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ImageWare® Systems Reports 2018 Q4 and Year-End Financial Results

Update on Biometric Sales and Marketing

SAN DIEGO, April 01, 2019 (GLOBE NEWSWIRE) -- ImageWare® Systems, Inc. (OTCQB: IWSY), a leader in mobile and cloud-based, multi-modal biometric identity management solutions, reported financial results for the fourth quarter and year-ended December 31, 2018. The revenue for both periods primarily reflects our legacy business.

Q4 Summary of Results

  • Revenue for the fourth quarter ended December 31, 2018 was $1.1 million compared with $1.2 million in the fourth quarter 2017.
  • Gross profit for the quarter was $906,000 (85%) as compared with $975,000 (80%).
  • Net loss from continuing operations was ($3.1 million) in the quarter compared with ($2.4) million in the fourth quarter 2017.

Year-End Summary of Results

  • Revenue for the year ended December 31, 2018 increased 2.6 % to $4.4 million as compared with $4.3 million for the year ended 2017.
  • Gross profit for 2018 was $3.5 million (80%) compared with $3.3 million (77%) in 2017.
  • Net loss for the year was ($12.6 million) in 2018 as compared with ($10.1 million) in 2017.
  • Cash at year-end 2018 was $5.7million as compared with $7.3 million at year-end 2017.

Recent Significant Events

  • We introduced the ImageWare Digital Identity PlatformTM, an end-to-end digital biometric identity proofing, authentication and lifecycle management solution. The platform provides the broadest set of identity validation and biometric authentication capabilities in the industry.
  • In February we announced an agreement in an 8-K filing that a global financial services provider chose ImageWare to provide multi-modal biometric authentication solutions for a healthcare application (used to comply with mandates under the 21st Century Cures Act).
  • In March in an 8-K filing we announced a contract award through our partner Contactable, to provide biometric authentication to a major multinational mobile telecommunications company.
  • ImageWare’s GVID Biometric Platform was selected to secure global cloud authentication for a24.io.
  • Gatekeeper Innovation and IWSY announced partnership to address opioid epidemic and improve patient outcomes.

Jim Miller, Chairman and CEO of ImageWare Systems said, “While 2018 revenues reflected primarily our legacy business, our recently announced deals document our transition to a recurring revenue model based on our newer cloud and mobile products.

“Pending initiatives and our work in the higher price point health care market signal that we are firmly on a path toward profitability,” Miller concluded.

2018 Year-End Results Investor Update Call   
The Company will host an investor update call on Monday, April 1, 2019 at 1:30pm PT (4:30pm ET). The Participant Dial-In Number for the conference call is Domestic/International 1-631-891-4304. Participants should dial in to the call at least five minutes before 1:30pm PT (4:30pm ET) on April 1, 2019. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=133630.

A replay of the recorded call will be available for 90 days on the Company’s website (https://www.iwsinc.com/corporate-updates/). You can also listen to a replay of the call by dialing toll-free 1-844-512-2921 (international only - 1-412-317-6671) starting April 1, 2019, at 7:30pm ET through April 8, 2019 at 11:59 pm ET. Please use PIN Number 10006361.

About ImageWare® Systems, Inc.
ImageWare Systems, Inc. is a leading developer of mobile and cloud-based identity management solutions, providing two-factor, biometric and multi-factor authentication solutions for the enterprise. The company delivers next-generation biometrics as an interactive and scalable cloud-based solution. ImageWare brings together cloud and mobile technology to offer two-factor, biometric, and multi-factor authentication for smartphone users, for the enterprise, and across industries.

ImageWare’s products support multi-modal biometric authentication including, but not limited to, face, voice, fingerprint, iris, palm, and more. All the biometrics can be combined with or used as replacements for authentication and access control tools, including tokens, digital certificates, passwords, and PINS, to provide the ultimate level of assurance, accountability, and ease of use for corporate networks, web applications, mobile devices, and PC desktop environments.

