UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission file number: 0-26056
IMAGE SENSING SYSTEMS, INC.
--------------------------------------------
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1519168
--------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 SPRUCE TREE CENTRE
1600 UNIVERSITY AVE. W.
ST. PAUL, MN 55104-3825
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(Address of principal executive offices)
(651) 603-7700
--------------------------------------------
(Issuer's telephone number)
Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required by Section 13 or 15(d)
of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [_]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: Common Stock, $.01 par value, 3,240,677
shares as of October 16, 2003.
IMAGE SENSING SYSTEMS, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
September 30, 2003 and December 31, 2002 4
Condensed Consolidated Statements of Income for the
Three- and Nine-month periods ended September 30, 2003
and 2002 5
Condensed Consolidated Statements of Cash Flows for the
Nine-month periods ended September 30, 2003 and 2002 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Disclosure Controls and Procedures 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 15
Exhibit Index 16
2
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange of 1934, as amended. Forward-looking
statements represent our expectations or beliefs concerning future events and
can be identified by the use of forward-looking words such as "believes," "may,"
"will," "should," "intends," "plans," "estimates," or "anticipates" or other
comparable terminology. Forward-looking statements are subject to risks and
uncertainties that may cause the Company's actual results to differ materially
from the results discussed in the forward-looking statements. Factors that might
cause such differences include, but are not limited to:
o lack of market acceptance of our products;
o budget constraints by governmental entities that purchase our
products;
o dependence on third parties for manufacturing and marketing
our products;
o continuing ability of our licensee to pay royalties owed;
o our inability to diversify our product offerings;
o revenue fluctuations caused by our dependence on sales to
governmental entities;
o failure to secure adequate protection for our intellectual
property rights;
o failure to respond to evolving industry standards and
technological changes;
o our inability to properly manage a growth in revenue and/or
production requirements;
o our inability to meet our future additional capital
requirements;
o our inability to retain key scientific and technical
personnel;
o control of our voting stock by insiders; and
o conditions beyond our control such as war, terrorist attacks,
severe acute respiratory syndrome (SARS) epidemic and economic
recession.
We caution that the forward-looking statements made in this report or in other
announcements made by the Company are further qualified by the factors set forth
in the Cautionary Statement included as Exhibit 99.1 to this Quarterly Report.
3
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2003 2002
------------ ------------
ASSETS (Unaudited) (Note)
Current assets:
Cash and cash equivalents $4,386,000 $2,625,000
Accounts receivable 2,091,000 1,417,000
Inventories 318,000 174,000
Prepaid expenses 140,000 123,000
Deferred income taxes 267,000 267,000
---------- ----------
Total current assets 7,202,000 4,606,000
Property and equipment, net 122,000 167,000
Other assets:
Capitalized software development costs, net 743,000 937,000
Goodwill 1,050,000 1,050,000
Other 29,000 29,000
---------- ----------
1,822,000 2,016,000
---------- ----------
Total assets $9,146,000 $6,789,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 593,000 $ 412,000
Due to former shareholders of subsidiary - 450,000
Accrued compensation 569,000 546,000
Income taxes payable 778,000 104,000
Deferred revenue 5,000 13,000
---------- ----------
Total current liabilities 1,945,000 1,525,000
Deferred income taxes 141,000 141,000
Shareholders' equity:
Common stock 32,000 32,000
Additional paid-in capital 4,895,000 4,717,000
Retained earnings 2,133,000 374,000
---------- ----------
7,060,000 5,123,000
---------- ----------
Total liabilities and shareholders' equity $9,146,000 $6,789,000
========== ==========
Note: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.
