GREAT BEAR INVESTMENTS INC, 10KSB40, 2000-10-16

GREAT BEAR INVESTMENTS INC
10KSB40, 2000-10-16
BUSINESS SERVICES, NEC

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 10 - KSB

Annual report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934

(Mark one)

/X/ Annual report pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934.

/ / Transition report under Section 13 or 15 (d) of the Securities Exchange Act
of 1934.

For The Fiscal year ended June 30, 2000

SECURITY BIOMETRICS, INC
(Exact name of Small Business Issuer in Its Charter)

NEVADA 98 020 9119
(State or other jurisdiction of (I.R.S Employer Identification
incorporation or organization) Number)

3838 CAMINO DEL RIO NORTH, SUITE 333, 92108 - 1789
SAN DIEGO, CA (Zip Code)
(Address of principal executive offices)

1-619-280-8000
(Issuer's Telephone Number)

Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class Name of Each Exchange on Which
To be so Registered Each Class is to be Registered
------------------- ------------------------------

n/a n/a

Securities registered under Section 12(g) of the Exchange Act:

COMMON EQUITY, PAR VALUE $.001
(Title of Class)

<PAGE>

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (20 has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
form 10-K.[X]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days: $ 65,283,335 as of September 29, 2000.

State the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: As of September 29, 2000, there
were 50,756,665 shares of common stock outstanding.

2
<PAGE>

SECURITY BIOMETRICS, INC.
FORM 10-KSB
TABLE OF CONTENTS

No. Title Page No.

PART I
<S> <C> <C>
Item 1. Description of Business 4
Item 2. Description of Property 19
Item 3. Legal proceedings 19
Item 4. Submission of Matters to a Vote of Security Holders 19

PART II

Item 5. Market for Common Equity and Related Stockholder
Matters 19
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations 21
Item 7. Financial Statements 24
Item 8. Changes in Disagreements with Accountants on
Accounting and Financial Disclosure 24

PART III

Item 9. Directors, Executive officers, Promoters and Control
Persons 24
Item 10. Executive Compensation 25
Item 11. Security ownership of Certain Beneficial Owners and
Management 25
Item 12. Certain Relationships and Related Transactions 26
Item 13. Exhibits, List and Reports 26
Signatures 29
</TABLE>

3
<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

a) BUSINESS DEVELOPMENT

The Registrant (Great Bear Resources, Inc) was incorporated in the State of
Nevada on March 12, 1999. The company on May 25, 1999 filed a certificate of
amendment changing its name to Great Bear Investments Inc.

On January 5, 2000, the company filed with NASD a 15c2-11 Information and
Disclosure Statement. The Registrant's common stock was cleared for trading by
NASD on the National Quotation Bureau "Pink Sheets" on May 3, 2000 with the
trading symbol "GBIV". No priced quotation had been entered until July 27, 2000.

On July 21, 2000, the company signed a Share Exchange Agreement whereby Great
Bear Investments, Inc. agreed to issue 38,256,665 Post roll-forward shares for
all of the shares (on a (1) one for (1) one share exchange) of Biometrics
Security, Inc. Biometrics Security, Inc then became a 100% wholly owned
subsidiary of Great Bear Investments, Inc.

The Registrant on July 21, 2000 approved a forward share split on a (1) one old
share for (4) four new share basis. This applied to all the shareholders of
record dated August 28, 2000. The name of the company on August 11, 2000 was
changed from Great Bear Investments, Inc. to Security Biometrics, Inc. The
company was issued a new trading symbol: "SBTI".

b) BUSINESS OF ISSUER

1) Nature of Biometrics Security, Inc. Business

Security Biometrics, Inc. was created to specifically develop, market under
license and distribute dynamic biometric technologies specific to the security
applications of banking and financial transactions. These include, but are not
limited to: dynamic gesture recognition technology (GRT), and dynamic signature
verification (DSV). It is important to note that, GRT is a dynamic system that
can be developed to interpret the biometric characteristics of hand gestures and
signatures using sophisticated software algorithms and performed on the
proprietary touchpads, which are deemed superior to existing input and pointing
technologies.

