Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): January 7,
2010
I.D.
SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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001-15087
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22-3270799
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(State
or other
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(Commission
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(IRS
Employer
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jurisdiction
of
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File
Number)
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Identification
No.)
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incorporation)
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One
University Plaza, Hackensack, New Jersey
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07601
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (201)
996-9000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
On
January 7, 2010, I.D. Systems, Inc. (the “Registrant”) entered
into a Membership Interest Purchase Agreement (the “Purchase Agreement”)
with General Electric Capital Corporation (“GECC”) and GE Asset
Intelligence, LLC (“GEAI”), pursuant to
which the Registrant acquired GEAI’s telematics business (the “Business”) through
the purchase of 100% of the membership interests of Asset Intelligence, LLC (the
“Company”), a
newly formed, wholly owned subsidiary of GEAI into which substantially all of
the assets, including intellectual property, and liabilities of the Business had
been transferred immediately prior to the closing. Effective with the
closing of the transaction, the Company became a wholly owned subsidiary of the
Registrant. In connection with the transaction, the Company offered
employment to all of the former employees of the Business.
Under the
terms of the Purchase Agreement, the Registrant paid consideration of $15
million in cash at closing. In addition, the Registrant may be
required to pay additional cash consideration of up to $2 million in or about
February 2011, contingent upon the number of new units of telematics equipment
sold or subject to a binding order to be sold by the Company during the
year ending December 31, 2010. The purchase price is subject to a
working capital adjustment to be performed during the first quarter of 2010,
pursuant to which a portion of the cash consideration paid at closing may be
returned to the Registrant to the extent that the actual working capital of the
Company delivered at closing, determined in accordance with a formula set forth
in the Purchase Agreement, is less than $5.5 million. Both the
contingent cash payment and the working capital adjustment are subject to
customary review and dispute resolution procedures under the Purchase
Agreement.
Each of
the Registrant, as purchaser, and GECC and GEAI, as sellers, made customary
representations and warranties in the Purchase Agreement. The
Purchase Agreement also contains a limited number of post-closing covenants,
including, without limitation, those regarding confidentiality, tax matters,
non-competition and general post-closing cooperation
obligations. Each party also agreed to indemnify the other party
against losses to which such party and/or its affiliates may become subject that
are based upon any breach or inaccuracy of any representation or warranty made
by a party and certain other breaches or failures to perform under the Purchase
Agreement, subject to the applicable survival period for such representations
and warranties, as are set forth in the Purchase Agreement, and a deductible
and/or a cap in certain circumstances.
GECC, the
Company and the Registrant also entered into a customary transition services
agreement at closing, pursuant to which the Company will receive certain
transition services from GECC with respect to the Business in order to
facilitate an orderly transition of the Business’ operations to the Company and
the Registrant after the closing.
In
connection with the Business’ separation from GECC, the Company has entered into
a three-year joint marketing agreement with GECC’s Trailer Fleet Services
(“TFS”)
business, a provider of trailer rentals, leases and sales across North
America. Under this arrangement, TFS will treat the Company as a
preferred supplier and will market the Company’s telematics products and
services to its customers.
The
Purchase Agreement is included in order to provide investors and security
holders with information regarding its terms and provisions. It is
not intended to provide any other factual information about the Registrant or
the other parties thereto. In particular, the assertions embodied in
the representations and warranties contained in the Purchase Agreement are
qualified by information in the disclosure schedules provided by the parties in
connection with the execution of the Purchase Agreement. The
disclosure schedules contain information that modifies, qualifies and creates
exceptions to the representations and warranties set forth in the Purchase
Agreement. Moreover, certain representations and warranties in the
Purchase Agreement may have been made for the purpose of allocating contractual
risk among the parties, rather than establishing matters as facts, and may be
subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors. Accordingly, investors and
security holders should not rely on the representations and warranties in the
Purchase Agreement as characterizations of the actual state of facts about any
of the parties thereto or any of their respective
affiliates. Moreover, information concerning the subject matter of
the representations and warranties may change after the date of the Purchase
Agreement, which subsequent information may or may not be fully reflected in the
Registrant’s public disclosures.
The
foregoing description of certain terms of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to
this Current Report on Form 8-K and incorporated herein by
reference.
