BIOMETRIC SECURITY CORP/BC, S-4/A, 1999-09-14

BIOMETRIC SECURITY CORP/BC
S-4/A, 1999-09-14
NON-OPERATING ESTABLISHMENTS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 13, 1999

REGISTRATION NO. 333-78007
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 3

FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------

BIOMETRIC SECURITY CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

<TABLE>
<S> <C> <C>
WYOMING 6719 98-0204725
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION NUMBER) IDENTIFICATION NUMBER)
</TABLE>

------------------------
SUITE 1940 -- 400 BURRARD STREET
VANCOUVER, BRITISH COLUMBIA
CANADA V6C 3A6
(604) 687-4144
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT)

------------------------

ROBERT M. KAMM, PRESIDENT
BIOMETRIC SECURITY CORP.
SUITE 1940 -- 400 BURRARD STREET
VANCOUVER, BRITISH COLUMBIA
CANADA V6C 3A6
(604) 687-4144
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

ROBERT M. KAMM, PRESIDENT
BIOMETRIC SECURITY CORP.
C/O HATHAWAY, SPEIGHT & KUNZ, LLC
ATTORNEYS AT LAW
2515 WARREN AVENUE
POST OFFICE BOX 1208
CHEYENNE, WYOMING 82003-1208
(307) 634-7723
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

------------------------

COPIES TO:

<TABLE>
<S> <C>
JONATHAN C. GUEST DAVID J. RAFFA
PERKINS, SMITH & COHEN, LLP CATALYST CORPORATE FINANCE LAWYERS
ONE BEACON STREET SUITE 1100
BOSTON, MASSACHUSETTS 02108 1055 WEST HASTINGS STREET
TELEPHONE: (617) 854-4000 VANCOUVER, BRITISH COLUMBIA
FACSIMILE: (617) 854-4040 CANADA V6E 2E9
TELEPHONE; (604) 688-6900
FACSIMILE: (604) 443-7000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: Not Applicable

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

PROSPECTUS

DATED SEPTEMBER , 1999

SUBJECT TO COMPLETION

BIOMETRIC SECURITY CORP.
(FORMERLY SONOMA RESOURCE CORP.)
SUITE 1940 -- 400 BURRARD STREET
VANCOUVER, BRITISH COLUMBIA
CANADA V6C 3A6

REPURCHASE OFFER

(3,285,260 SHARES OF COMMON STOCK WITHOUT PAR VALUE AT NOVEMBER 10, 1998)

On November 10, 1998, we transferred our corporate domicile from the
Province of British Columbia to the State of Wyoming. Our corporate affairs are
now governed by the law of Wyoming. Since we did not file a registration
statement in connection with this transfer, we may have violated the Securities
Act of 1933. Accordingly, we now offer to repurchase 3,285,260 shares of our
common stock outstanding at November 10, 1998, at a cash price of Cdn. $0.20
(US$ 0.13) per share, plus interest, for a total repurchase amount Cdn. $657,052
(US$ 427,084), plus interest. We are making this offer only to U.S. persons who
owned Biometric common stock at November 10, 1998.

THIS REPURCHASE OFFER WILL EXPIRE ON , 1999.

If we receive so many repurchase acceptances, or are otherwise required to
repurchase shares, so that immediate payment could make Biometric insolvent, we
may decide to defer payment or pay in installments so that Biometric is not
rendered insolvent. If we delay payment, Biometric will pay interest until
payment is made.

We do not make any recommendation about whether shareholders should accept
or reject the repurchase offer. Whether or not you accept this offer, you may
still have the right to sue Biometric for its failure to file a registration
statement under the Securities Act in connection with the transfer to Wyoming
and otherwise not complying with any applicable state or Canadian securities
laws.

If you want Biometric to repurchase your shares, please complete the
repurchase agreement accompanying this prospectus and return it as follows:
. Your completed form must be accompanied by any Biometric common
stock certificates that you possess. If you do not possess any Biometric common
stock certificates, you must provide other documentation as specified in the
repurchase agreement.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

THERE ARE A NUMBER OF RISKS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THIS
REPURCHASE OFFER. SEE "RISK FACTORS" BEGINNING ON PAGE 3.

THIS PROSPECTUS HAS NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. IT'S ILLEGAL FOR ANYONE TO TELL YOU OTHERWISE.

The date of this prospectus is September , 1999

<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<S> <C>
SUMMARY..................................................... 1
Biometric Security Corp. .............................. 1
The Repurchase Offer................................... 1
Legal Rights of Repurchase Offerees and Consequences of
Acceptance
or Non-Acceptance.................................... 2
Material Tax Consequences.............................. 2
Biometric Common Stock................................. 2
Historical Per Share Information....................... 2
RISK FACTORS................................................ 3
REPURCHASE OFFER............................................ 10
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING
SECURITIES................................................ 13
DIRECTORS AND EXECUTIVE OFFICERS............................ 14
EXECUTIVE COMPENSATION...................................... 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 18
BIOMETRIC SECURITY CORP. ................................... 20
DESCRIPTION OF PROPERTY..................................... 30
LEGAL PROCEEDINGS........................................... 30
SELECTED FINANCIAL DATA..................................... 31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 32
LEGAL MATTERS............................................... 37
EXPERTS..................................................... 37
WHERE YOU CAN FIND MORE INFORMATION......................... 37
CONSOLIDATED FINANCIAL STATEMENTS OF BIOMETRIC SECURITY
CORP...................................................... F-1
</TABLE>

<PAGE> 4

SUMMARY

In this summary, we highlight selected information from this document. We
haven't included all of the information that is important to you. To better
understand our share repurchase offer, you should read carefully this entire
document and the documents to which we have referred you. We have included page
references to direct you to more complete descriptions of the topics presented
in this summary. In this document, we use the plain "$" sign to refer to
Canadian dollars, and "US$" to refer to United States dollars.

BIOMETRIC SECURITY CORP. (PAGE 20)

Our principal business is our investment in Biometric Identification, Inc.,
a company based in California. Biometric Identification is controlled by Arete
Associates, a research and development contractor also based in California and
privately held. Biometric Identification designs, manufactures and markets
devices for fingerprint identification using technology based on "biometrics,"
which is the science of identifying individuals through their own unique
physical characteristics such as fingerprints and hand shape. Biometric
Identification acquired its technology under a license from Arete.

In June 1998, we agreed with Arete that we could invest up to US$ 5,000,000
in debentures, which are debt securities, to be issued by Biometric
Identification. We can convert these debentures into Biometric Identification
common stock. As of July 23, 1999, Biometric had acquired all US$ 5,000,000 of
the Biometric Identification debentures. If we convert all of them into
Biometric Identification common stock, we will hold approximately 45% of its
common stock. Biometric is currently evaluating whether to convert its
debentures into Biometric Identification common stock. We have not yet made a
decision about this.

Before we invested in Biometric Identification, we were in the mineral
exploration business. We still own several properties in Argentina. Since we do
not think the precious metals markets will soon recover from slumping demand, we
decided to get out of the mineral exploration business. We have ended all of our
Argentinean operations and recently reached a preliminary agreement to sell
these properties. When they are sold, we will have essentially left our former
business.

Please see "Where You Can Find More Information" on page 37 for additional
information about Biometric.

Our main office is located at Suite 1940, 400 Burrard Street, Vancouver,
British Columbia, Canada V6C 3A6, and our telephone number is (604) 687-4144.

THE REPURCHASE OFFER (PAGE 10)

We are offering to repurchase all shares of our common stock which were
held by U.S. shareholders of record on November 10, 1998, at a cash price of
$0.20 (US$ 0.13) per share, plus interest. This offer will expire on
, 1999. The repurchase price is the closing price of Biometric's
common stock on the Vancouver Stock Exchange on October 9, 1998, the date of the
shareholder vote approving our change of domicile to Wyoming.

We are making this repurchase offer because, when we changed our domicile
from British Columbia to Wyoming in November 1998, we may have been required to
file a registration statement with the SEC, which we did not do. Since we didn't
file a registration statement, we may have violated some federal and state
securities laws. If you accept the repurchase offer, but have already sold your
shares at a price below the repurchase price, you are entitled to receive cash
in the amount of that difference.

We are making this offer only to U.S. persons who owned Biometric common
stock at November 10, 1998. This is because Biometric, as a Canadian company,
made the disclosures required by Canadian law when we sought shareholder
approval for our transfer to Wyoming. All of our shareholders got the benefit of
disclosure in accordance with Canadian requirements, which we believe are
substantially similar to U.S. requirements. However, when we changed our
domicile from Canada to the U.S., our U.S. shareholders may have been entitled
to claim that we were presenting them with a new investment decision and that
the shareholder disclosure materials should have been registered in accordance
with the Securities Act of 1933.

Even though we are making this repurchase offer, we haven't concluded that
we did not comply with applicable federal and state securities laws, and we
aren't waiving any applicable statutes of limitation.

1
<PAGE> 5

If you want Biometric to repurchase your shares, please see "Repurchase
Offer," below, and the repurchase agreement accompanying this prospectus, for
instructions on how to respond to this repurchase offer.

LEGAL RIGHTS OF REPURCHASE OFFEREES AND CONSEQUENCES OF ACCEPTANCE OR
NON-ACCEPTANCE (PAGE 10)

We are making the repurchase offer to protect Biometric from any future
repurchase liability, although Biometric's liability may survive and may not be
limited by the repurchase offer. If you owned Biometric shares when we moved to
Wyoming, you could require us to buy those shares from you at the market price
at the time of the move, or make up the difference to you if you have since sold
your shares at a lower price.

MATERIAL TAX CONSEQUENCES (PAGE 11)

Tax matters are often complicated and the tax consequences to you from the
repurchase will depend in part on the facts of your own situation. You should
consult your tax advisors, as you think appropriate, for a full understanding of
the tax consequences to you from the repurchase. In general, though, if we
repurchase your shares, you would be subject to tax on the excess, if any, of
what we pay you now for your shares over what you originally paid for them. If
you have already sold your shares for a lower price than our repurchase offer
price, and we reimburse you for the difference, you would be subject to tax on
the excess, if any, of the total of our reimbursement to you plus what you sold
the shares for, over what you originally paid for the shares.

BIOMETRIC COMMON STOCK

On November 10, 1998 we had 20,834,412 outstanding shares of common stock,
and at September 9, 1999, we had 57,684,208. We do not have any other kind of
stock.

HISTORICAL PER SHARE INFORMATION (CANADIAN DOLLARS)

The following table shows historical earnings, dividend and book value per
share data for Biometric. The information is only a summary and you should read
it along with the following sections of this document for information about
Biometric's financial condition and results of operations: "Selected Financial
Data" on page 31; our audited financial statements and notes, beginning on page
F-1; and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" beginning on page 32.

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Book Value per Share......................... $ 0.12 $ 0.48 $ 0.89 $ 0.35 $ 0.37
Net Income (Loss) per Share...................... $(0.38) $(0.13) $(0.14) $(0.20) $(0.10)
Cash Dividends per Share......................... 0 0 0 0 0
</TABLE>

Market Price Information

Biometric's common shares are traded on the Vancouver Stock Exchange under
the symbol "BMS," and are also traded from time to time on the over-the-counter
market in the United States under the symbol "BMSX." Biometric's securities
issued in offshore transactions under Regulation S of the Securities Act are
traded in offshore resales governed by Rule 904 of Regulation S under the symbol
"BMS. S" on the VSE.

On May 6, 1999, the date before Biometric filed a registration statement
with the SEC concerning our proposed repurchase offer, the closing price of our
stock on the VSE was $0.35, and the closing price of our stock on the
over-the-counter market was US$ 0.25.

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<PAGE> 6

RISK FACTORS

You should read the first two risk factors to help you understand some of
the risks we face in connection with our repurchase offer. You may also find it
helpful to read the other risk factors so you understand more clearly the risks
of our investment in Biometric Identification.

This prospectus contains statements that plan for or anticipate the future.
We believe that some of these statements are "forward-looking" statements.
Forward-looking statements include statements about the future of the biometric
identity verification industry, statements about future business plans and
strategies, and most other statements that are not historical in nature. In this
prospectus, forward-looking statements use words like "anticipate," "plan,"
"believe," "expect," and "estimate." However, because forward-looking statements
involve future risks and uncertainties, there are factors, including those
discussed below, that could cause actual results to differ materially from those
expressed or implied. We have attempted to identify the major factors that could
cause differences between actual and planned or expected results, but we may not
have identified all of those factors. You therefore shouldn't place undue
reliance on forward-looking statements. Also, we have no obligation to publicly
update forward-looking statements we make in this prospectus.

RISKS RELATED TO OUR REPURCHASE OFFER

WE MAY HAVE VIOLATED SECURITIES LAWS IN CONNECTION WITH OUR MOVE TO
WYOMING, AND PERSONS WHO WERE OUR SHAREHOLDERS AT THAT TIME, INCLUDING NON-U.S.
SHAREHOLDERS, COULD REQUIRE BIOMETRIC TO REPURCHASE THEIR SHARES, OR THEY COULD
POSSIBLY SUE BIOMETRIC. As discussed under "Repurchase Offer," in November 1998
we transferred our corporate domicile from British Columbia to Wyoming. Since we
did not file a registration statement under United States securities law in
connection with this transfer, it is possible that we violated federal
securities laws and that, if we did so, anyone who owned our shares at the time
of the transfer could require us to repurchase the shares from them, or they
could sue us. The federal securities laws require registration of
securities -- sometimes even if a company is just changing its domicile, as we
did -- unless an appropriate exemption from the registration requirements of
those laws is available. If an exemption did not exist in connection with our
transfer to Wyoming, we may have violated the registration requirements. We make
no admission of any violation of federal securities laws. Also, no shareholder
has sought repurchase of any shares. However, we intend to make a repurchase
offer to the U.S. persons who held our shares at the time of the transfer to
Wyoming, by means of this prospectus. We are making this offer only to U.S.
persons who owned Biometric common stock at November 10, 1998 because, although
we complied with applicable Canadian disclosure requirements at the time of the
transfer, it is possible that our U.S. stockholders could claim that they were
being asked to make an investment decision and accordingly that the shareholder
material should have been registered under U.S. securities laws. If all our U.S.
shareholders as of November 10, 1998, accept the repurchase offer, we would need
to pay them approximately $657,052, or approximately US$ 427,084, based on
current exchange rates, plus interest. If our U.S. shareholders refuse to accept
the remedy offered in this repurchase offer, or if we can't complete the
repurchase offer, they could sue us, alleging violations of United States
securities laws. Further, even if we complete the repurchase offer, all of our
shareholders, including our U.S. shareholders, could still sue us, alleging
violations of United States securities laws.

WE ARE MAKING THIS REPURCHASE OFFER TO U.S. SHAREHOLDERS ONLY. HOWEVER,
BIOMETRIC'S NON-U.S. SHAREHOLDERS MAY BE ABLE TO COMPEL US TO REPURCHASE THEIR
SHARES AS WELL, IF THEY SUCCESSFULLY SUE US FOR VIOLATING U.S. SECURITIES LAWS
IN CONNECTION WITH OUR MOVE TO WYOMING. IF WE ARE COMPELLED TO REPURCHASE SHARES
FROM BIOMETRIC'S NON-U.S. SHAREHOLDERS, THIS COULD MAKE BIOMETRIC INSOLVENT OR
REQUIRE BIOMETRIC TO OBTAIN ADDITIONAL FINANCING. If all our U.S. shareholders
as of November 10, 1998, accept the repurchase offer, we would need to pay those
shareholders up to approximately $657,052 (US$ 427,084), plus interest. However,
if Biometric's non-U.S. shareholders are able to compel us to purchase their
shares as well, and all of the U.S. shareholders accept the repurchase offer, we
would need to pay those shareholders up to approximately Cdn. $4,200,000, or
approximately US$ 2,800,000, based on current exchange rates, plus

3
<PAGE> 7

interest. We might not have enough money available to pay our shareholders if
many of them accept the repurchase offer, and in any case, corporate law
prohibits our board of directors from making payments to shareholders that could
render Biometric insolvent. We might have to obtain additional funds by selling
stock or borrowing money, and we might not be able to raise enough money by
those means. We might have to delay payments or pay some shareholders in
installments to avoid making Biometric insolvent. If we have to delay payments,
we would have to pay interest on the amounts due, which would increase the total
amount we would have to pay and further strain our cash position.

RISKS RELATED TO OUR INVESTMENT IN BIOMETRIC IDENTIFICATION

FINANCING AND INVESTMENT RISKS

OUR ONLY MAJOR ASSET IS OUR INVESTMENT IN BIOMETRIC IDENTIFICATION
DEBENTURES. WE HAVE NO OTHER INVESTMENTS THAT COULD OFFSET POOR RESULTS OF
BIOMETRIC IDENTIFICATION, WHICH HAS A HISTORY OF NET LOSSES. IF BIOMETRIC
IDENTIFICATION CONTINUES TO LOSE MONEY, IT COULD LOSE INVESTMENT VALUE, WHICH IN
TURN COULD CAUSE YOUR INVESTMENT IN BIOMETRIC TO LOSE VALUE. Right now, our
success depends entirely on the future of Biometric Identification. In turn,
your investment in us is subject to that risk. Biometric Identification has a
history of losses, mainly due to the required accounting treatment of research
and development outlays which Biometric Identification has to expense in the
year incurred. For the year ended December 31, 1998, Biometric Identification
had a net loss of US$ 3,934,609, and for the year ended December 31, 1997,
Biometric Identification had a net loss of US$ 1,337,446. For the four months
ended April 30, 1999, Biometric Identification had a net loss of US$ 1,958,168.
We are leaving the natural resource industry sector in order to enter the
technology industry. But we have only identified one company, namely Biometric
Identification, in which to invest in the short term. We don't have any other
investments that might offset Biometric Identification's recent net losses.

BIOMETRIC DOESN'T CONTROL BIOMETRIC IDENTIFICATION. SINCE BIOMETRIC DOESN'T
YET OWN ANY SHARES IN BIOMETRIC IDENTIFICATION, BIOMETRIC DOESN'T HAVE
SHAREHOLDERS' RIGHTS SUCH AS THE RIGHT TO ELECT BIOMETRIC IDENTIFICATION
DIRECTORS, SO WE MAY NOT BE ABLE TO CAUSE BIOMETRIC IDENTIFICATION TO TAKE
ACTIONS THAT WE THINK MAKE GOOD BUSINESS OR FINANCIAL SENSE. Our investment in
Biometric Identification consists only of its convertible debentures that don't
have voting rights, so we currently have little to no control over Biometric
Identification management policies. Until we exercise our rights to convert
these debentures to common stock of Biometric Identification, we will not have
the voting and other rights provided to the shareholders of Biometric
Identification through their shareholdings. Although Biometric's new President,
Robert Kamm, is also President of Biometric Identification, we don't have any
control over Biometric Identification's shareholders or board of directors. We
might not always be able to cause Biometric Identification to take actions that
we think make good business or financial sense.

BIOMETRIC IDENTIFICATION HAS A LARGE AMOUNT OF DEBT FOR A COMPANY ITS SIZE
AND COULD DEFAULT IN ITS PAYMENT OF OBLIGATIONS. IF BIOMETRIC IDENTIFICATION
CAN'T MAKE ITS DEBT PAYMENTS, BIOMETRIC COULD LOSE ITS INVESTMENT IN BIOMETRIC
IDENTIFICATION. Our Biometric Identification convertible debentures are
unsecured and do not provide for regular payments of principal to us. If
Biometric Identification can't generate enough cash to pay our principal and
interest payments when due, it may default on our debentures and, if that
happens, we could be forced to begin collection efforts or lose all of our
investment. Biometric Identification currently has a large amount of debt. At
December 31, 1998, Biometric Identification had outstanding convertible debt
totaling US$ 2,709,000, compared to total assets of US$ 769,974. At April 30,
1999, Biometric Identification had outstanding convertible debt totaling US$
4,422,500, compared to total assets of US$ 1,167,040.

NEITHER BIOMETRIC NOR BIOMETRIC IDENTIFICATION IS PROFITABLE YET, AND
NEITHER COMPANY CAN BE SURE OF RAISING ENOUGH MONEY FROM OUTSIDE SOURCES, SO WE
MAY NOT BE ABLE TO GROW OUR BUSINESSES OR EVEN RAISE ENOUGH FUNDS NECESSARY TO
CONTINUE OPERATING OUR BUSINESSES. Biometric Identification is a relatively new
business, incorporated in 1995. In addition, our own business has recently
completely changed its direction.

4
<PAGE> 8

As new and growing businesses, both we and Biometric Identification don't yet
generate profits from our operations to cover our day-to-day operating costs and
to make investments, such as buying expensive new equipment, that we need to
grow our businesses. Therefore, we need money from outside sources and if we
can't raise enough money, we and Biometric Identification may not be able to
keep operating our businesses. In the past, both we and Biometric Identification
have had to sell stock in our companies, and also borrow money, to meet our
large and ongoing needs for capital. If we can't continue to raise enough money
from these sources, neither we nor Biometric Identification will be able to grow
our businesses and we may not even be able to cover our own day-to-day operating
needs. We have invested money in Biometric Identification, but that won't be
enough to keep Biometric Identification solvent. Further, if we can't provide
more money to Biometric Identification, and they have to sell more stock to
other people, our ownership interest in Biometric Identification could be
lessened.

RISKS RELATING TO BIOMETRIC IDENTIFICATION'S BUSINESS AND OPERATIONS

BIOMETRIC IDENTIFICATION MAY NOT BE ABLE TO DEVELOP A LARGE ENOUGH MARKET
FOR ITS BIOMETRIC IDENTITY VERIFICATION PRODUCTS; THESE PRODUCTS AREN'T YET IN
WIDE USE. UNLESS THIS MARKET GROWS, BIOMETRIC IDENTIFICATION MIGHT NOT BE ABLE
TO SUCCEED. If biometric identity verification products don't become generally
accepted in the marketplace, Biometric Identification could become one of
several competitors in a small market, and might not be able to generate enough
revenues and profits to grow beyond its current size. Its major products, namely
biometric identity verification products and biometric imaging products, have
not experienced widespread commercial acceptance. In part, this is because
biometric identity verification products are a new approach to identity
verification and they have not been widely used.

Factors that could affect whether Biometric Identification can develop a
large market for biometric identity verification products include:

- whether their cost, performance and reliability compare favorably to
competitive products

- whether customers come to understand their benefits

- whether the public will be "put off" by the intrusiveness of the
products and how companies collect and use fingerprint information

NOTE: Some groups have objected to biometric identity verification
products on civil liberties grounds, as an invasion of privacy, and
legislation has been proposed to regulate the use of biometric
identity verification products to prevent such abuse

- whether the public trusts that companies will not abuse the
confidentiality of personal information created from using biometric
identity verification products

- whether institutional purchasers such as banks and retailers will
install the infrastructure in automatic teller machines and
point-of-sale equipment to use biometric identity verification
products

- whether Biometric Identification can develop an international market
for its products and

- whether Biometric Identification successfully markets and promotes
its products

BECAUSE BIOMETRIC IDENTIFICATION IS MUCH SMALLER THAN MANY OF ITS
COMPETITORS, IT MAY LACK THE RESOURCES TO CAPTURE AN INCREASED MARKET SHARE.
ALSO, BIOMETRIC IDENTIFICATION'S LOW-TECH COMPETITORS CAN DEVOTE LESS RESOURCES
TO PRODUCT DEVELOPMENT AND MORE RESOURCES TO MARKETING WHICH COULD ALSO REDUCE
BIOMETRIC IDENTIFICATION'S MARKET SHARE. Biometric Identification is a small
company with a history of net losses. It may not be able to compete for market
share equally with some of the larger companies in the fingerprint
identification industry which, unlike Biometric Identification, can generate
large amounts of funds for use in product development and marketing. Further, in
addition to competing with other providers of sophisticated biometric imaging
systems, Biometric Identification also competes with providers who use
traditional "low-tech" identification and security systems, e.g., key card,
surveillance systems and passwords.

5
<PAGE> 9

Biometric Identification could lose market share to these low-tech companies as
well, since they may be able to concentrate more resources on marketing rather
than product development. A number of start-up and established companies develop
and market software and hardware for fingerprint biometric security applications
that could compete directly with Biometric Identification's products. It is also
possible that other biometric identification technologies of which we and
Biometric Identification are aware, could ultimately be more widely adopted.
These technologies could reduce demand for Biometric Identification's products
even if they were demonstrably superior. For example, a well-financed company
with a large customer base and established distribution channels for its less
sophisticated products might marginalize Biometric Identification's possibly
superior products.

IF BIOMETRIC IDENTIFICATION IS UNABLE TO KEEP UP WITH RAPID TECHNOLOGICAL
CHANGE ITS PRODUCTS COULD BECOME OBSOLETE, OR OTHER COMPANIES COULD EXPLOIT
MARKET OPPORTUNITIES FASTER, POSSIBLY CAUSING BIOMETRIC IDENTIFICATION TO LOSE
MARKET SHARE. Unless Biometric Identification's products keep up with the
demand for sophisticated technology, they could become obsolete. The markets for
biometric identity verification products and biometric imaging systems rapidly
change in response to newer, more advanced products. Even if Biometric
Identification can keep pace, it could fail to predict where the market is going
and thus develop technology that customers do not want to buy. Or Biometric
Identification might develop desirable products but too slowly and be surpassed
by a competitor.

