Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2015shares | |
Document And Entity Information [Abstract] | |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2015 |
Entity Registrant Name | ICTS INTERNATIONAL N V |
Entity Central Index Key | 1,010,134 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2,015 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 8,061,698 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,867 | $ 5,973 |
Restricted cash | 3,529 | 4,759 |
Accounts receivable, net | 24,673 | 20,991 |
Deferred tax assets, net | 127 | 131 |
Prepaid expenses and other current assets | 3,945 | 1,036 |
Current assets from discontinued operations | 39 | 134 |
Total current assets | 35,180 | 33,024 |
Property and equipment, net | 1,231 | 1,257 |
Goodwill | 314 | 314 |
Other assets | 471 | 410 |
Total assets | 37,196 | 35,005 |
CURRENT LIABILITIES: | ||
Notes payable - banks | 12,888 | 10,022 |
Accounts payable | 2,773 | 2,786 |
Accrued expenses and other current liabilities | 25,593 | 22,516 |
Income taxes payable | 45 | 53 |
Current liabilities from discontinued operations | 5 | 102 |
Total current liabilities | 41,304 | 35,479 |
Convertible notes payable to related party, including accrued interest | 39,240 | 38,504 |
Other liabilities | 124 | 81 |
Total liabilities | 80,668 | 74,064 |
SHAREHOLDERS' DEFICIT: | ||
Common stock, 0.45 Euro par value; 33,333,334 shares authorized; 8,061,698 shares issued and outstanding as of June 30, 2015 and as of December 31, 2014 | 4,507 | 4,507 |
Additional paid-in capital | 20,949 | 20,949 |
Accumulated deficit | (61,448) | (57,194) |
Accumulated other comprehensive loss | (7,480) | (7,321) |
Total shareholders' deficit | (43,472) | (39,059) |
Total liabilities and shareholders' deficit | $ 37,196 | $ 35,005 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - € / shares | Jun. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Common stock, par value per share | € 0.45 | € 0.45 |
Common stock, shares authorized | 33,333,334 | 33,333,334 |
Common stock, shares issued | 8,061,698 | 8,061,698 |
Common stock, shares outstanding | 8,061,698 | 8,061,698 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract] | ||
Revenue | $ 84,998 | $ 82,532 |
Cost of revenue | 77,907 | 74,115 |
GROSS PROFIT | 7,091 | 8,417 |
Operating expenses: | ||
Research and development | 1,371 | 1,095 |
Selling, general, and administrative | 10,257 | 8,346 |
Total operating expenses | 11,628 | 9,441 |
OPERATING LOSS | (4,537) | (1,024) |
Other income (expense), net | 295 | (1,369) |
LOSS BEFORE INCOME TAX EXPENSE | (4,242) | (2,393) |
Income tax expense | (12) | (54) |
LOSS FROM CONTINUING OPERATIONS | $ (4,254) | (2,447) |
Loss from discontinued operations | (103) | |
NET LOSS | $ (4,254) | $ (2,550) |
LOSS PER SHARE - BASIC AND DILUTED | ||
Continuing operations | $ (0.53) | $ (0.31) |
Discontinued operations | 0 | (0.01) |
Net loss | $ (0.53) | $ (0.32) |
Weighted average number of shares outstanding | 8,061,698 | 8,047,002 |
COMPREHENSIVE LOSS | ||
Net loss | $ (4,254) | $ (2,550) |
Translation adjustment | (159) | (53) |
Comprehensive loss | $ (4,413) | $ (2,603) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning Balance at Dec. 31, 2013 | $ (40,356) | $ 4,495 | $ 20,927 | $ (58,625) | $ (7,153) |
Beginning Balance, shares at Dec. 31, 2013 | 8,041,698 | ||||
Issuance of common stock | 20 | $ 12 | 8 | ||
Issuance of common stock, shares | 20,000 | ||||
Stock based compensation | 14 | $ 14 | |||
Net income (loss) | (2,550) | $ (2,550) | |||
Translation adjustment | (53) | $ (53) | |||
Ending Balance at Jun. 30, 2014 | (42,925) | $ 4,507 | $ 20,949 | $ (61,175) | $ (7,206) |
Ending Balance, shares at Jun. 30, 2014 | 8,061,698 | ||||
Net income (loss) | 3,981 | $ 3,981 | |||
Translation adjustment | (115) | $ (115) | |||
Ending Balance at Dec. 31, 2014 | $ (39,059) | $ 4,507 | $ 20,949 | $ (57,194) | $ (7,321) |
Ending Balance, shares at Dec. 31, 2014 | 8,061,698 | 8,061,698 | |||
Net income (loss) | $ (4,254) | $ (4,254) | |||
Translation adjustment | (159) | $ (159) | |||
Ending Balance at Jun. 30, 2015 | $ (43,472) | $ 4,507 | $ 20,949 | $ (61,448) | $ (7,480) |
