Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document And Entity Information | |
Entity Registrant Name | ICTS INTERNATIONAL N V |
Entity Central Index Key | 0001010134 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer | No |
Is Entity's Reporting Status Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Voluntary Filers | No |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 37,433,333 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2020 |
Entity Interactive Data Current | Yes |
Entity Incorporation, State or Country Code | P7 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 51,602 | $ 52,352 |
Restricted cash | 9,472 | 2,493 |
Accounts receivable, net | 34,371 | 43,311 |
Receivable from a related party | 2,200 | |
Prepaid expenses and other current assets | 18,909 | 4,980 |
Total current assets | 116,554 | 103,136 |
Defered tax assets, net | 1,169 | 476 |
Investments | 1,482 | 2,130 |
Property and equipment, net | 5,525 | 4,586 |
Operating lease right of use assets | 12,938 | 10,367 |
Goodwill | 746 | 681 |
Other assets | 1,974 | 2,071 |
Total assets | 140,388 | 123,447 |
CURRENT LIABILITIES: | ||
Bank overdrafts | 738 | |
Notes payable-banks | 8,104 | 19,908 |
Accounts payable | 3,716 | 5,808 |
Accrued expenses and other current liabilities | 32,887 | 35,195 |
Value added tax (VAT) payable | 11,096 | 6,476 |
Operating lease liabilities, current | 3,531 | 2,725 |
Loan payable | 1,121 | |
Loan payable to related parties | 1,538 | |
Convertible notes payable to a related party | 2,000 | |
Total current liabilities | 59,334 | 75,509 |
Convertible notes payable to a related party | 1,200 | |
Operating lease liabilities, non current | 9,333 | 7,562 |
Other liabilities | 25,684 | 1,761 |
Total liabilities | 95,551 | 84,832 |
COMMITMENTS AND CONTINGENCIES (NOTE 20) | ||
REDEEMABLE NON-CONTROLLING INTERESTS (NOTE 15) | 75,322 | 74,300 |
SHAREHOLDERS' DEFICIT: | ||
Common stock, €0.45 par value; 150,000,000 shares authorized as of December 31, 2020 and 2019. 37,433,333 and 35,433,333 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 19,186 | 18,120 |
Additional paid-in capital | 26,706 | 26,972 |
Accumulated deficit | (68,603) | (73,006) |
Accumulated other comprehensive loss | (6,259) | (6,172) |
Non-controlling interests in subsidiaries | (1,515) | (1,599) |
Total shareholders' deficit | (30,485) | (35,685) |
Total liabilities and shareholders' deficit | $ 140,388 | $ 123,447 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - € / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share | € 0.45 | € 0.45 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 37,433,333 | 35,433,333 |
Common stock, shares outstanding | 37,433,333 | 35,433,333 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenue | $ 248,419 | $ 333,307 | $ 345,221 |
Cost of revenue | 196,569 | 290,461 | 311,994 |
GROSS PROFIT | 51,850 | 42,846 | 33,227 |
Operating expenses: | |||
Research and development | 6,541 | 5,060 | 3,657 |
Goodwill impairment | 1,563 | ||
Selling, general and administrative | 37,239 | 33,063 | 34,924 |
Total operating expenses | 43,780 | 38,123 | 40,144 |
OPERATING INCOME (LOSS) | 8,070 | 4,723 | (6,917) |
Equity income (loss) from investment in affiliate | (790) | 91 | 124 |
Other expenses, net | (1,288) | (10,518) | (3,586) |
INCOME (LOSS) BEFORE INCOME TAX EXPENSES | 5,992 | (5,704) | (10,379) |
Income tax expenses | 590 | 1,549 | 685 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 5,402 | (7,253) | (11,064) |
Loss from discontinued operations | (289) | ||
NET INCOME (LOSS) | 5,402 | (7,253) | (11,353) |
Net income (loss) attributable to non-controlling interests | 999 | 789 | (123) |
NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. | $ 4,403 | $ (8,042) | $ (11,230) |
BASIC NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. PER SHARE | |||
Income (loss) from continuing operations | $ 0.12 | $ (0.26) | $ (0.47) |
Loss from discontinued operations | (0.01) | ||
Net income (loss) | $ 0.12 | $ (0.26) | $ (0.48) |
Basic weighted average number of shares | 35,827,854 | 30,524,461 | 23,415,068 |
DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. PER SHARE | |||
Income (loss) from continuing operations | $ 0.11 | $ (0.26) | $ (0.47) |
Loss from discontinued operations | (0.01) | ||
Net income (loss) | $ 0.11 | $ (0.26) | $ (0.48) |
Diluted weighted average number of shares | 38,424,718 | 30,524,461 | 23,415,068 |
COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $ 5,402 | $ (7,253) | $ (11,353) |
Other Comprehensive Income - Translation adjustments | 20 | 79 | 669 |
Comprehensive income (loss) | 5,422 | (7,174) | (10,684) |
Comprehensive income (loss) attributable to non-controlling interests | 1,106 | 795 | (123) |
COMREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. | $ 4,316 | $ (7,969) | $ (10,561) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non Controlling Interest | Total |
Balance at Dec. 31, 2017 | $ 10,655 | $ 23,128 | $ (53,734) | $ (6,914) | $ 123 | $ (26,742) |
Balance, shares at Dec. 31, 2017 | 21,000,000 | |||||
Issuance of common stock | $ 2,241 | 329 | 2,570 | |||
Issuance of common stock, shares | 4,100,000 | |||||
Net income (loss) | (11,230) | (123) | (11,353) | |||
Translation adjustment | 669 | 669 | ||||
Balance at Dec. 31, 2018 | $ 12,896 | 23,457 | (64,964) | (6,245) | (34,856) | |
Balance, shares at Dec. 31, 2018 | 25,100,000 | |||||
Issuance of common stock | $ 5,224 | 1,474 | 6,698 | |||
Issuance of common stock, shares | 10,333,333 | |||||
Net income (loss) | (8,042) | 15 | (8,027) | |||
Sale of AU10TIX Technologies B.V. preferred shares, series A-1, net | 2,041 | (1,614) | 427 | |||
Translation adjustment | 73 | 73 | ||||
Balance at Dec. 31, 2019 | $ 18,120 | 26,972 | (73,006) | (6,172) | (1,599) | $ (35,685) |
Balance, shares at Dec. 31, 2019 | 35,433,333 | 35,433,333 | ||||
Issuance of common stock | $ 1,066 | (266) | $ 800 | |||
Issuance of common stock, shares | 2,000,000 | |||||
Net income (loss) | 4,403 | 74 | 4,477 | |||
Translation adjustment | (87) | 10 | (77) | |||
Balance at Dec. 31, 2020 | $ 19,186 | $ 26,706 | $ (68,603) | $ (6,259) | $ (1,515) | $ (30,485) |
Balance, shares at Dec. 31, 2020 | 37,433,333 | 37,433,333 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | |||
Income (loss) from continuing operations | $ 5,402 | $ (7,253) | $ (11,064) |
Loss from discontinued operations | (289) | ||
Net income (loss) | 5,402 | (7,253) | (11,353) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 2,090 | 1,688 | 1,897 |
Goodwill impairment | 1,563 | ||
Accrued interest on convertible notes payable to a related party | 2,687 | ||
Accrued interest on loan payable to a related party | 59 | ||
Bad debt expense | 272 | 260 | 303 |
Deferred income taxes | (651) | (35) | (103) |
Loss on disposal of property and equipment | 71 | ||
Equity loss (income) from investment in affiliate | 790 | (91) | (124) |
Revaluation and related costs reimbursed to related party | 8,139 | ||
Changes in assets and liabilities: | |||
Accounts receivable, net | 11,395 | 669 | (249) |
Receivable from related party | (2,200) | ||
Prepaid expenses and other current assets | (13,562) | 1,366 | (3,680) |
Other assets | 485 | (89) | 28 |
Accounts payable | (2,548) | (30) | 592 |
Accrued expenses and other current liabilities | (5,116) | (8,854) | 11,311 |
VAT payable | 3,999 | (4,734) | 4,540 |
Operating lease accounts, net | 19 | (102) | |
Other liabilities | 23,786 | (26) | (308) |
Net cash provided by discontinued operations | 253 | ||
Net cash provided by (used in) operating activities | 24,232 | (9,092) | 7,416 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (2,197) | (1,884) | (2,917) |
Capitalization of software costs | (603) | ||
Proceeds from sale of property and equipment | 67 | ||
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 | (150) | (1,800) | (131) |
Deposits at (withdraws from) insurance companies | (226) | 151 | (295) |
Repayments from (loan to) an affiliate | 180 | (180) | |
Net cash used in investing activities | (3,109) | (3,353) | (4,696) |
CASH FLOW FROM FINANCING ACTIVITIES: | |||
Borrowings (repayments) under lines of credit, net | (13,091) | 8,076 | 1,485 |
Repayments of convertible notes payable to a related party | (29,572) | (2,381) | |
Proceeds from a related party | 1,000 | ||
Repayments of loan payable to a related party | (1,538) | (368) | (1,100) |
Proceeds from loan payable | 2,288 | ||
Repayment of loan payable | (1,121) | (1,120) | (1,198) |
Proceeds from sale of a subsidiary's preferred shares | 80,000 | ||
Transaction costs | (6,054) | ||
Increase (decrease) in bank overdrafts | (738) | (107) | 845 |
Net cash provided by (used in) financing activities | (16,488) | 51,855 | (61) |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 1,594 | (482) | (247) |
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 6,229 | 38,928 | 2,412 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF YEAR | 54,845 | 15,917 | 13,505 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF YEAR | 61,074 | 54,845 | 15,917 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
Stock issuance as reduction against convertible notes payable to related party | 800 | 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 | 613 | 1,963 | 836 |
Cash paid during the year for: Income taxes | $ 1,329 | $ 3,129 | $ 1,322 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Sweden [Member] | |
Net of acquired cash | $ 74 |
Spain [Member] | |
Net of acquired cash | $ 36 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 – ORGANIZATION Description of Business ICTS International N.V. (“ICTS”) was registered at the Department of Justice in Amstelveen, Netherlands on October 9, 1992. ICTS and subsidiaries (collectively referred to as “ICTS” or the "Company") operate in three reportable segments: (a) corporate (b) airport security and other aviation services and (c) authentication technology. The corporate segment does not generate revenue and contains primarily non-operational expenses. The airport security and other aviation services segment provides security and other services to airlines and airport authorities, predominantly in Europe and the United States of America. The authentication technology segment provide authentication services to financial and other institutions, predominantly in the United States of America and Europe. Liquidity and Financial Condition Accounting Standard Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern requires a Company’s management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances, as following: As of December 31, 2020 and 2019, the Company has a working capital of $57,220 and $27,627 and shareholders deficit of $30,485 and $35,685, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company incurred income (loss) from continuing operations of $5,402, $(7,253) and $(11,064), respectively, and cash flows provided by (used in) operating activities of $24,232, $(9,092) and $7,416, respectively. The Company had a line of credit in the Netherlands up to €12,000 ($14,742 as of December 31, 2020), which expired in March 2021 and additional line of credit in the United States of America up to $10,000, which will expire in October 2021 (see notes 10 and 22). Additionally, the Company has a note up to a maximum amount of $3 million with a related party that matures on January 1, 2022. The Company anticipates that it will not need its lines of credit for 12 months from issuance of these financial statements. The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections. The Company is dependent mostly in Europe and the United States of America for its business on the airline industry. In addition, the decisions taken by various governments have affected economic activity and the Company’s business as following: • 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 of the airport security and other aviation services in the twelve months ended December 31, 2020 were $86,894 lower than our revenues for the twelve months ended December 31, 2019. Many of the Company’s employees were laid off and / or ordered to stay home. • Governments in some of the countries in which we operate have announced the implementation of government assistance measures, which mitigated the impact of the COVID-19 outbreak on our results and liquidity. During 2020, in the United States of America, the government has approved a payroll support of $13,680 to the American subsidiary of the Company, all of which has been received as of December 31, 2020. Out of this amount the American subsidiary recognized an amount of $12,672 as reduction of labor expenses for the year ended December 31, 2020. In addition, during the first four months of 2021 additional support up to $15,916 was approved to that subsidiary. In the Netherlands, the government has approved a support of €17,619 ($21,645 as of December 31, 2020) for the year ended December 31, 2020. The Dutch government extended the support program until June 30, 2021 and might extend it beyond. For the months January through March 2021, the Company was granted additional assistance up to €4,556. In Germany, the employees are 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 pays to its German employees their full salary and the Company is being reimbursed by the German government for the payroll support amount. 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 the Netherlands wage tax, social security and VAT payments for the period March 2020 till May 2021 were postponed and will have to be paid in 36 installments, starting October 2021. As of December 31, 2020, the Company accumulated debt of €20,796 ($25,548 as of December 31, 2020) to the Dutch tax authorities. In Germany, the government postponed the payment of the VAT for the period February through April, 2020. The Company accumulated €5,462 ($6,710 as of December 31, 2020) which will be paid in the second half year of 2021. • 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 2021 and thereafter cannot be predicted. The Company’s business plan, together with the expected governmental support projects income from operations, compliance with all financial covenants, positive cash flows from operations and no external borrowings for operations. There can be no assurance that management will be successful in achieving its business plan. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The significant accounting policies are as follows: Functional Currency The accompanying consolidated financial statements are presented in United States dollars. The Company has determined that the functional currency of its foreign subsidiaries is the local currency, which is predominantly the Euro. For financial reporting purposes, the assets and liabilities of such subsidiaries are translated into United States dollars using exchange rates in effect at the balance sheet date. The revenue and expenses of such subsidiaries are translated into United States dollars using average exchange rates in effect during the reporting period. Resulting translation adjustments are presented as a separate category in shareholders' deficit called accumulated other comprehensive loss. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. The most significant estimates and assumptions included in these consolidated financial statements consist of the: (a) calculation of the allowance for doubtful accounts, (b) determination of the fair value of stock options, (c) recognition of contingent liabilities (d) valuation allowance of deferred income taxes, (e) determination of goodwill impairment (f) determination of future lease periods of existing lease contracts, and (g) determination of interest rates used in order to calculate the present value of the operating lease liabilities. Principles of Consolidation The consolidated financial statements include the accounts of ICTS International N.V. and its wholly-owned and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash and cash equivalents. Restricted Cash Restricted cash as of December 31, 2020 consists of: (a) $3,991 held in bank accounts that serve as cash collateral for outstanding letters of credit and (b) $5,481 held in several bank accounts in the Netherlands, which is restricted for payments to local tax authorities (see note 5). Restricted cash as of December 31, 2019 consists of: (a) $733 held in bank accounts that serve as cash collateral for outstanding letters of credit and (b) $1,760 held in several bank accounts in the Netherlands, which is restricted for payments to local tax authorities. The following table provides a reconciliation of cash and restricted cash reported on the balance sheet that sum to the total of the same such amounts shown in the statements of cash flows. December 31, 2020 2019 Cash and cash equivalents $ 51,602 $ 52,352 Restricted cash 9,472 2,493 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 61,074 $ 54,845 Accounts Receivable Accounts receivable represent amounts due to the Company for services rendered and are recorded net of an allowance for doubtful accounts. The allowance for credit losses is based on historical collection experience, factors related to specific customers and current economic trends. The Company writes off accounts receivable when determined to be uncollectible and are recognized as a reduction to the allowance for credit losses. As of December 31, 2020, and 2019, the allowance for doubtful accounts is $690 and $418, respectively. Fair Value Measurements The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 820, “Fair Value Measurement”. Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value should be based on assumptions that market participants would use. In determining the fair value, the Company assesses the inputs used to measure fair value using a three-tier hierarchy, as follows: 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. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Investments The Company accounts for investments in the equity securities of companies which represent an ownership interest of 20% to 50% and the ability to exercise significant influence, provided that ability does not represent control, using the equity method. The equity method requires the Company to recognize its share of the net income (loss) of its investees in the consolidated statement of operations until the carrying value of the investment is zero. The Company records investments in the equity securities of privately held companies which represent an ownership interest of less than 20% at cost minus impairment. Property and Equipment Equipment and furniture, internal-use software, leasehold improvements and vehicles are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used in determining depreciation are as follows: Years Equipment and facilities 3-7 Internal- use software 4-7 Vehicles 3-7 Leasehold improvements are amortized using the straight-line method over the shorter of the total term of the lease or the estimated useful lives of the assets. Capitalized Internal-Use Software Costs The Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Costs, such as maintenance and training are also expensed as incurred. Capitalized costs are included in property and equipment, and amortized on a straight-lined basis over the estimated useful life of the software. Amortization expense, which is included in depreciation expense, amounted to $147, $0 and $0 during the years ended December 31, 2020, 2019 and 2018, respectively. Goodwill Goodwill represents the excess purchase price over the fair value of the net tangible and intangible assets of an acquired business. Goodwill is assessed for impairment by reporting unit on an annual basis or when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company would record a goodwill impairment charge for the difference between the carrying value and the fair value of the goodwill, not to exceed the carrying amount of the goodwill. During the years ended December 31, 2020, 2019 and 2018, the Company recognized a goodwill impairment of $0, $0 and $1,563, respectively (see note 9). Long-Lived Assets The Company reviews long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company assesses recoverability by determining whether the net book value of the related asset will be recovered through the projected undiscounted future cash flows of the asset. If the Company determines that the carrying value of the asset may not be recoverable, it measures any impairment based on the fair value of the asset as compared to its carrying value. During the years ended December 31, 2020, 2019, and 2018, the Company did not record any impairment charges on its long-lived assets. Employee Rights Upon Retirement The Company is required to make severance payments to its Israeli employees upon dismissal of an employee or upon a termination of employment in certain circumstances. The Israeli pension and severance pay liability to the employees is covered mainly by deposits made at insurance companies. For its employees who are employed under the Section 14 of the Israeli Severance Pay Law, 1963 (“Section 14”), the Company makes deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employees’ rights upon termination. In addition, the related obligation and amounts deposited on behalf of the applicable employees for such obligations are not presented on the Company’s consolidated balance sheets, as the amounts funded are not under the control of management of the Company and the Company is legally released from the obligation to pay any severance payments to the employees once the required deposits amounts have been paid. For employees not under Section 14, severance liabilities are recorded based on the length of service and their latest monthly salary. The Company’s liabilities for the Israeli employees amounted to $1,556 and $1,493 as of December 31, 2020 and 2019, respectively and are included in other liabilities in the Company’s consolidated balance sheets. The deposits made at insurance companies to cover these liabilities amounted to $1,391 and $1,264 as of December 31, 2020 and 2019, respectively and are included in other assets in the Company’s consolidated balance sheets. Leases The Company adopted ASU 2016-02, Leases (Topic 842) as of January 1, 2019, using the modified retrospective approach. The standard provides a number of optional practical expedients in transition. The Company chose to apply the following permitted practical expedients: Not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. Short-term lease recognition exemption for all leases with a term shorter than 12 months. This means, that for those leases, the Company does not recognize Rights of Use (“ROU”) assets or lease liabilities. Applying the practical expedient to not separate lease and non-lease components for all of the Company’s leases as a lessee. The Company as a lessee Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A lease is a finance lease if it meets any one of the criteria below, otherwise the lease is an operating lease: The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The lease term is for the major part of the remaining economic life of the underlying asset. The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. Based on the criteria above, all of the Company's leases are classified as operating leases. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. Variable lease payments that depend on an index or a rate On the commencement date, the lease payments shall include variable lease payments that depend on an index or a rate (such as the Consumer Price Index or a market interest rate), initially measured using the index or rate at the commencement date. The Company does not remeasure the lease liability for changes in future lease payments arising from changes in an index or rate unless the lease liability is remeasured for another reason. Therefore, after initial recognition, such variable lease payments are recognized in profit or loss as they are incurred. Convertible Debt Instruments The Company evaluates convertible debt instruments to determine whether the embedded conversion option needs to be bifurcated from the debt instrument and accounted for as a freestanding derivative instrument or considered a beneficial conversion option. An embedded conversion option is considered to be a freestanding derivative when: (a) the economic characteristics and risks of the embedded conversion option are not clearly and closely related to the economic characteristics and risks of the host instrument, (b) the hybrid instrument that embodies both the embedded conversion option and the host instrument is not re-measured at fair value under otherwise applicable US GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded conversion option would be considered a derivative instrument subject to certain requirements (except when the host instrument is deemed to be conventional). When it is determined that an embedded conversion option should not be bifurcated from its host instrument, the embedded conversion option is evaluated to determine whether it contains any intrinsic value which needs to be discounted from the carrying value of the convertible debt instrument. The intrinsic value of an embedded conversion option is considered to be the difference between the fair value of the underlying security on the commitment date of the debt instrument and the effective conversion price embedded in the debt instrument. Contingent Liabilities The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of its business activities. Liabilities for such contingencies are recognized when: (a) information available prior to the issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can reasonably be estimated. Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss The Company's comprehensive income (loss) consists of the Company’s net income (loss) and foreign currency translation adjustments. Accumulated other comprehensive loss consist of the Company’s accumulated foreign exchange currency translation adjustments. Stock-Based Compensation Stock-based compensation to employees, including stock options, are measured at the fair value of the award on the date of grant based on the estimated number of awards that are ultimately expected to vest. The compensation expense resulting from stock-based compensation to management and administrative employees is recorded over the vesting period of the award in selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive income (loss). Compensation expense resulting from stock-based compensation to operational employees is recorded over the vesting period of the award in cost of revenue. Stock-based compensation issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the stock-based compensation, whichever is more readily determinable. Non-Controlling Interests The Company’s non-controlling interests represent the minority shareholder’s ownership interests related to the Company’s subsidiaries. The Company reports its non-controlling interests in subsidiaries as a separate component of equity in the consolidated balance sheets and reports net income (loss) attributable to the non-controlling interests in the consolidated statements of operations. Redeemable Non-Controlling Interests Certain non-controlling interests in a subsidiary are entitled to predefined Exit Rights that, for accounting purposes, constitute a contingent redemption event that is outside of the Company’s control. As such, these non-controlling interests are presented as temporary equity between liabilities and equity on the Company’s consolidated balance sheets. After initial recognition, at the fair value of the investment less directly attributable transaction costs, the carrying value of redeemable non-controlling interests is adjusted for the non-controlling interests share in the subsidiary’s profits and Other Comprehensive Income (Loss). The Company does not adjust the carrying value of the redeemable non-controlling interests to the deemed liquidation values of such shares as long as the liquidation events triggering the Exit Rights is not considered probable of occurring. Revenue Recognition Revenue is recognized when the promised services are performed for our clients, and the amount that reflects the consideration we are entitled to receive in exchange for those services is determined. The Company’s revenues are recorded net of any sales taxes. In order to determine the revenue, we (1) identify the contract with the client, (2) identify the performance obligations, usually it’s based on the hours spent, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation and (5) we recognize revenue as performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the client, and it is the unit of account for revenue recognition. The majority of our contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in our contracts and, therefore, is not distinct. The following table presents the Company’s revenues according to the Company’s segments: Year ended December 31, 2020 2019 2018 Airport Security and Other Aviation Services $ 222,654 $ 309,548 $ 329,150 Authentication Technology 25,765 23,759 16,071 Total revenue $ 248,419 $ 333,307 $ 345,221 The following table presents the Company’s revenues generated from customers by geographical area based on the geographical location of the customers invoicing address: Year ended December 31, 2020 2019 2018 Germany $ 119,500 48 % $ 137,207 41 % $ 134,646 39 % The Netherlands 58,446 24 % 97,700 29 % 121,465 35 % United States 45,305 18 % 73,719 22 % 69,548 20 % Other countries 25,168 10 % 24,681 8 % 19,562 6 % Total revenue $ 248,419 100 % $ 333,307 100 % $ 345,221 100 % Airport Security and Other Aviation Services Segment In the airport security and other aviation services, for performance obligations that we satisfy over time, revenues are recognized by consistently applying a method of measuring hours spent on that performance obligation. We generally utilize an input measure of time (hours and attendance for specific time framed service like specific flights) of the service provided. Performance obligations are satisfied over the course of each month and continue to be performed until the contract has been terminated or cancelled. Pricing and Reduction to Revenues We generally determine standalone selling prices based upon the prices included in the client contracts, using expected costs plus margin, or other observable prices. The price as specified in our client contracts is generally considered the standalone selling price as it is an observable input that depicts the price as if sold to a similar client in similar circumstances. Certain client contracts have variable consideration, including quality thresholds or other similar items that could reduce the transaction price. These amounts may be constrained and revenue is recorded to the extent we do not expect a significant reversal or when the uncertainty associated with the variable consideration is resolved. Our variable consideration amounts, if any, are not material, and we do not expect significant changes to our estimates. Contracts Our client contracts generally include standard payment terms acceptable in each of the countries, states and territories in which we operate. The payment terms vary by the type and location of our clients and services offered. Client payments are typically due in 30 to 60 days after invoicing, but may be a shorter or longer term depending on the contract. Our contracts with main customers are generally long-term contracts, between two to five years. The timing between satisfaction of the performance obligation, invoicing and payment is not significant. Practical Expedients and Exemptions Because nearly all our contracts are based on input measure of time of service provided (as hours or attendance) no exemptions need to be made. We have no material contracts with material revenues expected to be recognized subsequent to December 31, 2020 related to remaining performance obligations. Revenue Service Types The following is a description of our revenue service types, including Airport Security, Airline Security, Cargo Security, Other Airport Services, General Security Services and Other. Airport Security Staffing or manning for specialized airport security are usually based on long term contract issued via a public tender procedure. We recognize revenue given the unit of measure (hours) provided in the given time period and the specific price for specific hours agreed upon in the contracts. Quality and criteria of staffing are described in the contracts and are measured in the given time period. Deviations, if any, are discussed with the customer before invoicing and will be reflected in the invoice showing the approved hours and other cost elements as agreed upon price. Most contracts have an hourly rate that reflects an all-in tariff based on a full cost price calculation. In some of the contracts the hourly rates are split between a component based on hours and a component based on specific costs in a specific time period but always linked to the service provided in given time period. Revenue is recognized at the time period set in the contract. Airline Security Staffing or manning for airline security are usually based on long term contracts issued via a public tender procedure. We recognize revenue according to the unit of measure provided (usually attendance for specific time framed service like specific flights). The time framed specialized security services are in this case are the executed number of flights. When the manning for the security of these flights are delivered, the Company invoices the customer according to the agreed flight tariff. Cargo Security Staffing or manning for specialized cargo security are usually based on long term contract, sometimes publicly tendered. Contracts are based on hourly planned and executed screening services. Revenue is recognized based on the realized screening hours and contractually agreed upon hourly rate. Other Airport Services Airport Services include wheelchair attendants, pre-departure skycaps, bag-runners, agents, guards, charter security screening, janitorial, and cabin cleaning to major U.S. and foreign carriers in airports throughout the United States of America. Our contracts may include either single or multiple performance obligations and vary by airport and airline. We recognize revenue given the unit of measure (usually hours) provided in the given time period and the specific price for specific hours or attendance for specific event, time framed service as agreed upon in the contracts. General Security Services Security Services include providing armed and un-armed guards to private schools and places of worship, video surveillance and patrol. Contracts for security services generally include only a single performance obligation. We recognize revenue for security guard services given the unit of measure (hours) provided in the given time period. Revenue from video surveillance and patrol is recognized based upon a fixed monthly rate. Other Services Other services include revenues from (incidental) specialized security manning services, training services and ad hoc work performed on and off airports. Revenue is recognized over time as services are being performed, using the input of service delivered during the time period, according to the contractual agreed price. Authentication Technology Segment In the authentication technology segment, the Company offers authentication services on a cost per click basis, with a minimum yearly commitment which means the customer pays the Company according to the higher of (a) number of times the customer used the system in order to authenticate IDs or (b) according to the yearly minimum commitment. According to the agreement with the customers, each chargeable click has an agreed price and revenue is being recognized accordingly. Pricing and Reduction to Revenues We generally determine standalone selling prices based upon the prices included in the client contracts, using expected costs plus margin, or other observable prices. The price as specified in our client contracts is generally considered the selling price as agreed with the customer. Certain client contracts have variable consideration which are based on quantity of usage. These amounts may be constrained and revenue is recorded to the extent we do not expect a significant reversal or when the uncertainty associated with the variable consideration is resolved. Our variable consideration, if any, amounts are not material, and we do not expect significant changes to our estimates. Contracts Our client contracts generally include standard payment terms acceptable in each of the countries, states and territories in which we operate. The payment terms vary by the type and location of our clients and services offered. The minimum commitment is usually being paid in advance. Client payments are typically due in 30 days after invoicing, but may be a shorter or longer term depending on the contract. Our client contracts are usually for a one-year period with a renewal option. The timing between satisfaction of the performance obligation, invoicing and payment is not significant. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance. Deferred revenues at December 31, 2020 and 2019 were $2,143 and $1,652, respectively shown as part of the accrued expenses and other current liabilities and $263 and $268 shown as other liabilities. Revenue recognized for the years ended December 31, 2020, 2019 and 2018 that was included in the deferred revenue at the beginning of each year was $1,879, $2,001 and $854, respectively. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. Capitalized Contract Costs As part of obtaining contracts with certain customers in the authentication technology segment, the Company incurs upfront costs such as sales commissions. The Company capitalizes these costs which are subsequently amortized on a straight-line basis over the estimated life of the relationship with the customer. The Company applies the practical expedient that allows it to determine this estimate for a portfolio of contracts that have similar characteristics in terms of type of service, contract term and pricing. This estimate is reviewed by management at the end of each reporting period as additional information becomes available. Cost of Revenue Cost of revenue represents primarily payroll and employee related costs associated with employees who provide services under the terms of the Company's contractual arrangements, insurance and depreciation and amortization. Research and Development Costs Research and development costs are expensed as incurred and consist primarily of payroll and related costs. Advertising Costs Advertising costs are expensed as incurred. Advertising costs during the years ended December 31, 2020, 2019 and 2018 are $735, $828 and $528, respectively. Value Added Tax Certain of the Company’s operations are subject to Value Added Tax (“VAT”) applied on the services sold in those respective countries. The Company is required to remit the VAT collected to the tax authorities, but may deduct the VAT paid on certain eligible purchases. Income Taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities resulting Uncertain income tax positions are determined based upon the likelihood of the positions being sustained upon examination by taxing authorities. The benefit of a tax position is recognized in the consolidated financial statements in the period during which management believes it is more likely than not that the position will not be sustained. Income tax positions taken are not offset or aggregated with other positions. Income tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of income tax benefit that is more than 50 percent likely of being realized if challenged by the applicable taxing authority. The portion of the benefits associated with income tax positions taken that exceeds the amount measured is reflected as income taxes payable. The Company recognizes interest related to uncertain tax positions in interest expense. The Company recognizes penalties related to uncertain tax positions in selling, general and administrative expenses. Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is determined in the same manner as basic income (loss) per share, except that the number of shares is increased to include potentially dilutive securities using the treasury stock method. The Company had an income from continuing operations for the year ended December 31, 2020. Potentially dilutive securities were included in the computation of diluted income per share as the conversion rate of the convertible note payable to related party was lower than the weighted average computed price of the Company’s stock for the year 2020. The Company had a loss from continuing operations for the years ended December 31, 2019 and 2018. For periods of ne |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2020 | |
Business Combination | |