There is a pressing market pull for a new biometric security interface solution
sets with reputed industry leaders and analysts openly declaring the need for
new biometric solutions, as well as the utility of gesture devices over the
increasingly outdated interface set.

Security Biometrics is seeking to improve and expand the availability of passive
and dynamic biometric security systems to be placed under license for marketing
and distribution to the banking and financial transaction system.

Security Biometrics is positioning itself as a key provider of biometric
security interfaces that will offer a wide array of "end-to-end" solutions
targeted towards the specific multi-trillion dollar banking and financial
transaction market segments.

The past four decades have seen an astonishing and unprecedented revolution in
electronic technology. In the last two decades, with the increase in computing
power, miniaturization, and communications technology, losses through fraud to
the banking and financial transaction industries have been mounting to
staggering proportions fostered by this corollary revolution in information
technology. Simultaneously, the number of transaction applications has expanded
to match the growth in the Internet and electronic

4
<PAGE>

commerce. As a result, people now interact with computers on a daily basis, both
at work and in their personal lives.

Despite the rise in electronic transactions, little has been done to bring the
user's security interface up to par with current state of biometric
technologies. The need for secure access and identification in an increasing
number of applications, including banking and financial transactions, corporate
security, application and data access, as well as secure identification and
access to all sensitive applications and transactions based on the Internet,
including but not limited to, electronic commerce, is growing.

This provides Security Biometrics with an exceptional opportunity. The Company's
mission, "TO MAKE SECURITY APPLICATIONS FOR BANKING AND FINANCIAL TRANSACTIONS
SIMPLE, NATURAL, AND EFFECTIVE"--addresses precisely the present gap in security
technology.

DYNAMIC BIOMETRIC TECHNOLOGY

Dynamic biometric solutions measure operative human characteristics such as:

- Voice recognition
- Signature recognition
- Keystroke recognition
- Gesture recognition

Dynamic biometric technology identifies individuals based on how they do
something. For example, the way someone speaks or writes or types on a keyboard
are considered "dynamic" biometrics.

Using the Jane, Hong, Pankanti rating table adapted with SBJ descriptors,
dynamic biometrics include those shaded below. It should be noted that Jane,
Hong and Pankanti omitted gesture recognition, but it shares many
characteristics with the "signature" row below:

COMPARISON OF BIOMETRIC TECHNOLOGIES -1998-

<TABLE>
<CAPTION>
COLLECTIBILITY PERFORMANCE ACCEPTABILITY CIRCUMVENTION
--------------- ------------------------ ---------------------- ------------------
EASE OF USE. VERIFICATION/WORK & PUBLIC CIRCUMVENTION.
ENVIRONMENTAL FACTORS. ACCEPTABILITY, EASE
OF USE.
-------------------------- --------------- ------------------------ ---------------------- ------------------
<S> <C> <C> <C> <C>
FACE high low high low
-------------------------- --------------- ------------------------ ---------------------- ------------------
FINGERPRINT medium high medium high
-------------------------- --------------- ------------------------ ---------------------- ------------------
HAND GEOMETRY high medium medium medium
-------------------------- --------------- ------------------------ ---------------------- ------------------
KEYSTROKES medium low medium medium
-------------------------- --------------- ------------------------ ---------------------- ------------------
HAND VEIN medium medium medium high
-------------------------- --------------- ------------------------ ---------------------- ------------------
IRIS SCAN medium high low high
-------------------------- --------------- ------------------------ ---------------------- ------------------
RETINAL SCAN low high low high
-------------------------- --------------- ------------------------ ---------------------- ------------------
SIGNATURE high low high low
-------------------------- --------------- ------------------------ ---------------------- ------------------
VOICE PRINT medium low high low
-------------------------- --------------- ------------------------ ---------------------- ------------------
FACE THERMOGRAM high medium high high
-------------------------- --------------- ------------------------ ---------------------- ------------------
</TABLE>

SIGNATURE RECOGNITION

Signature biometrics can either be dynamic or static. Static signature
verification like that exercised for decades in banks only considers the
geometry of written letters. "Dynamic signature verification"(DSV) traces the
speed, velocity and pressure exerted during the physical movement of the pen
rather than the resulting static signature. DSV technology is primarily
concerned with the study of dynamic characteristics such as the movement of a
pen during the writing process rather than the static image of what has been
written. Aspects of the writing or signature remain relatively constant allowing
DSV systems to adopt over time. Tablet based systems often operate using off the
shelf digitizers allowing signature biometrics to be a cost effective solution
for a number of applications such as computer system access and for dispensing
pharmaceuticals.