See accompanying notes
4
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three-Month Periods Ended Nine-Month Periods Ended
September 30 September 30
------------------------- ------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
REVENUE:
Product sales $ 840,000 $ 594,000 $2,299,000 $1,826,000
Royalties 1,829,000 1,405,000 4,518,000 3,947,000
Consulting services - 36,000 5,000 108,000
---------- ---------- ---------- ----------
2,669,000 2,035,000 6,822,000 5,881,000
COSTS OF REVENUE:
Product sales 397,000 275,000 1,015,000 871,000
Royalties 83,000 77,000 210,000 214,000
Consulting services - 39,000 2,000 80,000
---------- ---------- ---------- ----------
480,000 391,000 1,227,000 1,165,000
---------- ---------- ---------- ----------
Gross profit 2,189,000 1,644,000 5,595,000 4,716,000
OPERATING EXPENSES:
Selling, marketing and product support 599,000 703,000 1,697,000 1,926,000
General and administrative 396,000 267,000 962,000 953,000
Research and development 162,000 113,000 507,000 471,000
Restructuring - - - 474,000
---------- ---------- ---------- ----------
1,157,000 1,083,000 3,166,000 3,824,000
---------- ---------- ---------- ----------
Income from operations 1,032,000 561,000 2,429,000 892,000
Other income (expense), net 14,000 7,000 14,000 18,000
---------- ---------- ---------- ----------
Income before income taxes 1,046,000 568,000 2,443,000 910,000
Income taxes 365,000 14,000 684,000 20,000
---------- ---------- ---------- ----------
Net income 681,000 554,000 $1,759,000 $ 890,000
========== ========== ========== ==========
----------
Net income per common share:
Basic $ 0.21 $ 0.18 $ 0.55 $ 0.28
========== ========== ========== ==========
Diluted $ 0.19 $ 0.17 $ 0.51 $ 0.28
========== ========== ========== ==========
Weighted average number of common shares outstanding:
Basic 3,236,000 3,153,000 3,199,000 3,153,000
========== ========== ========== ==========
Diluted 3,678,000 3,260,000 3,482,000 3,197,000
========== ========== ========== ==========
See accompanying notes
5
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine-Month Periods Ended
September 30
--------------------------
2003 2002
----------- -----------
OPERATING ACTIVITIES:
Net income $ 1,759,000 $ 890,000
Adjustments to reconcile net income to net cash
provided by operating activities 363,000 22,000
----------- -----------
Net cash provided by operating activities 2,122,000 912,000
INVESTING ACTIVITIES:
Purchase of property and equipment (56,000) (51,000)
Proceeds from sale of equipment - 40,000
Purchase of minority interest of Flow Traffic - (314,000)
----------- -----------
Net cash used in investing activities (56,000) (325,000)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options 145,000 1,000
Payment to former shareholders of subsidiary (450,000) -
----------- -----------
Net cash (used in) provided by financing activities (305,000) 1,000.00
----------- -----------
Increase in cash and cash equivalents 1,761,000 588,000
Cash and cash equivalents, beginning of period 2,625,000 1,199,000
----------- -----------
Cash and cash equivalents, end of period $ 4,386,000 $ 1,787,000
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Notes payable and deferred payment portion of
acquisition of minority interest of Flow Traffic, Ltd. $ 750,000
===========
See accompanying notes
6
IMAGE SENSING SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2003
Note A: Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the nine-month
period ended September 30, 2003 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes
thereto for the year ended December 31, 2002.
Certain reclassifications have been made in the 2002 condensed consolidated
financial statements to conform to the 2003 presentation.
Note B: Net Income Per Share
The following table sets forth the computations of basic and diluted net income
per share (in thousands, except per share information):
Three-Month Periods Nine-month Periods
Ended September 30 Ended September 30
------------------- ------------------
2003 2002 2003 2002
------ ------ ------ ------
Numerator:
Net income $ 681 $ 554 $1,759 $ 890
====== ====== ====== ======
Denominator:
Shares used in basic net
income per share
calculation: 3,236 3,153 3,199 3,153
Effect of diluted securities:
Employee and director
stock options 442 107 283 44
------ ------ ------ ------
Shares used in diluted
net income per share
calculations 3,678 3,260 3,482 3,197
====== ====== ====== ======
Basic net income per share $ .21 $ .18 $ .55 $ .28
Diluted net income per share $ .19 $ .17 $ .51 $ .28
7
Options to purchase 46,000 and 565,860 shares of common stock with a weighted
average exercise price of $7.87 and $2.58 per share were outstanding at
September 30, 2003 and 2002, respectively, but were not included in the
computation of diluted net income per share because the exercise price exceeded
the average market price of the common shares during the period.
