| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|-----|-------------------------------------------------------------------------------------|

| [   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|----------------------|-----------------------------------------------------------------------------------------|

| Delaware                                                                                          |   | 33-0224167                          |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization)                                     |   | (I.R.S. EmployerIdentification No.) |
|                                                                                              |   |
| 10815 Rancho Bernardo Road, Suite 310,San Diego, CA 92127(Address of principal executive offices) |
|  (858) 673-8600(Registrant’s Telephone Number, Including AreaCode)                    |

| Large accelerated filer                                          | [   ] | Accelerated filer               | [X]                  |
|------------------------------------------------------------------|----------------------|---------------------------------|----------------------|
| Non-accelerated filer(Do not check if smaller reporting company) | [   ] | Smaller Reporting Company  | [   ] |

E

b
f

|       |     |                                                                                          | Page     |
|------------|----------|-----------------------------------------------------------------------------------------------|----------|
|       |     |
| Part III   |     |                                                                                          |     |
|       |     |                                                                                          |     |
| Item10.    |     | Directors,Executive Officers and Corporate Governance                                         |  1  |
| Item11.    |     | ExecutiveCompensation                                                                         |  5  |
| Item12.    |     | Security Ownershipof Certain Beneficial Owners and Management and RelatedStockholders Matters |  13 |
| Item13.    |     | CertainRelationships and Related Transactions, and DirectorIndependence                       |  17 |
| Item14.    |     | PrincipalAccounting Fees and Services                                                         |  19 |
|       |     |                                                                                          |     |
| PartIV     |     |                                                                                          |     |
|       |     |                                                                                          |     |
| Item15.    |     | Exhibits                                                                                      |  20 |
|       |     |                                                                                          |     |
| SIGNATURES |  23 |

Table of Contents

R

| Name                               |   | Age |   | Principal Occupation/Position Held With the Company |
|------------------------------------|--------|-----|--------|------------------------------------------------------------------------------|
| Mr. S. James Miller, Jr. |   | 63  |   | Chief Executive Officer and Chairman of the Board ofDirectors                |
| Mr. Wayne Wetherell           |   | 64  |   | Sr. Vice President, Chief Financial Officer, Secretary andTreasurer          |
| Mr. David Harding                  |   | 47  |   | Vice President, Chief Technical Officer                                      |
| Mr. Robert Brown                   |   | 55  |   | Vice President, Sales and Business Development                               |
| Mr. David Carey               |   | 72  |   | Director                                                                     |
| Mr. Guy Steve Hamm            |   | 69  |   | Director                                                                     |
| Mr. David Loesch              |   | 72  |   | Director                                                                     |
| Mr. John Cronin               |   | 62  |   | Director                                                                     |
| Mr. Neal Goldman                   |   | 72  |   | Director                                                                     |
| Mr. Charles Crocker                |   | 78  |   | Director                                                                     |
| Mr. Dana W. Kammersgard            |   | 61  |   | Director                                                                     |

Table of Contents

Table of Contents

Table of Contents

Table of Contents

E

| ● | achieve or exceed our annual financial plan and achieveprofitability;  |
|----------|-----------------------------------------------------------------------------|

| ● | make continuous progression towards achieving our long-termstrategic objectives to be a high-growth company with growingprofitability; and  |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | increase our share price to provide greater value to ourstockholders.                                                                       |

| ● | base salary;  |
|----------|--------------------|

| ● | annual incentive compensation (in the form of bonuses orotherwise); and |
|----------|------------------------------------------------------------------------------|

| ● | equity awards pursuant to the terms and conditions of our 1999Stock Award Plan (the "1999Plan"). |
|----------|--------------------------------------------------------------------------------------------------|

Table of Contents

Table of Contents

| The Compensation Committee of the Board of Directors: |
|-------------------------------------------------------|
|  David Carey (Chairman)John CroninNeal Goldman   |