BUSINESS COMBINATION | NOTE 3 – BUSINESS COMBINATION Acquisition in Sweden In July 2018, the Company acquired 100% of the outstanding shares of Detact Security Solution AB. The purpose of the acquisition was to penetrate the Swedish aviation and cargo markets. Consideration of the acquisition was 9,500 SEK ($1,065 as of the purchase date), of which 6,500 SEK ($729 as of the purchase date) was paid in cash upon the signing of the purchase contract and 3,000 SEK ($336 as of the purchase date) was held in escrow for a period of three months or longer in case of disagreement between the parties. As of December 31, 2018, the funds in the escrow account were not released to the seller as a result of disagreement between the parties. The acquisition was accounted for as a purchase and accordingly a purchase price was allocated to the assets acquired and liabilities assumed at their fair value. The following represents the allocation of the purchase price as of the purchase date in SEK and the translation to United States Dollars as of the purchase date: 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 5,788 649 Non current liabilities 1,039 117 Total liabilities assumed 11,743 1,317 9,500 1,065 Goodwill associated with the new acquisition of Detact Security Solution AB was 9,005 SEK ($1,007 as of December 31, 2018) and deductible for income tax purposes. The goodwill consists principally of the expectations of future earnings and profits from expanding this business. In December 2018, the Company evaluated the goodwill and concluded the goodwill should be fully impaired (see note 9). Acquisition in Spain In January 2018, the Company acquired 100% of the outstanding shares of Abydos Consultores de Sistemas S.L.U. The purpose of the acquisition was to increase the Company’s activities in Spain. Consideration of the acquisition was €183 ($226 as of the purchase date), in cash upon the signing of the purchase contract. The name of Abydos Consultores de Sistemas S.L.U. was changed into I-SEC Aviation Security S.L. The acquisition was accounted for as a purchase and accordingly a purchase price was allocated to the assets acquired and liabilities assumed at their fair values. The following represents the allocation of the purchase price as of the purchase date in Euros and the translation to United States Dollars as of the purchase date: 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 Goodwill associated with the acquisition of Abydos Consultores de Sistemas S.L.U. was €188 ($232 as of December 31, 2018) and is deductible for income tax purposes. The goodwill arising from this acquisition consist principally of the expectations of future earnings and profits from expending this business. In December 2018 the Company evaluated the goodwill and concluded that the goodwill should be fully impaired (see note 9). |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 4 – DISCONTINUED OPERATIONS During the year ended December 31, 2017, the Company committed to a plan to cease the aviation security operations of its subsidiary in Cyprus. As of December 31, 2020 and 2019 the Company had no assets or liabilities in its consolidated balance sheets that related to the discontinued operations. A summary of the Company’s consolidated statements of operations from the above discontinued operations for the years ended December 31, 2020, 2019 and 2018 are as follows: For the Years Ended December 31, 2020 2019 2018 Revenue $ - $ - $ - Cost of revenue - - - GROSS PROFIT - - - Selling, general and administrative - - 289 Net loss - - (289 ) Less: Net loss attributable to non-controlling interests - - 123 LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. $ - $ - $ (166 ) |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are as following: December 31, 2020 2019 Receivable from the Dutch tax authorities (1) $ 12,285 $ 1,682 Receivable from the German authorities - COVID 19 (2) 1,887 - Dutch Governmental support - COVID 19 (3) 1,068 - Other 3,669 3,298 Total prepaid expenses and other currect assets $ 18,909 $ 4,980 (1) The Company is obligated to hold restricted cash in the Netherlands, which is restricted for payments to the tax authorities. From time to time the Company is allowed to make a request to release the money from the restricted account into the regular bank account. As part of the process the Company transfers the requested amount to the Dutch tax authorities, who pay it back after a few weeks into the Company’s regular bank account. (2) In Germany, the employees are eligible for payroll support (see note 1). The Company pays to its German employees their full salary and the Company is being reimbursed by the German government for the payroll support amount. (3) In the Netherlands, the Company is eligible for payroll support (see note 1). |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | NOTE 6 – INVESTMENTS Artemis Therapeutics, Inc. As of December 31, 2020, the Company owns 198,311 shares or 3.8% of the outstanding common stock of Artemis Therapeutics, Inc. (“ATMS”). As of December 31, 2020, ATMS has no operating business. The Company suspended its use of the equity method to accounting for this investment in 2007 after its investment balance was reduced to zero. As of December 31, 2020 and 2019, the Company’s share of the underlying net assets of ATMS is equal to the Company’s carrying value of its investment in ATMS ($0 and $0 at December 31, 2020 and 2019). The market value of the Company's investment in ATMS as of December 31, 2020 and 2019 is $79 and $10, respectively. The Company evaluated the stock price of ATMS but as ATMS share price is low, the number of shares that are being traded is low, and as ATMS still does not have any revenue, the Company determined that the value of the investment is impaired and accordingly, valued the investment at zero. Freezone I-SEC Korea Inc. In April 2018, the Company signed a Joint Venture Agreement with a South Korean Company in order to establish a Joint Venture Company (“JVC”) and to provide aviation security and non-security services in South Korea. Each one of the parties holds 50% (fifty percent) of the JVC’s equity. The Company uses the equity method for this investment. As of December 31, 2020, the Company’s investment is 332,715 KRW ($307). For the years ended December 31, 2020, 2019 and 2018, the Company recognized a profit (loss) in its consolidated statements of operations of (17,742) KRW, 105,092 KRW and 133,550 KRW, respectively ($(15), $91 and $124 as of December 31, 2020, 2019 and 2018, respectively) from its investment in the JVC. Mesh Technologies, Inc. In January 2019, the Company invested an amount of $50 in Mesh Technologies, Inc. (“Mesh”), a company incorporated in the USA. As of December 31, 2020, the investment represented 0.4% of the issued and outstanding share capital of Mesh. Mesh is a technology company providing cross border payments technology by innovating on the existing payment rails of established card networks available in the market. As Mesh is a private, closely held company, there is no active market for this investment. Therefore, the Company measures the investment at cost minus impairment. Arrow Ecology & Engineering Overseas (1999) In December 2019, the Company invested an amount of $1,750 in Arrow Ecology & Engineering Overseas (1999) Ltd (“Arrow”), a limited company incorporated in Israel. Arrow develops and operates a sustainable green process to recycle mixed and sorted municipal solid waste. The Company purchased few types of shares representing 23.3% of Arrow’s equity for an amount of $22 and shareholders loans were purchased for a price of $1,728 ($4,146 stated value less $2,418 allowance for credit losses, which have not changed since the acquisition). The Company uses the equity method for this investment. During the years ended December 31, 2020 and 2019, the Company recognized its estimated share in Arrow loss in the amount of $775 and $0, respectively, from this investment. The Company has an agreement with an entity related to its main shareholder, according to which, if the value of the investment decrease, the related party entity has guaranteed to repurchase this full investment at a minimum amount of $1,750. The guarantee is effective immediately as of the date of purchase and terminates after three years. Some Directors and managers of Arrow are related parties of the Company. GreenFox Logistics LLC. In March 2020, the Company invested an amount of $100 in GreenFox Logistics, LLC. (“GreenFox”), a company incorporated in the USA. The investment was done as SAFE investment (Simple Agreement for Future Equity). GreenFox is an on-demand delivery/moving/transportation company. As GreenFox is a private, closely held company, there is no active market for this investment. Therefore, the Company measures the investment at cost minus impairment. SardineAI Corp. In August 2020, the Company invested an amount of $50 in SardineAI Corp (“SardineAI”), a company incorporated in the USA. In return the Company received preferred shares representing less than 1% of SardineAI equity. SardineAI is a Fraud Prevention-as-a-Service (FaaS) platform for Digital businesses to detect frauds and financial crimes. As SardineAI is a private, closely held company, there is no active market for this investment. Therefore, the Company measures the investment at cost minus impairment. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 - PROPERTY AND EQUIPMENT Property and equipment is as follows: December 31, 2020 2019 Office, equipment and facilities $ 10,796 $ 8,866 Internal-use software 1,449 595 Vehicles 1,958 1,870 Leasehold improvements 2,972 2,352 17,175 13,683 Less: accumulated depreciation and amortization 11,650 9,097 Total property and equipment, net $ 5,525 $ 4,586 Depreciation and amortization expenses are $2,090, $1,688 and $1,897 for the years ended December 31, 2020, 2019 and 2018 respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 8 - LEASES Lessee Arrangements The Company enters into leases in the normal course of business primarily as part of its operations in the different airports, back office operations, research and development offices and headquarters offices. The table below presents the effects on the amounts relating to the Company’s total lease cost: Year ended December 31, 2020 2019 Operating lease cost $ 3,914 $ 3,421 Short-term lease cost 1,580 994 Total lease cost $ 5,494 $ 4,415 Other information: Cash paid for amounts included in the measurement of Lease liabilities: Operating cash flows from operating leases $ 3,962 $ 2,901 Right-of-use assets obtained in exchange for new operating lease liabilities $ 4,941 $ 541 Weighted-average remaining lease term - operating leases 4.5 years 4.1 years Weighted-average discount rate - operating leases 4.8 % 5.0 % Supplemental balance sheet information related to operating leases was as follows: Year ended December 31, 2020 2019 Operating lease ROU assets $ 12,938 $ 10,367 Other current liabilities $ 3,531 $ 2,725 Operating lease liabilities 9,333 7,562 Total operating lease liabilities $ 12,864 $ 10,287 Future undiscounted lease payments for operation leases with initial terms of more than one year as of December 31, 2020 are as follows: Year ending December 31, 2021 4,048 2022 3,122 2023 2,747 2024 2,194 2025 906 Thereafter 1,400 Total future minimum lease payments 14,417 Less: imputed interest 1,553 Total $ 12,864 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2020 | |
Line Of Credit One [Member] | |
GOODWILL | NOTE 9 – GOODWILL All the Company’s goodwill relates to its airport security and other aviation services segment. The change in goodwill during the year is as follows: 2020 2019 Balance as of the beginning of the year: Goodwill $ 2,182 $ 2,220 Accumulated impairment losses (1,501 ) (1,525 ) 681 695 Goodwill acquired during the year - - Impairment losses - - Exchange rate effect 65 (14 ) 746 681 Balance as of the end of the year: Goodwill 2,361 2,182 Accumulated impairment losses (1,615 ) (1,501 ) $ 746 $ 681 At December 31, 2020 and 2019, the Company performed qualitative assessments to determine if it was more likely than not that the fair value of the reporting units exceeded its carrying values, including goodwill. The qualitative assessments indicated that it was more likely than not that the fair value exceeded the carrying value of the reporting unit. At December 31, 2018, the qualitative assessment indicated that it was more likely than not that the carrying value of the reporting unit exceeded fair value. The quantitative impairment test includes comparing the carrying value of the reporting unit, including the existing goodwill and intangible assets, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment charge is recorded for the amounts in which the carrying value of the reporting unit exceeds the fair value of the reporting unit, up to the amount of goodwill attributed to the reporting unit. During the years ended on December 31, 2020, 2019 and 2018, the Company recognized impairment charges of $0, $0 and $1,563, respectively. The facts and circumstances that led to the impairment of goodwill during the year ended December 31, 2018 are as follows: Procheck, a wholly-owned subsidiary of the Company since 1998 was advised by its only customer, that its services are not required, its contract would not be renewed and will end on December 31, 2018, following a change in the governmental security concept in the Netherlands. Upon expiration of the agreement, the employment of its employees was terminated. A goodwill impairment loss of $314 was recognized. In January 2018, the Company acquired 100% of the outstanding shares of Abydos Consultores de Sistemas S.L.U (see note 3) and recorded goodwill of €188 ($215 as of December 31, 2018). The purpose of the acquisition was to increase the Company’s activities in Spain. As the Company did not win any of the main bids on which it participated during 2018, revenue, operating profits and cash flows were lower than expected in 2018. The earnings forecast for the next four years was revised and an impairment loss of €188 ($222 for the year ended December 31, 2018) was recognized. The fair value of Abydos Consultores de Sistemas S.L.U. was estimated using the expected present value of future cash flows. In July 2018, the Company acquired 100% of the outstanding shares of Detact Security Solution AB (see note 3) and recorded goodwill of 9,005 SEK ($1,027 for the year ended December 31, 2018). The purpose of the acquisition was to penetrate the Swedish aviation and cargo markets. After the acquisition, a major customer has terminated the contract with the Company. As a result, the revenue, operating profits and cash flows will be lower than expected. The earnings forecast for the next four years was revised and an impairment loss of 9,005 SEK ($1,007 as of December 31, 2018) was recognized. The fair value of Detact Security Solution AB was estimated using the expected present value of future cash flows. As the Company maintains a valuation allowance for the carrying value of its net deferred tax assets for the locations affected by the goodwill impairment, there is no effect on the Company’s deferred tax assets in the consolidated balance sheets (see note 18). |
NOTES PAYABLE - BANKS
NOTES PAYABLE - BANKS | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable to Bank [Abstract] | |
NOTES PAYABLE - BANKS | NOTE 10 – NOTES PAYABLE – BANKS United States of America The Company’s U.S. subsidiary is a party to a credit facility with a commercial lender, which provides a maximum borrowing capacity up to $10,000, subject to a borrowing base limitation. The borrowing base limitation was equivalent to: (i) 85% of eligible accounts receivable, as defined, plus (ii) 80% of eligible unbilled receivables, as defined, plus (iii) 95% of a $500 standby letter of credit that was provided to the lender by an entity related to the main Shareholder. Borrowings under the credit facility are secured by the U.S. subsidiary’s accounts receivable, unbilled receivables, equipment, cash and the $500 letter of credit that was provided to the lender by the Company. As of December 31, 2020, and 2019, the Company had approximately $0 and $6,475, respectively, outstanding under the line of credit arrangement. As of December 31, 2020 and 2019, the Company had $4,144 and $3,525, respectively, in unused borrowing capacity under the line of credit facility. Borrowings made under the credit facility bear interest, which is payable monthly, at LIBOR plus 3% per annum (3.14% as of December 31, 2020). The Company’s weighted average interest rate in the United States of America during the years ended December 31, 2020, 2019 and 2018 is 4.42%, 5.44% and 6.0% respectively. The Company is required to maintain a minimum fixed charge coverage ratio. The credit facility expires in October 2021. Europe The Company has a credit arrangement with a commercial bank, to provide it with up to €12,000 ($14,742 as of December 31, 2020) in borrowings which was renewed in May 2020 through March 2021. Borrowings under the line of credit bear interest at one-month EURIBOR plus 4.8% with a minimum of 4.8% per annum. The Company is also subject to unused line fee of 0.75% per annum, which is payable quarterly. The line of credit is secured by accounts receivable of ten of the Company’s European subsidiaries, tangible fixed assets and a bank guarantee of €2,000 ($2,457 as of December 31, 2020) provided by the parent company, ICTS International N.V. The line of credit cannot exceed 70% of the borrowing base. The line of credit includes certain financial covenants. As of December 31, 2020 and 2019, the Company had €6,432 and €11,872 ($7,902 and $13,313 as of December 31, 2020 and 2019), respectively, in outstanding borrowings under the line of credit arrangement. In addition to the line of credit arrangement, a guarantee facility of €2,500 ($3,071 as of December 31, 2020) is provided to the Company by the same commercial bank, which was also renewed until March 2021, with an interest of 2.5% per annum and an unused line fee of 0.75% per annum which is payable quarterly. As of December 31, 2020 and 2019, the Company had €973 and €2,316 ($1,195 and $2,596 as of December 31, 2020 and 2019), respectively, of outstanding guarantees under the guarantee facility, which related to leases and performance guarantees for contracts. The line of credit was not renewed and management expects to renew the guarantee facility which will be extended for one year under the same conditions. The guarantee facility is secured by the accounts receivables of ten of the Company’s European subsidiaries. The Company’s weighted average interest rate in Europe during the years ended December 31, 2020, 2019 and 2018, is 4.4%, 3.5% and 3.5% respectively. The Company has an additional credit arrangement in Sweden to provide it with up to 4,000 SEK ($490 as of December 31, 2020) in borrowings. Borrowings under the line of credit bear annual interest of 2.8% and subject to annual extension by the financial institution. The line of credit is secured by accounts receivable of the Swedish subsidiary. As of December 31, 2020 and 2019, the Company had 1,648 SEK and 1,115 SEK ($202 and $120 as of December 31, 2020 and 2019) respectively in outstanding borrowings under the line of credit facility. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 11 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities are as follows: December 31, 2020 2019 Accrued payroll and related costs $ 18,938 $ 20,662 Accrued vacation 5,582 6,639 Labor union contribution 1,440 2,089 Deferred revenue 2,143 1,652 Payroll support program funding 1,019 - Other 3,765 4,153 Total accrued expenses and other current liabilities $ 32,887 $ 35,195 |
LOAN PAYABLE
LOAN PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Property and Equipment Estimated Useful Lives | |
LOAN PAYABLE | NOTE 12 – LOAN PAYABLE In December 2018, the Company entered into an agreement with a financing company to provide it €2,000 ($2,457 as of December 31, 2020) as a loan until December 2020. The loan can be repaid earlier but not before December 2019. The loan bears interest of ten percent per annum. Interest is being paid quarterly. In November 2019, the Company repaid €1,000 ($1,229 as of December 31, 2020) of the payable loan plus accrued interest and in November 2020, the additional outstanding balance of €1,000 ($1,229 as of December 31, 2020) plus the accrued interest was repaid. |
DEBT TO RELATED PARTIES
DEBT TO RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
Convertible Notes Payable [Abstract] | |
DEBT TO RELATED PARTIES | NOTE 13 – DEBT TO RELATED PARTIES Convertible Notes Payable to a Related Party The Company has an agreement with an entity related to its main shareholder, to provide it with up to $37,000 in revolving loans through June 30, 2020. The term of the arrangement can be automatically extended for four additional six-month periods at the option of the holder. Loans received under the arrangement bear interest, which is compounded semi-annually and payable at maturity, at the interest rate of LIBOR plus 7% for U.S. dollar-denominated loans and the Company’s European commercial bank interest base rate plus 3% for Euro-denominated loans. The arrangement is secured by a 26% interest in one of the Company's European subsidiaries. In connection with the arrangement, the holder was granted an option to convert the outstanding principal notes payable under the arrangement into the Company's common stock at a price of $1.50 per share and the unpaid accrued interest at a price of $0.75 per share. In January 2019, the entity related to the main shareholder converted $2,889 accrued interest into 3,852,364 shares at a price of $0.75 per share. In May 2019, the Company granted this entity, the option to convert up to $2,000 of the loan into the Company’s shares at a price of $0.40 per share, and all other conversion rights for the balance of the debt except $2,611, which is convertible at a price of $0.75 per share, would eliminate. In December 2019, this entity converted the $2,611 accrued interest into 3,480,968 shares at a price of $0.75 per share. In October 2020, the entity converted $800 into 2,000,000 shares. In June 2019, the Board of Directors approved a one-time compensation of $8,139 to this entity for exchange rate and related losses suffered in connection with its convertible notes to the Company during the years. Compensation was approved subject to closing of investment transaction in the Company’s subsidiary, AU10TIX Technologies B.V. (“AU10TIX”, formerly ABC Technologies B.V.), which happened in July 2019 (see note 15). As a result, the Company recorded $8,139 in connection with this payment which is included in other expenses in the consolidated statement of operation and comprehensive income (loss). In July 2019, the Company repaid $30,000 of the convertible notes. In October 2020, the loan was extended until January 2022, the loan amount was reduced to $3,000 and the pledge of 26% interest in one of the Company's European subsidiaries was terminated. The Company’s weighted average interest during the years ended December 31, 2020, 2019 and 2018 is 7.60%, 8.30% and 7.70%, respectively. As of December 31, 2020 and 2019, convertible notes payable to this related party consist of $1,200 and $2,000, respectively. Note Payable to Related Party As of December 31, 2020 and 2019, notes payable to this related party consist of $0 and $1,538, respectively. Total interest expense related to these notes is $171, $1,218 and $2,687 for the years ended December 31, 2020, 2019 and 2018, respectively. |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | NOTE 14 – OTHER LIABILITIES Other liabilities are as follows: December 31, 2020 2019 Severance pay liability $ 1,556 $ 1,493 Deferred revenue 263 268 Deferred VAT 10,319 - Deferred wage tax and social security 13,100 - Other 446 - Total other liabilities $ 25,684 $ 1,761 Deferred VAT and deferred wage tax relates to measurements taken by the Dutch government, on which they postponed all VAT payable for the year 2020 and all wage tax and social security payable for the months March – December 2020 to be paid in 36 installments starting October 2021. |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NON-CONTROLLING INTERESTS | NOTE 15 – REDEEMABLE NON-CONTROLLING INTERESTS On July 3, 2019, AU10TIX entered into a Series A Preferred Subscription Agreement (the "Agreement") with TPG Lux 2018 SC I, S.a.r.l ("TPG"), according to which AU10TIX issued 3,000,000 Series A Preferred Shares ("Series A Shares") to TPG for a subscription price of US$60,000 in cash representing approximately 24% of the outstanding share capital of AU10TIX and 23.077% of the fully-diluted share capital of AU10TIX (see note 16). Transaction costs totaled $4,540 and were deducted from the redeemable non-controlling interests balance. On November 7, 2019, AU10TIX entered into a Series A and Series A-1 Preferred Subscription Agreement with Oak HC/FT Partners II, L.P. ("Oak"), according to which AU10TIX issued 1,000,000 Series A Preferred Shares and 23,622 Series A-1 Preferred Shares ("Series A-1 Shares" and together with Series A Shares – "the Preferred Shares") to Oak for a subscription price of US$20,000 in cash representing approximately 7.401% of the outstanding share capital of AU10TIX and 7.143% of the fully-diluted