Note C: Stock Options
Stock options issued to employees are accounted for under the intrinsic value
method as prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees." Except for performance based stock options, no stock-based employee
compensation cost is reflected in net income, as all options granted had an
exercise price equal to the market value of the underlying common stock on the
date of grant. The following table illustrates the effect on net income and net
income per share if we had applied the fair value method of accounting for stock
options under the provisions of FASB Statement No. 123, "Accounting for
Stock-Based Compensation" using the assumptions described below (in thousands,
except per share information):
Three-Month Periods Nine-month Periods
Ended September 30, Ended September 30,
----------------------- -----------------------
2003 2002 2003 2002
---- ---- ---- ----
Net income, as reported $ 681 $ 554 $ 1,759 $ 890
Deduct: Total stock-based employee
compensation expense determined under the
fair value method for all awards, net of
related tax effects 63 67 189 355
--------- --------- --------- ---------
Pro-forma net income 618 487 1,570 535
========= ========= ========= =========
Net income per share:
Basic -- as reported $ .21 $ .18 $ .55 $ .28
Basic -- pro forma $ .19 $ .15 $ .49 $ .17
Diluted -- as reported $ .19 $ .17 $ .51 $ .28
Diluted -- pro forma $ .17 $ .15 $ .44 $ .17
For purposes of the pro forma information the fair value of each stock option
granted is estimated on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions used: zero dividend yield;
expected volatility of 136% in 2003 and in 2002; risk-free interest rate of
4.25% in 2003 and in 2002; and expected life of 10 years for all years
presented.
8
Note D: New Accounting Pronouncements
In December 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure." SFAS No. 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of Accounting Principles Board ("APB")
Opinion No. 28, Interim Financial Reporting, to require pro-forma disclosure in
interim financial statements by companies that elect to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25.
The Company continues to use the intrinsic value method of accounting for
stock-based compensation. As a result, the transition provisions will not have
an effect on the Company's consolidated financial statements.
In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 addresses the disclosure
requirements of a guarantor in its interim and annual financial statements about
its obligations under certain guarantees that it has issued. FIN 45 also
requires a guarantor to recognize, at the inception of a guarantee, a liability
for the fair value of the obligation undertaken in issuing the guarantee. The
disclosure requirements of FIN 45 were effective for the Company beginning with
its year ended December 31, 2002. The liability recognition requirements will be
applicable prospectively to all guarantees issued or modified after December 31,
2002. This pronouncement is not anticipated to have a material effect on the
Company's consolidated financial position or results of operations.
In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 is an interpretation of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, and
addresses consolidation by business enterprises of variable interest entities.
FIN 46 applies immediately to variable interest entities created or obtained
after January 31, 2003 and it applies in the first fiscal year or interim period
ending after December 15, 2003, to variable interest entities in which an
enterprise holds a variable interest that is acquired before February 1, 2003.
This pronouncement is currently not anticipated to have a material effect on the
Company's consolidated financial position or results of operations.
In May 2003, the FASB issued Statement 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. Statement 150
changes the classification in the statement of financial position of certain
common financial instruments from either equity or mezzanine presentation to
liabilities and requires an issuer of those financial statements to recognize
changes in fair value or redemption amount, as applicable, in earnings. SFAS 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of Statement 150 did not have an
impact on the Company's financial position or results of operations.
9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview:
We have developed proprietary machine vision technology that converts real world
information into digital electronic signals for processing by computer, and have
applied it to traffic management problems. Our technology uses standard video
and computer equipment, combined with proprietary technology, including complex
detection algorithms, computer software, special purpose hardware, and a
Microsoft Windows(R)-based graphical user interface that enables standard video
cameras to work with the Autoscope system. The majority of our revenue is
derived from royalties received from Econolite Control Products, Inc., our North
American and Latin American distribution partner, based on its sales of traffic
control products which use our technology. A secondary source of revenue comes
from direct sales, which are primarily to customers in Europe and Asia.
Our critical accounting policies, including the assumptions and judgments
underlying them, are disclosed in Management's Discussion and Analysis of
Financial Condition and Results of Operations in Form 10-KSB for the fiscal year
ended December 31, 2002. These policies have been consistently applied in all
material respects and address such matters as revenue recognition, goodwill and
income tax accounting. While the estimates and judgments associated with the
application of these policies may be affected by different assumptions or
conditions, we believe the estimates and judgments associated with the reported
amounts are appropriate under the circumstances.
