Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2022 | |
Entity Registrant Name | ICTS INTERNATIONAL N.V. |
Entity Central Index Key | 0001010134 |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2022 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2022 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 81,211 | $ 88,753 |
Restricted cash | 17,364 | 14,699 |
Accounts receivable, net | 56,467 | 55,089 |
Prepaid expenses and other current assets | 10,337 | 16,021 |
Total current assets | 165,379 | 174,562 |
Deferred tax assets, net | 1,383 | 1,403 |
Investments | 446 | 525 |
Property and equipment, net | 6,130 | 5,710 |
Operating lease right of use assets | 10,270 | 10,938 |
Goodwill | 633 | 690 |
Other assets | 2,232 | 2,052 |
Total assets | 186,473 | 195,880 |
CURRENT LIABILITIES: | ||
Notes payable - banks | 167 | 199 |
Accounts payable | 7,218 | 5,857 |
Accrued expenses and other current liabilities | 37,603 | 39,834 |
Value added tax (VAT) payable | 5,159 | 5,378 |
Income taxes payable | 7,977 | 6,292 |
Operating lease liabilities, current | 3,506 | 3,317 |
Total current liabilities | 61,630 | 60,877 |
Convertible notes payable to a related party | 1,128 | 1,192 |
Operating lease liabilities, non current | 6,933 | 8,298 |
Other liabilities | 32,847 | 40,867 |
Total liabilities | 102,538 | 111,234 |
COMMITMENTS AND CONTINGENCIES | ||
REDEEMABLE NON-CONTROLLING INTERESTS | 90,280 | 90,478 |
SHAREHOLDERS' DEFICIT: | ||
Common stock, 0.45 Euro par value; 150,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 37,433,333 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 19,186 | 19,186 |
Additional paid-in capital | 16,844 | 16,844 |
Accumulated deficit | (33,789) | (33,796) |
Accumulated other comprehensive loss | (8,373) | (7,866) |
Non controlling interest in subsidaries | (213) | (200) |
Total shareholders' deficit | (6,345) | (5,832) |
Total liabilities and shareholders' deficit | $ 186,473 | $ 195,880 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - € / shares | Jun. 30, 2022 | Dec. 31, 2021 |
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 | 37,433,333 |
Common Stock, Shares, Outstanding | 37,433,333 | 37,433,333 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 156,011 | $ 154,419 |
Cost of revenue | 119,095 | 93,260 |
GROSS PROFIT | 36,916 | 61,159 |
Operating expenses: | ||
Research and development | 6,607 | 5,545 |
Selling, general and administrative | 27,912 | 22,915 |
Total operating expenses | 34,519 | 28,460 |
OPERATING INCOME | 2,397 | 32,699 |
Equity loss from investment in affiliates | 93 | 447 |
Other income (expense), net | 65 | (96) |
INCOME BEFORE INCOME TAX EXPENSE | 2,369 | 32,156 |
Income tax expense | 2,414 | 3,215 |
NET INCOME (LOSS) | (45) | 28,941 |
Net income (loss) attributable to non-controlling interests | (52) | 6,273 |
NET INCOME ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. | 7 | 22,668 |
BASIC AND DILUTED NET INCOME ATTRIBUTABLE TO ICTS INTERNATIONAL N.V. PER SHARE | ||
Net income attributable to ICTS International N.V. | 7 | 22,668 |
Less deemed dividend attributable to redeemable non-controlling interests | 0 | 10,102 |
Net income available to ICTS International N.V. Shareholders | $ 7 | $ 12,566 |
Basic weighted average number of shares | 37,433,333 | 37,433,333 |
Net Income per share attributable to ICTS International N.V. - basic | $ 0 | $ 0.34 |
Diluted weighted average number of shares | 40,108,529 | 40,231,313 |
Net income per share attributable to ICTS International N.V. - diluted | $ 0 | $ 0.31 |
COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | $ (45) | $ 28,941 |
Other comprehensive loss - translation adjustments | (314) | (484) |
Unrealized gains (losses) on derivative instruments | (352) | 0 |
Comprehensive income (loss) | (711) | 28,457 |
Comprehensive income (loss) attributable to non controlling interests | (38) | 6,817 |
COMPREHENSIVE INCOME (LOSS) ATTRUBUTABLE TO ICTS INTERNATIONAL N.V. | $ (673) | $ 21,640 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Non Controlling Interest | Total |
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 | |||||
Net income (loss) | $ 0 | 0 | 22,668 | 0 | 489 | 23,157 |
Translation adjustment | 0 | 0 | 0 | (474) | (10) | (484) |
Unrealized gains (losses) on derivative instruments | 0 | |||||
Change in terms of redeemable non controlling interests | 0 | (10,102) | 0 | 0 | 951 | (9,151) |
Balance at Jun. 30, 2021 | $ 19,186 | 16,604 | (45,935) | (6,733) | (85) | (16,963) |
Balance, shares at Jun. 30, 2021 | 37,433,333 | |||||
Net income (loss) | $ 0 | 0 | 12,139 | 0 | (208) | 11,931 |
Translation adjustment | 0 | 0 | 0 | (1,165) | 93 | (1,072) |
Unrealized gains (losses) on derivative instruments | 0 | 0 | 0 | 32 | 0 | 32 |
Stock-based compensation - AU10TIX Technologies B.V. | 0 | 240 | 0 | 0 | 0 | 240 |
Balance at Dec. 31, 2021 | $ 19,186 | 16,844 | (33,796) | (7,866) | (200) | $ (5,832) |
Balance, shares at Dec. 31, 2021 | 37,433,333 | 37,433,333 | ||||
Net income (loss) | $ 0 | 0 | 7 | 0 | (13) | $ (6) |
Translation adjustment | 0 | 0 | 0 | (155) | 0 | (155) |
Unrealized gains (losses) on derivative instruments | 0 | 0 | 0 | (352) | 0 | (352) |
Balance at Jun. 30, 2022 | $ 19,186 | $ 16,844 | $ (33,789) | $ (8,373) | $ (213) | $ (6,345) |
Balance, shares at Jun. 30, 2022 | 37,433,333 | 37,433,333 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 – 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” or “ICTS”) 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 provide security and other 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 the United States of America and Europe. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2022 | |
Basis Of Presentation [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION General The accompanying condensed unaudited consolidated financial statements for the six months ended June 30, 2022 have been prepared by the Company, in accordance with accounting principles generally accepted in the United States of America (“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, 2022 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. 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, 2022. 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, 2021, 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. Reclassification Certain amounts have been reclassified in prior years balance sheets to conform with current period presentation. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expenses And Other Current Assets Abstract | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, December 31, 2022 2021 Receivable from the Dutch tax authorities (1) $ 1,042 $ 9,091 Dutch governmental support - COVID 19 (2) 1,751 2,614 Receivable from the German authorities - COVID 19 (3) 601 527 VAT receivable 1,733 691 Prepaid insurance 762 408 Prepaid uniforms 509 366 Other 3,939 2,324 $ 10,337 $ 16,021 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 the Netherlands, the Company was eligible for payroll support (see note 13). 3. In Germany, the employees were eligible for payroll support (see note 13). The Company paid to its German employees their full salary and the Company was reimbursed by the German government for the payroll support amount. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | NOTE 4 – INVESTMENTS Artemis Therapeutics, Inc. As of June 30, 2022, the Company owns 125,916 shares or 2.4% of the outstanding common stock of Artemis Therapeutics, Inc. (“ATMS”) . On March 6, 2022, ATMS entered into a Share Exchange Agreement with Manuka Ltd and the shareholders of Manuka Ltd., a company incorporated in Israel engaged in developing and manufacturing skincare products based on Mānuka honey and bee venom. Following those agreements Manuka Ltd. became a wholly owned subsidiary of the ATMS. As the shareholders of Manuka Ltd. received the largest ownership interest in ATMS, Manuka Ltd. was determined to be the “accounting acquirer” in a reverse recapitalization. 