Item 1.01.     Entry into a Material Definitive Agreement.

On July 14, 2011, Asset Intelligence, LLC (“AI”), a Delaware limited liability company and wholly owned subsidiary of I.D. Systems, Inc. (the “Registrant”), a Delaware corporation, entered into a Sublease Agreement (as amended by Amendment No. 1 thereto, the “Sublease Agreement”) with AirSure Limited, LLC, a Colorado limited liability company, as sublessor (“Sublessor”), pursuant to which AI agreed to sublease from Sublessor certain premises (the “Leased Premises”) located in Plano, Texas, to be used as AI’s headquarters. Occupancy is expected to begin on November 1, 2011 (the “Commencement Date”).

The Leased Premises consist of approximately 11,482 rentable square feet. The term of the Sublease Agreement (the “Term”) begins on the Commencement Date and ends on September 30, 2015, unless earlier terminated pursuant to any of the terms, covenants or conditions of the Sublease Agreement or under applicable law. The base rent for the Leased Premises becomes payable beginning on February 1, 2012, and is approximately $17,701 per month (or $212,412 per year) through the remainder of the Term. AI also will be responsible for its pro rata share of any operating expenses, taxes and insurance expenses incurred by Sublessor in connection with the office building in which the Leased Premises are located.

In connection with AI’s entry into the Sublease Agreement, the Registrant entered into a Guaranty of Sublease (the “Guaranty”) with Sublessor, pursuant to which the Registrant has agreed to irrevocably and unconditionally guarantee the punctual payment, performance and fulfillment of all of the obligations of AI under the Sublease Agreement (including, without limitation, AI’s obligations to pay all rent), and to indemnify and hold Sublessor harmless from and against any damages or expenses that Sublessor may incur in the event that AI does not punctually pay, perform or fulfill such obligations.

This summary of the Sublease Agreement and the Guaranty does not purport to be complete and is qualified in its entirety by reference to full text of the Sublease Agreement and the Guaranty, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011.

Item 2.03     Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information under Item 1.01 above (“Entry into a Material Definitive Agreement”) is incorporated by reference into this Item 2.03, and is qualified in its entirety by reference to the full text of the Sublease Agreement and the Guaranty, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011.