5
<PAGE>

Key market advantages for DSV include public acceptance and economics. In the
1980's and early 1990's, DSV was considered the most likely selection for
financial transactions because of the carryover from current manual
authentication practice. People are used to signing their name at the bank. The
other big advantage for this method is the low cost of input devices. Writing
tablets are a fairly standard, while low cost computer peripherals allow
companies in this segment to focus on recognition software. Less prominent
disadvantages for signature recognition include a loss of accuracy depending on
the emotional and physical state of a person and a certain amount of performance
anxiety.

Worldwide revenues for signature recognition in 1999 were estimated to be $US
3.1 million, growing to $US 4.6 million in 2003. Healthcare is the leading
worldwide application market for signature recognition. Application markets that
follow close behind include welfare and banking. North American market revenues,
which represent approximately 85% of worldwide revenues, were estimated to be
$US 2.6 million in 1999. Healthcare, followed by banking are the leading North
American application markets for signature recognition.

LEADING SIGNATURE RECOGNITION VENDORS

<TABLE>
<CAPTION>
MARKETS SERVED
--------------------------------------------------------------------------------
LEADING VENDORS: LAW COMP./
SIGNATURE RECOGNITION PAC & ORDER TELECOM. IMMIGRATION WELFARE BANKING HEALTHCARE
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Softpro X
Checkmate Electronics X
Xenetek Corp. X X X
PenOp X
LCI Technology X X X X X X
-------------------------------------------------------------------------------------------------------
</TABLE>

VOICE RECOGNITION

Voice biometrics measure how a speaker says a word rather than what is said. The
voice input received by these devices is determined by the size and shape of
vocal tracts, mouth, nasal cavities, and lips.(1) Some voice systems identify a
specific phrase ("text-dependent") while higher end systems evaluate speech
regardless of the words spoken ("text-independent").

Vocal recognition systems have one big advantage and one big drawback. The
advantage is that input devices (eg. telephones) are inexpensive and readily
available. There is high public acceptance that stems from this history (people
are accustomed to being identified over the telephone). The big disadvantage
with this biometric is background noise. For cellular telephone applications it
is generally necessary to use several different templates including a quiet
office, roadside (outdoor) traffic, and the background engine noise of a car
interior.

Voice is a favorite input sensor for telecommunication trials with biometric
identification. This is a commonsense implementation since invariably
telecommunication companies are dealing with customers over the telephone. In
the 1999 tabulation of international trials from 1994 through 1997, 8 out of 11
trials used voice recognition systems.(2)

Voice recognition is one of the more active biometric markets in terms of
generating revenues. To attest to this, worldwide revenues for voice recognition
in 1999 were estimated to be $US 26 million, growing to $US 37.7 million in
2003. Telecommunications and physical access control are the leading worldwide
application market for voice recognition. North American market revenues, which
represent approximately 100% of the worldwide revenues, were estimated to be $US
26 million in 1999, growing to $US 36 million in 2003.

----------
(1) 'Biometircs: Promising frontiers for emerging identification market, Anil
Jain, Lin Hong, Sharath Pankanti, no date listed circa 1998, p.11.
(2) Biometrics Report 1999, Em3.5ma Newham, Calum Bunney, and Carolan Mearns
for SJB Services, p. 229.