BIOMETRIC IDENTIFICATION DEPENDS ON STRATEGIC RELATIONSHIPS FOR PRODUCT
DISTRIBUTION. IF THESE RELATIONSHIPS DON'T WORK OUT, OR IF THE OTHER COMPANIES
DON'T DO ENOUGH TO MARKET BIOMETRIC IDENTIFICATION PRODUCTS, BIOMETRIC
IDENTIFICATION COULD LOSE SALES. Biometric Identification's business plan
depends on establishing strategic relationships with marketing partners, such as
equipment manufacturers, systems integrators and resellers, to distribute some
of its products. It may be difficult for Biometric Identification to identify
and establish relationships to assure the successful marketing of its products.
Even if Biometric Identification identifies partners, negotiating deal terms can
be a laborious process. Once an agreement is reached, it could be terminable
with little notice, or disputes could arise as to interpretation. It's also
difficult to control the resources and effort that a partner will devote to the
marketing of Biometric Identification's products.

IF BIOMETRIC IDENTIFICATION'S PRODUCTS ARE DEFECTIVE OR FAIL TO MEET
PERFORMANCE CRITERIA, THIS COULD REQUIRE BIOMETRIC IDENTIFICATION TO DIVERT
RESOURCES AND INCUR COSTS TO CORRECT THE PROBLEM, WHICH WOULD REDUCE PROFITS.
ALSO, PRODUCT MALFUNCTIONS COULD ALIENATE CUSTOMERS, POSSIBLY RESULTING IN LOSS
OF CUSTOMERS OR NEGATIVE PUBLICITY. Despite careful quality control in design
and production, newly-introduced complex products often have undetected defects,
such as software "bugs," or they do not initially meet customer performance
specifications. This could require Biometric Identification to divert resources
from product development and marketing and concentrate instead on correcting the
problems, possibly incurring additional costs as well, which could result in
reduced sales and profits. Even if the defects are ultimately corrected,
Biometric Identification could:

- lose customers

- be forced to divert its employees and resources in order to work with the
dissatisfied customers

- make refunds

- cover breaches in product warranties, or

- conduct a product recall

Because Biometric Identification's products are designed to improve
security, malfunction could hurt Biometric Identification's customers. Examples
of the impact of product failure include:

- unauthorized persons gaining access to dangerous or sensitive physical
facilities

- the alteration or theft of customer database information, or

- fraudulent financial transactions

6
<PAGE> 10

These failures could result in loss of customers or negative publicity.
Even if defects are minor and readily corrected, Biometric Identification's
efforts at correction could reduce or even eliminate profits from sales.
Biometric Identification may not be able to maintain product liability insurance
to adequately cover such risks.

BIOMETRIC IDENTIFICATION HAS ONLY A LICENSE TO USE, RATHER THAN OUTRIGHT
OWNERSHIP OF, ITS BIOMETRIC IDENTITY VERIFICATION TECHNOLOGY. IF ARETE, THE
OWNER OF THE INTELLECTUAL PROPERTY RELATING TO THE BIOMETRIC IDENTIFICATION
TECHNOLOGY, DOES NOT ADEQUATELY PROTECT THE RIGHTS IT LICENCES TO BIOMETRIC
IDENTIFICATION, BIOMETRIC IDENTIFICATION WOULD BE AT A SIGNIFICANT COMPETITIVE
DISADVANTAGE THAT WOULD ADVERSELY AFFECT ITS BUSINESS OPERATIONS AND FINANCIAL
CONDITION. Biometric Identification licenses its technology from Arete under an
exclusive world-wide license. The license has no expiration date, although Arete
can terminate the license if Biometric Identification materially breaches the
license agreement. Biometric Identification has not yet accrued or paid any
significant royalties to Arete. Only after Biometric Identification has paid US$
1,250,000 of royalties will Arete transfer ownership of the intellectual
property outright to Biometric Identification. Until then, Biometric
Identification is dependent on Arete's maintaining its ownership and right to
exploit the technology. Biometric Identification doesn't control Arete's efforts
to protect its rights to these technologies. If Arete doesn't do enough to
protect the technologies, Biometric Identification would be put at a significant
competitive disadvantage since much of Biometric Identification's market
advantage stems from its use of technology that's currently unique to Arete.

BIOMETRIC IDENTIFICATION'S PROPRIETARY TECHNOLOGY MAY BE IMPOSSIBLE TO
PROTECT OR MAY INFRINGE ON OTHER TECHNOLOGIES. IF BIOMETRIC IDENTIFICATION CAN'T
ESTABLISH OR MAINTAIN OWNERSHIP AND CONTROL OF THESE TECHNOLOGIES, COMPETITORS
COULD EXPLOIT THE TECHNOLOGIES AND ENCROACH ON BIOMETRIC IDENTIFICATION'S MARKET
SHARE. IT IS ALSO POSSIBLE THAT OTHERS MAY CLAIM RIGHTS IN THE TECHNOLOGIES AND
SUCCESSFULLY SUE BIOMETRIC IDENTIFICATION FOR INFRINGEMENT OF PROPRIETARY
TECHNOLOGY RIGHTS. Subject to its license from Arete, Biometric
Identification's competitive advantage depends on owning and controlling the
right to exploit its technology, such as its unique fingerprint identification
technology that images the entire fingerprint, in contrast with typical
fingerprint identification methods that image only several points on the
fingerprint. If Biometric Identification is unable to fully exploit the rights
to technologies such as its fingerprint identification technology, competitors
could gain rights to the same or similar technologies and exploit those rights
to the detriment of Biometric Identification's market share. It is also possible
that a competitor may challenge Biometric Identification's rights in some of its
technologies, and if that happens, it could be costly for Biometric
Identification to defend its rights. It might even ultimately lose its rights to
those technologies if the competitor's challenge succeeds. The usual means to
protect proprietary rights in technology are through patent, copyright, trade
secret and contract law. Arete holds, and Biometric Identification expects
eventually to hold, United States and foreign patents covering certain of
Biometric Identification's products and technologies. Patent protection,
however, does not eliminate all risks. For example:

- the claimed inventions in Arete's patents may not be broad enough to
cover the technology contained in Biometric Identification's products

- Arete or Biometric Identification may have their patent applications
denied, or

- another person may challenge the validity of the patents or claim they do
not cover a similar invention which that person intends to commercialize

Biometric Identification also depends on its employees, consultants and
other persons to keep confidential Biometric Identification's trade secrets and
other proprietary information. If any of these persons reveals this confidential
information, Biometric Identification could lose major competitive advantages.

BIOMETRIC IDENTIFICATION DEPENDS ON ITS KEY TECHNOLOGY PERSONNEL TO DEVELOP
ITS PRODUCTS AND MANUFACTURING AND MARKETING STRATEGY, AND DEPENDS ON ITS
RELATIONSHIP WITH ARETE FOR ENGINEERING SERVICES. IF BIOMETRIC IDENTIFICATION
WERE TO LOSE KEY TECHNOLOGY PERSONNEL, ITS PRODUCT DEVELOPMENT COULD SLOW DOWN
AND CUSTOMERS THAT INTEGRATE ITS PRODUCTS WITH THEIRS MIGHT PERMANENTLY REPLACE
BIOMETRIC IDENTIFICATION AS A SUPPLIER. THIS WOULD HURT SALES AND PROFITS.
SIMILARLY, IF ARETE WERE NOT ABLE TO SUPPLY ENGINEERING SERVICES,

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<PAGE> 11

THIS COULD ALSO HURT PRODUCT DEVELOPMENT AND SALES, SINCE BIOMETRIC
IDENTIFICATION DEPENDS IN PART ON THESE SERVICES TO HELP DEVELOP ITS PRODUCTS
AND MANUFACTURING METHODS. Biometric Identification's competitive position
depends on its ability to find and keep employees who have special knowledge
about designing, manufacturing and marketing biometric identity verification
products. Loss of any of these key personnel could slow down product
development, potentially hurting Biometric Identification's ability to compete
and maintain its customer base. For example, Biometric Identification's products
are often specifically developed for incorporation into its customers' products,
and its personnel have developed an in-depth understanding of the customers'
product and market needs. Loss of these people could cause Biometric
Identification to lose customers, perhaps permanently. This would significantly
hurt sales.

Biometric Identification's senior management has many years of experience
in the biometric identity verification field. For example:

- Dr. Stephen Lubard, founder and Chairman of Biometric Identification, is
an engineer with over 20 years of experience in managing highly technical
projects and developing software and computer systems for solving complex
image processing problems

- Robert Kamm, Chief Executive Officer, is an experienced technology
entrepreneur and has started two previous technology companies

It would be very difficult and time-consuming for Biometric Identification
to locate personnel with the combination of skills and attributes required to
carry out its strategy.

Biometric Identification also depends on the engineering assistance it
receives from its parent, Arete. For example, Arete has agreed to provide
engineering services for Biometric Identification, in exchange for payments from
Biometric Identification. Under this agreement, Arete provides Biometric
Identification with the equivalent of services of four full-time engineers, and
Arete will use its best efforts to supply additional engineering assistance as
needed. If Arete can't provide enough engineering assistance, Biometric
Identification could lose access to technology that would enable it to compete
in the marketplace, which could also hurt sales.

POSSIBLE FAILURES BY THIRD PARTIES TO COMPLY WITH Y2K ISSUES COULD
COMPROMISE THEIR OWN PRODUCT SALES AND, TO THE EXTENT THEIR PRODUCTS INCLUDE
BIOMETRIC IDENTIFICATION PRODUCTS, COULD HURT SALES OF THOSE PRODUCTS AS
WELL. Biometric Identification's business involves integrating its products
with those of original equipment manufacturers and value added resellers. If any
of those companies is not Year 2000 compliant, their product sales, and
consequently Biometric Identification's sales, could drop. The Year 2000 issue
refers to possible negative impacts on business systems that could be caused by
the arrival of the new millennium. Best known is the possible inability of
computer software to recognize the year 2000 as a date. Unless the software is
fixed, date-sensitive systems may begin to fail prior to January 1, 2000.
Failures may range from relatively minor processing inaccuracies to catastrophic
system malfunctions. Failures may affect not only systems used to process
everyday business information, but also the imbedded computers that control
plant machinery, robotics, office equipment, elevators and building climate and
security systems.

Biometric does not expect to experience significant Year 2000 issues,
because we use standard commercial programs and systems that have been designed
or upgraded to comply with requirements imposed by the transition into the next
millennium. We are contacting our main suppliers to make sure that they are also
Year 2000 compliant, a process we expect to complete by the third quarter of
1999.

Biometric Identification has evaluated the products and services that it
offers, as well as its information technology infrastructure, and has determined
that they are Year 2000 compliant.

However, even though we and Biometric Identification believe that we are
Year 2000 compliant, we can't control Year 2000 compliance by third parties. To
the extent those parties are not Year 2000 compliant, that could hurt Biometric
Identification's sales and therefore its investment value.

OUR STOCK IS LOW-PRICED STOCK SUBJECT TO "PENNY STOCK" RULES;
BROKER-DEALERS MAY BE LESS WILLING TO DEAL IN PENNY STOCKS SUCH AS OURS IF THEY
FIND THE NEW "PENNY STOCK" LAWS TOO BURDENSOME. THIS COULD CAUSE THE

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<PAGE> 12

MARKET FOR BIOMETRIC STOCK TO BE LESS ACTIVE, WHICH IN TURN COULD MAKE IT HARDER
FOR YOU TO SELL YOUR BIOMETRIC STOCK WHEN YOU WANT AND AT A SATISFACTORY
PRICE. Our common stock would be classified as "penny stock" under United
States securities laws. These laws impose special rules on broker-dealers
trading in penny stocks that are not applicable to other stocks. If
broker-dealers find these requirements too burdensome and therefore are less
willing to deal in penny stocks, this might limit market activity for all penny
stocks, including Biometric's common stock. This could limit your ability to
sell your stock when you want and at a satisfactory price.

The laws relating to penny stocks were changed in 1990 because of alleged
abuses in the penny stock market. The new laws require broker-dealers who sell
penny stocks to meet potentially burdensome requirements. For example, a
broker-dealer selling a penny stock must:

- give the customer written information about the market for penny stocks
including a discussion of how those stocks are traded, and the risks of
the penny stock market. This information must also describe the
broker-dealer's duties to the customer and let the customer know about
his or her rights and remedies if the broker-dealer violates these
duties.

- give penny stock customers written monthly account statements that list
their holdings and estimated market values.

If broker-dealers find these requirements too burdensome, that might limit their
willingness to deal in penny stocks such as ours, possibly resulting in a less
active market which could lower the value of your investment in our common
stock.

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<PAGE> 13

REPURCHASE OFFER

BACKGROUND

On November 10, 1998 we transferred our corporate domicile from the
Province of British Columbia to the State of Wyoming. Our corporate affairs are
now governed by the law of Wyoming. In all other respects Biometric remained the
same. In order to make the transfer, Biometric had to solicit proxies as
required by Canadian corporate and securities law. The shareholder vote for the
transfer was 4,883,862 votes in favor, 24,226 votes against, and 440
abstentions.

A transfer such as Biometric made does not involve the organization of a
new corporation or any internal change in the transferring corporation. The only
change is that the corporation's affairs become governed by the law of the new
jurisdiction, in this case Wyoming.

As required by British Columbia law, we gave those of our shareholders who
dissented from the transfer a right at that time to have their shares redeemed
in cash. No shareholders exercised that dissent right.

Biometric did not file a registration statement under the Securities Act of
1933 when it transferred to Wyoming. The failure to file a registration
statement may have been a violation of the Securities Act. Because it may have
violated the Securities Act, Biometric is offering to repurchase from all U.S.
persons who held shares of stock issued by Biometric on or before November 10,
1998. This group of shareholders, which excludes persons who acquired Biometric
common stock after November 10, 1998, are referred to as "repurchase offerees"
in this prospectus and their shares as "repurchase shares". Repurchase offerees
who want Biometric to repurchase their repurchase shares must complete and
return the repurchase agreement accompanying this prospectus as Attachment A.
Even though we are making this repurchase offer, we haven't concluded that we
violated any applicable federal and state securities laws, and we aren't waiving
any rights.

We are making this offer only to U.S. persons who owned Biometric common
stock at November 10, 1998. This is because Biometric, as a Canadian company,
made required disclosures in compliance with Canadian law when we sought
shareholder approval for our transfer to Wyoming. All of our shareholders got
the benefit of disclosure in accordance with Canadian requirements, which we
believe are substantially similar to U.S. requirements. However, when we changed
our domicile from Canada to the U.S., our U.S. shareholders may have been
entitled to claim that we were presenting them with a new investment decision
and that the shareholder disclosure materials should have been registered in
accordance with the Securities Act of 1933.

REPURCHASE PRICE

Biometric will pay Cdn$0.20 or US$ 0.13, plus interest, for each share it
repurchases. The repurchase price represents the closing price of Biometric's
common stock on the Vancouver Stock Exchange on October 9, 1998, the date of the
shareholder vote approving Biometric's transfer to Wyoming. The U.S. dollar
price is based on the rate of exchange on October 9, 1998. Persons who accept
the repurchase offer but disposed of their shares before the offer was made at a
price below the repurchase price are entitled to receive cash in the amount of
the difference.

LEGAL RIGHTS OF REPURCHASE OFFEREES AND CONSEQUENCES OF ACCEPTANCE OR
NON-ACCEPTANCE

Under federal and state securities laws, the sale of securities must either
be registered or exempt from registration. These laws may also require
registration of securities where no sale is involved, as, for example, if a
company asks its shareholders to exchange their shares for other securities,
since the shareholder is being asked to make an investment decision. In the case
of Biometric's transfer from British Columbia to Wyoming, its shareholders were
arguably presented with an investment decision concerning whether they wished to
own shares in a British Columbia or Wyoming corporation. If there is no
exemption from registration, a corporation's unregistered sale of securities,
including an exchange such as Biometric effectively made with its shareholders
in November 1998, is a violation of federal and state securities laws. The
repurchase offerees' remedy for this violation is to bring a lawsuit against
Biometric for repurchase within the time specified under

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<PAGE> 14

applicable law. If successful, a repurchase offeree receives an amount per share
equal to the share price at the time of the deemed exchange less any
distributions made with respect to the shares; or, if the repurchase offeree
previously sold the shares, that person receives the repurchase price to be paid
for the shares less the proceeds received upon sale. Although the repurchase
offer is being made only to U.S. persons who held Biometric shares at November
10, 1998, it is possible that non-U.S. persons may also be able to exercise
these remedies. Under federal law, an action for repurchase must be brought
within one year of the issuance of the shares in violation of the registration
provisions, but in no event more than three years after the shares were offered
to investors. For purposes of this prospectus, the one-year period begins on the
date Biometric became a Wyoming corporation. State statutes of limitation vary.

Biometric is making the repurchase offer in an attempt to shield itself
from future civil liability for repurchase. Under many state statutes, the
repurchase offer, if carried out in compliance with the applicable statutes,
ends civil liability for repurchase, regardless of whether shareholders accept
the repurchase offer.

To the extent claims are not time-barred, Biometric may not be able to
shield itself from liability under federal securities laws because the SEC has
taken the position that liability under federal law is not avoided because a
potentially liable person makes a registered repurchase offer. In any event,
repurchase offerees, as well as the other persons who held Biometric shares at
November 10, 1998, who bring a lawsuit may be limited in their recovery to the
amount they would have received had they accepted the repurchase offer. Thus,
although repurchase offerees who accept the repurchase offer may be able to sue
Biometric, they may not be entitled to additional damages. According to the SEC,
repurchase offerees who do not accept the repurchase offer, as well as the other
persons who held Biometric shares at November 10, 1998, may be able to sue
Biometric for repurchase, but any such lawsuit may be subject to the defenses
described above.

MATERIAL TAX CONSEQUENCES

The following summary is a general discussion of material U.S. federal
income tax consequences of accepting the repurchase offer. The consequences to
each repurchase offeree will vary, depending in part on the circumstances and
status of the repurchase offeree. Generally, repurchase offerees who transfer
their repurchase shares to Biometric in exchange for the price paid by the
repurchase offeree for the repurchase shares, less any distributions with
respect to the repurchase shares, will realize gain equal to the excess of

- the aggregate amount paid by Biometric to the repurchase offeree for the
repurchase shares, over

- the price originally paid by the repurchase offeree for those repurchase
shares.

If the repurchase offeree previously sold the repurchase shares, the
repurchase offeree who accepts the repurchase offer will realize gain in an
amount equal to the excess, if any, of:

- the sale price received by the repurchase offeree plus the aggregate
amount paid by Biometric to the repurchase offeree for such repurchase
shares over

- the price originally paid by the repurchase offeree for the repurchase
shares.

Shareholders must recognize any gain realized as a result of accepting the
repurchase offer. There is no direct authority, however, regarding the character
of the gain for federal income tax purposes. Nevertheless, under general federal
income tax principles, repurchase offerees who hold their repurchase shares as a
capital asset on the date of the exchange or, in the case of a prior sale of
repurchase shares, repurchase offerees who held their repurchase shares as a
capital asset on the date of the prior sale or exchange, should be entitled to
report gain recognized as a result of accepting the repurchase offer as a
distribution in redemption of, or in exchange for, the repurchase shares,
subject to the provisions and limitations of Section 302 of the Internal Revenue
Code of 1986.

This discussion concerning federal income tax matters does not address all
potentially relevant federal income tax matters, or the consequences to persons
who, because of their circumstances or status are subject to special federal
income tax treatment. The discussion does not address state, local or foreign
tax issues, and is not intended as tax advice to any person. Consequently,
repurchase offerees are urged to consult their own tax advisors as to the
specific tax consequences to them of accepting the repurchase offer, including
tax

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<PAGE> 15

reporting requirements, the application and effect of federal, state, local,
foreign and other tax laws, and the implications of any changes in the tax laws.

REPURCHASE OFFER

Biometric is offering the repurchase offerees the right to sell their
repurchase shares to Biometric. Repurchase offerees who accept the repurchase
offer can exchange their repurchase shares for cash in the amount of the
repurchase price, plus interest, less the amount of any income or distributions
in cash or kind, received on the repurchase shares. Repurchase offerees who
accept the repurchase offer but disposed of their repurchase shares for less
than the repurchase price paid can receive cash in the amount of that
difference.

The repurchase offer will end at 5:00 p.m. local time, Vancouver, B.C., on
, 1999. Accordingly, repurchase offerees will have twenty business
days to respond to the repurchase offer. Repurchase offerees who have not
previously disposed of their repurchase shares may accept the repurchase offer
only by:

- completing the repurchase agreement accompanying this prospectus and

- returning it to Biometric by 5:00 p.m. on , 1999, together
with the certificates and documents evidencing the repurchase shares
(unless held by a nominee), as adjusted to give effect to any
distributions paid with respect to the repurchase shares, properly
endorsed for transfer.

Even if the nominee holding repurchase shares delivers those shares, as
required by the repurchase agreement, Biometric must receive the repurchase
agreement by the , 1999.

Repurchase offerees who have previously disposed of their repurchase shares
may accept the repurchase offer only by completing the repurchase agreement
accompanying this prospectus, and furnishing written evidence as to number of
shares sold, date of sale, and sale price per share, and returning the
repurchase agreement to Biometric by 5:00 p.m. on , 1999.

ANY REPURCHASE OFFEREE WHO FAILS TO RETURN A SIGNED REPURCHASE AGREEMENT
OR, IF REQUIRED, FAILS TO TENDER THE REPURCHASE SHARES BY THE DATE REQUIRED IN
THE REPURCHASE AGREEMENT WILL BE CONSIDERED TO HAVE REJECTED THE REPURCHASE
OFFER.

Biometric will decide all questions about the validity, form, eligibility,
including time of receipt, and acceptance of the repurchase agreement.
Biometric's decision will be final and binding. Biometric reserves the absolute
right to reject any or all repurchase agreements improperly completed, or if
Biometric's counsel believes their acceptance would be unlawful. Biometric also
reserves the right to waive any irregularity in the repurchase agreement.
Biometric's interpretation of the terms and conditions of the repurchase
agreement, including the instructions in the repurchase agreement, will be final
and binding. Biometric doesn't have to notify anyone of defects in connection
with repurchase agreements, and Biometric won't be liable for failure to give
that information.

Biometric will pay the purchase price to repurchase offerees who accept the
repurchase offer as soon as possible after Biometric receives the repurchase
agreement and the certificates and/or documents evidencing the repurchase
shares.

Repurchase offerees who elect not to accept the repurchase offer do not
have to respond to the repurchase offer. Repurchase offerees who do not respond
to the repurchase offer will continue to be the owners of the repurchase shares
and will hold repurchase shares subject to the restrictions which were in effect
at the time of their issuance.

Other Terms and Conditions

If Biometric receives such a large number of repurchase acceptances, or is
otherwise required to repurchase shares, so that it could not immediately pay
all shareholders without making Biometric insolvent under applicable law,
Biometric may elect to delay payment or pay some shareholders in installments to
avoid making Biometric insolvent. Biometric will not have to immediately make
repurchases that could constitute

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<PAGE> 16

insolvency distributions under applicable law. Management and Biometric's
auditors will make all necessary determinations about possible insolvency.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

As at November 10, 1998, we had 20,834,412 issued and outstanding fully
paid and non-assessable common shares without par value, each share carrying the
right to one vote. At September 9, 1999, Biometric had 57,684,208 common shares
issued and outstanding. BIOMETRIC HAS NO OTHER CLASSES OF VOTING SECURITIES.

To the knowledge of Biometric's management, as of September 9, 1999, no
person beneficially owns more than five percent of any class of Biometric's
voting securities other than as set forth below. The following table shows the
total amount of any class of Biometric's voting securities owned by each of its
executive officers and directors and by its executive officers and directors, as
a group, as of September 9, 1999.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME AND ADDRESS(1) OWNERSHIP(2) OF CLASS
------------------- ------------ ----------
<S> <C> <C>
Patrick McCleery(3)......................................... 4,079,958 6.8%

EXECUTIVE OFFICERS AND DIRECTORS
Robert M. Kamm.............................................. 0 0%
Robert F. Chase............................................. 540,000(4) 1.0%
Chester Idziszek............................................ 335,000(5) *
William A. Rand............................................. 2,679,364(6) 4.5%
Wayne Johnstone............................................. 479,700(7) 1.0%
Saundra J. Zimmer........................................... 95,000(8) *
All executive officers and directors as a group (6
persons)............................................... 4,129,064(2) 6.9%(2)
</TABLE>

- ---------------

* Less than one percent.

(1) The address for each of these persons other than Mr. McCleery is Suite
1940, 400 Burrard Street, Vancouver, British Columbia, Canada V6C 3A6. The
address for Mr. McCleery is 4510 Beverly Crescent, Vancouver, British
Columbia, Canada V6J 4E6.

(2) Beneficial ownership is determined in accordance with the rules of the SEC.
In computing the number of shares owned by a person and the percentage
ownership of that person, shares of common stock subject to options and
warrants held by that person that are currently exercisable or exercisable
within 60 days of May 31, 1999, are deemed outstanding. These shares,
however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Biometric does not know whether
any of these options or warrants will be exercised. Biometric relies on
information furnished by each of these persons as to their beneficial
ownership.

(3) Includes currently exercisable options and warrants, and options and
warrants exercisable within sixty days of the date of this prospectus to
purchase an aggregate of 1,420,000 shares as to Mr. McCleery and 750,000
shares as to Mrs. McCleery, with respect to which Mr. McCleery disclaims
any beneficial ownership. They also include 750,000 shares beneficially
owned by Mrs. McCleery, with respect to which Mr. McCleery disclaims any
beneficial ownership. Biometric does not know whether any of these options
or warrants will be exercised.

