SAN DIEGO, CA — (Marketwired) — 11/14/13 — ImageWare Systems, Inc. (OTCQB: IWSY) (ImageWare), a leader in mobile and cloud-based, multi-modal biometric identity management solutions, reported financial results for the third quarter ended September 30, 2013.

Awarded $2.2 million contract to expand biometric identity management services for the U.S. Department of Veteran Affairs.

Awarded a U.S. federally sponsored pilot program for iris recognition with 20 state and local law enforcement agencies.

Selected to provide complete identity management and booking system for the city of Fredericton, New Brunswick.

Introduced GoMobile Interactive, the industry-s first biometric mobile identity management platform for the iPhone and Android operating systems.

Total revenues in the third quarter of 2013 increased 167% to $2.5 million from $938,000 in the third quarter of 2012. The increase was primarily due to approximately $1.5 million received in August for software licenses in connection with a $2.2 million contract with the U.S. Department of Veteran Affairs.

Gross margin in the third quarter of 2013 increased significantly to 88.0%, compared to 72.7% in the third quarter of 2012. The increase was primarily due to the increased software license revenues.

Net income in the third quarter of 2013 also improved significantly to $326,000 or $0.00 per diluted share, compared to a net loss of $2.7 million or $(0.04) per diluted share in the third quarter of 2012.

At September 30, 2013, cash and cash equivalents totaled $3.5 million, compared to $1.0 million at June 30, 2013 and $4.2 million at December 31, 2012. The company continues to carry no debt and currently maintains a $2.5 million unsecured line of credit.

“Our strong third quarter results were primarily due to the $2.2 million contract we secured with our largest customer, the U.S. Department of Veteran Affairs,” said Jim Miller, chairman and CEO of ImageWare. “This key contract drove our first cash flow positive quarter in nearly five years.

“The biometric identity solutions we are providing the VA, which are in strict compliance with U.S. government standards, serve as a working model for facilitating more rapid commercial sector adoption. In fact, we recently announced a contract award from our second commercial customer, Global Payout, which further endorses the turnkey use of our solutions in our target markets. Along with our technology partner, Fujitsu, we continue to explore many significant opportunities and look forward to a worldwide expansion model. As such, we are currently in discussions with several potential clients regarding licensing opportunities and will continue to target large enterprise businesses and emerging applications.

“Due to external factors not related to our portion of the contract, we-re now anticipating the completion date of our LAX deployment to be shifted from the fourth quarter to early 2014. More than ever, we are confident the steps we are taking to advance and position our cloud, SaaS and mobile offerings in the commercial and consumer marketplace will provide increasing shareholder value, with better visibility and a strengthening recurring revenue stream.”

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 2013 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 14, 2013
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-877-941-4774
International dial-in number: 1-480-629-9760
Conference ID: 4648785

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 at and via ImageWare-s investor relations section at .

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through December 14, 2013.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4648785

ImageWare Systems, Inc. (OTCQB: IWSY) is a leading developer of mobile and cloud-based identity management solutions, providing biometric, secure credential and law enforcement technologies. Scalable for worldwide deployment, ImageWare-s biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare-s identification products are used to manage and issue secure credentials, including national IDs, passports, driver-s licenses, smart cards and access control credentials. ImageWare-s digital booking products provide law enforcement with integrated mug shot, fingerprint livescan and investigative capabilities. ImageWare is headquartered in San Diego, CA, with offices in Portland, OR, Washington, D.C., and Ottawa, Ontario. For more information on ImageWare Systems, Inc., visit .

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, 2012, its quarterly reports on Form 10-Q for the quarter ended March 31 and its other reports filed with the Securities and Exchange Commission under the Securities 3 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.

Liolios Group, Inc.
Cody Slach or Greg Falesnik
Tel 1-949-574-3860

Tony Fisch
Tony Fisch Consulting
Tel 1-323-461-7878

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