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 June 30, 2022, and December 31, 2021, 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 June 30, 2022 and December 31, 2021). The market value of the Company's investment in ATMS as of June 30, 2022 and December 31, 2021 is $472 and $120, respectively. The Company evaluated the stock price of ATMS. The share price in the end of June, 2022 was relatively high for few weeks, including June 30, 2022 and then it declined. As ATMS share price is currently low, the number of shares that are being traded is limited, and as ATMS still does not have material revenue or profitable operations, 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 June 30, 2022, and December 31, 2021, the Company’s investment is 203,557 KRW and 322,294 KRW, respectively ($155 and $271 as of June 30, 2022 and December 31, 2021 , respectively). For the periods ended June 30, 2022 and 2021, the Company recognized a profit (loss) in its consolidated statements of operations of (118,926) KRW, and 3,718 KRW, respectively ($(96) and $3 as of June 30, 2022, and 2021, 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 June 30, 2022, and December 31, 2021, the investment represented less of 1% 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. In December 2021, the Company sold approximately 25% of its investment for a total amount of $200 and recognized a gain of $186. 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 periods ended June 30, 2022 and December 31, 2021 , the Company recognized losses from its investment in Arrow in the amount of $0 and $975, respectively . As of June 30, 2022 and December 31, 2021 the value of the investment in the Company’s books is zero. 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 was effective immediately as of the date of purchase and terminates after three years. In October 2022, the guarantee was extended for additional three years until January 1, 2026. 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. Silver Circle One In December 2021, and in March, 2022, the Company invested an amount of $18 and $10, respectively, in Silver Circle One, a capital fund which aims to invest in private emerging companies with focus on consumer, commerce and technology companies. The company committed to invest up to $100 on the pool. As Silver Circle One is a private, closely held fund, there is no active market for this investment. Therefore, the company measures the investment at cost minus impairment. Justt Fintech Ltd (previously Acrocharge Ltd) In December 2021, the Company invested an amount of $50 in Justt Fintech Ltd ("Justt"), a company incorporated in Israel. As of June 30, 2022, and December 31, 2021, the investment represented less than 1% of the issued and outstanding share capital of Justt. Justt is a technology company which fully automated chargeback disputes on behalf of online merchants. As Justt is a private, closely held company, there is not active market for this investment. Therefore, the Company measures the investment at cost minus impairment. Nilus OS Ltd In March 2022, the Company invested an amount of $25 in Nilus OS Ltd (“Nilus”), a company incorporated in Israel. As of June 30, 2022 the investment represented less than 1% of the issued and outstanding share capital of Nilus. Nilus is a company that automates payment and financial workflows for platforms that involve transfers of money. As Nilus 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 | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 - PROPERTY AND EQUIPMENT Property and equipment is as follows: June 30, December 31, 2022 2021 Office, equipment and facilities $ 7,711 $ 8,602 Internal-use software 3,172 2,085 Vehicles 1,722 1,617 Leasehold improvements 2,844 2,918 15,449 15,222 Less: accumulated depreciation and amortization 9,319 9,512 Total property and equipment, net $ 6,130 $ 5,710 Depreciation and amortization expense are $1,117 and $985 for the periods ended June 30, 2022 and 2021, respectively. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 6 – LEASES The Company enters into lease agreements in the normal course of business primarily as part of its operations in the different airports, back office operations, research and development offices and headquarter offices. The table below presents the effects on the amounts relating to the Company’s total lease cost: Period ended, June 30, 2022 June 30, 2021 Operating lease cost $ 2,326 2,195 Short-term lease cost 712 883 Total lease cost $ 3,038 3,078 Other information: Cash paid for amounts included in the measurement of Lease liabilities: Operating cash flows from operating leases $ 2,337 2,215 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,931 2,647 Weighted-average remaining lease term - operating leases 3.6 years 4.3 years Weighted-average discount rate - operating leases 5.1 % 5.0 % Supplemental balance sheet information related to operating leases was as follows: June 30, 2022 December 31, 2021 Operating lease ROU assets $ 10,270 10,938 Other current liabilities $ 3,506 3,317 Operating lease liabilities 6,933 8,298 Total operating lease liabilities $ 10,439 11,615 Maturities of operating lease liabilities as of June 30, 2022 were as follows: Year ending December 31, 2022 (excluding the six months ended June 30, 2022) $ 2,114 2023 3,514 2024 2,924 2025 1,245 2026 871 Thereafter 865 Total future minimum lease payments 11,533 Less: imputed interest 1,094 Total $ 10,439 |
NOTES PAYABLE - BANKS
NOTES PAYABLE - BANKS | 6 Months Ended |
Jun. 30, 2022 | |
Notes Payable to Bank [Abstract] | |
NOTES PAYABLE – BANKS | NOTE 7 – NOTES PAYABLE – BANKS United States of America The Company’s U.S. subsidiary was a party to a credit facility with a commercial lender, which provided 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. Borrowings under the credit facility were 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. Borrowings made under the credit facility bore interest, which was payable monthly, at LIBOR plus 3% per annum. As of June 30, 2021, the Company had no outstanding balances under the line of credit arrangement. The credit facility expired on October 2021. Europe The Company had a credit arrangement with a commercial bank, to provide it with up to €12,000 in borrowings which was renewed in May 2020 through March 2021. Borrowings under the line of credit bore interest at one-month EURIBOR plus 4.8% with a minimum of 4.8% per annum. The Company was also subject to unused line fee of 0.75% per annum, which was payable quarterly. The line of credit was secured by accounts receivable of ten of the Company’s European subsidiaries, tangible fixed assets and a bank guarantee of €2,000 provided by the parent company, ICTS International N.V. The line of credit could not exceed 70% of the borrowing base. The line of credit included certain financial covenants. The line of credit expired in March 2021. In addition to the line of credit arrangement, a guarantee facility of €2,500 ($2,841 as of December 31, 2021) was provided to the Company by the same commercial bank, which was renewed until March 2022, with an interest of 2.5% per annum and an unused line fee of 0.75% per annum which was payable quarterly. As of December 31, 2021, the Company had €1,022 ($1,161 as of December 31, 2021) of outstanding guarantees under the guarantee facility, which related to leases and performance guarantees for contracts. The guarantee facility expired in March 2022. The Company has an additional credit arrangement in Sweden to provide it with up to 4,000 SEK ($389 as of June 30, 2022) 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 June 30, 2022, and December 31, 2021, the Company had 1,715 SEK and 1800 SEK ($167 and $199 as of June 30, 2022 and December 31, 2021) respectively, in outstanding borrowings under the line of credit facility. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 8 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities are as follows: June 30, December 31, 2022 2021 Accrued payroll and related costs $ 21,063 $ 23,864 Accrued vacation 8,968 7,152 A 469 1,371 Labor union contribution 147 925 Deferred revenue 2,634 2,239 Accrued Legal expenses 1,416 2,019 Currency hedging costs 475 - Other 2,431 2,264 Total accrued expenses and other current liabilities $ 37,603 $ 39,834 |