6
<PAGE>

LEADING VOICE RECOGNITION VENDORS

<TABLE>
<CAPTION>
MARKETS SERVED
--------------------------------------------------------------------------------
LEADING VENDORS: LAW COMP./
VOICE RECOGNITION PAC & ORDER TELECOM. IMMIGRATION WELFARE BANKING HEALTHCARE
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
InterVoice-Brite X X X
VeriVoice Inc. X X X X
Veritel Corp. X X X
ORGA X X X X
ITT Industries X X X
-----------------------------------------------------------------------------------------------------
</TABLE>

OVERVIEW OF POTENTIAL PRODUCT USERS: BANKING AND FINANCIAL TRANSACTIONS MARKET

Table below also prioritises revenue streams from the perspective of small,
medium and large sized American banks. The contribution from service charges
(which include ATM service charges), debit card charges, and visa/MasterCard
interchange, credit card accounts and ATM interchange fees are highlighted
because they relate bank revenues to transaction types discussed in later
sections.

TOP 15 RETAIL SOURCES OF BANK INCOME

<TABLE>
<CAPTION>
BANK ASSETS IN MILLIONS OF US DOLLARS
------------------------------------------------------
$1,000 PLUS $300 - $999 UNDER $300
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Account Maintenance $8,405 $448 $248
Service Charges $7,819 $559 $242
------------------------------------------------------------------------------------------
Discount Brokerage Services $2,874 $26 $14
Home Mortgages $2,658 $577 $223
Debit Card (on & offline) $2,197 $111 $30
------------------------------------------------------------------------------------------
Sales of Mutual Funds $1,997 $53 $21
Sales of Annuities $1,917 $66 -
Installment Loans $1,464 $188 $98
Personal Trust Services $1,443 $818 $230
Visa/MasterCard Interchange $1,185 $125 $52
------------------------------------------------------------------------------------------
Credit Card Accounts $1,149 $101 $22
Sales of Insurance Products $919 $59 $45
Exchange Fees $893 $45 421
ATM Interchange $893 $173 $25
------------------------------------------------------------------------------------------
SOURCE: AMERICAN BANKERS ASSOCIATION
</TABLE>

FINANCIAL TRANSACTIONS: ATM TRANSACTIONS

The ubiquitous automated teller or "ATM" has eclipsed bank tellers as the
workhorse for retail financial transactions in Canada and the United States.
There are over 15,000 bank-operated ABMs in Canada and Canadians have access to
over 23,506 other ABMs through the Interac network.(3) The average Canadian logs
over 50 ABM transactions per year. The penetration of ATM machines in the United
States has been similar with over 240,000 units executing transactions worth
over 900 million dollars per month.

Since Canadian banks have never been constrained geographically, they are large
relative to American Banks. Table below relates the ATM deployment of Canadian
banks relative to American banks.

----------
(3) 'Technology and the Service Network', Canadian Bank Facts, Canadian
Banker's Association, 1999.

7
<PAGE>

TOP 25 NORTH AMERICAN ATM OWNERS

<TABLE>
<CAPTION>
TOTAL ATMS TOTAL DEBIT CARDS
--------------------------------------------------------------------------------
<S> <C> <C>
Bank of America 14,000 21,600,000
Bank One Corp 8,500 6,212,200
Wells Fargo Bank 6,500 12,708,000
Royal Bank of Canada 4,800 6,300,000
CIBC 4,200 6,000,000
Citibank 4,000 6,500,000
First Union National Bank 3,778 4,450,000
US Bancorp 3,600 2,768,749
FleetBoston Financial Corp 3,500 4,100,000
PNC Bank Corp 2,827 1,700,000
Keybank 2,586 2,900,000
Caisses Populaires et deconomie 2,296 3,900,000
Firstar Corp 2,200 1,742,923
Bank of Nova Scotia 2,070 3,400,000
The Toronto Dominion Bank 2,000 3,300,000
SunTrust Bank 1,950 1,600,000
Chase Manhattan Bank NA 1,890 4,200,000
National City Corp 1,845 2,294,604
Washington Mutual Bank 1,460 4,365,000
TCF Bank 1,406 1,100,807
Washington Mutual Savings Bank 1,400 3,000,000
Fifth Third Bank 1,376 3,821,000
Wachovia Corp. 1,375 2,400,000
The Huntington National Bank 1,350 1,300,000
AmSouth Bancorporation 1,300 1,386,599
--------------------------------------------------------------------------------
SOURCE: CARD INDUSTRY DIRECTORY, 2001 EDITION, CREDIT CARD MANAGEMENT
</TABLE>