(4) Includes 250,000 shares and, in addition, warrants currently exercisable to
purchase 250,000 shares, owned by Mrs. Chase, with respect to which Mr.
Chase disclaims any beneficial ownership. Biometric does not know whether
any of these warrants will be exercised.

(5) Includes currently exercisable options and options exercisable within sixty
days of the date of this prospectus to purchase a total of 285,000 shares.
Biometric does not know whether any of these options will be exercised.

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<PAGE> 17

(6) Includes currently exercisable options and options exercisable within sixty
days of the date of this prospectus to purchase a total of 285,000 shares.
Also includes 1,432,864 shares and, in addition, warrants currently
exercisable to purchase 961,500 shares, beneficially owned by Rand Edgar
Capital Corp., a private British Columbia company, which is owned by the
wives of Mr. Rand and Brian Edgar and of which Mr. Rand was a director,
with respect to which Mr. Rand disclaims any beneficial ownership.
Biometric does not know whether any of these options or warrants will be
exercised.

(7) Includes currently exercisable options and warrants, and options and
warrants exercisable within sixty days of the date of this prospectus to
purchase a total of 291,050 shares. Also includes 10,000 shares owned by
Mrs. Johnstone, with respect to which Mr. Johnstone disclaims any
beneficial ownership. Biometric does not know whether any of these options
or warrants will be exercised.

(8) Includes currently exercisable options and options exercisable within sixty
days of the date of this prospectus to purchase a total of 95,000 shares.
Ms. Zimmer does not own any shares of Biometric's common stock. Biometric
does not know whether any of these options will be exercised.

To the knowledge of Biometric's management, there are no arrangements whose
operation may at a subsequent date result in a change of control of Biometric.

DIRECTORS AND EXECUTIVE OFFICERS

The employees and consultants forming Biometric's management team and
directors, and their resumes, are described briefly below.

Robert Kamm, President and Director

Mr. Kamm, age 42, has been President of Biometric since May 31, 1999 and a
director since that date. He is also Chief Executive Officer and a director of
Biometric Identification. He has served Biometric Identification in those
capacities since March 1998. Mr. Kamm is an experienced technology entrepreneur
and has started two previous technology companies. From May 1997 to March 1998,
Mr. Kamm was Chief Operating Officer and Chief Financial Officer of VideoActive
Corp. From January 1996 to May 1997, he was Senior Vice President of Monument
Mortgage, and from June 1994 to June 1995 he was President of Online Mortgage
Documents. Prior to obtaining his M.B.A., Mr. Kamm was employed by General
Motors Corporation's fuel systems division in manufacturing engineering
management. In this role, Mr. Kamm was responsible for divisional investment
planning and was also integrally involved in the development of GM's fuel
injection product line. Mr. Kamm received a B.S. degree in Economics and
Marketing from Alfred University in 1979, and received an M.B.A. in Finance from
the University of California (Los Angeles) in 1985.

Robert Chase, Chief Financial Officer and Director

Mr. Chase, age 56, has been Chief Financial Officer of Biometric since July
29, 1999 and a director since that date. In addition, he has been a director and
Chief Financial Officer of Biometric Identification since July 1999. Since 1998,
he has served as a director of Citation Resources Inc. and was its President
from September 1998 to July 1999. He is also President, Chief Executive Officer
and a director of Lexacal Investment Corp., having served in those capacities
since 1995. Since 1998, he has also served as President and a director of
Citation Resources Inc. He is also a director of Pacific Northern Gas Ltd. From
1989 to 1994, Mr. Chase was Senior Vice-President, Finance and Chief Financial
Officer of Westar Group Ltd. He received his Chartered Accountant designation
from the University of Manitoba in 1970.

Chester Idziszek, Director

Mr. Idziszek, age 51, is a director of Biometric. Mr. Idziszek devotes
approximately 10% of his time to Biometric. Mr. Idziszek has served Biometric in
this capacity since March 1, 1995. Mr. Idziszek is also the President and CEO
and a director of Adrian Resources Ltd., and a director of: Oromin Explorations
Ltd., Braddick Resources Ltd., Cross Lake Minerals Ltd. and Fresco Developments
Ltd. He is also President and a

14
<PAGE> 18

director of Madison Enterprises Corporation, Buffalo Diamonds Ltd., Hyperion
Resources Corp. and Maracote International Resources Inc., which was formerly
Cherry Lane Fashion Group. He was a director of Arequipa Resources Ltd. between
July 1993 and August 1996. In addition, from 1990 to 1992, he was the Chief
Executive Officer, President and a director of Prime Equities International
Corporation. Mr. Idziszek was also President of Prime Explorations Ltd. from
1987 to 1990. In addition, he has been a director and/or officer of numerous
other junior mining and resource companies trading on the Vancouver Stock
Exchange. These companies include Image Data International, La Plata Gold
Corporation, Barrier Technology, Haddington Resources Ltd., Arlo Resources Ltd.,
Minamerica Corporation and Waseco Resources Inc. Of these companies, Adrian
Resources Ltd., Madison Enterprises Corporation and Maracote International
Resources Inc. each have a class of securities registered under Section 12 of
the Securities Exchange Act of 1934. Mr. Idziszek has a B.Sc. (Geology) degree
from University of Waterloo (1971) and an M.Sc. (Appl. Min. Expl.) degree from
the University of Waterloo.

William A. Rand, Director

Mr. Rand, age 57, is a director of Biometric. Mr. Rand devotes
approximately 10% of his time to Biometric. Mr. Rand has served Biometric in
this capacity since November 1, 1995. Mr. Rand is a director of Rand Edgar
Investment Corp., an investment firm in Vancouver, B.C. which provides advisory
services to Biometric. Prior to that, Mr. Rand was a partner in a law firm and
practiced securities law. Mr. Rand currently sits on the board of a number of
publicly traded mineral resource companies. These companies include Consolidated
Team Resources Corp., Dome Ventures, Inc., Broadlands Resources Corp.,
International Curator Resources Ltd., International Uranium Corp., Lexacal
Investment Corp., Lundin Oil AB, Red Sea Oil Corporation, Santa Catalina Mining
Corp., South Atlantic Resources Corp., Tanganyika Oil Co. Ltd., and Tenke Mining
Corp. Of the companies for which Mr. Rand is a director, Broadlands Resources
Ltd., International Curator Resources Ltd., International Uranium Corp., Lundin
Oil AB and Tenke Mining Corp. each have a class of securities registered under
Section 12 of the Exchange Act. Mr. Rand has considerable expertise in
organizing and managing emerging public mineral resource exploration companies.
Mr. Rand has a B.Comm. degree from McGill University (1963), an LLB degree from
Dalhousie University (1966) and an LLM degree from the London School of
Economics (1977).

Wayne Johnstone, Director

Mr. Johnstone, age 45, is a director of Biometric. Mr. Johnstone devotes
approximately 70% of his time to Biometric. Mr. Johnstone has served Biometric
in this capacity since June 30, 1998 and was a director of Biometric's
predecessor, Sonoma Resource Corp., from August 1989 to November 1995. He has
served as Corporate Secretary of Alantra Venture Corp. since June 1999. Mr.
Johnstone is a self-employed chartered accountant providing consulting and
accounting services to various publicly traded companies. Prior to that Mr.
Johnstone served as a senior accountant for Viceroy Resource Corp. and
controller of Baja Gold Inc., a company which merged with Viceroy Resource
Corp., from February 1994 to December 1996. Prior to that Mr. Johnstone served
as an accountant for Weston Mineral Services Ltd., a private British Columbia
company. Mr. Johnstone has a B.Comm. degree from The University of British
Columbia (1978).

Saundra Zimmer, Secretary

Ms. Zimmer, age 36, is the Secretary of Biometric and is employed by
Biometric on essentially a full time basis. Ms. Zimmer devotes approximately 75%
of her time to Biometric. Ms. Zimmer has served Biometric as Secretary since
June 21, 1995 and was previously Secretary of Biometric from August 1989 and May
1993. Ms. Zimmer has been the Administrative Assistant of Biometric since August
1, 1995 and before that from 1986 and 1990. From 1990 to 1995, she was the
Administrative Assistant of Rich Coast Resources Ltd. She has been a director of
Alantra Venture Corp. since March 1998, and Corporate Secretary of Kaieteur
Resource Corporation since November 1, 1995.

15
<PAGE> 19

EXECUTIVE COMPENSATION

We are required to set out particulars of compensation paid to the
following persons:

(a) Biometric's chief executive officer during the most recently completed
fiscal year;

(b) each of Biometric's four most highly compensated executive officers
who were serving as executive officers at the end of the most recently
completed fiscal year and whose total salary and bonus exceeds US$
100,000 per year; and

(c) any additional individuals for whom disclosure would have been
provided under (b) except that the individual was not serving as an
executive officer of Biometric at the end of the most recently
completed fiscal year.

On December 31, 1998, the end of its last full fiscal year, Biometric
employed only one person meeting any of those requirements, namely, Patrick W.
McCleery, then the Chairman of the Board, President and a director of Biometric.
Accordingly, the only person treated in the following charts is Mr. McCleery.

SUMMARY OF COMPENSATION

The following table is a summary of compensation paid to Mr. McCleery
during Biometric's last three fiscal years.

ANNUAL COMPENSATION LONG TERM COMPENSATION
AWARDS PAYOUTS
RESTRICTED
SHARES
SECURITIES OR
FISCAL OTHER ANNUAL UNDER RESTRICTED
NAME AND YEAR COMPENSATION OPTIONS SHARE LTIP ALL OTHER
POSITION OF PRINCIPAL ENDING SALARY BONUS (CDN. $)(1) GRANTED UNITS PAYOUTS COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PATRICK W. MCCLEERY 1998 0 0 $120,059 420,000 0 N/A 0
Chairman of the Board and 1997 0 0 $127,122 0 0 N/A 0
President 1996 0 0 $117,196 359,761 0 N/A 0
</TABLE>

(1) Other annual compensation included consulting fees in connection with Mr.
McCleery's managerial activities, and corporate finance advisory fees paid
to Mr. McCleery.

LONG-TERM INCENTIVE PLANS -- AWARDS IN MOST RECENTLY COMPLETED FISCAL YEAR

Biometric has no long-term incentive plan in place. A "Long-Term Incentive
Plan" is a plan under which awards are made based on performance over a period
longer than one fiscal year. It is different from a plan for options, SARs, or
stock appreciation rights, or restricted share compensation.

16
<PAGE> 20

OPTIONS AND STOCK APPRECIATION RIGHTS GRANTED DURING THE MOST RECENTLY COMPLETED
FISCAL YEAR

During its last fiscal year Biometric granted the following incentive stock
options to Mr. McCleery. Biometric did not grant any stock appreciation rights
during this period.
<TABLE>
<CAPTION>

MARKET VALUE
OF SECURITIES
UNDERLYING
SECURITIES % OF TOTAL OPTIONS ON
UNDER EXERCISE OR OPTIONS THE DATE OF
OPTIONS BASE PRICE GRANTED TO GRANT (CDN$/
DATE OF GRANTED (CDN$/ EMPLOYEES IN SECURITY)
NAME GRANT (#) SECURITY) FISCAL YEAR (1) EXPIRATION DATE
<S> <C> <C> <C> <C> <C> <C>
PATRICK W. MCCLEERY Jan. 28, 1998 420,000 $0.23 23.5% $0.23 January 28, 2001

POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
OPTION TERM
NAME 5%($) 10%($)
<S> <C> <C>
PATRICK W. MCCLEERY $9,950 $20,286
</TABLE>

(1) Calculated as the closing price of Biometric's shares on the Vancouver Stock
Exchange on the date of the grant.

AGGREGATED OPTIONS AND STOCK APPRECIATION RIGHTS EXERCISED DURING THE MOST
RECENTLY

COMPLETED FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES

The following table sets out incentive stock options exercised by Mr.
McCleery during the last fiscal year, as well as the fiscal year end value of
stock options held by him. During this period, he held no outstanding stock
appreciation rights.

VALUE OF UNEXERCISED
SECURITIES AGGREGATE UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END ($)
EXERCISE REALIZED (CDN$) EXERCISABLE/UNEXERCISABLE EXERCISABLE/
NAME (#) (1) (#) UNEXERCISABLE (2)
<S> <C> <C> <C> <C>
PATRICK W. MCCLEERY 0 0 420,000/0 0/0
</TABLE>

(1) Based on the difference between the option exercise price and the closing
market price of Biometric's shares, on the date of exercise.

(2) In-the-Money Options are those where the market value of the underlying
securities as at the most recent fiscal year end exceeds the option exercise
price. The closing market price of Biometric's shares on December 31, 1998
(i.e., fiscal year end) was Cdn.$0.18.

TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS

Effective May 31, 1999, Patrick McCleery resigned as Chairman, President
and a director of Biometric. Mr. McCleery and Biometric have made an agreement,
dated May 31, 1999, that Mr. McCleery will be paid $4,000 per month plus
severance pay of $6,000 per month, plus benefits and stock options as determined
by the board of directors. This agreement expires on June 30, 2001. There are no
employment contracts between Biometric and any of its officers. Effective July
29, 1999, Biometric appointed Robert Chase as Chief Financial Officer, at a
remuneration of $10,000 per month payable to Lexacal Investment Corp., of which
Mr. Chase is President, Chief Executive Officer and a director. Biometric has no
defined benefit or actuarial plans.

COMPENSATION OF DIRECTORS

Mr. McCleery's compensation was disclosed above. Biometric did not pay any
cash compensation to any other Biometric director for his services as a director
during the fiscal year ended December 31, 1998.

Biometric has no standard arrangement to compensate directors for their
services in their capacity as directors except for the granting from time to
time of incentive stock options in accordance with the policies of the Vancouver
Stock Exchange. During the last fiscal year, Biometric granted its directors,
other than Mr. McCleery, incentive stock options to purchase a total of 665,000
Biometric common shares. It granted 285,000 to William Rand, 285,000 to Chester
Idziszek, and 95,000 to Wayne Johnstone. These options are exercisable up to the
close of business on January 28, 2001.

17
<PAGE> 21

All of the existing stock options are non-transferable and terminate on the
earlier of the expiration date or the 30th day after the date on which the
director, officer or employee, as the case may be, terminates his position at
Biometric. If a director is forced to resign or is removed by special
resolution, or if a senior officer or other employee is fired for cause, his
options expire on the day of removal or firing.

The outstanding options will be adjusted if Biometric consolidates,
subdivides or similarly changes its share capital.

During the fiscal year ended December 31, 1998 Biometric paid $56,561 to
Rand Edgar Investment Corp. and Wayne Johnstone for consulting fees. Rand Edgar
Investment Corp. is owned equally by William A. Rand, a director of Biometric,
and Brian Edgar.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Biometric has no committee that performs the function of a compensation
committee. None of Biometric's officers or directors serves on a committee
making compensation decisions of any other entity. directors generally
participate in compensation-related matters.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as disclosed below, since the start of the last completed fiscal
year, no insider of Biometric, or any associate or affiliate of an insider, had
any material interest, direct or indirect, in any transaction or any proposed
transaction which has materially affected or would materially affect Biometric.

Effective July 29, 1999, Biometric appointed Robert Chase as Chief
Financial Officer, at a remuneration of $10,000 per month payable to Lexacal
Investment Corp., of which Mr. Chase is President, Chief Financial Officer and a
director.

Also effective May 31, 1999, Robert M. Kamm succeeded Patrick McCleery as
President of Biometric, and became a director of Biometric. Mr. Kamm is Chief
Executive Officer of Biometric Identification. From June 1998 through July 1999,
Biometric has invested a total of US$ 5,000,000 in convertible debentures of
Biometric Identification. These debentures are convertible into the common stock
of Biometric Identification. Based on the current number of Biometric
Identification shares outstanding, if Biometric converted all of its debentures,
it would own 45% of the outstanding common stock of Biometric Identification.
For a discussion of this investment and the terms of the debentures, please see
"Biometric Security Corp. -- Description of Business of Biometric Security
Corp.," below.

In June 1998, Biometric agreed to acquire an interest in Biometric
Identification, Inc., a private California corporation. The Biometric
Identification acquisition was arranged by Rand Edgar Capital Corp., a private
company controlled by the spouses of Brian Edgar and William Rand. Mr. Rand is a
director of Biometric. Rand Edgar Capital originally entered into a memorandum
of understanding with Biometric Identification and with Arete Associates, a
private California company, dated March 18, 1998, amended and replaced May 20,
1998. Rand Edgar Capital assigned its interest in the amended memorandum to
Biometric on May 21, 1998 in exchange for a fee of US$145,000, plus
reimbursement of its expenses. As of June 12, 1998, Rand Edgar Capital elected
to take its fee in the form of 715,575 common shares of Biometric to be issued
at a price of $0.30 per share for a total value of US$145,000. Biometric's
closing stock price on the VSE on June 12, 1998, was $0.28. These shares were to
be issued in pro rata tranches in accordance with the tranche advances being
made by Biometric to Biometric Identification. These finders fee shares were
actually issued in the form of special warrants at a price of $0.30 per special
warrant. Each special warrant is exercisable without the payment of any
additional consideration into one common share of Biometric. Rand Edgar Capital
elected to take shares valued at US$145,000 instead of cash in order to help
Biometric conserve

18
<PAGE> 22

its cash. "Special warrants" can be converted to shares at the holder's option.
As at December 31, 1998, Biometric had issued 250,450 shares to Rand Edgar
Capital under the terms of this agreement. As of August 11, 1999, Biometric
issued the remaining 465,125 shares to Rand Edgar Capital under the terms of
this agreement. For further information about this acquisition, please see
"Biometric Security Corp. -- Business of Biometric Security Corp.," below.

During 1998, Rand Edgar Capital loaned Biometric a total of $250,000. The
loan is unsecured and was due on December 26, 1998. A total of $99,225 of the
loan was repaid on December 29, 1998, and the balance of the loan of $150,775
was repaid after December 31, 1998. As of August 11, 1999, Biometric also issued
65,789 shares at a deemed price of $0.19 per share, as allowed for under the
rules of the Vancouver Stock Exchange, as consideration for the loan. The value
of these shares was based on Biometric's closing stock price on the VSE on
November 25, 1998, the date the loan was made, which was $0.19.

As part of a private placement completed on July 22, 1999, Barbara Chase,
the wife of Robert Chase, Chief Financial Officer and a director of Biometric,
and Wendy McCleery, the wife of Patrick McCleery, formerly Chairman, President
and a director of Biometric, participated in an offering of units at $0.20 per
unit. Each unit consisted of one common share and one non-transferable share
purchase warrant, and each warrant was exercisable for a period of two years at
a price of $0.20 in the first year and $0.23 in the second year. Mrs. Chase and
Mrs. McCleery each subscribed for 250,000 units. Biometric's closing stock price
on the VSE on July 22, 1999, was $0.20.

As part of a private placement completed on April 15, 1999, Patrick
McCleery and Wendy McCleery participated in an offering of units at $0.15 per
unit. Each unit consisted of one common share and one non-transferable share
purchase warrant, and each warrant was exercisable for a period of two years at
a price of $0.15 in the first year and $0.17 in the second year. Mr. McCleery
subscribed for 500,000 units and Mrs. McCleery for 500,000 units. Biometric's
closing stock price on the VSE on April 15, 1999, was $0.25.

As part of a private placement completed on January 29, 1999. Patrick
McCleery and Wayne Johnstone and Rand Edgar Capital and Wendy McCleery
participated in the offering of units at $0.15 per unit. Each unit consisted of
one common share and one non-transferable share purchase warrant, and each
warrant was exercisable for a period of two years at a price of $0.15 in the
first year and $0.17 in the second year. Mr. McCleery subscribed for 500,000
units, Mr. Johnstone for 96,050 units, Mrs. McCleery for 823,000 units and Rand
Edgar Capital for 661,500 units. Biometric's closing stock price on the VSE on
January 29, 1999, was $0.20.

As part of a private placement completed on May 15, 1998, Wendy McCleery,
Wayne Johnstone and Rand Edgar Capital participated in an offering of special
warrants at a price of $ 0.15 per special warrant. Each warrant was
exchangeable, at no additional cost, into one common share and one
non-transferable share purchase warrant that was exercisable for a period of two
years at a price of $0.15 in the first year and $0.17 in the second year. Mrs.
McCleery subscribed for 1,000,000 special warrants, Rand Edgar Capital
subscribed for 300,000 special warrants and Mr. Johnstone subscribed for 100,000
special warrants. Biometric's closing stock price on the VSE on May 15, 1998,
was $0.22.

During the fiscal year ended December 31, 1998, Biometric paid a total of
$56,561 to Rand Edgar Investment Corp. and Wayne Johnstone for consulting fees.
Rand Edgar Investment Corp. is owned equally by William A. Rand, a director of
Biometric, and Brian Edgar. Also during that fiscal year, Biometric paid
$120,059 in consulting fees to Patrick McCleery. Please see "Executive
Compensation -- Summary of Compensation" for more information about Mr.
McCleery's compensation when he was Chairman of Biometric. The terms of these
consulting arrangements were as fair to Biometric as those that Biometric could
have obtained from unrelated third parties and arm's-length negotiation.

19
<PAGE> 23

BIOMETRIC SECURITY CORP.

DESCRIPTION OF BUSINESS

Structure of Biometric Security Corp.

Biometric Security Corp. was incorporated by registration of its memorandum
and articles under the Company Act (British Columbia) on January 16, 1979 under
the name "North American Power Petroleums Inc." Its name was changed to "Sonoma
Resource Corp." on January 5, 1990. Sonoma adopted a new set of Articles
effective as of July 19, 1996.

On November 10, 1998 Sonoma transferred its domicile from British Columbia
to the State of Wyoming, changed its name from "Sonoma Resource Corp." to
"Biometric Security Corp." and adopted Articles of Continuance governed by
Wyoming law but unchanged from its prior charter except so as to conform to
requirements of the Wyoming corporations statute. On November 12, 1998,
Biometric increased its authorized capital to an unlimited number of common
shares.

Biometric's executive offices are located at Suite 1940, 400 Burrard
Street, Vancouver, British Columbia, Canada, V6C 3A6. Its registered office and
address for service in British Columbia is care of its solicitors, Catalyst
Corporate Finance Lawyers, Suite 1100, 1055 West Hastings, Vancouver, British
Columbia, Canada V6E 2E9. Biometric's registered office and address for service
in Wyoming is care of its Wyoming attorneys, Hathaway, Speight & Kunz, LLC, 2515
Warren Avenue, P.O. Box 1208, Cheyenne, Wyoming, U.S.A. 82003-1208.

On December 31, 1998 Biometric owned six subsidiaries, detailed in the
chart below, which are related to its mineral exploration activities in
Argentina. See "Business of Biometric Security Corp. -- Historical Operations:
Mineral Exploration in Argentina" for more information about these activities.
Except for Sonoma Resource de Argentina S.A., further described below, none of
the subsidiaries has any material assets and Biometric plans dissolve them as
soon as possible.

<TABLE>
<CAPTION>
DATE OF JURISDICTION OF PERCENTAGE
NAME OF SUBSIDIARY INCORPORATION INCORPORATION OWNERSHIP(1)
------------------ ------------- --------------- ------------
<S> <C> <C> <C>
Sonoma Resource de Argentina S.A. November 30, 1995 Argentina 100%
Castano S.A. August 7, 1996 Argentina 100%
Castano Mining (Barbados) Ltd. June 6, 1996 Barbados 100%
Cerro Toro S.A. August 5, 1996 Argentina 100%
Cerro Toro Mining (Barbados) Ltd. June 6, 1996 Barbados 100%
Sonoma Resource (Bermuda) Ltd. June 5, 1996 Bermuda 100%
</TABLE>

- ---------------
(1) Represents the percentage of voting securities held. None of the
subsidiaries has any non-voting securities outstanding.

Business of Biometric Security Corp.

Historical Operations: Mineral Exploration in Argentina

Until mid-1998 Biometric's business was exclusively mineral exploration. In
light of the state of the markets for gold and other precious metals, Biometric
made a strategic decision to leave the resource sector and began disposing of
its mineral exploration assets. Biometric made this change because management
believes that the price of gold will remain depressed into the foreseeable
future. That means that Biometric, in common with other precious metal
exploration companies, would have trouble financing its exploration operations,
since this financing is based on cash flow estimates of future production from
mineral properties. With low metals prices, even if mines are put into
production, the cash flows based on those prices may not be high enough to
justify exploration financing.

On December 31, 1998, Biometric's mineral exploration assets were held
indirectly through its wholly-owned subsidiary Sonoma Resource de Argentina S.A.
This subsidiary owned 100% of the Cerro Toro Project

20
<PAGE> 24

located in the San Juan Province of Argentina and the Apeleg Claim Block located
in the Chubut Province of Argentina, which included 9 properties comprising
93,709 hectares. These limited Argentina operations were what remained following
cutbacks made by Biometric earlier in 1998, when Biometric had significantly
reduced its staff and overhead in Argentina and had substantially cut back on
its exploration activities.