DEBT TO RELATED PARTIES
DEBT TO RELATED PARTIES | 6 Months Ended |
Jun. 30, 2022 | |
Convertible Notes Payable To Related Party Abstract | |
DEBT TO RELATED PARTIES | NOTE 9 – 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 $3,000 in revolving loans through January 1, 2022. Loans received under the arrangement beared interest, which was 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 was 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 up to $2,000 of the loan into the Company’s shares at a price of $0.40 per share. In October 2020, the entity converted $800 into 2,000,000 shares. In December 2021, the loan was extended until January 2024 As of June 30, 2022, and December 31, 2021 the convertible notes payable to this related party consist o f $1,128 and $1,192, respectively. Total interest expense related to the note is $16 and $40 for the periods ended June 30, 2022, and 2021, respectively. |
OTHER LIABILITIES
OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | NOTE 10 – OTHER LIABILITIES Other liabilities are as follows: June 30, December 31, 2022 2021 Severance pay $ 1,603 $ 1,631 Deferred VAT 12,060 14,703 Deferred wage tax 17,730 22,534 Deferred revenue 647 1,030 Other 807 969 Total other liabilities $ 32,847 $ 40,867 Deferred VAT and deferred wage tax relates to measurements taken by the Dutch government, on which they postponed all VAT payable for the years 2021 and 2020 and all wage tax and social security payable for the months March – December 2021 to be paid in 60 installments starting March 2023, except for VAT payments starting October 2022. |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NON-CONTROLLING INTERESTS | NOTE 11 – 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 15). 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 AU10TIX. 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 AU10TIX) 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 AU10TIX’s control. As such, Series A Shares have been presented outside of permanent equity as redeemable non-controlling interests. AU10TIX 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). AU10TIX 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. On June 28, 2021, TPG, Oak, GF GW LLC (“GF”) and AU10TIX, entered into a Sale and Purchase Agreement (the “SPA”), pursuant to which Oak and GF purchased preferred shares in AU10TIX from TPG. In connection with the SPA, (i) such parties and ICTS entered into an amended and restated shareholders agreement (the “SHA”) and an amended and restated registration rights agreement (the “RRA”) and (ii) AU10TIX’s Articles of Association (the “Articles”) were amended by a deed of amendment (the “Deed of Amendment”). Pursuant to the SPA, Oak purchased 755,906 AU10TIX Series A Preferred shares from TPG and GF purchased 1,511,811 AU10TIX Series A Preferred Shares from TPG. In connection with such purchases, all outstanding AU10TIX’s Series A Preferred Shares and Series A-1 Preferred Shares were re-designated as New Series A Preferred Shares and the Ordinary Shares owned by ICTS were re-designated as Class B Ordinary Shares, as described below. In consideration of the benefits to Oak increasing its shareholding and GF becoming a shareholder, AU10TIX provided certain customary warranties to Oak and GF concerning AU10TIX and its business. In addition, AU10TIX agreed to be primarily liable to Oak and GF for any breaches by TPG of its customary fundamental warranties given to Oak and GF (including that TPG owns AU10TIX Series A Preferred Shares being sold to Oak and GF); provided, that, TPG has agreed to indemnify and hold AU10TIX harmless for any losses incurred by AU10TIX in relation to such fundamental warranties given by TPG. Following the completion of the sales and purchases contemplated by the SPA on June 28, 2021: (i) ICTS owns 68.69% of the outstanding share capital of AU10TIX in the form of Class B Ordinary Shares; (ii) Oak owns 12.87% of the outstanding share capital of AU10TIX in the form of New Series A Preferred Shares; (iii) GF owned 10.93% of the outstanding share capital of AU10TIX in the form of New Series A Preferred Shares; and (iv) TPG owns 7.51% of the outstanding share capital of AU10TIX in the form of New Series A Preferred Shares. In addition, AU10TIX may issue up to 500,000 Class A Ordinary Shares under its existing employee stock option plan. The SHA and the Articles (as amended by the Deed of Amendment) provide for the following material matters in respect of the rights attaching to the New Series A Preferred Shares and the Ordinary Shares and the ongoing governance of AU10TIX: General: The New Series A Preferred Shares are entitled to one vote per share and rank equally with the Ordinary Shares in regards to dividends. The Ordinary Shares are divided into two classes: Class A Ordinary Shares and Class B Ordinary Shares, which rank equally as to dividends. The Class A Ordinary Shares are entitled to one vote per share. The Class B Ordinary Shares are entitled to three votes per share and may only be held by ICTS and its permitted transferees. Liquidation Preference: the holders of New Series A Preferred Shares (“Series A Holders”) are entitled to a liquidation preference upon the occurrence of a (i) sale, initial public offering, which term includes certain business combinations with a SPAC (an “IPO”), merger, consolidation or reorganization, which results in change of control of AU10TIX, and (ii) 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) US$26.4583 per share, subject to adjustments for certain events affecting the capital of AU10TIX (the “Starting Price”) plus all accrued but unpaid dividends in respect of the New Series A Preferred Shares, less all dividends previously paid on the New Series A Preferred Shares, and (b) the proceeds distributable in respect of the New Series A Preferred Shares had they been converted into Class A Ordinary Shares. The Ordinary Shares rank equally in liquidation. Conversion Rights: The New Series A Preferred Shares are subject to conversion into Class A Ordinary Shares on a 1:1 basis (subject to adjustments for certain events affecting the capital of AU10TIX): (a) upon the written request by any Series A Holder; and (b) immediately prior to a qualifying IPO of AU10TIX (being an IPO where each Class A Ordinary Share is valued at not less than 150% of the Starting Price at the completion of the IPO, subject to adjustments for certain events affecting the capital of AU10TIX) (a "Qualifying IPO"). The Class B Ordinary Shares are convertible into Class A Ordinary Shares at any time upon the written request of a holder of Class B Ordinary Shares on a 1:1 basis, subject to adjustments for certain events affecting the capital of AU10TIX. Anti-Dilution Protection: The SHA contains 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 Starting Price, then the Series A Holders shall be entitled to receive additional Class A Ordinary Shares (at no further cost) on a weighted-average basis, reflecting the value of the equity in AU10TIX, as determined based on the subscription price paid in the new issue of securities. Transfers: Subject to certain customary exceptions, including a transfer to a permitted transferee, any shareholder (other than TPG, Oak and GF) wishing to transfer any of the shares held by it shall first offer such shares to each shareholder holding 3% or more of AU10TIX’s outstanding share capital at the same price and on the same terms at which the selling shareholder wishes to transfer such shares. New Issuances: Subject to certain customary