
$ | 9,644,000 | $ | 5,103,000 | $ | 12,558,000 | ||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Cash
paid for:
|
||||||||||||
Interest
|
$ | 29,000 | $ | 10,000 | $ | — | ||||||
Non-
Cash Financing Activity:
|
||||||||||||
Shares
withheld pursuant to stock issuance
|
$ | - | $ | 344,000 | $ | 424,000 |
December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Expected
volatility
|
60 | % | 53 | % | 67 | % | ||||||
Expected
life of options
|
5
years
|
5
years
|
5
years
|
|||||||||
Risk
free interest rate
|
5 | % | 5 | % | 3 | % | ||||||
Dividend
yield
|
0 | % | 0 | % | 0 | % |
December
31,
|
||||||||||||
Basic
and diluted loss per share
|
2006
|
2007
|
2008
|
|||||||||
Net
loss
|
$ | (1,616,000 | ) | $ | (7,341,000 | ) | $ | (4,175,000 | ) | |||
Weighted
average shares outstanding – Basic and diluted
|
10,501,000 | 11,205,000 | 10,887,000 | |||||||||
Basic
and diluted loss per share
|
$ | (0.15 | ) | $ | (0.66 | ) | $ | (0.38 | ) |
December 31, 2007
|
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Fair
Value
|
||||||||||||
Investments -
short term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
Governement agency bonds
|
$ | 12,086,000 | $ | 2,000 | $ | (7,000 | ) | $ | 12,081,000 | |||||||
Mutual funds
|
2,457,000 | - | - | 2,457,000 | ||||||||||||
Total available for sale
|
14,543,000 | 2,000 | (7,000 | ) | 14,538,000 | |||||||||||
Held to maturity securities
|
||||||||||||||||
Government agency bonds
|
6,847,000 | - | - | 6,847,000 | ||||||||||||
Total investments
- short term
|
21,390,000 | 2,000 | (7,000 | ) | 21,385,000 | |||||||||||
Marketable
securities - long term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
Auction rate securities
|
25,125,000 | - | - | 25,125,000 | ||||||||||||
Government agency bonds
|
8,895,000 | 16,000 | - | 8,911,000 | ||||||||||||
Total available for sale
|
34,020,000 | 16,000 | - | 34,036,000 | ||||||||||||
Held to maturity securities
|
||||||||||||||||
Government agency bonds
|
885,000 | - | - | 885,000 | ||||||||||||
Corporate bonds
|
3,594,000 | - | - | 3,594,000 | ||||||||||||
Total held to maturity securities
|
4,479,000 | - | - | 4,479,000 | ||||||||||||
Total investments
- long term
|
38,499,000 | 16,000 | - | 38,515,000 | ||||||||||||
Total
investments
|
$ | 59,889,000 | $ | 18,000 | $ | (7,000 | ) | $ | 59,900,000 |
December
31, 2008
|
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Fair
Value
|
||||||||||||
Investments -
short term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
Governement agency bonds
|
$ | 4,801,000 | $ | 10,000 | $ | (7,000 | ) | $ | 4,804,000 | |||||||
Mutual funds
|
- | - | - | - | ||||||||||||
Total available for sale
|
4,801,000 | 10,000 | (7,000 | ) | 4,804,000 | |||||||||||
Held to maturity securities
|
||||||||||||||||
Government agency bonds
|
3,746,000 | - | - | 3,746,000 | ||||||||||||
Total investments
- short term
|
8,547,000 | 10,000 | (7,000 | ) | 8,550,000 | |||||||||||
Investments -
long term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
Government agency bonds
|
11,417,000 | 43,000 | - | 11,460,000 | ||||||||||||
Total available for sale
|
11,417,000 | 43,000 | - | 11,460,000 | ||||||||||||
Held to maturity securities
|
||||||||||||||||
Government agency bonds
|
1,846,000 | - | - | 1,846,000 | ||||||||||||
Corporate bonds
|
1,518,000 | - | - | 1,518,000 | ||||||||||||
Total held to maturity securities
|
3,364,000 | - | - | 3,364,000 | ||||||||||||
Trading securities
|
||||||||||||||||
Auction
rate securities
|
20,425,000 | - | (2,308,000 | ) | 18,117,000 | |||||||||||
Auction
