Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
U.S. GAAP ☒
|
International Financial Reporting Standards as issued Other ☐
|
by the International Accounting Standards Board ☐
|
(U.S. dollars in Thousands)
|
||||||||||||||||||||
December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
Cash and cash equivalents
|
$
|
52,352
|
$
|
12,801
|
$
|
9,073
|
$
|
3,892
|
$
|
7,912
|
||||||||||
Total current assets
|
103,136
|
67,219
|
61,982
|
43,908
|
40,002
|
|||||||||||||||
Total assets from discontinued operations
|
-
|
-
|
306
|
853
|
-
|
|||||||||||||||
Total assets
|
123,447
|
75,087
|
71,853
|
47,980
|
43,007
|
|||||||||||||||
Total current liabilities
|
75,509
|
75,058
|
59,197
|
45,365
|
45,007
|
|||||||||||||||
Total liabilities from discontinued operations
|
-
|
-
|
41
|
536
|
-
|
|||||||||||||||
Total liabilities
|
84,832
|
109,943
|
98,595
|
81,457
|
85,215
|
|||||||||||||||
Redeemable non-controlling interests
|
74,300
|
-
|
-
|
-
|
-
|
|||||||||||||||
Shareholders' deficit
|
35,685
|
34,856
|
26,742
|
33,477
|
42,208
|
U.S. dollars in Thousands
|
||||||||||||||||||||
Year ended December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
Revenue
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
$
|
255,576
|
$
|
187,022
|
||||||||||
Cost of revenue
|
290,461
|
311,994
|
254,728
|
223,486
|
167,959
|
|||||||||||||||
GROSS PROFIT
|
42,846
|
33,227
|
42,954
|
32,090
|
19,063
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Research and development
|
5,060
|
3,657
|
2,683
|
2,660
|
2,565
|
|||||||||||||||
Goodwill impairment
|
-
|
1,563
|
-
|
-
|
-
|
|||||||||||||||
Selling, general and administrative
|
33,063
|
34,924
|
26,201
|
21,583
|
20,291
|
|||||||||||||||
Total operating expenses
|
38,123
|
40,144
|
28,884
|
24,243
|
22,856
|
|||||||||||||||
OPERATING INCOME (LOSS)
|
4,723
|
(6,917
|
)
|
14,070
|
7,847
|
(3,793
|
)
|
|||||||||||||
Equity Income from investment in affiliate
|
91
|
124
|
-
|
-
|
-
|
|||||||||||||||
Other expenses, net
|
10,518
|
3,586
|
6,172
|
4,501
|
760
|
|||||||||||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSES
|
(5,704
|
)
|
(10,379
|
)
|
7,898
|
3,346
|
(4,553
|
)
|
||||||||||||
Income tax expenses
|
1,549
|
685
|
2,033
|
1,004
|
149
|
|||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(7,253
|
)
|
(11,064
|
)
|
5,865
|
2,342
|
(4,702
|
)
|
||||||||||||
Loss from discontinued operations
|
-
|
289
|
95
|
-
|
-
|
|||||||||||||||
NET INCOME (LOSS)
|
$
|
(7,253
|
)
|
$
|
(11,353
|
)
|
$
|
5,770
|
$
|
2,342
|
$
|
(4,702
|
)
|
|||||||
Less: Net income (loss) attributable to non-controlling interests
|
789
|
(123
|
)
|
(50
|
)
|
-
|
-
|
|||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V.
|
$
|
(8,042
|
)
|
$
|
(11,230
|
)
|
$
|
5,820
|
$
|
2,342
|
$
|
(4,702
|
)
|
|||||||
INCOME (LOSS) PER SHARE - BASIC AND DILUTED
|
||||||||||||||||||||
Continuing operations
|
$
|
0.26
|
$
|
(0.47
|
)
|
$
|
0.28
|
$
|
0.20
|
$
|
(0.58
|
)
|
||||||||
Discontinued operations
|
-
|
(0.01
|
)
|
-
|
-
|
-
|
||||||||||||||
Net income (loss)
|
$
|
0.26
|
$
|
(0.48
|
)
|
$
|
0.28
|
$
|
0.20
|
$
|
(0.58
|
)
|
||||||||
Weighted average number of shares outstanding
|
30,524,461
|
23,415,068
|
21,000,000
|
11,518,929
|
8,085,599
|
|||||||||||||||
•
|
Private Charter Flight Screening for Airlines - which includes security check of passengers' body and carry-on items.
|
•
|
Cargo Security Screening – for some international and domestic carriers.
|
•
|
Catering Security Screening – for some international and domestic carriers.
|
•
|
Aircraft Security Screening – for some international and domestic carriers.
|
•
|
Aircraft Search – Search of the entire aircraft to detect dangerous objects.
|
•
|
Cleaning the aircraft interior
|
•
|
Conducting cabin searches
|
Year ended December 31,
|
||||
2020
|
$
|
3.1
|
||
2021
|
2.1
|
|||
2022
|
1.7
|
|||
2023
|
1.6
|
|||
2024
|
1.3
|
|||
Thereafter
|
2.1
|
|||
$
|
11.9
|
U.S. dollars in Thousands
|
||||||||||||
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
||||||
Cost of revenue
|
290,461
|
311,994
|
254,728
|
|||||||||
Gross profit
|
42,846
|
33,227
|
42,954
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
5,060
|
3,657
|
2,683
|
|||||||||
Goodwill impairment
|
-
|
1,563
|
-
|
|||||||||
Selling, general and administrative
|
33,063
|
34,924
|
26,201
|
|||||||||
Total operating expenses
|
38,123
|
40,144
|
28,884
|
|||||||||
OPERATING INCOME (LOSS)
|
4,723
|
(6,917
|
)
|
14,070
|
||||||||
Equity income from investment in affiliate
|
91
|
124
|
-
|
|||||||||
Other expenses, net
|
(10,518
|
)
|
(3,586
|
)
|
(6,172
|
)
|
||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSES
|
(5,704
|
)
|
(10,379
|
)
|
7,898
|
|||||||
Income tax expenses
|
1,549
|
685
|
2,033
|
|||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(7,253
|
)
|
(11,064
|
)
|
5,865
|
|||||||
Loss from discontinued operations
|
-
|
(289
|
)
|
(95
|
)
|
|||||||
NET INCOME (LOSS)
|
(7,253
|
)
|
(11,353
|
)
|
5,770
|
|||||||
Less: Net income (loss) attributable to non-controlling interests
|
789
|
(123
|
)
|
(50
|
)
|
|||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V.
