Imageware Systems Inc (OTCMKTS:IWSY) Capturing The Attention Of Big Players

Imageware Systems Inc. (OTCMKTS:IWSY), the cloud-based identity management solutions, is a new business profile that captured our attention.Why?Recently, several news hit the market. The most significant was that the company extended its agreement with Fujitsu and entered into a new resell agreement with a global distributor of storage and networking solutions.Before we provide more details, have a look at the recent share price action. The company is showing signs of strong growth and the market is responding very well. The share price not only jumped from $0.9 to $1.20, the market interest also seemed to grow because share volume has been picking up as well. 1 year chart for IWSYBusinessIWSY is headquartered in San Diego, CA. The company operates in the emerging market for biometrically enabled software-based identity management solutions. It creates software providing a "highly reliable indication of a person’s identity by registering human characteristics that are unique to us all."If you think that this industry is only for big corporations and common mortals do not require this type of services, then you are wrong. The following information was given by the company in one of its presentations to investors. We are vulnerable, have a look:

• According to Digital Journal, an identity is stolen every 3 seconds.
• According to IRS, tax identity theft has increased by 700% in the last 3 years.
• Over 80% of organizations are victims of fraud.
• According to a study conducted by Javelin Strategy & Research in 2017, in 2016, identity fraud has cost the U.S. $16 billion and affected 15 million people; 16% up than 2015 .

On the top of it, there are security systems that are said to be required by law. According to the company, law enforcement is seeking capability to utilize additional biometrics, such as iris, and DNA.What's the company offering?The products use multiple biometrics at the same time. Face recognition, fingerprints and voice recognition software is provided. In the following presentation, we found a very good explanation of how its system works: Presentation to InvestorsRecent DevelopmentsIn our opinion, the most significant information was released on June 20, 2017. The company noted that Fujitsu had decided to extend the company's biometric security solutions portfolio. Fujitsu, which was already a reseller working for the company, will be not only providing biometric identity and access management solutions to mobile devices, but will also provide additional authentication methods including fingerprint, face, and voice recognition.Thomas Bengs, Director and Head of Biometrics at Fujitsu in EMEIA, explained that enterprises understand very well that implementing access control is more important than ever. Additionally, he celebrated the deal and noted that now clients of the company will be able to benefit from more choice "both in terms of the technologies they deploy and the ability to offer authentication via mobile devices." Fujitsu LogoWe appreciate the deal with Fujitsu, as it is a well-known Japanese information and communication technology company with more than 155,000 employees, which has reported a consolidated revenues of 4.5 trillion yen (US $40 billion) for the fiscal year ended March 31, 2017. Additionally, on July 19, 2017, the company again released another deal with Fujitsu. The new agreement increased the portfolio of products:

• Fujitsu PalmSecure® family
• SAMURAI Platform™
• RoboSOC™
• Consulting services
• Security Operations Centers (SOC)

As we noted previously, Jim Miller, Chairman and CEO of ImageWare Systems, Inc., remarked that the Fujitsu brand is synonymous with quality and IWSY "is very proud to be at the core of the family of biometric and security products they offer to their clients." The market seemed to react to this news and commenced an upward trend.On August 14, 2017, the company released the financial results for the second quarter ended June 30, 2017. Additionally, it noted several operational highlights that included a new resell agreement with Info X Distribution, a global distributor of storage and networking solutions. Furthermore, it was announced that the company had been selected in the CIO Applications as one of the “Top 25 Cyber Security Companies for 2017.”The most relevant from the Q2 financial results were:

• Revenues were up by 6% as compared to revenues in the same period in 2016.
• Gross margin also increased and was said to be 76.4%.
• The net loss was $(0.03) per share.

We believe that the most interesting comment from the management was said by Jim Miller, ImageWare’s chairman and CEO:

"In May, we were honored to be recognized by CIO Applications as one of the ‘Top 25 Cyber Security Companies for 2017,’ further validating our strong positioning and brand awareness in the marketplace." Source

Finally, we need to note that the company successfully received $11 million from the sale of new Series A Preferred Stock. The proceeds will be for expenses in marketing, sales, and working capital.ConclusionCurrently trading with a market cap of $110 million and 69 employees, IWSY is an exciting story among small caps. With only $1.5 million in cash, $3.4 million as goodwill and $6.9 million in total liabilities, we believe that the market is pushing up the share price, as it is expecting revenues from Fujitsu and the other re-sellers. We appreciate this agreement, but we will also be looking at new financing sources, such as the $11 million from the sale of securities. As always, follow the smart money!We will be updating our subscribers as soon as we know more. For the latest updates on IWSY, sign up below!Image courtesy of FlickrDisclosure: We have no position in IWSY and have not been compensated for this article.