Table of Contents

| Name and Principal Position       | Year   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Salary |    |   | Stock Awards |   |   | Option Awards(1)(2) |   | All OtherCompensation |    |   | Total  |
|--------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------------|--------|--------|---------------------|--------|----------------------------|---------|--------|--------|
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |    |   |         |   |   |                |   |                       |    |   |   |
| S. James Miller, Jr.                             | 2016   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 368,938 |   |         | $      | -      |                |   | $                          | 174,185 |   | $      | 19,816 | (3) |   | $ | 562,939 |
| Chairman of the Board andChief Executive Officer | 2015   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 370,284 |   |         | $      | -      |                |   | $                          | 184,850 |   | $      | 21,551 |   |   | $ | 576,685 |
|                                             | 2014   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 356,699 |   |         | $      | -      |                |   | $                          | 91,935  |   | $      | 21,310 |   |   | $ | 469,944 |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |    |   |         |   |   |                |   |                       |    |   |   |   |   |   |   |   |
| Wayne G. Wetherell                               | 2016   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 207,333 |   |         | $      |   |                |   | $                          | 48,676  |   | $      | 11,787 | (4)  |   | $ | 267,796 |
| Senior Vice PresidentChief Financial Officer,    | 2015   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 211,320 |   |         | $      | -      |                |   | $                          | 92,425  |   | $      | 13,714 |   |   | $ | 317,459 |
| Secretary, and Treasurer                         | 2014   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 207,333 |   |         | $      | -      |                |   | $                          | 18,387  |   | $      | 13,534 |   |   | $ | 239,254 |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |    |   |         |   |   |                |   |                       |    |   |   |   |   |   |   |   |
| David Harding                                    | 2016   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 242,955 |   |         | $      |   |                |   | $                          | 150,807 |   | $      | 4,105 | (5)  |   | $ | 397,867 |
| Vice President andChief Technical Officer        | 2015   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 234,400 |   |         | $      | -      |                |   | $                          | 154,041 |   | $      | 3,768 |   |   | $ | 392,209 |
|                                             | 2014   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 230,000 |   |         | $      | -      |                |   | $                          | 91,935  |   | $      | 3,757 |   |   | $ | 325,692 |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |    |   |         |   |   |                |   |                       |    |   |   |   |   |   |   |   |
| Robert Brown(7)                                  | 2016   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 187,292 |   |         | $      |   |                |   | $                          | 161,843 |   | $      | 1,301 | (6) |   | $ | 350,436 |
| Vice President Sales andBusiness Development     | 2015   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | 97,500  |   |         | $      | -      |                |   | $                          | 466,042 |   | $      | 253 |   |   | $ | 563,795 |
|                                             | 2014   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | -       |   |         | $      | -      |                |   | $                          | -       |   | $      | - |   |   | $ | - |
|  (1)                                        |   |  All option awards were granted under the1999 Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (2)                                              |   | The amounts presented in this column do not reflect the cash valueor realizable value of option grants to the named executiveofficers during the year ended December 31, 2016.  During theyear ended December 31, 2016, no named executive officer exercisedan option and therefore no value was realized during the reportingperiod.  The amounts reflect the grant date fair value ofthe options awarded in the fiscal year ended December 31,2016, 2015 and 2014 respectively, in accordance with the provisionsof ASC 718. We have elected to use the Black-Scholesoption-pricing model, which incorporates various assumptionsincluding volatility, expected life, and interest rates. We arerequired to make various assumptions in the application of theBlack-Scholes option-pricing model and have determined that thebest measure of expected volatility is based on the historicalweekly volatility of our common stock. Historical volatilityfactors utilized in our Black-Scholes computations range from 74%to 121%. We have elected to estimate the expected life of an awardbased upon the SEC approved “simplified method” notedunder the provisions of Staff Accounting Bulletin No. 110. Theexpected term used by the Company during the years ended December31, 2016, 2015 and 2014 was 5.9 years. The difference between theactual historical expected life and the simplified method wasimmaterial.  The interest rate used is the risk free interestrate and is based upon U.S. Treasury rates appropriate for theexpected term. Interest rates used in the Company’sBlack-Scholes calculations for the years ended December 31, 2016,2015 and 2014 was 2.6%. Dividend yield is zero, as we do not expectto declare any dividends on our common shares in the foreseeablefuture. In addition to the key assumptions used in theBlack-Scholes model, the estimated forfeiture rate at the time ofvaluation is a critical assumption. We have estimated an annualizedforfeiture rate of 0% for corporate officers, 4.1% for members ofthe Board of Directors and 6.0% for all other employees. We reviewthe expected forfeiture rate annually to determine if that percentis still reasonable based on historical experience.  |
| (3)                                              |   | This amount includes premiums on life insurance and disabilityinsurance of $9,216 and matching 401(k) contributions of$10,600.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (4)                                              |   | This amount includes premiums on life insurance and disabilityinsurance of $3,377 and matching 401(k) contributions of$8,408.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (5)                                              |   | This amount includes premiums in life insurance and disabilityinsurance of $2,905 and matching 401(k) contributions of$1,200.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (6)                                              |   | This amount includes premiums on life insurance and disabilityinsurance of $1,301.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (7)                                              |   | Mr. Brown joined the Company in June 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

Table of Contents

|                         |         Grant Date  |  All Other Option Awards: Number of Securities UnderlyingOptions(#)  |      Exercise or Base Price of Option Awards($/Share)(1)  |   Grant Date Fair Value of Stock and Option Awards($)(2)  |
|------------------------------|------------------------------------------------------------------|-------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
| S.James Miller, Jr.          | 09/20/2016                                                       |   300,000                                                            |  $1.37                                                                        |  $249,424                                                      |
| Wayne  G.Wetherell | 09/20/2016                                                       |   75,000                                                             |  $1.37                                                                        |  $62,356                                                       |
| DavidHarding                 | 09/20/2016                                                       |   300,000                                                            |  $1.37                                                                        |  $249,424                                                      |
| RobertBrown                  | 09/20/2016                                                       |   75,000                                                             |  $1.37                                                                        |  $62,356                                                       |

