##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from ______ to ___________
 Commission file number 1-9330
 INTELLIGENT SYSTEMS CORPORATION
  Georgia
    
    58-1964787(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 4355 Shackleford Road, Norcross, Georgia
    
    30093(Address of principal executive offices)
    
    (Zip Code)
 (770) 381-2900
 þ o
  o þ




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TABLE OF CONTENTS  Item 1. Financial StatementsItem 2. Managements Discussion and Analysis or Plan of OperationsItem 3. Controls and ProceduresPart II. OTHER INFORMATIONItem 4. Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSIGNATURESEX-31.1 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICEREX-31.2 SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICEREX-32.1 SECTION 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER    Table of Contents  
 Item 1. Financial Statements
 Intelligent Systems Corporation
 CONSOLIDATED BALANCE SHEETS  (in thousands, except share amounts)
 June 30,
    
    
    December 31,2005
    
    
    2004(unaudited)ASSETSCurrent assets:Cash
    
    $
    1,431
    
    
    $
    670Accounts receivable, net
    
    
    3,592
    
    
    
    2,931Inventories
    
    
    741
    
    
    
    653Other current assets
    
    
    486
    
    
    
    217Total current assets
    
    
    6,250
    
    
    
    4,471Long-term investments
    
    
    4,659
    
    
    
    4,879Property and equipment, at cost less accumulated depreciation
    
    
    879
    
    
    
    781Goodwill, net
    
    
    2,047
    
    
    
    2,049Other intangibles, net
    
    
    619
    
    
    
    699Other assets, net
    
    
    17
    
    
    
    25Total assets
    
    $
    14,471
    
    
    $
    12,904LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    $
    300
    
    
    $
    267Accounts payable
    
    
    835
    
    
    
    867Deferred revenue
    
    
    5,793
    
    
    
    4,895Accrued payroll
    
    
    1,212
    
    
    
    928Accrued expenses and other current liabilities
    
    
    560
    
    
    
    552Total current liabilities
    
    
    8,700
    
    
    
    7,509Other long-term liabilities
    
    
    263
    
    
    
    310Commitments and contingencies (Note 9)Minority interest
    
    
    1,516
    
    
    
    1,516Stockholders equity:Common stock, $0.01 par value, 20,000,000 shares authorized, 4,478,971 shares
issued and outstanding at June 30, 2005 and December 31, 2004
    
    
    45
    
    
    
    45Paid-in capital
    
    
    18,410
    
    
    
    18,410Accumulated other comprehensive loss
    
    
    (177
    )
    
    
    (124
    )Accumulated deficit
    
    
    (14,286
    )
    
    
    (14,762
    )Total stockholders equity
    
    
    3,992
    
    
    
    3,569Total liabilities and stockholders equity
    
    $
    14,471
    
    
    $
    12,904
 The accompanying notes are an integral part of these consolidated balance sheets.
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Intelligent Systems Corporation
 CONSOLIDATED STATEMENTS OF OPERATIONS  (unaudited; in thousands, except share and per share amounts)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004RevenueProducts
    
    $
    2,820
    
    
    $
    1,786
    
    
    $
    4,883
    
    
    $
    5,013Services
    
    
    1,842
    
    
    
    1,557
    
    
    
    3,358
    
    
    
    2,942Total revenue
    
    
    4,662
    
    
    
    3,343
    
    
    
    8,241
    
    
    
    7,955Cost of salesProducts
    
    
    869
    
    
    
    804
    
    
    
    1,732
    
    
    
    1,789Services
    
    
    980
    
    
    
    707
    
    
    
    1,849
    
    
    
    1,517Total cost of sales
    
    
    1,849
    
    
    
    1,511
    
    
    
    3,581
    
    
    
    3,306Operating expensesMarketing
    
    
    601
    
    
    
    687
    
    
    
    1,142
    
    
    
    1,347General & administrative
    
    
    800
    
    
    
    914
    
    
    
    1,759
    
    
    
    1,809Research & development
    
    
    1,675
    
    
    
    2,102
    
    
    
    3,302
    
    
    
