I.D. SYSTEMS, INC. (NASDAQ:IDSY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On July 11, 2017, I.D. Systems, Inc. (the “Company”), together with its wholly-owned subsidiary Keytroller, LLC, a Delaware limited liability company (the “Purchaser”), entered into an asset purchase agreement (the “Purchase Agreement”) with Keytroller, LLC, a Florida limited liability company (“Keytroller”), and the principals of Keytroller party thereto, to which the Company has agreed to acquire substantially all of the assets of Keytroller (the “Acquisition”) for consideration including (i) $7 million of cash payable at closing, (ii) $2 million of shares of our common stock issuable at closing, computed based on a per share price equal to the volume weighted average price of our common stock on the NASDAQ Global Market during the ten consecutive trading days ending on the third trading day prior to the closing date (the “Market Price”), (iii) up to a total of $3 million of shares of our common stock as earn-out payments, computed based on the Market Price, based on the performance of the acquired business for the two years following closing, and (iv) the assumption of certain liabilities of Keytroller. The cash portion of the purchase price may be adjusted upwards or downwards based on the difference between the working capital of the acquired business at closing and a specified target.

The Purchase Agreement contains representations, warranties, covenants, indemnifications and closing conditions customary for transactions of this type. Additionally, Keytroller has agreed not to engage in certain transactions or take certain actions prior to closing without the Purchaser’s prior written consent.

The Purchase Agreement is subject to customary termination provisions, and also may be terminated by the Purchaser or Keytroller if closing has not occurred on or before August 1, 2017.

The foregoing description 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, which is filed herewith as Exhibit 2.1 and is incorporated herein by reference. We have included the Purchase Agreement to provide investors and stockholders with information regarding its terms, but not to provide any other factual information about the Company or Keytroller. The Purchase Agreement contains representations and warranties that the parties to the Purchase Agreement made to and solely for the benefit of each other, and the assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Purchase Agreement and are modified in important part by the underlying disclosure schedules.

Item 2.02. Results of Operations and Financial Condition.

On July 11, 2017, the Company issued a press release reporting preliminary financial results for the fiscal quarter ended June 30, 2017 and announcing the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 regarding the issuance of shares of our common stock to the Purchase Agreement is incorporated into this Item 3.02 by reference. The offer and sale of such securities is being made in reliance upon an exemption from the registration requirements to Section 4(a)(2) under the Securities Act of 1933, as amended, based upon representations made by Keytroller in the Purchase Agreement and related documents.

Item 8.01. Other Events.

The information set forth in Item 2.02 is incorporated into this Item 8.01 by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

* We have omitted certain schedules and exhibits to this agreement in accordance with Item 601(b)(2) of Regulation S-K, and we will supplementally furnish a copy of any omitted schedule and/or exhibit to the Securities and Exchange Commission (the “SEC”) upon request.

Forward-Looking Statements

This report, including Exhibit 99.1 filed herewith, contains 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 Company’s operations and business environment, which may be beyond the Company’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, potential contract values, accretion or other financial information; emerging new products; and plans, strategies, objectives and initiatives of management for future operations. 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 Company’s products to continue to develop, the inability to protect the Company’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 Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2016. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements represent the judgment of management of the Company regarding future events. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable at the time that they are made, the Company can give no assurance that such expectations will prove to be correct. Unless otherwise required by applicable law, the Company 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.

ID SYSTEMS INC Exhibit
EX-2.1 2 ex2-1.htm   Execution Version   ASSET PURCHASE AGREEMENT   BY AND AMONG   I.D. SYSTEMS,…
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About I.D. SYSTEMS, INC. (NASDAQ:IDSY)

I.D. Systems, Inc. (I.D. Systems) develops, markets and sells wireless machine-to-machine solutions for managing and securing enterprise assets, which include industrial vehicles, such as forklifts and airport ground support equipment, rental vehicles, and transportation assets, such as dry van trailers, refrigerated trailers, railcars and containers. Its systems utilize radio frequency identification (RFID), wireless fidelity (Wi-Fi), satellite or cellular communications, and sensor technology and software to control, track, monitor and analyze assets. It provides data reporting and analysis software tool platform, I.D. Systems Analytics PowerFleet IQ (for fleets of forklifts and other industrial trucks) and VeriWise IQ (for fleets of containers, trailers and other transportation assets). Its solutions include industrial and rental fleet asset management, industrial fleet asset management, transportation asset management and rental fleet asset management solutions.