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ImageWare Restructures Certain Senior Securities

Restructuring Results in the Cancellation of Certain Dividend Payments and Paves the Way to Obtain Necessary Working Capital

ImageWare Systems, Inc., a leader in biometric identification and authentication software, announced that it has reached an agreement with holders of over 90% of its Series A Convertible Preferred Stock to restructure Series A Preferred held by such holders. The restructuring results in the waiver of dividends payable to the holders executing the agreement due for the quarters ending March 31 and June 30, 2020, and, depending on the performance of the Company’s Common Stock, the remainder of fiscal 2020. The restructuring also paves the way for the Company to finance its working capital requirements through the issuance of a senior security.

Restructuring Terms

  • One-half of the Series A Preferred held by the holders who executed agreements will be exchanged for an equivalent number of newly created Series A-1 Convertible Preferred Stock.
  • The Series A-1 Preferred would be convertible into Common Stock of the Company at $0.65 per share and would automatically convert into Common Stock when the volume weighted average closing price (VWAP) of the Company’s Common Stock for the preceding twenty trading days is at least $1.00.
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As a result of the restructuring, the Series A Preferred exchanged for Series A-1 Preferred will be cancelled. The remaining Series A Preferred may be automatically converted into Series A-1 Preferred in the event the VWAP for the preceding five trading days prior to a quarterly dividend payment date is less than $0.35 per share, and if greater than $0.35 per share, the Company will have the option to either pay the required dividend, or convert the Series A Preferred into Series A-1 Preferred.

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Kristin A. Taylor, President and Chief Executive Officer, said “We are very pleased to have reached this agreement with certain holders of our Series A Preferred, and hope to reach a similar agreement with the holders of our Series C Convertible Preferred Stock in the near future. This significant milestone represents a substantial first step in our restructuring program which the new management team prioritized since joining the Company and paves the way for financing discussions with current and prospective investors to provide the Company with required working capital. The positive resolution of these issues will preserve the equity in the business and is beneficial to all stakeholders of the Company. We are encouraged to now be able to execute upon our new strategic business and financing plan which will result in increased long-term valuation, revenue and much needed results.”

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