ImageWare Systems, a San Diego-based maker of identity management software, reported second quarter revenue of $937,000, compared with $1 million in revenue for the like quarter of 2013.

The company reported a $2.1 million net loss for the quarter, compared with a net loss of $5.6 million in the second quarter of 2013. That loss included a $4 million charge for changes in the fair value of its derivative liabilities, ImageWare said.

The second quarter was highlighted by the signing of a $1 million contract with the state of Baja California, Mexico, to implement a multimodal biometric driver license system, the company said.

CEO Jim Miller said the company expects a new recurring revenue stream in the third quarter from the company’s partnerships with Fujitsu ad T-Systems, but revealed no details.