| (1) |   | Each option was granted at an exercise price equal to the fairmarket value of our Common Stock on the grant date which was equalto the closing price of a share of our common stock, as reported bythe OTCQB, on the date of grant. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) |   | The amounts reflect the grant date fair value, in accordance withthe provisions of ASC 718. Assumptions used in the calculation ofthese amounts are included in Note 2 of the Consolidated FinancialStatements included in our Annual Report on Form 10-K for the yearended December 31, 2016. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Table of Contents

|                      | Option Awards                                                   |   | Stock Awards                                                                         |
|---------------------------|----------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|
| Name                      | Number ofSecuritiesUnderlyingUnexercisedOptions:Exercisable (#) |   | Number ofSecuritiesUnderlyingUnexercisedOptions:Unexercisable (#)               |   | OptionExercisePrice($) |   | OptionExpirationDate |   | Number of Shares That Have NotVested (#) |   |  MarketValue of Shares That Have Not Vested ($) |
| S. James Miller, Jr. | 100,000                                                              |   | —                                                                             |   | $ | 0.20 |   | 1/27/2019 |   |  — |   | $ |  — |
|                      | 183,000                                                              |   | —                                                                             |   | $ | 0.73 |   | 1/29/2020 |   |  — |   | $ |  — |
|                      | 225,000                                                              |   | —                                                                             |   | $ | 1.11 |   | 3/10/2021 |   |  — |   | $ |  — |
|                      | 450,000                                                              |   | —                                                                             |   | $ | 0.92 |   | 2/2/2022 |   |  — |   | $ |  — |
|                      | 100,000                                                              |   | —                                                                             |   | $ | 0.93 |   | 2/8/2023 |   |  — |   | $ |  — |
|                      | 100,000                                                              |   | —                                                                             |   | $ | 1.93 |   | 10/29/2023 |   |  — |   | $ |  — |
|                      | 33,336                                                               |   | 16,664                                                                               |   | $ | 2.29 |   | 12/15/2024 |   |  — |   | $ |  — |
|                      | 62,500                                                               |   | 87,500                                                                               |   | $ | 1.73 |   | 9/14/2025 |   |  — |   | $ |  — |
|                      |  —                                                       |   |            300,000            |   |   |          1.37 |   |     9/20/2026 |   |  — |   | $ |  — |
|                      |                                                                 |   |                                                                                 |   |   |   |   |   |   |   |   |   |    |
| Wayne G. Wetherell        | 60,000                                                               |   | —                                                                             |   | $ | 0.20 |   | 1/27/2019 |   |  — |   | $ |  — |
|                      | 60,000                                                               |   | —                                                                             |   | $ | 0.73 |   | 1/29/2020 |   |  — |   | $ |  — |
|                      | 100,000                                                              |   |  —                                                                       |   | $ | 0.92 |   | 2/2/2022 |   |  — |   | $ |  — |
|                      | 10,000                                                               |   | —                                                                             |   | $ | 1.93 |   | 10/29/2023 |   |  — |   | $ |  — |
|                      | 6,668                                                                |   | 3,332                                                                                |   | $ | 2.29 |   | 12/15/2024 |   |  — |   | $ |  — |
|                      | 31,250                                                               |   | 43,750                                                                               |   | $ | 1.73 |   | 9/14/2025 |   |  — |   | $ |  — |
|                      |  —                                                       |   |              75,000 |   |   |          1.37 |   |     9/20/2026 |   |  — |   | $ |  — |
|                      |                                                                 |   |                                                                                 |   |   |   |   |   |   |   |   |   |    |
| David Harding             | 50,000                                                               |   | —                                                                             |   | $ | 0.20 |   | 1/27/2019 |   |  — |   | $ |  — |
|                      | 80,000                                                               |   | —                                                                             |   | $ | 0.73 |   | 1/29/2020 |   |  — |   | $ |  — |
|                      | 325,000                                                              |   | —                                                                             |   | $ | 0.92 |   | 2/2/2022 |   |  — |   | $ |  — |
|                      | 100,000                                                              |   | —                                                                             |   | $ | ..93 |   | 2/8/2023 |   |  — |   | $ |  — |
|                      | 75,000                                                               |   | —                                                                             |   | $ | 1.93 |   | 10/29/2023 |   |  — |   | $ |  — |
|                      | 33,336                                                               |   | 16,664                                                                               |   | $ | 2.29 |   | 12/15/2024 |   |  — |   | $ |  — |
|                      | 52,088                                                               |   | 72,912                                                                               |   | $ | 1.73 |   | 9/14/2025 |   |  — |   | $ |  — |
|                      |  —                                                       |   |            300,000            |   |   |          1.37 |   |    9/20/2026 |   |  — |   | $ |  — |
|                      |                                                                 |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Robert Brown              | 125,000                                                              |   | 175,000                                                                              |   | $ | 1.70 |   | 7/16/2025 |   |  — |   | $ |  — |
|                      | 31,250                                                               |   | 43,750                                                                               |   | $ | 1.73 |   | 9/14/2025 |   |  — |   | $ |  — |
|                      | —                                                             |   |  75,000                                                                         |   |   | 1.37 |   |  9/20/2026 |   |  — |   | $ |  — |