exceptions, each shareholder holding 3% or more of AU10TIX’s outstanding share capital has the right to participate in any new issuance of securities by AU10TIX. Information Rights: Subject to certain exceptions, each shareholder holding 3% or more of AU10TIX’s outstanding share capital is entitled to receive certain financial information regarding AU10TIX including budgets, annual and quarterly accounts and details of any third party offer for the stock or assets of AU10TIX, as well as certain inspection rights. Exit Rights: At any time from and after July 3, 2026, upon written request by Series A Holders holding at least 60% of the then outstanding New Series A Preferred Shares (the “Preferred Majority”), AU10TIX is required to use reasonable endeavors to facilitate a sale of AU10TIX within six months after such written request, and, thereafter, the Preferred Majority has the right to step-in and require AU10TIX to facilitate a sale or IPO. On the exercise of such step-in right, each other shareholder (including ICTS) is required to cooperate with the Preferred Majority regarding such sale or IPO and the Preferred Majority has the right to exercise drag rights over the shares held by other shareholders in order to facilitate such exit event. Board Arrangements: The Shareholders Agreement and Articles provide that the board of directors of AU10TIX shall be constituted by up to six directors: (i) four of whom will be appointed by the holder of a majority of the Class B Ordinary Shares (i.e., currently ICTS); (ii) one of whom will be appointed by Oak (for so long as Oak holds at least 50% of the New Series A Preferred Shares held on the date of the closing of the transactions contemplated by the SPA, subject to adjustments for certain events affecting the capital of AU10TIX); and (iii) one of whom will be appointed by GF (for so long as GF holds at least 50% of the New Series A Preferred Shares held on the date of the closing of the transactions contemplated by the SPA, subject to adjustments for certain events affecting the capital of AU10TIX). As a general matter, the board of AU10TIX is able to pass resolutions by a simple majority, subject to the consent rights of the Preferred Majority set out below. Preferred Majority Consent Rights: For as long as the Series A Holders hold, in the aggregate, at least 25% of the New Series A Shares Preferred Shares held on the date of the closing of the transactions contemplated by the SPA, subject to adjustments for certain events affecting the capital of AU10TIX, the consent of the Preferred Majority is required for the following actions (i) amending the SHA or the Articles in a manner that would adversely affect the rights, preferences or privileges of the New Series A Preferred Shares; (ii) issuing new securities ranking senior to or pari passu with the New Series A Preferred Shares; (iii) making of any dividend or distribution other than a dividend or distribution that is pro rata to the Series A Holders and the holders of the Ordinary Shares; (iv) redeeming any Ordinary Shares; (v) incurring debt in excess of 4.0x AU10TIX’s consolidated EBITDA in the 12-month period ending on the last day of the month preceding the month in which the debt was incurred; (vi) consummating an IPO other than a Qualifying IPO; (vii) making certain changes to the size of AU10TIX’s board; (viii) making any fundamental change in the nature of the business of AU10TIX and its subsidiaries; (ix) entering into related party transactions, unless such transaction is commercially reasonable and on an arm’s-length basis; and (x) either amending AU10TIX’s existing stock option plan or creating a new stock option plan to allow for the issuance of more than 500,000 additional Class A Common Shares. Tag Rights: Following completion of the procedures on transfers set out above, each Series A Holder holding 3% or more of AU10TIX’s outstanding shares will have the right to participate proportionately in any third-party share sale by another shareholder other than a Series A Holder (subject to certain customary exceptions). Drag Rights: AU10TIX has the right to drag other shareholders into an exit event subject to certain requirements being satisfied (including either (i) holders of New Series A Shares receiving the greater of: (a) the Starting Price and (b) the proceeds distributable in respect of the New Series A Preferred Shares had they been converted into Class A Ordinary Shares, in each case with the approval of the Board, the Preferred Majority and the holders of a majority of the shares or (ii) a minimum value per New Series A Share of 150% of the Starting Price approved by the Board and holders of a majority of the shares, in each case subject to adjustments for certain events affecting the capital of AU10TIX) in relation to such exit transaction. Termination: The SHA terminates upon (i) the agreement of AU10TIX, the Preferred Majority and a majority of the holders of the Ordinary Shares or (ii) the closing of a Qualifying IPO. Tax Matters: AU10TIX is required to provide the Series A Holders with certain customary information for U.S. federal tax reporting purposes. Confidentiality and Public Announcements: The SHA provides for customary confidentiality protections and limitations on public announcements without consent. The RRA provides the Series A Holders (and in certain cases the holders of the Class B Ordinary Shares) with a limited number of customary long-form and short-form demand registration rights, shelf registration rights and the right to participate under certain conditions if AU10TIX determines to register its shares. In addition, AU10TIX has undertaken to (i) take certain actions to facilitate the rights of the parties under the RRA; (ii) provide customary indemnification; (iii) not agree to further registration rights superior to those granted under the RRA; and (iv) limit issuances of its shares under certain circumstances set out in the RRA. Pre-emption Rights: The Shareholders Agreement contains a restriction on issuing any securities senior to or pari passu with the New Series A Preferred Shares for so long as the holders of the New Series A Preferred Shares on June 28, 2021 (or their transferees in accordance with the terms of the Shareholders Agreement) continue to collectively hold at least 25% of such number (appropriately adjusted for certain corporate events) of New Series A Preferred Shares. In addition, each shareholder holding in excess of 3% of AU10TIX’s outstanding shares has the right to participate in any new issuance of securities by AU10TIX, subject to customary exceptions. The Company has assessed whether the change in the terms of the Preferred Shares following the closing of the 2021 SPA constituted a modification or extinguishment for accounting purposes, by comparing the fair value of these Preferred Shares immediately before and immediately after the closing of the 2021 SPA. An extinguishment occurs when the difference in fair value exceeds 10%, while a modification occurs when such fair value difference is lower than 10%. Additionally, the carrying value of the Series A-1 Shares, which were previously presented among non-controlling interests, were reclassified to redeemable non-controlling interests and initially recognized at their fair value, following their re-designation as New Series A Preferred Shares. Following the modification and extinguishment of the Preferred Shares, and the reclassification of the Series A-1 Shares, the Company adjusted the carrying value of the redeemable non-controlling interests by $9,057, with a corresponding decrease to additional paid-in capital and non-controlling interests in the amounts of $10,102 and $1,045, respectively. The following table sets forth for the movement in the redeemable non-controlling interests: Period Ended June 30, 2022 December 31, 2021 Balance as of the beginning of the year $ 90,478 $ 75,322 Net Income (Loss) (38 ) 6,200 Other Comprehensive Income - Translation adjustment (160 ) (211 ) Conversion of AU10TIX shares A-1 into new series A - 9,057 Stock-based compensation - 110 Balance as of the end of the year $ 90,280 $ 90,478 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 12 - 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: Period ended June 30, 2022 2021 Airport Security and Other Aviation Services $ 131,191 114,001 Authentication Technology 24,820 40,418 Total revenues $ 156,011 $ 154,419 The following table presents the Company’s revenues generated from customers by geographical area based on the geographical location of the customers invoicing address: Period ended June 30, 2022 2021 Germany $ 57,064 36.6 % $ 56,026 36.3 % 42,843 27.5 % 49,418 32.0 % 28,383 18.2 % 22,698 14.7 % 17,300 11.1 % 14,205 9.2 % 10,421 6.7 % 12,072 7.8 % $ 156,011 100.0 % $ 154,419 100.0 % 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 June 30, 2022 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. |
