Good day, ladies and gentlemen, and thank you for standing by. Welcome to the I.D. Systems Incorporated first quarter 2010 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator instructions) As a reminder, this conference may be recorded. I would like to introduce your host for today, Mr. Jeffery Jagid, Chairman and CEO. Sir, please go ahead.

Thank you, and welcome to I.D. Systems fiscal 2010 first quarter conference all. I’m Jeffrey Jagid, the Chairman and CEO of I.D. Systems. With me are Ned Mavrommatis, our CFO; Darryl Miller, our Chief Operating Officer; and Ken Ehrman, President of I.D. Systems. I will speak briefly about the quarter and where we are heading in 2010. Ned will review our financials, Darryl will discuss our progress integrating our Asset Intelligence acquisition, and Ken will talk briefly about the recent product and technology developments. We will then open the call to your questions. Before we begin, let me reiterate the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. The following discussion contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products, product demand and market acceptance risks, fluctuations in operating results and other risks detailed from time-to-time in I.D. Systems’ filings with the Securities and Exchange Commission. These risks could cause the Company’s actual results for the current fiscal year and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. For the first quarter ended March 31st, 2010, I.D. Systems revenue were $6.1 million, which includes approximately $1.1 million in recurring service contract revenue from our newly acquired Asset Intelligence business unit. Our net loss for the three month period was $4 million. On a non-GAAP basis, excluding stock-based compensation expenses, our net loss for the quarter was $3.6 million. The lingering effects of the recession continue to restrict technology spending in our core industrial markets, which continue to impact our revenues in the first quarter. However, our gross margins for the quarter remained strong at over 55%. We succeeded in expanding business with several key…

Thank you, Jeff, and hello to everyone on the call today. As Jeff noted, for the three months ended March 31st, 2010, I.D. Systems revenues were $6.1 million compared to $2.9 million for the three months ended March 31st, 2009. The increase in revenues was attributable primarily to the service contracts held by our Asset Intelligence business unit acquired from GE in January 2010, which currently averages approximately $1.1 million per month in recurring revenue under multi-year contracts. Our gross margin for the first quarter was 55.3% compared to 54.2% for the corresponding period in 2009. Our net loss for the quarter, as Jeff mentioned, was $4 million, or $0.36 per basic and diluted share compared to a net loss of $3.1 million or $0.28 per basic and diluted share for the first quarter of 2009. Excluding $454,000 of stock-based compensation expenses, our non-GAAP net loss for the quarter was $3.6 million, or $0.32 per basic and diluted share. Excluding the $454,000 in stock-based compensation expense, operating expenses for the quarter were $7.2 million, and due to cost-cutting and integration efforts, we expect quarterly operating expenses to be approximately $5.5 million in the third quarter of 2010. Our balance sheet remains strong. As of March 31st, excluding our $9.5 million line of credit, we had approximately $30.1 million in cash, cash equivalents, and marketable securities and $36 million of working capital. We continue to focus our capital resources on opportunities for growth, both organic and inorganic, and we remain optimistic about our future prospects. I look forward to sharing our results with you as we continue to make progress. With that, I would like to turn the call over to Darryl Miller, our Chief Operating Officer, to discuss the progress we have made in our integration of Asset Intelligence business unit.

Thanks, Ned, and thanks to everyone joining us on the call today. For those of you who may not be able to join on our fiscal 2009 year-end call, over the call we hosted I.D. Systems acquisition of Asset Intelligence in January, let me briefly summarize the AI business. AI provides solutions, a combination of proprietary freight center technologies, cellular and satellite communications, and Web-based data analytics to help consumers reduce costs, enhance security and comply with regulatory requirements, and also optimize utilization of and revenue from these types of mobile assets. As Jeff noted, AI currently generates over $1.1 million in monthly recurring revenue under multi-year service contracts. Jeff also emphasized one of the key synergies of the acquisition beyond the complementary blending of technologies and asset management solutions is the opportunity to consolidate operational cost. To achieve our projected $8 million in combined annual corporate cost reductions, we have merged every department of the combined companies to get as lean as we possibly can; pursue joint marketing corporation; combined customer support efforts; and develop cross-selling strategies, including the joint presentation of our solution as a value-added combination for key customers like Wal-Mart. I am pleased to report, we are on pace to achieve our cost targets. We’ve also integrated our technology road maps to accelerate product development. As a result, Asset Intelligence was able to announce three new products in the first quarter of 2010 our VeriWise brand Track & Trace product is a low-cost, long-life, cellular device with flexible mounting [ph] options and simple installation, which is designed for basic trailer and container location pinging applications, theft counter measures, and short term asset analytics. Our VeriWise Reefer product is a refrigerated trailer control unit, which we’ve integrated with the leading reefer brands, Thermo King and Carrier, to provide interior cargo sensing, real-time temperature alerts, remote control capabilities, and fuel management. And finally, our VeriWise Intermodal Container device is a domestic container tracking system with coast-to-coast North American satellite coverage incorporating proprietary power management technology for long product life, advanced cargo sensing, and motion detection to track key start-of-drive and end-of-drive data. As a final note on AI contribution to I.D. Systems first quarter results, we signed a five-year agreement with Royal Freight, a truck-load carrier with customers throughout North America to equip 750 dry van trailers with our VeriWise trailer management solutions, including cargo, and door sensing and location technology. This particular customer was outdated with a competitor’s product, and decided to switch to VeriWise based on product performance and return on investment. We are seeing initial signs of market recovery as trailing manufacturing and freight activity is picking up, which, we believe will free up investment dollars for telematic solutions. I look forward to bringing you further updates on the continued success of the Asset Intelligence integration and I.D. Systems overall operations for the rest of 2010 and beyond. With that, I would like to turn the call over to Ken Ehrman, our President.