In November 1998, Biometric through its subsidiary reached an agreement to
sell up to 100% of its Argentinean properties to Inlet Resources Ltd., a
corporation organized under British Columbia law with executive offices in
Vancouver. In order to grant Inlet an option to acquire 90% of the properties,
Inlet and Biometric entered into a written agreement for the purchase on January
21, 1999, which was approved on February 15, 1999 by the Canadian regulatory
authorities. Under the agreement, Inlet must pay US$ 750,000 and issue 300,000
of its shares to Biometric over a three year period and also complete a work
commitment requiring expenditure of US$ 2,150,000. Under this work commitment,
Inlet must spend a total of US$ 2,150,000 on exploration work over three years,
on the optioned Argentinean properties. If Inlet fails to meet this commitment,
it will lose the right to exercise its option to acquire the properties. Inlet
may acquire the remaining 10% by the payment of US$ 2,000,000 to Biometric. By
March 1, 1999, Biometric had received US$ 150,000 and 100,000 common shares of
Inlet.

Inlet is a public company whose stock is traded on the Vancouver Stock
Exchange. The closing price for Inlet's stock on June 9, 1999, was $0.07. Inlet
is engaged in the acquisition, exploration, development and subsequent
production relating to mining properties. Biometric had acquired 100,000 shares
of Inlet common stock and has since sold the shares for $11,078. Biometric holds
no Inlet shares at this time. At December 31, 1998, Inlet had 20,174,875 shares
outstanding. If Biometric receives 200,000 shares of Inlet stock, Biometric's
ownership percentage would be approximately 1%.

When Inlet has met all its obligations under the agreement, Biometric will
have completed its departure from the natural resource sector. It has no plans
to return to this industry.

Current Activity: Investment in U.S. Fingerprint Technology Company

On June 12, 1998, Biometric entered into an agreement to acquire up to US$
5,000,000 of convertible debentures to be issued by Biometric Identification,
Inc., a California corporation which is engaged in development of fingerprint
identification technology and related products. Biometric now has no other
activity than its investment in Biometric Identification but, as further
discussed below, is contemplating entering into the same business as Biometric
Identification.

Biometric Identification is controlled by Arete Associates, a California
corporation having its executive offices in Los Angeles. Arete owns
approximately 80% of the issued and outstanding shares of Biometric
Identification. Employees of Biometric Identification and Arete hold the
remaining shares of Biometric Identification.

Arete has been a Department of Defense research and development contractor
for over 20 years specializing in sensor systems and pattern recognition
software development. Many of Arete's mathematicians and physicists helped
develop the fingerprint identification technology now being further developed
and commercialized by Biometric Identification. Arete has obtained the
recognition of the technical community through an integration of scientific
knowledge and advanced sensor systems expertise.

21
<PAGE> 25

Terms of Investment in Biometric Identification Inc.

Under the Biometric Identification debenture purchase agreement, Biometric
agreed to invest in Biometric Identification by purchasing in a series of
tranches up to US$ 5,000,000 of convertible debentures issuable by Biometric
Identification. The Biometric Identification debentures bear interest at the
lowest "applicable federal rate" required to avoid imputation of interest under
U.S. tax law and, unless converted, will mature and be payable on June 12, 2003,
the fifth anniversary after the closing date of the first three tranches. As of
July 23, 1999, Biometric had purchased all US$ 5,000,000 of the debentures as
shown in the following table:

<TABLE>
<CAPTION>
DESIGNATION PRINCIPAL AMOUNT OUTSIDE PURCHASE DATE
----------- ---------------- -----------------------------
<S> <C> <C>
Tranche A & B US$ 350,000 Advanced before June 12, 1998
Tranche C US$ 900,000 Advanced on June 12, 1998
Tranche D US$ 500,000 Advanced on August 12, 1998
Tranche E:
First advance US$ 75,000 Advanced on November 13, 1998
Second advance US$ 250,000 Advanced on November 25, 1998
Third advance US$ 250,000 Advanced on December 18, 1998
Fourth advance US$ 550,000 Advanced on January 29, 1999
Fifth advance US$ 125,000 April 16, 1999
Tranche F US$ 500,000 April 16, 1999
Tranche G US$ 1,500,000 Completed July 23, 1999
Total: US$ 5,000,000
</TABLE>

Biometric may convert the Biometric Identification debentures at any time
into shares of Biometric Identification common stock. The debentures will be
automatically converted on an initial public offering by Biometric
Identification. As shown in the following table, if Biometric were to
immediately convert all of its Biometric Identification debentures without
Biometric Identification having issued any additional dilutive securities,
Biometric would hold 45% of Biometric Identification's common stock. That
percentage, however, is subject to dilution resulting from share issuances
resulting from exercise of stock options granted or to be granted under
Biometric Identification's incentive stock option plan as well as any subsequent
equity financings undertaken by Biometric Identification in which Biometric does
not participate.

<TABLE>
<CAPTION>
PERCENT UPON
CONVERSION OF
DESIGNATION ENTIRE TRANCHE CUMULATIVE PERCENTAGE
----------- -------------- ---------------------
<S> <C> <C>
Tranche A, B & C............................ 20.00% 20.00%
Tranches D & E.............................. 13.33% 33.33%
Tranches F & G.............................. 11.67% 45.00%
</TABLE>

Biometric has not made a decision whether to exercise its right to convert
the Biometric Identification debentures.

The Biometric Identification debenture purchase agreement includes
acknowledgements by Biometric and Biometric Identification that they intend to
merge if they determine it is in their interests following analysis of their
mutual business objectives and whether a merger could be advantageously
structured following consideration of tax, securities and other legal matters.
The Biometric Identification debenture purchase agreement has no legally binding
provision requiring the parties to merge, and the parties are not currently
conducting any merger negotiations.

Rand Edgar Capital Corp., a private British Columbia corporation with
executive offices in Vancouver, British Columbia, arranged for Biometric's
purchase of the Biometric Identification debentures. Rand Edgar Capital is owned
and controlled by two persons, one of whom is the wife of Mr. William Rand, a
director of Biometric.

22
<PAGE> 26

Rand Edgar Capital originally entered into a memorandum of understanding
with Biometric Identification and with Arete dated March 18, 1998, amended and
replaced May 20, 1998. Rand Edgar Capital assigned its interest in the
memorandum to Biometric on May 21, 1998 upon payment of US$ 145,000 plus
reimbursement of its expenses. On June 12, 1998, Rand Edgar Capital elected that
its fee could be paid in the form of 715,575 common shares of Biometric at $0.30
per share. These shares were issued in pro rata tranches with the closing of
tranches of Biometric's purchase of Biometric Identification debentures. Finders
fee shares issued to date have actually been in the form of special warrants,
each exercisable for one share of Biometric's common stock at $0.30 per share.
As of December 31, 1998, Biometric had issued 250,450 shares to Rand Edgar
Capital in connection with the finder's fee. In addition, as of August 11, 1999,
Biometric issued 465,125 shares to Rand Edgar Capital in respect of the
Biometric Identification debentures that Biometric purchased on November 13 and
25, 1998, December 18, 1998, January 29, 1999, April 16, 1999 and July 23, 1999.
This completes the issuance of all the shares Biometric agreed to issue to Rand
Edgar Capital in connection with the finder's fee.

BUSINESS OF BIOMETRIC IDENTIFICATION INC.

Overview

Biometric Identification was incorporated in 1995 as a subsidiary of Arete.
Arete granted Biometric Identification an exclusive world-wide license for all
uses of Arete's fingerprint identification technology, to the full extent of
Arete's rights in the technology. The license agreement provides that Biometric
Identification will pay Arete a license fee of US$ 0.10 per unit for the first
2,500,000 products and US$ 0.05 per unit for the next 20,000,000 products. Upon
the payment of US$ 1,250,000 of royalties, Arete will transfer ownership of the
licensed intellectual property outright to Biometric Identification. Although
the license has no expiration date, Arete can terminate the license on 30 days'
notice if Biometric Identification materially breaches the license agreement.

Biometric Identification has continued to develop the Arete technology and
undertake its commercialization. Biometric Identification's products use
patented software for positive personal identification. The technology provides
a higher level of security and ease of use compared to traditional older methods
of identification such as personal identification numbers and passwords. The
advantage of Biometric Identification fingerprint identification technology
relative to competitive products derives from its greater accuracy because it
images the entire fingerprint and the rapidity with which it can be integrated
into customer identification systems.

Biometric Technologies

Biometrics is the science of identifying an individual through his or her
own unique physical characteristics. The biometrics industry is based upon the
premise that there are substantial commercial markets for positive personal
identification based on the widespread need of employers, governmental agencies,
service companies, among others, for accurate, rapid, cost-efficient and
user-acceptable identification of persons. The existence of passwords for data
access, PINs for ATM and account access, identification cards, photos and
signatures on credit cards provides evidence of this need.

There are six primary forms of biometric technology, as listed below.
Biometric Identification is focusing on fingerprint identification technology.

- Fingerprint Scanning -- mainly used for retail point of sale and credit
card transactions, e-commerce and Internet/intranet security

- Face Recognition -- mainly used for governmental applications such as
welfare agencies and departments of motor vehicles

- Hand Geometry -- mainly used for time and attendance monitoring

- Iris/Retina Scanning -- mainly used for high security applications such
as nuclear power plants

- Voice Recognition -- mainly used for remote access applications such as
remote banking

- Signature Recognition -- mainly used for document processing in financial
and insurance industries and in government applications
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<PAGE> 27

Technology and Products

Biometric Identification's products use a patented fingerprint verification
software. The system registers the entire fingerprint of an individual, saves a
template of it, and then at a later time verifies the individual's identity by
retrieving the template and comparing it with a newly obtained fingerprint
image. Biometric Identification's line of biometric fingerprint identification
products includes those which can be used in stand-alone mode or as part of a
larger application. These products can be integrated into a broad range of
existing applications that require user authentication such as access to
personal computers, computer networks, ATMs, credit card readers and physical
access control systems.

Competitive Features of Biometric Identification's Fingerprint Identification
Technology

Verification software is the essential component of fingerprint
identification biometrics. Biometric Identification's software presents
improvements in accuracy of verification and integration with other software and
hardware. Biometric Identification's products are small, versatile and
inexpensive. During 1998, Biometric Identification spent US$ 1,500,000 on
product research and development. Biometric Identification plans to spend
approximately US$ 2 million in 1999.

Biometric Identification's products are unique among fingerprint
identification systems for three major reasons:

- - Accuracy and Long-Term Reliability of Identification.

Many fingerprint verification software techniques involve making
identification based on certain features of the fingerprint, known as "minutia",
but not the entire fingerprint. These minutia-based programs can be fooled by
temporary alterations such as changes to the finger due to cuts or swelling. In
contrast, the Biometric Identification technique images the entire two
dimensional ridge structure of the fingerprint so as to create a template for
comparison purposes. The software's comparison technique compensates for image
distortion, dislocation, rotation, sensor noise, finger swelling and scarring.
It is only after performance of these compensatory techniques, and the process
then indicates that the two print images still do not match, that the candidate
print is declared dissimilar to the template.

Minutia-based systems often have difficulty compensating for distortion and
other factors so that over time they become less reliable in identifying stored
fingerprints. This can require individuals to re-enroll, i.e., create new
templates, and increases the probability of a false rejection.

Test results confirm that Biometric Identification's identification system
is highly accurate. Less than one usage in a thousand results in a false
positive, i.e., incorrect identity confirmation, or false negative, i.e.,
failure to confirm identity. The system permits enrollment of new users through
one touch in a process completed within less than five seconds. Response time in
usage is usually less than one second. Biometric Identification tests the
accuracy of its fingerprint identification systems using various software
programs that test the products throughout the manufacturing process. The tests
include general checks of systems and circuitry, and tests for tolerance of
image quality.

- - Flexibility and Rapidity of Integration into Products.

Another unique feature of Biometric Identification's products is that the
software, rather than being a permanent, unchangeable part of a computer chip,
is programmable and therefore more flexible for various uses. This means that
the software can be more easily integrated into products developed by original
equipment manufacturers or value added resellers which are sold to the ultimate
user. By comparison, most competitive products rely on so-called "application
specific integrated circuit" technology, sometimes referred to as "software
frozen into silicon," which does not lend itself so readily to customization
because the software is a permanent part of the chip in that technology, and
cannot be changed.

Biometric Identification has also developed an application software
development kit to assist, for example, value added resellers in integrating
their software with Biometric Identification products. Biometric
Identification's software is compatible with Windows 95 and Windows NT and is
provided in the form of a "dynamic link library" which means that Biometric
Identification's software can link, or communicate, with

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<PAGE> 28

the user's. This allows a user to customize the products for purposes of meeting
the user specific needs and enabling capability with its computer environment.

- - Small and Inexpensive Products.

Biometric Identification's products use silicon sensor technology to take a
picture of the fingerprint. Silicon sensor technology is smaller than a quarter
coin, which allows Biometric Identification to embed it in very small devices.
Biometric Identification is the first company to complete the integration of its
software into a self-contained system the size of a business card, as included
in its Veriprint 1100 product, discussed below. Biometric Identification's
products require only microprocessors to run their software. This makes them
less expensive than competitors' products, which have to be run on PCs since
their software requires other PC components such as hard drive and memory cards,
rather than the PC's microprocessor alone.

Biometric Identification's Products

Biometric Identification has developed three main products. The first is
Biometric Identification's core software technology and the next two represent
customer-ready applications. Biometric Identification's product line of
biometric fingerprint identification products includes products which can be
deployed in stand-alone mode or as part of a larger application. Biometric
Identification does not manufacture its own products but instead "outsources"
its manufacturing so as to control costs.

Currently, Biometric Identification's major outside manufacturer is
PrimeTech Electronics, Inc. This relationship is not exclusive for either
Biometric Identification or PrimeTech, and Biometric Identification believes
that it can readily find other outside manufacturers if PrimeTech were to be
unavailable to manufacture Biometric Identification products. Biometric
Identification purchases silicon sensors, its primary manufacturing component,
either directly from the large silicon sensor companies such as Infineon
Corporation (formerly a division of Siemens), Harris, ST Micro, Veridicom and
Thomson CSF Semiconducteurs Specifiques, or through PrimeTech. Biometric
Identification purchases its board parts, meaning the collection of printed or
soldered circuitry on which the sensors are placed, from PrimeTech. Biometric
Identification has not entered into written purchasing or supply contracts with
any of these companies.

Biometric Identification's existing product line is summarized below. All
of these products are available for retail sale:

1. BIOMETRIC IDENTIFICATION FINGERPRINT IDENTIFICATION
SOFTWARE -- The core software which is the "engine" of Biometric
Identification's product applications and features the following:

- Biometric Identification's patented fingerprint verification
software that, as discussed above, focuses on fingerprint ridge
patterns rather than minutia

- detection of latex/rubber fake fingers used to "fool" less
sophisticated identification systems

- performs both matching (one-to-one) and searching (one-to-many)
in a database

2. VERIPRINT 2100 OPTICAL TERMINAL -- Complete biometric terminal
with case, keypad and small liquid crystal display. This product
is presently an "optically based sensor" product, meaning that it
uses light or optics to sense or "see" the fingerprint. Each unit
sells for US$ 800 to US$ 900. The product has been available since
1997 and there are now approximately 3,500 units being used in
connection with time and attendance and access control
applications.

Biometric Identification hopes during the first half of 2000 to
achieve "silicon sensor" integration which is superior to an
optically based sensor product because use of silicon enables the
product to become much smaller without loss of performance.

3. VERIPRINT 1100 SILICON SENSOR, INTEGRATION COMPONENT -- Introduced
in 1998, this is the first ever use of "silicon sensor" technology
in a self-contained programmable fingerprint system including
template storage for up to 4,000 persons. The product is smaller
than a business card and no thicker than a half dollar, so that it
can be easily integrated into equipment manufacturer products such
as readers and keyboards. Biometric Identification sells this to
equipment

25
<PAGE> 29

manufacturers for approximately US$ 200-400 per unit, depending on
volume. Applications include safeguarding Internet access, electronic
commerce and other sensitive data applications.

In addition to its existing products, Biometric Identification is also
working on a new product, the Veriprint 2200, which Biometric Identification
expects to begin marketing in 2000. This product is to be a hybrid of the
Veriprint 1100 and the Veriprint 2100 in that it will incorporate the silicon
sensor technology of the Veriprint 1100, and will include a case, keypad and
screen display similar to the Veriprint 2100. The Veriprint 2200 will contain a
limited amount of storage for the fingerprint templates.

Biometric Identification's plans for additional future revenue include
licensing its proprietary fingerprint identification software to large original
equipment manufacturers in such areas as smart card technology, electronic
commerce, and computer equipment. Biometric Identification does not currently
license its technology to any equipment manufacturers, but its software is
currently being tested by several equipment manufacturers in anticipation of
forming a licensing relationship in the future.

Product Integration

Biometric Identification has integrated its products with newly-introduced
silicon sensor-based technology and is working with five vendors of the
integrated system: Veridicom, Inc., ST Micro Electronics, Thomson CSF
Semiconducteurs Specifiques, Infineon Corporation (formerly a division of
Siemens) and AuthenTec Inc. Biometric Identification has also completed product
integration with several other manufacturers such as Radionics, Inc.,
Westinghouse Security Electronics, Inc., Chubb Security, Simplex, Northern
Computer and Apollo Computer. The integration process is time-consuming and
expensive because it generally involves two levels of integration: first, the
hardware must be designed to accommodate the company's products; then the
software must be integrated with the hardware.

Biometric Identification has not entered into written supply, production or
distribution contracts with any of the companies that integrate Biometric
Identification's products with theirs. Biometric Identification typically enters
into non-disclosure agreements with these companies, and provides other
documents concerning the product integration process such as product
specifications and integration timetables.

Market for Products

Market Overview

The biometrics industry started with forensic applications using
fingerprints for law enforcement and government security applications. In the
last 30 years, electronic fingerprinting has evolved as an alternative storage
and retrieval medium to paper and ink.

Biometric Identification believes that the fingerprint identification
segment is a large and widely accepted method of biometric identification. New
technologies, such as Biometric Identification's products, are overcoming the
historical problems of inaccuracy, false rejections and user nonacceptance that
have limited the use of this tool for biometric identification and have held
back long term market growth. With advances in computer technology, including
cost reduction, miniaturization, and growing familiarity of the public with
computer-based solutions, there is much greater potential for commercial
investment in this area, particularly as prices further decline following
ongoing technology development and increasingly widespread commercial
implementation.

Biometric Identification's Market Focus

There are many applications for electronic fingerprint devices, including:

- point-of-sale devices

- electronic commerce

- access control, and

- computer security.

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<PAGE> 30

Although Biometric Identification's technology can be used in almost any
environment requiring highly accurate and rapid identification of persons, it
would be much more expensive and time consuming to focus initially on
applications in so-called open systems, which involve large numbers of ever
changing users and sites. Examples of open systems include the credit card and
electronic commerce industries. Because there is extensive demand for
application in closed systems, which are less time-intensive and expensive to
implement, Biometric Identification has decided to focus its efforts on these in
the short term. Examples of closed systems include access control for company
personnel, time and attendance records for employees, and access and usage
security for computer networks.

Time and Attendance Records

There is high demand for closed system identification controls. Many
industries, such as manufacturing, retail, and service, with large numbers of
wage workers desire to reduce the fraud associated with "buddy punching," which
refers to clocking in and out for an absent co-worker. Buddy punching is
relatively easy because cards and personal identification numbers are not
intrinsically linked to the card holder.

Biometric Identification currently provides its time and attendance
products to companies such as Stromberg Corporation, Control Module, Inc. and
Synel Corporation.

Building Access Control

Another promising closed system for Biometric Identification products is in
controlling entry of persons to buildings and office suites. The need is growing
in the large U.S. service economy involving large numbers of office workers who
are highly concentrated in urban areas with a strong perceived need to prevent
extremely costly vandalism and theft or alteration of records. Large
corporations, sensitive government locations, law and other professional firms,
hospitals, banks, correctional institutions, airports and educational
institutions are all examples of institutions with large office security
requirements.

The introduction of biometric devices in this market has been limited,
despite the considerable size of this marketplace, likely due to cost and system
integration impediments. The electronic access control market is dominated by
card and proximity reader devices placed on entries to control and limit access.
Biometric Identification's discussions at trade shows and with access control
companies demonstrate that if biometric solutions could approach the cost level
of card and proximity reader devices, then a biometric solution could become the
primary application. Biometric Identification has designed its Veriprint 1100
product line to meet these cost levels. Also, Biometric Identification's product
require less customer administrative oversight than for a card reader system
because there is no longer any need to record and physically control
identification cards.

Biometric Identification has completed or is nearing completion of
integrating its product with those of large card identification companies such
as Westinghouse Security Electronics Inc. and Radionics, Inc. For example,
Westinghouse and Radionics have integrated Biometric Identification's V2100
product with their access control systems.

Biometric Identification is presently working with Radionics, Inc., one of
the largest home security companies in the U.S., in order to integrate Biometric
Identification biometrics into their access control and intrusion systems.

Computer Security

As corporations and other organizations have decentralized their computer
operations by widely installing PCs, the points of access to networked systems
and sensitive databases have greatly increased. Although PCs may substantially
improve employee productivity, their proliferation presents a far larger
security risk because access points are now so numerous. Networked PC systems
are expected to grow as computer-based management of information increases
worldwide. The rapid expansion of PC networked systems provides an important
area of market growth for biometric products. Organizations now have concerns
about a range of computer security issues such as protection of privacy of
personnel and customer data, prevention of theft of

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<PAGE> 31

competitively advantageous information including trade secrets, and prevention
of deliberate damage to and corruption of data and systems.

Biometric Identification expects the commercial and governmental network
security market to be one of the largest sources of demand for its biometric
products. There may be also be a developing market of home users who would be
willing to purchase inexpensive and compact security devices such as those of
Biometric Identification.

Identification of Government Service Recipients

In U.S. government applications, public agencies use biometrics to verify
the identity of persons who wish to receive a service from the agency or pass
through an application process. Examples include welfare agencies, departments
of motor vehicles, and the U.S. Immigration and Naturalization Service.
Biometric Identification believes that there is interest in this area from
governments due to concerns about fraud.

Biometric Identification also provides products for non-U.S. governments.
For example, Biometric Identification's Veriprint 2100 system is being used by
the Venezuelan legislature in verification terminals that allow members of the
Chamber of Deputies and Senate, and their authorized surrogates, to vote
electronically from their desks.

Marketing and Distribution Channels

The favorable performance of Biometric Identification products, combined
with aggressive pricing, has enabled Biometric Identification to secure
relationships with several large companies. Biometric Identification desires
that once integration is completed with each equipment manufacturer's products,
the equipment manufacturer will then introduce Biometric Identification products
into their distribution channels.

Biometric Identification has been executing its sales strategy through its
sales team and has been actively marketing its product since September 1997.
Since then, Biometric Identification has developed a list of alliances with key
customers including Westinghouse, Radionics, Thomson CSF, Gemplus and Keysource.
Biometric Identification has no customer that accounts for 10% or more of its
revenues where the loss of that customer would significantly hurt Biometric
Identification.

Biometric Identification is targeting both large and small companies.
Although the larger companies offer long term sales potential, the innovative
smaller value added resellers and equipment manufacturers are more often the
first to adopt new technologies and create early stage demand from consumers.
Early users sometimes divert business from industry leaders which creates
incentive for the big companies to follow suit. Biometric Identification is also
going to target systems integrators and large consulting firms that thrive on
introducing new technologies to their customers.

To date, Biometric Identification has focused on the time and attendance
and access control markets. During 1999, it intends to expand its marketing
efforts to include direct contact with financial institutions, "smart" and
credit card companies, electronic commerce and computer equipment companies
where interest in biometrics is growing.

Biometric Identification has retained a small marketing company located in
the United Kingdom as a representative for Biometric Identification in the
European market area. Biometric Identification wishes to secure several sales
representatives to assist Biometric Identification in introducing its products
into the European and Asian marketplaces.

Competition

Biometric Identification competes with other providers of biometric
identification services to the commercial markets it serves in time and
attendance monitors, access control and computer security. In addition,
Biometric Identification competes with providers of non-biometric identification
services. Biometric Identification believes that the principal methods of
competition in the identification verification industry are providing function,
ease of integration and an affordable price. Many of Biometric Identification's
actual and

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<PAGE> 32

potential competitors have greater financial, marketing and other resources than
Biometric Identification possesses.

Patents, Trademarks, and Copyrights

Arete has provided an exclusive license to Biometric Identification for its
five pending patents in fingerprint sensing systems and methods. The patent
applications have been filed during the past three years with the U.S. patent
office and three have proceeded to filings under the Patent Cooperation Treaty.
Of these, one has proceeded to national stage filings in Brazil, Japan and
Canada, and with the European Patent Office. Effective January 8, 1999, a patent
on key technology elements of ridge recognition was issued in the United States.

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<PAGE> 33

DESCRIPTION OF PROPERTY

Biometric occupies approximately 2,300 square feet of leased space at Suite
1940, 400 Burrard Street, Vancouver, British Columbia under a lease expiring
October 31, 2000. A total of four Biometric employees operate out of its
Vancouver office.

Biometric Identification occupies one administration office in California
and sales offices in Dayton, Ohio and London, England.

Biometric Identification's California offices occupy a total of
approximately 4,200 square feet and are located at 5000 Van Nuys Blvd., Sherman
Oaks, California.

LEGAL PROCEEDINGS

Other than as disclosed below, no material legal proceedings are pending to
which Biometric is a party or of which any of its properties is subject.