GOVERNMENTAL SUPPORT
GOVERNMENTAL SUPPORT | 6 Months Ended |
Jun. 30, 2022 | |
Governmental Support [Abstract] | |
GOVERNMENTAL SUPPORT | NOTE 13 – GOVERNMENTAL SUPPORT During the years 2022 and 2021, 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. In the United States of America, the government has approved a payroll support of $0, and $15,918, respectively to the American subsidiary of the Company. Out of those amounts, the American subsidiary recognized amounts of $0 and $11,539 as reduction of labor expenses for the periods ended June 30, 2022, and June 30, 2021, respectively. During the periods ended June 30, 2022 and December 31, 2021, the Dutch government has provided financial assistance of €4,556 and €18,135 ($4,746 and $22,608 as of June 30, 2022 and December 31, 2021), respectively. Out of those amounts, the Dutch subsidiaries recognized amounts of €4,556 and €8,979 ($4,746 and $10,595 as of June 30, 2022 and June 30, 2021) as reduction of labor expenses, respectively. 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 applied for this support starting from April 2020 to June 2021. In addition, the German government reimburse employers for salary costs regarding employees that are in quarantine. In the Netherlands wage tax, social security and VAT payments for the period March 2020 until September 2021 were postponed and will have to be paid in 60 installments, starting October 2022. As of June 30, 2022, and December 31, 2021, the Company accumulated debt of €33,456 and €33,456 ($34,794 and $38,018 as of June 30, 2022 and December 31, 2021), respectively, to the Dutch tax authorities for those postponed payments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Letters of Credit and Guarantees As of June 30, 2022 the Company has $4,762 in outstanding letters of credit. Such letters of credit are being secured by the same amounts in restricted cash with commercial banks. 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. Inquiry Proceedings On June 24, 2021 a minority shareholder of the Company initiated inquiry proceedings before the Enterprise Chamber of the Amsterdam Court of Appeal (the “Court”) which is a specialized court dedicated to resolving corporate disputes. The shareholder has requested the Court to appoint an investigator on behalf of the Court in accordance with Dutch law, to investigate certain activities of the Company that have been previously disclosed by the Company in its periodic filings with the SEC for the fiscal years ended December 31, 2020 and 2019. The shareholder has not requested the Court to order preliminary relief, but has requested the Court to order the registrant to pay the costs of the proceedings. On June 24th, 2022, the Court rendered its judgment after reviewing all filings and a court hearing. The Court accepted ICTS’s defense on all items except two and appointed an investigator to examine two items. The two items are: The conversion of loans in 2019 from a related party at a share price of $0.40 and the issuance of shares to directors and certain employees in 2019 at a share price of $0.40. White Line In 2017, the company invested $3,500 in White Line B.V., a limited Company incorporated in the Netherlands, representing 10% of the issued and outstanding share capital of White Line B.V. The Company had an agreement with an entity related to its main shareholder, according to which, if the value of this investment decreased, the related party entity has guaranteed to repurchase this full investment in minimum amount of $3,500. In December 2018, the related party entity purchased the full investment from the Company for $3,500. In 2021, the Company has a dispute with White Line B.V. as certain items disclosed in White Line B.V. financials appeared questionable. ICTS requested the court to instruct White line to disclose certain documents. As the economical ownership is not within the Company any more, the Company has no financial exposure on this dispute. On November 15th, 2022, the Appeal Court of Amsterdam rendered its judgment after reviewing all filings and a court hearing. The Court rejected ICTS’s request for disclosure of documents. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHICAL INFORMATION | NOTE 15 – 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 Authentication Corporate Aviation Services Technology Total Six months ended June 30, 2022: Revenue $ - $ 131,191 $ 24,820 $ 156,011 Depreciation and amortization 41 466 610 1,117 Net income (loss) (1,198 ) 1,276 (123 ) (45 ) Total assets $ 10,108 $ 105,906 $ 70,459 $ 186,473 Six months ended June 30, 2021: Revenue $ - $ 114,001 $ 40,418 $ 154,419 Depreciation and amortization 37 698 250 985 Net income (loss) (760 ) 9,241 20,460 28,941 Total assets $ 10,739 $ 107,368 $ 66,067 $ 184,174 The following table sets forth, for the periods indicated, revenue generated from customers by geographical area based on the geographical location of the customers invoicing address: Six months ended June 30, 2022 2021 Germany $ 57,063 $ 56,026 United States of America 42,842 49,418 The Netherlands 28,385 22,698 Spain 17,300 14,205 Other 10,421 12,072 Total $ 156,011 $ 154,419 The following table sets forth, for the periods indicated, property and equipment, net of accumulated depreciation and amortization by country: June 30, December 31, 2022 2021 Germany $ 356 $ 361 United States of America 701 422 The Netherlands 452 624 Spain 113 118 Other 4,508 4,185 Total $ 6,130 $ 5,710 Property and equipment, net, in other countries include $4,227 and $3,956 property and equipment in Israel as of June 30, 2022 and December 31, 2021. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Basis Of Presentation [Abstract] | |
General | General The accompanying condensed unaudited consolidated financial statements for the six months ended June 30, 2022 have been prepared by the Company, in accordance with accounting principles generally accepted in the United States of America (“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, 2022 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. 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, 2022. 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, 2021, 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. |