Ending Balance, shares at Jun. 30, 2015 | 8,061,698 | 8,061,698 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 - BASIS OF PRESENTATION General The accompanying condensed unaudited consolidated financial statements for the six months ended June 30, 2015 have been prepared by the Company, in accordance with accounting principles generally accepted in the United States of America or US GAAP for financial information. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of June 30, 2015 and the results of operations for the six months then ended. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company for the year ended December 31, 2014 which are included in the Company's Form 20-F filed with the Securities and Exchange Commission. The results of operations presented are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015. The following discussion and analysis should be read in conjunction with the financial statements, related notes and other information included in this report and with the Risk Factors included in Part 1 Item 3 in our Annual Report on Form 20-F for the year ended December 31, 2014, filed with the SEC. This Report contains statements that may constitute forward-looking statements. Generally, forward-looking statements include words or phrases such as anticipates, believes, estimates, expects, intends, plans, projects, could, may, might, should, will, the negative of such terms, and words and phrases of similar import. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties. These risks and uncertainties could cause our actual results to differ materially from those described in the forward-looking statements. Any forward-looking statement represents our expectations or forecasts only as of the date it was made and should not be relied upon as representing its expectations or forecasts as of any subsequent date. Except as required by law, we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change. Reclassifications Certain amounts, related primarily to discontinued operations and income taxes payable in the prior year balance sheet, statements of operations and comprehensive loss have been reclassified to conform the current period presentation. |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2015 | |
ORGANIZATION [Abstract] | |
ORGANIZATION | NOTE 2 - ORGANIZATION Description of Business ICTS International N.V. (ICTS) was established by the Department of Justice in Amstelveen, Netherlands on October 9, 1992. ICTS and subsidiaries (collectively referred to as, the Company) operate in three reportable segments: (a) Corporate (b) Airport security and other aviation services and (c) Technology. The corporate segment does not generate revenue and contains primarily non-operational expenses. The airport security and other aviation services segment provide security and other services to airlines and airport authorities, predominantly in Europe and the United States of America. The technology segment is predominantly involved in the development and sale of identity security software to customers in Europe and the Unites States of America. Financial Condition The Company has a working capital deficit and a history of recurring losses from continuing operations and negative cash flows from continuing operations. As of June 30, 2015 and December 31, 2014, the Company has a working capital deficit of $ 6,124 2,455 4,254 2,447 Management believes that the Company's operating cash flows and related party/third party financing activities will provide it with sufficient funds to meet its obligations and execute its business plan for the next twelve months. However, there are no assurances that management's plans to generate sufficient cash flows from operations and obtain additional financing from related parties/third parties will be successful. In May 2014, the Company increased its borrowing capacity (before accrued interest) under the convertible notes payable to related party to $ 37,000 The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2015 | |
DISCONTINUED OPERATIONS [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 3 - DISCONTINUED OPERATIONS During the year ended December 31, 2013 the Company ceased the operations of its subsidiaries in the United Kingdom (I-SEC UK), and Denmark (I-SEC Denmark). In addition, the Company committed to a plan to cease operations of its subsidiary in Belgium (I-SEC Belgium). All of the subsidiaries provided aviation security services in the respective countries. During the year ended December 31, 2014, the Company committed to a plan to cease the operations of its subsidiary in Switzerland (I-SEC Switzerland), which provided aviation security services. A summary of the Company's assets and liabilities from discontinued operations as of June 30, 2015 and December 31, 2014 are as follows: June 30, December 31, 2015 2014 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 39 $ 30 Accounts receivable, net - 104 Total current assets from discontinued operations $ 39 $ 134 LIABILITIES CURRENT LIABILITIES: Accounts payable $ - $ 97 Accrued expenses and other current liabilities 5 5 Total current liabilities from discontinued operations $ 5 $ 102 A summary of the Company's results from discontinued operations for the periods ended June 30, 2015 and 2014 is as follows: Period ended, June 30, 2015 2014 Revenue $ 97 $ 567 Cost of revenue 95 569 Gross profit (Excess of cost of revenue over revenue) 2 (2 ) Selling, general and administrative expenses 5 101 Operating loss (3 ) (103 ) Other income, net 3 - Income tax benefit - - Loss from discontinued operations $ - $ (103 ) |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