|
$
|
(8,042
|
)
|
$
|
(11,230
|
)
|
$
|
5,820
|
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of revenue
|
87.1
|
%
|
90.4
|
%
|
85.6
|
%
|
||||||
Gross profit
|
12.9
|
%
|
9.6
|
%
|
14.4
|
%
|
||||||
Research and development
|
1.5
|
%
|
1.1
|
%
|
0.9
|
%
|
||||||
Goodwill impairment
|
-
|
%
|
0.4
|
%
|
-
|
%
|
||||||
Selling, general and administrative
|
9.9
|
%
|
10.1
|
%
|
8.7
|
%
|
||||||
Total operating expenses
|
11.4
|
%
|
11.6
|
%
|
9.6
|
%
|
||||||
OPERATING INCOME (LOSS)
|
1.5
|
%
|
(2.0
|
)%
|
4.8
|
%
|
||||||
Equity income from investment in affiliate
|
-
|
%
|
-
|
%
|
-
|
%
|
||||||
Other expenses, net
|
(3.2
|
)%
|
(1.0
|
)%
|
(2.1
|
)%
|
||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSES
|
(1.7
|
)%
|
(3.0
|
)%
|
2.7
|
%
|
||||||
Income tax expenses
|
0.5
|
%
|
0.2
|
%
|
0.7
|
%
|
||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(2.2
|
)%
|
(3.2
|
)%
|
2.0
|
%
|
||||||
Loss from discontinued operations
|
-
|
%
|
(0.1
|
)%
|
-
|
%
|
||||||
NET INCOME (LOSS)
|
(2.2
|
)%
|
(3.3
|
)%
|
2.0
|
%
|
||||||
Less: Net income (loss) attributable to non-controlling interests
|
0.2
|
%
|
-
|
%
|
-
|
%
|
||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V.
|
(2.4
|
)%
|
(3.3
|
)%
|
2.0
|
%
|
(U.S. dollars in Thousands)
|
||||||||||||
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Germany
|
$
|
137,207
|
$
|
134,646
|
$
|
125,896
|
||||||
Netherlands
|
97,700
|
121,465
|
103,862
|
|||||||||
United States of America
|
73,719
|
69,548
|
54,891
|
|||||||||
Other
|
24,681
|
19,562
|
13,033
|
|||||||||
Total
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
U.S. Dollars in thousands
|
||||||||||||||||
Airport
|
||||||||||||||||
Security
|
||||||||||||||||
and Other
|
||||||||||||||||
Aviation | Authentication | |||||||||||||||
Corporate
|
Services
|
Technology
|
Total
|
|||||||||||||
Year ended December 31, 2019:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
309,548
|
$
|
23,759
|
$
|
333,307
|
||||||||
Depreciation and amortization
|
46
|
1,328
|
314
|
1,688
|
||||||||||||
Income (loss) from continuing operations
|
(11,740
|
)
|
(2,406
|
)
|
6,893
|
(7,253
|
)
|
|||||||||
Goodwill
|
-
|
681
|
-
|
681
|
||||||||||||
Total assets from continuing operations
|
23,381
|
64,647
|
35,419
|
123,447
|
||||||||||||
Year ended December 31, 2018:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
329,150
|
$
|
16,071
|
$
|
345,221
|
||||||||
Depreciation and amortization
|
45
|
1,756
|
96
|
1,897
|
||||||||||||
Income (loss) from continuing operations
|
(6,205
|
)
|
(9,163
|
)
|
4,304
|
(11,064
|
)
|
|||||||||
Goodwill
|
695
|
695
|
||||||||||||||
Total assets from continuing operations
|
329
|
66,373
|
8,385
|
75,087
|
||||||||||||
Year ended December 31, 2017:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
292,393
|
$
|
5,289
|
$
|
297,682
|
||||||||
Depreciation and amortization
|
46
|
1,333
|
37
|
1,416
|
||||||||||||
Income (loss) from continuing operations
|
(9,569
|
)
|
16,078
|
(644
|
)
|
5,865
|
||||||||||
Goodwill
|
1,044
|
1,044
|
||||||||||||||
Total assets from continuing operations
|
4,089
|
63,742
|
3,536
|
71,367
|
|
• |
Decrease of travel by flights, reducing the demand for services the Company provide as part of its Airport Security and other aviation services. As a result, our cumulative revenues in the first four months at 2020 was approximately
$8.3 million lower than our 2019 revenues in the same period with the major negative impact identified in March and April, which has been continuing in May and June, so far. Many of the Company’s employees were laid off and / or ordered
to stay home. The Company’s operating results have declined significantly in 2020 and our liquidity has been negatively impacted.
|
|
• |
Governments in some of the countries in which we operate have also announced the implementation of government assistance measures, which may mitigate the impact of the COVID-19 outbreak on our results
and liquidity. In the United States of America, the government has approved a payroll support of $13.7 million to the American subsidiary of the Company. In the Netherlands, the government has approved a support of €8.3 million
($9.1 million as of June 1, 2020) for the period April 1, 2020 until June 30, 2020 under the NOW program. In addition, once the current support period will expire, the Company is entitled to request additional support for the
period July 1, 2020 until October 31, 2020 and is expecting to get €6.9 million ($7.6 million as of June 1, 2020). In Germany, the Company is eligible for payroll support up to 60% of the employee’s payroll (on individual basis) in
case the employees meet the support plan requirements. The Company has already applied for this support starting from April 2020. These available governmental support plans might be extended and/or changed according to the future
COVID-19 developments. In addition the Dutch and the German governments are providing through local banks long term loans up to 10 years to companies that meet certain requirements. The Company is evaluating the terms of those
loans and its eligibility to such loans.
|
|
• |
Depending on the duration of the COVID-19 crisis and continued negative impact on economic activity, the Company might experience further negative results and liquidity restrains. The exact impact on our
activities in the remainder of 2020 and thereafter cannot be predicted.
|
Contractual Obligations
|
Payments due by Period (U.S. Dollars in Thousands)
|
|||||||||||||||||||
Total
|
Less than 1 Year
|
1-3 years
|
4-5 years
|
more than 5 years
|
||||||||||||||||
Line of credit in the U.S.