Table of Contents

Table of Contents

| Plan Category                                     |  Number of securities to be issuedupon exercise of outstanding options, warrantsand rights  |  Weighted-Average exercise price of outstanding options, warrantsand rights  |  Number of securities remaining availablefor future issuance under equity compensation plans(excluding securities reflected incolumn) (a)  |
|--------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |  (a)                                                                                                                           |  (b)                                                                                        |  (c)                                                                                                                                                                     |
| Equity compensation plans approved by securityholders: |                                                                                                                           |                                                                                        |                                                                                                                                                                     |
| 1999Stock Award Plan, as amended and restated          |   6,506,843                                                                                                               |  $1.21                                                                                      |   55,938                                                                                                                                                            |
|                                                   |                                                                                                                      |                                                                                   |                                                                                                                                                                |
|                                                   |                                                                                                                      |                                                                                   |                                                                                                                                                                |
| Total                                                  |   6,506,843                                                                                                               |  $1.21                                                                                      |   55,938                                                                                                                                                            |

Table of Contents

|            |  Fees Earned orPaid in Cash ($)  |  StockAwards ($)  |  OptionAwards($) (1)  |  All Other Compensation ($)  |  Total ($)  |
|-----------------|-----------------------------------------------------------|-----------------------------|--------------------------------------|----------------------------------------|----------------------------|
| GuySteve Hamm   |  $5,500                                         |  $—        |  $44,758                   |  $—                   |  $50,258         |
|            |                                       |         |                  |                    |        |
| DavidCarey      |  $7,500                                         |  $—        |  $44,758                   |  $—                   |  $52,258         |
|            |                                       |         |                  |                    |        |
| DavidLoesch     |  $2,500                                         |  $—        |  $44,758                   |  $—                   |  $47,258         |
|            |                                       |         |                  |                    |        |
| JohnCronin      |  $2,500                                         |  $—        |  $44,758                   |  $—                   |  $47,258         |
|            |                                       |         |                  |                    |        |
| NealGoldman     |  $2,500                                         |  $—        |  $44,758                   |  $—                   |  $47,258         |
|            |                                       |         |                  |                    |        |
| CharlesCrocker  |  $—                                           |  $—        |  $45,811                   |  $—                   |  $45,811         |
|            |                                       |         |                  |                    |        |
| DanaKammersgard |  $—                                           |  $—        |  $21,366                   |  $—                   |  $21,366         |

| (1) | Theamounts reflect the grant date fair value of options recognized ascompensation in 2016, in accordance with the provisions of ASC 718and thus may include amounts from awards granted prior to 2016.Assumptions used in the calculation of these amounts are includedin Notes to the Consolidated FinancialStatements. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 12. |  SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERSMATTERS |
|----------|-----------------------------------------------------------------------------------------------------|

| (i)   | Each of our officers and directors;                                                                                                                                                                                                                                                                                                                                                                                                               |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | All officer and directors as a group; and                                                                                                                                                                                                                                                                                                                                                                                                         |
| (iii) | Each person known by us to beneficially own five percent or more ofthe outstanding shares of our Common Stock, Series B Preferred,Series E Preferred and Series F Preferred.  Percentownership is calculated based on239,400shares of Series B Preferred,12,000shares of Series E Preferred, 2,000 shares ofSeries F Preferred, 6,021 shares of Series G Preferredand 92,326,286 shares Common Stock outstanding at April 12,2017. |

Table of Contents

| Name, Address and Title (if applicable) |  Series B Convertible Redeemable Preferred Stock (1)  |  % Ownership of Class (1)  |
|-----------------------------------------|----------------------------------------------------------------------|-------------------------------------------|
| DarrelynCarpenter                       |   28,000                                              |   12%                           |
|                                    |                                                  |                       |
| FrederickC. Orton                       |   20,000                                              |   8%                            |
|                                    |                                                  |                       |
| HowardHarrison                          |   20,000                                              |   8%                            |
|                                    |                                                  |                       |
| WesleyHampton                           |   16,000                                              |   7%                            |

| (1) | Beneficial ownership is determined in accordance with the rules ofthe SEC and generally includes voting or investment power withrespect to securities.   |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name, Address and Title (if applicable)     |  Series E Convertible Redeemable Preferred Stock (1)  |  % Ownership of Class (1)  |
|---------------------------------------------|-----------------------------------------------------------------|-------------------------------------------|
| CharlesL. Frischer                          |   2,636                                          |   22%                           |
|                                        |                                             |                       |
| NealGoldman                                 |   2,278                                          |   19%                           |
|                                        |                                             |                       |
| CF Special Situation Fund I LP(2)           |   2,286                                          |   19%                           |
|                                        |                                             |                       |
| Wynnefield Partners Small Cap Value, LPI(3) |   1,500                                          |   12.5%                         |