    4,202Loss from operations
    
    
    (263
    )
    
    
    (1,871
    )
    
    
    (1,543
    )
    
    
    (2,709
    )Other incomeInterest income (expense), net
    
    
    12
    
    
    
    (5
    )
    
    
    18
    
    
    
    (8
    )Investment income (loss)
    
    
    914
    
    
    
    (371
    )
    
    
    1,956
    
    
    
    (371
    )Equity in income of affiliate companies
    
    
    19
    
    
    
    51
    
    
    
    36
    
    
    
    13Other income (loss), net
    
    
    13
    
    
    
    (9
    )
    
    
    21
    
    
    
    50Income (loss) before income tax provision
    
    
    695
    
    
    
    (2,205
    )
    
    
    488
    
    
    
    (3,025
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    Net income (loss)
    
    $
    695
    
    
    $
    (2,205
    )
    
    $
    476
    
    
    $
    (3,025
    )Basic net income (loss) per share
    
    $
    0.16
    
    
    $
    (0.49
    )
    
    $
    0.11
    
    
    $
    (0.68
    )Diluted net income (loss) per share
    
    $
    0.15
    
    
    $
    (0.49
    )
    
    $
    0.10
    
    
    $
    (0.68
    )Basic weighted average shares outstanding
    
    
    4,478,971
    
    
    
    4,478,971
    
    
    
    4,478,971
    
    
    
    4,478,971Diluted weighted average shares outstanding
    
    
    4,628,183
    
    
    
    4,478,971
    
    
    
    4,638,043
    
    
    
    4,478,971
 The accompanying notes are an integral part of these consolidated financial statements.
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Intelligent Systems Corporation
 CONSOLIDATED STATEMENTS OF CASH FLOW  (unaudited, in thousands)
 Six Months Ended June 30,CASH PROVIDED BY (USED FOR):
    
    2005
    
    
    2004OPERATIONS:Net income (loss)
    
    $
    476
    
    
    $
    (3,025
    )Adjustments to reconcile net income (loss) to net cash used for operating activities:Depreciation and amortization
    
    
    257
    
    
    
    315Deferred gain recognized
    
    
    
    
    
    
    (33
    )Investment (income) loss
    
    
    (1,956
    )
    
    
    371Equity in earnings of affiliate companies
    
    
    (36
    )
    
    
    (13
    )Changes in operating assets and liabilitiesAccounts receivable
    
    
    (661
    )
    
    
    (1,127
    )Inventories
    
    
    (88
    )
    
    
    58Other current assets
    
    
    (269
    )
    
    
    387Accounts payable
    
    
    (32
    )
    
    
    50Deferred revenue
    
    
    898
    
    
    
    1,301Accrued payroll
    
    
    284
    
    
    
    (207
    )Other non-current assets
    
    
    8
    
    
    
    (10
    )Accrued expenses and other current liabilities
    
    
    (37
    )
    
    
    140Cash used for operating activities
    
    
    (1,156
    )
    
    
    (1,793
    )INVESTING ACTIVITIES:Proceeds related to sale of investments
    
    
    2,117
    
    
    
    1,073Distributions from long-term investments
    
    
    9
    
    
    
    124Repayments under notes receivable
    
    
    
    
    
    
    15Purchases of intangible assets
    
    
    (6
    )
    
    
    Purchases of property and equipment
    
    
    (268
    )
    
    
    (105
    )Cash provided by investing activities
    
    
    1,852
    
    
    
    1,107FINANCING ACTIVITIES:Borrowings under short-term borrowing arrangements
    
    
    705
    
    
    
    980Repayments under short-term borrowing arrangements
    
    
    (672
    )
    
    
    (860
    )Cash provided by financing activities
    
    
    33
    
    
    
    120Effects of exchange rate changes on cash
    
    
    32
    
    
    
    (20
    )Net increase (decrease) in cash
    
    
    761
    
    
    
    (586
    )Cash at beginning of period
    
    
    670
    
    
    
    1,133Cash at end of period
    
    $
    1,431
    
    
    $
    547SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    5
    
    
    $
    5
 The accompanying notes are an integral part of these consolidated financial statements.
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Intelligent Systems Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    Throughout this report, the terms we, us, ours, ISC and company refer to
Intelligent Systems Corporation, including its majority-owned subsidiaries.
 2.
    
