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SAN DIEGO, Nov. 09, 2017 -- ImageWare Systems, Inc. (ImageWare or IWS) (OTCQB:IWSY), a leader in mobile and cloud-based, multi-modal biometric identity management solutions, has issued financial results for the third quarter ended September 30, 2017, as well as a corporate update to highlight the company’s progress since its last quarterly update on August 14, 2017.
Operational Highlights
- Received IBM PartnerWorld’s Ready for IBM Security Intelligence designation for ImageWare’s GoVerifyID Enterprise Suite.
- Demonstrated the GoVerifyID Enterprise Suite for IBM Security Access Manager (ISAM) at the 2017 Money 20/20 event.
- Integrated into Fujitsu’s Secure DirectClick™, an encrypted communications and data transfer solution that can be embedded in any website or mobile application, which has also been integrated into Biometrics-as-a-Service™, a SaaS solution providing mobile, out-of-band, multi-biometric user authentication.
- Received notice that ImageWare was awarded two additional Canadian patents around its IWS Biometric Engine®.
- Completed an $11 million registered direct offering.
- Appointed Robert Clutterbuck and Charles Frischer to its Board of Directors.
Management Commentary
“We continue to demonstrate the strength of our GoVerifyID Enterprise Suite,” said Jim Miller, ImageWare’s chairman and CEO. “Just last month, we received a highly accredited designation from IBM PartnerWorld, which validates our integration with IBM Security products to help protect their customers around the world. Ultimately, ISAM users will be able to utilize our multi-modal biometric authentication with mobile devices by swiping a fingerprint, taking a selfie, or even providing a voice sample to authenticate their identity.
“During the third quarter, we secured an $11 million financing to bolster our balance sheet and accelerate our sales and marketing efforts. We believe this financing is a reflection of the strong progress we’ve made to commercialize our leading identity management solutions and position them for growth. We plan to capitalize on our operational momentum to further expand our partnership agreements for our mobile and cloud-based products.”
Third Quarter 2017 Financial Results
Total revenues in the third quarter of 2017 were up 28% to $1.1 million compared to $0.8 million in the same year-ago period. The increase was primarily due to higher license revenue from identification projects.
Gross margin in the third quarter of 2017 increased 610 basis points to 78.7% from 72.6% in the year-ago quarter. The increase was primarily due to the higher license revenue with lower relative costs.
Net loss in the third quarter of 2017 was $2.4 million or $(0.03) per share, unchanged from the year-ago quarter.
On September 30, 2017, cash and cash equivalents totaled $9.9 million compared to $1.6 million on December 31, 2016. The increase was due to an $11 million registered direct offering completed in September. As of September 30, 2017, the company carried $6.0 million in debt compared to $2.5 million at December 31, 2016.
Conference Call
ImageWare will hold a conference call today at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its third quarter 2017 results. The company’s Chairman and CEO Jim Miller and CFO Wayne Wetherell will host the conference call, followed by a question and answer period.
Date: Thursday, November 9, 2017
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-800-239-9838
International dial-in number: 1-323-794-2551
Conference ID: 2862800
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
The conference call will be broadcast live and available for replay here and via ImageWare’s investor relations section at www.iwsinc.com.
A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through December 9, 2017.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 2862800
About ImageWare Systems, Inc.