Reclassification | Reclassification Certain amounts have been reclassified in prior years balance sheets to conform with current period presentation. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expense, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | June 30, December 31, 2022 2021 Receivable from the Dutch tax authorities (1) $ 1,042 $ 9,091 Dutch governmental support - COVID 19 (2) 1,751 2,614 Receivable from the German authorities - COVID 19 (3) 601 527 VAT receivable 1,733 691 Prepaid insurance 762 408 Prepaid uniforms 509 366 Other 3,939 2,324 $ 10,337 $ 16,021 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 the Netherlands, the Company was eligible for payroll support (see note 13). 3. In Germany, the employees were eligible for payroll support (see note 13). The Company paid to its German employees their full salary and the Company was reimbursed by the German government for the payroll support amount. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property And Equipment | June 30, December 31, 2022 2021 Office, equipment and facilities $ 7,711 $ 8,602 Internal-use software 3,172 2,085 Vehicles 1,722 1,617 Leasehold improvements 2,844 2,918 15,449 15,222 Less: accumulated depreciation and amortization 9,319 9,512 Total property and equipment, net $ 6,130 $ 5,710 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Schedule of Components of Lease Cost | Period ended, June 30, 2022 June 30, 2021 Operating lease cost $ 2,326 2,195 Short-term lease cost 712 883 Total lease cost $ 3,038 3,078 Other information: Cash paid for amounts included in the measurement of Lease liabilities: Operating cash flows from operating leases $ 2,337 2,215 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,931 2,647 Weighted-average remaining lease term - operating leases 3.6 years 4.3 years Weighted-average discount rate - operating leases 5.1 % 5.0 % |
Schedule of Supplemental Balance Sheet Information Related to Leases | June 30, 2022 December 31, 2021 Operating lease ROU assets $ 10,270 10,938 Other current liabilities $ 3,506 3,317 Operating lease liabilities 6,933 8,298 Total operating lease liabilities $ 10,439 11,615 |
Schedule of Future Minimum Lease Payment | Year ending December 31, 2022 (excluding the six months ended June 30, 2022) $ 2,114 2023 3,514 2024 2,924 2025 1,245 2026 871 Thereafter 865 Total future minimum lease payments 11,533 Less: imputed interest 1,094 Total $ 10,439 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | June 30, December 31, 2022 2021 Accrued payroll and related costs $ 21,063 $ 23,864 Accrued vacation 8,968 7,152 A 469 1,371 Labor union contribution 147 925 Deferred revenue 2,634 2,239 Accrued Legal expenses 1,416 2,019 Currency hedging costs 475 - Other 2,431 2,264 Total accrued expenses and other current liabilities $ 37,603 $ 39,834 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities [Abstract] | |
Schedule Of Other Liabilities | June 30, December 31, 2022 2021 Severance pay $ 1,603 $ 1,631 Deferred VAT 12,060 14,703 Deferred wage tax 17,730 22,534 Deferred revenue 647 1,030 Other 807 969 Total other liabilities $ 32,847 $ 40,867 |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of Redeemable Non-controlling Interests | Period Ended June 30, 2022 December 31, 2021 Balance as of the beginning of the year $ 90,478 $ 75,322 Net Income (Loss) (38 ) 6,200 Other Comprehensive Income - Translation adjustment (160 ) (211 ) Conversion of AU10TIX shares A-1 into new series A - 9,057 Stock-based compensation - 110 Balance as of the end of the year $ 90,280 $ 90,478 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of Company's Revenues According to Company's Segments | Period ended June 30, 2022 2021 Airport Security and Other Aviation Services $ 131,191 114,001 Authentication Technology 24,820 40,418 Total revenues $ 156,011 $ 154,419 |
Schedule of Company's Revenues Disaggregated by Geography | Period ended June 30, 2022 2021 Germany $ 57,064 36.6 % $ 56,026 36.3 % 42,843 27.5 % 49,418 32.0 % 28,383 18.2 % 22,698 14.7 % 17,300 11.1 % 14,205 9.2 % 10,421 6.7 % 12,072 7.8 % $ 156,011 100.0 % $ 154,419 100.0 % |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results by Segment | Airport Security and Other Authentication Corporate Aviation Services Technology Total Six months ended June 30, 2022: Revenue $ - $ 131,191 $ 24,820 $ 156,011 Depreciation and amortization 41 466 610 1,117 Net income (loss) (1,198 ) 1,276 (123 ) (45 ) Total assets $ 10,108 $ 105,906 $ 70,459 $ 186,473 Six months ended June 30, 2021: Revenue $ - $ 114,001 $ 40,418 $ 154,419 Depreciation and amortization 37 698 250 985 Net income (loss) (760 ) 9,241 20,460 28,941 Total assets $ 10,739 $ 107,368 $ 66,067 $ 184,174 |
Schedule of Revenues by Geographic Area | Six months ended June 30, 2022 2021 Germany $ 57,063 $ 56,026 United States of America 42,842 49,418 The Netherlands 28,385 22,698 Spain 17,300 14,205 Other 10,421 12,072 Total $ 156,011 $ 154,419 |
Schedule of Property and Equipment, Net by Geographic Regions | June 30, December 31, 2022 2021 Germany $ 356 $ 361 United States of America 701 422 The Netherlands 452 624 Spain 113 118 Other 4,508 4,185 Total $ 6,130 $ 5,710 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | |
Prepaid Expense, Current [Abstract] | |||
Receivable from the Dutch tax authorities | [1] | $ 1,042 | $ 9,091 |
Dutch Governmental support - COVID 19 | [2] | 1,751 | 2,614 |
Receivable from the German authorities - COVID 19 | [3] | 601 | 527 |
VAT receivable | 1,733 | 691 | |
Prepaid insurance | 762 | 408 | |
Prepaid uniforms | 509 | 366 | |
Other | 3,939 | 2,324 | |
Total prepaid expenses and other current assets | $ 10,337 | $ 16,021 | |
[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]the Netherlands, the Company was eligible for payroll support (see note 13).[3]In Germany, the employees were eligible for payroll support (see note 13). The Company paid to its German employees their full salary and the Company was reimbursed by the German government for the payroll support amount. |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) ₩ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Aug. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Jun. 30, 2022 KRW (₩) shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 KRW (₩) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 KRW (₩) | Dec. 31, 2021 USD ($) | Mar. 31, 2020 USD ($) | Jan. 31, 2019 USD ($) | Apr. 30, 2018 | |
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Investments | $ 446 | $ 525 | ||||||||||||
Freezone I-SEC Korea Inc. [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Ownership interest | 50% | |||||||||||||
Profit (loss) | ₩ (118,926) | $ (96) | ₩ 3,718 | $ 3 | ||||||||||
Investments | ₩ 203,557 | 155 | ₩ 322,294 | 271 | ||||||||||
Mesh Technologies, Inc. [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Percentage of investment sold | 25% | |||||||||||||
Investment sold | $ 200 | |||||||||||||
Investments | $ 50 | |||||||||||||
Realized Investment Gains | $ 186 | |||||||||||||
Ownership interest description | less of 1% | |||||||||||||
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% | |||||||||||||
Receivables stated value | $ 4,146 | |||||||||||||
Allowance for credit losses | 2,418 | |||||||||||||
Estimated loss on investment | $ 0 | $ 975 | ||||||||||||
Investments | $ 1,750 | |||||||||||||
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 | |||||||||||||
Ownership interest description | less than 1% | |||||||||||||
Silver Circle One [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Investments | $ 10 | 18 | ||||||||||||
Committed to invest | 100 | |||||||||||||
Justt Fintech Ltd Previously Acrocharge Ltd [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Investments | 50 | |||||||||||||
Ownership interest description | less than 1% | less than 1% | less than 1% | |||||||||||
Nilus Os Ltd [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Investments | $ 25 | |||||||||||||
Ownership interest description | less than 1% | less than 1% | ||||||||||||
Artemis Therapeutics, Inc. [Member] | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||||||
Common stock owned | shares | 125,916 | 125,916 | ||||||||||||
Carrying value | 0 | 0 | ||||||||||||
Market value | $ 472 | $ 120 | ||||||||||||
Ownership interest | 2.40% | 2.40% |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 1,117 | $ 985 |
PROPERTY AND EQUIPMENT (Schedul
PROPERTY AND EQUIPMENT (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 15,449 | $ 15,222 |
Less: accumulated depreciation and amortization | 9,319 | 9,512 |
Total property and equipment, net | 6,130 | 5,710 |
