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): October 3, 2019
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 Incorporation)
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File
Number)
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Identification
No.)
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123
Tice Boulevard, Woodcliff Lake, New Jersey
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07677
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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
(Former
name or former address, if changed since last report)
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):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, par value $0.01 per share
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IDSY
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The
Nasdaq Global Market
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Introductory
Note
This
Current Report on Form 8-K is being filed in connection with the completion, on October 3, 2019 (the “Closing Date”),
of the previously announced Transactions (as defined below) contemplated by (i) the Agreement and Plan of Merger, dated as of
March 13, 2019 (the “Merger Agreement”), by and among I.D. Systems, Inc., a Delaware corporation (“I.D. Systems”),
PowerFleet, Inc., a Delaware corporation and a wholly-owned subsidiary of I.D. Systems prior to the Transactions (“PowerFleet”),
Pointer Telocation Ltd., a public company limited by shares formed under the laws of the State of Israel (“Pointer”),
Powerfleet Israel Holding Company Ltd., a private company limited by shares formed under the laws of the State of Israel and a
wholly-owned subsidiary of PowerFleet (“Pointer Holdco”), and Powerfleet Israel Acquisition Company Ltd., a private
company limited by shares formed under the laws of the State of Israel and a wholly-owned subsidiary of Pointer Holdco prior to
the Transactions (“Pointer Merger Sub”), and (ii) the Investment and Transaction Agreement, dated as of March 13,
2019, as amended by Amendment No. 1 thereto dated as of May 16, 2019, Amendment No. 2 thereto dated as of June 27, 2019 and Amendment
No. 3 thereto dated as of October 3, 2019 (the “Investment Agreement,” and together with the Merger Agreement, the
“Agreements”), by and among I.D. Systems, PowerFleet, PowerFleet US Acquisition Inc., a Delaware corporation and a
wholly-owned subsidiary of PowerFleet prior to the Transactions (“I.D. Systems Merger Sub”), and ABRY Senior Equity
V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P. and ABRY Investment Partnership, L.P. (the “Investors”), affiliates
of ABRY Partners II, LLC.
At
the effective time of the I.D. Systems Merger (as defined below) on October 3, 2019 (the “I.D. Systems Merger Effective
Time”), pursuant to the terms of the Investment Agreement, I.D. Systems reorganized into a new holding company structure
by merging I.D. Systems Merger Sub with and into I.D. Systems (the “I.D. Systems Merger”), with I.D. Systems surviving
as a direct, wholly-owned subsidiary of PowerFleet. Also on October 3, 2019, at the effective time of the Pointer Merger (as defined
below), pursuant to the terms of the Merger Agreement, Pointer Merger Sub merged with and into Pointer (the “Pointer Merger”),
with Pointer surviving as a direct, wholly-owned subsidiary of Pointer Holdco and an indirect, wholly-owned subsidiary of PowerFleet.
As a result of the I.D. Systems Merger, the Pointer Merger and the other transactions contemplated by the Agreements (the “Transactions”),
I.D. Systems and Pointer Holdco each became direct, wholly-owned subsidiaries of PowerFleet and Pointer became an indirect, wholly-owned
subsidiary of PowerFleet. In addition, as a result of the Transactions, PowerFleet became a publicly traded corporation, and former
I.D. Systems stockholders and former Pointer shareholders received common stock of PowerFleet, par value $0.01 per share (“PowerFleet
Common Stock”), as described further below. I.D. Systems common stock, par value $0.01 per share (“I.D. Systems Common
Stock”), ceased trading on the Nasdaq Global Market and Pointer ordinary shares, par value NIS 3.00 per share (“Pointer
Ordinary Shares”), ceased trading on the Nasdaq Capital Market and the Tel Aviv Stock Exchange (“TASE”), following
the close of trading on October 2, 2019 and the effectiveness of the Pointer Merger on October 3, 2019, respectively, and PowerFleet
Common Stock commenced trading on the Nasdaq Global Market on October 3, 2019 and is expected to commence trading on the TASE
on October 6, 2019, in each case under the symbol “PWFL”.