Results of Operations (Comparison of Three-and Nine-month Periods Ended
September 30, 2003 and 2002):
Revenues for the third quarter of 2003 were $2,669,000, up 31% from $2,035,000
for the same period a year ago. The increase in revenues for the third quarter
was due primarily to a 41% increase in product sales over the comparable period
in 2002 and a 30% increase in royalty revenue compared to the third quarter of
2002. The increase in sales revenue was due primarily to large product orders
shipped to customers in Asia and Europe in the third quarter. The largest orders
in Europe were for products introduced within the past year. Royalty revenue for
the third quarter of 2003 increased primarily due to a large sale of Autoscope
Solo products by Econolite in their southwest territory.
Revenues for the nine-month period ended September 30, 2003, were $6,822,000, an
increase of 16% from $5,881,000 a year ago. A 26% increase in product sales and
a 14% increase in royalty revenue from Econolite for the current period over the
comparable nine-month period in 2002 were the primary reasons for the increase
in revenues. These increases were offset by the decrease in consulting services
from $108,000 in the comparable period of 2002 to $5,000 in the current
nine-month period ended September 30, 2003
10
Gross profits for the third quarter of 2003 were $2,189,000, or 82% of revenue,
compared to $1,644,000, or 81% of revenue, for the same period a year ago. Gross
profits for the nine-month period ended September 30, 2003 were $5,595,000, or
82% of revenue, compared to $4,716,000 or 80% of revenue a year ago. The slight
increase in gross profit margin for the third quarter and nine-month period
ended September 30, 2003, was due primarily to the decrease in revenue from
consulting services which had a lower margin than either product sales or
royalty revenue. We do not expect that our cost of product sales relative to
product sales or royalty costs relative to royalty revenue will change
appreciably during the balance of 2003.
Operating expenses were $1,157,000 for the third quarter of 2003, an increase of
7% from $1,083,000 for the comparable period a year ago. The slight increase is
due primarily to the addition of sales and service personnel in Asia and the
United States. For the nine-month period ended September 30, 2003, operating
costs were $3,166,000 compared to $3,824,000 for the comparable period of 2002.
The decrease was due primarily to severance and other restructuring costs
totaling $474,000 incurred in the first and second quarters of 2002, which did
not recur in 2003. Employment cost savings from the restructuring also
contributed to the decrease in operating expenses for the nine-month period.
Research and development expenses were $162,000 in the third quarter of 2003
compared to $113,000 for the same period a year ago, while R & D expenses were
$507,000 for the nine-month period ended September 30, 2003 compared to $471,000
for the comparable period in 2002. The increase in the third quarter of 2003 and
the nine-month period ended September 30, 2003 over the comparable periods in
2002 was due primarily to increased activity in developing communication
protocols and other software upgrades.
Income taxes for the third quarter and first half of 2003 are not comparable to
the same periods in 2002 when much of the federal tax expense was offset by net
operating loss carryforwards. In 2003 we expect to recognize the benefit of net
operating loss and research and development tax credit carryforwards not
previously recognized, which will reduce our income tax expense below the 35%
statutory level. As of September 30, 2003, we have net operating loss
carryforwards for income tax purposes of $372,000 and research and development
tax credits carryforwards of $321,000 that expire in the years 2007 through
2020.
Liquidity and Capital Resources:
Cash and cash equivalents increased by $1,761,000 for the nine-month period
ended September 30, 2003 compared to an increase in cash and cash equivalents of
$588,000 for the same period a year ago. In the nine-month period ended
September 30, 2003, cash was provided primarily from operating activities,
offset in part by payments to former shareholders of our subsidiary, Flow
Traffic Ltd. For the same period a year ago we had made a $314,000 initial
payment for the acquisition of the minority interest in Flow Traffic Ltd.
At September 30, 2003, we had $4,386,000 in cash and cash equivalents along with
an available revolving line of credit with a bank of $500,000. Management
believes that our cash and investment position, anticipated cash flows from
operations, and funds available through our
11
bank line of credit will be sufficient to meet cash and working capital
requirements for current operations for the foreseeable future.