ImageWare is headquartered in San Diego, California, with offices in Portland, Oregon; Ottawa, Ontario; Tokyo, Japan; and Mexico City, Mexico. To learn more about ImageWare, visit https://iwsinc.com/ and follow us on TwitterLinkedInYouTube and Facebook.

Forward-Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “if,” “should” and “will” and similar expressions as they relate to ImageWare Systems, Inc. are intended to identify such forward-looking statements. ImageWare may from time to time update publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see “Risk Factors” in ImageWare’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Investor Relations Contact                  
Harvey Bibicoff, CEO                        
Bibicoff + MacInnis, Inc.                                                        
818.379.8500    harvey@bibimac.com

               
SELECTED COMPARATIVE FINANCIAL HIGHLIGHTS              
In thousands, except share and per share amounts              
               
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2018   2017   2018   2017
Revenues              
  Product $   404    $   509    $   1,761    $   1,614 
  Maintenance 663    712    2,643     2,679 
Total Revenues 1,067    1,221    4,404    4,293 
               
Cost of Revenue              
  Product 30    44    205    152 
  Maintenance 131    202    671    839 
               
Gross Profit 906    975    3,528    3,302 
  85%   80%   80%   77%
Operating Expenses              
  General & administrative 1,113    1,137    4,285    3,723 
  Sales and marketing  971    697    3,571    2,816 
  Research and development 1,868    1,515    7,351    6,324 
  Depreciation and amortization 17    14    51    68 
  Total Operating Expenses 3,969    3,363    15,258    12,931 
               
Loss from operations (3,063)   (2,388)   (11,730)   (9,629)
               
Interest (income) expense, net (34)   149    463    591 
Change in fair value of derivative liabilities   46      -      232      - 
Other componsents of net periodic pension expense   46      -      118      98 
Other (income) expense, net   (4)     -      (4)   (125)
               
Income (loss) from continuing operations before income taxes (3,117)   (2,537)   (12,539)   (10,193)
               
Income taxes   10    (134)   11    (124)
               
Income (loss) from continuing operations   (3,127)     (2,403)     (12,550)     (10,069)
               
Net income (loss) $   (3,127)   $   (2,403)   $   (12,550)   $   (10,069)
               
Preferred dividends   (1,476)     (825)     (3,913)     (2,400)
Preferred stock exchange   -      -      -      (1,245)
Net income (loss) available to common shareholders $   (4,603)   $   (3,228)   $   (16,463)   $   (13,714)
               
Per share data - basic              
  Net income (loss) from continuing operations $   (0.03)   $   (0.03)   $   (0.13)   $   (0.11)
  Preferred dividends   (0.02)     (0.00)     (0.04)     (0.03)
  Preferred stock exchange   -      -      -      (0.01)
  Basic income (loss) per share available to common shareholders $   (0.05)   $   (0.03)     (0.17)   $   (0.15)
               
Basic weighted-average common shares   96,793,088      93,624,074      95,210,572      92,816,723 
               


         
CONSOLIDATED BALANCE SHEETS        
         
  December 31,     December 31,
  2018     2017
Assets:        
  Cash $   5,694     $   7,317
  Accounts receivable, net 968     458
  Inventories 29     79
  Other current assets 233     163
  Property and equipment, net 244     43
  Other assets 332     35
  Intangible assets, net 82     93
  Goodwill 3,416     3,416
Total Assets $   10,998     $   11,604
         
Liabilities and Shareholders' Deficit:        
  Current liabilities $   3,846     $   2,658
  Convertible line of credit to related party net of discount   -        5,774
  Pension obligation 1,876     2,024
  Other long-term liabilities 147       - 
  Mezzanine equity 8,156       - 
  Shareholders' equity (deficit) (3,027 )   1,148
Total Liabilities and Shareholders' Equity (Deficit) $   10,998     $   11,604