| (1)    | Beneficial ownership is determined in accordance with the rules ofthe SEC and generally includes voting or investment power withrespect to securities.                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                           |
| (2)    | Includes 120 shares held in the name of CF Special Situation FundII, LP, and 286 shares held by Robert T.Clutterbuck.  Mr. Clutterbuck has shared voting anddispositive power of these shares.  |
| (3)    | Includes 450 shares held in the name of Wynnefield Partners SmallCap Value, LP and 300 shares held by Wynnefield Small Cap ValueOffshore Fund Ltd.                                                             |

| Name, Address and Title (if applicable) |  Series F Convertible Redeemable Preferred Stock(1)  |  % Ownership of Class (1)  |
|-----------------------------------------|----------------------------------------------------------------|-------------------------------------------|
| CAP1, LLC                               |   2,000                                         |   100%                          |

| (1)    | Beneficial ownership is determined in accordance with the rules ofthe SEC and generally includes voting or investment power withrespect to securities.   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                               |

Table of Contents

| Name, Address and Title (if applicable) |  Series G Convertible Redeemable Preferred Stock(1)  |  % Ownership of Class (1)  |
|-----------------------------------------|----------------------------------------------------------------|-------------------------------------------|
| CFSpecial Situations Fund (2)           |   5,215                                         |   87%                           |
|                                    |                                            |                       |
| CharlesL. Frischer                      |   469                                           |   8%                            |

| (1) | Beneficial ownership is determined in accordance with the rules ofthe SEC and generally includes voting or investment power withrespect to securities.   |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes3,380 shares held in the name of CF Special Situation Fund I, LP,223 shares held in the name of CF Special Situation Fund I, LP,1,612 shares held by Robert T. Clutterbuck.  Mr.Clutterbuck has shared voting and dispositive power of theseshares.   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Table of Contents

| Name and Address                                                            |  Number of Shares (1)  |  Percent of Class (2)  |
|-----------------------------------------------------------------------------|--------------------------------------------|--------------------------------------------|
|                                                                        |                             |                             |
| Directors and Named Executive Officers:                                     |                             |                             |
|                                                                        |                             |                             |
| S. James Miller, Jr. (3)                                               |   2,114,189                 |   2.3%                           |
| Chairman,Chief Executive Officer                                            |                        |                        |
|                                                                        |                        |                        |
| David Carey (4)                                                        |  195,689                              |   *                         |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| G. Steve Hamm (5)                                                      |  195,775                              |   *                         |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| David Loesch (6)                                                       |  223,897                              |   *                         |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| Neal I. Goldman (7)                                                    |  34,115,915                           |   36.5%                          |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| John Cronin (8)                                                        |  156,189                              |   *                         |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| Charles Crocker (9)                                                    |  631,189                              |   *                         |
| Director                                                                    |                        |                        |
|                                                                        |                        |                        |
| Wayne Wetherell (10)                                                   |   586,201                   |   *                         |
| SVPof Administration, Chief Financial Officer, Secretary                    |                        |                        |
|                                                                        |                        |                        |
| David Harding (11)                                                     |   835,006                   |   *                         |
| ChiefTechnical Officer                                                      |                        |                        |
|                                                                        |                        |                        |
| RobertBrown(12)                                                             |   175,000                   |   *                         |
| VicePresident, Sales and Business Development                               |                        |                        |
|                                                                        |                        |                        |
| Totalbeneficial ownership of directors and officers as a group (10persons): |   39,281,550                |   42.0%                          |

| (1) | All entries exclude beneficial ownership of shares issuablepursuant to options that have not vested or that are not otherwiseexercisable as of the date hereof or which will not become vestedor exercisable within 60 days of  April 12,2017. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)             | Percentages are rounded to nearest one-tenth of one percent.Percentages are based on 92,326,286 shares of Common Stockoutstanding as of April 12, 2017. Options that are presentlyexercisable or exercisable within 60 days of April 12, 2017 aredeemed to be beneficially owned by the stockholder holding theoptions for the purpose of computing the percentage ownership ofthat stockholder, but are not treated as outstanding for thepurpose of computing the percentage of any otherstockholder. |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3)                  | Includes 75,201 shares held jointly with spouse,1,270,502 shares issuable upon exercise of stock options, eachexercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                             |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (4)                  | Includes 94,003 shares issuable upon exercise of stock optionsexercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (5)                  | Includes 96,503 shares issuable upon exercise of stock optionsexercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (6)                  | Includes 94,003 shares issuable upon exercise of stock options,each exercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                            |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (7)                  | Includes 1,198,947 shares issuable upon the conversion of Series EPreferred Stock and 66,503 shares issuable upon exercise of stockoptions, each exercisable within 60 days of April 12, 2017. Mr.Goldman exercises sole voting and dispositive power over 30,968,215shares, and shared voting and dispositive power over 3,147,700reported shares, of which 3,000,000 shares are owned by the GoldmanFamily 2012 GST Trust and 147,700 shares are owed by The Neal andMarlene Goldman Foundation.           |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (8)                  | Includes 116,503 shares issuable upon exercise of stock optionsexercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                                 |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (9)                  | Includes 116,503  shares issuable upon exercise of stockoptions exercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                      |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (10)                 |  Includes 275,001 shares issuable upon exercise of stockoptions exercisable within 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                           |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (11)                 | Includes 730,006shares issuable upon exercise of stock options exercisable within60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (12)                 | Includes175,000 shares issuable upon exercise of stock options exercisablewithin 60 days of April 12, 2017.                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| * less than 1%  |