|
$
|
6,475
|
$
|
-
|
$
|
6,475
|
$
|
-
|
$
|
-
|
||||||||||
Lines of credit in Europe
|
13,433
|
13,433
|
-
|
-
|
-
|
|||||||||||||||
Loan payable
|
1,121
|
1,121
|
-
|
-
|
-
|
|||||||||||||||
Consulting agreements
|
1,008
|
168
|
504
|
336
|
-
|
|||||||||||||||
Convertible notes payable - related party (including accrued interest)
|
2,000
|
2,000
|
-
|
-
|
-
|
|||||||||||||||
Future interest and fees on line of credit and convertible notes to a related party (1)
|
875
|
350
|
525
|
-
|
-
|
|||||||||||||||
Loan payable to a related party
|
1,538
|
1,538
|
-
|
-
|
-
|
|||||||||||||||
Operating lease obligations
|
11,883
|
3,100
|
5,333
|
2,658
|
792
|
|||||||||||||||
$
|
38,333
|
$
|
21,710
|
$
|
12,837
|
$
|
2,994
|
$
|
792
|
|||||||||||
(1) Interest and fees are estimated based on future interest rates expected to be applicable.
|
Age
|
Position
|
|
---
|
--------
|
|
Menachem Atzmon
|
75
|
Chairman of the Supervisory Board
|
Ron Atzmon
|
44
|
Member of the Supervisory Board and Managing Director of AU10TIX
|
Gil Atzmon
|
46
|
Member of the Supervisory Board
|
Philip M. Getter
|
83
|
Member of the Supervisory Board, Chairman of the Audit Committee
|
David W. Sass
|
84
|
Member of the Supervisory Board
|
Gail F. Lieberman
|
76
|
Member of the Supervisory Board, Member of the Audit Committee and Chairman of the Compensation Committee
|
Gordon Hausmann
|
74
|
Member of the Supervisory Board, Member of the Compensation Committee and Member of the Audit Committee
|
Ran Langer
|
74
|
Joint Managing Director
|
Alon Raich
|
44
|
Joint Managing Director and Chief Financial Officer
|
Rom Shaked
|
37
|
Joint Managing Director and Internal Controller
|
Non-equity
|
Nonqualified
|
Number
of
Option
Award
|
Number
of
Stock
Awards
|
||||||||||||||||||||||||||||||
Incentive
|
Deferred
|
||||||||||||||||||||||||||||||||
|
All Other
|
Plan
|
Compensation
|
||||||||||||||||||||||||||||||
Principal
Position
|
Year
|
Salary
$
|
Bonus
$
|
Compensations
$
|
Compensation
$
|
Earnings
$
|
Total
$
|
||||||||||||||||||||||||||
Managing
|
2019
|
476
|
-
|
20
|
-
|
-
|
-
|
-
|
496
|
||||||||||||||||||||||||
Director (a)
|
2018
|
481
|
295
|
21
|
-
|
-
|
-
|
-
|
797
|
||||||||||||||||||||||||
2017 |
423
|
-
|
32
|
-
|
-
|
-
|
-
|
455
|
Non-equity
|
Nonqualified
|
Number
of
Option
Award
|
Number
of
Stock
Awards
|
||||||||||||||||||||||||||||
Incentive
|
Deferred
|
||||||||||||||||||||||||||||||
|
All Other
|
Plan
|
Compensation
|
||||||||||||||||||||||||||||
Principal
|
Year
|
Salary
|
Bonus
|
Compensations
|
Compensation
|
Earnings
|
Total
|
||||||||||||||||||||||||
Position
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||
Managing
|
|||||||||||||||||||||||||||||||
Director of a
|
|||||||||||||||||||||||||||||||
subsidiary (b)
|
2019
|
185
|
616
|
-
|
-
|
-
|
-
|
-
|
801
|
Salaries, fees,
|
Pension, retirement
|
|||||||
commissions
|
and other
|
|||||||
and bonuses
|
similar benefits
|
|||||||
(in thousands)
|
||||||||
Supervisory Directors as a group ( 7 persons)
|
$
|
254
|
$
|
-
|
||||
Officers as a group ( 4 persons)
|
$
|
1,672
|
$
|
94
|
Percent of
|
||||||||
Amount
Beneficially
|
Common shares
|
|||||||
Name Shareholders Holding Five Percent or More
|
Owned (a)
|
Outstanding (a)
|
||||||
MacPherson Trust and its Ultimate Beneficial Owners (b)
|
61.6
|
%
|
21,818,861
|
|||||
Menachem J. Atzmon
|
13.7
|
%
|
4,850,000
|
|||||
All officers and directors as a group (10 persons), the MacPherson Trust and its Ultimate Beneficial Owners
|
89.2
|
%
|
31,604,907
|
(a)
|
The amounts include common shares owned by each of the above, directly or indirectly.
|
(b)
|
1. The MacPherson Trust (“Trust”) was created for the benefit of the family of Mr. Menachem J. Atzmon. The Trust owns Spencer Corporation, Limited, which holds together with the Trust and its
Ultimate Beneficial Owners approximately 61.6% of the issued and outstanding Common Shares. Mr. Atzmon disclaims any beneficial interest in the MacPherson Trust. Spencer Corporation Limited and the MacPherson Trust and its Ultimate Beneficial
Owners together with Mr. Atzmon are able to appoint all the directors of ICTS and control the affairs of ICTS.
2. As of June 1, 2020 the Company has notes payable to a related party in the total amount of $0 million and accrued interest of $2.7 million. Out of this amount $2.0 million is convertible at a rate of $0.40
per share. The calculation above does not take into consideration the conversion of the accrued interest.
|
Year
|
High
|
Low
|
||||||
2015
|
$
|
0.85
|
$
|
0.51
|
||||
2016
|
$
|
0.71
|
$
|
0.40
|
||||
2017
|
$
|
1.30
|
$
|
0.45
|
||||
2018
|
$
|
1.09
|
$
|
0.40
|
||||
2019
|
$
|
3.00
|
$
|
0.15
|
2019
|
High
|
Low
|
||||||
First quarter
|
$
|
0.26
|
$
|
0.25
|
||||
Second quarter
|
$
|
0.25
|
$
|
0.15
|
||||
Third quarter
|
$
|
1.45
|
$
|
0.19
|
||||
Fourth quarter
|
$
|
3.00
|
$
|
1.05
|
||||
2018
|
High
|
Low
|
||||||
First quarter
|
$
|
1.09
|
$
|
0.60
|
||||
Second quarter
|
$
|
0.80
|
$
|
0.40
|
||||
Third quarter
|
$
|
0.80
|
$
|
0.47
|
||||
Fourth quarter
|
$
|
0.48
|
$
|
0.40
|
||||
2017
|
High
|
Low
|
||||||
First quarter
|
$
|
0.57
|
$
|
0.45
|
||||
Second quarter
|
$
|
0.62
|
$
|
0.45
|
||||
Third quarter
|
$
|
0.80
|
$
|
0.55
|
||||
Fourth quarter
|
$
|
1.30
|
$
|
0.51
|
•
|
The excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the shares,
|
•
|
The amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which the Company was a PFIC, will be treated as ordinary income, and
|
•
|
The amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be
imposed on the resulting tax attributable to each such year.