Thank you, Darryl, and thanks again to everyone joining us on the call today. In addition to the Asset Intelligence product developments in the first quarter of 2010, we expanded both our core I.D. Systems product mix and our intellectual property portfolio. Our new range of industrial vehicle management systems, which we announced at a major material-handling industry trade event in April, 2010, includes a version of our patented PowerFleet system tailored for a leading lift truck manufacturer, a hosted or Software-as-a-Service vehicle management system we call PowerBox, and a new packaging of our didBOX product for the North American industrial vehicle management market. Our PowerFleet system has been integrated into The Raymond Corporation’s iWarehouse fleet management solution as part of a marketing agreement under which Raymond will offer our products and services to its national network of industrial truck dealers. Our reliable, effective, vehicle management technology and flexible, wireless communication options help make iWarehouse one of the industry’s most robust fleet optimization solutions for industrial truck fleets. Our new PowerBox vehicle management system is a sats [ph] based hosted solution designed to simplify system acquisition, deployment, and benefit achievement for customers with small-to-medium fleets or larger fleets with very basic requirements like access control, electronic safety check list and impact sensing. PowerBox features pre-configured and self-learning system capabilities as well as a combination of RF and cellular communications for automatic, wireless data flows as well as remote Internet based software and dashboards styled reports that quantify both the benefits, not just the data, and they are automatically delivered via email. This approach significantly simplifies implementation, and virtually eliminates the need for IT involvement on the part of our customers. Our new didBOX products for North America emanated from our 2009 acquisition of U.K. based didBOX Limited. These are non-wireless…

Thank you, Ken. That concludes the formal portion of our call. I would now like to open the call to questions from our listeners.

(Operator instructions) And our first question comes from the line of Matthew Hoffman of Cowen and Company. Matthew Hoffman – Cowen and Company: Hey, good afternoon, guys. Can I have a series of questions here, first time running through the combined company P&L? So may be you can go through first, give us a little bit of a better view of what the – you’ve given us two lines of the model, services and products, and you haven’t broken it out by VeriWise, and PowerFleet. Can you give us some sort of way to break up the numbers? You’ve given us historical for 1Q09 for PowerFleet services revenue looks like, was it relatively consistent year-over-year or if you can give us the stop numbers, that would be a good place to start. Just help us break out the top line a little bit, PowerFleet and VeriWise.

Sure, Matt. The revenue was $6.1 million. Of that $3.9 million came from Asset Intelligence, $1.8 million came from I.D. Systems, Inc., U.S., $357,000 came from I.D. Systems GmbH in Europe, and $99,000 came from didBOX, Ltd., our subsidiary in the U.K. Matthew Hoffman – Cowen and Company: Okay, excellent, alright. Can you go through the net adds or some of sort of a subscriber metric, how did it track versus the – or I think really for 20 million – in terms 20,000 subscribers for the year, how are you moving towards that goal for the VeriWise business?

We are not going to disclose specific subscriber numbers at this point, but we are – we do feel comfortable with the number on an annual basis and obviously our focus internally is on revenue generation and revenue growth whether that comes from the additional subscribers, additional services or renewals from existing customers and the like. So, at this point, we feel pretty good about how the year is shaping. We certainly have our work cut out for us, but we do not feel comfortable at this point disclosing specific subscriber information. Matthew Hoffman – Cowen and Company: Okay. So, trying to also get a feel for the business here as you look at the breakdown of the VeriWise hardware versus services, I know you are not going to give us some subscriber data, but if you could, just comment on the hardware data because we are looking at that on a GAAP and a cash basis and trying to break the model down into two elements seems to be – you were little bit better on the GAAP revenue than we thought but the loss is a little greater. Is that because the momentum was greater in terms of actually the expenses incurred in the period was – were higher because you did more product sales, help us – or services than you had anticipated, just help us through the model and where things came in versus your expectations?

Sure. And I will point you to a couple of places, Matt. One thing, our non-GAAP revenue, which is not included here in the P&L would have been $629,000 higher, so if we included really on a non-GAAP basis, the revenue would have been $6.8 million. The number that I want to point you to is on the balance sheet that the deferred revenue number, and if you combine difficult revenue, current and non-current, that adds up to $3.1 million. And as we go forward, you should see that number growing because of the new hardware sales coming in from AI and also prepaid maintenance contracts coming in from I.D. Systems, and that number would help with our recurrent revenue going forward, if that makes sense. Matthew Hoffman – Cowen and Company: It does, it does. Thanks of pointing that out, again, it’s first time through with the combined company, so some of the questions. Will be sharper around next time. But let’s go ahead and let’s talk some other business for a second and the I’ll let couple of other people jump in here. As you look at the – I think there were some comments, Darryl, you made them on the market picking up. How do you feel about – you know, as you look at the different – is that a comment that’s specific to Asset Intelligence, or is that PowerFleet as well?