    The unaudited consolidated financial statements presented in this Form 10-QSB have been
prepared in accordance with accounting principles generally accepted in the United States
applicable to interim financial statements. Accordingly, they do not include all of the
information and notes required for complete financial statements. In the opinion of ISC
management, these consolidated financial statements contain all adjustments (which comprise
only normal and recurring accruals) necessary to present fairly the financial position and
results of operations as of and for the three and six month periods ended June 30, 2005 and
2004. The interim results for the three and six months ended June 30, 2005 are not
necessarily indicative of the results to be expected for the full year. These statements
should be read in conjunction with our consolidated financial statements and notes thereto for
the fiscal year ended December 31, 2004, as filed in our annual report on Form 10-KSB.
 3.
    
    Change in Accounting Policy Effective April 1, 2005, we changed our method of depreciation
for machinery, equipment, furniture and fixtures placed in service after March 31, 2005 to the
straight-line method. This change was applied on a prospective basis to assets acquired after
that date. Our previous policy of depreciation for additions of such assets was the 150%
declining balance method. Assets placed in service prior to the effective date of the change
continue to be depreciated using accelerated methods. We changed our method of depreciation
based upon managements belief that the straight-line method provides a better matching of
costs and revenues. Given our circumstances and the character of our assets and operations,
we believe the straight-line method is preferable. There is no cumulative effect of this
change. The effect of this change on net income for the quarter ended June 30, 2005 was to
increase net income by approximately $5,000 or $0.001 per share.
 4.
    
    Comprehensive Income (Loss)  In accordance with Financial Accounting Standards Board
Statement No. 130, Reporting Comprehensive Income, comprehensive income (loss) is the total
of net income (loss) and all other non-owner changes in equity in a period. A summary
follows:
 Consolidated Statements of Comprehensive Income (Loss)
    
    Three Months Ended 6/30,
    
    
    Six Months Ended 6/30,(unaudited, in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    695
    
    
    $
    (2,205
    )
    
    $
    476
    
    
    $
    (3,025
    )Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    17
    
    
    
    4
    
    
    
    32
    
    
    
    (20
    )Unrealized loss on available-for-sale securities
    
    
    24
    
    
    
    
    
    
    
    (85
    )
    
    
    Comprehensive income (loss)
    
    $
    736
    
    
    $
    (2,201
    )
    
    $
    423
    
    
    $
    (3,045
    )
 5.
    
    Stock-Based Compensation At June 30, 2005, we had two stock-based compensation plans. We
account for the plans under the intrinsic value recognition and measurement principles of
Accounting Principles Board (APB) No. 25, Accounting for Stock Issued to Employees, and
related interpretations. The intrinsic value recognition is measured by the difference
between the exercise price and the market value of the underlying securities. Based on the
additional disclosure requirements of Statement of Financial Accounting Standards (SFAS) No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure  an Amendment to
SFAS No. 123, the following table illustrates the effect of net income and earnings (loss)
per share if we had applied the fair value recognition provisions of SFAS No. 123, Accounting
for Stock-Based Compensation.
 Three Months Ended 6/30,
    
    
    Six Months Ended 6/30,(in thousands, except per share data)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss), reported
    
    $
    695
    
    
    $
    (2,205
    )
    
    $
    476
    
    
    $
    (3,025
    )Add: stock-based employee compensation included
in reported net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deduct: stock-based compensation expense determined under fair
value based method for all awards
    
    
    (10
    )
    
    
    (10
    )
    
    
    (18
    )
    
    
    (19
    )Pro forma net income (loss)
    
    $
    685
    
    
    $
    (2,215
    )
    
    $
    458
    
    
    $
    (3,044
    )Pro forma net income (loss) per common share basic
    
    $
    0.15
    
    
    $
    (0.49
    )
    
    $
    0.10
    
    
    $
    (0.68
    )Pro forma net income (loss) per common share diluted
    
    $
    0.15
    
    
    $
    (0.49
    )
    
    $
    0.10
    
    
    $
    (0.68
    )
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6.
    