|
•
|
a corporation;
|
•
|
another entity with a capital divided into shares;
|
•
|
a cooperative (association); or
|
•
|
another legal entity that has an enterprise or an interest in an enterprise to which the Shares are attributable,
|
•
|
a qualifying pension fund;
|
•
|
a qualifying investment fund (fiscale beleggingsinstelling) or a qualifying exempt investment institution (vrijgestelde beleggingsinstelling); or
|
•
|
another entity exempts from corporate income tax,
|
(a)
|
such holder has an enterprise or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment (vaste inrichting) or a permanent representative
(vaste vertegenwoordiger) in the Netherlands and to which enterprise or part of an enterprise, as the case may be, Shares are attributable; or
|
(b)
|
such income or capital gain forms a “benefit from miscellaneous activities in the Netherlands” (“resultaat uit overige werkzaamheden in Nederland”) which would for instance be the case if
the activities in the Netherlands with respect to Shares exceed “normal active asset management” (“normaal, actief vermogensbeheer” or if such income and gains are derived from the holding, whether directly or indirectly, of (a combination
of) shares, debt claims or other rights (together, a “lucrative interest” (“lucratief belang”)) that the holder thereof has acquired under such circumstances that such income and gains are intended to be remuneration for work or services
performed by such holder (or a related person), in whole or in part, in the Netherlands, whether within or outside an employment relation, where such lucrative interest provides the holder thereof, economically speaking, with certain
benefits that have a relation to the relevant work or services.
|
2019
|
2018
|
|||||||
Audit fees
|
$
|
245
|
$
|
230
|
||||
Audit related fees
|
-
|
-
|
||||||
Tax fees
|
-
|
-
|
||||||
Total fees
|
$
|
245
|
$
|
230
|
Page
|
|
Consolidated Financial Statements:
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-8
|
|
Financial Statement Schedule:
|
|
F-43
|
For the Years Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
||||||
Cost of revenue
|
290,461
|
311,994
|
254,728
|
|||||||||
GROSS PROFIT
|
42,846
|
33,227
|
42,954
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
5,060
|
3,657
|
2,683
|
|||||||||
Goodwill impairment
|
-
|
1,563
|
-
|
|||||||||
Selling, general and administrative
|
33,063
|
34,924
|
26,201
|
|||||||||
Total operating expenses
|
38,123
|
40,144
|
28,884
|
|||||||||
OPERATING INCOME (LOSS)
|
4,723
|
(6,917
|
)
|
14,070
|
||||||||
Equity income from investment in affiliate
|
91
|
124
|
-
|
|||||||||
Other expenses, net
|
(10,518
|
)
|
(3,586
|
)
|
(6,172
|
)
|
||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSES
|
(5,704
|
)
|
(10,379
|
)
|
7,898
|
|||||||
Income tax expenses
|
1,549
|
685
|
2,033
|
|||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(7,253
|
)
|
(11,064
|
)
|
5,865
|
|||||||
Loss from discontinued operations
|
-
|
(289
|
)
|
(95
|
)
|
|||||||
NET INCOME (LOSS)
|
$
|
(7,253
|
)
|
$
|
(11,353
|
)
|
$
|
5,770
|
||||
Net income (loss) attributable to non-controlling interests
|
789
|
(123
|
)
|
(50
|
)
|
|||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ICTS
|
||||||||||||
INTERNATIONAL N.V.
|
$
|
(8,042
|
)
|
$
|
(11,230
|
)
|
$
|
5,820
|
||||
INCOME (LOSS) PER SHARE - BASIC AND DILUTED
|
||||||||||||
Continuing operations
|
$
|
(0.26
|
)
|
$
|
(0.47
|
)
|
$
|
0.28
|
||||
Discontinued operations
|
-
|
(0.01
|
)
|
-
|
||||||||
Net income (loss)
|
$
|
(0.26
|
)
|
$
|
(0.48
|
)
|
$
|
0.28
|
||||
Weighted average number of shares outstanding
|
30,524,461
|
23,415,068
|
21,000,000
|
|||||||||
COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Net income (loss)
|
$
|
(7,253
|
)
|
$
|
(11,353
|
)
|
$
|
5,770
|
||||
Other Comprehensive Income - Translation adjustments
|
79
|
669
|
965
|
|||||||||
Comprehensive income (loss)
|
(7,174
|
)
|
(10,684
|
)
|
6,735
|
|||||||
Comprehensive income (loss) attributable to non-controlling and redeemable non-controlling interests
|
795
|
(123
|
)
|
(30
|
)
|
|||||||
COMREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V.