ImageWare Systems, Inc. is a leading developer of mobile and cloud-based identity management solutions, providing biometric 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 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, Calif., with offices in Portland, OR, Ottawa, Ontario, and Mexico City, Mexico. To learn more about ImageWare, visit http://iwsinc.com; follow us on Twitter, LinkedIn, YouTube 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. (“ImageWare”) are intended to identify such forward-looking statements. ImageWare may from time to time update these 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, 2016 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:
Liolios
Cody Slach
Tel 1-949-574-3860
[email protected]
IMAGEWARE SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| September 30, | December 31, | ||||||
| 2017 | 2016 | ||||||
| Assets: | |||||||
| Cash | $ | 9,866 | $ | 1,586 | |||
| Accounts receivable, net | 217 | 287 | |||||
| Inventories | 100 | 23 | |||||
| Other current assets | 196 | 135 | |||||
| Property and equipment, net | 49 | 93 | |||||
| Other assets | 35 | 34 | |||||
| Intangible assets, net | 97 | 106 | |||||
| Goodwill | 3,416 | 3,416 | |||||
| Total Assets | $ | 13,976 | $ | 5,680 | |||
| Liabilities and Shareholders' Deficit: | |||||||
| Current liabilities | $ | 3,054 | $ | 2,516 | |||
| Convertible line of credit to related party net of discount | 5,729 | 2,528 | |||||
| Pension obligation | 1,983 | 1,895 | |||||
| Shareholders' equity (deficit) | 3,210 | (1,259 | ) | ||||
| Total Liabilities and Shareholders' Equity (Deficit) | $ | 13,976 | $ | 5,680 | |||
IMAGEWARE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | ||||||||||||||||
| Product | $ | 425 | $ | 209 | $ | 1,105 | $ | 968 | ||||||||
| Maintenance | 659 | 639 | 1,967 | 1,919 | ||||||||||||
| Total Revenues | 1,084 | 848 | 3,072 | 2,887 | ||||||||||||
| Cost of Revenue | ||||||||||||||||
| Product | 17 | 32 | 108 | 162 | ||||||||||||
| Maintenance | 214 | 200 | 637 | 624 | ||||||||||||
| Gross Profit | 853 | 616 | 2,327 | 2,101 | ||||||||||||
| 79% | 73% | 76% | 73% | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General & administrative | 968 | 904 | 3,055 | 2,810 | ||||||||||||
| Sales and marketing | 656 | 717 | 2,119 | 2,133 | ||||||||||||
| Research and development | 1,496 | 1,301 | 4,439 | 3,932 | ||||||||||||
| Depreciation and amortization | 16 | 33 | 54 | 103 | ||||||||||||
| Total Operating Expenses | 3,136 | 2,955 | 9,667 | 8,978 | ||||||||||||
| Loss from operations | (2,283 | ) | (2,339 | ) | (7,340 | ) | (6,877 | ) | ||||||||
| Interest (income) expense, net | 178 | 89 | 443 | 135 | ||||||||||||
| Other (income) expense, net | (75 | ) | - | (125 | ) | (200 | ) | |||||||||
| Income (loss) from continuing operations before income taxes | (2,386 | ) | (2,428 | ) | (7,658 | ) | (6,812 | ) | ||||||||
| Income taxes | 4 | 3 | 10 | 10 | ||||||||||||
| Income (loss) from continuing operations | (2,390 | ) | (2,431 | ) | (7,668 | ) | (6,822 | ) | ||||||||
| Net income (loss) | $ | (2,390 | ) | $ | (2,431 | ) | $ | (7,668 | ) | $ | (6,822 | ) | ||||
| Preferred dividends | (553 | ) | (317 | ) | (1,575 | ) | (986 | ) | ||||||||
| Preferred stock exchange | (1,245 | ) | - | (1,245 | ) | - | ||||||||||
| Net income (loss) available to common shareholders | $ | (4,188 | ) | $ | (2,748 | ) | $ | (10,488 | ) | $ | (7,808 | ) | ||||
| Per share data - basic | ||||||||||||||||
| Net income (loss) from continuing operations | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.07 | ) | ||||
| Preferred dividends | (0.00 | ) | - | (0.02 | ) | (0.01 | ) | |||||||||
| Preferred stock exchange | (0.01 | ) | - | (0.01 | ) | - | ||||||||||
| Basic income (loss) per share available to common shareholders | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.11 | ) | $ | (0.08 | ) | ||||
| Basic weighted-average common shares | 93,197,689 | 94,550,721 | 92,538,582 | 94,309,309 | ||||||||||||