rate securities put right
|
- | 1,970,000 | - | 1,970,000 | ||||||||||||
Total trading securities
|
20,425,000 | 1,970,000 | (2,308,000 | ) | 20,087,000 | |||||||||||
Total investments
- long term
|
35,206,000 | 2,013,000 | (2,308,000 | ) | 34,911,000 | |||||||||||
Total
investments
|
$ | 43,753,000 | $ | 2,023,000 | $ | (2,315,000 | ) | $ | 43,461,000 |
December
31,
|
||||||||
2007
|
2008
|
|||||||
Equipment
|
$ | 1,144,000 | $ | 918,000 | ||||
Computer
software
|
695,000 | 528,000 | ||||||
Computer
hardware
|
654,000 | 700,000 | ||||||
Furniture
and fixtures
|
238,000 | 176,000 | ||||||
Automobile
|
35,000 | 47,000 | ||||||
Leasehold
improvements
|
500,000 | 504,000 | ||||||
3,266,000 | 2,873,000 | |||||||
Accumulated
depreciation and amortization
|
(1,868,000 | ) | (1,823,000 | ) | ||||
$ | 1,398,000 | $ | 1,050,000 |
2006
|
2007
|
2008
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
2,730,000 | $ | 6.94 | 2,784,000 | $ | 8.97 | 2,761,000 | $ | 9.57 | |||||||||||||||
Granted
|
388,000 | 21.30 | 308,000 | 13.37 | 602,000 | 6.66 | ||||||||||||||||||
Exercised
|
(200,000 | ) | 3.92 | (205,000 | ) | 1.79 | (505,000 | ) | 2.73 | |||||||||||||||
Forfeited
|
(134,000 | ) | 10.94 | (126,000 | ) | 18.26 | (257,000 | ) | 13.74 | |||||||||||||||
Outstanding
at end of year
|
2,784,000 | $ | 8.97 | 2,761,000 | $ | 9.57 | 2,601,000 | $ | 9.81 | |||||||||||||||
Exercisable
at end of year
|
1,535,000 | $ | 5.49 | 1,677,000 | $ | 7.13 | 1,485,000 | $ | 9.37 |
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||||||
1.20
- 3.81
|
56,000 |
2 years
|
$ | 2.79 | 56,000 | $ | 2.79 | ||||||||||||||
3.82
- 10.00
|
1,517,000 |
6 years
|
6.47 | 912,000 | 6.56 | ||||||||||||||||
10.01 –
19.94
|
774,000 |
7 years
|
12.78 | 402,000 | 12.88 | ||||||||||||||||
19.95 –
25.38
|
254,000 |
7 years
|
22.31 | 115,000 | 22.51 | ||||||||||||||||
2,601,000 |
6 years
|
$ | 9.81 | $ |
71,000
|
1,485,000 | $ | 9.37 | $ |
71,000
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Weighted
Average
Remaining
Contractual
Life
|
|||||||||||||
Options
exercisable at December 31, 2008
|
1,485,000 | $ | 9.37 | $ | 71,000 | 4.44 | ||||||||||
Vested
and expected to vest at December 31,2008
|
2,601,000 | $ | 9.81 | $ | 71,000 | 6.08 |
Weighted
|
||||||||
Average
|
||||||||
Non-vested
Options
|
Grant
Date
Fair
Value
|
|||||||
Non-vested
at January 1, 2008
|
1,084,000 | $ | 7.16 | |||||
Granted
|
603,000 | 3.87 | ||||||
Vested
|
(366,000 | ) | 4.45 | |||||
Forfeited
|
(205,000 | ) | 7.24 | |||||
Non-vested
at December 31, 2008
|
1,116,000 | $ | 5.78 |
Weighted
|
||||||||
Average
|
||||||||
Non-vested
Shares
|
Grant
Date
Fair
Value
|
|||||||
Non-vested
at January 1, 2006
|
- | $ | - | |||||
Granted
|
92,000 | 18.98 | ||||||
Vested
|
- | |||||||
Forfeited
|
(1,000 | ) | 18.89 | |||||
Non-vested
at December 31, 2006
|
91,000 | $ | 18.99 |
Non-vested
at January 1, 2007
|
91,000 | $ | 18.99 | |||||
Granted
|
20,000 | 13.85 | ||||||
Vested
|
(45,000 | ) | 18.99 | |||||
Forfeited
|
(1,000 | ) | 18.89 | |||||
Non-vested
at December 31, 2007
|
65,000 | $ | 17.40 |
Non-vested
at January 1, 2008
|
65,000 | $ | 17.40 | |||||
Granted
|
21,000 | 7.41 | ||||||
Vested
|
(50,000 | ) | 17.96 | |||||
Forfeited
|
(5,000 | ) | 18.89 | |||||
Non-vested
at December 31, 2008
|
31,000 | $ | 9.49 |
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Income
tax expense (benefit) at the federal statutory rate
|
$ | (549,000 | ) | $ | (2,496,000 | ) | $ | (1,419,000 | ) | |||
State
and local income taxes, net of effect on federal taxes
|
(81,000 | ) | (436,000 | ) | (248,000 | ) | ||||||