|
$
|
(7,969
|
)
|
$
|
(10,561
|
)
|
$ |
6,765
|
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Other
|
Non
|
Total
|
|||||||||||||||||||||||||
Common Stock
|
Paid-In
|
Accumulated
|
Comprehensive
|
Controlling
|
Shareholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Interests
|
Deficit
|
||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2016
|
21,000,000
|
$
|
10,655
|
$
|
23,128
|
$
|
(59,554
|
)
|
$
|
(7,859
|
)
|
$
|
153
|
$
|
(33,477
|
)
|
||||||||||||
Net income (loss)
|
-
|
-
|
-
|
5,820
|
-
|
(50
|
)
|
5,770
|
||||||||||||||||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
945
|
20
|
965
|
|||||||||||||||||||||
BALANCE AT DECEMBER 31, 2017
|
21,000,000
|
10,655
|
23,128
|
(53,734
|
)
|
(6,914
|
)
|
123
|
(26,742
|
)
|
||||||||||||||||||
Issuance of common stock
|
4,100,000
|
2,241
|
329
|
-
|
-
|
-
|
2,570
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(11,230
|
)
|
-
|
(123
|
)
|
(11,353
|
)
|
||||||||||||||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
669
|
-
|
669
|
|||||||||||||||||||||
BALANCE AT DECEMBER 31, 2018
|
25,100,000
|
12,896
|
23,457
|
(64,964
|
)
|
(6,245
|
)
|
-
|
(34,856
|
)
|
||||||||||||||||||
Net income (loss)
|
-
|
-
|
-
|
(8,042
|
)
|
-
|
15
|
(8,027
|
)
|
|||||||||||||||||||
Issuance of common stock
|
10,333,333
|
5,224
|
1,474
|
-
|
-
|
-
|
6,698
|
|||||||||||||||||||||
Sale of ABC Technologies B.V. preferred shares, series A-1, net
|
-
|
-
|
2,041
|
-
|
-
|
(1,614
|
)
|
427
|
||||||||||||||||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
73
|
-
|
73
|
|||||||||||||||||||||
BALANCE AT DECEMBER 31, 2019
|
35,433,333
|
$
|
18,120
|
$
|
26,972
|
$
|
(73,006
|
)
|
$
|
(6,172
|
)
|
$
|
(1,599
|
)
|
$
|
(35,685
|
)
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
CASH FLOW FROM OPERATING ACTIVITIES:
|
||||||||||||
Income (loss) from continuing operations
|
$
|
(7,253
|
)
|
$
|
(11,064
|
)
|
$
|
5,865
|
||||
Loss from discontinued operations
|
-
|
(289
|
)
|
(95
|
)
|
|||||||
Net income (loss) from continuing operations
|
(7,253
|
)
|
(11,353
|
)
|
5,770
|
|||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
1,688
|
1,897
|
1,416
|
|||||||||
Goodwill impairment
|
-
|
1,563
|
-
|
|||||||||
Accrued interest on convertible notes payable to a related party
|
-
|
2,687
|
2,706
|
|||||||||
Accrued interest on loan payable to a related party
|
-
|
59
|
109
|
|||||||||
Bad debt expense
|
260
|
303
|
97
|
|||||||||
Deferred income taxes
|
(35
|
)
|
(103
|
)
|
33
|
|||||||
Equity income from investment in affiliate
|
(91
|
)
|
(124
|
)
|
-
|
|||||||
Revaluation and related costs reimbursed to related party
|
8,139
|
-
|
-
|
|||||||||
Changes in assets and liabilities:
|
||||||||||||
Accounts receivable, net
|
669
|
(249
|
)
|
(7,591
|
)
|
|||||||
Income tax receivable
|
1,284
|
(1,496
|
)
|
60
|
||||||||
Prepaid expenses and other current assets
|
82
|
(2,184
|
)
|
(645
|
)
|
|||||||
Other assets
|
(89
|
)
|
28
|
(359
|
)
|
|||||||
Accounts payable
|
(30
|
)
|
592
|
1,667
|
||||||||
Accrued expenses and other current liabilities
|
(7,055
|
)
|
12,358
|
3,144
|
||||||||
Income taxes payable
|
(1,799
|
)
|
(1,047
|
)
|
1,866
|
|||||||
VAT payable
|
(4,734
|
)
|
4,540
|
232
|
||||||||
Operating lease accounts, net
|
(102
|
)
|
-
|
-
|
||||||||
Other liabilities
|
(26
|
)
|
(308
|
)
|
476
|
|||||||
Net cash provided by discontinued operations
|
-
|
253
|
95
|
|||||||||
Net cash provided by (used in) operating activities
|
(9,092
|
)
|
7,416
|
9,076
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase of property and equipment
|
(1,884
|
)
|
(2,917
|
)
|
(2,529
|
)
|
||||||
Purchase of subsidiary in Denmark, net of acquired cash of $499
|
-
|
-
|
(1,066
|
)
|
||||||||
Purchase of subsidiary in Sweden, net of acquired cash of $74
|
-
|
(989
|
)
|
-
|
||||||||
Purchase of subsidiary in Spain, net of acquired cash of $36
|
-
|
(184
|
)
|
-
|
||||||||
Investments
|
(1,800
|
)
|
(131
|
)
|
(3,500
|
)
|
||||||
Deposits at (withdraws from) insurance companies
|
151
|
(295
|
)
|
(245
|
)
|
|||||||
Repayments from (loan to) an affiliate
|
180
|
(180
|
)
|
-
|
||||||||
Net cash used in investing activities
|
$
|
(3,353
|
)
|
$
|
(4,696
|
)
|
$
|
(7,340
|
)
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
CASH FLOW FROM FINANCING ACTIVITIES:
|
||||||||||||
Borrowings under lines of credit, net
|
$
|
8,076
|
$
|
1,485
|
$
|
1,387
|
||||||
Proceeds from convertible notes payable to a related party
|
-
|
-
|
382
|
|||||||||
Repayments of convertible notes payable to a related party
|
(29,572
|
)
|
(2,381
|
)
|
(2,808
|
)
|
||||||
Proceeds from a related party
|
1,000
|
-
|
-
|
|||||||||
Proceeds from (repayments of) loan payable to a related party
|
(368
|
)
|
(1,100
|
)
|
1,300
|
|||||||
Proceeds from loan payable
|
-
|
2,288
|
1,198
|
|||||||||
Repayment of loan payable
|
(1,120
|
)
|
(1,198
|
)
|
-
|
|||||||
Proceeds from sale of a subsidiary's preferred shares
|
80,000
|
-
|
-
|
|||||||||
Transaction costs related to the sale of a subsidiary's preferred shares
|
(6,054
|
)
|
-
|
-
|
||||||||
Increase (decrease) in bank overdrafts
|
(107
|
)
|
845
|
(1,109
|
)
|
|||||||
Net cash provided by (used in) financing activities
|
51,855
|
(61
|
)
|
350
|
||||||||
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(482
|
)
|
(247
|
)
|
3,740
|
|||||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
38,928
|
2,412
|
5,826
|
|||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF YEAR
|
15,917
|
13,505
|
7,679
|
|||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF YEAR
|
$
|
54,845
|
$
|
15,917
|
$
|
13,505
|
||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
|
||||||||||||
Stock issuance as reduction against convertible notes payable to related party
|
$
|
6,698
|
$
|
2,570
|
$
|
-
|
||||||
Sale of investment in White Line as reduction against convertible notes payable to related party
|
$
|
-
|
$
|
3,500
|
$
|
-
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
1,963
|
$
|
836
|
$
|
634
|
||||||
Income taxes
|
$
|
3,129
|
$
|
1,322
|
$
|
120
|
|
• |
Decrease of travel by flights, reducing the demand for services the Company provide as part of its Airport Security and other aviation services. As a result, our cumulative revenues in the first four months at 2020 was
approximately $8,255 lower than our 2019 revenues in the same period with the major negative impact identified in March and April, which has been continuing in May and June so far and many of the Company’s employees were laid off and
/ or ordered to stay home. The Company’s operating results have declined significantly in 2020 and our liquidity has been negatively impacted.
