ICTS International N.V. Reports Results for the Year 2005; Nasdaq Advises of Stock Holder's Equity Deficiency

ICTS International N.V. (NASDAQ: ICTS), a leading
provider of advanced security services, reported on Friday, September
15 2006 it's results for the year ended December 31, 2005 are as
follows:
   Revenues from continuing operations in the year 2005 amounted to
$57.7 million as compared with $58 million for the year 2004. For the
year 2005, revenues were derived primarily from non-aviation security
services provided in the United States.
   Operating loss for the year 2005 amounted to $7.7 million,
compared to an operating loss of $7.0 million for the year 2004.
   Loss from continuing operations for the year 2005 amounted to
$11.3 million ($1.74 per fully diluted share). This compares to a net
loss of $10.5 million in the year 2004 ($1.61 per fully diluted
share).
   Loss from discontinued operations for the year 2005 amounted to
$13.5 million. This compares to a net loss of $15.5 million in the
year 2004. The loss this year is a result of one time provision of 14
years future rent and capital loss from sale of equipments.
   Loss for the year 2005 amounted to $24.9 million ($3.81 per fully
diluted share). This compares to a net loss of $26 million in the year
2004 ($3.98 per fully diluted share).
   Shareholders' equity (deficiency) as of December 31, 2005 totals
$5.1 million.
   Auditor's Report. In connection with the audit for the year end
December 31, 2005 the Company's independent auditors have raised the
going concern of the Company in their report.
   Nasdaq letter. The Company on September 19, 206 received a notice
from The Nasdaq Stock Market that the Staff determined that the
Company's stockholder's equity was ($5,148,000). Accordingly, the
Company does not comply with the minimum $10,000,000 stockholders'
equity requirement for continued listing on The Nasdaq Global Market
set forth in Marketplace Rule 4450(a)(3) and this matter serves as an
additional basis for delisting the Company's securities from The
Nasdaq Stock Market.
   Mr. Menachem Atzmon, the Chairman of the Supervisory Board of the
Company, indicated that "the financial statements for the year ended
December 31, 2005 reflected the major restructuring steps developed by
management of the Company. These steps which amounted to $13.5
million, primarily dealt with the close down of the Company's
entertainment business located in Atlantic City and Baltimore,
Maryland. In addition, due to GAAP requirements of presentation, the
financial statements do not reflect the real impact of ICTS's
investment in two affiliates: 1) 31.83% ownership interest in Inksure
Technologies Inc. is presented on the Equity method as $1.8 million
asset and $1.1 million loss, while our share in it's market value as
of December 31, 2005 was $14 million (August 2006 independent
evaluation of Inksure indicates our share value of $19 million. 2) 50%
share in NAS with total revenue of more than $40 million, is not
consolidated. The investment is presented on the Equity method showing
an asset of $1.2 million and profit of $700K. Mr. Atzmon further
stated "The Company re-entered the aviation business in Europe, as
well as entering the mass transportation security business with the
focus on railroad security business. The Company is currently
aggressively marketing its capabilities in the railroad security
business, having obtained a contract for rail security development in
Rotterdam, Amsterdam. The Company is continuing to develop and to
market its technological products as a stand alone product as well as
supporting tools for the aviation security services, the emergency
preparedness services and for the new activities the company entered
into".

   About ICTS International N.V.

   ICTS specializes in the development and implementation of
innovative security concepts and solutions designed to meet the needs
of a variety of industries, mainly including transportation (aviation,
railroad and other means of public transportation), border control and
sensitive facilities. ICTS International benefits from over two
decades of expertise and international operational experience in
transportation security, with a particular emphasis on high-risk
environments, passenger processing transactions and the integration of
security services to provide a comprehensive security solution. It
also offers a wide variety of customized training programs, tailored
procedures and a wide range of security consulting services. The
company has developed and implemented unique technological solutions,
based on its comprehensive approach to security, designed to enhance
the level of security while accelerating the security check process.
www.icts-int.com

   This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995,
regarding the Company's business strategy and future plans of
operations. Forward-looking statements involve known and unknown risks
and uncertainties, both general and specific to the matters discussed
in this press release. These and other important factors, including
those mentioned in various Securities and Exchange Commission filings
made periodically by the Company, may cause the Company's actual
results and performance to differ materially from the future results
and performance expressed in or implied by such forward-looking
statements. The forward-looking statements contained in this press
release speak only as of the date hereof and the Company expressly
disclaims any obligation to provide public updates, revisions or
amendments to any forward-looking statements made herein to reflect
changes in the Company's expectations or future events.
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                                                        December 31,
                                                      ----------------
                                                        2005    2004
                                                       ------- -------
                     A s s e t s
CURRENT ASSETS:
     Cash and cash equivalents                        $ 5,927 $ 3,224
     Restricted cash and short term investments         3,724   4,773
     Accounts receivable (net of allowance for
     doubtful accounts of $1,237 and $2,708 as of
     December 31, 2005 and 2004, respectively)         13,639  11,958
     Prepaid expenses                                   1,335   1,051
     Other current assets                                 337   2,523
     Current assets from discontinued operations          482   1,139
                                                       ------- -------
     T o t a l current assets                          25,444  24,668
                                                       ------- -------
INVESTMENTS:
     Investments in associated companies                2,989   3,774
     Other investments                                    495   7,118
     Deferred income taxes                                  0       3
                                                      -------- -------
                                                        3,484  10,895
                                                       ------- -------
PROPERTY AND EQUIPMENT:
     Cost                                               4,232   3,549
     Less - accumulated depreciation and amortization   2,979   2,534
                                                       ------- -------
                                                        1,253   1,015
                                                       ------- -------
GOODWILL                                                  314     314
                                                       ------- -------
OTHER ASSETS, net of
     Accumulated amortization                           1,663   1,754
         Non current assets from discontinued
          operations                                       55  16,316
                                                       ------- -------
              T o t a l other assets                    1,718  18,070
                                                       ------- -------
         T o t a l assets                             $32,213 $54,962
                                                       ======= =======

    The accompanying notes are an integral part of the consolidated
                         financial statements.