Increase
(decrease) in valuation allowance
|
(150,000 | ) | 2,040,000 | 535,000 | ||||||||
Fixed
assets accumulated book/tax difference - prior year
|
117,000 | — | (196,000 | ) | ||||||||
ISO
grants and restricted shares
|
599,000 | 837,000 | 990,000 | |||||||||
Stock
options
|
- | - | - | |||||||||
Expiration
of state net operating loss
|
- | - | 254,000 | |||||||||
Other
|
64,000 | 55,000 | 84,000 | |||||||||
$ | 0 | $ | 0 | $ | 0 |
|
§
|
Level
1: Unadjusted quoted prices in active markets for identical assets or
liabilities.
|
|
§
|
Level
2: Inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly. These include quoted prices for
similar assets or liabilities in active markets and quoted prices for
identical or similar assets or liabilities in markets that are not
active.
|
§
|
|
§
|
Level
3: Unobservable inputs that reflect the reporting entity’s own
assumptions.
|
Balance at
December
31,
|
Basis of Fair Value Measurements
|
|||||||||||||||
2008
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Investments –
short term
|
$ | 8,550,000 | $ | 8,550,000 | $ | — | $ | — | ||||||||
Investments –
long term
|
34,911,000 | 14,824,000 | — | 20,087,000 | ||||||||||||
$ | 43,461,000 | $ | 23,374,000 | $ | — | $ | 20,087,000 |
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||
Fair
value, January 1, 2008
|
$ | 25,125,000 | $ | — | ||||
Purchases
|
— | — | ||||||
Sales
|
(4,700,000 | ) | — | |||||
Transfers
(out) in
|
(20,425,000 | ) | 20,425,000 | |||||
Purchase
of ARSR
|
— | 1,970,000 | ||||||
Unrealized
loss included in statement of operations
|
— | (2,308,000 | ) | |||||
Fair
value, December 31, 2008
|
$ | — | $ | 20,087,000 | ||||
Change
in unrealized loss
|
$ | ( 338,000 | ) |
Year
Ending
|
||||
December
31,
|
||||
2009
|
455,000
|
|||
2010
|
108,000
|
|||
$
|
563,000
|
Year Ended December 31, 2007
|
||||||||||||||||
1st Quarter
|
2nd Quarter
|
3rd Quarter
|
4th Quarter
|
|||||||||||||
Revenue:
|
||||||||||||||||
Products
|
$ | 2,310,000 | $ | 705,000 | $ | 5,466,000 | $ | 2,556,000 | ||||||||
Services
|
2,311,000 | 1,518,000 | 1,052,000 | 1,165,000 | ||||||||||||
4,621,000 | 2,223,000 | 6,518,000 | 3,721,000 | |||||||||||||
Cost
of revenue:
|
||||||||||||||||
Cost
of products
|
1,146,000 | 411,000 | 2,725,000 | 1,577,000 | ||||||||||||
Cost
of services
|
1,233,000 | 785,000 | 546,000 | 506,000 | ||||||||||||
2,379,000 | 1,196,000 | 3,271,000 | 2,083,000 | |||||||||||||
Gross
Profit
|
2,242,000 | 1,027,000 | 3,247,000 | 1,638,000 | ||||||||||||
Selling,
general and administrative expense
|
3,824,000 | 3,880,000 | 4,004,000 | 4,255,000 | ||||||||||||
Research
and development expense
|
706,000 | 594,000 | 828,000 | 721,000 | ||||||||||||
Other
income and (expense)
|
826,000 | 803,000 | 795,000 | 893,000 | ||||||||||||
Net
loss
|
$ | (1,462,000 | ) | $ | (2,644,000 | ) | $ | (790,000 | ) | $ | (2,445,000 | ) | ||||
Loss
per share – basic and diluted
|
$ | (0.13 | ) | $ | (0.23 | ) | $ | (0.07 | ) | $ | (0.22 | ) |
Year Ended December 31, 2008
|
||||||||||||||||
1st Quarter
|
2nd Quarter
|
3rd Quarter
|
4th Quarter
|
|||||||||||||
Revenue:
|
||||||||||||||||
Products
|
$ | 3,253,000 | $ | 3,471,000 | $ | 7,360,000 | $ | 5,988,000 | ||||||||
Services
|
1,075,000 | 1,989,000 | 1,977,000 | 1,933,000 | ||||||||||||
4,328,000 | 5,460,000 | 9,337,000 | 7,921,000 | |||||||||||||
Cost
of revenue:
|
||||||||||||||||
Cost
of products
|
1,536,000 | 1,678,000 | 3,622,000 | 3,160,000 | ||||||||||||
Cost
of services
|
680,000 | 917,000 | 948,000 | 925,000 | ||||||||||||
2,216,000 | 2,595,000 | 4,570,000 | 4,085,000 | |||||||||||||