Effective as of November 10, 1998, in compliance with the "continuation"
procedure provided for under the Company Act (British Columbia), Biometric
transferred its domicile into the State of Wyoming, where it is now governed by
the Wyoming Business Corporation Act. Biometric's management has subsequently
determined that Biometric should transfer its domicile back to British Columbia.
In order to solicit shareholder approval for this transfer, Biometric filed on
March 5, 1999, as required by the Securities Exchange Act of 1934, a preliminary
proxy statement with the SEC which was reviewed by the SEC staff. Based on its
review, the staff informally advised Biometric that the staff believes that
Biometric's transfer to Wyoming was an event that would have required the filing
of a registration statement with the SEC, under the Securities Act of 1933.

In response to the SEC's advice, on May 7, 1999, Biometric filed a
registration statement under the Securities Act on Form S-4 for a repurchase
offer with respect to the shares deemed to have been offered in connection with
the transfer to Wyoming. Repurchase offerees may be able to sue Biometric for a
possible violation of the registration requirement under the Securities Act.
Biometric's exposure in that event is difficult to quantify because its
shareholders were provided their statutory right of dissent under the Company
Act (British Columbia) to be paid the fair market value of their shares if they
dissented from the transfer to Wyoming. No shareholder exercised that dissent
right.

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<PAGE> 34

SELECTED FINANCIAL DATA

The selected consolidated financial data shown below with respect to
Biometric's consolidated statements of operations for each of the three fiscal
years in the period ended December 31, 1998 and with respect to the consolidated
balance sheets at December 31, 1998 and 1997, and with respect to Biometric's
consolidated statements of operations for each of the six months ended June 30,
1999 and 1998, and with respect to the consolidated balance sheets at June 30,
1999 and 1998, are derived from Biometric's audited consolidated financial
statements as of December 31, 1998 and unaudited interim consolidated financial
statements as of June 30, 1999, included on pages F-1 - F-30. Consolidated
statement of operations data for the years ended December 31, 1995 and 1994, and
balance sheet data at December 31, 1996, 1995 and 1994 have been derived from
Biometric's audited consolidated financial statements that are not included in
this prospectus. These financial statements, which included a note reconciling
differences between U.S. and Canadian GAAP, were filed with Biometric's Annual
Reports on Form 20-F.

You should read the following selected financial consolidated financial
data in conjunction with Biometric's consolidated financial statements and the
notes on pages F-1 - F-30. Historical operating results are not necessarily
indicative of the results in any future period.

As a result of Biometric's transfer into Wyoming, Biometric adopted U.S.
GAAP and restated prior years figures to be in accordance with U.S. GAAP. Since
Biometric's functional currency is Canadian dollars, all amounts are in Canadian
dollars.

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE FISCAL YEARS ENDED DEC. 31,
--------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- -------- -------- -------- -------
(STATED IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT PER SHARE DATA)
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue................ $ 4 $ 66 $ 79 $ 175 $ 102 $ 211 $ 36
Net income (loss)...... $ (2,416) $ (5,317) $ (7,125) $ (2,200) $ (1,259) $ (1,142) $ (406)
Net income (loss) per
share................ $ (0.07) $ (0.31) $ (0.38) $ (0.13) $ (0.14) $ (0.20) $ (0.10)
Cash dividends declared
per share............ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Working capital........ $ 76 $ 1,280 $ 10 $ 3,072 $ 6,369 $ 1,936 $ 1,846
Total assets........... $ 3,147 $ 3,640 $ 2,567 $ 8,274 $ 10,451 $ 2,721 $ 2,010
Total liabilities...... $ 907 $ 405 $ 299 $ 283 $ 571 $ 91 $ 143
Share capital.......... $ 16,177 $ 12,948 $ 13,789 $ 12,388 $ 12,077 $ 3,567 $ 1,662
Retained earnings
(deficit)............ $ (13,938) $ (9,713) $ (11,521) $ (4,397) $ (2,197) $ (937) $ 204
</TABLE>

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<PAGE> 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

NOTE: WE USE THE NAME "BIOMETRIC" FOR DISCUSSIONS OF ALL PERIODS IN THIS
SECTION, EVEN THOUGH BIOMETRIC ASSUMED ITS CURRENT NAME ONLY IN NOVEMBER
1998.

Current Capital Resources and Liquidity

Since inception, Biometric's capital resources have been limited. Since
cash generated from operations has been nominal, Biometric has had to rely upon
the sale of equity and debt securities for cash required for investments and
operations, among other things. In 1998, Biometric acquired the right to invest
up to US$ 5,000,000 into Biometric Identification by way of the acquisition of
convertible debentures. See "Biometric Security Corp. -- Business of Biometric
Security Corp." for a discussion of the terms of this investment. Biometric
completed its purchase of the US$ 5,000,000 of Biometric Identification
debentures on July 23, 1999. Biometric's working capital or cash flows are not
sufficient to fund ongoing operations and other commitments. The ability of
Biometric to settle its liabilities as they come due and to fund its commitments
and ongoing operations is dependent upon the ability of Biometric to obtain
additional equity or debt financing. If Biometric cannot raise the necessary
financing directly by way of debt, equity or other means, the lack of capital
may force it to curtail its operating activities and potential investment
activities. There is no assurance that Biometric will obtain any such financing.

Biometric does not currently have any commitments for material capital
expenditures over the near or long term, and none are presently contemplated
over normal operating requirements.

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

Results of Operations

For the six-month period ended June 30, 1999 Biometric incurred a net loss
of $2,416,248 resulting in a loss per share of $0.07. The loss for the six-month
period ended June 30, 1999 resulted from cash and short term investment earnings
of $4,239 less expenses of $1,014,967. In addition, Biometric realized mineral
property recoveries of $164,855 and an equity loss in the operations of BII of
$1,570,375. This is compared to a net loss for the six-month period ended June
30, 1998 of $5,316,647 and a loss per share of $0.31. The loss for the six-month
period ended June 30, 1998 resulted from cash and short term investment earnings
of $65,603 less expenses of $549,186 and losses on the disposal of equipment of
$27,587. In addition, Biometric wrote-off mineral property costs totaling
$4,805,477 which increased the loss for the six-month period ended June 30,
1998.

At March 1, 1999, Biometric had received US$ 150,000 and 100,000 common
shares of Inlet. Biometric has since sold these shares for $11,078, or
approximately $0.11 per share, which was the quoted market price for Inlet
shares on the date of sale. As Biometric had previously written off the mineral
property costs, the cash and shares originally received from Inlet, net of
expenses incurred, has been reflected in the statement of operations.

Administrative costs in the six-month period ended June 30, 1999 increased
85% over 1998 primarily as a result of Biometric incurring increased
professional fees, consulting fees and finders fees.

Liquidity and Capital Resources

During the six-month period ended June 30, 1999 Biometric realized a net
increase in cash from operations, financing and investments of $32,221. The loss
for the period was $2,416,248.

During the six-month period ended June 30, 1999 Biometric completed private
placements totaling 23,333,331 units. These private placements were for
proceeds, before costs, of $3,500,000, of which $660,592

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<PAGE> 36

had been advanced to Biometric prior to December 31, 1998. In addition,
Biometric received $477,833 on the exercise of warrants. During the first
quarter, Biometric repaid a short-term $150,775 loan payable that was
outstanding at December 31, 1998.

During the six-month period ended June 30, 1999 Biometric invested an
additional $2,129,062 (US$ 1,425,000) in convertible debentures of Biometric
Identification.

Balance Sheets

Total cash and short-term investments at June 30, 1999 were $227,403 as
compared to $245,182 at December 31, 1998, and working capital increased to
$76,288 as at June 30, 1999 compared to $10,478 as at December 31, 1998. The
increase in cash and working capital is largely attributable to Biometric's
completing three private placements that raised gross cash proceeds of
$3,500,000 less $660,592 received by Biometric before December 31, 1998 and the
related costs of completing the financing.

At June 30, 1999 a total of $5,600,417 (US$ 3,750,000) has been invested in
convertible debentures of Biometric Identification. This is compared to
$3,471,355 (US$ 2,325,000), that had been invested at December 31, 1998, less
$1,275,000, which represents Biometric's share of Biometric Identification's
losses to December 31, 1998 and the amortized portion of the excess of
Biometric's investment over its share of Biometric Identification's net assets.
Effective June 1999, Biometric's investment in the Biometric Identification
convertible debentures has been accounted for by the equity method, as Biometric
has determined that it can exert significant influence over Biometric
Identification. Accordingly, Biometric has reduced its investment by $2,845,375,
which is its share of Biometric Identification's losses to June 30, 1999 and the
amortized portion of the excess of Biometric's investment over its share of
Biometric Identification's net assets. The excess of the cost of Biometric's
investment over its share of net assets is being amortized on a straight-line
basis over five years.

At June 30, 1999 Biometric had no loans payable and had repaid the $150,775
short term loan that was outstanding at December 31, 1998.

At June 30, 1999 Biometric had received $nil in share subscriptions and had
completed the private placement it had received $660,592 for prior to December
31, 1998.

In May 1999 Biometric filed a registration statement with the SEC offering
U.S. persons who owned Biometric common stock at the time Biometric transferred
its corporate domicile to Wyoming, the right to have their shares repurchased by
Biometric at their fair market value on the date of the shareholder vote
concerning Biometric's transfer to Wyoming. A provision of $657,052 for this
contingent liability has been recorded in Biometric's accounts as of June 30,
1999, as a reduction of share capital. Any amount not repurchased by Biometric
on expiry of the repurchase offer will be reclassified to share capital. See
"Legal Proceedings" for further discussion of the repurchase offer.

Subsequent Events

- Biometric completed a $2,000,000 private placement on July 22, 1999. The
private placement consisted of 10,000,000 units, brokered on a best
efforts basis, at a price of $0.20 per unit for total proceeds of
$2,000,000. Each unit consists of one common share and one two-year
non-transferable share purchase warrant. Each warrant is exercisable at a
price of $0.20 per share in the first year and $0.23 per share in the
second year. Remuneration paid to the broker for acting as agent
consisted of a $186,000 commission payable in cash and a two year
broker's warrant exercisable into a maximum of 1,500,000 shares of
Biometric. The broker's warrants are exercisable at a price of $0.20 per
share in the first year and $0.23 per share in the second year.

- Biometric invested an additional US$ 1,250,000 in Biometric
Identification debentures.

- Biometric announced an annual general meeting of the shareholders, at
which time the shareholders will be asked to vote on Biometric's proposal
to transfer its domicile to British Columbia and to

33
<PAGE> 37

consolidate Biometric's share capital on the basis of one
post-consolidated share for each five pre-consolidated shares.

FISCAL YEARS ENDED DECEMBER 31, 1998 AND 1997

Results of Operations

A $0.38 loss per share in the fiscal year ended December 31, 1998 resulted
from cash and short-term investment earnings of $79,129 less expenses of
$1,287,586, mineral property write-offs of $4,592,237 and an equity loss in the
operations of BII of $1,275,000. This is compared to a $0.13 loss per share in
the fiscal year ended December 31, 1997 from cash and short-term investment
earnings of $175,185, expenses of $759,182, and mineral property write-offs of
$1,615,898.

Administrative costs in 1998 increased 79% over 1997, primarily as a result
of Biometric incurring increased professional fees and finders fees.

Liquidity and Capital Resources

During 1998 Biometric had a reduction in cash from operations, financing
and investments of $3,084,928. The loss for the year was $7,124,561, which
consisted largely of the write-down of mineral properties and an equity loss in
BII.

During 1998, Biometric completed a 3,375,000 unit private placement that
raised proceeds of $506,250 and a 660,000 unit private placement that raised
proceeds of $99,000. In addition, Biometric raised $23,000 from the exercise of
100,000 stock options. Biometric also issued 250,450 common shares at a deemed
value of $75,135 for finders fees in connection with the Biometric
Identification debentures.

During 1998, Biometric invested $3,471,355, in Biometric Identification
convertible debentures, disposed of equipment used in Argentina for proceeds of
$151,512 and recovered $185,335 of security deposits.

Balance Sheets

Total cash and short-term investments at December 31, 1998 were $245,182 as
compared to $3,330,110 at December 31, 1997 and working capital decreased to
$10,478 as at December 31, 1998 compared to $3,072,259 as at December 31, 1997.
The decrease in cash and working capital is largely attributable to Biometric's
investment of $3,471,355 in convertible debentures of Biometric Identification
during the year.

At December 31, 1998 a total of $3,471,355 (US$ 2,325,000) had been
invested in convertible debentures of Biometric Identification. Effective June
1999, Biometric determined that it had the ability to exercise significant
influence over the activities of Biometric Identification, and in accordance
with Accounting Principles Board Opinion No. 18, Biometric's financial
statements for 1998 have been restated to reflect this change. Accordingly,
Biometric's investment in the Biometric Identification convertible debentures
has been accounted for by the equity method and Biometric has reduced its
investment by $1,275,000, which is its share of Biometric Identification's
losses to December 31, 1998 and the amortized portion of the excess of
Biometric's investment over its share of Biometric Identification's net assets.
The excess of Biometric's investment over its share of net assets is being
amortized on a straight-line basis over five years.

Equipment and leasehold improvements totaled $60,758 at December 31, 1998
as compared to $248,213 at December 31, 1997. The decrease is a result of
Biometric selling off equipment in 1998.

Mineral properties totaled nil at December 31, 1998 as compared to
$4,670,516 at December 31, 1997. The decrease is a result of writing off the
deferred costs in June 1998, when it was determined there was little prospect of
further work being carried out on the properties and Biometric changed its
business from mineral exploration to its investment in Biometric Identification.
In November 1998, subsequent to writing off the deferred costs, Biometric
granted Inlet Resources Ltd. an option to purchase up to a 100% interest in
Biometric's Argentine mineral properties.

34
<PAGE> 38

Share capital totaled $13,128,263 at December 31, 1998 as compared to
$12,387,691 at December 31, 1997. The increase is a result of Biometric issuing
shares for cash proceeds of $628,250 and shares for services having a value of
$112,322.

Shares subscribed totaled $660,592 at December 31, 1998 as compared to nil
at December 31, 1997 as investors had advanced Biometric $660,592 as funds
advanced for a private placement that was completed after the year-end.

YEARS ENDED DECEMBER 31, 1997 AND 1996

Results of Operations

A $0.13 loss per share in the fiscal year ended December 31, 1997 resulted
from cash and short-term investment earnings of $175,185 less expenses of
$759,182 and mineral property write-offs of $1,615,898. This is compared to a
$0.14 loss per share in the fiscal year ended December 31, 1996 from cash and
short-term investment earnings of $102,147, expenses of $826,609 and mineral
property write-offs of $534,853.

Administrative costs in 1997 decreased 13% over 1996 as a result of
Biometric cutting back promotional, travel, consultants and other costs.

Liquidity and Capital Resources

During the year ended December 31, 1997, Biometric had an increase in cash
of $1,587,977 primarily as a result of its financing activities. The loss for
the year was $2,199,895, which consisted largely of the write-down of mineral
properties. During 1997, Biometric completed a special warrant placement of
5,000,000 units that raised net proceeds of $5,106,645. See 1996 liquidity and
capital resources below. Biometric raised $184,000 from the exercise of 200,000
warrants, and $126,400 from the exercise of 120,000 options.

During 1997 Biometric incurred expenditures on mineral properties totaling
$3,033,103 and purchased equipment and leasehold improvements of $79,658.

Balance Sheets

Total cash and short-term investments at December 31, 1997 were $3,330,110
as compared to $1,742,133, excluding $5,106,645 of cash in escrow, at December
31, 1996. Working capital decreased to $3,072,259 as at December 31, 1997
compared to $6,369,429 as at December 31, 1996. Share capital increased
primarily as a result of the closing of the 5,000,000 unit special warrant
offering announced in October 1996. Advances on share subscriptions decreased
from $5,106,645 to nil as a result of the completion of the 5,000,000 unit
special warrant financing.

Biometric expended a total of $3,171,103 of mineral property costs in
Argentina that was initially capitalized during 1997.

YEARS ENDED DECEMBER 31, 1996 AND 1995

Results of Operations

A $0.14 loss per share in the fiscal year ended December 31, 1996 resulted
from cash and short-term investment earnings of $102,147 less expenses of
$826,609 and mineral property write-offs of $534,853. This is compared to a
$0.20 loss per share in the fiscal year ended December 31, 1995 from cash and
short-term investment earnings of $210,620, expenses of $606,230 and resource
property write-downs of $746,371.

Administrative costs in 1996 increased 36.4% over 1995 as a result of
Biometric's move to new office premises, the hiring of additional personnel,
advertising, promotional, exploration and travel costs incurred to support
Biometric's mineral projects.

35
<PAGE> 39

Liquidity and Capital Resources

During the year ended December 31, 1996, Biometric increased its cash by
$99,492 primarily as a result of its financing activities which raised
$3,403,506 by private placements and the exercise of warrants and options.

The loss for the year was $1,259,315, which included a $534,853 write-off
of mineral properties.

On October 22, 1996, Biometric announced the private placement of 5,000,000
special warrants at an issue price of $1.10 per special warrant. Each special
warrant entitled the holder to acquire, without further consideration, one unit
comprising one common share and one-half of a share purchase warrant. Each whole
warrant entitled the holder to purchase one additional share at $1.30 per share
for a two year period. At December 31, 1996, Biometric held in escrow the
proceeds from the sale of special warrants of $5,106,645, net of commissions and
other offering costs, pending completion of a prospectus qualifying the common
shares and share purchase warrants for distribution.

Biometric also granted the underwriters 250,000 special compensation
options as partial compensation for the placement of the special warrants. Each
special compensation option entitled the underwriter to acquire, without further
consideration, one compensation option. Each compensation option was exercisable
for one unit at a price of $1.10 per unit to January 31, 1999. Each unit
consists of one common share and one-half of a share purchase warrant, with each
whole warrant entitling the underwriter to purchase one additional share for
$1.30 per share to January 31, 1999.

In January 1997, Biometric issued the 5,000,000 shares and 5,000,000
one-half share purchase warrants upon exercise of the 5,000,000 special
warrants. Biometric also issued 250,000 compensation options to the underwriter
upon the exercise of 250,000 special compensation options. In addition, the net
proceeds from the sale of special warrants, together with interest earned
thereon, were released to Biometric.

Biometric received additional financing during 1996 from: the net proceeds
of $1,486,568 from three private placements during 1996 totaling 1,537,000
common shares; $1,828,138 from the exercise of 2,022,250 warrants; and $88,800
from the exercise of 110,000 options granted to employees.

During 1996 Biometric incurred expenditures on mineral properties totaling
$2,998,643, purchased equipment and leasehold improvements totaling $223,643.
Also during 1996, Biometric sold marketable securities for proceeds of $193,527
and paid a security deposit of $138,000.

Balance Sheets

Total cash and short-term investments at December 31, 1996 were $1,742,133,
excluding $5,106,645 of cash in escrow, as compared to $1,796,691 at December
31, 1995. Working capital increased to $6,369,429 as at December 31, 1996
compared to $1,935,574 as at December 31, 1995.

A total of $2,998,691 in mineral property costs were expended in Argentina
and initially capitalized during 1996.

During 1996 Biometric expended $223,643 on equipment and leasehold
improvements giving it a total of $257,743 in equipment net of depreciation at
December 31, 1996. This compares to $42,600 for equipment and leaseholds at
December 31, 1995.

At December 31, 1996 Biometric had $138,000 in a security deposit related
to a mineral property it was exploring in 1996.

At December 31, 1996 Biometric had accounts payable of $570,752 largely
related to the exploration work it was carrying out in South America.

36
<PAGE> 40

YEAR 2000 COMPLIANCE

The Year 2000 issue refers to possible negative impacts on business systems
that could be caused by the arrival of the new millennium. Best known is the
possible inability of computer software to recognize the year 2000 as a date.
Unless the software is fixed, date-sensitive systems may begin to fail prior to
January 1, 2000.

Biometric does not expect to experience significant Year 2000 issues,
because it uses standard commercial programs and systems that have been designed
or upgraded to comply with requirements imposed by the transition into the next
millennium. Biometric is contacting its main suppliers to make sure that they
are also Year 2000 compliant, a process Biometric expects to complete by the
third quarter of 1999.

Biometric Identification has evaluated the products and services that it
offers, as well as its information technology infrastructure, and has determined
that they are Year 2000 compliant. Biometric Identification's business involves
integrating its products with those of original equipment managers and value
added resellers. If any of those companies is not Year 2000 compliant, their
product sales, and consequently Biometric Identification's sales, could drop.
Biometric Identification is contacting these companies to determine the state of
their Year 2000 compliance. Biometric Identification expects to complete this
process by the third quarter of 1999.

LEGAL MATTERS

The validity of the shares of Biometric common stock issued as of
Biometric's transfer from British Columbia to Wyoming will be passed upon for
Biometric by Hathaway, Speight & Kunz, LLC, Cheyenne, Wyoming, U.S.A.

EXPERTS

Biometric's consolidated financial statements as of December 31, 1998 and
1997, and for each of the three years in the period ended December 31, 1998
included in this prospectus, have been so included in reliance on the report of
KPMG LLP, independent chartered accountants, given on the authority of that firm
as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

Biometric has filed with the SEC a registration statement on Form S-4,
including amendments, under the Securities Act with respect to its common stock
as discussed herein. This prospectus does not contain all of the information set
forth in the registration statement and its exhibits and schedules. For further
information about Biometric and its common stock, please see the registration
statement and the exhibits and schedules filed with it. Statements contained in
this prospectus as to the contents of any contract or any other document
referred to are not necessarily complete. In each instance, we refer you to the
copy of the contract or document filed as an exhibit to the registration
statement for further details.

Biometric files annual, quarterly and special reports and other information
with the SEC. You may read and copy any document filed by Biometric, including
the registration statement and its exhibits and schedules, at the SEC's public
reference room, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information about its public reference room.
These SEC filings are also available to the public at the SEC's web site at
"www.sec.gov."

37
<PAGE> 41

BIOMETRIC SECURITY CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Audited Financial Statements as of December 31, 1998
Auditors' Report to the Shareholders................... F-2
Consolidated Balance Sheets as of December 31, 1998 and
1997.................................................. F-3
Consolidated Statements of Operations and Deficit for
the years ended
December 31, 1998, 1997 and 1996..................... F-4
Consolidated Statements of Cash Flows for the years
ended December 31, 1998,
1997 and 1996........................................ F-5
Notes to Consolidated Financial Statements............. F-6
Unaudited Interim Financial Statements as of June 30, 1999
Unaudited Interim Consolidated Balance Sheets as of
June 30, 1999,
December 31, 1998, and June 30, 1998................. F-22
Unaudited Interim Consolidated Statements of Operations
and Deficit for
the six months ended June 30, 1999 and 1998.......... F-23
Unaudited Interim Consolidated Statements of Cash Flows
for the six
months ended June 30, 1999 and 1998.................. F-24
Notes to Unaudited Interim Consolidated Financial
Statements............................................ F-25
</TABLE>

F-1
<PAGE> 42

AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Biometric Security Corp.
(formerly Sonoma Resource Corp.) as at December 31, 1998 and 1997 and the
consolidated statements of operations and deficit and cash flows for each of the
years in the three year period ended December 31, 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31,
1998 and 1997 and the results of its operations and its cash flows for each of
the years in the three year period ended December 31, 1998 in accordance with
generally accepted accounting principles in the United States.

As discussed in notes 2(e) and 5, during 1999, the Company changed the
method of accounting for its investment in convertible debentures of Biometric
Identification Inc. from the fair value method, as an available-for-sale
investment, to the equity method. In accordance with Accounting Principles Board
Opinion No. 18, the consolidated financial statements for 1998 have been
restated to reflect the Company's share of the losses of Biometric
Identification Inc. since acquisition, and to eliminate the foreign exchange
translation gains and intercorporate interest income related thereto.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

February 23, 1999, except as to notes 2(e),

5 and 15(c), which are as of September 7, 1999

F-2
<PAGE> 43

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN CANADIAN DOLLARS)

DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
------------ ----------
(RESTATED --
NOTE 5)
<S> <C> <C>
ASSETS
Current assets:
Cash................................................... $ 245,182 $3,330,110
Amounts receivable..................................... 55,076 19,002
Prepaid expenses....................................... 9,257 6,252
----------- ----------
309,515 3,355,364
Equipment and leasehold improvements (note 3)............... 60,758 248,213
Mineral properties (note 4)................................. -- 4,670,516
Investment (note 5)......................................... 2,196,355 --
----------- ----------
$ 2,566,628 $8,274,093
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities............... $ 148,262 $ 283,105
Loan payable (note 6).................................. 150,775 --
----------- ----------
299,037 283,105
Shareholders' equity:
Share capital (note 7):
Authorized:
Unlimited (1997 -- 100,000,000) common shares
Issued:
20,834,412 (1997 -- 16,448,962) common shares..... 13,128,263 12,387,691
Advances on share subscriptions (note 7(b))............ 660,592 --
Deficit................................................ (11,521,264) (4,396,703)
----------- ----------
2,267,591 7,990,988
Continuing operations (note 1)
Commitments and contingencies (notes 5 and 13)
Subsequent events (notes 5, 6, 7 and 14)
----------- ----------
$ 2,566,628 $8,274,093
=========== ==========
</TABLE>

On behalf of the Board:

, Director

See accompanying notes to consolidated financial statements.