share capital of AU10TIX. For accounting purposes, the investment was allocated to the Series A and Series A-1 Preferred Shares on a relative fair value basis: $19,537 and $461, respectively. Transaction costs totaled $1,513 and were deducted from the respective investment amounts. Following the Oak investment, on November 7, 2019, TPG subscribed for 307,087 Series A-1 Shares at nominal value (US$0.001 per share) (“Bonus Issue Series A-1 Shares”) in order to preserve its 23.077% ownership interest in the fully diluted share capital of AU10TIX. The Preferred Shares Rights Liquidation Preference: The holders of Series A Shares (“Series A Holders”) are entitled to a liquidation preference upon the occurrence of a sale, initial public offering (“IPO”), merger, consolidation, reorganization, winding-up, dissolution or liquidation of AU10TIX, pursuant to which the Series A Holders are entitled, on the occurrence of such event and in priority to the ordinary shares, to receive the greater of: (a) an amount equal to the initial subscription price for the Series A Shares, plus all accrued but unpaid dividends in respect of the Series A Shares, less all dividends previously paid on the Series A Shares, and (b) the proceeds distributable in respect of the Series A Shares had they been converted into ordinary shares. The initial subscription price for the Series A Shares (and calculations derived therefrom) are subject to customary adjustments as set forth in the agreements executed in connection with the Sale. Conversion Rights: The Series A Shares are subject to conversion into ordinary shares of AU10TIX: (a) on the written request by any Series A Shareholder; and (b) immediately prior to a qualifying IPO of AU10TIX (being an IPO where the net aggregate gross proceeds to AU10TIX exceed US$75 million and where the subscription price per share paid by the public is not less than 150% of the initial subscription price paid for the Series A Shares). Pursuant to these conversion arrangements, the Series A Shares will convert into ordinary shares on a 1:1 basis (subject to certain agreed upon adjustments). Anti-Dilution Protection: The Shareholders Agreements contain customary broad-based weighted average anti-dilution protection whereby, if further shares are issued by AU10TIX at a price per new security that is less than the initial subscription price paid for the Series A Shares, then the Series A Holders shall be entitled to receive additional Series A Shares (at no further cost) on a weighted-average basis, reflecting the value of equity in AU10TIX as determined based on the subscription price paid in the new issue of securities. Pre-emption Rights: The Shareholders Agreements contain a restriction on issuing any securities ranking senior to or on party with the Series A Shares for as long as TPG and/or any subsequent investor holds at least one third of the overall number of Series A Shares in issue as at the date of completion of the Sale. In addition, each shareholder holding in excess of 3% of the shares of AU10TIX has the right to participate in any new issuance of securities by the AU10TIX, subject to customary exceptions. Exit Rights: At any time from and after the fifth (5th) anniversary of completion of the issuance, upon written request by TPG, AU10TIX is required to use reasonable endeavors to facilitate the sale by TPG of the Preferred Shares (or, following conversion, ordinary shares) to a third party at a price in excess of 150% of the initial subscription price paid for the Series A Shares and subject to a right of first refusal in favor of the Company. In the event that, three (3) months thereafter, a sale of the Preferred Shares held by TPG has not been consummated, upon written request by TPG, AU10TIX is required to facilitate a sale of AU10TIX within six (6) months after such written request, and thereafter, TPG has the right to require AU10TIX to facilitate a sale or IPO of AU10TIX. On the exercise of such rights, each other shareholder (including the Company) is required to cooperate with TPG regarding such sale or IPO and TPG has the right to exercise drag rights over the shares held by other shareholders in order to facilitate such exit event. The Exit Right is part of the issuance of the Series A Shares, and was not entered into separately from the transaction that created the non-controlling interests. The Exit Right is not legally detachable from the non-controlling interests because it is non-transferrable (i.e., the instrument cannot be transferred without the underlying preferred shares). Thus, the Exit Right would not be separately exercisable from the non-controlling interests shares because the non-controlling interests shares will be settled when the Exit Right is exercised. As a result, the Exit Right would be considered embedded in the Series A Shares held by TPG. Shares of redeemable convertible preferred stock are not mandatorily or currently redeemable. However, the Exit Right would constitute a contingent redemption event that is outside of the Company’s control. As such, Series A Shares have been presented outside of permanent equity as redeemable non-controlling interests. The Company has adjusted the carrying value of the redeemable non-controlling interests to adjust for the non-controlling interests share in AU10TIX's profits and Other Comprehensive Income (Loss). The Company has not adjusted the carrying values of the redeemable non-controlling interests to the deemed liquidation values of such shares since a liquidation event was not probable at any of the balance sheet dates. Subsequent adjustments to increase or decrease the carrying values to the ultimate liquidation values will be made only if and when it becomes probable that such a liquidation event will occur. The Series A-1 Preferred Shares do not entitle their holders to any liquidation or exit rights as the Series A Preferred Shares, and therefore are classified within permanent equity, as non-controlling interests. The anti-dilution provisions cited above have not been bifurcated from the host contract since they are to be settled into AU10TIX's non-traded shares, thus the "net settlement" criteria is not met. The following table sets forth for the movement in the redeemable non-controlling interests: Year Ended December 31, 2020 2019 Balance as of the beginning of the year $ 74,300 $ - Sale of AU10TIX Technologies B.V. series A Shares, net - 73,520 Net Income 925 774 Other Comprehensive Income - Translation adjustment 97 6 Balance as of the end of the year $ 75,322 $ 74,300 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 16 – STOCK-BASED COMPENSATION AU10TIX’s subsidiary has a Stock Option Plan which has reserved 500,000 shares of its common stock for its future issuance. As of December 31, 2020, the subsidiary has 13,000,000 authorized shares of which 12,500,000 shares are issued and outstanding. Under the stock option plan, stock options may be granted to employees, officers, directors, consultants and service providers of the subsidiary at an exercise price as determined by the subsidiary’s board of directors with expiration terms of not more than ten years after the date such option is granted. Options granted under the plan generally vest over a period of four years. The following is a summary of the Company’s subsidiary stock options issued and outstanding: Number of options Weighted average exercise price Weighted average remaining contractual term Options outstanding as of December 31, 2019 200,500 $ 0.01 Options granted - - Options exercised - - Forfeited - - Options outstanding , end of the year 200,500 $ 0.01 6.5 years Options exercisable, as of December 31, 2020 200,500 $ 0.01 6.5 years Non-vested options consist of the following Number of Weighted average options exercise price Non-vested opions, as of December 31, 2019 43,875 $ 0.01 Granted - - Vested 43,875 0.01 Forfeited - - Non-vested options, as of December 31, 2020 - $ - During the years ended December 31, 2020, 2019 and 2018, there were no compensation expenses related to the issuance of stock option plan. As of December 31, 2020, the Company does not have any unrecognized compensation cost related to stock options granted under the stock option plans. |
OTHER EXPENSES, NET
OTHER EXPENSES, NET | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSES, NET | NOTE 17 – OTHER EXPENSES, NET Other expense is summarized as follows: Year ended December 31, 2020 2019 2018 Interest expense to related parties (see Note 13) $ (171 ) $ (1,218 ) $ (2,746 ) Interest expense and other bank charges (901 ) (1,479 ) (1,261 ) Interest income 178 151 - Revaluation and related costs reimbursed to related party - (8,139 ) - Foreign currency gain (loss) (254 ) 148 417 Other income (expense) (140 ) 19 4 Total other expense, net $ (1,288 ) $ (10,518 ) $ (3,586 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18 – INCOME TAXES The components of income (loss) before income tax benefit (expense) from continuing operations are as follows: Year Ended December 31, 2020 2019 2018 The Netherlands $ 469 $ (11,508 ) $ (13,107 ) Subsidiaries outside of the Netherlands 5,523 5,804 2,728 Income (loss) before income tax expenses $ 5,992 $ (5,704 ) $ (10,379 ) The current income tax expense from subsidiaries outside of the Netherlands is $1,345, $1,492 and $548 for the years ended December 31, 2020, 2019 and 2018, respectively. There was no current income tax expense or benefit for the Netherlands for the years ended December 31, 2020, 2019 and 2018. The deferred income tax benefit from subsidiaries outside of the Netherlands is $676, $29 and $87 for the years ended December 31, 2020, 2019 and 2018, respectively. There was no deferred income tax expense for the Netherlands for the years ended December 31, 2020, 2019 and 2018. Additionally, tax expenses (benefits) from subsidiaries in the Netherlands include $(79), $86 and $0, for the years ended December 31, 2020, 2019 and 2018, respectively, of tax related to previous years. Tax expenses from subsidiaries outside the Netherlands include $0, $0 and $224 for the years ended December 31, 2020, 2019 and 2018, respectively, of tax related to previous years. The components of deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Operating loss carryforwards $ 16,694 $ 20,171 Capital loss carryforwards 159 148 Allowance for doubtful accounts 110 14 Tax credit carryforwards 560 560 Accrued expenses and other 774 691 Research and development expenses 432 - Total deferred tax assets 18,729 21,584 Deferred tax liabilities: Depreciation of property and equipment (115 ) (62 ) 18,614 21,522 Valuation allowance (17,445 ) (21,046 ) Deferred tax assets, net $ 1,169 $ 476 The ultimate realization of the net deferred tax assets in each jurisdiction the Company does business in is dependent upon the generation of future taxable income in that jurisdiction during the periods in which net operating loss carry forwards are available and items that gave rise to the net deferred tax assets become deductible. At present, the Company does not have a sufficient history of generating taxable income in the various jurisdictions it does business in, or positive expected core earnings to conclude that it is more likely than not that the Company will be able to realize its net deferred tax assets in the near future and, therefore, a valuation allowance was established for the carrying value of the net deferred tax assets, with the exception of few locations, which are currently generating taxable income. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion of the valuation allowance in other jurisdictions. As of December 31, 2020, the Company has net operating losses carry forwards of $32,308 in the Netherlands, which expire in 2021 through 2027. As of December 31, 2020, the Company has net operating loss carry forwards of $19,726 in the United States of America, which will expire in 2026 through 2037. During the year 2021 the Company is expected to get additional amounts as taxable governmental assistance from the United States government which will have an effect on the Company’s profitability and the utilization of the net operating loss carry forwards. In Israel, the Company has net carry forward losses of $6,660 which do not expire. The ultimate utilization of such net operating loss carry forwards is limited in certain situations. As of December 31, 2020, the Company has capital loss carry forwards of $692 in Israel. Such capital loss carry forwards do not expire and can be offset against future capital gains generated in Israel. As of December 31, 2020, the Company has $560 in tax credits for the welfare to work and work opportunity programs in the United States of America that expire in 2024 through 2029. During the years ended December 31, 2020 and 2019 the valuation allowance increased (decreased) by $(3,601) and $2,568, respectively. The Company's effective income tax rate differs from the Netherlands' statutory rate of 25% as follows: Year Ended December 31, 2020 2019 2018 Effective loss (income) tax benefit from continuing operations at statutory rate $ (1,498 ) $ 1,426 $ 2,595 Rate differential 610 1,024 682 Non-deductible expense (857 ) (584 ) (565 ) Adjustments to prior year tax losses (3,604 ) (429 ) (408 ) Changes in valuation allowance 3,601 (2,568 ) (2,577 ) Other 1,158 (418 ) (412 ) Income tax expense from continuing operations $ (590 ) $ (1,549 ) $ (685 ) As of December 31, 2020 and 2019 there are no unrecognized tax benefits. As of December 31, 2020 and 2019, the Company has income tax payable of $351 and $162, respectively, included in accrued expenses and other current liabilities. The Company files income tax returns in the Netherlands and other foreign jurisdictions. Income tax returns for the years since 2014 are subject to examination in the Netherlands. In the United States of America, income tax returns for the years since 2017 are subject to examination. Income tax returns for the tax years since 2015 are subject to examination in foreign jurisdictions. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 19 - RELATED PARTY TRANSACTIONS An entity related to one of the Company's Supervisory Board members provide legal services to the Company. Legal expense related to these services is $46, $46 and $35 for the years ended December 31, 2020, 2019 and 2018, respectively. The Company engages the services of a related party to provide certain selling and management services to the authentication technology segment. The Company incurred expenses of $741, $801 and $715 for such services for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, and 2019 the outstanding balances due for these services were $114 and $191, respectively, included in accrued expenses and other current liabilities. In addition, since April 2018, the related party serves as a board member of the Company and was paid an amount of $38, $28 and $15 as board fees, for the years ended December 31, 2020, 2019 and 2018, respectively. An entity related to the Company’s main shareholder provided a letter of credit of $500 to a commercial bank to guarantee a borrowing arrangement on behalf of one of the Company’s subsidiaries. In December 2019, the Company replaced the letter of credit by its own letter of credit. The Company engages the services of a related party to provide certain selling services to its authentication technology segment. The Company incurred expenses of $87, $106 and $110 for such services for the years ended December 31, 2020, 2019 and 2018, respectively. The Company engages the services of a related party to provide internal audit services. As of February 2020, the related party acts as a Managing Director of the Company. The Company incurred expenses of $182, $170 and $155 for such services for the years ended December 31, 2020, 2019 and 2018, respectively. The chairman of the board, a related party, receives annual compensation of $50 for his services as chairman. In addition, in 2020, the Company incurred salary expenses of $125 for the services he provides to AU10TIX. In August 2017, the Company engaged the services of a related party to provide certain selling and administrative services to its authentication technology segment. The Company incurred expenses of $0, $39 and $103 for such services for the years ended December 31, 2020, 2019 and 2018, respectively. In addition, the related party serves as a board member of the Company, and was paid an amount of $38, $30 and $15 as board fees, for the years ended December 31, 2020, 2019 and 2018, respectively. In May 2018, the Company engaged the services of a related party to provide certain administration services. The Company incurred expenses of $118, $98 and $53 for such services for the years ended December 31, 2020, 2019 and 2018, respectively. In May 2019, the Company engaged the services of Arrow (see note 6) to provide some administrative services. The Company incurred expenses of $115 and $62 for such services for the years ended December 31, 2020 and 2019, respectively. In June 2019, the Company issued 3,000,000 shares to certain directors and officers of the Company for a purchase price of $0.40 per share. The Compensation Committee determines the composition and amount of director and key employee compensation. When the annual award consists of equity purchases, it is only permitted at a price equal or above market. In December 2019, the Company purchased shares and shareholders debt of Arrow for $1,750 (see note 6). In May 2020, an entity related to the Company’s main shareholder provided a letter of credit of €2,000 ($2,475 as of December 31, 2020) to a commercial bank to guarantee a borrowing arrangement on behalf of one of the Company’s subsidiaries. The Company provided to the related party a deposit of $2,200 against the letter of credit which will be paid back to the Company once the letter of credit will be cancelled. The Company has debt to related parties (see note 13). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 - COMMITMENTS AND CONTINGENCIES Letters of Credit and Guarantees As of December 31, 2020, the Company has $3,991 in outstanding letters of credit. Such letters of credit are being secured by the same amounts in restricted cash with commercial banks (see note 2). As of December 31, 2020, the Company has €973 ($1,195 as of December 31, 2020) in outstanding guarantees on its lines of credit arrangement in Europe (see note 10), which relate to leases and performance guarantee for contracts. Legal Proceedings General The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. These claims are primarily related to grievances filed by current and former employees for unfair labor practices or discrimination, and for passenger aviation claims. Management recognizes a liability for any matter when the likelihood of an unfavorable outcome is deemed to be probable and the amount is able to be reasonably estimated. Management has concluded that such claims, in the aggregate, would not have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. Agency Agreements In April 2013, prior to the purchase of one of the current subsidiaries in Europe, the Company entered into an agency agreement with a third party to assist it with this transaction. According to the agreement, in the event that the operations in that country are sold in the future, the third-party agent is entitled to a payment of €3,000 ($3,686 as of December 31, 2020). In March 2016, the Company entered into an agreement with a third party to assist the Company with the possible sale of one of the Company’s subsidiaries (see note 15). The fees depend on the outcome of the assignment and are between 2% - 5% of the sale consideration but not less than $4,000. In February 2019 the agreement was amended. According to the amendment, in case that less than 50% of the voting stock or majority of the subsidiary assets are being sold the transaction fee will be 5% of the sale consideration but not lower than $3,000. In August 2017, the Company entered into an agreement with a third party to assist the Company with a possible sale of one of the Company’s subsidiaries. The fees depend on the outcome of the assignment and are between 2% - 10% of the sale consideration but not less than € 2,000 ($2,457 as of December 31, 2020). |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHICAL INFORMATION | NOTE 21 – SEGMENT AND GEOGRAPHICAL INFORMATION The Company operates in three reportable segments: (a) corporate (b) airport security and other aviation services and (c) authentication technology. The corporate segment does not generate revenue and contains primarily non-operational expenses. The airport security and other aviation services segment provides security and other aviation services to airlines and airport authorities, predominantly in Europe and the United States of America. The authentication technology segment provides authentication services to financial and other institutions, predominantly in Europe and the United States of America. All inter-segment transactions are eliminated in consolidation. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The operating results of these reportable segments are regularly reviewed by the chief operating decision. Airport Security and Other Aviation Services Corporate Authentication Technology Total Year ended December 31, 2020: Revenue $ - $ 222,654 $ 25,765 $ 248,419 Depreciation and amortization 72 1,302 716 2,090 Income (loss) from continuing operations (3,853 ) 6,056 3,199 5,402 Goodwill - 746 - 746 Total assets from continuing operations 12,488 86,550 41,350 140,388 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 The following table sets forth, for the periods indicated, revenue generated from customers by geographical area based on the geographical location of the customer’s invoicing address: Year Ended December 31, 2020 2019 2018 Germany $ 119,500 $ 137,207 $ 134,646 The Netherlands 58,446 97,700 121,465 United States 45,305 73,719 69,548 Other countries 25,168 24,681 19,562 Total revenue $ 248,419 $ 333,307 $ 345,221 The following table sets forth, for the periods indicated, property and equipment, net of accumulated depreciation and amortization, by country: December 31, 2020 2019 Germany $ 449 $ 516 The Netherlands 598 862 United States 305 354 Other countries 4,173 2,854 Total property and equipmat, net $ 5,525 $ 4,586 Property and equipment, net, in other countries include $3,179 and $2,212 property and equipment in Israel, as of December 31, 2020 and 2019, respectively. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts (US $ in thousands) Charges Charges to to Beginning Costs and other End of of year Expenses accounts Deductions Year Allowance for doubtful accounts (1): Year ended December 31, 2018 $ 103 303 (166 ) - $ 240 Year ended December 31, 2019 $ 240 261 (83 ) - $ 418 Year ended December 31, 2020 $ 418 710 (438 ) - $ 690 Allowance for net deferred tax assets: Year ended December 31, 2018 $ 15,901 - 2,577 - $ 18,478 Year ended December 31, 2019 $ 18,478 - 2,568 - $ 21,046 Year ended December 31, 2020 $ 21,046 - - (3,601 ) $ 17,445 (1) Write-off net of recoveries for the allowance for doubtful accounts. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Functional Currency | Functional Currency The accompanying consolidated financial statements are presented in United States dollars. The Company has determined that the functional currency of its foreign subsidiaries is the local currency, which is predominantly the Euro. For financial reporting purposes, the assets and liabilities of such subsidiaries are translated into United States dollars using exchange rates in effect at the balance sheet date. The revenue and expenses of such subsidiaries are translated into United States dollars using average exchange rates in effect during the reporting period. Resulting translation adjustments are presented as a separate category in shareholders' deficit called accumulated other comprehensive loss. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. The most significant estimates and assumptions included in these consolidated financial statements consist of the: (a) calculation of the allowance for doubtful accounts, (b) determination of the fair value of stock options, (c) recognition of contingent liabilities (d) valuation allowance of deferred income taxes, (e) determination of goodwill impairment (f) determination of future lease periods of existing lease contracts, and (g) determination of interest rates used in order to calculate the present value of the operating lease liabilities. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of ICTS International N.V. and its wholly-owned and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash as of December 31, 2020 consists of: (a) $3,991 held in bank accounts that serve as cash collateral for outstanding letters of credit and (b) $5,481 held in several bank accounts in the Netherlands, which is restricted for payments to local tax authorities (see note 5). Restricted cash as of December 31, 2019 consists of: (a) $733 held in bank accounts that serve as cash collateral for outstanding letters of credit and (b) $1,760 held in several bank accounts in the Netherlands, which is restricted for payments to local tax authorities. The following table provides a reconciliation of cash and restricted cash reported on the balance sheet that sum to the total of the same such amounts shown in the statements of cash flows. December 31, 2020 2019 Cash and cash equivalents $ 51,602 $ 52,352 Restricted cash 9,472 2,493 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 61,074 $ 54,845 |
Accounts Receivable | Accounts Receivable Accounts receivable represent amounts due to the Company for services rendered and are recorded net of an allowance for doubtful accounts. The allowance for credit losses is based on historical collection experience, factors related to specific customers and current economic trends. The Company writes off accounts receivable when determined to be uncollectible and are recognized as a reduction to the allowance for credit losses. As of December 31, 2020, and 2019, the allowance for doubtful accounts is $690 and $418, respectively. |
Fair Value Measurements | Fair Value Measurements The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 820, “Fair Value Measurement”. Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value should be based on assumptions that market participants would use. In determining the fair value, the Company assesses the inputs used to measure fair value using a three-tier hierarchy, as follows: 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. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Investments | Investments The Company accounts for investments in the equity securities of companies which represent an ownership interest of 20% to 50% and the ability to exercise significant influence, provided that ability does not represent control, using the equity method. The equity method requires the Company to recognize its share of the net income (loss) of its investees in the consolidated statement of operations until the carrying value of the investment is zero. The Company records investments in the equity securities of privately held companies which represent an ownership interest of less than 20% at cost minus impairment. |
Property and Equipment | Property and Equipment Equipment and furniture, internal-use software, leasehold improvements and vehicles are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used in determining depreciation are as follows: Years Equipment and facilities 3-7 Internal- use software 4-7 Vehicles 3-7 Leasehold improvements are amortized using the straight-line method over the shorter of the total term of the lease or the estimated useful lives of the assets. |
Capitalized Internal-Use Software Costs | Capitalized Internal-Use Software Costs The Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Costs, such as maintenance and training are also expensed as incurred. Capitalized costs are included in property and equipment, and amortized on a straight-lined basis over the estimated useful life of the software. Amortization expense, which is included in depreciation expense, amounted to $147, $0 and $0 during the years ended December 31, 2020, 2019 and 2018, respectively. |
Goodwill | Goodwill Goodwill represents the excess purchase price over the fair value of the net tangible and intangible assets of an acquired business. Goodwill is assessed for impairment by reporting unit on an annual basis or when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company would record a goodwill impairment charge for the difference between the carrying value and the fair value of the goodwill, not to exceed the carrying amount of the goodwill. During the years ended December 31, 2020, 2019 and 2018, the Company recognized a goodwill impairment of $0, $0 and $1,563, respectively (see note 9). |
Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company assesses recoverability by determining whether the net book value of the related asset will be recovered through the projected undiscounted future cash flows of the asset. If the Company determines that the carrying value of the asset may not be recoverable, it measures any impairment based on the fair value of the asset as compared to its carrying value. During the years ended December 31, 2020, 2019, and 2018, the Company did not record any impairment charges on its long-lived assets. |
Employee Rights Upon Retirement | Employee Rights Upon Retirement The Company is required to make severance payments to its Israeli employees upon dismissal of an employee or upon a termination of employment in certain circumstances. The Israeli pension and severance pay liability to the employees is covered mainly by deposits made at insurance companies. For its employees who are employed under the Section 14 of the Israeli Severance Pay Law, 1963 (“Section 14”), the Company makes deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employees’ rights upon termination. In addition, the related obligation and amounts deposited on behalf of the applicable employees for such obligations are not presented on the Company’s consolidated balance sheets, as the amounts funded are not under the control of management of the Company and the Company is legally released from the obligation to pay any severance payments to the employees once the required deposits amounts have been paid. For employees not under Section 14, severance liabilities are recorded based on the length of service and their latest monthly salary. The Company’s liabilities for the Israeli employees amounted to $1,556 and $1,493 as of December 31, 2020 and 2019, respectively and are included in other liabilities in the Company’s consolidated balance sheets. The deposits made at insurance companies to cover these liabilities amounted to $1,391 and $1,264 as of December 31, 2020 and 2019, respectively and are included in other assets in the Company’s consolidated balance sheets. |
Leases | Leases The Company adopted ASU 2016-02, Leases (Topic 842) as of January 1, 2019, using the modified retrospective approach. The standard provides a number of optional practical expedients in transition. The Company chose to apply the following permitted practical expedients: Not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. Short-term lease recognition exemption for all leases with a term shorter than 12 months. This means, that for those leases, the Company does not recognize Rights of Use (“ROU”) assets or lease liabilities. Applying the practical expedient to not separate lease and non-lease components for all of the Company’s leases as a lessee. The Company as a lessee Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A lease is a finance lease if it meets any one of the criteria below, otherwise the lease is an operating lease: The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The lease term is for the major part of the remaining economic life of the underlying asset. The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. Based on the criteria above, all of the Company's leases are classified as operating leases. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. Variable lease payments that depend on an index or a rate On the commencement date, the lease payments shall include variable lease payments that depend on an index or a rate (such as the Consumer Price Index or a market interest rate), initially measured using the index or rate at the commencement date. The Company does not remeasure the lease liability for changes in future lease payments arising from changes in an index or rate unless the lease liability is remeasured for another reason. Therefore, after initial recognition, such variable lease payments are recognized in profit or loss as they are incurred. |
Convertible Debt Instruments | Convertible Debt Instruments The Company evaluates convertible debt instruments to determine whether the embedded conversion option needs to be bifurcated from the debt instrument and accounted for as a freestanding derivative instrument or considered a beneficial conversion option. An embedded conversion option is considered to be a freestanding derivative when: (a) the economic characteristics and risks of the embedded conversion option are not clearly and closely related to the economic characteristics and risks of the host instrument, (b) the hybrid instrument that embodies both the embedded conversion option and the host instrument is not re-measured at fair value under otherwise applicable US GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded conversion option would be considered a derivative instrument subject to certain requirements (except when the host instrument is deemed to be conventional). When it is determined that an embedded conversion option should not be bifurcated from its host instrument, the embedded conversion option is evaluated to determine whether it contains any intrinsic value which needs to be discounted from the carrying value of the convertible debt instrument. The intrinsic value of an embedded conversion option is considered to be the difference between the fair value of the underlying security on the commitment date of the debt instrument and the effective conversion price embedded in the debt instrument. |
Contingent Liabilities | Contingent Liabilities The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of its business activities. Liabilities for such contingencies are recognized when: (a) information available prior to the issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can reasonably be estimated. |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss | Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss The Company's comprehensive income (loss) consists of the Company’s net income (loss) and foreign currency translation adjustments. Accumulated other comprehensive loss consist of the Company’s accumulated foreign exchange currency translation adjustments. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation to employees, including stock options, are measured at the fair value of the award on the date of grant based on the estimated number of awards that are ultimately expected to vest. The compensation expense resulting from stock-based compensation to management and administrative employees is recorded over the vesting period of the award in selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive income (loss). Compensation expense resulting from stock-based compensation to operational employees is recorded over the vesting period of the award in cost of revenue. Stock-based compensation issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the stock-based compensation, whichever is more readily determinable. |
Non-Controlling Interests | Non-Controlling Interests The Company’s non-controlling interests represent the minority shareholder’s ownership interests related to the Company’s subsidiaries. The Company reports its non-controlling interests in subsidiaries as a separate component of equity in the consolidated balance sheets and reports net income (loss) attributable to the non-controlling interests in the consolidated statements of operations. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests Certain non-controlling interests in a subsidiary are entitled to predefined Exit Rights that, for accounting purposes, constitute a contingent redemption event that is outside of the Company’s control. As such, these non-controlling interests are presented as temporary equity between liabilities and equity on the Company’s consolidated balance sheets. After initial recognition, at the fair value of the investment less directly attributable transaction costs, the carrying value of redeemable non-controlling interests is adjusted for the non-controlling interests share in the subsidiary’s profits and Other Comprehensive Income (Loss). The Company does not adjust the carrying value of the redeemable non-controlling interests to the deemed liquidation values of such shares as long as the liquidation events triggering the Exit Rights is not considered probable of occurring. |
Revenue Recognition | Revenue Recognition Revenue is recognized when the promised services are performed for our clients, and the amount that reflects the consideration we are entitled to receive in exchange for those services is determined. The Company’s revenues are recorded net of any sales taxes. In order to determine the revenue, we (1) identify the contract with the client, (2) identify the performance obligations, usually it’s based on the hours spent, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation and (5) we recognize revenue as performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the client, and it is the unit of account for revenue recognition. The majority of our contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in our contracts and, therefore, is not distinct. The following table presents the Company’s revenues according to the Company’s segments: Year ended December 31, 2020 2019 2018 Airport Security and Other Aviation Services $ 222,654 $ 309,548 $ 329,150 Authentication Technology 25,765 23,759 16,071 Total revenue $ 248,419 $ 333,307 $ 345,221 The following table presents the Company’s revenues generated from customers by geographical area based on the geographical location of the customers invoicing address: Year ended December 31, 2020 2019 2018 Germany $ 119,500 48 % $ 137,207 41 % $ 134,646 39 % The Netherlands 58,446 24 % 97,700 29 % 121,465 35 % United States 45,305 18 % 73,719 22 % 69,548 20 % Other countries 25,168 10 % 24,681 8 % 19,562 6 % Total revenue $ 248,419 100 % $ 333,307 100 % $ 345,221 100 % Airport Security and Other Aviation Services Segment In the airport security and other aviation services, for performance obligations that we satisfy over time, revenues are recognized by consistently applying a method of measuring hours spent on that performance obligation. We generally utilize an input measure of time (hours and attendance for specific time framed service like specific flights) of the service provided. Performance obligations are satisfied over the course of each month and continue to be performed until the contract has been terminated or cancelled. Pricing and Reduction to Revenues We generally determine standalone selling prices based upon the prices included in the client contracts, using expected costs plus margin, or other observable prices. The price as specified in our client contracts is generally considered the standalone selling price as it is an observable input that depicts the price as if sold to a similar client in similar circumstances. Certain client contracts have variable consideration, including quality thresholds or other similar items that could reduce the transaction price. These amounts may be constrained and revenue is recorded to the extent we do not expect a significant reversal or when the uncertainty associated with the variable consideration is resolved. Our variable consideration amounts, if any, are not material, and we do not expect significant changes to our estimates. Contracts Our client contracts generally include standard payment terms acceptable in each of the countries, states and territories in which we operate. The payment terms vary by the type and location of our clients and services offered. Client payments are typically due in 30 to 60 days after invoicing, but may be a shorter or longer term depending on the contract. Our contracts with main customers are generally long-term contracts, between two to five years. The timing between satisfaction of the performance obligation, invoicing and payment is not significant. Practical Expedients and Exemptions Because nearly all our contracts are based on input measure of time of service provided (as hours or attendance) no exemptions need to be made. We have no material contracts with material revenues expected to be recognized subsequent to December 31, 2020 related to remaining performance obligations. Revenue Service Types The following is a description of our revenue service types, including Airport Security, Airline Security, Cargo Security, Other Airport Services, General Security Services and Other. Airport Security Staffing or manning for specialized airport security are usually based on long term contract issued via a public tender procedure. We recognize revenue given the unit of measure (hours) provided in the given time period and the specific price for specific hours agreed upon in the contracts. Quality and criteria of staffing are described in the contracts and are measured in the given time period. Deviations, if any, are discussed with the customer before invoicing and will be reflected in the invoice showing the approved hours and other cost elements as agreed upon price. Most contracts have an hourly rate that reflects an all-in tariff based on a full cost price calculation. In some of the contracts the hourly rates are split between a component based on hours and a component based on specific costs in a specific time period but always linked to the service provided in given time period. Revenue is recognized at the time period set in the contract. Airline Security Staffing or manning for airline security are usually based on long term contracts issued via a public tender procedure. We recognize revenue according to the unit of measure provided (usually attendance for specific time framed service like specific flights). The time framed specialized security services are in this case are the executed number of flights. When the manning for the security of these flights are delivered, the Company invoices the customer according to the agreed flight tariff. Cargo Security Staffing or manning for specialized cargo security are usually based on long term contract, sometimes publicly tendered. Contracts are based on hourly planned and executed screening services. Revenue is recognized based on the realized screening hours and contractually agreed upon hourly rate. Other Airport Services Airport Services include wheelchair attendants, pre-departure skycaps, bag-runners, agents, guards, charter security screening, janitorial, and cabin cleaning to major U.S. and foreign carriers in airports throughout the United States of America. Our contracts may include either single or multiple performance obligations and vary by airport and airline. We recognize revenue given the unit of measure (usually hours) provided in the given time period and the specific price for specific hours or attendance for specific event, time framed service as agreed upon in the contracts. General Security Services Security Services include providing armed and un-armed guards to private schools and places of worship, video surveillance and patrol. Contracts for security services generally include only a single performance obligation. We recognize revenue for security guard services given the unit of measure (hours) provided in the given time period. Revenue from video surveillance and patrol is recognized based upon a fixed monthly rate. Other Services Other services include revenues from (incidental) specialized security manning services, training services and ad hoc work performed on and off airports. Revenue is recognized over time as services are being performed, using the input of service delivered during the time period, according to the contractual agreed price. Authentication Technology Segment In the authentication technology segment, the Company offers authentication services on a cost per click basis, with a minimum yearly commitment which means the customer pays the Company according to the higher of (a) number of times the customer used the system in order to authenticate IDs or (b) according to the yearly minimum commitment. According to the agreement with the customers, each chargeable click has an agreed price and revenue is being recognized accordingly. Pricing and Reduction to Revenues We generally determine standalone selling prices based upon the prices included in the client contracts, using expected costs plus margin, or other observable prices. The price as specified in our client contracts is generally considered the selling price as agreed with the customer. Certain client contracts have variable consideration which are based on quantity of usage. These amounts may be constrained and revenue is recorded to the extent we do not expect a significant reversal or when the uncertainty associated with the variable consideration is resolved. Our variable consideration, if any, amounts are not material, and we do not expect significant changes to our estimates. Contracts Our client contracts generally include standard payment terms acceptable in each of the countries, states and territories in which we operate. The payment terms vary by the type and location of our clients and services offered. The minimum commitment is usually being paid in advance. Client payments are typically due in 30 days after invoicing, but may be a shorter or longer term depending on the contract. Our client contracts are usually for a one-year period with a renewal option. The timing between satisfaction of the performance obligation, invoicing and payment is not significant. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance. Deferred revenues at December 31, 2020 and 2019 were $2,143 and $1,652, respectively shown as part of the accrued expenses and other current liabilities and $263 and $268 shown as other liabilities. Revenue recognized for the years ended December 31, 2020, 2019 and 2018 that was included in the deferred revenue at the beginning of each year was $1,879, $2,001 and $854, respectively. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. Capitalized Contract Costs As part of obtaining contracts with certain customers in the authentication technology segment, the Company incurs upfront costs such as sales commissions. The Company capitalizes these costs which are subsequently amortized on a straight-line basis over the estimated life of the relationship with the customer. The Company applies the practical expedient that allows it to determine this estimate for a portfolio of contracts that have similar characteristics in terms of type of service, contract term and pricing. This estimate is reviewed by management at the end of each reporting period as additional information becomes available. |