At
the I.D. Systems Merger Effective Time, each share of I.D. Systems Common Stock outstanding immediately prior to such time (other
than any I.D. Systems Common Stock owned by I.D. Systems immediately prior to the I.D. Systems Merger Effective Time) was converted
automatically into the right to receive one share of PowerFleet Common Stock. At the Pointer Merger Effective Time (as defined
below), each Pointer Ordinary Share outstanding immediately prior to such time (other than Pointer Ordinary Shares owned, directly
or indirectly, by I.D. Systems, PowerFleet or any of their subsidiaries or Pointer or any of its wholly-owned subsidiaries immediately
prior to the Pointer Merger Effective Time) was cancelled in exchange for $8.50 in cash, without interest (the “Cash Consideration”),
and 1.272 shares of PowerFleet Common Stock (the “Stock Consideration,” and together with the Cash Consideration,
the “Pointer Merger Consideration”).
I.D.
Systems stock options and restricted stock awards that were outstanding immediately prior to the I.D. Systems Merger Effective
Time were converted automatically into equivalent PowerFleet awards on the same terms and conditions applicable to such I.D. Systems
stock options and restricted stock awards prior to the I.D. Systems Merger Effective Time.
At
the effective time of the Pointer Merger on October 3, 2019 (the “Pointer Merger Effective Time”), each award of options
to purchase Pointer Ordinary Shares that was outstanding and unvested immediately prior to such time was cancelled and substituted
with options to purchase shares of PowerFleet Common Stock under the PowerFleet, Inc. 2018 Incentive Plan (“2018 Plan”)
on the same material terms and conditions as were applicable to the corresponding option immediately prior to the Pointer Merger
Effective Time, except that (i) the number of shares of PowerFleet Common Stock underlying such substituted option is equal to
the product of (A) the number of Pointer Ordinary Shares underlying such option immediately prior to the Pointer Merger Effective
Time multiplied by (B) 2.544, with any fractional shares rounded down to the nearest whole number of shares of PowerFleet Common
Stock, and (ii) the per-share exercise price is equal to the quotient obtained by dividing (A) the exercise price per Pointer
Ordinary Share subject to such option immediately prior to the Pointer Merger Effective Time by (B) 2.544 (rounded up to the nearest
whole cent).
At
the Pointer Merger Effective Time, each award of options to purchase Pointer Ordinary Shares that was outstanding and vested immediately
prior to such time was cancelled in exchange for the right to receive the product of (i) the excess, if any, of (A) the Pointer
Merger Consideration (allocated between the Cash Consideration and the Stock Consideration in the same proportion as for holders
of Pointer Ordinary Shares), over (B) the exercise price per Pointer Ordinary Share subject to such option, multiplied by (ii)
the total number of Pointer Ordinary Shares underlying such option. If the exercise price of a vested option was equal to or greater
than the consideration payable in respect of a vested option, such option was cancelled without payment.
At
the Pointer Merger Effective Time, each award of restricted stock units of Pointer (a “Pointer RSU”) that was outstanding
and vested immediately prior to such time was cancelled in exchange for the right to receive the Pointer Merger Consideration
(allocated between the Cash Consideration and the Stock Consideration in the same proportion as for holders of Pointer Ordinary
Shares). Each Pointer RSU that was outstanding and unvested immediately prior to such time was cancelled and substituted with
restricted stock units under the 2018 Plan representing the right to receive, on the same material terms and conditions as were
applicable under such Pointer RSU immediately prior to the Pointer Merger Effective Time, that number of shares of PowerFleet
Common Stock equal to the product of (i) the number of Pointer Ordinary Shares underlying such Pointer RSU immediately prior to
the Pointer Merger Effective Time multiplied by (ii) 2.544, with any fractional shares rounded down to the nearest lower whole
number of shares of PowerFleet Common Stock.
The
issuance of PowerFleet Common Stock in connection with the Transactions was registered under the Securities Act of 1933, as amended,
pursuant to PowerFleet’s registration statement on Form S-4 (File No. 333-231725) (as amended, the “Registration Statement”),
filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective on July 25, 2019. The definitive
joint proxy statement/prospectus of I.D. Systems and Pointer that forms part of the Registration Statement and that was filed
with the SEC pursuant to Rule 424(b)(3) on July 25, 2019 (the “Joint Proxy Statement/Prospectus”) contains additional
information about the Transactions.