F-3

<PAGE> 44

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
(RESTATED --
NOTE 5)
<S> <C> <C> <C>
Revenue:
Interest and other income......................... $ 79,129 $ 175,185 $ 62,670
Gain on disposal of marketable securities......... -- -- 39,477
------------ ----------- -----------
79,129 175,185 102,147
General and administrative expenses:
Business consultants.............................. 78,306 87,345 158,305
Depreciation and depletion........................ 9,858 67,100 8,500
Finder's fee (note 5)............................. 99,822 -- --
Foreign exchange loss (gain)...................... 5,834 (20,198) (20,630)
Interest and bank charges......................... 14,449 2,159 2,507
Legal, audit and accounting....................... 563,234 141,256 66,461
Management fees................................... 120,059 127,121 164,451
Office expense.................................... 113,851 113,570 136,891
Public listing.................................... 66,153 37,035 38,080
Salaries, wages and administration................ 56,129 61,979 68,841
Travel, accommodation and promotion............... 159,891 103,332 203,203
------------ ----------- -----------
1,287,586 720,699 826,609
------------ ----------- -----------
(1,208,457) (545,514) (724,462)
Other expenses:
Write-off of mineral properties (note 4).......... 4,592,237 1,615,898 534,853
Share of loss of Biometric Identification Inc.
(note 5)........................................ 1,275,000 -- --
Mineral exploration............................... -- 16,395 --
Loss on disposal of equipment..................... 48,867 22,088 --
------------ ----------- -----------
5,916,104 1,654,381 534,853
------------ ----------- -----------
Loss for the year...................................... (7,124,561) (2,199,895) (1,259,315)
Deficit, beginning of year............................. (4,396,703) (2,196,808) (937,493)
------------ ----------- -----------
Deficit, end of year................................... $(11,521,264) $(4,396,703) $(2,196,808)
============ =========== ===========
Loss per share......................................... $ (0.38) $ (0.13) $ (0.14)
============ =========== ===========
Weighted average number of shares...................... 18,825,977 16,170,395 8,933,410
============ =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 45

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
(RESTATED --
NOTE 5)
<S> <C> <C> <C>
Cash flows from operating activities:
Loss for the year..................................... $(7,124,561) $(2,199,895) $(1,259,315)
Adjustments to reconcile loss for the year to net cash
used in operating activities:
Write-off of mineral properties.................. 4,592,237 1,615,898 534,853
Share of loss of Biometric Identification Inc.... 1,275,000 -- --
Loss on disposal of equipment.................... 48,867 22,088 --
Depreciation and depletion....................... 9,858 67,100 8,500
Non-cash fees and expenses....................... 112,322 -- --
Gain on disposal of marketable securities........ -- -- (39,477)
Decrease (increase) in amounts receivable........ (36,074) 29,846 107,230
Decrease (increase) in prepaid expenses.......... (3,005) 36,303 31,331
Increase (decrease) in accounts payable and
accrued liabilities........................... (134,844) (287,647) 479,671
----------- ----------- -----------
Net cash used in operating activities................... (1,260,200) (716,307) (137,207)
Cash flows from investing activities:
Proceeds on sale of marketable securities............. -- -- 193,527
Equipment and leasehold improvements.................. (22,781) (79,658) (223,643)
Proceeds on disposal of equipment and leasehold
improvements....................................... 151,512 -- --
Mineral properties.................................... (145,306) (3,033,103) (2,998,691)
Security deposit (paid) recovered..................... 185,335 -- (138,000)
Proceeds on sale of mineral properties................ 38,250 -- --
Investment............................................ (3,471,355) -- --
----------- ----------- -----------
Net cash used in investing activities................... (3,264,345) (3,112,761) (3,166,807)
Cash flows from financing activities:
Loan payable.......................................... 250,000 -- --
Repayment of loan payable............................. (99,225) -- --
Issuance of common shares............................. 628,250 5,417,045 3,403,506
Advances on share subscriptions....................... 660,592 -- --
----------- ----------- -----------
Net cash provided by financing activities............... 1,439,617 5,417,045 3,403,506
----------- ----------- -----------
Increase (decrease) in cash............................. (3,084,928) 1,587,977 99,492
Cash, beginning of year................................. 3,330,110 1,742,133 1,642,641
----------- ----------- -----------
Cash, end of year....................................... $ 245,182 $ 3,330,110 $ 1,742,133
=========== =========== ===========
</TABLE>

- ---------------

Supplementary cash flow information (note 9)

See accompanying notes to consolidated financial statements.

F-5

<PAGE> 46

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

1. CONTINUING OPERATIONS:

The Company was incorporated under the laws of British Columbia, Canada.
During 1998, the Company changed its principal business activity from the
exploration and development of resource properties to an investment holding
company, with its principal holding being its investment in Biometric
Identification Inc. ("BII") (note 5). BII's principal business activity is the
development, manufacture and marketing of fingerprint identification systems in
the United States. BII has not yet achieved profitable operations. In connection
with this change in business activity during 1998, the Company changed its name
from Sonoma Resource Corp. to Biometric Security Corp., and on November 10,
1998, the Company was continued under the laws of the State of Wyoming (also see
note 14(a)).

These financial statements have been prepared in accordance with accounting
principles applicable to a going concern, which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary course of
business. At December 31, 1998, the Company has a net working capital position
of approximately $10,000, which is not sufficient to meet its commitments or
fund ongoing operations. The ability of the Company to settle its liabilities as
they come due and to fund its commitments and ongoing operations is dependent
upon the ability of the Company to obtain additional equity financing (also see
notes 7(b) and 14(b)). The recoverability of the Company's investment in BII is
dependent upon the establishment of profitable commercial operations in BII, the
ability of the Company to obtain additional debt or equity financing to complete
the acquisition of BII or the proceeds from the disposition of the Company's
interest in BII.

2. SIGNIFICANT ACCOUNTING POLICIES:

(a) Basis of presentation:

These consolidated financial statements have been prepared in accordance
with accounting principles and practices that are generally accepted in the
United States, which conform, in all material respects, with those generally
accepted in Canada, except as explained in note 15.

(b) Basis of consolidation:

The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are directly or indirectly wholly-owned, and
include (with the jurisdiction of incorporation in brackets):

Sonoma Resource de Argentina S.A. (Argentina)

Sonoma Resource (Bermuda) Ltd. (Bermuda)

Cerro Toro Mining (Barbados) Ltd. (Barbados)

Cerro Toro S.A. (Argentina)

Castano Mining (Barbados)

Castano S.A. (Argentina)

All intercompany balances and transactions have been eliminated.

Equipment and leasehold improvements are stated at cost and depreciated
over their estimated useful lives on a declining-balance basis at 15% per year.

(d) Mineral properties:

Mineral property acquisition costs and related exploration and development
expenditures are deferred until the property is placed into production, sold or
abandoned. These costs will be amortized over the

F-6
<PAGE> 47

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

estimated life of the property following commencement of commercial production
or written off if the property is sold, allowed to lapse or abandoned.
Administration expenditures are expensed in the period incurred.

Mineral property acquisition costs include the cash consideration and the
fair market value of common shares issued for mineral property interests. A
property acquired under an option agreement or by joint venture, where payments
are made at the sole discretion of the Company, is recorded in the accounts at
the time of payment.

On an on-going basis, the Company evaluates the status of its mineral
properties based on results to date to determine the nature of exploration and
development work that is warranted in the future. If there is little prospect of
further work on a property being carried out, the deferred costs related to that
property are written down to their estimated recoverable amount.

The amounts shown for mineral properties reflect costs incurred to date,
less write-offs and recoveries, and are not intended to reflect present or
future values.

(e) Investments:

At December 31, 1998, the investment in convertible debentures of BII (note
5) was classified by the Company as an available-for-sale investment, although
the Company intends to hold these debt securities until conversion or maturity.
Available-for-sale investments are carried at fair value, with any unrealized
holding gain or loss excluded from earnings and reported as a net amount in a
separate component of shareholders equity until realized. Interest income is
recognized in earnings when earned.

During 1999, the Company determined that it had the ability to exercise
significant influence over the operating, financing and investing activities of
BII. In addition, the Company determined that the investment in convertible
debentures could be considered to be similar in nature to an equity investment
in BII. As a result of these two factors, the Company changed the method of
accounting for its investment in BII from the fair value method, as an
available-for-sale investment, to the equity method, effective in June 1999. In
accordance with Accounting Principles Board ("APB") Opinion No. 18 "The Equity
Method of Accounting for Investments in Common Stock", the Company's financial
statements for 1998 have been restated to reflect this change.

Under the equity method, the cost of the investment is adjusted for the
Company's share of post-acquisition earnings or losses of BII, as if the Company
had converted its BII debentures into shares of BII at the time of each
acquisition. The excess of the cost of its investment over the Company's share
of the net assets of BII, which has been allocated by the Company to BII's
technology rights, is being amortized on a straight-line basis over five years.
The Company has recorded $1,275,000 as its share of the loss of BII during the
period ended December 31, 1998. In addition, previously reported foreign
exchange translation gains of $85,875 relating to this investment have been
reversed, and accrued interest income of $79,989 has been eliminated in
connection with this change. The overall result of this change was to reduce
investment as at December 31, 1998 by $1,440,864, increase loss for the year
ended December 31, 1998 by $1,440,864, or $0.08 per share, and increase deficit
as at December 31, 1998 by $1,440,864.

(f) Stock options:

The Company applies the intrinsic value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations, in accounting for its stock
options. As such, compensation expense would be recorded on the date of grant
only if the current market price of the underlying stock exceeded the exercise
price.

F-7
<PAGE> 48

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(g) Loss per share:

Basic loss per share is calculated using the weighted average number of
shares outstanding during the year. Diluted loss per share has not been
presented as the effect on basic loss per share would be anti-dilutive.

(h) Foreign currency translation:

Transactions of the Company and its subsidiaries that are denominated in
foreign currencies are recorded in Canadian dollars at exchange rates in effect
at the related transaction dates. Monetary assets and liabilities denominated in
foreign currencies are adjusted to reflect exchange rates at the balance sheet
date. Exchange gains and losses arising on the translation of monetary assets
and liabilities are included in the determination of operations for the year.

(i) Use of estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant areas requiring the use of management estimates
relate to the determination of impairment of mineral properties and equipment,
useful lives for depreciation and the carrying value of the investment in BII.
Actual results could differ from those estimates.

(j) Comparative figures:

Certain of the prior years' comparative figures have been reclassified to
conform with the presentation adopted for 1998.

3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Equipment................................................... $ 67,759 $ 71,320
Automotive equipment........................................ -- 209,179
Leasehold improvements...................................... 19,138 15,941
-------- --------
86,897 296,440
Accumulated depreciation.................................... (26,139) (48,227)
-------- --------
$ 60,758 $248,213
======== ========
</TABLE>

F-8
<PAGE> 49

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

4. MINERAL PROPERTIES:

The continuity of mineral property acquisition costs, exploration and
development expenditures, write-offs and deferred expenditures at year end is as
follows:

<TABLE>
<CAPTION>
CHUBUT AND
CERRO TORO CASTANO SAN LUIS
PROPERTIES(A) GROUP(B) PROPERTIES(C) OTHER(C) TOTAL
-------------- --------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997........... $3,983,092 $ -- $687,424 $ -- $4,670,516
Exploration and development
expenditures:
Access costs.................. 772 -- -- -- 772
Assays........................ -- -- 2,882 -- 2,882
Communication................. -- -- 332 -- 332
Contract labour and
supervision................ 5,737 -- -- -- 5,737
Data acquisition and
analysis................... 941 -- 596 -- 1,537
Equipment and field
supplies................... 5,231 -- 259 -- 5,490
Field administration.......... 21,674 -- -- -- 21,674
Field car rental and
transportation............. 3,271 -- 389 -- 3,660
Geological and geophysical.... 40,471 -- 28,810 -- 69,281
Insurance..................... 5,762 -- -- -- 5,762
Legal and other............... 19,552 -- 6,687 -- 26,239
Travel and accommodation...... 1,669 -- 271 -- 1,940
---------- --------- -------- -------- ----------
105,080 -- 40,226 -- 145,306
---------- --------- -------- -------- ----------
4,088,172 -- 727,650 -- 4,815,822
Recovery of security deposit....... -- (185,335) -- -- (185,335)
Deposit received on option
agreement....................... -- -- -- (38,250) (38,250)
Write-offs......................... (4,088,172) 185,335 (727,650) 38,250 (4,592,237)
---------- --------- -------- -------- ----------
Balance, December 31, 1998......... $ -- $ -- $ -- $ -- $ --
========== ========= ======== ======== ==========
</TABLE>

F-9
<PAGE> 50

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
CHUBUT AND
CERRO TORO CASTANO SAN LUIS
PROPERTIES(A) GROUP(B) PROPERTIES(C) OTHER(C) TOTAL
-------------- ---------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996.......... $1,591,602 $1,000,818 $217,877 $305,014 $3,115,311
Acquisition costs................... 7,610 165,308 55,726 31,637 260,281
Exploration and development
expenditures:
Access costs................... 66,273 -- 27,030 -- 93,303
Assays......................... 109,858 -- -- -- 109,858
Camp........................... 2,121 -- -- -- 2,121
Communication.................. 15,802 -- -- -- 15,802
Contract drilling.............. 1,203,985 -- -- -- 1,203,985
Contract labour and
supervision.................. 82,045 -- 16,685 -- 98,730
Data acquisition and
analysis..................... 19,512 -- 2,364 22,516 44,392
Equipment and field supplies... 156,120 -- 42,676 512 199,308
Field administration........... 149,318 -- 860 -- 150,178
Field car rental and
transportation............... 77,563 -- 15,021 364 92,948
Geological and geophysical..... 394,316 1,400 200,277 30,280 626,273
Insurance...................... 23,369 -- 1,308 707 25,384
Legal and other................ 19,852 -- 33,002 55,620 108,474
Travel and accommodation....... 63,746 -- 74,598 1,722 140,066
---------- ---------- -------- -------- ----------
2,383,880 1,400 413,821 111,721 2,910,822
---------- ---------- -------- -------- ----------
3,983,092 1,167,526 687,424 448,372 6,286,414
Write-offs.......................... -- (1,167,526) -- (448,372) (1,615,898)
---------- ---------- -------- -------- ----------
Balance, December 31, 1997.......... $3,983,092 $ -- $687,424 $ -- $4,670,516
========== ========== ======== ======== ==========
</TABLE>

A brief description of the Company's mineral properties is as follows:

(a) Cerro Toro Properties:

On February 15, 1995, the Company filed three exploration permits with the
regulatory authorities in San Juan Province, Argentina covering 1,845 hectares
located in San Juan Province. The Company was subsequently notified that 100% of
the rights of ownership established by the procedures of the Province belong to
the Company.

In June 1998, the Company determined there was little prospect of further
work being carried out on the properties. Accordingly, all deferred expenditures
relating to the Cerro Toro Properties were written off at that time.

(b) Castano Group:

In 1996, the Company entered into a purchase/option agreement to acquire
100% of the rights and interests in the Castano Group of mineral properties
located in San Juan Province, Argentina. In 1997, the Company terminated the
purchase/option agreement in accordance with the provisions provided therein and
wrote off the remaining deferred expenditures on the Castano Group. During 1998,
the Company recovered a security deposit that had previously been written off.

F-10
<PAGE> 51

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

During 1995, the Company staked and applied for a number of cateos and
manifestaciones within Cordova, San Luis, Chubut and Santa Cruz provinces, all
of which were of a grass roots nature. At December 31, 1997, the Company had
staked and applied for 13 cateos and 20 manifestaciones in the San Luis and
Chubut provinces.

In 1997, the Company wrote-off costs incurred relating to properties in
provinces other than San Luis and Chubut that the Company did not intend to
pursue.

As the Cordova and San Luis cateos and manifestaciones were not renewed
during 1999, all deferred expenditures relating to these properties were written
off during 1998.

During November 1998, the Company entered into a letter agreement to grant
Inlet Resources Ltd. ("Inlet") an option to purchase up to a 100% interest in
the Company's Argentine properties. Under the terms of the agreement, the
Company granted Inlet an option to purchase up to 90% of the properties, over a
three year period, with a buyout of the remaining 10% for U.S. $2,000,000.
During the first year, the agreement requires Inlet to pay the Company U.S.
$150,000 in stages, issue the Company 100,000 shares and complete a U.S.
$650,000 work program, to earn a 50% interest in the properties. During the
second and third years, the agreement provides that Inlet will pay the Company a
total of U.S. $600,000 in stages, issue 200,000 shares and complete work
commitments totalling U.S. $1,500,000 to earn an additional 40% interest in the
properties. To December 31, 1998, the Company received a cash deposit of U.S.
$25,000 relating to the option agreement.

5. INVESTMENT:

<TABLE>
<CAPTION>
1998
------------
(RESTATED --
SEE BELOW)
<S> <C>
Investment, at cost......................................... $3,471,355
Share of losses of BII...................................... 1,275,000
----------
$2,196,355
==========
</TABLE>

During 1998, the Company entered into an agreement to purchase convertible
debentures entitling the Company to acquire up to a 45% interest in Biometric
Identification Inc. ("BII"), a private California-based company in the business
of developing, manufacturing and marketing fingerprint recognition technology.
Under the terms of the agreement, the Company has the right to acquire up to
U.S. $5,000,000 of convertible debentures to be issued by BII. If all such
debentures are acquired and converted into shares of BII, the Company will hold
approximately 45% of the issued shares of BII.

This investment was initiated by a related party which assigned its
interest to the Company in exchange for a fee up to U.S. $145,000, plus
reimbursement of its expenses. The related party elected to take this fee in the
form of 715,575 common shares at a deemed price of $0.30 per share. These shares
will be issued in pro-rata tranches on the same basis the debentures are
purchased by the Company.

The debentures have a term of five years from the date of the closing of
the first acquisition and bear interest at the lowest interest rate imputed
under the U.S. Internal Revenue Code.

F-11
<PAGE> 52

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

At December 31, 1998, the Company had acquired debentures of BII totalling
U.S. $2,325,000 in accordance with the terms of the agreement and had issued
250,450 shares and allotted 82,292 shares, at a total value of $99,822, to the
related party. Additional debenture acquisitions and share issuances for finders
fees under the terms of the original agreement are scheduled as follows:

<TABLE>
<CAPTION>
DEBENTURE
DATES AMOUNTS (U.S. $) SHARES
- ----- ---------------- -------
<S> <C> <C>
February 1, 1999 (paid).............................. $ 550,000 78,713
February 22, 1999.................................... 125,000 17,889
March 12, 1999....................................... 500,000 71,558
May 12, 1999......................................... 1,500,000 214,673
---------- -------
$2,675,000 382,833
========== =======
</TABLE>

At December 31, 1998, the fair value of the Company's investment in
debentures of BII is estimated to approximate its carrying value.

Subsequent to December 31, 1998, the debenture acquisitions scheduled to be
made on February 22, 1999 and March 12, 1999 were deferred, by mutual agreement,
until April 2, 1999, and the May 12, 1999 scheduled acquisition was deferred
until July 23, 1999. All of the remaining scheduled acquisitions were made.

As discussed in note 2(e), during 1999, the Company changed the method of
accounting for its investment in BII to the equity method, and in accordance
with APB No. 18, has restated the consolidated financial statements for 1998 to
reflect the Company's share of losses of BII since acquisition, to reverse
previously reported foreign exchange translation gains related to the
investment, and to eliminate intercorporate interest income, as if the Company
had always accounted for its investment in BII using the equity method.

Summarized financial information for the Company's share of BII is as
follows (note: balance sheet amounts represent the Company's 28.2% effective
ownership interest as at December 31, 1998 and statement of operations amounts
represent the Company's 23.8% effective ownership interest during the period
June 12, 1998 to December 31, 1998):

<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
<S> <C>
Working capital............................................. $ 787
Capital assets.............................................. 11,821
Intangible assets........................................... 2,277,562
Convertible debentures payable to others.................... (93,765)
----------
Net assets.................................................. $2,196,355
==========
</TABLE>

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 12, 1998 TO
DECEMBER 31, 1998
-----------------
<S> <C>
Revenues.................................................... $ 166,000
Expenses, including amortization of excess purchase price... (1,441,000)
-----------
Loss for the period......................................... $(1,275,000)
===========
</TABLE>

F-12
<PAGE> 53

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

6. LOAN PAYABLE:

During 1998, a company controlled by a director loaned the Company a total
of $250,000. The loan is unsecured, non-interest bearing and was due on December
26, 1998. A total of $99,225 of the loan was repaid on December 29, 1998, and
the balance of the loan of $150,775 was repaid subsequent to December 31, 1998.

The Company also allotted 65,789 shares at a deemed price of $0.19 per
share at December 31, 1998, as allowed for under the rules of the Vancouver
Stock Exchange, as consideration for the loan.

7. SHARE CAPITAL:

(a) Issued:

<TABLE>
<CAPTION>
NUMBER
OF SHARES AMOUNT
---------- -----------
<S> <C> <C>
Balance at December 31, 1996............................... 11,128,962 $ 6,970,646
Issued during the year for cash by way of:
Private placement of special warrants, net of issue
costs............................................... 5,000,000 5,106,645
Exercise of warrants.................................. 200,000 184,000
Exercise of options................................... 120,000 126,400
---------- -----------
Balance at December 31, 1997............................... 16,448,962 12,387,691
Issued during the year for cash by way of:
Private placements.................................... 4,035,000 605,250
Exercise of options................................... 100,000 23,000
Issued during the year for finder's fee (note 5)........... 250,450 75,135
---------- -----------
20,834,412 13,091,076
Allotted during the year for:
Finder's fee (note 5)................................. 82,292 24,687
Carrying charges (note 6)............................. 65,789 12,500
---------- -----------
Balance at December 31, 1998............................... 20,982,493 $13,128,263
========== ===========
</TABLE>

During 1997, the Company issued the 5,000,000 common shares and 5,000,000
one-half share purchase warrants upon exercise of 5,000,000 previously issued
special warrants. In addition, 250,000 compensation options were issued to the
underwriter upon the exercise of 250,000 special compensation options granted to
the underwriter in connection with this special warrant private placement. Each
compensation option entitles the underwriter to acquire a unit, consisting of
one share and one-half of a share purchase warrant, at an exercise price of
$1.10 per share prior to January 20, 1999. Each whole warrant entitles the
underwriter to acquire one share at an exercise price of $1.30 prior to January
20, 1999. Subsequent to December 31, 1998, these compensation options expired
unexercised.

During 1998, the Company completed a 3,375,000 unit private placement at a
price of $0.15 per unit and a 660,000 unit private placement at a price of $0.15
per unit. Each unit consisted of one common share and one non-transferable share
purchase warrant. Each warrant is exercisable for a period of two years and
entitles the holder to purchase one additional common share at a price of $0.15
per share in the first year and $0.17 per share in the second year.

F-13
<PAGE> 54

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(b) Advances on share subscriptions:

At December 31, 1998, the Company had received advances on share
subscriptions for 4,403,950 units at $0.15 per unit in connection with:

- - a brokered private placement of 6,666,666 units at $0.15 per unit for total
proceeds of $1,000,000; and

- - a non-brokered private placement of 5,000,000 units at $0.15 per unit for
total proceeds of $750,000.

Each unit consists of one common share and one non-transferable share
purchase warrant exercisable for a period of two years. Each warrant will be
exercisable at a price of $0.15 per share in the first year and $0.17 per share
in the second year. The agent will be paid a 10% commission payable in cash and
brokers' warrants exercisable into shares of the Company for a period of two
years not exceeding 15% of the number of units issued to investors pursuant to
the private placements. The brokers' warrants will be exercisable at a price of
$0.15 per share the first year and $0.17 per share in the second year.

Subsequent to December 31, 1998, the Company received the additional
$1,089,408 of proceeds, paid the $100,000 commission, issued the 11,666,666
shares and share purchase warrants and issued the 1,000,000 brokers' warrants.