SEGMENT AND GEOGRAPHICAL INFORMATION [Abstract] | |
SEGMENT AND GEOGRAPHICAL INFORMATION | NOTE 4 SEGMENT AND GEOGRAPHICAL INFORMATION The Company operates in three reportable segments: (a) Corporate (b) Airport security and other aviation services and (c) Technology. The corporate segment does not generate revenue and contains primarily non-operational expenses. The airport security and other aviation services segment provide security and other services to airlines and airport authorities, predominantly in Europe and the United States of America. The technology segment is predominantly involved in the development and sale of identity security software to customers 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 chief operating decision maker reviews the operating results of these reportable segments. The performance of the reportable segments is based primarily on loss (profit) from continuing operations. Amounts in the table bellow represent the figures of the continuing operations in the different reportable segments. Airport Security and Other Aviation Corporate Services Technology Total Six months ended June 30, 2015: Revenue $ - $ 84,495 $ 503 $ 84,998 Depreciation and amortization - 315 29 344 Loss from continuing operations 1,266 1,126 1,862 4,254 Total assets 473 36,277 407 37,157 Six months ended June 30, 2014: Revenue $ - $ 82,136 $ 396 $ 82,532 Depreciation and amortization - 380 50 430 Loss (Profit) from continuing operations 1,325 (623 ) 1,745 2,447 Total assets 584 32,051 259 32,894 The following table sets forth, for the periods indicated, revenue generated by country: Six months ended June 30, 2015 2014 Netherlands $ 31,091 $ 34,285 Germany 28,368 21,883 United States of America 19,969 19,555 Other 5,570 6,809 Total $ 84,998 $ 82,532 The following table sets forth, for the periods indicated, property and equipment, net of accumulated depreciation and amortization by country: June 30, 2015 2014 Netherlands $ 510 $ 532 Germany 173 239 United States of America 298 433 Other 250 339 Total $ 1,231 $ 1,543 |
BASIS OF PRESENTATION (Policy)
BASIS OF PRESENTATION (Policy) | 6 Months Ended |
Jun. 30, 2015 | |
BASIS OF PRESENTATION [Abstract] | |
General | General The accompanying condensed unaudited consolidated financial statements for the six months ended June 30, 2015 have been prepared by the Company, in accordance with accounting principles generally accepted in the United States of America or US GAAP for financial information. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of June 30, 2015 and the results of operations for the six months then ended. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company for the year ended December 31, 2014 which are included in the Company's Form 20-F filed with the Securities and Exchange Commission. The results of operations presented are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015. The following discussion and analysis should be read in conjunction with the financial statements, related notes and other information included in this report and with the Risk Factors included in Part 1 Item 3 in our Annual Report on Form 20-F for the year ended December 31, 2014, filed with the SEC. This Report contains statements that may constitute forward-looking statements. Generally, forward-looking statements include words or phrases such as anticipates, believes, estimates, expects, intends, plans, projects, could, may, might, should, will, the negative of such terms, and words and phrases of similar import. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties. These risks and uncertainties could cause our actual results to differ materially from those described in the forward-looking statements. Any forward-looking statement represents our expectations or forecasts only as of the date it was made and should not be relied upon as representing its expectations or forecasts as of any subsequent date. Except as required by law, we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change. |
Reclassifications | Reclassifications Certain amounts, related primarily to discontinued operations and income taxes payable in the prior year balance sheet, statements of operations and comprehensive loss have been reclassified to conform the current period presentation. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
DISCONTINUED OPERATIONS [Abstract] | |
