x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Delaware
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22-3270799
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|
(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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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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Page
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||
Balance
Sheets as of December 31, 2006
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||
and
March 31, 2007 (unaudited)
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1
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|
Statements
of Operations (unaudited)
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||
for
the three months ended March 31, 2006 and 2007
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2
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Statements
of Cash Flows (unaudited)
|
||
for
the three months ended March 31, 2006 and 2007
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3
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Notes
to (unaudited) Financial Statements
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4
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|
Item
2. Management’s Discussion and Analysis of
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||
Financial
Condition and Results of Operations
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8
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|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
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13
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Item
4. Controls and Procedures
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13
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PART
II - OTHER INFORMATION
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||
Item
1a. Risk Factors
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14
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Item
6. Exhibits
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14
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|
Signatures
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15
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December
31, 2006
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March
31, 2007
|
||||||
(Unaudited)
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|||||||
ASSETS
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|||||||
Cash
and cash equivalents
|
$
|
9,644,000
|
$
|
11,681,000
|
|||
Marketable
securities
|
60,716,000
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58,913,000
|
|||||
Accounts
receivable, net
|
5,101,000
|
3,844,000
|
|||||
Unbilled
receivables
|
1,042,000
|
745,000
|
|||||
Inventory
|
6,430,000
|
5,911,000
|
|||||
Interest
receivable
|
179,000
|
222,000
|
|||||
Officer
loan
|
8,000
|
5,000
|
|||||
Prepaid
expenses and other current assets
|
271,000
|
209,000
|
|||||
Total
current assets
|
83,391,000
|
81,530,000
|
|||||
Fixed
assets, net
|
1,394,000
|
1,337,000
|
|||||
Deferred
contract costs
|
33,000
|
25,000
|
|||||
Other
assets
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87,000
|
87,000
|
|||||
$
|
84,905,000
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$
|
82,979,000
|
||||
LIABILITIES
|
|||||||
Accounts
payable and accrued expenses
|
$
|
2,950,000
|
$
|
1,840,000
|
|||
Current
portion of long term debt
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221,000
|
186,000
|
|||||
Deferred
revenue
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221,000
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216,000
|
|||||
Total
current liabilities
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3,392,000
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2,242,000
|
|||||
Long
term debt
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19,000
|
--
|
|||||
Deferred
revenue
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133,000
|
214,000
|
|||||
Deferred
rent
|
77,000
|
72,000
|
|||||
Total
liabilities
|
3,621,000
|
2,528,000
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|||||
STOCKHOLDERS'
EQUITY
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|||||||
Preferred
stock; authorized 5,000,000 shares, $.01 par value; none
issued
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--
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--
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|||||
Common
stock; authorized 50,000,000 shares, $.01 par value; 11,337,000 and
11,379,000 shares issued at December 31, 2006 and March 31, 2007,
respectively, shares outstanding, 11,297,000 and 11,328,000 at December
31, 2006 and March 31, 2007, respectively.
|
113,000
|
113,000
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|||||
Additional
paid-in capital
|
93,423,000
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94,242,000
|
|||||
Accumulated
deficit
|
(12,151,000
|
)
|
(13,613,000
|
)
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|||
Comprehensive
income
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12,000
|
3,000
|
|||||
81,397,000
|
80,745,000
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||||||
Treasury
stock; 40,000 shares and 51,000 shares at cost
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(113,000
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)
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(294,000
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)
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|||
Total
stockholders’ equity
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81,284,000
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80,451,000
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|||||
Total
liabilities and stockholders’ equity
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$
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84,905,000
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$
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82,979,000
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Three
months ended
March
31,
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|||||||
2006
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2007
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||||||
Revenue:
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|||||||
Products
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$
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4,132,000
|
$
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2,310,000
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|||
Services
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2,258,000
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2,311,000
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|||||
6,390,000
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4,621,000
|
||||||
Cost
of Revenue:
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|||||||
Cost
of products
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2,010,000
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1,146,000
|
|||||
Cost
of services
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1,193,000
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1,233,000
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|||||
3,203,000
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2,379,000
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||||||
Gross
Profit
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3,187,000
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2,242,000
|
|||||
Selling,
general and administrative expenses
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2,748,000
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3,824,000
|
|||||
Research
and development expenses
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493,000
|
706,000
|
|||||
Loss
from operations
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(54,000
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)
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(2,288,000
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)
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|||
Interest
income
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150,000
|
792,000
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|||||
Interest
expense
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(9,000
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)
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(4,000
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)
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|||
Other
income
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38,000
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38,000
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|||||
Net
income (loss)
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$
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125,000
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$
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(1,462,000
|
)
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||
Net
income (loss) per share - basic and diluted
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$
|
0.01
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$
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(0.13
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)
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Weighted
average common shares outstanding- basic