The continuity of share purchase warrants during 1998 is as follows:

<TABLE>
<CAPTION>
BALANCE, BALANCE,
EXERCISE DECEMBER 31, EXPIRED OR DECEMBER 31,
EXPIRY DATE PRICE 1997 GRANTED EXERCISED CANCELLED 1998
- ----------- -------- ------------ ------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
January 26, 1998........... $ 1.47 37,000 -- -- (37,000) --
August 21, 1998............ 1.25 1,400,000 -- -- (1,400,000) --
October 22, 1998........... 1.30 2,500,000 -- -- (2,500,000) --
October 22, 1998/1999...... 0.15/0.17 -- 660,000 -- -- 660,000
March 31, 1999/2000........ 0.15/0.17 -- 3,375,000 -- -- 3,375,000
--------- --------- --- ---------- ---------
3,937,000 4,035,000 -- (3,937,000) 4,035,000
========= ========= === ========== =========
</TABLE>

The continuity of share purchase warrants during 1997 is as follows:

<TABLE>
<CAPTION>
BALANCE, BALANCE,
EXERCISE DECEMBER 31, EXPIRED OR DECEMBER 31,
EXPIRY DATE PRICE 1996 GRANTED EXERCISED CANCELLED 1997
- ----------- -------- ------------ ------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
January 26, 1997/1998..... $1.28/1.47 37,000 -- -- -- 37,000
June 22, 1997............. 0.92 700,000 -- (100,000) (600,000) --
June 29, 1997............. 0.92 300,000 -- -- (300,000) --
September 14, 1997........ 0.92 150,000 -- -- (150,000) --
December 5, 1997.......... 0.92 100,000 -- (100,000) -- --
August 21, 1998........... 1.25 1,400,000 -- -- -- 1,400,000
October 22, 1998.......... 1.30 -- 2,500,000 -- -- 2,500,000
--------- --------- -------- ---------- ---------
2,687,000 2,500,000 (200,000) (1,050,000) 3,937,000
========= ========= ======== ========== =========
</TABLE>

F-14
<PAGE> 55

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(d) Stock options:

(i) Continuity:

The continuity of stock options during 1998 is as follows:

<TABLE>
<CAPTION>
BALANCE, BALANCE,
EXERCISE DECEMBER 31, EXPIRED OR DECEMBER 31,
EXPIRY DATE PRICE 1997 GRANTED EXERCISED CANCELLED 1998
- ----------- -------- ------------ ------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
April 27, 1998............ $1.00 100,000 -- -- (100,000)(a) --
September 14, 1998........ 0.34 30,000 -- -- (30,000)(a) --
October 30, 1999.......... 1.33 387,261 -- -- (387,261)(a) --
January 21, 2000.......... 0.34 130,000 -- -- (130,000)(a) --
January 21, 2000.......... 1.36 390,000 -- -- (390,000)(a) --
July 6, 2000.............. 0.32 -- 50,000 -- -- 50,000
August 28, 2000........... 0.20 -- 100,000 -- -- 100,000
January 28, 2001.......... 0.23 -- 1,640,000(a) (100,000) (285,000) 1,255,000
--------- --------- -------- ---------- ---------
1,037,261 1,790,000 (100,000) (1,322,261) 1,405,000
========= ========= ======== ========== =========
</TABLE>

- ---------------

(a) During 1998, these 1,037,261 outstanding options were cancelled and replaced
with the 1,640,000 options at $0.23 per share expiring January 28, 2001.

The continuity of stock options during 1997 is as follows:

<TABLE>
<CAPTION>
BALANCE, BALANCE,
EXERCISE DECEMBER 31, EXPIRED OR DECEMBER 31,
EXPIRY DATE PRICE 1996 GRANTED EXERCISED CANCELLED 1997
- ----------- -------- ------------ ------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
February 16, 1997........... $0.90 40,000 -- (40,000) -- --
January 30, 1998............ 0.91 50,000 -- -- (50,000) --
April 27, 1998.............. 1.00 100,000 -- -- -- 100,000
September 14, 1998.......... 1.10 70,000 -- (40,000) (30,000)(b) --
September 14, 1998.......... 0.34 -- 30,000(b) -- -- 30,000
December 8, 1998............ 0.97 373,635 -- -- (373,635) --
July 31, 1999............... 1.12 10,000 -- -- (10,000) --
September 25, 1999.......... 1.16 50,000 -- (40,000) (10,000) --
October 30, 1999............ 1.33 387,261 -- -- -- 387,261
January 21, 2000............ 1.36 -- 620,000 -- (230,000)(b) 390,000
January 21, 2000............ 0.34 -- 230,000(b) -- (100,000) 130,000
--------- ------- -------- ---------- ---------
1,080,896 880,000 (120,000) (803,635) 1,037,261
========= ======= ======== ========== =========
</TABLE>

- ---------------

(b) During 1997, these options were repriced to $0.34 per share.

(ii) Compensation expense:

The Company's Board of Directors grants stock options to its officers,
directors and key employees in accordance with the rules prescribed by the
Vancouver Stock Exchange. Stock options are granted with an exercise price equal
to the stock's quoted value on the Vancouver Stock Exchange at the date of
grant. Stock options granted generally have varying terms of up to three years
and vest and become fully exercisable from the date of grant.

F-15
<PAGE> 56

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

The per share weighted-average fair value of stock options granted during
1998, 1997 and 1996 was $0.16, $0.17 and $0.89 on the date of grant, using the
Black Scholes option-pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Expected dividend yield..................................... 0% 0% 0%
Risk-free interest rate..................................... 6.2% 5.0% 6.1%
Expected life (years)....................................... 2 2 2
Expected volatility over expected life...................... 139% 139% 139%
</TABLE>

The Company applies APB Opinion No. 25 in accounting for granting stock
options and accordingly, no compensation cost has been recognized for its stock
options in the financial statements. Had the Company determined compensation
cost based on the fair value at the grant date for its stock options under
Statement of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation ("FAS 123"), the Company's loss for the year would have increased
to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
(RESTATED --
NOTE 5)
<S> <C> <C> <C>
Loss for the year:
As reported............................ $(7,124,561) $(2,199,895) $(1,259,315)
Compensation expense under FAS 123..... 286,558 152,888 458,384
----------- ----------- -----------
Pro forma loss for the year................. $ 7,411,119 $(2,352,783) $(1,717,699)
=========== =========== ===========
Pro forma loss per share.................... $ (0.39) $ (0.15) $ (0.19)
=========== =========== ===========
</TABLE>

8. FINANCIAL INSTRUMENTS:

The fair values of the Company's cash, amounts receivable, accounts payable
and accrued liabilities and loan payable approximate their carrying amounts
because of the immediate or short term to maturity of these financial
instruments.

9. NON-CASH FINANCING AND INVESTING ACTIVITIES:

The Company has the following non-cash financing and investing activities:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Financing activities:
Shares issued and allotted for finders fee.... $ 99,822 $ -- $ --
Shares allotted as consideration for loan
payable..................................... 12,500 -- --
-------- -------- --------
$112,322 $ -- $ --
======== ======== ========
Investing activities:
Accrued interest income on investment......... $(79,989) $ -- $ --
======== ======== ========
</TABLE>

10. SEGMENTED INFORMATION:

During 1998, the Company adopted the accounting standards related to
segment disclosures recently approved by the accounting standard-setting bodies
in the United States and Canada. The information presented below is consistent
with these standards. The Company has not allocated general and administrative
expenses from the corporate segment.

F-16
<PAGE> 57

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(a) Operating segments:

The Company has determined its operating segments to be mineral exploration
and development, and corporate, which includes holding investments, based on the
way management organizes and manages its business.

<TABLE>
<CAPTION>
MINERAL
EXPLORATION AND
1998 DEVELOPMENT CORPORATE TOTAL
- ---- --------------- ------------ ------------
(RESTATED -- (RESTATED --
NOTE 5) NOTE 5)
<S> <C> <C> <C>
Revenue............................................ $ -- $ 79,129 $ 79,129
General and administrative expenses................ -- 1,287,586 1,287,586
Other expenses..................................... 4,592,237 1,323,867 5,916,104
----------- ----------- -----------
Loss for the year.................................. $(4,592,237) $(2,532,324) $(7,124,561)
=========== =========== ===========
Capital expenditures (recovered)................... $ (78,279) $ 3,342,624 $ 3,264,345
=========== =========== ===========
Identifiable assets................................ $ -- $ 2,566,628 $ 2,566,628
=========== =========== ===========
1997
Revenue............................................ $ -- $ 175,185 $ 175,185
General and administrative expenses................ -- 720,699 720,699
Other expenses..................................... 1,632,293 22,088 1,654,381
----------- ----------- -----------
Loss for the year.................................. $(1,632,293) $ (567,602) $(2,199,895)
=========== =========== ===========
Capital expenditures............................... $ 3,033,103 $ 79,658 $ 3,112,761
=========== =========== ===========
Identifiable assets................................ $ 4,670,516 $ 3,603,577 $ 8,274,093
=========== =========== ===========
1996
Revenue............................................ $ -- $ 102,147 $ 102,147
General and administrative expenses................ -- 826,609 826,609
Other expenses..................................... 534,853 -- 534,853
----------- ----------- -----------
Loss for the year.................................. $ (534,853) $ (724,462) $(1,259,315)
=========== =========== ===========
Capital expenditures............................... $ 3,136,691 $ 30,116 $ 3,166,807
=========== =========== ===========
</TABLE>

(b) Geographic information:

As previously disclosed (note 4), all of the Company's mineral exploration
and development activities during 1996 through 1998 were in Argentina.

Except for the Company's investment in BII (note 5) and related share of
losses, substantially all of the Company's corporate activities during 1996
through 1998 were in Canada.

11. RELATED PARTY TRANSACTIONS:

During 1998, fees of $156,620 (1997 -- $233,348; 1996 -- $324,500) were
charged by certain directors or companies controlled by them for management,
consulting, accounting and administrative services. Management believes the
costs of related party services approximate amounts that would have been paid
for similar services rendered by unrelated parties.

Included in accounts payable and accrued liabilities at December 31, 1998
is $15,044 (1997 -- $35,332) payable to a director and a company controlled by a
director related to the above fees.

F-17
<PAGE> 58

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

12. INCOME TAXES:

As at December 31, 1998, the Company has approximately $3,000,000 of losses
for Canadian income tax purposes that expire between 2000 and 2005 and that may
be available to reduce taxable income in Canada in future years. In addition,
the Company had deducted approximately $8,000,000 for book purposes in excess of
amounts deducted for tax purposes, primarily for expenditures incurred on the
Company's mineral properties and equipment. The Company has taken a valuation
allowance of the full amount of the tax benefit thereon due to the uncertainty
of whether these deferred tax assets will be realized.

13. CONTINGENCIES:

(a) Uncertainty due to the Year 2000 Issue:

The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effect of the Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue affecting the
Company, including those related to the efforts of investees, suppliers or other
third parties, will be fully resolved.

(b) Contingent liability:

As disclosed elsewhere in these financial statements (notes 1 and 14(a)),
the Company continued its jurisdiction of incorporation from British Columbia to
the State of Wyoming, effective November 10, 1998, and has proposed to continue
from Wyoming back into British Columbia in 1999. In the course of their review
of the Company's proposal, the United States Securities and Exchange Commission
(the "SEC") has advised the Company that they believe the original continuance
to Wyoming was an event that would have required the filing of a registration
statement with the SEC. As a result, the Company appears to have been in
technical violation of the U.S. Securities Act of 1933 (the "Act") and United
States holders of shares of the Company, at the time of the original continuance
to Wyoming may have common law remedies under the Act. In addition, the Company
may be required to offer such United States holders of shares of the Company the
right to have their shares repurchased by the Company at their fair market value
at the time of the original continuance.

The Company is currently reviewing its options to resolve this matter. No
provision has been recorded in the accounts for any contingent loss, as the
outcome is not determinable at this time.

14. SUBSEQUENT EVENTS:

(a) Corporate continuance:

Subsequent to December 31, 1998, the Company announced an extraordinary
general meeting of the shareholders of the Company to be held on April 12, 1999,
at which time the shareholders will vote on the Company's proposal to continue
the Company to the Province of British Columbia and to consolidate the Company's
share capital on the basis of one post-consolidated share for each five
pre-consolidated shares. The meeting date was subsequently postponed and has not
yet been rescheduled.

F-18
<PAGE> 59

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(b) Private placement:

Subsequent to December 31, 1998, the Company announced, subject to
regulatory approval, a best-efforts brokered private placement of up to
11,666,666 units at $0.15 per unit to raise gross proceeds of up to $1,750,000.
Each unit will consist of one common share and one non-transferable share
purchase warrant exercisable at $0.15 per share in the first year and $0.17 per
share in the second year. The agent will be paid a 10% commission, payable in
cash, and up to 1,750,000 brokers' warrants exercisable at $0.15 per share in
the first year and $0.17 per share in the second year.

15. DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES:

Accounting practices under United States and Canadian generally accepted
accounting principles ("GAAP"), as they affect the Company, are substantially
the same, except for the following:

(a) Unrealized gains for trading securities:

Investments held principally for the purpose of selling them in the near
term are considered trading securities. Under Canadian GAAP, unrealized gains on
trading securities are not recorded in the accounts until realized. Under United
States GAAP, unrealized gains and losses for trading securities are included in
earnings. Accordingly, under Canadian GAAP, the gain on disposal of marketable
securities during 1996 would be recorded as $72,400, as under Canadian GAAP, the
$32,923 unrealized holding gain at December 31, 1995 would not have been
included in earnings in 1995.

(b) Stock-based compensation:

Canadian GAAP for stock-based compensation is similar to that provided in
APB Opinion No. 25 under United States GAAP (note 2(f)), although FAS 123
requires additional disclosure of the effects of accounting for stock-based
compensation using the fair value method (note 7(c)). Accordingly, under
Canadian GAAP, there would be no material differences in the consolidated
financial statements in respect of stock-based compensation.

Under Canadian GAAP, an investor changing from the cost to the equity
method of accounting for investments would record its share of the earnings or
losses of the investee only from the time the investor obtained the ability to
exercise significant influence over the investee. The investor's share of
earnings or losses of the investee prior to this time would not be recorded in
the accounts of the investor under Canadian GAAP. United States GAAP requires an
investor to restate prior period's financial statements to record the investor's
share of the earnings or losses of the investee, as if the investor had always
accounted for its investment in the investee using the equity method.
Accordingly, under Canadian GAAP, the $1,275,000 share of loss of BII recorded
for 1998 would not be recorded, and the intercorporate interest for 1998 of
$79,989 would not have been eliminated.

(d) Foreign currency translation:

Canadian GAAP requires that non-current, foreign currency denominated
monetary items that have a fixed or ascertainable life extending beyond the end
of the following fiscal year should be translated into Canadian dollars at the
exchange rate in effect at the transaction date and adjusted to reflect the
current exchange rate at each balance sheet date, with any gain or loss relating
to the initial translation and balance

F-19
<PAGE> 60

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

sheet date adjustment being deferred and amortized over the remaining life of
the item. Under Canadian GAAP, the Company's investment in convertible
debentures of BII, prior to the change to the equity method of accounting for
such investments, would have been translated in this manner. United States GAAP
requires such gains or losses to be included in operations in the period.
Canadian and United States GAAP for foreign currency translation of investments
accounted for by the equity method are comparable. Accordingly, the foreign
exchange gain of $85,875 relating to the revaluation of the investment that was
previously reported under Canadian GAAP at December 31, 1998, would be retained
in the investment balance, but the effect would be recorded as a deferred credit
on the consolidated balance sheet and amortization of $9,551 would be recorded
for the 1998 fiscal year, under Canadian GAAP.

A reconciliation of the effects of the differences between Canadian GAAP
and United States GAAP on the balance sheets and statements of operations and
deficit is summarized as follows:

<TABLE>
<CAPTION>
1998 1997
------------ ----------
(RESTATED --
NOTE 5)
<S> <C> <C>
Total assets under United States GAAP....................... $2,566,628 $8,274,093
Adjustments to increase investment to reverse share of
losses of BII............................................. 1,275,000 --
---------- ----------
To record foreign exchange translation gain................. 85,875 --
To reverse intercorporate interest eliminated............... 79,989 --
----------
Total assets under Canadian GAAP............................ $4,007,492 $8,274,093
========== ==========
</TABLE>

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Total liabilities under United States GAAP.................. $ 299,037 $ 283,105
Deferred foreign exchange gain, net of amortization of
$9,551.................................................... 76,324 --
---------- ----------
Total liabilities under Canadian GAAP....................... $ 375,361 $ 283,105
========== ==========
</TABLE>

<TABLE>
<CAPTION>
1998 1997
------------ ----------
(RESTATED --
NOTE 5)
<S> <C> <C>
Shareholders' equity under United States GAAP............... $2,267,591 $7,990,988
Adjustments:
Reverse intercorporate interest eliminated............. 77,989 --
Amortization of deferred foreign exchange gain......... 9,551 --
Reverse share of losses of BII......................... 1,275,000 --
---------- ----------
1,364,540 --
---------- ----------
Shareholders' equity under Canadian GAAP.................... $3,632,131 $7,990,988
========== ==========
</TABLE>

F-20
<PAGE> 61

BIOMETRIC SECURITY CORP.

(FORMERLY SONOMA RESOURCE CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
(RESTATED --
NOTE 5)
<S> <C> <C> <C>
Loss for the year under United States
GAAP..................................... $ (7,124,561) $(2,199,895) $(1,259,315)
Adjustments:
Reverse intercorporate interest
eliminated.......................... 79,987 -- --
Amortization of deferred foreign
exchange gain....................... 9,551 -- --
Realized gain on disposal of trading
securities.......................... -- -- 32,923
Reverse share of losses of BII........ 1,275,000 -- --
------------ ----------- -----------
1,364,540 -- 32,923
------------ ----------- -----------
Loss for the year under Canadian GAAP...... (5,760,021) (2,199,895) (1,226,392)
Deficit, beginning of year under Canadian
GAAP..................................... (4,396,703) (2,196,808) (970,416)
------------ ----------- -----------
Deficit, end of year under Canadian GAAP... $(10,156,724) $(4,396,703) $(2,196,808)
------------ ----------- -----------
Loss per share under Canadian GAAP......... $ (0.31) $ (0.13) $ (0.14)
============ =========== ===========
</TABLE>

F-21
<PAGE> 62

BIOMETRIC SECURITY CORP.

CONSOLIDATED BALANCE SHEET
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30,
1999 1998 1998
------------ ------------ ----------
(RESTATED -- (RESTATED --
NOTE 4) NOTE 4)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash.............................................. $ 277,403 $ 245,182 $1,655,323
Accounts receivable............................... 43,265 55,076 17,062
Prepaid expenses and deposits..................... 5,976 9,257 13,406
------------ ----------- ----------
326,644 309,515 1,685,791
Equipment and leasehold improvements................ 65,046 60,758 116,262
Investment (Note 4)................................. 2,755,042 2,196,355 1,837,500
------------ ----------- ----------
$ 3,146,732 $ 2,566,628 $3,639,553
============ =========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.................................. $ 250,356 $ 148,262 $ 405,294
Loan payable...................................... -- 150,775 --
------------ ----------- ----------
250,356 299,037 405,294
CONTINGENT LIABILITY
(Notes 1 and 7(b))................................ 657,052 -- --
SHAREHOLDERS' EQUITY
Share capital (Note 1)............................ 16,176,836 13,128,263 12,947,609
Shares subscribed................................. -- 660,592 --
Deficit............................................. (13,937,512) (11,521,264) (9,713,350)
------------ ----------- ----------
2,239,324 2,267,591 3,234,259
------------ ----------- ----------
$ 3,146,732 $ 2,566,628 $3,639,553
============ =========== ==========
</TABLE>

On Behalf of the Board of Directors

<TABLE>
<S> <C>
/s/ ROBERT M. KAMM /s/ WAYNE JOHNSTONE
- -------------------------------------------- --------------------------------------------
Director Director
</TABLE>

F-22
<PAGE> 63

BIOMETRIC SECURITY CORP.

CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
----------------------------
JUNE 30, JUNE 30,
1999 1998
------------ ------------
(RESTATED --
NOTE 4)
<S> <C> <C>
REVENUE
Interest (Note 4)......................................... $ 4,239 $ 65,603
------------ -----------
EXPENSES
Professional fees and registration costs.................. 532,268 246,113
Business consultants...................................... 97,394 23,600
Amortization.............................................. 4,902 9,427
Finder's fee (Note 4)..................................... 61,183 53,668
Foreign exchange.......................................... 1,246 (12,354)
Interest and bank charges................................. 1,195 687
Management fees........................................... 64,200 60,000
Offices expenses.......................................... 68,604 36,734
Listing costs............................................. 42,334 35,570
Salaries, wages and administration........................ 49,326 37,671
Travel and accommodation.................................. 92,315 58,070
------------ -----------
1,014,967 549,186
------------ -----------
(1,010,728) (483,583)
SHARE OF LOSS OF BII........................................ (1,570,375) --
RECOVERY (WRITE-OFF) OF MINERAL PROPERTIES.................. 164,855 (4,805,477)
LOSS ON DISPOSAL OF ASSETS.................................. -- (27,587)
------------ -----------
LOSS FOR THE PERIOD......................................... (2,416,248) (5,316,647)
DEFICIT, BEGINNING OF PERIOD
As previously reported.................................... (10,080,400) (4,396,703)
Adjustment for 1998 share of losses of BII (note 4)....... (1,440,864) --
------------ -----------
As restated............................................... (11,521,264) (4,396,703)
------------ -----------
DEFICIT, END OF PERIOD...................................... $(13,937,512) $(9,713,350)
============ ===========
LOSS PER SHARE.............................................. $ (0.07) $ (0.31)
============ ===========
</TABLE>

F-23
<PAGE> 64

BIOMETRIC SECURITY CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS
(EXPRESSED IN CANADIAN DOLLARS)
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)

<TABLE>
<CAPTION>
1999 1998
------------ ------------
(RESTATED --
NOTE 4)
<S> <C> <C>
OPERATIONS
Loss for the period....................................... $(2,416,248) $(5,316,647)
Items not involving cash:
Share of losses of BII................................. 1,570,375 --
Depreciation........................................... 4,902 9,427
Loss on disposal of assets............................. -- 27,587
(Recovery) Write-off of mineral properties............. (164,855) 4,805,477
Changes in non-cash working capital items.............. 117,186 116,975
Non-cash fees.......................................... 61,183 53,668
----------- -----------
(827,457) (303,513)
----------- -----------
FINANCING
Issue of common shares, net............................... 2,983,850 506,250
Repayment of loan......................................... (150,775) --
----------- -----------
2,833,075 506,250
----------- -----------
INVESTMENTS
Capital assets............................................ (9,190) (13,054)
Mineral properties........................................ 164,855 (134,961)
Proceeds on disposal of fixed assets...................... -- 107,991
Increase in investment (Note 4)........................... (2,129,062) (1,837,500)
----------- -----------
(1,973,397) (1,877,524)
----------- -----------
CHANGE IN CASH.............................................. 32,221 (1,674,787)
CASH, BEGINNING OF PERIOD................................... 245,182 3,330,110
----------- -----------
CASH, END OF PERIOD......................................... $ 277,403 $ 1,655,323
=========== ===========
</TABLE>

F-24
<PAGE> 65

BIOMETRIC SECURITY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN CANADIAN DOLLARS)

FOR THE SIX MONTHS ENDED JUNE 30, 1999

(UNAUDITED)

1. SHARE CAPITAL

a) Authorized: Unlimited (1998 -- 100,000,000) common shares without par
value.

b) Issued:

<TABLE>
<CAPTION>
SHARES AMOUNT
---------- -----------
<S> <C> <C>
Balance, December 31, 1997..................... 16,448,962 $12,387,691
Issued during the year for cash by way of:
Private placements........................... 4,035,000 605,250
Exercise of options.......................... 100,000 23,000
Issued during the year for finder's fee........ 250,450 75,135
---------- -----------
20,834,412 13,091,076
Allotted during the year for:
Finder's fee (Note 4)........................ 82,292 24,687
Carrying charges (Note 5).................... 65,789 12,500
---------- -----------
Balance, December 31, 1998..................... 20,982,493 13,128,263
Issued during the period for cash by way of:
Private placements........................... 11,666,666 1,750,000
Exercise of warrants......................... 100,000 15,000
---------- -----------
32,749,159 14,893,263
Private placement.............................. 11,666,665 1,750,000
Exercise of warrants........................... 2,885,551 462,833
---------- -----------
47,301,375 17,106,096
Allotted during the period for:
Finder's fee (Note 4)........................ 203,941 61,183
Less: share issue costs........................ (333,391)
---------- -----------
47,505,316 16,833,888
Less: Contingent Liability (Note 7(b))......... (3,285,260) (657,052)
---------- -----------
Balance, June 30, 1999......................... 44,220,056 $16,176,836
========== ===========
</TABLE>

c) During the three month period ended March 31, 1999 the Company completed
brokered and non-brokered private placements that totalled 11,666,666 units at
$0.15 per unit for gross proceeds of $1,750,000. Each unit consisted of one
common share and one non-transferable share purchase warrant exercisable at
$0.15 per share in the first year and $0.17 per share in the second year. The
agent for the brokered private placement was paid a 10% commission totalling
$100,000 and 1,000,000 broker warrants exercisable at $0.15 per share in the
first year and $0.17 per share in the second year.

d) Private Placement:

During the three month period ended June 30, 1999 the Company completed a
brokered private placement of 11,666,665 units at $0.15 per unit to raise gross
proceeds of up to $1,750,000. Each unit consisted of one common share and one
non-transferable share purchase warrant exercisable at $0.15 per share in the
first year and $0.17 per share in the second year. The agent was paid a 10%
commission, payable in cash, and 1,600,000 broker warrants exercisable at $0.15
per share in the first year and $0.17 per share in the second year.

F-25
<PAGE> 66

BIOMETRIC SECURITY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

FOR THE SIX MONTHS ENDED JUNE 30, 1999

(UNAUDITED)

e) At June 30, 1999 the Company reserved in respect of options and
warrants:

Options:

<TABLE>
<CAPTION>
NUMBER OF SHARES EXERCISE PRICE EXPIRY DATE
- ---------------- -------------- -----------
<S> <C> <C>
750,000 $0.22 April 16, 2001
1,180,000 $0.23 January 28, 2001
50,000 $0.32 July 6, 2000
100,000 $0.20 August 28, 2000
---------
2,080,000
=========
</TABLE>

Warrants:

<TABLE>
<CAPTION>
NUMBER OF SHARES EXERCISE PRICE EXPIRY DATE
- ---------------- -------------- -----------
<S> <C> <C>
1,775,000 $0.17 March 31, 2000
660,000 $0.15 September 10, 1999
$0.17 September 10, 2000
11,281,115 $0.15 January 29, 2000
January 29, 2001
13,266,665 $0.15 April 15, 2000
$0.17 April 15, 2001
----------
26,982,780
==========
</TABLE>

2. RELATED PARTY TRANSACTIONS

Fees of $138,750 (1998 -- $72,500; 1997 -- $142,228) were charged by
directors or companies affiliated with them for management, consulting and
administrative services.

