SAN DIEGO, CA, September 29, 2006 - ImageWare® Systems, Inc. (AMEX: IW) has received notice from The American Stock Exchange (AMEX) that it has accepted ImageWare’s plan of compliance and granted ImageWare extensions to regain compliance with continued listing standards. At the present time ImageWare remains out of compliance with certain AMEX continued listing standards.

Previously, AMEX notified ImageWare that the company was not in compliance with Rules 1003(a)(ii) and (iii) of the AMEX Company Guide because the company’s shareholders’ equity was less than $4,000,000 and losses from continuing operations were incurred in three of the last four fiscal years, and that its shareholder’s equity was less than $6,000,000 and losses from continuing operations were incurred in ImageWare’s last five fiscal years. In addition, AMEX indicated that the company was not in compliance with Section 1003(a)(iv) of the AMEX Company Guide relating to the company’s overall operations, financial resources and financial condition. ImageWare was provided the opportunity to submit a plan of compliance to AMEX, and submitted its plan on June 28, 2006, which was updated on September 12, 2006.

ImageWare will be subject to periodic review by the AMEX staff during the extension period. In order to meet the company’s plan of compliance, ImageWare must demonstrate compliance with Section 1003(a)(iv) of the AMEX Company Guide by November 15, 2006 and compliance with Sections (a)(i), (ii) and (iii) of the AMEX Company Guide by November 30, 2007. Failure to make progress consistent with the plan or regain compliance with the continued listing standards by the end of the applicable extension periods could result in the AMEX initiating delisting proceedings pursuant to Section 1009 of the AMEX Company Guide. There is no assurance that ImageWare will make progress consistent with the plan, or that ImageWare will be able to continue its listing on AMEX.

About ImageWare Systems, Inc.
ImageWare Systems, Inc. (AMEX:IW), is a leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the Company's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. The Company also provides comprehensive digital workflow solutions for the professional photography industry. ImageWare is headquartered in San Diego, with offices in Washington DC and Canada. For more information visit www.iwsinc.com.

Safe Harbor Statement
This news release may contain forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. While these statements are meant to convey to the public the company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. While management believes such representation to be true and accurate based on the information available to the company, actual results may differ materially from those described. The company's operations and business prospects are always subject to risks and uncertainties. Important facts that may cause actual results to differ are set forth in the company’s periodic filings with the U.S. Securities and Exchange Commission.

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