On June 30, 2011, the Audit Committee of the Board of Directors of ImageWare Systems, Inc., a Delaware corporation (the "Company"), dismissed Marcum LLP ("Marcum") as the Company's independent registered public accounting firm, and engaged Mayer Hoffman McCann P.C. ("MHM") as its independent registered public accounting firm. Our decision to dismiss Marcum and to engage MHM was approved by the Board of Directors of the Company on June 30, 2011 based on the Board's decision to reduce the expenses of completing the Company's audits of the financial statements for the fiscal years ended 2009, 2010 and subsequent periods. The Company intends to complete the required audits, and bring the Company current in its reporting obligations under the Securities Exchange Act of 1934.

On October 1, 2010, the Company's prior independent registered public accounting firm, Stonefield Josephson, Inc. ("Stonefield"), combined its practice with Marcum and began practicing in California and Hong Kong as "MarcumStonefield", a division of Marcum. Accordingly, effective October 1, 2010, Stonefield effectively resigned as the Company's independent registered public accounting firm and Marcum became the Company's independent registered public accounting firm. This change in the Company's independent registered public accounting firm was approved by the Audit Committee of the Company's Board of Directors on October 6, 2010.

The report of Stonefield on the consolidated financial statements for the Company for the fiscal year ending December 31, 2008 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to audit scope or accounting principles. Stonefield's's opinion did contain a qualification raising substantial doubt about the Company's ability to continue as a going concern due to the Company's financial condition.

During the Company's two most recent fiscal years and the subsequent interim periods through the date of dismissal, there were no disagreements with Stonefield and subsequently Marcum on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in connection with its reports on the financial statements for those periods. Marcum did not, however, render an opinion with respect to the Company's financial statements for the fiscal years ended 2009 and 2010, which financial statements will be audited by MHM.

On August 16, 2010, the Company filed a Current Report on Form 8-K indicating that the Company had determined that its financial statements for the three and six months ended March 31 and June 30, 2009, respectively, which are included in its Forms 10-Q for the quarters ended March 31, 2009 and June 30, 2009, should not be relied upon due to an error in such financial statements with respect to the accounting for certain derivative features of the Company's Series C and D Preferred Stock and certain warrants which were previously recorded as equity instruments in accordance with generally accepted accounting principles in effect through December 31, 2008. After discussion with the Company's Board of Directors and Marcum, the Company decided to restate the financial statements for the three and six months ended March 31 and June 30, 2009, respectively, and intends to file corrected reports for the affected periods. Other than as set forth above, for the year ended December 31, 2008, and through the date of this Form 8-K, there were no "reportable events" as that term is described in Item 304(a)(1)(v) of Regulation S-K.

During the fiscal year ended December 30, 2008 and through the date of this Form 8-K, neither the Company, nor anyone acting on its behalf, consulted with MHM with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that would have been rendered on the Company's consolidated financial statements, or any matters that were either the subject of a disagreement (as that term is used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K). Prior to the Company's engagement of MHM, MHM did not provide the Company with either written or oral advice that was an important factor considered by the Company in reaching a decision to dismiss Marcum as its independent registered public accounting firm.

The Company provided Marcum with a copy of the foregoing disclosures on this Form 8-K and requested that Marcum furnish the Company with a letter addressed to the Securities Exchange Commission stating whether it agrees with the above statements, and if not, stating the respects in which it does not agree. The Company has received the requested letter from Marcum stating that it does agree, and a copy is filed as Exhibit 16.1 to this Form 8-K.

See Exhibit Index.