Cost of Revenue | Cost of Revenue Cost of revenue represents primarily payroll and employee related costs associated with employees who provide services under the terms of the Company's contractual arrangements, insurance and depreciation and amortization. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and consist primarily of payroll and related costs. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs during the years ended December 31, 2020, 2019 and 2018 are $735, $828 and $528, respectively. |
Value Added Tax | Value Added Tax Certain of the Company’s operations are subject to Value Added Tax (“VAT”) applied on the services sold in those respective countries. The Company is required to remit the VAT collected to the tax authorities, but may deduct the VAT paid on certain eligible purchases. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities resulting Uncertain income tax positions are determined based upon the likelihood of the positions being sustained upon examination by taxing authorities. The benefit of a tax position is recognized in the consolidated financial statements in the period during which management believes it is more likely than not that the position will not be sustained. Income tax positions taken are not offset or aggregated with other positions. Income tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of income tax benefit that is more than 50 percent likely of being realized if challenged by the applicable taxing authority. The portion of the benefits associated with income tax positions taken that exceeds the amount measured is reflected as income taxes payable. The Company recognizes interest related to uncertain tax positions in interest expense. The Company recognizes penalties related to uncertain tax positions in selling, general and administrative expenses. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is determined in the same manner as basic income (loss) per share, except that the number of shares is increased to include potentially dilutive securities using the treasury stock method. The Company had an income from continuing operations for the year ended December 31, 2020. Potentially dilutive securities were included in the computation of diluted income per share as the conversion rate of the convertible note payable to related party was lower than the weighted average computed price of the Company’s stock for the year 2020. The Company had a loss from continuing operations for the years ended December 31, 2019 and 2018. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common share is anti-dilutive due to the net losses in 2019 and 2018. Potentially dilutive securities were excluded from the computation of diluted loss per share as the conversion rate of the convertible note payable to related party was higher than the market price of the Company’s common stock as of December 31, 2019 and 2018, and the effect of including them is anti-dilutive. The following table summarizes the number of shares of common stock attributable to potentially dilutive securities outstanding for each of the periods: Year Ended December 31, 2020 2019 2018 Shares issuable upon conversion of convertible notes payable to related party at a price of $0.40 3,000,000 5,000,000 - Shares issuable upon conversion of convertible notes payable to related party at a price of $1.50 - - 14,731,267 Shares issuable upon conversion of accrued interest payable to related party at a price of $0.75 - - 11,779,776 Total 3,000,000 5,000,000 26,511,043 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, income taxes payable, VAT payable, notes payable-banks, long-term loan payable and loan payable to related party approximate their carrying values due to the short-term nature of the instruments. The carrying values of the convertible notes payable to a related party and other liabilities are not readily determinable because: (a) these instruments are not traded and, therefore, no quoted market prices exist upon which to base an estimate |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which are subject to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. The Company maintains cash and cash equivalents and restricted cash in accounts with financial institutions in the United States of America, Europe, Japan and Israel. As of December 31, 2020, accounts at financial institutions located in the United States of America are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250 per institution. As of December 31, 2020, cash, cash equivalents and restricted cash of $5,773 is being held in the United States of America, of which $5,523 is uninsured. Bank accounts located in Europe, Japan and Israel, totaling $55,301 as of December 31, 2020, are uninsured. The Company renders services to a limited number of airlines and airports through service contracts and provides credit without collateral. Some of these airlines and airports may have difficulties in meeting their financial obligations, which can have a material adverse effect on the Company's consolidated financial position, results of operations and cash flows. To mitigate this risk, the Company regularly reviews the creditworthiness of its customers through its credit evaluation process. Revenue from two customers represented 70% of total revenue during the year ended December 31, 2020, of which one customer accounted for 48% and the other customer accounted for 22% of total revenue. Accounts receivable from these two customers represented 47% of total accounts receivable as of December 31, 2020. Revenue from two customers represented 69% of total revenue during the year ended December 31, 2019, of which one customer accounted for 41% and the other customer accounts for 28% of total revenue. Accounts receivable from these two customers represented 57% of total accounts receivable as of December 31, 2019. Revenue from two customers represented 72% of total revenue during the year ended December 31, 2018, of which one customer accounted for 38% and the other customer accounts for 34% of total revenue. Accounts receivable from these two customers represented 55% of total accounts receivable as of December 31, 2018. Both customers mentioned above, have been principle customers in the last three years. |
Risks and Uncertainties | Risks and Uncertainties The Company is currently engaged in direct operations in numerous countries and is therefore subject to risks associated with international operations (including economic and/or political instability and trade restrictions). Such risks can cause the Company to have significant difficulties in connection with the sale or provision of its services in international markets and have a material impact on the Company's consolidated financial position, results of operations and cash flows. The Company is subject to changes in interest rates based on Central Banks Federal Reserve actions and general market conditions. The Company does not utilize derivative instruments to manage its exposure to interest rate risk. Furthermore, as a result of its international operations, the Company is subject to market risks associated with foreign currency exchange rate fluctuations. The Company does not utilize derivative instruments to manage its exposure to such market risk. As such, significant foreign currency exchange rate fluctuations can have a material impact on the Company's consolidated financial position, results of operations and cash flows. |
Reclassification | Reclassification Certain amounts have been reclassified in prior years balance sheets and statements of cash flows to conform with current period presentation. |
Adoption of New Accounting Standard | Adoption of New Accounting Standard On January 1, 2020, the Company adopted ASU 2016-13 Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, replacing the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses under the Current Expected Credit Loss (CECL) methodology is applicable to trade and other receivables, financial assets measured at amortized cost including loans and other instruments. The Company applies ASC 326 its accrual for doubtful accounts and for financial assets purchased with credit deterioration (PCD) related to its investment in Arrow (see note 6). ASC 326 requires credit losses to be presented as an allowance for credit losses. The remaining noncredit discount will be accreted into interest income at the effective interest rate. As allowed by ASC 326, the Company elected to maintain a pool of loans for the purpose of applying the standard, due to similar characteristics of the loans. Management assesses the extent to which fair value is less than amortized cost. The assessment indicates that the present value of cash flows expected to be collected is less than the amortized cost basis, thus a credit loss exists and an allowance for credit losses is recorded for credit loss. Changes in the allowance for credit losses are recorded as provision for credit loss expenses. Management estimates the allowance using relevant available information from internal and external sources, relating to past events current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The adoption of ASC 326 did not have a material effect on the Company's consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Standards Update 2019-12 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard will become effective for interim and annual periods, beginning after December 15, 2020, with early adoption permitted. The adoption of this standard is not expected to have material effect on the Company’s operating results or financial condition. Accounting Standards Update 2020-01 In January 2020, the FASB issued an update for Investments-Equity Securities (Topic 321) and Investments-Equity method and Joint Ventures (Topic 323). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, for the purposes of applying the measurement alternative in accordance with topic 321 immediately before applying or upon discontinuing the equity method. The amendment is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash and Restricted Cash | The following table provides a reconciliation of cash and restricted cash reported on the balance sheet that sum to the total of the same such amounts shown in the statements of cash flows. December 31, 2020 2019 Cash and cash equivalents $ 51,602 $ 52,352 Restricted cash 9,472 2,493 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 61,074 $ 54,845 |
Schedule of Property and Equipment Estimated Useful Lives | The estimated useful lives used in determining depreciation are as follows: Years Equipment and facilities 3-7 Internal- use software 4-7 Vehicles 3-7 |
Schedule of Revenues Segments | The following table presents the Company’s revenues according to the Company’s segments: Year ended December 31, 2020 2019 2018 Airport Security and Other Aviation Services $ 222,654 $ 309,548 $ 329,150 Authentication Technology 25,765 23,759 16,071 Total revenue $ 248,419 $ 333,307 $ 345,221 |
Schedule of Disaggregated by Geography and Percentage of Revenues | The following table presents the Company’s revenues generated from customers by geographical area based on the geographical location of the customers invoicing address: Year ended December 31, 2020 2019 2018 Germany $ 119,500 48 % $ 137,207 41 % $ 134,646 39 % The Netherlands 58,446 24 % 97,700 29 % 121,465 35 % United States 45,305 18 % 73,719 22 % 69,548 20 % Other countries 25,168 10 % 24,681 8 % 19,562 6 % Total revenue $ 248,419 100 % $ 333,307 100 % $ 345,221 100 % |
Schedule of Antidilutive Securities Outstanding | The following table summarizes the number of shares of common stock attributable to potentially dilutive securities outstanding for each of the periods: Year Ended December 31, 2020 2019 2018 Shares issuable upon conversion of convertible notes payable to related party at a price of $0.40 3,000,000 5,000,000 - Shares issuable upon conversion of convertible notes payable to related party at a price of $1.50 - - 14,731,267 Shares issuable upon conversion of accrued interest payable to related party at a price of $0.75 - - 11,779,776 Total 3,000,000 5,000,000 26,511,043 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Detact Security Solution AB [Member] | |
Schedule of allocation of purchase price as of purchase date | The following represents the allocation of the purchase price as of the purchase date in SEK and the translation to United States Dollars as of the purchase date: 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 5,788 649 Non current liabilities 1,039 117 Total liabilities assumed 11,743 1,317 9,500 1,065 |
Abydos Consultores de Sistemas S.L.U [Member] | |
Schedule of allocation of purchase price as of purchase date | The following represents the allocation of the purchase price as of the purchase date in Euros and the translation to United States Dollars as of the purchase date: 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 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | A summary of the Company’s consolidated statements of operations from the above discontinued operations for the years ended December 31, 2020, 2019 and 2018 are as follows: For the Years Ended December 31, 2020 2019 2018 Revenue $ - $ - $ - Cost of revenue - - - GROSS PROFIT - - - Selling, general and administrative - - 289 Net loss - - (289 ) Less: Net loss attributable to non-controlling interests - - 123 LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. $ - $ - $ (166 ) |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense, Current [Abstract] | |
Schedule of Prepaid expenses and other current assets | Prepaid expenses and other current assets are as following: December 31, 2020 2019 Receivable from the Dutch tax authorities (1) $ 12,285 $ 1,682 Receivable from the German authorities - COVID 19 (2) 1,887 - Dutch Governmental support - COVID 19 (3) 1,068 - Other 3,669 3,298 Total prepaid expenses and other currect assets $ 18,909 $ 4,980 (1) The Company is obligated to hold restricted cash in the Netherlands, which is restricted for payments to the tax authorities. From time to time the Company is allowed to make a request to release the money from the restricted account into the regular bank account. As part of the process the Company transfers the requested amount to the Dutch tax authorities, who pay it back after a few weeks into the Company’s regular bank account. (2) In Germany, the employees are eligible for payroll support (see note 1). The Company pays to its German employees their full salary and the Company is being reimbursed by the German government for the payroll support amount. (3) In the Netherlands, the Company is eligible for payroll support (see note 1). |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property And Equipment | Property and equipment is as follows: December 31, 2020 2019 Office, equipment and facilities $ 10,796 $ 8,866 Internal-use software 1,449 595 Vehicles 1,958 1,870 Leasehold improvements 2,972 2,352 17,175 13,683 Less: accumulated depreciation and amortization 11,650 9,097 Total property and equipment, net $ 5,525 $ 4,586 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Components of Lease Cost | The table below presents the effects on the amounts relating to the Company’s total lease cost: Year ended December 31, 2020 2019 Operating lease cost $ 3,914 $ 3,421 Short-term lease cost 1,580 994 Total lease cost $ 5,494 $ 4,415 Other information: Cash paid for amounts included in the measurement of Lease liabilities: Operating cash flows from operating leases $ 3,962 $ 2,901 Right-of-use assets obtained in exchange for new operating lease liabilities $ 4,941 $ 541 Weighted-average remaining lease term - operating leases 4.5 years 4.1 years Weighted-average discount rate - operating leases 4.8 % 5.0 % |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to operating leases was as follows: Year ended December 31, 2020 2019 Operating lease ROU assets $ 12,938 $ 10,367 Other current liabilities $ 3,531 $ 2,725 Operating lease liabilities 9,333 7,562 Total operating lease liabilities $ 12,864 $ 10,287 |
Schedule of Future Minimum Lease Payment | Future undiscounted lease payments for operation leases with initial terms of more than one year as of December 31, 2020 are as follows: Year ending December 31, 2021 4,048 2022 3,122 2023 2,747 2024 2,194 2025 906 Thereafter 1,400 Total future minimum lease payments 14,417 Less: imputed interest 1,553 Total $ 12,864 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in goodwill during the year is as follows: 2020 2019 Balance as of the beginning of the year: Goodwill $ 2,182 $ 2,220 Accumulated impairment losses (1,501 ) (1,525 ) 681 695 Goodwill acquired during the year - - Impairment losses - - Exchange rate effect 65 (14 ) 746 681 Balance as of the end of the year: Goodwill 2,361 2,182 Accumulated impairment losses (1,615 ) (1,501 ) $ 746 $ 681 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities are as follows: December 31, 2020 2019 Accrued payroll and related costs $ 18,938 $ 20,662 Accrued vacation 5,582 6,639 Labor union contribution 1,440 2,089 Deferred revenue 2,143 1,652 Payroll support program funding 1,019 - Other 3,765 4,153 Total accrued expenses and other current liabilities $ 32,887 $ 35,195 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other liabilities are as follows: December 31, 2020 2019 Severance pay liability $ 1,556 $ 1,493 Deferred revenue 263 268 Deferred VAT 10,319 - Deferred wage tax and social security 13,100 - Other 446 - Total other liabilities $ 25,684 $ 1,761 |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Redeemable Non-controlling Interests | The following table sets forth for the movement in the redeemable non-controlling interests: Year Ended December 31, 2020 2019 Balance as of the beginning of the year $ 74,300 $ - Sale of AU10TIX Technologies B.V. series A Shares, net - 73,520 Net Income 925 774 Other Comprehensive Income - Translation adjustment 97 6 Balance as of the end of the year $ 75,322 $ 74,300 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following is a summary of the Company’s subsidiary stock options issued and outstanding: Number of options Weighted average exercise price Weighted average remaining contractual term Options outstanding as of December 31, 2019 200,500 $ 0.01 Options granted - - Options exercised - - Forfeited - - Options outstanding , end of the year 200,500 $ 0.01 6.5 years Options exercisable, as of December 31, 2020 200,500 $ 0.01 6.5 years |
Schedule of nonvested share activity | Non-vested options consist of the following Number of Weighted average options exercise price Non-vested opions, as of December 31, 2019 43,875 $ 0.01 Granted - - Vested 43,875 0.01 Forfeited - - Non-vested options, as of December 31, 2020 - $ - |
OTHER EXPENSES, NET (Tables)