New Accounting Pronouncements:
In December 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure." SFAS No. 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of Accounting Principles Board ("APB")
Opinion No. 28, Interim Financial Reporting, to require pro-forma disclosure in
interim financial statements by companies that elect to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25.
The Company continues to use the intrinsic value method of accounting for
stock-based compensation. As a result, the transition provisions will not have
an effect on the Company's consolidated financial statements.
In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 addresses the disclosure
requirements of a guarantor in its interim and annual financial statements about
its obligations under certain guarantees that it has issued. FIN 45 also
requires a guarantor to recognize, at the inception of a guarantee, a liability
for the fair value of the obligation undertaken in issuing the guarantee. The
disclosure requirements of FIN 45 were effective for the Company beginning with
its year ended December 31, 2002. The liability recognition requirements will be
applicable prospectively to all guarantees issued or modified after December 31,
2002. This pronouncement is not anticipated to have a material effect on the
Company's consolidated financial position or results of operations.
In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 is an interpretation of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, and
addresses consolidation by business enterprises of variable interest entities.
FIN 46 applies immediately to variable interest entities created or obtained
after January 31, 2003 and it applies in the first fiscal year or interim period
ending after December 15, 2003, to variable interest entities in which an
enterprise holds a variable interest that is acquired before February 1, 2003.
This pronouncement is currently not anticipated to have a material effect on the
Company's consolidated financial position or results of operations.
In May 2003, the FASB issued Statement 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. Statement 150
changes the classification in the statement of financial position of certain
common financial instruments from either equity or mezzanine presentation to
liabilities and requires an issuer of those financial statements to recognize
changes in fair value or redemption amount, as applicable, in earnings. SFAS 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption
12
of Statement 150 did not have an impact on the Company's financial position or
results of operations.
Item 3. Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities
Exchange Act of 1934 (the "Exchange Act")). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that, as of the
end of the period covered by this report, our disclosure controls and procedures
were effective in timely alerting them to the material information relating to
us (or our consolidated subsidiary) required to be included in the reports we
file or submit under the Exchange Act.
Changes in Internal Control Over Financial Reporting
During the fiscal quarter covered by this report, there has been no change in
our internal control over financial reporting (as defined in Rule 13a-15(f) or
15d-15(f) under the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are furnished as part of this quarterly report on Form
10-QSB for the quarterly period ended September 30, 2003.
Exhibit
Number Description
------- -----------
10.1 Addendum to Consulting Agreement, effective May 1,
2002 between ISS and Arthur J. Bourgeois
31.1 Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, dated
October 27, 2003.
31.2 Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, dated
October 27, 2003.
32.1 Chief Executive Officer Certification Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated
October 27, 2003.
13
32.2 Chief Financial Officer Certification Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated
October 27, 2003.
99.1 Cautionary Statement, incorporated herein by
reference to Exhibit 99.1 to the Company's Form
10-KSB for the fiscal year ended December 31, 2002.
(b) Reports on Form 8-K
On August 11, 2003, we furnished a Current Report on Form 8-K
disclosing a financial press release dated July 22, 2003.
14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Image Sensing Systems, Inc.
Date: October 27, 2003 /s/ James Murdakes
-------------------------------------------
James Murdakes
Chairman and Chief Executive Officer
(principal executive officer)
Date: October 27, 2003 /s/ Arthur J. Bourgeois
-------------------------------------------
Arthur J. Bourgeois
Chief Financial Officer
(principal financial and accounting officer)
15
EXHIBIT INDEX TO FORM 10-QSB
Exhibit No. Description
----------- -----------
10.1 Addendum to Consulting Agreement, effective May 1, 2002
between ISS and Arthur J. Bourgeois.
31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, dated October 27, 2003.
31.2 Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes- Oxley Act of 2002, dated October 27,
2003.
32.1 Chief Executive Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, dated October 27, 2003.
32.2 Chief Financial Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, dated October 27, 2003.
99.1 Cautionary Statement, incorporated herein by reference to
Exhibit 99.1 to the Company's Form 10-KSB for the fiscal year
ended December 31, 2002.