ImageWare Systems, Inc.

Revenue for the three months ended September 30, 2021 was $778,000 versus $2.5 million in the same period of 2020. Gross profit was $622,000 versus $1.6 million a year ago. Operating expense was $3.1 million compared with $2.7 million, and operating loss was $2.4 million versus a loss of $1.1 million in Q3 2020. The company ended the quarter with $1.7 million in cash, and the $1.6 million PPP loan was forgiven during the quarter. On guidance, management did not provide formal next-quarter or full-year financial targets; instead, it said it expects more revenue in 2022 from law enforcement and federal agencies, and noted that new sales opportunities may take 6 months to a year to implement.

CEO Kristin Taylor said the company has rebuilt and rationalized its product set into a unified platform with three functional solutions: enroll and identify, badge and credential, and authenticate. She emphasized rising activity across channels, recent customer wins, and the new King County deal as evidence the refocused strategy is working. Taylor also said the company is pursuing strategic alternatives with Imperial Capital and is in discussions for additional short-term capital, expressing confidence it can secure enough funding to bridge working capital needs.

Interim CFO Mike Shambach focused on the quarter’s financial decline: revenue of $778,000 was down from $2.5 million, gross profit was $622,000 versus $1.6 million, and operating expense increased to $3.1 million from $2.7 million. He attributed higher expenses to professional services fees, licenses, dues, insurance, stock-based compensation, and one-time discontinued services charges, partly offset by lower personnel and rent costs. He also said cash at quarter-end was $1.7 million and highlighted that the $1.6 million PPP loan was forgiven in the quarter.

There was no live Q&A because management said confidentiality agreements tied to recent strategic discussions prevented it from taking questions. As a result, there were no analyst questions or direct back-and-forth on revenue trends, cash burn, or the strategic review. Management said it would follow up with investors later and promised a future Q&A.