SAN DIEGO, CA, January 22, 2004 - ImageWare Systems, Inc. (AMEX: IW), a global provider of digital imaging, identification and biometric solutions, today announced that it has signed an agreement with Carnival Cruise Lines, the world’s largest cruise operator, to conduct a pilot project aboard the new Carnival Miracle to enhance the photo purchasing experience for guests and speed the photo procurement process. The pilot project, which encompasses a photo-retrieval kiosk that utilizes “facial-recognition” software, is part of Carnival’s ongoing effort to leverage technology to maximize guest satisfaction.

“We’re looking forward to testing this innovative new technology aboard Carnival Miracle. Our objective is to enhance our guests’ experience by utilizing state-of-the-art technology that reduces the time and energy it takes to physically search for keepsake photos,” said Bob Woodry, Carnival’s vice president of Photo/Video Services. “As an innovator in digital imaging and facial recognition technologies, ImageWare is the only company that combines professional photography expertise with innovative software capabilities that meet our demands. This is a terrific concept and if successful, we anticipate implementing the system aboard our other ‘Fun Ships’.”

Under the terms of this agreement, ImageWare will leverage a combination of its facial recognition and digital imaging capabilities to develop a system that will store all professional keepsake photos taken of guests vacationing aboard Carnival Miracle beginning this spring. To access the system, a guest simply steps up to a stand-alone photo-retrieval kiosk, which will capture an image of his or her face. This image is then compared, using facial recognition technology, to all faces in all photos that have been captured on the cruise. Once the search is complete, photos containing the guest, including group and individual shots, will appear on the screen and be available for review and purchase.

“We are very excited to be working with Carnival and eager to implement the project,” said Paul Devermann, SVP and general manager of ImageWare’s Professional Digital Imaging Group. “By leveraging our technologies and core competency in software development, ImageWare is uniquely positioned to create innovative products that will open new markets for the Company, such as cruise lines and theme parks. Our digital imaging, identification and biometric solutions have been validated and successfully deployed across multiple markets including government, law enforcement and professional photography.”

Carnival is the world’s most popular cruise line, with 19 ‘Fun Ships’ operating three-to 16-day voyages to The Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, the Panama Canal, Canada, New England and Bermuda from homeports throughout North America. The line’s 20th ‘Fun Ship’, the 2,124-passenger Carnival Miracle is slated to debut from Jacksonville, Fla., Feb. 27, 2004.

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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