Equipment And Facilities Member | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 7,711 | 8,602 |
Internal-use software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 3,172 | 2,085 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,722 | 1,617 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 2,844 | $ 2,918 |
LEASE (Schedule of Components o
LEASE (Schedule of Components of Lease Expense) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Lease Cost | ||
Operating lease cost | $ 2,326 | $ 2,195 |
Short-term lease cost | 712 | 883 |
Total lease cost | 3,038 | 3,078 |
Cash paid for amounts included in the measurement of Lease liabilities: | ||
Operating cash flows from operating leases | 2,337 | 2,215 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,931 | $ 2,647 |
Weighted-average remaining lease term - operating leases | 3 years 7 months 6 days | 4 years 3 months 18 days |
Weighted-average discount rate - operating leases | 5.10% | 5% |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee Disclosure [Abstract] | ||
Operating lease ROU assets | $ 10,270 | $ 10,938 |
Other current liabilities | 3,506 | 3,317 |
Operating lease liabilities | 6,933 | 8,298 |
Total operating lease liabilities | $ 10,439 | $ 11,615 |
LEASES (Schedule of Future Mini
LEASES (Schedule of Future Minimum Lease Payments) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Operating leases | ||
2022 (excluding the six months ended June 30, 2022) | $ 2,114 | |
2023 | 3,514 | |
2024 | 2,924 | |
2025 | 1,245 | |
2026 | 871 | |
Thereafter | 865 | |
Total future minimum lease payments | 11,533 | |
Less: imputed interest | 1,094 | |
Total | $ 10,439 | $ 11,615 |
NOTES PAYABLE - BANKS (Narrativ
NOTES PAYABLE - BANKS (Narrative) (Details) € in Thousands, kr in Thousands, $ in Thousands | 1 Months Ended | |||||||
Mar. 31, 2022 EUR (€) | Oct. 31, 2021 USD ($) | Mar. 31, 2021 EUR (€) | Jun. 30, 2022 SEK (kr) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2021 SEK (kr) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Outstanding guarantees | € 1,022 | $ 1,161 | ||||||
Replacement of amount of letter of credit | $ 500 | |||||||
Commercial bank [Member] | Bank Guarantee Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 2.50% | |||||||
Unused line fee | 0.75% | |||||||
United States [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, maximum borrowing amount | $ 10,000 | |||||||
Europe [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Bank guarantee Amount | € | € 2,000 | |||||||
Europe [Member] | Bank Guarantee Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, maximum borrowing amount | € 2,500 | 2,841 | ||||||
Europe [Member] | Commercial bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit not exceed | 70% | |||||||
Line of Credit [Member] | United States [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, amount outstanding | $ 0 | 0 | ||||||
Line of Credit [Member] | United States [Member] | LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate basis points above reference rate | 3% | |||||||
Line of Credit [Member] | Standby Letters of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of collateral | 95% | |||||||
Line of Credit [Member] | Accounts Receivable [Member] | United States [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of collateral | 85% | |||||||
Line of Credit [Member] | Unbilled Accounts Receivable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Pledged Assets | $ 500 | |||||||
Line of Credit [Member] | Unbilled Accounts Receivable [Member] | United States [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of collateral | 80% | |||||||
Line of Credit Europe [Member] | Europe [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, maximum borrowing amount | € | € 12,000 | |||||||
Debt instrument, interest rate basis points above reference rate | 4.80% | |||||||
Unused line fee | 0.75% | |||||||
Line of Credit Europe [Member] | Europe [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate basis points above reference rate | 4.80% | |||||||
Line of Credit Europe [Member] | Sweden [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, maximum borrowing amount | kr 4,000 | $ 389 | ||||||
Debt instrument, effective interest rate | 2.80% | 2.80% | ||||||
Line of Credit Ten [Member] | Sweden [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, amount outstanding | kr 1,715 | $ 167 | kr 1,800 | $ 199 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Schedule of Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related costs | $ 21,063 | $ 23,864 |
Accrued vacation | 8,968 | 7,152 |
Accrued commissions | 469 | 1,371 |
Labor union contribution | 147 | 925 |
Deferred revenue | 2,634 | 2,239 |
Accrued Legal expenses | 1,416 | 2,019 |
Currency hedging costs | 475 | 0 |
Other | 2,431 | 2,264 |
Total accrued expenses and other current liabilities | $ 37,603 | $ 39,834 |
DEBT TO RELATED PARTIES (Narrat
DEBT TO RELATED PARTIES (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Oct. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 16 | $ 40 | ||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt conversion, amount converted | $ 800 | |||
Debt conversion, shares issued | 2,000,000 | |||
Convertible Note Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Note payable to related party, principal amount | $ 1,128 | $ 1,192 | ||
Majority Shareholder [Member] | Convertible Note Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity date | Jan. 31, 2024 | |||
Percent of interest in subsidiary securing arrangement | 26% | |||
Revised maximum borrowing capacity | $ 2,000 | |||
Interest rate | 2.50% | |||
Majority Shareholder [Member] | Convertible Note Payable [Member] | United States [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate basis points above reference rate | 7% | |||
Majority Shareholder [Member] | Convertible Note Payable [Member] | Europe [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate basis points above reference rate | 3% | |||
Majority Shareholder [Member] | Convertible Note Payable [Member] | Option to convert [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt conversion, option to convert | $ 2,000 | |||
Majority Shareholder [Member] | Convertible Note Payable [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 3,000 | |||
Debt Instrument, Convertible, Conversion Price | $ 0.4 |
OTHER LIABILITIES (Schedule of
OTHER LIABILITIES (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Other Liabilities [Abstract] | ||
Severance pay liability | $ 1,603 | $ 1,631 |
Deferred VAT | 12,060 | 14,703 |
Deferred wage tax | 17,730 | 22,534 |
Deferred revenue | 647 | 1,030 |
Other | 807 | 969 |
Total other liabilities | $ 32,847 | $ 40,867 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTERESTS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 07, 2019 | Jul. 03, 2019 | Jun. 28, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Subscription price of preferred shares represents percentage of outstanding share capital | 24% | ||||
Holdings percentage of fully-diluted share captial | 68.69% | ||||
IPO, possible proceeds | $ 75,000 | ||||
Subscripition price, minimum percentage of initial subscription price | 150% | ||||
Conversion basis | 1:1 | ||||
Shares issuable upon the exercise of stock options | 500,000 | ||||
Percentage of shareholder holding right to purchase shares | 3% | ||||
Percentage of minimum value per new series A share | 150% | ||||
Conversion of AU10TIX shares A-1 into new series A | $ 0 | $ 9,057 | |||
Decrease in APIC | 10,102 | ||||
Decrease in non-controlling interests | $ 1,045 | ||||
Series A Preferred Stock [Member] | |||||
Percentage of shares right to purchase shares in case of sale by one of the shareholders, the seller has to offer to other shareholders | 50% | ||||
Percentage of shareholder holding exit rights | 60% | ||||
Aggregate percentage of holding share | 25% | ||||
Shareholders agreement continue to collectively hold percentage | 25% | ||||