Schedule of Discontinued Operations | A summary of the Company's assets and liabilities from discontinued operations as of June 30, 2015 and December 31, 2014 are as follows: June 30, December 31, 2015 2014 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 39 $ 30 Accounts receivable, net - 104 Total current assets from discontinued operations $ 39 $ 134 LIABILITIES CURRENT LIABILITIES: Accounts payable $ - $ 97 Accrued expenses and other current liabilities 5 5 Total current liabilities from discontinued operations $ 5 $ 102 A summary of the Company's results from discontinued operations for the periods ended June 30, 2015 and 2014 is as follows: Period ended, June 30, 2015 2014 Revenue $ 97 $ 567 Cost of revenue 95 569 Gross profit (Excess of cost of revenue over revenue) 2 (2 ) Selling, general and administrative expenses 5 101 Operating loss (3 ) (103 ) Other income, net 3 - Income tax benefit - - Loss from discontinued operations $ - $ (103 ) |
SEGMENT AND GEOGRAPHICAL INFO12
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
SEGMENT AND GEOGRAPHICAL INFORMATION [Abstract] | |
Summary of Operating Results by Segment | Airport Security and Other Aviation Corporate Services Technology Total Six months ended June 30, 2015: Revenue $ - $ 84,495 $ 503 $ 84,998 Depreciation and amortization - 315 29 344 Loss from continuing operations 1,266 1,126 1,862 4,254 Total assets 473 36,277 407 37,157 Six months ended June 30, 2014: Revenue $ - $ 82,136 $ 396 $ 82,532 Depreciation and amortization - 380 50 430 Loss (Profit) from continuing operations 1,325 (623 ) 1,745 2,447 Total assets 584 32,051 259 32,894 |
Schedule of Revenues by Geographic Area | Six months ended June 30, 2015 2014 Netherlands $ 31,091 $ 34,285 Germany 28,368 21,883 United States of America 19,969 19,555 Other 5,570 6,809 Total $ 84,998 $ 82,532 |
Schedule of Property and Equipment by Geographic Area | June 30, 2015 2014 Netherlands $ 510 $ 532 Germany 173 239 United States of America 298 433 Other 250 339 Total $ 1,231 $ 1,543 |
ORGANIZATION (Details)
ORGANIZATION (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
ORGANIZATION [Abstract] | |||
Working capital (deficit) | $ (6,124) | $ (2,455) | |
Loss from continuing operations | (4,254) | $ (2,447) | |
Borrowing capacity under convertible notes payable to related party | $ 37,000 |
DISCONTINUED OPERATIONS (Summar
DISCONTINUED OPERATIONS (Summary of Assets and Liabilities from Discontinued Operations) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 39 | $ 30 |
Accounts receivable, net | 104 | |
Total current assets from discontinued operations | $ 39 | 134 |
CURRENT LIABILITIES: | ||
Accounts payable | 97 | |
Accrued expenses and other current liabilities | $ 5 | 5 |
Total current liabilities from discontinued operations | $ 5 | $ 102 |
DISCONTINUED OPERATIONS (Summ15
DISCONTINUED OPERATIONS (Summary of Results from Discontinued Operations) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
DISCONTINUED OPERATIONS [Abstract] | ||
Revenue | $ 97 | $ 567 |
Cost of revenue | 95 | 569 |
Gross profit (Excess of cost of revenue over revenue) | 2 | (2) |
Selling, general and administrative expenses | 5 | 101 |
Operating loss | (3) | $ (103) |
Other income, net | $ 3 | |
Income tax benefit | ||
Loss from discontinued operations | $ (103) |
SEGMENT AND GEOGRAPHICAL INFO16
SEGMENT AND GEOGRAPHICAL INFORMATION (Operating Results of Reportable Segments) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 84,998 | $ 82,532 |
Depreciation and amortization | 344 | 430 |
Loss (Profit) from continuing operations | 4,254 | 2,447 |
Total assets | $ 37,157 | $ 32,894 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | ||
Depreciation and amortization | ||
Loss (Profit) from continuing operations | $ 1,266 | $ 1,325 |
Total assets | 473 | 584 |
Airport Security and Other Aviation Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 84,495 | 82,136 |
Depreciation and amortization | 315 | 380 |
Loss (Profit) from continuing operations | 1,126 | (623) |
Total assets | 36,277 | 32,051 |
Technology [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 503 | 396 |
Depreciation and amortization | 29 | 50 |
Loss (Profit) from continuing operations | 1,862 | 1,745 |
Total assets | $ 407 | $ 259 |
SEGMENT AND GEOGRAPHICAL INFO17
SEGMENT AND GEOGRAPHICAL INFORMATION (Revenue by Country) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 84,998 | $ 82,532 |
Netherlands [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 31,091 | 34,285 |
Germany [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 28,368 | 21,883 |
United States of America [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 19,969 | 19,555 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 5,570 | $ 6,809 |
SEGMENT AND GEOGRAPHICAL INFO18
SEGMENT AND GEOGRAPHICAL INFORMATION (Property and Equipment by Country) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 1,231 | $ 1,257 | $ 1,543 |
Netherlands [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 510 | 532 | |
Germany [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 173 | 239 | |
United States of America [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 298 | 433 | |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 250 | $ 339 |