Gross
profit
|
2,112,000 | 2,865,000 | 4,767,000 | 3,836,000 | ||||||||||||
Selling,
general and administrative expense
|
4,261,000 | 4,278,000 | 3,910,000 | 4,311,000 | ||||||||||||
Research
and development expense
|
711,000 | 708,000 | 672,000 | 792,000 | ||||||||||||
Other
income , net
|
826,000 | 593,000 | 434,000 | 35,000 | ||||||||||||
Net
(loss) income
|
$ | (2,034,000 | ) | $ | (1,528,000 | ) | $ | 619,000 | $ | (1,232,000 | ) | |||||
(Loss)
income per share – basic and diluted
|
$ | (0.19 | ) | $ | (0.14 | ) | $ | 0.06 | $ | (0.11 | ) |
•
|
if
the information that is responsive to the information required with
respect to this Item 10 is provided by means of an amendment to this
Annual Report on Form 10-K filed with the Securities and Exchange
Commission prior to the filing of such definitive proxy statement;
or
|
|
•
|
If
such proxy statement is not mailed to stockholders and filed with the
Securities and Exchange Commission within 120 days after the end of the
registrant’s most recently completed fiscal year, in which case the
registrant will provide such information by means of an amendment to this
Annual Report on Form 10-K.
|
•
|
if
the information that is responsive to the information required with
respect to this Item 11 is provided by means of an amendment to this
Annual Report on Form 10-K filed with the Securities and Exchange
Commission prior to the filing of such definitive proxy statement;
or
|
|
•
|
If
such proxy statement is not mailed to stockholders and filed with the
Securities and Exchange Commission within 120 days after the end of the
registrant’s most recently completed fiscal year, in which case the
registrant will provide such information by means of an amendment to this
Annual Report on Form 10-K.
|
•
|
if
the information that is responsive to the information required with
respect to this Item 12 is provided by means of an amendment to this
Annual Report on Form 10-K filed with the Securities and Exchange
Commission prior to the filing of such definitive proxy statement;
or
|
|
•
|
If
such proxy statement is not mailed to stockholders and filed with the
Securities and Exchange Commission within 120 days after the end of the
registrant’s most recently completed fiscal year, in which case the
registrant will provide such information by means of an amendment to this
Annual Report on Form 10-K.
|
•
|
if
the information that is responsive to the information required with
respect to this Item 13 is provided by means of an amendment to this
Annual Report on Form 10-K filed with the Securities and Exchange
Commission prior to the filing of such definitive proxy statement;
or
|
|
•
|
If
such proxy statement is not mailed to stockholders and filed with the
Securities and Exchange Commission within 120 days after the end of the
registrant’s most recently completed fiscal year, in which case the
registrant will provide such information by means of an amendment to this
Annual Report on Form 10-K.
|
•
|
if
the information that is responsive to the information required with
respect to this Item 14 is provided by means of an amendment to this
Annual Report on Form 10-K filed with the Securities and Exchange
Commission prior to the filing of such definitive proxy statement;
or
|
|
•
|
If
such proxy statement is not mailed to stockholders and filed with the
Securities and Exchange Commission within 120 days after the end of the
registrant’s most recently completed fiscal year, in which case the
registrant will provide such information by means of an amendment to this
Annual Report on Form 10-K.
