ImageWare® Reports Third Quarter and Nine-Months Results
SAN DIEGO, Nov. 23, 2020 /PRNewswire/ -- ImageWare(®) Systems, Inc. (OTCQB: IWSY), a leader in biometric identification and authentication, today reported financial results for the third quarter and nine-month period ended September 30, 2020.
Q3 Highlights
-- Chris Dickson named VP of Sales to utilize his technical background to
form and lead new sales strategies to achieve our aggressive revenue
goals
-- BioIntellic(TM) - the first new release by the new development team - is
our standalone, highly scalable anti-spoofing detection feature
(embedded in the Biometric Engine) to ensure secure onboarding
-- BioIntellic bolsters our joint offering with our existing proofing
partner in the African market, Contactable, and also supports our
existing MTN business as well as drives new business in the African
region and beyond
-- Generated $1.2 million in orders from an existing contract with the U.S.
Department of Veterans Affairs to provide smart badge technology along
with a new contract for professional services to expand user
functionality
-- Restructured certain senior securities as an important first step in
executing our strategic business and financing plan
-- Closed a $2.2 million equity advance in the quarter as the first tranche
of an $11.56 million Series D Preferred capital raise (closed on
November 12(th)), supporting our plans for substantial growth
-- Implemented further cost cutting measures to reduce burn rate
Kristin A. Taylor, Chair, President and CEO, said, "Our talented and dedicated team members are the backbone of our accomplishments. While working remotely during the pandemic, they continue to excel and thrive. I applaud their many accomplishments and on-going contributions.
"Our recently completed $11.56 million capital raise provides us with the means and the runway to continue building and growing ImageWare 2.0 to achieve meaningful success for our investors on our way to becoming cash flow positive," concluded Taylor.
Momentum
-- Growing sales pipeline
-- Q3 added 79 net-new opportunities (including 56 new opportunities in
Law Enforcement
-- This increase compares with Q2 in which we added 67 net-new
opportunities (including 45 new opportunities in Law Enforcement)
-- New bookings
-- Q3 new bookings increased 28% to $2,014,933 as compared with
$1,573,140 in the same period last yea
-- The 70 bookings included 46 new/upsell plus 24 renewals
-- We are moving historic customers and new bookings to a subscription
model (typically 12 months) for which revenue will be recognized ratably
over the year
-- New bookings represent new contracts signed in the period and will
be recognized as revenue over the life of the contract.
-- In October, we completed a new QuickCapture Mobile software product that
resides on the Laxton Chameleon 5 and 8 devices. QuickCapture Mobile
will be an inherent part of our final Law Enforcement 2.0
-- This powerful solution allows officers, public safety and military
personnel in the field to have dynamic data on a perpetrator in the
palm of their hands
-- We have shown more than 15 QuickCapture Mobile demonstrations in the
past 30 days to agencies with keen interest
-- New hires
-- Actively interviewing and hiring new technical software sales
candidates
-- We are now successfully showcasing products and new developments in
monthly webinars to new and existing customers.
-- Existing customers present the greatest opportunities for immediate
revenue given their long history of working with ImageWare and
appreciation of our 24/7 support
-- IP monetization - in September we established Phase One with a new IP
business unit as part of our monetization and broader patent plan
-- Actively pursuing licensing and anticipate first revenues from these
efforts in 2021
-- Next week the team completes the multiphase upgrade for GoVerifyID®
(GVID) enterprise-ready authentication product to expand usefulness and
Cloud-based biometrics MFA (multi-factor authentication)
-- Enables sales to double down
-- A new self-service portal (enabling end-users to test, purchase and
provision GVID in an automated way) will be released in early 202
-- Development to continue to work on a Zero Trust product for remote
workers
-- Continued refresh of the components of the Identity Platform (Cloud and
mobile-capable)
-- Progressing with the upgrade of the corporate website for launch early
next year
Sales Strategy Overview
ImageWare's sales team is delivering growth through strong renewals, and critical momentum with new business. Our renewed sales strategy and focus continue to yield increasing results. A direct result of the COVID-19 pandemic, we are seeing increasing cybersecurity demand from the new and burgeoning remote workforce.
The integration work in our Identity Platform is expected to be completed in Q2. Our recent successful demonstration was very well received - and we have existing customers who have expressed particular interest.
The lucrative enterprise market remains a key priority for us as we focus resources to target future customers in financial services, retail, manufacturing, education and healthcare.
Third Quarter Results
-- Revenue for the third quarter ended September 30, 2020 grew 215% to
$2,471,000 compared with $785,000 for the third quarter of 2019.
-- The increase was driven primarily by services revenue for smart
badge technology, services integration and training for the US
Department of Veterans' Affairs.
-- Gross profit for the third quarter 2020 grew 152% to $1,633,000, or 66%,
versus $647,000, or 82%, in the same period last year.
-- The lower margin in Q3 2020 is attributable to the one-time impact
of additional services costs incurred for one particular customer.
-- Net loss narrowed to ($626,000) for the third quarter 2020 compared with
a loss of ($2,665,000) in the same period last year.