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  The following table summarizes certain statement of operations data
 for ICTS for the years ended December 31, 2005, 2004, 2003, 2002 and
                                 2001:

                   (U.S. Dollars in thousand except per share data)
                               Year ended December 31,
               -------------------------------------------------------
                   2005       2004       2003       2002       2001
                ---------- ---------- ---------- ---------- ----------
REVENUES
                  $57,713 $   57,993 $   67,933 $  278,561 $  212,137
COST OF
 REVENUES          53,721     52,825     52,557    212,439    189,925
                ---------- ---------- ---------- ---------- ----------
GROSS PROFIT        3,992      5,168     15,376     66,122     22,212
SELLING,
 GENERAL AND
 ADMINISTRATIVE
 EXPENSES          11,690     12,201      8,547     25,635     18,641
IMPAIRMENT OF
 ASSETS AND
 GOODWILL                                   797      9,156        820
               ----------- ---------- ---------- ---------- ----------
OPERATING
 INCOME (LOSS)     (7,698)    (7,033)     6,032     31,331      2,751
FINANCIAL
 INCOME
 (EXPENSES) -
 net                 (908)      (452)     4,118      3,046      1,977
OTHER INCOME
 (EXPENSES) -
 net                  147     (2,907)      (353)    41,229     29,520
INCOME (LOSS)
 BEFORE TAXES      (8,459)   (10,392)     9,797     75,606     34,248
INCOME TAXES
 BENEFIT
 (EXPENSE)         (2,387)     1,529     (3,910)   (16,442)    (4,919)
SHARE IN LOSSES
 OF ASSOCIATED
 COMPANIES -
 net                 (486)    (1,625)    (6,661)    (1,807)      (395)
MINORITY
 INTERESTS IN
 PROFIT OF
 SUBSIDIARIES                                                  (2,735)
               ----------- ---------- ---------- ---------- ----------
PROFIT (LOSS)
 FROM
 CONTINUING
 OPERATIONS       (11,332)   (10,488)      (744)    57,357     26,198

DISCONTINUED
 OPERATIONS:
Loss from
 discontinued
 operations,
 net of tax
  Benefit of
  $2,525,
  $1,655 and
  $795 in 2005,
  2004 and
  2003,
  respectively
  Includes loss
  of $4,7774 on
  sale of
  assets to a
  related party
  on 2005, and
  after share
  in loss of
  associated
  company of
  $36 and $81
  in 2005 and
  2004,
  respectively    (13,548)   (15,474)   (18,130)      (542)
INCOME  (LOSS)
 FOR THE YEAR     (24,880)   (25,962)   (18,904)$   56,815 $   26,198
                ---------- ---------- ---------- ---------- ----------
OTHER
 COMPREHENSIVE
 INCOME:
  Translation
   adjustments     (1,560)     1,043      3,456        710     (1,811)
  Unrealized
   gains
   (losses) on
   marketable
   securities        (214)      (616)       794        731       (345)
  Reclass-
   ification
   adjustment
   for losses
   for
   available
   for sale
   securities
   included in
   net income                               237       (771)       368
                   (1,774)       427      4,487        670     (1,788)
                ---------- ---------- ---------- ---------- ----------
TOTAL
 COMPREHENSIVE
 INCOME (LOSS)
FOR THE YEAR   $  (26,654)$  (25,535)$  (14,417)$   57,485 $   24,410
                ========== ========== ========== ========== ==========
LOSSES PER
 SHARE:

Profit (Loss)
 from continued
 operations:
Profit (Loss)
 per common
 share - basic $    (1.74)$    (1.61)$   ( 0.12)$     8.93 $     4.18
                ========== ========== ========== ========== ==========
Profit (Loss)
 per common
 share -
 diluted       $    (1.74)$    (1.61)$   ( 0.12)$     8.88 $     4.09
                ========== ========== ========== ========== ==========
(Loss) from
 discontinued
 operations:
(Loss) per
 common share -
 basic         $    (2.07)$    (2.37)$    (2.78)$    (0.08)
                ========== ========== ========== ==========
(Loss) per
 common share -
 diluted       $    (2.07)$    (2.37)$    (2.78)$    (0.08)
                ========== ========== ========== ==========
NET INCOME
 (LOSS):
Profit (Loss)
 per common
 share - basic $    (3.81)$    (3.98)$   ( 2.90)$    8 .85 $     4.18
                ========== ========== ========== ========== ==========
Profit (Loss)
 per common
 share -
 diluted       $    (3.81)$    (3.98)$   ( 2.90)$     8.80 $     4.09
                ========== ========== ========== ========== ==========
Weighted
 average shares
 of common
 stock
 outstanding    6,528,100  6,524,250  6,513,100  6,419,575  6,263,909
Adjusted
 diluted
 weighted
 average shares
 of Common
 stock
 outstanding    6,528,100  6,524,250  6,513,100  6,453,447  6,412,535
                ========== ========== ========== ========== ==========
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