Table of Contents

P

Table of Contents

| Balanceoutstanding under Lines of Credit as of December 31,2014                    |  $1,550          |
|------------------------------------------------------------------------------------|----------------------------|
|      Borrowingunder Lines of Credit                       |   750       |
|      Repayments                                           |   (350      |
|      Exchangeof Indebtedness for Series E Preferred Stock |   (1,950)        |
| Balanceoutstanding under Lines of Credit as of December 31,2015                    |  $—       |
|      Borrowingsunder Lines of Credit                      |   2,650     |
|      Repayments                                           |   —  |
| Balanceoutstanding under Lines of Credit as of December 31,2016                    |  $2,650          |

Table of Contents

O

|              |  Fiscal Year Ended  |
|-------------------|-------------------------------|
|              |  2016               |  2015  |
|              |                |     |
| Auditfees         |  $202,000           |  $214,000  |
|              |           |      |
| Audit-relatedfees |   —     |   —  |
|              |           |      |
| Taxfees           |   —     |   —  |
|              |           |      |
| Allother fees     |   —     |   —  |
|              |           |      |
| TotalFees         |  $202,000           |  $214,000  |

| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
|----------|--------------------------------------------|

| (a) | The following documents are filed as part of this AnnualReport: |
|-----|-----------------------------------------------------------------|

| Exhibit No. |   | Description                                                                                                                                                                                                                                                       |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1         |   | Agreement and Plan of Merger, dated October 27, 2005 (incorporatedby reference to Annex A to the Company’s Definitive ProxyStatement on Schedule 14A, filed November 15, 2005).                                                                            |
| 3.1         |   | Certificate of Incorporation (incorporated by reference to Annex Bto the Company’s Definitive Proxy Statement on Schedule 14A,filed November 15, 2005).                                                                                                    |
| 3.2         |   | Certificate of Amendment to Articles of Incorporation (incorporatedby reference to Exhibit 3.1 to the Company's Current Report on Form8-K, filed October 14, 2011).                                                                                               |
| 3.3         |   | Amendedand Restated Bylaws (incorporated by reference to Exhibit 3.2 tothe Company’s Current Report on Form 8-K, filed February 16,2017).                                                                                                                  |
| 3.4         |   | Certificate of Designations, Preferences and Rights of the Series EConvertible Preferred Stock (incorporated by reference to Exhibit3.1 to the Company’s Current Report on Form 8-K, filedFebruary 2, 2015).                                               |
| 3.5         |   | Certificate of Designations, Preferences and Rights of the Series FConvertible Preferred Stock (incorporated by reference to Exhibit3.1 to the Company’s Current Report on Form 8-K, filedSeptember 9, 2016).                                              |
| 3.6         |   | Certificate of Designations, Preferences and Rights of the Series GConvertible Preferred Stock (incorporated by reference to Exhibit3.1 to the Company’s Current Report on Form 8-K, filedDecember 30, 2016).                                              |
| 3.7         |   | Amendment No. 1 to the Certificate of Designations, Preferences andRights of the Series E Convertible Preferred Stock (incorporated byreference to Exhibit 3.2 to the Company’s Current Report onForm 8-K, filed December 30, 2016).                       |
| 4.1         |   | Form of Amendment to Warrant, dated March 21, 2012, (incorporatedby reference to Exhibit 4.16 to the Company's Annual Report on Form10-K, filed April 4, 2012).                                                                                                   |
| 10.1        |   | Employment Agreement, dated September 27, 2005, between the Companyand S. James Miller (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K, filed September 30,2005).                                                    |
| 10.2        |   | Form of Indemnification Agreement entered into by the Company withits directors and executive officers (incorporated by reference toExhibit 10.4 to the Company’s Registration Statement on FormSB-2 (No. 333-93131), filed December 20, 1999, asamended). |
| 10.3        |   | Amended and Restated 1999 Stock Plan Award (incorporated byreference to Appendix B of the Company’s Definitive ProxyStatement on Schedule 14A, filed November 21, 2007).                                                                                   |
| 10.4        |   | Form of Stock Option Agreement (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K,filed July 14, 2005).                                                                                                                 |
| 10.5        |   | 2001 Equity Incentive Plan (incorporated by reference to Exhibit10.2 to the Company’s Quarterly Report on Form 10-QSB, filedNovember 14, 2001).                                                                                                            |
| 10.6        |   | Securities Purchase Agreement, dated September 25, 2007, by andbetween the Company and certain accredited investors (incorporatedby reference to Exhibit 10.1 to the Company’s Current Reporton Form 8-K, filed September 26, 2007).                       |
| 10.7        |   | Office Space Lease between I.W. Systems Canada Company and GECanada Real Estate Equity, dated July 25, 2008 (incorporated byreference to Exhibit 10.39 to the Company’s Annual Report onForm 10-K, filed February 24, 2010).                               |
| 10.8        |   | Form of Securities Purchase Agreement, dated August 29, 2008 by andbetween the Company and certain accredited investors (incorporatedby reference to Exhibit 10.40 to the Company’s Annual Reporton Form 10-K, filed February 24, 2010).                   |
| 10.9        |   | Change of Control and Severance Benefits Agreement, dated September27, 2008, between Company and Charles Aubuchon (incorporated byreference to Exhibit 10.41 to the Company’s Annual Report onForm 10-K, filed February 24, 2010).                         |
| 10.10       |   | Change of Control and Severance Benefits Agreement, dated September27, 2008, between Company and David Harding (incorporated byreference to Exhibit 10.42 to the Company’s Annual Report onForm 10-K, filed February 24, 2010).                            |
| 10.11       |   | First Amendment to Employment Agreement, dated September 27, 2008,between the Company and S. James Miller (incorporated by referenceto Exhibit 10.43 to the Company’s Annual Report on Form 10-K,filed February 24, 2010).                                 |
| 10.12       |   | Form of Convertible Note dated November 14, 2008 (incorporated byreference to Exhibit 10.45 to the Company’s Annual Report onForm 10-K, filed February 24, 2010).                                                                                          |
| 10.13       |   | Second Amendment to Employment Agreement, dated April 6, 2009,between the Company and S. James Miller (incorporated by referenceto Exhibit 10.50 to the Company’s Annual Report on Form 10-K,filed February 24, 2010).                                     |