The
foregoing description of the Agreements and the Transactions does not purport to be complete and is qualified in its entirety
by reference to the full text of (i) the Merger Agreement, which is incorporated herein by reference to Exhibit 2.1 to I.D. Systems’
Current Report on Form 8-K filed with the SEC on March 15, 2019, and (ii) the Investment Agreement (including Amendment No. 1
and Amendment No. 2 thereto), which is incorporated herein by reference to Exhibit 2.2 to I.D. Systems’ Current Report on
Form 8-K filed with the SEC on March 15, 2019, to Exhibit 2.1 to I.D. Systems’ Current Report on Form 8-K filed with the
SEC on May 20, 2019 and to Exhibit 2.1 to I.D. Systems’ Current Report on Form 8-K filed with the SEC on June 27, 2019,
and Amendment No. 3 to the Investment Agreement, which is filed as Exhibit 2.5 to this Current Report on Form 8-K and incorporated
herein by reference.
The
representations, warranties and covenants contained in the agreements and documents described above were made only for purposes
of those agreements and documents and as of the specified dates set forth therein, were solely for the benefit of the parties
to those agreements and documents, may be subject to limitations agreed upon by those parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk between those parties instead of establishing particular matters
as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable
to investors. Investors should not rely on these representations, warranties or covenants or any descriptions thereof as characterizations
of the actual state of facts or conditions of PowerFleet, I.D. Systems or Pointer or any of their respective subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date
of the applicable agreement, which subsequent information may or may not be fully reflected in PowerFleet’s, I.D. Systems’
or Pointer’s public disclosures.
The
Cash Consideration was financed using (i) net proceeds of the issuance and sale by PowerFleet of 50,000 shares of PowerFleet’s
Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), to the Investors
for an aggregate purchase price of $50,000,000 pursuant to the terms of the Investment Agreement, and (ii) term loan borrowings
by Pointer Holdco on the Closing Date of $30,000,000 under a credit agreement, dated August 19, 2019 (the “Credit Agreement”),
with Bank Hapoalim B.M., pursuant to which Bank Hapoalim B.M. agreed to provide Pointer Holdco with two senior secured term loan
facilities in an aggregate principal amount of $30,000,000 (comprised of two facilities in the aggregate principal amount of $20,000,000
and $10,000,000) and a five-year revolving credit facility to Pointer in an aggregate principal amount of $10,000,000. A summary
of the voting powers, designations, preferences and other special rights, and qualifications, limitations and restrictions, of
the Series A Preferred Stock is contained in the section of the Joint Proxy Statement/Prospectus entitled “Description of
Parent Capital Stock.” The Credit Agreement was previously described in I.D. Systems’ Current Report on Form 8-K filed
with the SEC on August 23, 2019.
Item
1.01.
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Entry
into a Material Definitive Agreement.
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On
October 3, 2019, PowerFleet, I.D. Systems, I.D. Systems Merger Sub and the Investors entered into Amendment No. 3 to the Investment
Agreement (the “Investment Agreement Third Amendment”), pursuant to which PowerFleet agreed to issue and sell to the
Investors in a private placement convertible unsecured promissory notes in the aggregate principal amount of $5,000,000 (the “Notes”)
at the closing of the Transactions. The principal amount of, and accrued interest through the maturity date on, the Notes will
convert automatically into Series A Preferred Stock (at the original issuance price thereof) upon receipt of the approval by PowerFleet’s
stockholders in accordance with Nasdaq rules. The Notes will bear interest at 10% per annum, will mature on the third business
day before the first anniversary of their issuance date (unless earlier converted) and may be prepaid in full subject to a prepayment
premium.
The
foregoing description of the Investment Agreement Third Amendment does not purport to be complete and is qualified in its entirety
by reference to the full text of the Investment Agreement Third Amendment, which is filed as Exhibit 2.5 to this Current Report
on Form 8-K and incorporated herein by reference.
Item
2.01.
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Completion
of Acquisition or Disposition of Assets.
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The
information set forth in the Introductory Note, Item 3.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by
reference into this Item 2.01.
Item
3.01.
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Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of
Listing.