|
3.1
|
Amended
and Restated Certificate of Incorporation of I.D. Systems, Inc. as
amended.
|
3.2
|
Amended
and Restated By-Laws of I.D. Systems, Inc. (incorporated herein by
reference to I.D. Systems, Inc.’s Form SB-2 filed with the SEC on June 30,
1999).
|
4.1
|
Specimen
Certificate of I.D. Systems, Inc.’s Common Stock (incorporated herein by
reference to I.D. Systems, Inc.’s Form SB-2 filed with the SEC on June 30,
1999).
|
10.1
|
1995
Non-Qualified Stock Option Plance (incorporated by reference to I.D.
Systems Inc.’s Form SB-2
filed with the SEC on June 30, 1999)
|
|
10.2
|
1999
Stock Option Plan (incorporated herein by reference to I.D. Systems,
Inc.’s Form SB-2 filed with the SEC on June 30,
1999).
|
10.3
|
1999
Director Option Plan (incorporated herein by reference to I.D. Systems,
Inc.’s Form SB-2 filed with the SEC on June 30, 1999).
|
|
10.4
|
2007
Equity Compensation Plan (incorporated by reference to I.D. Systems,
Inc.’s Form S-8 filed with the SEC on July 19, 2007).
|
|
10.5
|
Office
Lease dated November 4, 1999 between I.D. Systems, Inc. and Venture
Hackensack Holding, Inc. (incorporated herein by reference to I.D.
Systems, Inc.’s Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1999 filed with the SEC on March 29,
2000).
|
23.1
|
Consent
of Eisner LLP.
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
I.D.
SYSTEMS, INC.
|
||
By:
|
/s/
Jeffrey M. Jagid
|
|
Jeffrey
M. Jagid
|
||
Chief
Executive Officer
|
||
(Principal
Executive Officer)
|
||
By:
|
/s/
Ned Mavrommatis
|
|
Ned
Mavrommatis
|
||
Chief
Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|
Signature
|
Title
|
Date
|
||
/s/
Jeffrey M. Jagid
|
||||
Jeffrey
M. Jagid
|
Chief
Executive Officer and Director
|
March 16, 2009
|
||
(Principal
Executive Officer)
|
||||
/s/
Kenneth S. Ehrman
|
||||
Kenneth
S. Ehrman
|
President,
Chief Operating Office and Director
|
March 16, 2009
|
||
/s/
Ned Mavrommatis
|
||||
Ned
Mavrommatis
|
Chief
Financial Officer (Principal Financial
|
March 16, 2009
|
||
and
Accounting Officer)
|
||||
/s/
Lawrence Burstein
|
||||
Lawrence
Burstein
|
Director
|
March 16, 2009
|
||
/s/
Harold D. Copperman
|
Director
|
March 16, 2009
|
||
Harold
D. Copperman
|
||||
/s/
Michael Monaco
|
Director
|
March 16, 2009
|
||
Michael
Monaco
|
||||
|
Charged to
|
||||||||||||
Balance at
|
(Write-off)
|
Balance at
|
|||||||||||
Beginning
|
to Costs and
|
End of
|
|||||||||||
Description
|
Period
|
Expenses
|
Period
|
||||||||||
Inventory
reserve
|
|||||||||||||
Year
ended December 31, 2008
|
$ | 642 | $ | 126 | $ | 748 | |||||||
Year
ended December 31, 2007
|
$ | 125 | $ | 517 | $ | 642 | |||||||
Year
ended December 31, 2006
|
$ | 305 | $ | (180 | ) | $ | 125 |
Charged to
|
|||||||||||||
Balance at
|
(Write-off )
|
Balance at
|
|||||||||||
Beginning
|
to Costs and
|
End of
|
|||||||||||
Description
|
Period
|
Expenses
|
Period
|
||||||||||
Allowance for doubtful accounts
|
|||||||||||||
Year
ended December 31, 2008
|
$ | 239 | $ | — | $ | 239 | |||||||
Year
ended December 31, 2007
|
$ | 239 | $ | — | $ | 239 | |||||||
Year
ended December 31, 2006
|
$ | 28 | $ | 211 | $ | 239 |