-- Net loss per share narrowed to ($0.02) for the third quarter ended 2020
versus ($0.04) in the same period in 2019.
Nine-Month Results
-- Revenue for the nine months ended September 30, 2020 increased 37% to
$3,999,000 compared with $2,527,000 for the nine-month period in 2019.
-- Gross profit for the nine months ended 2020 was $2,890,000, or 72%,
versus $2,046,000, or 81%, in the same period last year. The lower
margin in the nine months ended 2020 is primarily attributable to the
one-time costs associated with the customer previously mentioned.
-- Net loss narrowed to ($6,781,000) for the nine months ended 2020
compared with a loss of ($9,235,000) in the same period last year.
-- Net loss per share narrowed to ($0.09) for the nine months ended 2020
versus ($0.13) in the same period in 2019.
Conference Call Details
Date / Time:
Monday, November 23rd at 1:30 pm PT
Dial In #: 1-631-891-4304 Domestic/International (at least
five minutes before start time)
Replay:
1-412-317-6671; PIN Number 10011639
Available from November 23, 2020, at 7:30pm ET
through November 25, 2020 at 11:59pm ET
For web access to listen to the update and replay, please visit: https://www.iwsinc.com/company/investor-relations/. The replay will be available for at least 90 days.
About ImageWare® Systems, Inc.
Founded in 1987, ImageWare provides defense-grade biometric identification and authentication for access to your data, products, services or facilities. We are experts in biometric authentication and considered a preeminent patent holder of multimodal IP, having many of the most-cited patents in the industry. Our patented IWS Biometric Engine® (BE) is the most accurate and fastest biometrics matching engine in the industry, capable of our patented fusion of multiple biometrics. Part of our heritage is in law enforcement having built the first statewide digital booking platform for United States local law enforcement - and more than three decades of experience in the challenging government sector creating biometric smart cards and logical access for millions of individuals. We are a "biometrics first" company, leveraging unique human characteristics to provide unparalleled accuracy for identification while protecting your identity. Please visit www.iwsinc.com.
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, 2019 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.
Media Contact:
Investor Relations:
Jessica Belair
Terri MacInnis, VP of IR
ImageWare
Systems, Inc.
Bibicoff + MacInnis, Inc.
(310) 717-0877
(818) 379-8500 x2
jbelair@iwsinc.com terri@bibimac.com
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ImageWare(R) Systems, Inc.
SELECTED COMPARATIVE FINANCIAL HIGHLIGHTS
In thousands, except share and per share amounts
---
Three Months Ended
Nine Months Ended
September 30,
September 30,
---
2020 2019 2020 2019
Revenues
Product $1,858 $155 $2,129 $592
Maintenance 613 630 1,870 1,935
Total Revenues 2,471 785 3,999 2,527
Cost of Revenue
Product 715 41 781 158
Maintenance 123 97 328 323
Gross Profit 1,633 647 2,890 2,046
66% 82% 72% 81%
Operating Expenses
General & administrative 953 791 2,875 2,793
Sales and marketing 615 985 2,239 2,924
Research and development 1,117 1,898 4,503 5,511
Depreciation and amortization 18 17 54 53
Total Operating Expenses 2,703 3,691 9,671 11,281
Loss from operations -1,070 -3,044 -6,781 -9,235
Interest (income) expense, net 56 -27 131 -80
Change in fair value of derivative liabilities (535) (388) (369) (445)
Other components of net periodic pension expense 31 35 106 113
Other expense 3 4 1
Loss from continuing operations before income taxes -625 -2,664 -6,653 -8,824
Income taxes 1 1 -1 1
Loss from continuing operations (626) (2,665) (6,652) (8,825)
Net loss $(626) $(2,665) $(6,652) $(8,825)
Preferred dividends, preferred stock discount accretion and deemed
dividends from preferred stock exchange (2,529) (1,300) (5,275) (3,968)
Net loss available to common shareholders $(3,155) $(3,965) $(11,927) $(12,793)
Per share data - basic
Basic income (loss) per share available to common shareholders $(0.02) $(0.04) $(0.09) $(0.13)
Basic weighted-average common shares 133,341,134 106,571,261 125,558,524 102,830,312
ImageWare(R) Systems, Inc.
CONSOLIDATED BALANCE
SHEETS
September 30, December 31,
2020 2019
Assets:
Cash $2,906 $1,030
Accounts receivable, net 473 657
Inventories 22 615
Other current assets 178 243
Property and equipment,
net 169 216
Other assets 512 257
Operating lease right-of-
use assets 1,649 1,906
Intangible assets, net 61 70
Goodwill 3,416 3,416
Total Assets $9,386 $8,410
Liabilities and
Shareholders' Deficit:
Current liabilities $8,199 $4,198
Note payable -bank, net
of current portion 853
Pension obligation 2,380 2,256
Lease liabilities -long
term 1,406 1,716
Other long-term
liabilities 69 118
Mezzanine equity 9,401 8,884
Shareholders' deficit -12,922 -8,762
Total Liabilities and
Shareholders' Deficit $9,386 $8,410
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SOURCE ImageWare Systems, Inc.