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8,382,000
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11,346,000
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|||||
Weighted
average common shares outstanding- diluted
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10,227,000
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11,346,000
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|||||
Three
months ended
March
31,
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|||||||
2006
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2007
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||||||
Cash
flows from operating activities:
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|||||||
Net
income (loss)
|
$
|
125,000
|
$
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(1,462,000
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)
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||
Adjustments
to reconcile net income (loss) to cash (used in) provided by operating
activities:
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|||||||
Inventory
reserve
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--
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75,000
|
|||||
Accrued
interest income (expense)
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4,000
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(16,000
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)
|
||||
Stock-based
compensation expense
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383,000
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767,000
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|||||
Depreciation
and amortization
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113,000
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133,000
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|||||
Deferred
rent expense
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(5,000
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)
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(5,000
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)
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|||
Deferred
revenue
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194,000
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76,000
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|||||
Deferred
contract costs
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53,000
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8,000
|
|||||
Unrealized
loss on investments
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--
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(9,000
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)
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||||
Changes
in:
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|||||||
Accounts
receivable
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(408,000
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)
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1,257,000
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||||
Unbilled
receivables
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(528,000
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)
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297,000
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||||
Inventory
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(900,000
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)
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444,000
|
||||
Prepaid
expenses and other assets
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13,000
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62,000
|
|||||
Investment
in sales type leases
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203,000
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--
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|||||
Accounts
payable and accrued expenses
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200,000
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(1,291,000
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)
|
||||
Net
cash (used in) provided by operating activities
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(553,000
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)
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336,000
|
||||
Cash
flows from investing activities:
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|||||||
Purchase
of fixed assets
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(355,000
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)
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(76,000
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)
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|||
Purchase
of investments
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(19,147,000
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)
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(3,811,000
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)
|
|||
Maturities
of investments
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340,000
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5,587,000
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|||||
Collection
of officer loan
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2,000
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3,000
|
|||||
Net
cash (used in) provided by investing activities
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(19,160,000
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)
|
1,703,000
|
||||
Cash
flows from financing activities:
|
|||||||
Repayment
of term loan
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(51,000
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)
|
(54,000
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)
|
|||
Proceeds
from exercise of stock options
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321,000
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52,000
|
|||||
Net
proceeds from stock offering
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64,025,000
|
--
|
|||||
Net
cash provided by (used in) financing activities
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64,295,000
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(2,000
|
)
|
||||
Net
increase (decrease) in cash and cash equivalents
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44,582,000
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2,037,000
|
|||||
Cash
and cash equivalents - beginning of period
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2,138,000
|
9,644,000
|
|||||
Cash
and cash equivalents - end of period
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$
|
46,720,000
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$
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11,681,000
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|||
Supplemental
disclosure of cash flow information:
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|||||||
Cash
paid for:
|
|||||||
Interest
|
$
|
9,000
|
$
|
4,000
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Three
Months Ended
March
31,
|
|||||||
2006
|
2007
|
||||||
Basic
earnings per share
|
|||||||
Net
income (loss)
|
$
|
125,000
|
$
|
(1,462,000
|
)
|
||
Weighted
average shares outstanding
|
8,382,000
|
11,346,000
|
|||||
Basic
income (loss) per share
|
$
|
0.01
|
$
|
(0.13
|
)
|
||
Diluted
earnings per share
|
|||||||
Net
income (loss)
|
$
|
125,000
|
$
|
(1,462,000
|
)
|
||
Weighted
average shares outstanding
|
8,382,000
|
11,346,000
|
|||||
Dilutive
effect of stock options
|
1,845,000
|
--
|
|||||
Weighted
average shares outstanding, diluted
|
10,227,000
|
11,346,000
|
|||||
Diluted
income (loss) per share
|
$
|
0.01
|
$
|
(0.13
|
)
|
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Average
|
Remaining
|
Aggregate
|
|||||||||||
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||
Options
|
Price
|
Term
|
Value
|
||||||||||
Outstanding
at beginning of year
|
2,784,000
|
$
|
8.97
|
||||||||||
Granted
|
132,000
|
14.63
|
|||||||||||
Exercised
|
(23,000
|
)
|
2.20
|
||||||||||
Forfeited
|
(36,000
|
)
|
18.72
|
||||||||||
Outstanding
at end of period
|
2,857,000
|
$
|
9.16
|
6
years
|
$
|
12,811,000
|
|||||||
Exercisable
at end of period
|
1,776,000
|
$
|
6.14
|
6
years
|
$
|
11,188,000
|
2006
|
2007
|
||||||
Volatility
|
60
|
%
|
51
|
%
|
|||
Expected
life of options
|
5
years
|
5
years
|
|||||
Risk
free interest rate
|
5
|
%
|
5
|
%
|
|||
Dividend
yield
|
0
|
%
|
0
|
%
|
Three
months ended
March
31,
|
|||||||
2006
|
2007
|
||||||
Revenue:
|
|||||||
Products
|
64.7
|
%
|
50.0
|
%
|
|||
Services
|
35.3
|
50.0
|
|||||
100.0
|
100.0
|
||||||
Cost
of Revenues:
|
|||||||
Product
cost of revenues
|
48.6
|
49.6
|
|||||
Service
cost of revenues
|
52.8
|
53.4
|
|||||
Total
Gross Profit
|
49.9
|
48.5
|
|||||
Selling,
general and administrative expenses
|
43.0
|
82.8
|
|||||
Research
and development expenses
|
7.7
|
15.3
|
|||||
Loss
from operations
|
(0.8
|
)
|
(49.6
|
)
|
|||
Net
interest income
|
2.2
|
17.1
|
|||||
Other
income
|
0.6
|
0.9
|
|||||
Net
income (loss)
|
2.0
|
%
|
(31.6
|
)%
|
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
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
Section
906 of the Sarbanes-Oxley Act of
2002.
|
I.D.
Systems, Inc.
|
||
Dated:
May
10, 2007
|
By:
|
/s/
Jeffrey M. Jagid
|
Jeffrey
M. Jagid
|
||
Chief
Executive Officer
|
||
(Principal
Executive Officer)
|
||
Dated:
May
10, 2007
|
By:
|
/s/
Ned Mavrommatis
|
Ned
Mavrommatis
|
||
Chief
Financial Officer
|
||
(Principal
Financial Officer)
|
||