Item
2.01. Completion
of Acquisition or Disposition of Assets.
The information under Item 1.01 above
(“Entry into Material Definitive Agreement”) is incorporated by reference into
this Item 2.01, and is qualified in its entirety by reference to the full text
of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated herein by reference.
Item
8.01. Other
Events.
On
January 7, 2010, the Registrant issued a news release announcing the execution
of the Purchase Agreement and the completion of the transactions contemplated
thereby. A copy of the news release is attached as Exhibit 99.1 to
this Current Report on Form 8-K and incorporated herein by
reference.
Forward-Looking
Statements
Some
of the statements contained in this Current Report on Form 8-K, including
Exhibit 99.1 hereto, constitute forward-looking statements within the meaning of
the federal securities laws. Forward-looking statements typically are
identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,”
“anticipate,” “estimate” and similar words, and the opposites of such words,
although some forward-looking statements are expressed
differently. Forward-looking statements involve known and unknown
risks and uncertainties that exist in the Registrant’s operations and business
environment, which may be beyond the Registrant’s control, and which may cause
actual results, performance or achievements to be materially different from
future results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of
historical fact are statements that could be forward-looking
statements. For example, forward-looking statements include, without
limitation: statements regarding prospects for additional customers;
market forecasts; projections of earnings, revenues, synergies, accretion or
other financial information; and plans, strategies and objectives of management
for future operations, including integration plans in connection with the
acquisition. Without limiting the generality of the foregoing,
readers are also cautioned that the contingent consideration that may be payable
by the Registrant in connection with the acquisition, as described in Items 1.01
and 2.01 of this Current Report on Form 8-K, should not be construed as an
indication or expectation of the Company’s future performance. The
risks and uncertainties referred to above include, but are not limited to,
future economic and business conditions, the loss of key customers or reduction
in the purchase of products by any such customers, the failure of the market for
the Registrant’s products to continue to develop, the possibility that the
Registrant may not be able to integrate successfully the business, operations
and employees of acquired businesses, the inability to protect the Registrant’s
intellectual property, the inability to manage growth, the effects of
competition from a variety of local, regional, national and other providers of
wireless solutions, and other risks detailed from time to time in the
Registrant’s filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the year ended December 31,
2008. These risks could cause actual results to differ materially
from those expressed in any forward-looking statements made by, or on behalf of,
the Registrant. Forward-looking statements represent the judgment of
management of the Registrant regarding future events. Although the
Registrant believes that the expectations reflected in such forward-looking
statements are reasonable at the time that they are made, the Registrant can
give no assurance that such expectations will prove to be
correct. The Registrant assumes no obligation to update any
forward-looking statements, and expressly disclaims any obligation to do so,
whether as a result of new information, future events or otherwise.
Item
9.01.
Financial Statements and Exhibits.
(a) Financial statements of
businesses acquired.
The
financial statements required by this Item 9.01, with respect to the acquisition
described in Item 2.01 hereof, are not filed herewith. To the extent
such financial statements are required to be filed, they will be filed by an
amendment no later than 71 days after the date on which this Current Report on
Form 8-K was required to be filed pursuant to Item 2.01.
(b) Pro forma financial
information.
The pro
forma financial information required by this Item 9.01, with respect to the
acquisition described in Item 2.01 hereof, is not filed herewith. To
the extent such pro forma financial information is required to be filed, it will
be filed by an amendment no later than 71 days after the date on which this
Current Report on Form 8-K was required to be filed pursuant to Item
2.01.
(d) Exhibits.
2.1
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Membership
Interest Purchase Agreement, dated as of January 7, 2010, by and among the
Registrant, GECC and GEAI.
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99.1
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News
Release, dated January 7, 2010.
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SIGNATURE
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 hereunto duly
authorized.
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I.D. SYSTEMS,
INC. |
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Date: January
13, 2010
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By:
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/s/ Ned
Mavrommatis |
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Name: Ned
Mavrommatis
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Title: Chief
Financial Officer
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INDEX TO
EXHIBITS
Exhibit Number
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Description
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2.1
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Membership
Interest Purchase Agreement, dated as of January 7, 2010, by and among
I.D. Systems, Inc., General Electric Capital Corporation and GE Asset
Intelligence, LLC.
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99.1
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News
Release, dated January 7,
2010.
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