|
|
• |
Governments in some of the countries in which we operate have also announced the implementation of government assistance measures, which may mitigate the impact of the COVID-19 outbreak on our
results and liquidity. In the United States of America, the Government has approved a payroll support of $13,680 to the American subsidiary of the Company. In the Netherlands, the government has approved a support of €8,250
($9,075 as of June 1, 2020) for the period April 1, 2020 until June 30, 2020, under the NOW program. In addition, once the current support period will expire, the Company is entitled to request additional support for the
period July 1, 2020 until October 31, 2020 and is expecting to get €6,900 ($7,590 as of June 1, 2020). In Germany, the Company is eligible for payroll support up to 60% of the employee’s payroll (on individual basis) in
case the employees meet the support plan requirements. The Company has already applied for this support starting from April 2020. These available governmental support plans might be extended and/or changed according to the
future COVID-19 developments. In addition the Dutch and the German governments are providing through local banks long term loans up to 10 years to companies that meet certain requirements. The Company is evaluating the
terms of those loans and its eligibility to such loans.
|
|
• |
Depending on the duration of the COVID-19 crisis and continued negative impact on economic activity, the Company might experience further negative results and liquidity restrains. The exact impact on our activities in the remainder
of 2020 and thereafter cannot be predicted.
|
|
December 31, | |||||||
|
2019 | 2018 | ||||||
|
|
|||||||
Cash and cash equivalents | $ | 52,352 | $ | 12,801 | ||||
Restricted cash | 2,493 | 3,116 | ||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | 54,845 | $ | 15,917 |
|
Level 1 - |
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Companies have the ability to access at the measurement date.
|
|
Level 2 - |
Inputs to the valuation methodology include:
|
|
• |
Quoted prices for similar assets or liabilities in active markets;
|
|
• |
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
|
• |
Inputs other than quoted prices that are observable for the asset or liability;
|
|
• |
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
Level 3 - |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
Years
|
|
Equipment and facilities
|
3-7
|
Internal- use software
|
4-7
|
Vehicles
|
3-7
|
According to the previous accounting policy
|
The change
|
As presented according to Topic 842
|
||||||||||
Dollars in thousands
|
||||||||||||
As of January 1, 2019:
|
||||||||||||
Assets:
|
||||||||||||
Prepaid expenses
|
26
|
(26
|
)
|
-
|
||||||||
Operating leases ROU
|
-
|
12,632
|
12,632
|
|||||||||
26
|
12,606
|
12,632
|
||||||||||
Current liabilities:
|
||||||||||||
Current maturity of lease liabilities
|
-
|
2,859
|
2,859
|
|||||||||
Non-current liabilities:
|
||||||||||||
Lease liabilities
|
-
|
9,747
|
9,747
|
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Airport Security and Other Aviation Services
|
$
|
309,548
|
$
|
329,150
|
$
|
292,393
|
||||||
Authentication Technology
|
23,759
|
16,071
|
5,289
|
|||||||||
Total revenues
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
Year ended December 31,
|
||||||||||||||||||||||||
2019
|
2018
|
2017
|
||||||||||||||||||||||
Germany
|
$
|
137,207
|
41
|
%
|
$
|
134,646
|
39
|
%
|
$
|
125,896
|
42
|
%
|
||||||||||||
The Netherlands
|
97,700
|
29
|
%
|
121,465
|
35
|
%
|
103,862
|
35
|
%
|
|||||||||||||||
United States
|
73,719
|
22
|
%
|
69,548
|
20
|
%
|
54,891
|
18
|
%
|
|||||||||||||||
Other countries
|
24,681
|
8
|
%
|
19,562
|
6
|
%
|
13,033
|
5
|
%
|
|||||||||||||||
Total revenues
|
$
|
333,307
|
100
|
%
|
$
|
345,221
|
100
|
%
|
$
|
297,682
|
100
|
%
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Shares issuable upon conversion of convertible notes
|
||||||||||||
payable to related party at a price of $0.40
|
5,000,000
|
-
|
-
|
|||||||||
Shares issuable upon conversion of convertible notes
|
||||||||||||
payable to related party at a price of $1.50
|
-
|
14,731,267
|
16,652,333
|
|||||||||
Shares issuable upon conversion of accrued interest
|
||||||||||||
payable to related party at a price of $0.75
|
-
|
11,779,776
|
16,815,677
|
|||||||||
Total
|
5,000,000
|
26,511,043
|
33,468,010
|
SEK
|
U.S. Dollars
|
|||||||
Cash
|
663
|
74
|
||||||
Accounts receivable
|
8,902
|
999
|
||||||
Other current assets
|
445
|
50
|
||||||
Fixed assets
|
1,189
|
133
|
||||||
Goodwill
|
9,005
|
1,010
|
||||||
Other assets
|
1,039
|
116
|
||||||
Total identifiable assets acquired
|
21,243
|
2,382
|
||||||
Notes Payables-banks
|
4,734
|
531
|
||||||
Accounts Payable
|
182
|
20
|
||||||
Other current liabilities
|
5,787
|
649
|
||||||
Non current liabilities
|
1,039
|
117
|
||||||
Total liabilities assumed
|
11,742
|
1,317
|
||||||
9,501
|
1,065
|
EUR
|
U.S. Dollars
|
|||||||
Cash
|
29
|
36
|
||||||
Accounts receivable
|
142
|
175
|
||||||
Fixed assets
|
88
|
108
|
||||||
Other assets
|
11
|
14
|
||||||
Goodwill
|
188
|
232
|
||||||
Total identifiable assets acquired
|
458
|
565
|
||||||
Notes payables-banks
|
11
|
14
|
||||||
Accounts payable
|
19
|
23
|
||||||
Accrued expenses and other current liabilities
|
126
|
155
|
||||||
Other liabilities
|
119
|
147
|
||||||
Total liabilities assumed
|
275
|
339
|
||||||
183
|
226
|
DKK
|
U.S. Dollars
|
|||||||
Cash
|
3,161
|
499
|
||||||
Accounts receivable
|
3,219
|
508
|
||||||
Other receivables
|
124
|
20
|
||||||
Fixed assets
|
665
|
105
|
||||||
Goodwill
|
4,478
|
707
|
||||||
Total identifiable assets acquired
|
11,647
|
1,839
|
||||||
Accounts payable and accrued expenses
|
1,647
|
260
|
||||||
Total liabilities assumed
|
1,647
|
260
|
||||||
10,000
|
1,579
|
For the Years Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
609
|
||||||
Cost of revenue
|
-
|
-
|
588
|
|||||||||
GROSS PROFIT
|
-
|
-
|
21
|
|||||||||
Selling, general and administrative
|
-
|
289
|
116
|
|||||||||
Net loss
|
-
|
(289
|
)
|
(95
|
)
|
|||||||
Less: Net loss attributable to non-controlling interests
|
-
|
123
|
47
|
|||||||||
LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE
|
||||||||||||
TO ICTS INTERNATIONAL N.V.