| 10.14 |   | Office Space Lease between the Company and Allen W. Wooddell, datedJuly 25, 2008 (incorporated by reference to Exhibit 10.54 to theCompany’s Annual Report on Form 10-K, filed February 24,2010).                                  |
|-------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.15 |   | Third Amendment to Employment Agreement, dated December 10, 2009,between the Company and S. James Miller (incorporated by referenceto Exhibit 10.60 to the Company’s Annual Report on Form 10-K,filed February 24, 2010).          |
| 10.16 |   | Securities Purchase Agreement, dated December 12, 2011, by andbetween the Company and certain accredited investors (incorporatedby reference to Exhibit 10.1 to the Company’s Current Reporton Form 8-K, filed December 21, 2011). |
| 10.17 |   | Note Exchange Agreement, dated December 12, 2011, by and betweenthe Company and certain accredited investors (incorporated byreference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed December 21, 2011).       |
| 10.18 |   | Fourth Amendment to Employment Agreement, dated March 10, 2011,between the Company and S. James Miller, (incorporated by referenceto Exhibit 10.40 to the Company’s Annual Report on Form 10-K,filed January 17, 2012).            |
| 10.19 |   | Fifth Amendment to Employment Agreement, dated January 31, 2012,between the Company and S. James Miller, Jr., (incorporated byreference to Exhibit 10.44 to the Company’s Annual Report onForm 10-K, filed April 4, 2012.          |
| 10.20 |   | Employment Agreement, dated January 1, 2013, between the Companyand Wayne Wetherell (incorporated by reference to Exhibit 10.1 tothe Company's Current Report on Form 8-K, filed March 7,2013).                                           |
| 10.21 |   | Employment Agreement, dated January 1, 2013, between the Companyand David Harding (incorporated by reference to Exhibit 10.1 to theCompany's Current Report on Form 8-K, filed March 7,2013).                                             |
| 10.22 |   | Convertible Promissory Note dated March 27, 2013 issued by theCompany to Neal Goldman (incorporated by reference to Exhibit 10.41to the Company's Annual Report on Form 10-K, filed April 1,2013).                                        |
| 10.23 |   | Amendment to Convertible Promissory Note, dated March 12, 2014(incorporated by reference to Exhibit 10.1 to the Company's CurrentReport on Form 8-K, filed March 13, 2014).                                                               |
| 10.24 |   | Note Exchange Agreement, dated January 29, 2015 (incorporated byreference to the Company’s Current Report on Form 8-K, filedFebruary 2, 2015).                                                                                     |
| 10.25 |   | SixthAmendment to Employment Agreement, by and between S. James Millerand the Company, dated November 1, 2013 (incorporated by referenceto Exhibit 10.1 to the Company's Current Report on Form 8-K, filedNovember 7, 2013).              |
| 10.26 |   | Seventh Amendment to Employment Agreement, by and between S. JamesMiller, Jr. and the Company, dated January 9, 2015 (incorporated byreference to the Company’s Current Report on Form 8-K, filedJanuary 15, 2015).                |
| 10.27 |   | Second Amendment to Employment Agreement, by and between WayneWetherell and the Company, dated January 9, 2015 (incorporated byreference to the Company’s Current Report on Form 8-K, filedJanuary 15, 2015).                      |
| 10.28 |   | SecondAmendment to Employment Agreement, by and between David E. Hardingand the Company, dated January 9, 2015 (incorporated by referenceto the Company’s Current Report on Form 8-K, filed January15, 2015).                      |
| 10.29 |   | AmendmentNo. 3 to Convertible Promissory Note, dated December 8, 2014(incorporated by reference to the Company’s Current Report onForm 8-K, filed December 10, 2014).                                                              |
| 10.30 |   | ThirdAmendment to Employment Agreement, by and between Wayne Wetherelland the Company, dated December 14, 2015 (incorporated by referenceto Exhibit 10.2 to the Company's Current Report on Form 8-K, filedDecember 21, 2015).            |
| 10.31 |   | ThirdAmendment to Employment Agreement, by and between David E. Hardingand the Company, dated December 14, 2015 (incorporated by referenceto Exhibit 10.3 to the Company's Current Report on Form 8-K, filedDecember 21, 2015).           |
| 10.32 |   | EighthAmendment to Employment Agreement, by and between S. James Millerand the Company, dated December 14, 2015 (incorporated by referenceto Exhibit 10.1 to the Company's Current Report on Form 8-K, filedDecember 21, 2015).           |
| 10.33 |   | Amendment No. 4 to Convertible Promissory Note, dated March 8, 2016(incorporated by reference to the Company's Current Report on Form8-K, filed March 10, 2017).                                                                          |