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On
the Closing Date, in connection with the completion of the Transactions, I.D. Systems notified the Nasdaq Stock Market LLC (“Nasdaq”)
that the Transactions had been consummated and requested that the trading of its shares on the Nasdaq Global Market be suspended
and that the listing of its shares on the Nasdaq Global Market be withdrawn. In addition, I.D. Systems requested that Nasdaq file
with the SEC a notification on Form 25 to report the delisting of its shares from the Nasdaq Global Market and to deregister its
shares under Section 12(b) of the Securities Exchange Act of 1934, as amended.
Item
3.03.
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Material
Modification to Rights of Security Holders.
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The
information set forth in the Introductory Note, Item 5.01 and Item 5.03 of this Current Report on Form 8-K is incorporated by
reference into this Item 3.03. The disclosure set forth in the sections titled “Comparison of the Rights of Holders of I.D.
Systems Common Stock and Parent Common Stock” and “Description of Parent Capital Stock” in the Registration
Statement is incorporated herein by reference.
Item
5.01.
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Change
in Control of Registrant.
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As
a result of the completion of the Transactions, I.D. Systems became a wholly-owned subsidiary of PowerFleet.
The
information set forth in the Introductory Note and Item 5.02 of this Current Report on Form 8-K is incorporated by reference into
this Item 5.01.
Item
5.02.
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
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In
connection with the Transactions and effective as of the I.D. Systems Merger Effective Time, Kenneth Brakebill and Christopher
Formant resigned as directors of I.D. Systems and David Mahlab, Anders Bjork and John Hunt were appointed to the board of directors
of I.D. Systems.
Item
5.03.
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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On
October 3, 2019, in connection with the completion of the Transactions and pursuant to the Investment Agreement, at the I.D. Systems
Merger Effective Time, I.D. Systems’ certificate of incorporation and bylaws were amended and restated in their entirety.
Copies of I.D. Systems’ Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws are filed as Exhibits
3.1 and 3.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
On
October 3, 2019, PowerFleet issued a press release announcing the completion of the Transactions. A copy of the press release
is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item
9.01.
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Financial
Statements and Exhibits.
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(d)
Exhibits.
Exhibit
No.
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Description
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2.1
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Agreement and Plan of Merger, dated as of March 13, 2019, by and among PowerFleet, Inc., Powerfleet Israel Holding Company Ltd., Powerfleet Israel Acquisition Company Ltd., I.D. Systems, Inc. and Pointer Telocation Ltd. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of I.D. Systems, Inc., filed with the SEC on March 15, 2019).
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2.2
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Investment and Transaction Agreement, dated as of March 13, 2019, by and among I.D. Systems, Inc., PowerFleet, Inc., PowerFleet US Acquisition Inc., ABRY Senior Equity V, L.P. and ABRY Senior Equity Co-Investment Fund V, L.P. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K of I.D. Systems, Inc., filed with the SEC on March 15, 2019).
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2.3
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Amendment No. 1 to the Investment and Transaction Agreement, dated as of May 16, 2019, by and among I.D. Systems, Inc., PowerFleet, Inc., PowerFleet US Acquisition Inc., ABRY Senior Equity V, L.P. and ABRY Senior Equity Co-Investment Fund V, L.P. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of I.D. Systems, Inc., filed with the SEC on May 20, 2019).
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2.4
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Amendment No. 2 to the Investment and Transaction Agreement, dated as of June 27, 2019, by and among I.D. Systems, Inc., PowerFleet, Inc., PowerFleet US Acquisition Inc., ABRY Senior Equity V, L.P. and ABRY Senior Equity Co-Investment Fund V, L.P. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of I.D. Systems, Inc., filed with the SEC on June 27, 2019).
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2.5
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Amendment No. 3 to the Investment and Transaction Agreement, dated as of October 3, 2019, by and among I.D. Systems, Inc., PowerFleet, Inc., PowerFleet US Acquisition Inc., ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P. and ABRY Investment Partnership, L.P.
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3.1
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Amended and Restated Certificate of Incorporation of I.D. Systems, Inc.
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3.2
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Amended and Restated Bylaws of I.D. Systems, Inc.
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99.1
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Press release, dated October 3, 2019.
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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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By:
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/s/ Ned
Mavrommatis
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Name:
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Ned Mavrommatis
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Title:
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Chief Financial Officer
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Date:
October 3, 2019
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