    Industry Segments Our consolidated subsidiaries are involved in two industry segments:
Information Technology products and services, and Industrial Products. Operations in
Information Technology products and services include development and sales of software
licenses and related professional services and software maintenance contracts provided through
three subsidiaries: QS Technologies, Inc., VISaer, Inc., and CoreCard Software, Inc.
Operations in the Industrial Products segment include the manufacture and sale of
bio-remediating parts washing systems by our ChemFree Corporation subsidiary. Total revenue
by industry segment includes sales to unaffiliated customers. Sales between our industry
segments are not material. Operating profit (loss) is total revenue less operating expenses.
None of the corporate overhead expense is allocated to the individual industry segments.
Identifiable assets by industry segment are those assets that are used in our subsidiaries in
each industry segment. Corporate assets are principally cash, notes receivable and
investments. The table following contains segment information for the three and six months
ended June 30, 2005 and 2004.
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(unaudited, in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Information TechnologyRevenue
    
    $
    3,219
    
    
    $
    1,636
    
    
    $
    5,095
    
    
    $
    4,590Operating loss
    
    
    (192
    )
    
    
    (1,835
    )
    
    
    (1,501
    )
    
    
    (2,513
    )Industrial ProductsRevenue
    
    
    1,443
    
    
    
    1,707
    
    
    
    3,146
    
    
    
    3,365Operating income
    
    
    153
    
    
    
    140
    
    
    
    442
    
    
    
    224Consolidated SegmentsRevenue
    
    $
    4,662
    
    
    $
    3,343
    
    
    $
    8,241
    
    
    $
    7,955Operating loss
    
    
    (39
    )
    
    
    (1,695
    )
    
    
    (1,059
    )
    
    
    (2,289
    )A reconciliation of consolidated
segment data above to
consolidated loss follows:Consolidated segments operating loss
    
    $
    (39
    )
    
    $
    (1,695
    )
    
    $
    (1,059
    )
    
    $
    (2,289
    )Corporate expenses
    
    
    (224
    )
    
    
    (176
    )
    
    
    (484
    )
    
    
    (420
    )Consolidated operating loss
    
    $
    (263
    )
    
    $
    (1,871
    )
    
    $
    (1,543
    )
    
    $
    (2,709
    )Interest income (expense)
    
    
    12
    
    
    
    (5
    )
    
    
    18
    
    
    
    (8
    )Investment income (loss)
    
    
    914
    
    
    
    (371
    )
    
    
    1,956
    
    
    
    (371
    )Equity in income of affiliates
    
    
    19
    
    
    
    51
    
    
    
    36
    
    
    
    13Other income (loss)
    
    
    13
    
    
    
    (9
    )
    
    
    21
    
    
    
    50Income (loss) before income tax
    
    $
    695
    
    
    
    (2,205
    )
    
    
    488
    
    
    
    (3,025
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    Net income (loss)
    
    $
    695
    
    
    $
    (2,205
    )
    
    $
    476
    
    
    $
    (3,025
    )Depreciation and AmortizationInformation Technology
    
    $
    69
    
    
    $
    95
    
    
    $
    133
    
    
    $
    218Industrial Products
    
    
    62
    
    
    
    42
    
    
    
    117
    
    
    
    83Consolidated segments
    
    
    131
    
    
    
    137
    
    
    
    250
    
    
    
    301Corporate
    
    
    1
    
    
    
    6
    
    
    
    7
    
    
    
    14Consolidated depreciation and amortization
    
    $
    132
    
    
    $
    143
    
    
    $
    257
    
    
    $
    315Capital ExpendituresInformation Technology
    
    $
    44
    
    
    $
    (15
    )
    
    $
    57
    
    
    $
    1Industrial Products
    
    
    173
    
    
    
    35
    
    
    
    181
    
    
    
    104Consolidated segments
    
    
    217
    
    
    
    20
    
    
    
    238
    
    
    
