ImageWare Systems Issues Corporate Update
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Imageware Systems, Inc. (QB) (USOTC:IWSY)
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Today : Wednesday 14 August 2013
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ImageWare Systems, Inc. (OTCQB: IWSY) (ImageWare), a leader in cloud-based, multi-modal biometric identity management solutions, has issued a corporate update to highlight the company's progress since its last update on May 10, 2013.
Key Milestones and Events
•Introduced the industry's first biometric mobile identity management platform, GoMobile Interactive™ (GMI), for the iPhone and Android operating systems.
•Initiated a 60-day biometric security management pilot project with a major financial institution.
•Awarded $2.2 million contract to expand biometric identity management services for the U.S. Department of Veteran Affairs (VA).
Progress Overview and Outlook
Since ImageWare's last update in May, the company has achieved multiple milestones in product development and market penetration. During the first quarter of 2013, ImageWare entered into a contract with Fujitsu to market a cloud-based, multi-modal biometric identity management offering delivered on the Fujitsu Global Cloud Platform (FGCP). The FGCP is believed to be one of the world's largest cloud platforms and features ImageWare's patented CloudID™ product suite, which is anchored by its Biometric Engine® 2.0. Under the contract, ImageWare will invoice its customers on a monthly subscription basis and receive a majority of associated revenues.
As a result of this contract, during the second quarter of 2013, ImageWare secured its first agreement with Emida, a leader in the global prepayment and value transfer market, to provide cloud identity management services for mobile wallet subscribers and partners using its CloudID. Together, ImageWare and Fujitsu will deliver a fully-validated, feature-rich security solution that will provide unprecedented identity and value exchange protection for financial transactions on a smartphone.
Emida currently operates in 37 countries throughout the world and supports a network of more than 54,000 retail points. With an annualized dollar payment volume in excess of $1.5 billion and more than 240 million payment transactions processed each year, partnering with Emida presents an attractive opportunity for ImageWare and showcases its "plug-in" approach for cloud-based identity management applications.
"The agreement with Emida, which launches in September, marks our first commercial customer in connection with the FGCP," said Jim Miller, chairman and CEO of ImageWare. "In addition, the North American roll-out of the FGCP is underway and progressing well. Not only have we trained the North American Fujitsu retail sales team to market our solution, we have also reached a preliminary agreement for a global expansion model. Through Fujitsu, we are currently in discussions with several clients regarding licensing opportunities and will continue to target large enterprise businesses and emerging applications.
"In fact, as the result of a Fujitsu introduction, we recently initiated a 60-day biometric security management pilot project with a major financial institution, which is an area we have been heavily targeting, and it is progressing as planned. We are also currently in discussions with other IT integrators that have the potential to distribute our CloudID product suite."
ImageWare has continued to develop and advance its biometrically secured, mobile transaction technology that is built upon the wireless push technology and related patents it acquired from VOCEL last year. In July 2013, ImageWare introduced GoMobile Interactive, the industry's first biometrically enabled mobile identity management platform. Integrated with ImageWare's Biometric Engine, GMI allows businesses, service and content providers to offer users biometric security for their products, services and content on the Android or iPhone operating systems.
By supporting multi-modal biometrics on a mobile device, ImageWare is now able to offer an out-of-band security solution that is far superior to traditional password or PIN protection. Targeting verticals such as mobile banking and value transfer, retail, healthcare and entertainment services, GMI also includes a standalone application that can be used as a turnkey solution or software development kit, enabling integration with existing applications for the Android and iPhone. Additionally, GMI supports dynamic information gathering that clients can utilize, such as documenting clinical trials or compliance with pharmaceutical regimes, through interactive surveys that can be optionally secured with biometrics.
"Integrating interactive messaging technology with our Biometric Engine provides the missing security link facing a growing number of enterprises and government agencies using mobile platforms to transact business or interact with their users," noted Miller. "GoMobile Interactive is designed to provide unprecedented security for sensitive data over smartphones. The response we have gotten from GMI is very encouraging and we are currently in substantive discussions with several new clients regarding licensing opportunities."
Earlier this month, ImageWare was awarded a $2.2 million contract by its largest customer, the U.S. Department of Veteran Affairs, to expand its personal identity verification (PIV) credentialing capabilities across federal, state and local facilities. The multi-biometric identity management solution was first implemented with the VA in 2007, whereby ImageWare has provided enrollment and on-going management of face, Livescan fingerprint and fingerprint minutia. These services, which are in compliance with U.S. government standards, provide a greater level of security and drive the standards for commercial adoption.
Under the terms of the agreement, ImageWare will deliver software licenses during the third quarter of 2013 and will receive approximately $1.5 million in revenue. Additionally, ImageWare will receive service revenue valued at approximately $650,000 that will be recognized proportionally over the next year.
"Our extended relationship with the VA is a testament to the quality of service we provide," said Miller. "As part of the system expansion, the VA will also be upgrading to our patented Biometric Engine 2.0, which enables the enrollment and management of unlimited population sizes should the VA decide to roll this solution out across the entire organization. As stated on our previous corporate update call, we expect our third quarter to be cash flow positive, in large part due to this contract."
"ImageWare's proven track record of government experience executing best-of-breed, patented, fully compliant biometric solutions will drive the standards for commercial and consumer adoption," concluded Miller. "While we will continue to pursue government contracts, the steps we have taken to further penetrate these markets will provide us forward-looking visibility along with strong recurring revenue, as we gain traction with our Cloud, SaaS and mobile offerings."