3. DIRECTORS

Mr. R. Kamm

Mr. W. Rand

Mr. C. Idziszek

Mr. W. Johnstone

4. INVESTMENT

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
(RESTATED -- (RESTATED --
SEE BELOW) SEE BELOW)
<S> <C> <C>
Investment, at cost............................. $5,600,417 $3,471,355
Share of losses of BII.......................... (2,845,375) (1,275,000)
---------- ----------
$2,755,042 $2,196,355
========== ==========
</TABLE>

During 1998 the Company entered into an agreement to purchase convertible
debentures entitling the Company to acquire up to a 45% interest in Biometric
Identification Inc. ("BII"), a private California-based company in the business
of developing, manufacturing and marketing fingerprint recognition technology.
Under the terms of the agreement, the Company has the right to acquire up to US
$5,000,000 of convertible

F-26
<PAGE> 67
BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(EXPRESSED IN CANADIAN DOLLARS)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)

debentures to be issued by BII. If all such debentures are acquired and
converted into shares of BII, the Company will hold approximately 45% of the
issued shares of BII.

This investment was initiated by a related party which assigned its
interest to the Company in exchange for a fee up to US $145,000, plus
reimbursement of its expenses. The related party elected to take this fee in the
form of 715,575 common shares as a deemed price of $0.30 per share. These shares
will be issued in pro-rata tranches on the same basis the debentures are
purchased by the Company. The debentures have a term of five years from the date
of the closing of the first acquisition and bear interest at the lowest interest
rate imputed under the U.S. Internal Revenue Code.

At June 30, 1999 the Company had acquired debentures of BII totalling US
$3,750,000 in accordance with the terms of the agreement and had issued 250,450
shares and allotted 286,233 shares at a total value of Cdn $161,005, to the
related party. Additional debenture acquisitions and share issuances for finders
fees under the terms of the original agreement are scheduled as follows:

<TABLE>
<CAPTION>
DEBENTURE
DATES AMOUNT (US $) SHARES
----- ------------- -------
<S> <C> <C>
July 23, 1999.................................... 1,250,000 178,892
</TABLE>

Subsequent to June 30, 1999 the debenture acquisition scheduled to be made on
July 23, 1999 was made.

During 1999, the Company determined that it had the ability to exercise
significant influence over the operating, financing and investing activities of
BII. In addition, the Company determined that the investment in convertible
debentures could be considered to be similar in nature to an equity investment
in BII. As a result of these two factors, the Company changed the method of
accounting for its investment in BII from the fair value method, as an
available-for-sale investment, to the equity method, effective in June 1999. In
accordance with Accounting Principles Board Opinion No. 18 "The Equity Method of
Accounting for Investments in Common Stock", the Company's financial statements
for 1998 have been restated to reflect this change.

Under the equity method, the cost of the investment is adjusted for the
Company's share of post-acquisition earnings or losses of BII, as if the Company
had converted its BII debentures into shares of BII at the time of each
acquisition. The excess of the cost of its investment over the Company's share
of the net assets of BII, which has been allocated by the Company to BII's
technology rights, is being amortized on a straight-line basis over five years.
The Company has recorded $1,570,375 as its share of the loss of BII for the six
months ended June 30, 1999, and $1,275,000 as its share of the loss of BII for
the period ended December 31, 1998. In addition, previously reported foreign
exchange losses of $178,069 at June 30, 1999 and gains of $85,875 as at December
31, 1998 relating to this investment have been reversed, and accrued interest
income of $55,922 as at June 30, 1999 and $79,989 as at December 31, 1998 have
been eliminated in connection with this change. The overall result of this
change was to reduce investment as at June 30, 1999 by $2,889,092 and as at
December 31, 1998 by $1,440,864, increase loss for the six months ended June 30,
1999 by $1,448,228, or $0.04 per share, and for the year ended December 31, 1998
by $1,440,864, or $0.08 per share, and increase deficit as at June 30, 1999 by
$2,889,092 and as at December 31, 1998 by $1,440,864.

5. LOAN PAYABLE

During 1998, a company affiliated with a director loaned the Company a
total of $250,000. The loan was unsecured, non-interest bearing and was due on
December 26, 1998. A total of $99,225 of the loan was repaid on December 29,
1999, and the balance of the loan of $150,775 was repaid subsequent to December
31, 1998.

F-27
<PAGE> 68
BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(EXPRESSED IN CANADIAN DOLLARS)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)

The Company allotted 65,789 shares at a deemed price of $0.19 per share at
December 31, 1998, as allowed for under the rules of the Vancouver Stock
Exchange, as consideration for the loan.

6. MINERAL PROPERTIES

During June 1998, the Company changed its principal business activity from
mineral exploration to the development of fingerprint identification systems. As
the Company had determined there was little prospect of further work being
carried out on the properties, it wrote-off the deferred mineral exploration
expenditures at that time.

<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
ACQUISITION COSTS......................... $ -- $ -- $ 80,321
----------- ----------- -----------
EXPLORATION AND DEVELOPMENT EXPENDITURES
Access costs............................ -- 772 17,929
Assays.................................. -- 2,882 31,690
Communication........................... -- 332 15,802
Contract drilling, excavation and
trenching............................ -- -- 1,203,872
Contract labour and supervision......... -- 3,289 105,178
Data acquisition and analysis........... -- 1,537 44,367
Equipment and field supplies............ -- 5,417 168,674
Field administration.................... -- 16,895 73,192
Field car rental and transportation..... -- 3,499 58,966
Geological and geophysical.............. -- 69,281 311,192
Insurance............................... -- 5,762 18,523
Legal and other......................... -- 23,936 52,871
Travel and accommodation................ -- 1,359 74,553
----------- ----------- -----------
-- 134,961 2,176,809
----------- ----------- -----------
-- 134,961 2,257,130
----------- ----------- -----------
MINERAL PROPERTIES, BEGINNING OF PERIOD... -- 4,670,516 3,115,311
----------- ----------- -----------
-- 4,805,477 5,372,441
LESS: AMOUNTS WRITTEN-OFF................. -- (4,805,477) (1,002,218)
----------- ----------- -----------
MINERAL PROPERTIES, END OF PERIOD......... $ -- $ -- $ 4,370,223
=========== =========== ===========
</TABLE>

The Company continues to hold several Argentine properties and has entered
into an agreement to grant Inlet Resources Ltd. ("Inlet") an option to purchase
up to a 100% interest in these properties. Under the terms of the agreement, the
Company granted Inlet an option to purchase up to 90% of the properties, over a
three year period, with a buyout of the remaining 10% for US $2,000,000. During
the first year the agreement required Inlet to pay the Company US $150,000 in
stages, issue the Company 100,000 shares and complete a US $650,000 work program
to earn a 50% interest in the properties. During the second and third years the
agreement provides that Inlet will pay the Company a total of US $600,000 in
stages, issue 200,000 shares and

F-28
<PAGE> 69

BIOMETRIC SECURITY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

FOR THE SIX MONTHS ENDED JUNE 30, 1999

(UNAUDITED)

complete work commitments totalling US $1,500,000 to earn an additional 40%
interest in the properties. To June 30, 1999 the Company had received US
$150,000 and 100,000 shares relating to the option agreement.

7. CONTINGENCIES:

a) Uncertainty due to the Year 2000 Issue:

The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effect of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the Company,
including those related to the efforts of investees, suppliers or other
third parties, will be fully resolved.

b) Contingent Liability:

The Company continued its jurisdiction of incorporation from British
Columbia to the State of Wyoming, effective November 10, 1998, and has
proposed to continue from Wyoming back into British Columbia in 1999. In
the course of their review of the Company's proposal, the United States
Securities and Exchange Commission (the "SEC") had advised the Company that
they believe the original continuance to Wyoming was an event that would
have required the filing of a registration statement with the SEC. As a
result, the Company appears to have been in technical violation of the U.S.
Securities Act of 1933 (the "Act") and holders of shares of the Company at
the time of the original continuance to Wyoming may have common law
remedies under the Act. The Company complied with applicable Canadian
disclosure requirements at the time of transfer and offered all
shareholders the right to dissent and no shareholders exercised this right.
In May 1999 the Company filed a registration statement with the SEC
offering U.S. holders of shares of the Company, at the time of continuance,
the right to have their shares repurchased by the Company at their fair
market value at the time of the original continuance. A provision for the
contingent liability has been recorded in these accounts as a reduction of
share capital. Any amount not repurchased by the Company on expiry of the
repurchase offer will be reclassified to share capital.

8. SUBSEQUENT EVENTS

a) Corporate Continuance:

During the period the Company announced an extraordinary general
meeting of the shareholders of the Company to be held on April 12, 1999, at
which time the shareholders were to vote on the Company's proposal to
continue the Company to the Province of British Columbia and to consolidate
the Company's share capital on the basis of one post-consolidated share for
each five pre-consolidated shares. The meeting was subsequently postponed
and has been scheduled for October 8, 1999.

b) Private Placement:

Subsequent to June 30, 1999 the Company completed a brokered private
placement of 10,000,000 units at $0.20 per unit for gross proceeds of
$2,000,000. Each unit consisted of one common share and one
non-transferable share purchase warrant exercisable at $0.20 per share in
the first year and $0.23 per

F-29
<PAGE> 70

BIOMETRIC SECURITY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(EXPRESSED IN CANADIAN DOLLARS)

FOR THE SIX MONTHS ENDED JUNE 30, 1999

(UNAUDITED)

share in the second year. The agent was paid a $186,000 commission, payable
in cash, and 1,500,000 broker warrants exercisable at $0.20 per share in
the first year and $0.23 per share in the second year.

9. SEGMENTED INFORMATION

a) Operating Segments:

The Company has determined its operating segments to be mineral
exploration and development, and corporate which includes holding
investments, based on the way management organizes and manages its
business.

<TABLE>
<CAPTION>
MINERAL
EXPLORATION AND
DEVELOPMENT CORPORATE TOTAL
--------------- ----------- -----------
(RESTATED (RESTATED
-NOTE 4) -NOTE 4)
<S> <C> <C> <C>
1999
Revenue.................................. $ -- $ 4,239 $ 4,239
General and administrative............... -- 1,014,967 1,014,967
Recovery of mineral properties........... 164,855 -- 164,855
Share of losses of BII................... -- 1,570,375 1,570,375
----------- ----------- -----------
(Loss) Gain for the period............... $ 164,855 $(2,581,103) $(2,416,248)
=========== =========== ===========
Capital expenditures..................... $ (164,855) $ 2,138,252 $ 1,973,397
=========== =========== ===========
Identifiable assets...................... $ -- $ 3,146,732 $ 3,146,732
=========== =========== ===========
1998
Revenue.................................. $ -- $ 65,603 $ 65,603
General and administrative............... -- 549,186 549,186
Write-off of resource properties......... (4,805,477) -- (4,805,477)
Loss on sale of assets................... -- (27,587) (27,587)
----------- ----------- -----------
(Loss) Gain for the period............... $(4,805,477) $ (511,170) $(5,316,647)
=========== =========== ===========
Capital expenditures (recoveries)........ $ 134,961 $ 1,742,563 $ 1,877,524
=========== =========== ===========
Identifiable assets...................... $ -- $ 3,639,553 $ 3,639,553
=========== =========== ===========
</TABLE>

b) Geographic Information:

All of the Company's mineral exploration and development activities
during 1997 through 1999 were in Argentina.

Except for the Company's investment in BII and related share of
losses, substantially all of the Company's corporate activities during 1997
through 1999 were in Canada.

F-30
<PAGE> 71

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Upon its transfer to Wyoming in 1998, Biometric retained its by-laws as
then in effect. Biometric's by-laws provide that, subject to the provisions of
the British Columbia Company Act, the directors may, with court approval, cause
Biometric to indemnify a director or former director of Biometric or a director
or former director of a corporation of which Biometric is or was a member, and
the heirs and personal representatives of any such person, against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a
judgment, actually and reasonably incurred by him, including an amount paid to
settle an action or satisfy a judgment in a civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or having
been a director of Biometric or a director of such corporation, including any
action or proceeding brought by Biometric or any such corporation. Each director
of Biometric on being elected or appointed shall be deemed to have contracted
with Biometric on the terms of the foregoing indemnity.

The by-laws also provide that, subject to the provisions of the British
Columbia Company Act, the directors may cause Biometric to indemnify any
officer, employee or agent of Biometric or of a corporation of which Biometric
is or was a member (notwithstanding that he is also a director) and his heirs
and personal representatives against all costs, charges and expenses whatsoever
incurred by him and resulting from his actions as an officer, employee or agent
of Biometric or of such corporation. In addition Biometric shall indemnify the
Secretary or an Assistant Secretary of Biometric (if he or she shall not be a
full time employee of Biometric and notwithstanding that he or she is also a
director) and his or her heirs and personal representatives against all costs,
charges and expenses whatsoever incurred by him or her and arising out of the
functions assigned to the Secretary by the British Columbia Company Act or
Biometric's by-laws. Each such Secretary and Assistant Secretary on being
appointed shall be deemed to have contracted with Biometric on the terms of the
foregoing indemnity.

Relevant Wyoming statutory provisions are as follows:

Section 17-16-851 of the Wyoming Business Corporation Act provides that a
corporation may indemnify an individual who is a party to a proceeding because
he is a director against liability incurred in the proceeding if, among other
factors: (i) he conducted himself in good faith; and (ii) he reasonably believed
that his conduct was in or at least not opposed to the corporation's best
interests; and (iii) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. Such indemnification must
be authorized by directors, legal counsel or shareholders as provided in Section
17-16-855.

Unless ordered by a court under Wyoming Business Corporation Act Section
17-16-854(a)(iii), a corporation may not indemnify a director under Section
17-16-851: (i) in connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in connection with the
proceeding if it is determined that the director has met the standard of conduct
as set forth in the preceding paragraph; or (ii) in connection with any
proceeding with respect to conduct for which he was adjudged liable on the basis
that he received a financial benefit to which he was not entitled.

Pursuant to Section 17-16-852 of the Wyoming Business Corporation Act, a
corporation is required to indemnify a director who was wholly successful, on
the merits or otherwise, in the defense of any proceeding to which he was a
party because he was a director of the corporation against reasonable expenses
incurred by him in connection with the proceeding.

Pursuant to Section 17-16-853 of the Wyoming Business Corporation Act, a
corporation may, before final disposition of a proceeding, advance funds to pay
for or reimburse reasonable expenses incurred by a director who is a party to a
proceeding because he is a director, if he delivers to the corporation: (i) a
written affirmation of his good faith belief that he has met the standard of
conduct described in Wyoming Business Corporation Act Section 17-16-851; and
(ii) his written undertaking to repay any funds advanced if he is not entitled
to mandatory indemnification under Section 17-16-852 (above) and it is
determined that he has not met the standard of conduct described in Wyoming
Business Corporation Act Section 17-16-851.
II-1
<PAGE> 72

Section 17-16-854 of the Wyoming Business Corporation Act provides for a
director who is a party to a proceeding because he is a director to apply for
indemnification or an advance for expenses to the court conducting the
proceeding or another court of competent jurisdiction. If the court determines
that the director is entitled to indemnification or advance for expenses, it may
also order the corporation to pay the director's reasonable expenses incurred in
connection with obtaining court-ordered indemnification or advance for expenses.

Section 17-16-856 of the Wyoming Business Corporation Act provides that a
corporation may indemnify and advance expenses to an officer of the corporation
who is a party to a proceeding because he is an officer of the corporation: (i)
to the same extent as a director; and (ii) if he is an officer but not a
director, to such further extent as may be provided by the articles of
incorporation, the by-laws, a resolution of the board of directors or contract,
except for: (A) liability in connection with a proceeding by or in the right of
the corporation other than for reasonable expenses incurred in connection with
the proceeding; or (B) liability arising out of conduct that constitutes:
receipt by him of a financial benefit to which he is not entitled; an
intentional infliction of harm on the corporation or the shareholders; or (C) an
intentional violation of criminal law; and (iii) a corporation may also
indemnify and advance expenses to a current or former officer, employee or agent
who is not a director to the extent, consistent with public policy, that may be
provided by its articles of incorporation, by-laws, general or specific action
of its board of directors or contract. An officer of a corporation who is not a
director is entitled to mandatory indemnification under Section 17-16-852 of the
Wyoming Business Corporation Act, and may apply to a court under Section
17-16-854 of the Wyoming Business Corporation Act for indemnification or an
advance for expenses, in each case to the same extent to which a director may be
entitled to indemnification or advance for expenses under those provisions.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<S> <C>
*3.1 Registrant's Articles of Continuance into the State of
Wyoming.
*3.2 Registrant's By-Laws, as amended.
*3.3 Registrant's Articles of Amendment re Authorized Stock.
5 Opinion of Hathaway, Speight & Kunz, LLC (including the
consent of such firm), regarding the legality of
Registrant's stock issued as of Registrant's Continuance
into the State of Wyoming.
*10.1 Biometric Identification Agreement, dated June 12, 1998.
*10.2 Inlet Resources, Ltd. Agreement, dated January 21, 1999.
**21 Subsidiaries of the Registrant.
23.1 Consent of Hathaway, Speight & Kunz, LLC (included as part
of Exhibit 5 hereto).
23.2 Consent of KPMG LLP, independent auditors.
+24.1 Power of Attorney.
+24.2 Power of Attorney.
*27.1 Financial Data Schedule.
+99 Repurchase Agreement.
</TABLE>

- ---------------
+ Previously filed.

* Filed as an exhibit to Biometric's Annual Report on Form 10-K for the year
ended December 31, 1998.

** Filed as an exhibit to the Biometric's Annual Report on Form 10-K/A for the
year ended December 31, 1998.

(b) Financial Statement Schedules.

II-2
<PAGE> 73

ITEM 22. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (sec.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into this prospectus pursuant to
Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3
<PAGE> 74

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Vancouver,
British Columbia, Canada, on September 13, 1999.

BIOMETRIC SECURITY CORP.

By: *

----------------------------------
Robert M. Kamm
President and Director

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

* President and Director (Principal September 13, 1999
- ------------------------------------------ Executive Officer)
Robert M. Kamm

** Director September 13, 1999
- ------------------------------------------
Chester Idziszek

/s/ ROBERT F. CHASE Chief Financial Officer and Director September 13, 1999
- ------------------------------------------ (Principal Financial and Accounting
Robert F. Chase Officer)

/s/ WAYNE JOHNSTONE Director September 13, 1999
- ------------------------------------------
Wayne Johnstone

/s/ WILLIAM A. RAND Director September 13, 1999
- ------------------------------------------
William A. Rand

*By: /s/ SAUNDRA J. ZIMMER
-------------------------------------
Name: Saundra J. Zimmer
Title: Attorney-in-Fact

**By: /s/ WAYNE JOHNSTONE
------------------------------------
Name: Wayne Johnstone
Title: Attorney-in-Fact
</TABLE>

II-4
<PAGE> 75

EXHIBIT INDEX

*3.1 Registrant's Articles of Continuance into the State of
Wyoming.
*3.2 Registrant's By-Laws, as amended.
*3.3 Registrant's Articles of Amendment re Authorized Stock.
5 Opinion of Hathaway, Speight & Kunz, LLC (including the
consent of such firm), regarding the legality of
Registrant's stock issued as of Registrant's Continuance
into the State of Wyoming.
*10.1 Biometric Identification Agreement, dated June 12, 1998.
*10.2 Inlet Resources, Ltd. Agreement, dated January 21, 1999.
**21 Subsidiaries of the Registrant.
23.1 Consent of Hathaway, Speight & Kunz, LLC (included as part
of Exhibit 5 hereto).
23.2 Consent of KPMG LLP, independent auditors.
+24.1 Power of Attorney.
+24.2 Power of Attorney.
*27.1 Financial Data Schedule.
+99 Repurchase Agreement.
</TABLE>

- ---------------

+ Previously filed.

* Filed as an exhibit to Biometric's Annual Report on Form 10-K for the year
ended December 31, 1998.

** Filed as an exhibit to the Biometric's Annual Report on Form 10-K/A for the
year ended December 31, 1998.

<PAGE> 1
EXHIBIT 5

[HATHAWAY, SPEIGHT & KUNZ, LLC LETTERHEAD]

September 8, 1999

Biometric Security Corp.
400 Burrard Street, Suite 1940
Vancouver, BC
V6C 3A6

RE: Biometric Security Corp.
Continuation to Wyoming

Ladies and Gentlemen:

We have acted as special counsel in the state of Wyoming to Biometric
Security Corp., a Wyoming corporation (the "Company") formerly known as Sonoma
Resource Corp. in connection with the Registration Statement on Form S-4 (No.
333-78007), as amended (the "Form S-4"), filed with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Company's common stock as discussed therein.
On November 10, 1998, the Company continued into Wyoming from British Columbia
(the "Continuation") through the filing of Articles of Continuance with the
Wyoming Secretary of State pursuant to Wyoming Statute Section 17-16-1710.
Wyoming Statute Section 17-16-1710 of the Wyoming Business Corporation Act (the
"Act") provides that any corporation incorporated for any purposes, other than
an insurance company or a financial institution, under the laws of any
jurisdiction other than Wyoming, may if the foreign jurisdiction will
acknowledge the corporation's termination of domicile in the foreign
jurisdiction, apply to the Wyoming Secretary of State to continue the foreign
corporation in Wyoming as if it had been incorporated in the state of Wyoming. A
copy of the Certificate of Continuance issued by the Wyoming Secretary of State
on November 10, 1998, is attached hereto as Attachment A.

As special counsel to the Company, in connection with this opinion, we have
examined and relied upon such records, documents, certificates and other
instruments as in our judgment are necessary or appropriate to form the basis
for the opinion set forth herein. In our examinations, we have assumed the
genuineness of all signatures, the legal capacity of natural persons signing or
delivering any instrument, the authenticity of all documents submitted to us as
<PAGE> 2
Biometric Security Corp.
September 8, 1999
Page 2

originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such latter documents.

With respect to the Continuation of the Company into Wyoming, we are of
the opinion that upon the Company's continuance into Wyoming, each share of
common stock of the Company outstanding was legally issued, fully paid and
non-assessable.

The opinion set forth above is subject to the following qualifications,
exceptions and limitations:

A. We are qualified to practice law only in the State of Wyoming and we
do not purport to be conversant with the laws of jurisdictions other
than Wyoming. Accordingly, we express no opinion herein as to laws
other than the laws of the State of Wyoming and the federal laws of
the United States applicable therein.

B. The opinion set forth herein is rendered in reliance upon the
Certificate of Continuance issued by the Wyoming Secretary of State on
November 10, 1998.

C. The opinion set forth herein is limited to that expressly stated and
no other opinion or opinions should be implied.

D. The opinion set forth herein is as of the date hereof and we assume no
obligation to update or supplement such opinion to reflect any facts
or circumstances that may hereafter come to our attention or any
change in the law that may hereafter occur.

We hereby consent to the filing of this opinion as an exhibit to the Form
S-4 and to the reference to this firm appearing under the heading "Legal
Matters" in the related Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the General Rules and Regulations of the
SEC thereunder.

Respectfully submitted,

HATHAWAY, SPEIGHT & KUNZ, LLC

By:
---------------------------
Rick A. Thompson

Attachment A
RT/ccg
<PAGE> 3
STATE OF WYOMING

OFFICE OF THE
SECRETARY OF STATE

[Watermark of Great Seal
of the State of Wyoming]

UNITED STATES OF AMERICA,)
STATE OF WYOMING ) SS.

I, DIANA J. OHMAN, Secretary of State of the State of Wyoming, do hereby
certify that

... SONOMA RESOURCE CORP. ...

a corporation originally organized under the laws of British Columbia, Canada,
did on November 10, 1998, apply for a Certificate of Registration and filed
Articles of Continuance in the office of the Secretary of State of Wyoming.

I FURTHER CERTIFY that SONOMA RESOURCE CORP. has renounced its original
country of incorporation, and is now incorporated under the laws of the state of
Wyoming in accordance with W.S. 17-16-1710.

I FURTHER CERTIFY that the name of this corporation was changed from
SONOMA RESOURCE CORP. to BIOMETRIC SECURITY CORP. upon the filing of the
Application for Certificate of Registration and Articles of Continuance.

IN TESTIMONY WHEREOF, I have hereunto set my
hand and affixed the Great Seal of the State
of Wyoming. Done at Cheyenne, the Capital,
this 10th day of NOVEMBER, A.D., 1998.
[Watermark of Great Seal
of the State of Wyoming]
/s/ Diana J. Ohman
---------------------------------------------
SECRETARY OF STATE

By /s/ Sharon Cochran
---------------------------------------------

Attachment A

<PAGE> 1

EXHIBIT 23.2

To the Board of Directors
Biometric Security Corp.:

We consent to the use of our report dated February 23, 1999, except as to
notes 2(e), 5 and 15(c), which are as of September 7, 1999, on the consolidated
balance sheets of Biometric Security Corp. as at December 31, 1998 and 1997, and
the consolidated statements of operations and deficit and cash flows for each of
the years in the three year period ended December 31, 1998, included in the
Registration Statement on Form S-4 (No. 333-78007) and related Prospectus of
Biometric Security Corp., and to the reference to our firm under the heading
"Experts" in the Registration Statement.

KPMG LLP
Chartered Accountants
Vancouver, Canada
September 13, 1999