We are registering 26,802,440 shares of our common stock, $0.01 per share, of ImageWare Systems, Inc. (“ we ,” “ us ,” or the “ Company ”), by selling stockholders listed beginning on page 58 of this prospectus (“ Selling Stockholders ”). All of the shares being offered, when sold, will be sold by the Selling Stockholders. The shares of Common Stock registered for resale under this registration statement include:
up to 9,325,000 shares of common stock issued in a private placement transaction consummated on December 20, 2011 (the “ Private Placement ”);
up to 8,445,000 shares of common stock issuable upon exercise of warrants issued in connection with the Private Placement;
up to 5,632,440 shares of common stock issued upon conversion of our Series C 8% Convertible Preferred Stock upon consummation of the Private Placement;
up to 3,400,000 shares of common stock issuable upon exercise of certain warrants owned by BET Funding, LLC.
We will not receive any proceeds from the sale of the shares by the Selling Stockholders; however, if the warrants are exercised we will receive the exercise price of the warrants, if exercised at all. We will pay the expenses of registering the shares sold by the Selling Stockholders. See “ Selling Stockholders ” beginning on page 58 of this prospectus for a list of the Selling Stockholders.