| 10.34     |   | Convertible Promissory Note, dated March 9, 2016 (incorporated byreference to the Company's Current Report on Form 8-K, filed March10, 2017).                                                                                           |
|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.35     |   | Form of Securities Purchase Agreement, dated September 7, 2016(incorporated by reference to Exhibit 10.1 to the Company’sCurrent Report on Form 8-K, filed September 9, 2016).                                                   |
| 10.36     |   | Amendment No. 5 to Convertible Promissory Note, dated January 23,2017 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 10-K, filed January 26,2017).                                            |
| 10.37     |   | Form of Subscription Agreement for Series G Convertible PreferredStock (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K, filed December 30,2016).                                           |
| 10.38     |   | Form of Exchange Agreement (incorporated by reference to Exhibit10.2 to the Company’s Current Report on Form 8-K, filedDecember 30, 2016).                                                                                       |
| 10.39     |   | Ninth Amendment to Employment Agreement, by and between JamesMiller, Jr. and the Company, dated October 20, 2016 (incorporatedby reference to Exhibit 10.3 to the Company’s Current Reporton Form 8-K, filed December 30, 2016). |
| 10.40     |   | FourthAmendment to Employment Agreement, by and between Wayne Wetherelland the Company, dated October 20, 2016 (incorporated by referenceto Exhibit 10.4 to the Company’s Current Report on Form 8-K,filed December 30, 2016).   |
| 10.41     |   | Fourth Amendment to Employment Agreement, by and between David E.Harding and the Company, dated October 20, 2016 (incorporated byreference to Exhibit 10.5 to the Company’s Current Report onForm 8-K, dated December 30, 2016). |
| 21.1      |   | List of Subsidiaries (incorporated by referenced to Exhibit 21.1 tothe Company’s Annual Report on Form 10-K filed February 24,2010).                                                                                             |
| 23.1      |   | Consent of Independent Registered Public AccountingFirm.                                                                                                                                                                                |
| 31.1      |   | Certification of CEO as Required by Rule 13a-14(a)/15d-14, filedherewith.                                                                                                                                                               |
| 31.2      |   | Certification of CFO as Required by Rule 13a-14(a)/15d-14, filedherewith.                                                                                                                                                               |
| 32*       |   | Certification of CEO and CFO as Required by Rule 13a-14(a) and Rule15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 ofTitle 18 of the United States Code.                                                                |
| 101.INS * |   | XBRL Instance Document                                                                                                                                                                                                                  |
| 101.SCH * |   | XBRL Taxonomy Extension Schema                                                                                                                                                                                                          |
| 101.CAL * |   | XBRL Taxonomy Extension Calculation Linkbase                                                                                                                                                                                            |
| 101.DEF * |   | XBRL Taxonomy Extension Definition Linkbase                                                                                                                                                                                             |
| 101.LAB * |   | XBRL Taxonomy Extension Label Linkbase                                                                                                                                                                                                  |
| 101.PRE * |   | XBRL Taxonomy Extension Presentation Linkbase                                                                                                                                                                                           |

Table of Contents

G
N

| Registrant Date:April 21, 2017 |   | ImageWare Systems, Inc. /s/ S. JamesMiller, Jr.           |
|-------------------------------------|--------|----------------------------------------------------------------|
|                                |   | S.James Miller, Jr.                                            |
|                                |   | ChiefExecutive Officer (Principal Executive Officer),President |