OTHER EXPENSES, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expenses | Other expense is summarized as follows: Year ended December 31, 2020 2019 2018 Interest expense to related parties (see Note 13) $ (171 ) $ (1,218 ) $ (2,746 ) Interest expense and other bank charges (901 ) (1,479 ) (1,261 ) Interest income 178 151 - Revaluation and related costs reimbursed to related party - (8,139 ) - Foreign currency gain (loss) (254 ) 148 417 Other income (expense) (140 ) 19 4 Total other expense, net $ (1,288 ) $ (10,518 ) $ (3,586 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before income tax benefit (expense) | The components of income (loss) before income tax benefit (expense) from continuing operations are as follows: Year Ended December 31, 2020 2019 2018 The Netherlands $ 469 $ (11,508 ) $ (13,107 ) Subsidiaries outside of the Netherlands 5,523 5,804 2,728 Income (loss) before income tax expenses $ 5,992 $ (5,704 ) $ (10,379 ) |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Operating loss carryforwards $ 16,694 $ 20,171 Capital loss carryforwards 159 148 Allowance for doubtful accounts 110 14 Tax credit carryforwards 560 560 Accrued expenses and other 774 691 Research and development expenses 432 - Total deferred tax assets 18,729 21,584 Deferred tax liabilities: Depreciation of property and equipment (115 ) (62 ) 18,614 21,522 Valuation allowance (17,445 ) (21,046 ) Deferred tax assets, net $ 1,169 $ 476 |
Schedule of Effective Income Tax Rate | The Company's effective income tax rate differs from the Netherlands' statutory rate of 25% as follows: Year Ended December 31, 2020 2019 2018 Effective loss (income) tax benefit from continuing operations at statutory rate $ (1,498 ) $ 1,426 $ 2,595 Rate differential 610 1,024 682 Non-deductible expense (857 ) (584 ) (565 ) Adjustments to prior year tax losses (3,604 ) (429 ) (408 ) Changes in valuation allowance 3,601 (2,568 ) (2,577 ) Other 1,158 (418 ) (412 ) Income tax expense from continuing operations $ (590 ) $ (1,549 ) $ (685 ) |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Operating Results by Segment | The operating results of these reportable segments are regularly reviewed by the chief operating decision. Airport Security and Other Aviation Services Corporate Authentication Technology Total Year ended December 31, 2020: Revenue $ - $ 222,654 $ 25,765 $ 248,419 Depreciation and amortization 72 1,302 716 2,090 Income (loss) from continuing operations (3,853 ) 6,056 3,199 5,402 Goodwill - 746 - 746 Total assets from continuing operations 12,488 86,550 41,350 140,388 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 |
Schedule of Revenues by Geographic Area | The following table sets forth, for the periods indicated, revenue generated from customers by geographical area based on the geographical location of the customer’s invoicing address: Year Ended December 31, 2020 2019 2018 Germany $ 119,500 $ 137,207 $ 134,646 The Netherlands 58,446 97,700 121,465 United States 45,305 73,719 69,548 Other countries 25,168 24,681 19,562 Total revenue $ 248,419 $ 333,307 $ 345,221 |
Schedule of Property and Equipment, Net by Geographic Regions | The following table sets forth, for the periods indicated, property and equipment, net of accumulated depreciation and amortization, by country: December 31, 2020 2019 Germany $ 449 $ 516 The Netherlands 598 862 United States 305 354 Other countries 4,173 2,854 Total property and equipmat, net $ 5,525 $ 4,586 |
ORGANIZATION (Details)
ORGANIZATION (Details) € in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021EUR (€) | Apr. 30, 2021USD ($) | Dec. 31, 2021 | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2017USD ($) | |
Working capital (deficit) | $ 57,220 | $ 27,627 | |||||||
Shareholders' deficit | 30,485 | 35,685 | $ 34,856 | $ 26,742 | |||||
Income (losses) from continuing operations | 5,402 | (7,253) | (11,064) | ||||||
Net cash provided by (used in) operating activities | $ 24,232 | (9,092) | 7,416 | ||||||
Line of credit, expiration | Oct. 30, 2021 | Oct. 30, 2021 | |||||||
Related Party Note [Member] | |||||||||
Line of credit, borrowing capacity | $ 3,000 | ||||||||
Line of credit, expiration | Jan. 1, 2022 | Jan. 1, 2022 | |||||||
Airport Security and Other Aviation Services [Member] | |||||||||
Income (losses) from continuing operations | $ 6,056 | $ (2,406) | $ (9,163) | ||||||
Difference between cumulative revenues for 2020 and 2019 | (86,894) | ||||||||
The Netherlands [Member] | |||||||||
Payroll support amount | 21,645 | ||||||||
Line of credit, borrowing capacity | $ 14,742 | ||||||||
Line of credit, expiration | Mar. 31, 2021 | Mar. 31, 2021 | |||||||
Accumulated debt to tax authorities | $ 25,548 | ||||||||
The Netherlands [Member] | Euro Member Countries, Euro [Member] | |||||||||
Payroll support amount | € | € 17,619 | ||||||||
Line of credit, borrowing capacity | € | € 12,000 | ||||||||
Accumulated debt to tax authorities | € | 20,796 | ||||||||
Germany [Member] | |||||||||
Payroll support, percentage | 60.00% | 60.00% | |||||||
Debt to VAT | $ 6,710 | ||||||||
Germany [Member] | Euro Member Countries, Euro [Member] | |||||||||
Debt to VAT | € | € 5,462 | ||||||||
United States [Member] | |||||||||
Line of credit, borrowing capacity | 10,000 | ||||||||
Subsequent Event [Member] | The Netherlands [Member] | |||||||||
Line of credit, expiration | Jun. 30, 2021 | ||||||||
Subsequent Event [Member] | The Netherlands [Member] | Euro Member Countries, Euro [Member] | |||||||||
Payroll support amount | € | € 4,556 | ||||||||
American subsidiary [Member] | |||||||||
Payroll support amount | 13,680 | ||||||||
Reduction of labor expenses | $ 12,672 | ||||||||
American subsidiary [Member] | Subsequent Event [Member] | |||||||||
Payroll support amount | $ 15,916 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for doubtful debts | $ 690 | $ 418 | |
Advertising costs | 735 | 828 | $ 528 |
Goodwill impairment | 1,563 | ||
Deferred revenues | 2,143 | 1,652 | |
Revenue recognized | 1,879 | 2,001 | 854 |
Amortization expense of capitalized internal-use software costs | 147 | 0 | $ 0 |
Israeli employees [Member] | |||
Total severance liabilities | 1,556 | 1,493 | |
Deposits to cover severance liabilities | 1,391 | 1,264 | |
Accrued Expenses [Member] | |||
Deferred revenues | 2,143 | 1,652 | |
Other Liabilities [Member] | |||
Deferred revenues | $ 263 | $ 268 | |
Sales Revenue, Goods, Net [Member] | |||
Concentration risk, percentage | 70.00% | 69.00% | 72.00% |
Sales Revenue, Goods, Net [Member] | Customer One [Member] | |||
Concentration risk, percentage | 48.00% | 41.00% | 38.00% |
Sales Revenue, Goods, Net [Member] | Customer Two [Member] | |||
Concentration risk, percentage | 22.00% | 28.00% | 34.00% |
Accounts Receivable [Member] | |||
Concentration risk, percentage | 47.00% | 57.00% | 55.00% |
Europe Japan And Israel [Member] | |||
Total cash balance not insured by the FDIC | $ 55,301 | ||
United States [Member] | |||
Cash and cash equivalents and restricted cash | 5,773 | ||
Total cash balance not insured by the FDIC | $ 5,523 | ||
Minimum [Member] | |||
Ownership interest | 20.00% | ||
FDIC Insured amount | $ 250 | ||
Contract term | 2 years | ||
Maximum [Member] | |||
Ownership interest | 50.00% | ||
Contract term | 5 years | ||
Letter of Credit [Member] | |||
Restricted cash | $ 3,991 | $ 733 | |
Cash Restricted For Payments To Local Tax Authorities [Member] | |||
Restricted cash | $ 5,481 | $ 1,760 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Reconciliation of Cash and Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Significant Accounting Policies Schedule Of Reconciliation Of Cash And Restricted Cash | ||||
Cash and cash equivalents | $ 51,602 | $ 52,352 | ||
Restricted cash | 9,472 | 2,493 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 61,074 | $ 54,845 | $ 15,917 | $ 13,505 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Offices, equipment and facilities [Member] | Minimum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 3 years |
Offices, equipment and facilities [Member] | Maximum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 7 years |
Internal-use software [Member] | Minimum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 4 years |
Internal-use software [Member] | Maximum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 7 years |
Vehicles [Member] | Minimum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Accounting Policies [Line Items] | |
Estimated useful life | 7 years |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Revenues Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Line Items] | |||
Total revenues | $ 248,419 | $ 333,307 | $ 345,221 |
Airport Security and Other Aviation Services [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | 222,654 | 309,548 | 329,150 |
Authentication Technology [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | $ 25,765 | $ 23,759 | $ 16,071 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Disaggregated by Geography and Percentage of Revenues) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Line Items] | |||
Total revenues | $ 248,419 | $ 333,307 | $ 345,221 |
Percentage of Revenues | 100.00% | 100.00% | 100.00% |
Germany [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | $ 119,500 | $ 137,207 | $ 134,646 |
Percentage of Revenues | 48.00% | 41.00% | 39.00% |
The Netherlands [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | $ 58,446 | $ 97,700 | $ 121,465 |
Percentage of Revenues | 24.00% | 29.00% | 35.00% |
United States [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | $ 45,305 | $ 73,719 | $ 69,548 |
Percentage of Revenues | 18.00% | 22.00% | 20.00% |
Other countries [Member] | |||
Accounting Policies [Line Items] | |||
Total revenues | $ 25,168 | $ 24,681 | $ 19,562 |
Percentage of Revenues | 10.00% | 8.00% | 6.00% |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Antidilutive Securities Outstanding) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Line Items] | |||
Number of shares of common stock attributable to potentially dilutive securities | 3,000,000 | 5,000,000 | 26,511,043 |
Shares Issuable upon conversion of convertible Notes Payable to related party at a price of $0.40 [Member] | |||
Accounting Policies [Line Items] | |||
Number of shares of common stock attributable to potentially dilutive securities | 3,000,000 | 5,000,000 | |
Shares Issuable upon conversion of convertible Notes Payable to related party at a price of $1.50 [Member] | |||
Accounting Policies [Line Items] | |||
Number of shares of common stock attributable to potentially dilutive securities | 14,731,267 | ||
Shares issuable upon conversion of accrued interest payable to related party at a price of $0.75 [Member] | |||
Accounting Policies [Line Items] | |||
Number of shares of common stock attributable to potentially dilutive securities | 11,779,776 |
BUSINESS COMBINATION (Narrative
BUSINESS COMBINATION (Narrative) (Details) € in Thousands, kr in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018EUR (€) | Dec. 31, 2018SEK (kr) | Jul. 31, 2018SEK (kr) | Jan. 31, 2018EUR (€) | |
Abydos Consultores de Sistemas S.L.U [Member] | |||||||
Percentage of acquistion of outstanding shares | 100.00% | 100.00% | 100.00% | ||||
Consideration | $ 226 | ||||||
Goodwill | 232 | ||||||
Abydos Consultores de Sistemas S.L.U [Member] | Euro Member Countries, Euro [Member] | |||||||
Consideration | € | € 183 | ||||||
Goodwill | € | € 188 | € 188 | |||||
Detact Security Solution AB [Member] | |||||||
Percentage of acquistion of outstanding shares | 100.00% | ||||||
Consideration | 1,065 | ||||||
Contingent consideration | 336 | ||||||
Payment due at purchase date | 729 | ||||||
Goodwill | $ 1,007 | ||||||
Detact Security Solution AB [Member] | Sweden, Kronor | |||||||
Consideration | kr | kr 9,500 | ||||||
Contingent consideration | kr | kr 3,000 | ||||||
Payment due at purchase date | kr | 6,500 | ||||||
Goodwill | kr | kr 9,005 | kr 9,005 |
BUSINESS COMBINATION (Schedule
BUSINESS COMBINATION (Schedule of Purchase Price Allocation) (Details) € in Thousands, kr in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018SEK (kr) | Jul. 31, 2018USD ($) | Jul. 31, 2018SEK (kr) | Jan. 31, 2018USD ($) | Jan. 31, 2018EUR (€) |
Abydos Consultores de Sistemas S.L.U [Member] | |||||||
Goodwill | $ 232 | ||||||
Abydos Consultores de Sistemas S.L.U [Member] | Euro Member Countries, Euro [Member] | |||||||
Cash | € | € 29 | ||||||
Accounts receivable | € | 142 | ||||||
Fixed assets | € | 88 | ||||||
Goodwill | € | € 188 | 188 | |||||
Other assets | € | 11 | ||||||
Total identifiable assets acquired | € | 458 | ||||||
Notes payables-banks | € | 11 | ||||||
Accounts payable | € | 19 | ||||||
Accrued expenses and other current liabilities | € | 126 | ||||||
Other liabilities | € | 119 | ||||||
Total liabilities assumed | € | 275 | ||||||
Total identifiable assets acquired and liabilities assumed | € | € 183 | ||||||
Abydos Consultores de Sistemas S.L.U [Member] | United States of America, Dollars | |||||||
Cash | $ 36 | ||||||
Accounts receivable | 175 | ||||||
Fixed assets | 108 | ||||||
Goodwill | 232 | ||||||
Other assets | 14 | ||||||
Total identifiable assets acquired | 565 | ||||||
Notes payables-banks | 14 | ||||||
Accounts payable | 23 | ||||||
Accrued expenses and other current liabilities | 155 | ||||||
Other liabilities | 147 | ||||||
Total liabilities assumed | 339 | ||||||
Total identifiable assets acquired and liabilities assumed | $ 226 | ||||||
Detact Security Solution AB [Member] | |||||||
Goodwill | $ 1,007 | ||||||
Detact Security Solution AB [Member] | United States of America, Dollars | |||||||
Cash | $ 74 | ||||||
Accounts receivable | 999 | ||||||
Other current assets | 50 | ||||||
Fixed assets | 133 | ||||||
Goodwill | 1,010 | ||||||
Other assets | 116 | ||||||
Total identifiable assets acquired | 2,382 | ||||||
Notes payables-banks | 531 | ||||||
Accounts payable | 20 | ||||||
Other liabilities | 649 | ||||||
Non current liabilities | 117 | ||||||
Total liabilities assumed | 1,317 | ||||||
Total identifiable assets acquired and liabilities assumed | $ 1,065 | ||||||
Detact Security Solution AB [Member] | Sweden, Kronor | |||||||
Cash | kr | kr 663 | ||||||
Accounts receivable | kr | 8,902 | ||||||
Other current assets | kr | 445 | ||||||
Fixed assets | kr | 1,189 | ||||||
Goodwill | kr | kr 9,005 | 9,005 | |||||
Other assets | kr | 1,039 | ||||||
Total identifiable assets acquired | kr | 21,243 | ||||||
Notes payables-banks | kr | 4,734 | ||||||
Accounts payable | kr | 182 | ||||||
Other liabilities | kr | 5,788 | ||||||
Non current liabilities | kr | 1,039 | ||||||
Total liabilities assumed | kr | 11,743 | ||||||
Total identifiable assets acquired and liabilities assumed | kr | kr 9,500 |
DISCONTINUED OPERATIONS (Summar
DISCONTINUED OPERATIONS (Summary of Results from Discontinued Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Revenue | |||
Cost of revenue | |||
GROSS PROFIT | |||
Selling, general and administrative | 289 | ||
Net loss | (289) | ||
Less: Net loss attributable to non-controlling interests | 123 | ||
LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. | $ (166) |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Schedule of Prepaid expenses and other current assets consist) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Prepaid Expense, Current [Abstract] | |||
Receivable from the Dutch tax authorities | [1] | $ 12,285 | $ 1,682 |
Receivable from the German authorities - COVID 19 | [2] | 1,887 | |
Dutch Governmental support - COVID 19 | [3] | 1,068 | |
Other | 3,669 | 3,298 | |
Total prepaid expenses and other current assets | $ 18,909 | $ 4,980 | |
[1] | The Company is obligated to hold restricted cash in the Netherlands, which is restricted for payments to the tax authorities. From time to time the Company is allowed to make a request to release the money from the restricted account into the regular bank account. As part of the process the Company transfers the requested amount to the Dutch tax authorities, who pay it back after a few weeks into the Company's regular bank account. | ||
[2] | In Germany, the employees are eligible for payroll support (see note 1). The Company pays to its German employees their full salary and the Company is being reimbursed by the German government for the payroll support amount. | ||
[3] | In the Netherlands, the Company is eligible for payroll support (see note 1). |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) ₩ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2020KRW (₩)shares | Dec. 31, 2019USD ($) | Dec. 31, 2019KRW (₩) | Dec. 31, 2018USD ($) | Dec. 31, 2018KRW (₩) | Dec. 31, 2020KRW (₩) | Aug. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Apr. 30, 2018 | |
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Investments | $ 2,130 | $ 1,482 | $ 2,130 | |||||||||
Freezone I-SEC Korea Inc. [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Investments | 307 | |||||||||||
Profit from investment | $ (15) | $ 91 | $ 124 | |||||||||
Freezone I-SEC Korea Inc. [Member] | Korea (South), Won | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Investments | ₩ | ₩ 332,715 | |||||||||||
Profit from investment | ₩ | ₩ (17,742) | ₩ 105,092 | ₩ 133,550 | |||||||||
Mesh Technologies, Inc. [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Ownership interest | 0.40% | 0.40% | ||||||||||
Investments | $ 50 | |||||||||||
Arrow [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Price paid for shares | 22 | |||||||||||
Price paid for debt | $ 1,728 | |||||||||||
Ownership interest | 23.30% | 23.30% | ||||||||||
Investments | $ 1,750 | $ 1,750 | ||||||||||
Option to purchase investment | $ 1,750 | |||||||||||
Receivables stated value | 4,146 | 4,146 | ||||||||||
Allowance for credit losses | 2,418 | 2,418 | ||||||||||
Estimated loss on investment | $ 775 | 0 | ||||||||||
GreenFox Logistics, LLC. [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Investments | $ 100 | |||||||||||
SardineAI Corp [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Investments | $ 50 | |||||||||||
Artemis Therapeutics, Inc. [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Common stock owned | shares | 198,311 | 198,311 | ||||||||||
Carrying value | 0 | $ 0 | 0 | |||||||||
Market value | $ 10 | $ 79 | $ 10 | |||||||||
Ownership interest | 3.80% | 3.80% | ||||||||||
Entity Owned [Member] | Freezone I-SEC Korea Inc. [Member] | ||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||
Ownership interest | 50.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 17,175 | $ 13,683 | |
Less: accumulated depreciation and amortization | 11,650 | 9,097 | |
Total property and equipment, net | 5,525 | 4,586 | |
Depreciation expense | 2,090 | 1,688 | $ 1,897 |
Offices, equipment and facilities [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 10,796 | 8,866 | |
Internal-use software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 1,449 | 595 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 1,958 | 1,870 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 2,972 | $ 2,352 |
LEASE (Schedule of Components o
LEASE (Schedule of Components of Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Cost | ||
Operating lease cost | $ 3,914 | $ 3,421 |
Short-term lease cost | 1,580 | 994 |
Total lease cost | 5,494 | 4,415 |
Cash paid for amounts included in the measurement of Lease liabilities: | ||
Operating cash flows from operating leases | 3,962 | 2,901 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 4,941 | $ 541 |
Weighted-average remaining lease term - operating leases | 4 years 6 months | 4 years 1 month 6 days |
Weighted-average discount rate - operating leases | 4.80% | 5.00% |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee Disclosure [Abstract] | ||
Operating lease ROU assets | $ 12,938 | $ 10,367 |
Other current liabilities | 3,531 | 2,725 |
Operating lease liabilities | 9,333 | 7,562 |
Total operating lease liabilities | $ 12,864 | $ 10,287 |
LEASES (Schedule of Future Mini
LEASES (Schedule of Future Minimum Lease Payments) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating leases | ||
2021 | $ 4,048 | |
2022 | 3,122 | |
2023 | 2,747 | |
2024 | 2,194 | |
2025 | 906 | |
Thereafter | 1,400 | |
Total future minimum lease payments | 14,417 | |
Less: imputed interest | 1,553 | |
Total | $ 12,864 | $ 10,287 |
GOODWILL (Schedule of Goodwill)
GOODWILL (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Balance as of the beginning of the year: | |||
Goodwill | $ 2,182 | $ 2,220 | |
Accumulated impairment losses | (1,501) | (1,525) | |
Goodwill, net | 681 | 695 | |
Goodwil acquired during the year | |||
Impairment losses | $ (1,563) | ||
Exchange rate effect | 65 | (14) | |
Total | 746 | 681 | |
Balance as of the end of the year: | |||
Goodwill | 2,361 | 2,182 | 2,220 |
Accumulated impairment losses | (1,615) | (1,501) | (1,525) |
Goodwill, net | $ 746 | $ 681 | $ 695 |
GOODWILL (Narrative) (Details)
GOODWILL (Narrative) (Details) € in Thousands, kr in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018SEK (kr) | |
Goodwill | $ 746 | $ 681 | $ 695 | ||
Goodwill accumulated impairment losses | 1,615 | 1,501 | 1,525 | ||
Goodwill impairment | 1,563 | ||||
Procheck International B.V [Member] | |||||
Goodwill impairment | $ 314 | ||||
Abydos Consultores de Sistemas S.L.U [Member] | |||||
Ownership interest | 100.00% | 100.00% | 100.00% | ||
Goodwill | $ 215 | ||||
Goodwill accumulated impairment losses | $ 222 | ||||
Abydos Consultores de Sistemas S.L.U [Member] | Euro Member Countries, Euro [Member] | |||||
Goodwill | € | € 188 | ||||
Goodwill accumulated impairment losses | € | € 188 | ||||
Detact Security Solution AB [Member] | |||||
Ownership interest | 100.00% | 100.00% | 100.00% | ||
Goodwill | $ 1,027 | ||||
Goodwill accumulated impairment losses | $ 1,007 | ||||
Detact Security Solution AB [Member] | Sweden, Kronor | |||||
Goodwill | kr | kr 9,005 | ||||
Goodwill accumulated impairment losses | kr | kr 9,005 |
NOTES PAYABLE - BANKS (Details)
NOTES PAYABLE - BANKS (Details) € in Thousands, kr in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2020SEK (kr) | Dec. 31, 2019EUR (€) | Dec. 31, 2019SEK (kr) | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||||
Credit facility, expiration date | Oct. 30, 2021 | ||||||
Outstanding guarantees | $ 1,195 | ||||||
Replacement of amount of letter of credit | 500 | ||||||
Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Bank guarantee Amount | $ 2,457 | ||||||
Commercial Bank [Member] | Bank Guarantee Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 2.50% | ||||||
Unused line fee | 0.75% | ||||||
Euro Member Countries, Euro [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate | 4.40% | 3.50% | 4.40% | 4.40% | 3.50% | 3.50% | 3.50% |
Outstanding guarantees | € | € 973 | € 2,316 | |||||
Euro Member Countries, Euro [Member] | Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Bank guarantee Amount | € | € 2,000 | ||||||
United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 10,000 | ||||||
Weighted average interest rate | 4.42% | 5.44% | 4.42% | 4.42% | 5.44% | 5.44% | 6.00% |
Europe [Member] | Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, expiration date | Dec. 31, 2019 | ||||||
Line of credit not exceed | 70.00% | ||||||
Line of Credit [Member] | Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, expiration date | Dec. 31, 2019 | ||||||
Line of Credit [Member] | United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate basis points above reference rate | 3.00% | ||||||
Credit facility, expiration date | Oct. 31, 2021 | ||||||
Credit facility, amount outstanding | $ 0 | $ 6,475 | |||||
Credit facility, remaining borrowing capacity | 4,144 | $ 3,525 | |||||
Line of Credit [Member] | Standby Letters of Credit [Member] | United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Pledged assets used to secure credit facility | $ 500 | ||||||
Percentage of collateral | 95.00% | 95.00% | 95.00% | ||||
Line of Credit [Member] | Accounts Receivable [Member] | United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of collateral | 85.00% | 85.00% | 85.00% | ||||
Line of Credit [Member] | Unbilled Accounts Receivable [Member] | United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of collateral | 80.00% | 80.00% | 80.00% | ||||
Line Of Credit Two [Member] | United States [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, effective interest rate | 3.14% | 3.14% | 3.14% | ||||
Line of Credit Line [Member] | Europe [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate basis points above reference rate | 4.80% | 4.80% | |||||
Unused line fee | 0.75% | ||||||
Line of Credit Europe [Member] | Europe [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 14,742 | ||||||
Percentage of collateral | 80.00% | 80.00% | 80.00% | ||||
Credit facility, amount outstanding | $ 7,902 | $ 13,313 | |||||
Line of Credit Europe [Member] | Europe [Member] | Euro Member Countries, Euro [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | € | € 12,000 | ||||||
Line of Credit Europe [Member] | Sweden [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 490 | ||||||
Debt instrument, effective interest rate | 2.80% | 2.80% | 2.80% | ||||
Line of Credit Europe [Member] | Sweden [Member] | Sweden, Kronor | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | kr | kr 4,000 | ||||||
Line of Credit Ten [Member] | Europe [Member] | Euro Member Countries, Euro [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, amount outstanding | € | € 6,432 | € 11,872 | |||||
Line of Credit Ten [Member] | Sweden [Member] | Sweden, Kronor | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, amount outstanding | kr | kr 1,648 | kr 1,115 | |||||
Guarantees facility [Member] | Europe [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 3,071 | ||||||
Outstanding guarantees | 1,195 | 2,596 | |||||
Guarantees facility [Member] | Europe [Member] | Euro Member Countries, Euro [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | € | € 2,500 | ||||||
Line of Credit Europe [Member] | Sweden [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, amount outstanding | $ 202 | $ 120 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related costs | $ 18,938 | $ 20,662 |
Accrued vacation | 5,582 | 6,639 |
Labor union contribution | 1,440 | 2,089 |
Deferred revenue | 2,143 | 1,652 |
Payroll support program funding | 1,019 | |
Other | 3,765 | 4,153 |
Total accrued expenses and other current liabilities | $ 32,887 | $ 35,195 |
LOAN PAYABLE (Narrative) (Detai
LOAN PAYABLE (Narrative) (Details) € in Thousands, $ in Thousands | 1 Months Ended | ||||||
Nov. 30, 2020USD ($) | Nov. 30, 2020EUR (€) | Nov. 30, 2019USD ($) | Nov. 30, 2019EUR (€) | Dec. 31, 2020 | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | |
Loan amount | $ | $ 2,457 | ||||||
Loan repaid | $ | $ 1,229 | $ 1,229 | |||||
Loan bear interest | 10.00% | ||||||
Euro Member Countries, Euro [Member] | |||||||
Loan amount | € | € 2,000 | ||||||
Loan repaid | € | € 1,000 | € 1,000 |
DEBT TO RELATED PARTIES (Detail
DEBT TO RELATED PARTIES (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2020 | Jul. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Jan. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||||
Interest expense | $ 171 | $ 1,218 | $ 2,687 | |||||
Convertible Notes Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average interest rate | 7.60% | 8.30% | 7.70% | |||||
Debt instrument, principal | $ 1,200 | $ 2,000 | ||||||
Note payable to related party, principal amount | $ 0 | $ 1,538 | ||||||
Euro Member Countries, Euro [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average interest rate | 4.40% | 3.50% | 3.50% | |||||
Convertible Note Payable [Member] | Majority Shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, maturity date | Jan. 31, 2022 | |||||||
Percent of interest in subsidiary securing arrangement | 26.00% | |||||||
Debt conversion, price per share | $ 0.75 | $ 1.50 | $ 0.75 | |||||
Debt conversion, amount converted | $ 800 | $ 2,889 | $ 2,611 | |||||
Debt conversion, shares issued | 2,000,000 | 3,852,364 | 3,480,968 | |||||
Reduced loan amount | $ 3,000 | |||||||
Convertible Note Payable [Member] | Majority Shareholder [Member] | Option to convert [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion, price per share | $ 0.40 | |||||||
Debt conversion, option to convert | $ 2,000 | |||||||
Convertible Note Payable [Member] | Majority Shareholder [Member] | All other conversion rights for balance of debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion, price per share | $ 0.75 | |||||||
Debt conversion, option to convert | $ 2,611 | |||||||
Convertible Note Payable [Member] | Majority Shareholder [Member] | United States of America, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, maturity date | Jun. 30, 2020 | |||||||
Debt instrument, interest rate basis points above reference rate | 7.00% | |||||||
Convertible Note Payable [Member] | Majority Shareholder [Member] | Euro Member Countries, Euro [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate basis points above reference rate | 3.00% | |||||||
Convertible Note Payable [Member] | Maximum [Member] | Majority Shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, maximum amount | $ 37,000 | |||||||
Convertible Note Payable [Member] | Minimum [Member] | Majority Shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion, price per share | $ 0.75 | |||||||
Convertible Notes Payable [Member] | Majority Shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
One time compensation approved | $ 8,139 | |||||||
Repayments of convertible loans | $ 30,000 |
OTHER LIABILITIES (Narrative) (
OTHER LIABILITIES (Narrative) (Details) | 10 Months Ended |
Dec. 31, 2020Installments | |
Other Liabilities [Abstract] | |
Number of installments for wage tax and social security payable | 36 |
OTHER LIABILITIES (Schedule of
OTHER LIABILITIES (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities [Abstract] | ||
Severance pay liability | $ 1,556 | $ 1,493 |
Deferred revenue | 263 | 268 |
Deferred VAT | 10,319 | |
Deferred wage tax and social security | 13,100 | |
Other | 446 | |
Total other liabilities | $ 25,684 | $ 1,761 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTERESTS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 07, 2019 | Jul. 03, 2019 | Dec. 31, 2020 |
AU10TIX Technologies [Member] | Series A Preferred Stock [Member] | Within next 3.5 years [Member] | |||
IPO, possible proceeds | $ 75,000 | ||
Subscripition price, minimum percentage of initial subscription price | 150.00% | ||
Conversion basis | 1:1 | ||
AU10TIX Technologies [Member] | Investor [Member] | Series A Preferred Stock [Member] | |||
Number of stock issued | 3,000,000 | ||
Value of preferred shares issued | $ 20,000 | $ 60,000 | |
Subscription price of preferred shares represents percentage of outstanding share capital | 7.401% | 24.00% | |
Subscription price of preferred shares represents percentage of fully-diluted share captial | 7.143% | 23.077% | |
Transaction costs | $ 1,513 | $ 4,540 | |
Shares issued | 1,000,000 | ||
Fair value of investment | $ 19,537 | ||
AU10TIX Technologies [Member] | Investor [Member] | Series A-1 Preferred Stock [Member] | |||
Shares issued | 23,622 | ||
Fair value of investment | $ 461 | ||
TPG [Member] | Investor [Member] | Series A-1 Preferred Stock [Member] | |||
Holdings, percentage of outstanding share capital | 23.077% | ||
Number of Preferred shares subscribed | 307,087 | ||
Nominal value per share | $ 0.001 |
REDEEMABLE NON-CONTROLLING IN_4
REDEEMABLE NON-CONTROLLING INTERESTS (Schedule of Redeemable Non-controlling Interests) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | ||
Balance as of the beginning of the year | $ 74,300 | |
Sale of AU10TIX Technologies B.V. series A Shares, net | 73,520 | |
Net Income | 925 | 774 |
Other Comprehensive Income - Translation adjustment | 97 | 6 |
Balance as of the end of the year | $ 75,322 | $ 74,300 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 37,433,333 | 35,433,333 |
Common stock, shares outstanding | 37,433,333 | 35,433,333 |
Subsidiary [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance | 500,000 | |
Common stock, shares authorized | 13,000,000 | |
Common stock, shares issued | 12,500,000 | |
Common stock, shares outstanding | 12,500,000 |
STOCK-BASED COMPENSATION (Sched
STOCK-BASED COMPENSATION (Schedule of Stock Option Activity for Subsidiary) (Details) - Subsidiary [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of options | |
Options outstanding, beginning balance | shares | 200,500 |
Options granted | shares | |
Options exercised | shares | |
Forfeited | shares | |
Options outstanding, ending balance | shares | 200,500 |
Options exercisable at end of period | shares | 200,500 |
Stock Option, Weighted Average Exercise Price | |
Options outstanding, beginning balance | $ / shares | $ 0.01 |
Options granted | $ / shares | |
Options exercised | $ / shares | |
Forfeited | $ / shares | |
Options outstanding, ending balance | $ / shares | 0.01 |
Options exercisable at end of period | $ / shares | $ 0.01 |
Stock Option, Additional Disclosures | |
Weighted average remaining contractual term | 6 years 6 months |
Weighted average remaining contractual term. exercisable | 6 years 6 months |
STOCK-BASED COMPENSATION (Sch_2
STOCK-BASED COMPENSATION (Schedule of Nonvested Option Activity) (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of Non-vested options | |
Non-vested options, Beginning Balance | shares | 43,875 |
Granted | shares | |
Vested | shares | 43,875 |
Forfeited | shares | |
Non-vested options, Ending Balance | shares | |
Weighted Average Exercise Price | |
Non-vested options, Beginning Balance | $ / shares | $ 0.01 |
Granted | $ / shares | |
Vested | $ / shares | 0.01 |
Forfeited | $ / shares | |
Non-vested options, Ending Balance | $ / shares |
OTHER EXPENSES, NET (Details)
OTHER EXPENSES, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Interest expense to related parties (see Note 13) | $ (171) | $ (1,218) | $ (2,746) |
Interest expense and other bank charges | (901) | (1,479) | (1,261) |
Interest income | 178 | 151 | |
Revaluation and related costs reimbursed to related party | (8,139) | ||
Foreign currency gain (loss) | (254) | 148 | 417 |
Other income (expense) | (140) | 19 | 4 |
Total other expense, net | $ (1,288) | $ (10,518) | $ (3,586) |
INCOME TAXES (Components of inc
INCOME TAXES (Components of income (loss) before income tax benefit (expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | |||
Income (loss) before income tax expenses | $ 5,992 | $ (5,704) | $ (10,379) |
Netherlands [Member] | |||
Income Taxes [Line Items] | |||
Income (loss) before income tax expenses | 469 | (11,508) | (13,107) |
Subsidiaries outside of the Netherlands [Member] | |||
Income Taxes [Line Items] | |||
Income (loss) before income tax expenses | $ 5,523 | $ 5,804 | $ 2,728 |
INCOME TAXES (Income Tax Benefi
INCOME TAXES (Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax benefit (expense) | |||
Current: The Netherlands | |||
Current: Subsidiaries outside of The Netherlands | 1,345 | 1,492 | 548 |
Deferred: The Netherlands | |||
Deferred: Subsidiaries outside of the Netherlands | $ 676 | $ 29 | $ 87 |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Operating loss carryforwards | $ 16,694 | $ 20,171 |
Capital loss carryforwards | 159 | 148 |
Allowance for doubtful accounts | 110 | 14 |
Tax credit carryforwards | 560 | 560 |
Accrued expenses and other | 774 | 691 |
Research and development expenses | 432 | |
Total deferred tax assets | 18,729 | 21,584 |
Deferred tax liabilities: | ||
Depreciation of property and equipment | (115) | (62) |
Deferred tax assets net of deferred tax liabilities before valuation allowance | 18,614 | 21,522 |
Valuation allowance | (17,445) | (21,046) |
Deferred tax assets, net | $ 1,169 | $ 476 |
INCOME TAXES (Effective Income
INCOME TAXES (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
The Netherlands' statutory rate | 25.00% | 25.00% | 25.00% |
Effective loss (income) tax benefit from continuing operations at statutory rate | $ (1,498) | $ 1,426 | $ 2,595 |
Rate differential | 610 | 1,024 | 682 |
Non-deductible expense | (857) | (584) | (565) |
Adjustments to prior year tax losses | (3,604) | (429) | (408) |
Changes in valuation allowance | 3,601 | (2,568) | (2,577) |
Other | 1,158 | (418) | (412) |
Income tax expense from continuing operations | $ (590) | $ (1,549) | $ (685) |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets. capital loss carryforwards | $ 159 | $ 148 | |
Change in valuation allowance | (3,601) | 2,568 | |
Income taxes payable | 351 | 162 | |
Subsidiary [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax expense (benefits), prior years | 0 | 0 | $ 224 |
Netherlands [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carry forward | $ 32,308 | ||
Years under examination | 2014 | ||
Income tax expense (benefits), prior years | $ (79) | $ 86 | $ 0 |
Netherlands [Member] | Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carry forward expiration dates | Dec. 31, 2021 | ||
Netherlands [Member] | Maximum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carry forward expiration dates | Dec. 31, 2027 | ||
United States [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carry forward | $ 19,726 | ||
Tax credit carryforwards | $ 560 | ||
Years under examination | 2017 | ||
United States [Member] | Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards, expiration dates | Dec. 31, 2024 | ||
Net operating loss carry forward expiration dates | Dec. 31, 2026 | ||
United States [Member] | Maximum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards, expiration dates | Dec. 31, 2029 | ||
Net operating loss carry forward expiration dates | Dec. 31, 2037 | ||
ISRAEL | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets. capital loss carryforwards | $ 692 | ||
Net operating loss carry forward | $ 6,660 | ||
Subsidiaries outside of the Netherlands [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Years under examination | 2015 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, € in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020EUR (€) | Jun. 30, 2019$ / sharesshares | |
Related Party Transaction [Line Items] | |||||
Legal expense | $ 46 | $ 46 | $ 35 | ||
Selling and administrative | 37,239 | 33,063 | 34,924 | ||
Investments | 1,482 | 2,130 | |||
Arrow [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling and administrative | 115 | 62 | |||
Investments | 1,750 | ||||
Board of Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Annual Compensation | 50 | ||||
Directors and Officers [Member] | |||||
Related Party Transaction [Line Items] | |||||
Issuance of common stock | shares | 3,000,000 | ||||
Issuance of stock, per share | $ / shares | $ 0.40 | ||||
Shareholder [Member] | Guarantees facility [Member] | |||||
Related Party Transaction [Line Items] | |||||
Line of credit, maximum borrowing amount | 2,475 | 500 | |||
Security deposit | 2,200 | ||||
Shareholder [Member] | Guarantees facility [Member] | Euro Member Countries, Euro [Member] | |||||
Related Party Transaction [Line Items] | |||||
Line of credit, maximum borrowing amount | € | € 2,000 | ||||
Related Party One [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling and management services | 741 | 801 | 715 | ||
Amount due to related parties | 114 | 191 | |||
Related Party One [Member] | Board of Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Board fees | 38 | 28 | 15 | ||
Related Party Two [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling and management services | 87 | 106 | 110 | ||
Related Party Four [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling and administrative | 0 | 39 | 103 | ||
Related Party Four [Member] | Board of Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Board fees | 38 | 30 | 15 | ||
AU10TIX [Member] | Board of Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Salary expenses | 125 | ||||
Related Party Three [Member] | |||||
Related Party Transaction [Line Items] | |||||
Internal audit services | 182 | 170 | 155 | ||
Related Party Five [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling and administrative | $ 118 | $ 98 | $ 53 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) € in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Aug. 31, 2017USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2019EUR (€) | Feb. 28, 2019USD ($) | Mar. 31, 2016USD ($) | Apr. 30, 2013USD ($) | |
Commitments And Contingencies [Line Items] | |||||||
Outstanding letters of credit | $ 3,991 | ||||||
Guarantees as security | 1,195 | ||||||
Agency fee payable | 3,686 | ||||||
Commision expected to be received by third party | 5.00% | ||||||
Sale consideration, fee | $ 2,457 | ||||||
Minimum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Agency fee payable | $ 3,000 | $ 4,000 | |||||
Commision expected to be received by third party | 2.00% | 2.00% | |||||
Maximum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Commision expected to be received by third party | 10.00% | 5.00% | |||||
Euro Member Countries, Euro [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Guarantees as security | € | € 973 | € 2,316 | |||||
Agency fee payable | $ 3,000 | ||||||
Euro Member Countries, Euro [Member] | Minimum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Sale consideration, fee | $ 2,000 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION (Summary of Operating Results by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 248,419 | $ 333,307 | $ 345,221 |
Depreciation and amortization | 2,090 | 1,688 | 1,897 |
Income (loss) from continuing operations | 5,402 | (7,253) | (11,064) |
Goodwill | 746 | 681 | 695 |
Total assets from continuing operations | 140,388 | 123,447 | 75,087 |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | |||
Depreciation and amortization | 72 | 46 | 45 |
Income (loss) from continuing operations | (3,853) | (11,740) | (6,205) |
Goodwill | |||
Total assets from continuing operations | 12,488 | 23,381 | 329 |
Airport Security and Other Aviation Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 222,654 | 309,548 | 329,150 |
Depreciation and amortization | 1,302 | 1,328 | 1,756 |
Income (loss) from continuing operations | 6,056 | (2,406) | (9,163) |
Goodwill | 746 | 681 | 695 |
Total assets from continuing operations | 86,550 | 64,647 | 66,373 |
Authentication Technology [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 25,765 | 23,759 | 16,071 |
Depreciation and amortization | 716 | 314 | 96 |
Income (loss) from continuing operations | 3,199 | 6,893 | 4,304 |
Goodwill | |||
Total assets from continuing operations | $ 41,350 | $ 35,419 | $ 8,385 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION (Revenue by Country) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 248,419 | $ 333,307 | $ 345,221 |
Germany [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 119,500 | 137,207 | 134,646 |
The Netherlands [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 58,446 | 97,700 | 121,465 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 45,305 | 73,719 | 69,548 |
Other countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 25,168 | $ 24,681 | $ 19,562 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION (Property and Equipment by Country) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 5,525 | $ 4,586 |
Germany [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 449 | 516 |
The Netherlands [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 598 | 862 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 305 | 354 |
Other countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 4,173 | 2,854 |
ISRAEL | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 3,179 | $ 2,212 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Allowance for Doubtful Accounts [Member] | ||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning of year | [1] | $ 418 | $ 240 | $ 103 |
Charges to Costs and Expenses | [1] | 710 | 261 | 303 |
Charges to other accounts | [1] | (438) | (83) | (166) |
Deductions | [1] | |||
End of Year | [1] | 690 | 418 | 240 |
Allowance for Net Deferred Tax Assets [Member] | ||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning of year | 21,046 | 18,478 | 15,901 | |
Charges to Costs and Expenses | ||||
Charges to other accounts | 2,568 | 2,577 | ||
Deductions | (3,601) | |||
End of Year | $ 17,445 | $ 21,046 | $ 18,478 | |
[1] | Write-off net of recoveries for the allowance for doubtful accounts. |