Au 10 Tix Technologies [Member] | |||||
Holdings percentage of fully-diluted share captial | 3% | ||||
Subscripition price, minimum percentage of initial subscription price | 150% | ||||
Percentage of shareholder holding right to purchase shares | 3% | ||||
Au 10 Tix Technologies [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% | ||||
Subscription price of preferred shares represents percentage of fully-diluted share captial | 7.143% | 23.077% | |||
Transaction costs | $ 4,540 | $ 1,513 | |||
Shares issued | 1,000,000 | ||||
Fair value of investment | $ 19,537 | ||||
Conversion basis | 1:1 | ||||
Share price | $ 26.4583 | ||||
Au 10 Tix Technologies [Member] | Series A-1 Preferred Stock [Member] | |||||
Fair value of investment | $ 461 | ||||
Au 10 Tix Technologies [Member] | Series B Ordinary Shares [Member] | |||||
Conversion basis | 1:1 | ||||
Au 10 Tix Technologies [Member] | Investor [Member] | Series A-1 Preferred Stock [Member] | |||||
Shares issued | 23,622 | ||||
TPG [Member] | |||||
Percentage of initial subscription price paid | 150% | ||||
TPG [Member] | Series A Preferred Stock [Member] | |||||
Subscription price of preferred shares represents percentage of fully-diluted share captial | 7.51% | ||||
TPG [Member] | Investor [Member] | Series A-1 Preferred Stock [Member] | |||||
Number of Preferred shares subscribed | 307,087 | ||||
Nominal value per share | $ 0.001 | ||||
Holdings percentage of fully-diluted share captial | 23.077% | ||||
Oak [Member] | |||||
Subscription price of preferred shares represents percentage of fully-diluted share captial | 12.87% | ||||
Oak [Member] | Series A Preferred Stock [Member] | |||||
Percentage of shares right to purchase shares in case of sale by one of the shareholders, the seller has to offer to other shareholders | 50% | ||||
Purchase of preferred stock | 755,906 | ||||
GF [Member] | Series A Preferred Stock [Member] | |||||
Subscription price of preferred shares represents percentage of fully-diluted share captial | 10.93% | ||||
Purchase of preferred stock | 1,511,811 |
REDEEMABLE NON-CONTROLLING IN_4
REDEEMABLE NON-CONTROLLING INTERESTS (Schedule of Redeemable Non-controlling Interests) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Noncontrolling Interest [Abstract] | ||
Balance as of the beginning of the year | $ 90,478 | $ 75,322 |
Net Income (Loss) | (38) | 6,200 |
Other Comprehensive Income - Translation adjustment | (160) | (211) |
Conversion of AU10TIX shares A-1 into new series A | 0 | 9,057 |
Stock-based compensation | 0 | 110 |
Balance as of the end of the year | $ 90,280 | $ 90,478 |
REVENUE RECOGNITION (Schedule o
REVENUE RECOGNITION (Schedule of Company's Revenues According to Company's Segments) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 156,011 | $ 154,419 |
Airport Security and Other Aviation Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 131,191 | 114,001 |
Authentication Technology [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 24,820 | $ 40,418 |
REVENUE RECOGNITION (Schedule_2
REVENUE RECOGNITION (Schedule of Company's Revenues Disaggregated by Geography) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 156,011 | $ 154,419 |
Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 156,011 | $ 154,419 |
Revenue, Percentage | 100% | 100% |
GERMANY | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 57,063 | $ 56,026 |
GERMANY | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 57,064 | $ 56,026 |
Revenue, Percentage | 36.60% | 36.30% |
The Netherlands [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 28,385 | $ 22,698 |
The Netherlands [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 28,383 | $ 22,698 |
Revenue, Percentage | 18.20% | 14.70% |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 42,842 | $ 49,418 |
United States [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 42,843 | $ 49,418 |
Revenue, Percentage | 27.50% | 32% |
SPAIN [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 17,300 | $ 14,205 |
SPAIN [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 17,300 | $ 14,205 |
Revenue, Percentage | 11.10% | 9.20% |
Other Countries [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 10,421 | $ 12,072 |
Revenue, Percentage | 6.70% | 7.80% |
GOVERNMENTAL SUPPORT (Narrative
GOVERNMENTAL SUPPORT (Narrative) (Details) € in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | 15 Months Ended | |||||||
Jun. 30, 2022 EUR (€) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 EUR (€) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2021 USD ($) | |
The Netherlands [Member] | ||||||||||
Payroll support amount | € 4,556 | $ 4,746 | € 18,135 | $ 22,608 | ||||||
Accumulated debt to tax authorities | 33,456 | € 33,456 | $ 34,794 | $ 38,018 | ||||||
United States [Member] | ||||||||||
Line of credit, borrowing capacity | $ 10,000 | |||||||||
Germany [Member] | ||||||||||
Payroll support, percentage | 60% | |||||||||
American subsidiary [Member] | ||||||||||
Payroll support amount | 0 | $ 15,918 | ||||||||
Reduction of labor expenses | 0 | $ 11,539 | ||||||||
Dutch Subsidiaries [Member] | ||||||||||
Reduction of labor expenses | € 4,556 | $ 4,746 | € 8,979 | $ 10,595 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2022 | Jun. 24, 2021 | Dec. 31, 2018 | |
Commitments And Contingencies [Line Items] | ||||
Outstanding letters of credit | $ 4,762 | |||
White Line B.V. [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Investment amount | $ 3,500 | |||
Percentage of issued and outstanding share acquired | 10% | |||
Minimum guaranteed amount for investment repurchase | $ 3,500 | |||
Amount of investment resold | $ 3,500 | |||
Directors And Employees [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Conversion price of loans | $ 0.4 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION (Schedule of Operating Results by Segment) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 156,011 | $ 154,419 |
Depreciation and amortization | 1,117 | 985 |
Net income (loss) | (45) | 28,941 |
Total assets | 186,473 | 184,174 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Depreciation and amortization | 41 | 37 |
Net income (loss) | (1,198) | (760) |
Total assets | 10,108 | 10,739 |
Airport Security and Other Aviation Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 131,191 | 114,001 |
Depreciation and amortization | 466 | 698 |
Net income (loss) | 1,276 | 9,241 |
Total assets | 105,906 | 107,368 |
Authentication Technology Member | ||
Segment Reporting Information [Line Items] | ||
Revenue | 24,820 | 40,418 |
Depreciation and amortization | 610 | 250 |
Net income (loss) | (123) | 20,460 |
Total assets | $ 70,459 | $ 66,067 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION (Schedule of Revenue by Country) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 156,011 | $ 154,419 |
GERMANY | ||
Segment Reporting Information [Line Items] | ||
Revenue | 57,063 | 56,026 |
United States of America [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 42,842 | 49,418 |
The Netherlands [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 28,385 | 22,698 |
Spain [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 17,300 | 14,205 |
Other countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 10,421 | $ 12,072 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION (Schedule of Property and Equipment by Country) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 6,130 | $ 5,710 |
GERMANY | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 356 | 361 |
United States of America [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 701 | 422 |
The Netherlands [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 452 | 624 |
Spain [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 113 | 118 |
Segment Geographical Groups Of Countries Other Member | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 4,508 | 4,185 |
Israel [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 4,227 | $ 3,956 |