|
$
|
-
|
$
|
(166
|
)
|
$
|
(48
|
)
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Offices, equipment and facilities
|
$
|
8,866
|
$
|
7,489
|
||||
Internal-use software
|
595
|
587
|
||||||
Vehicles
|
1,870
|
1,912
|
||||||
Leasehold improvements
|
2,352
|
1,957
|
||||||
13,683
|
11,945
|
|||||||
Less: accumulated depreciation and amortization
|
9,097
|
7,682
|
||||||
Total property and equipment, net
|
$
|
4,586
|
$
|
4,263
|
|
Year ended December 31, 2019 | |||
Operating lease cost | $ | 3,421 | ||
Short-term lease cost | 994 | |||
Total lease cost | $ | 4,415 | ||
|
||||
Other information: | ||||
Cash paid for amounts included in the measurement of Lease liabilities: | ||||
Operating cash flows from operating leases | $ | 2,901 | ||
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 541 | ||
|
||||
Weighted-average remaining lease term - operating leases | 4.1 years | |||
|
||||
Weighted-average discount rate - operating leases | 5.0 | % |
December 31, 2019
|
||||
Operating lease ROU assets
|
$
|
10,367
|
||
Other current liabilities
|
$
|
2,725
|
||
Operating lease liabilities
|
7,562
|
|||
Total operating lease liabilities
|
$
|
10,287
|
Year ending December 31,
|
||||
2020
|
$
|
3,100
|
||
2021
|
2,063
|
|||
2022
|
1,660
|
|||
2023
|
1,610
|
|||
2024
|
1,329
|
|||
Thereafter
|
2,121
|
|||
Total future minimum lease payments
|
11,883
|
|||
Less: imputed interest
|
1,596
|
|||
Total
|
$
|
10,287
|
2019
|
2018
|
|||||||
Balance as of the beginning of the year:
|
||||||||
Goodwill
|
$
|
2,220
|
$
|
1,044
|
||||
Accumulated impairment losses
|
(1,525
|
)
|
-
|
|||||
695
|
1,044
|
|||||||
Goodwill acquired during the year
|
-
|
1,242
|
||||||
Impairment losses
|
-
|
(1,563
|
)
|
|||||
Exchange rate effect
|
(14
|
)
|
(28
|
)
|
||||
681
|
695
|
|||||||
Balance as of the end of the year:
|
||||||||
Goodwill
|
2,182
|
2,220
|
||||||
Accumulated impairment losses
|
(1,501
|
)
|
(1,525
|
)
|
||||
$
|
681
|
$
|
695
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Accrued payroll and related costs
|
$
|
20,662
|
$
|
21,082
|
||||
Accrued vacation
|
6,639
|
6,647
|
||||||
Accrual for minimum wage increase
|
-
|
508
|
||||||
Labor union contribution
|
2,089
|
2,197
|
||||||
Severance accrual for Procheck termination
|
-
|
7,728
|
||||||
Deferred revenue
|
1,652
|
2,001
|
||||||
Other
|
3,991
|
2,510
|
||||||
Total accrued expenses and other current liabilities
|
$
|
35,033
|
$
|
42,673
|
2019
|
||||
Balance as of the beginning of the year
|
$
|
-
|
||
Sale of ABC Technologies B.V. series A Shares, net
|
73,520
|
|||
Net Income
|
774
|
|||
Other Comprehensive Income - Translation adjustment
|
6
|
|||
Balance as of the end of the year
|
$
|
74,300
|
Number of
options
|
Weighted average exercise price
|
Weighted average remaining contractual term
|
||||||||||
Options outstanding as of December 31, 2018
|
290,500
|
$
|
0.01
|
|
||||||||
Options granted
|
-
|
-
|
||||||||||
Options exercised
|
-
|
-
|
||||||||||
Forfeited
|
90,000
|
-
|
||||||||||
Options outstanding , end of the year
|
200,500
|
$
|
0.01
|
7.5 years
|
||||||||
Options exercisable, as of December 31, 2019
|
156,625
|
$
|
0.01
|
7.5 years
|
Number of
|
Weighted average
|
|||||||
options
|
exercise price
|
|||||||
Non-vested opions, as of December 31, 2018
|
160,250
|
$
|
0.01
|
|||||
Granted
|
-
|
-
|
||||||
Vested
|
(61,375
|
)
|
-
|
|||||
Forfeited
|
(55,000
|
)
|
-
|
|||||
Non-vested options, as of December 31, 2019
|
43,875
|
$
|
0.01
|
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Interest expense to related parties (see Note 12)
|
$
|
(1,218
|
)
|
$
|
(2,746
|
)
|
$
|
(2,875
|
)
|
|||
Interest expense and other bank charges
|
(1,479
|
)
|
(1,261
|
)
|
(1,073
|
)
|
||||||
Interest income
|
151
|
-
|
170
|
|||||||||
Revaluation and related costs reimbursed to related party
|
(8,139
|
)
|
-
|
-
|
||||||||
Foreign currency gain (loss)
|
148
|
417
|
(2,450
|
)
|
||||||||
Other income
|
19
|
4
|
56
|
|||||||||
Total other expense, net
|
$
|
(10,518
|
)
|
$
|
(3,586
|
)
|
$
|
(6,172
|
)
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
The Netherlands
|
$
|
(11,508
|
)
|
$
|
(13,107
|
)
|
$
|
1,602
|
||||
Subsidiaries outside of the Netherlands
|
5,804
|
2,728
|
6,296
|
|||||||||
Income (loss) before income tax expenses
|
$
|
(5,704
|
)
|
$
|
(10,379
|
)
|
$
|
7,898
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Deferred tax assets:
|
||||||||
Operating loss carryforwards
|
$
|
20,171
|
$
|
17,627
|
||||
Capital loss carryforwards
|
148
|