    105Corporate
    
    
    30
    
    
    
    
    
    
    
    30
    
    
    
    Consolidated capital expenditures
    
    $
    247
    
    
    $
    20
    
    
    $
    268
    
    
    $
    105
 June 30, 2005
    
    
    December 31, 2004(unaudited)Identifiable AssetsInformation Technology
    
    $
    5,248
    
    
    $
    4,777Industrial Products
    
    
    3,341
    
    
    
    3,013Consolidated segments
    
    
    8,589
    
    
    
    7,790Corporate
    
    
    5,882
    
    
    
    5,114Consolidated assets
    
    $
    14,471
    
    
    $
    12,904
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7.
    
    Concentration of Revenue The following table indicates the percentage of consolidated
revenue represented by each customer for any period in which such customer represented more
than 10% of consolidated revenue.
 Three Months Ended June 30
    
    
    Six Months Ended June 30,(unaudited)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004VISaer Customer A
    
    
    
    
    
    
    11
    %VISaer Customer B
    
    
    14
    %VISaer Customer C
    
    
    
    
    
    
    
    
    
    
    10
    %CoreCard Customer D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    %ChemFree Customer E
    
    
    
    
    
    
    10
    %
 8.
    
    Distribution from ISC Guernsey, Ltd.  In the first and second quarters of 2005, we received
additional cash distributions from ISC Guernsey, Ltd in the amount of $1,042,000 and
$1,075,000, respectively. Such amounts are reflected in investment income for the three and
six month periods ended June 30, 2005. We do not expect to receive any additional
distributions related to ISC Guernsey. For further information on the ISC Guernsey
transaction, please refer to Note 2 to our Consolidated Financial Statements included in our
2004 Form 10-KSB.
 9.
    
    Commitments and Contingencies Please refer to Note 8 to our Consolidated Financial
Statements included in our 2004 Form 10-KSB for a description of our commitments and
contingencies.
 10.
    
    Write-down of Carrying Value of Investment During the quarter ended June 30, 2005, we
recorded a charge of $76,000 and $85,000, respectively, against the carrying values of our
minority investments in privately-held Aderis Pharmaceuticals, Inc. and LanCope, Inc. to
reflect our estimate of realizable value. Both entities had recent new financing transactions
that indicated a non-temporary diminution in value of the asset.
 
 Item 2. Managements Discussion and Analysis or Plan of Operations
 In addition to historical information, this Form 10-QSB may contain forward-looking statements
relating to ISC. All statements, trend analysis and other information relative to markets for our
products and trends in revenue, gross margins and anticipated expense levels, as well as other
statements including words such as anticipate, believe, plan, estimate, expect, and
intend, and other similar expressions, constitute forward-looking statements. Prospective
investors are cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements included those factors described below under
Factors That May Affect Future Performance. ISC undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events
or changes in future operating results.
 For purposes of this discussion and analysis, we are assuming and relying upon the readers
familiarity with the information contained in Item 6 Managements Discussion and Analysis or Plan
of Operation, in the Form 10-KSB for the year ended December 31, 2004 as filed with the Securities
and Exchange Commission.
 Overview
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
    
    A change in revenue level at one of our subsidiaries may impact consolidated revenue or
be offset by an opposing change at another subsidiary.
    
    Economic and marketplace trends may impact our subsidiaries differently or not at all and
two of our software subsidiaries have limited experience in their marketplaces which makes
it difficult to identify and evaluate trends that may impact their business.
    
    Two of our software subsidiaries, CoreCard Software and VISaer, have been involved in
major new product development initiatives for the past four years and have limited
experience delivering and installing their new products at customer sites, making it
difficult to predict with certainty when they will recognize revenue on individual software
contracts.
    