You know, I think each one has their unique opportunities. As I kind of hone in on our report from what we did on an AI piece. Our trailer orders in March soared 165% versus where they were March this time last year, it’s about 13,000 trailer orders. All the trailer manufacturers are – our backlog is our highest in the past 18 months, which includes Great Dane, Wabash, and Hyundai, and then the U.S. freight tonnage jumped 7.5%, which is in line with the fuel index increase as well at 7%. So, all those signs are generating that a lot of the companies that we are currently talking to and have been and generating ROI solutions, providing this continues increase will free up cash to make some of those investments in purchases. Matthew Hoffman – Cowen and Company: Got it. That sounds good. Last question for you, Ned. I think the OpEx commentary of $5.5 million that’s new commentary for the third quarter if I heard you correctly, I think we’ve got it modeled it at six, I don’t know if you have been spot on that estimate, but is that your new guidance from – if – just correct me if I am wrong?

Yes, if you look at the – our cost-cutting efforts, we expect to primarily be completed in the second quarter with (inaudible) going into July, so we expect the operating expenses for the third quarter t be approximately $5.5 million. Matthew Hoffman – Cowen and Company: Alright, last question, employee count at the end of the first quarter and then what you expect it to be end of the second quarter?

End of the first quarter it was 115, we are on 99 right now, and we expect to be 85 by the end of July. Matthew Hoffman – Cowen and Company: Thank you very much.

Welcome.

Thank you, sir. And our next question comes from the line of Walter Schenker of Titan Capital. Walter Schenker – Titan Capital: Hi Jeffrey; hi Ned.

Hi, Walter. Walter Schenker – Titan Capital: A couple of things. First is the statement, the revenues in the traditional I.D. Systems business continue to be my word ‘unacceptable,’ I forget the word you actually used, Jeffrey. Can you give us some sense, we aren’t making reference anymore to some of our largest store customers such as Wal-Mart and the post office, what we can look forward to or what’s happening with some of our historically large customers, as you look at the rest of the year?

I think that’s a great observation, Walter, and while I certainly in my remarks didn’t use the word ‘unacceptable’ it is a great word to capture how I feel about it. The revenue year-over-year if you compare the first quarter of last year to the first quarter this year and in the powered industrial vehicle business, the growth was less than a rate that I would be satisfied with. Having said that, we have – did, as I mentioned in the remarks, did have achieved some – certain milestone within the quarter that we are proud of that continue to position us to further penetrate that existing base of customers that you referred to. We did make some progress on some new business that again we need to deepen those relationships as well to ultimately have that success reflected in the financials. As far as the postal service is concerned, as you know based on the lack of business from postal in ’09, they have been operating under a spending freeze although we do continue to work with them as our product is installed in well over 100 postal facilities, so they do continue to be – use the system, they are reliant on it in those facilities. And we are, believe it or not, starting to feel a little bit of an interest from facilities that we weren’t seeing in ’09. So, I do believe that things are improving a bit in the environment. I think it’s reflected in what’s happening in our discussions with postal. I am hopeful that we can covert that into some revenue generating opportunities this year. As far as Wal-Mart is concerned, as you know, we are in all of their regional distribution facilities. The AI business has installed about 55,000 trailers, and we are talking to them, and we have been talking to them about expanding into their grocery facilities. What I may not have mentioned is that what they told us what they would have liked to do is run the system in a pilot grocery facility for about a year and collect data through all of their seasons in order to do a very thorough analysis. I think Pete and his team have done a good job of conveying to them why they do not really need to do that, so I think that there could be some opportunity this year with Wal-Mart domestically, and of course we’ve commented in the past about our efforts internationally in Canada, Mexico as well as Europe. Walter Schenker – Titan Capital: Okay. And just the second question, I apologize if (inaudible) because I am on a cell phone and I am in New York, and AT&T sucks, that’s a commentary. Could you comment, Ned, on expected cash flow for the year, what cash usage on a full year basis you might or might not expect to have? And, secondly, if it is going to be neutral to positive, when that start occurring?

Sure, yes, Walter, our – well, I did not comment before, but I did comment on our previous call and estimates still remain the same. We expect to be cash flow neutral for the whole year. We will be using cash in the second quarter as well, and then we should see positive cash flow in third and fourth quarters. Walter Schenker – Titan Capital: Okay, thank you.

Thank you, Walter.

Thank you, sir. (Operator instructions) And I see no further questions in queue.

Okay, thank you. Thank you, everyone, for participating today. I look forward to bringing you further updates on the continued progress we make with the business for the rest of 2010 and beyond. Thank you very much.