143
|
||||||
Allowance for doubtful accounts
|
14
|
13
|
||||||
Tax credit carryforwards
|
560
|
560
|
||||||
Accrued expenses and other
|
691
|
682
|
||||||
Total deferred tax assets
|
21,584
|
19,025
|
||||||
Deferred tax liabilities:
|
||||||||
Depreciation of property and equipment
|
(62
|
)
|
(111
|
)
|
||||
21,522
|
18,914
|
|||||||
Valuation allowance
|
(21,046
|
)
|
(18,478
|
)
|
||||
Deferred tax assets, net
|
$
|
476
|
$
|
436
|
||||
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Effective loss (income) tax benefit from continuing operations at statutory rate
|
$
|
1,426
|
$
|
2,595
|
$
|
(1,975
|
)
|
|||||
Rate differential
|
1,024
|
682
|
(545
|
)
|
||||||||
Non-deductible expense
|
(584
|
)
|
(565
|
)
|
(131
|
)
|
||||||
Adjustments to prior year tax losses
|
(429
|
)
|
(408
|
)
|
-
|
|||||||
Tax rate change-impact on prior years
|
-
|
-
|
(4,472
|
)
|
||||||||
Changes in valuation allowance
|
(2,568
|
)
|
(2,577
|
)
|
5,368
|
|||||||
Other
|
(418
|
)
|
(412
|
)
|
(278
|
)
|
||||||
Income tax expense from continuing operations
|
$
|
(1,549
|
)
|
$
|
(685
|
)
|
$
|
(2,033
|
)
|
Airport
Security
and Other
Aviation
Services
|
||||||||||||||||
Authentication
Technology
|
||||||||||||||||
Corporate
|
Total
|
|||||||||||||||
Year ended December 31, 2019:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
309,548
|
$
|
23,759
|
$
|
333,307
|
||||||||
Depreciation and amortization
|
46
|
1,328
|
314
|
1,688
|
||||||||||||
Income (loss) from continuing operations
|
(11,740
|
)
|
(2,406
|
)
|
6,893
|
(7,253
|
)
|
|||||||||
Goodwill
|
-
|
681
|
-
|
681
|
||||||||||||
Total assets from continuing operations
|
23,381
|
64,647
|
35,419
|
123,447
|
||||||||||||
Year ended December 31, 2018:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
329,150
|
$
|
16,071
|
$
|
345,221
|
||||||||
Depreciation and amortization
|
45
|
1,756
|
96
|
1,897
|
||||||||||||
Income (loss) from continuing operations
|
(6,205
|
)
|
(9,163
|
)
|
4,304
|
(11,064
|
)
|
|||||||||
Goodwill
|
-
|
695
|
-
|
695
|
||||||||||||
Total assets from continuing operations
|
329
|
66,373
|
8,385
|
75,087
|
||||||||||||
Year ended December 31, 2017:
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
292,393
|
$
|
5,289
|
$
|
297,682
|
||||||||
Depreciation and amortization
|
46
|
1,333
|
37
|
1,416
|
||||||||||||
Income (loss) from continuing operations
|
(9,569
|
)
|
16,078
|
(644
|
)
|
5,865
|
||||||||||
Goodwill
|
-
|
1,044
|
-
|
1,044
|
||||||||||||
Total assets from continuing operations
|
4,089
|
63,742
|
3,536
|
71,367
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Germany
|
$
|
137,207
|
$
|
134,646
|
$
|
125,896
|
||||||
The Netherlands
|
97,700
|
121,465
|
103,862
|
|||||||||
United States
|
73,719
|
69,548
|
54,891
|
|||||||||
Other countries
|
24,681
|
19,562
|
13,033
|
|||||||||
Total
|
$
|
333,307
|
$
|
345,221
|
$
|
297,682
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Germany
|
$
|
516
|
$
|
225
|
||||
The Netherlands
|
862
|
1,118
|
||||||
United States
|
354
|
624
|
||||||
Other countries
|
2,854
|
2,296
|
||||||
Total
|
$
|
4,586
|
$
|
4,263
|
Charges
|
||||||||||||||||||||
(credit)
|
Charges
|
|||||||||||||||||||
to
|
to
|
|||||||||||||||||||
Beginning
|
Costs and
|
other
|
End of
|
|||||||||||||||||
of year
|
Expenses
|
accounts
|
Deductions
|
Year
|
||||||||||||||||
Allowance for doubtful accounts (1):
|
||||||||||||||||||||
Year ended December 31, 2017
|
$
|
84
|
$
|
97
|
$
|
(78
|
)
|
$
|
-
|
$
|
103
|
|||||||||
Year ended December 31, 2018
|
103
|
303
|
(166
|
)
|
-
|
240
|
||||||||||||||
Year ended December 31, 2019
|
240
|
261
|
(83
|
)
|
-
|
418
|
||||||||||||||
Allowance for net deferred tax assets:
|
||||||||||||||||||||
Year ended December 31, 2017
|
$
|
21,269
|
$
|
-
|
$
|
-
|
$
|
(5,368
|
)
|
$
|
15,901
|
|||||||||
Year ended December 31, 2018
|
15,901
|
-
|
2,577
|
-
|
18,478
|
|||||||||||||||
Year ended December 31, 2019
|
18,478
|
-
|
2,568
|
-
|
21,046
|
|
I, |
Rom Shaked, certify that:
|
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c) |
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
|
(d) |
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company's internal control over financial reporting; and
|
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report
financial information; and
|
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
Dated: |
June 15, 2020
|
By: |
/s/ Rom Shaked
|
By: |
/s/ Rom Shaked
|
Dated: |
June 15, 2020
|
By: |
/s/ Alon Raich
|
Dated: |
June 15, 2020
|