    Our subsidiaries are relatively small in revenue size and, in the Information Technology
sector, license revenue at a subsidiary in a given period may consist of a relatively small
number of contracts. Consequently, even small delays in a subsidiarys delivery or customer
acceptance under a software contract (which may be out of its control) could have a
significant and unpredictable impact on consolidated revenue that we can recognize in a
given quarterly or annual period.
    Results of Operations
  Revenue
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Cost of Sales
  Operating Expenses
 Interest Income (Expense)
 Investment Income (Loss)
 Page 9




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Equity in Earnings of Affiliate Companies 
 Other Income (Loss), Net
 Income Taxes
 Liquidity and Capital Resources
     Critical Accounting Policies and Estimates
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Factors That May Affect Future Operations
  
    
    Delays in software development projects which could cause our customers to delay
implementations, delay payments or cancel contracts, which would increase our costs, reduce
our revenue and increase our cash requirements.
    
    Undetected software errors which may delay product releases, increase our costs, result
in non-acceptance of our software by customers or delay revenue recognition.
    
    Competitive pressures (including pricing, changes in customer requirements and
preferences, and competitor product offerings) which may cause prospective customers to
choose an alternative product solution, resulting in lower revenue and profits (or increased
losses).
    
    The inability of our CoreCard or VISaer subsidiaries to establish a base of referenceable
customers for their new product offerings, resulting in lower revenue and profits (or
increased losses), increased cash needs and possibly leading to restructuring or cutting
back of the subsidiarys operations.
    
    Failure of our products specifications and features to achieve market acceptance.
    
    Delays in anticipated customer payments for any reason which would increase our cash
requirements and possibly our losses.
    
    Declines in performance, financial condition or valuation of minority-owned companies
which could cause us to write-down the carrying value of our investment or postpone an
anticipated liquidity event, which could negatively impact our earnings and cash.
    
    A worsening trend in the financial results, condition or outlook for the commercial
aviation industry worldwide which could impact VISaers near-term customer purchases, thus
increasing its losses and need for cash.
    
    The relatively limited sales and marketing experience of our VISaer and CoreCard
subsidiaries in their respective markets could cause them to misinterpret or fail to
interpret or adjust to a trend in the market or to underestimate the sales cycle time frame.
    
    In the Industrial Products market, failure by ChemFree to achieve its budgeted growth in
the European market or to reverse the recent decline in sales through its domestic
distributor network could cause lower than anticipated sales and profits.
    
    An insufficient number of potential CoreCard customers decide to purchase and run an
in-house software system and instead choose to outsource their account transaction
processing which could result in lower revenue, increased costs and greater cash
requirements.
    
    Budget reductions by state and local governments for information technology products that
delay award of contracts or implementations for our QS Technologies subsidiary.
    
    Other general economic and political conditions, particularly those which may cause
international business and domestic government customers to delay or cancel software
purchase decisions.
 
 Item 3. Controls and Procedures
  Page 11




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##### Table of Contents



Part II. OTHER INFORMATION
 
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 6. Exhibits
  3(i)
    
    Amended and Restated Articles of Incorporation of the Registrant dated November 14, 1991, as
amended November 25, 1997. (Incorporated by reference to Exhibit 3.1 to the Registrants
Annual Report on Form 10-K for the year ended December 31, 1991 and to Exhibit 3.1 to the
Registrants Report on Form 8-K dated November 25, 1997.)3(ii)
    
    Bylaws of the Registrant dated June 6, 1997. (Incorporated by reference to Exhibit 3(ii) of
the Registrants Form 10-K/A for the year ended December 31, 1997.)
 4.1
    
    Rights Agreement dated as of November 25, 1997 between the Registrant and American Stock
Transfer & Trust Company as Rights Agent. (Incorporated by reference to Exhibit 4.1 of the
Registrants Report on Form 8-K dated November 25, 1997 and filed on December 16, 1997.)4.2
    
    Form of Rights Certificate. (Incorporated by reference to Exhibit 4.2 of the Registrants
Report on Form 8-K dated November 25, 1997 and filed on December 16, 1997.)31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer furnished as required by
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
  INTELLIGENT SYSTEMS CORPORATION
RegistrantDate:  August 15, 2005
    By: /s/ J. Leland StrangeJ. Leland StrangeChief Executive Officer, PresidentDate:  August 15, 2005
    By: /s/ Bonnie L. HerronBonnie L. HerronChief Financial Officer Page 12