Unit growth of ATMs and related transaction volumes appear to have slowed down
since 1997/8. In Table 37 the growth of ATM dispensers and transaction volumes
is summarized for the United States. Several variables may have contributed to
the apparent drop in transaction volumes. Firstly, from a data collection
standpoint, the switch from data collection from March to June may have had some
effect.

A second possible causal factor for the slowed increase in ATM usage may be due
to a change in customer usage. According to the Debit Card Directory, as more
merchants allow customers to take cash back in excess of debit card POS
purchases, consumers are probably taking advantage of this option in order to
minimize ATM surcharges.(4) This simple transaction evolution paired with
consumer familiarity and comfort with debit cards has the potential to curb
future ATM penetration.

US ATM DEPLOYMENT AND TOTAL TRANSACTIONS PER MONTH IN $US MILLIONS

<TABLE>
<CAPTION>
TOTAL ATMS % UP TRANSACTIONS % UP
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 122,706 12% 807.4 10%
1996 139,134 13% 890.3 15%
1997 165,000 19% 910 10%
1998 187,000 13% 930 2%
1999 227,000 21% 907.4 -2%
2000 240,000 6% 920 1%
--------------------------------------------------------------------------------
NOTE: JUNE DATA FOR 1989-1998. MARCH DATA FOR 1999 AND 2000.
SOURCE: BANK NETWORK NEWS.
</TABLE>

Through the course of research on ATM losses some reporting anomalies began to
emerge. ATM and POS debit card "losses" measured by the ABA in Tables below
appear low relative to the volume of transactions discussed earlier in this
section. Benchmark Research followed up this query with Jane Yao, one of the ABA
analysts that authored the ABA Retail Bank survey. According to Ms. Yao, a
variety of reasons may have contributed to financial institutions under
reporting actual losses. Suggestions from Ms. Yao included limited communication
between bank departments

----------
(4) 'POS Networks', Debit Card Directory, 2001 Edition, p.21.

8
<PAGE>

and the possibility that individual losses may have been recorded as operating
expenses. Actual versus reported losses are a hotly contested issue between
representatives of the banking and security industries.(5)

ATM LOSSES PER BANK IN 1998 SOURCE ABA

<TABLE>
<CAPTION>
BANK ASSETS IN MILLIONS OF DOLLARS
------------------------------------------------------
UNDER 300 300 - 999 1,000 PLUS
COMMUNITY BANK MID-SIZE BANKS LARGE BANKS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average losses per Bank
INCLUDING FRAUD AND OPERATIONS $ 842 $ 3,425 $ 43,269
-----------------------------------------------------------------------------------------
SOURCE: AMERICAN BANKERS ASSOCIATION
</TABLE>

Tables below break down average service charges for US banks and service
providers based on the location of the transaction. If there is any message when
it comes to ATM service charges, it is that supplementary security innovations
like biometric authentication must occur at a very low marginal cost per
transaction given the current legislative and consumer climate.

FEES PER TRANSACTION FOR SELECTED ATM FUNCTIONS

<TABLE>
<CAPTION>
AT BANK'S OWN ATMS AT OTHER INSTITUTION'S ATMS
--------------------------------------------------------------------------------------------
<S> <C> <C>
Deposits $ 1.20 $ 1.00
DDA/savings withdrawals $ 1.50 $ 1.00
Credit Card Advances $ 1.50 $ 1.00
Balance inquiries $ 1.35 $ 1.00
Transfers between Accounts $ 1.20 $ 1.00
Bill payments $ 1.00 $ 1.00
Surcharges $ 1.50 --
--------------------------------------------------------------------------------------------
SOURCE: AMERICAN BANKERS ASSOCIATION
</TABLE>

FEES CHARGED CUSTOMERS FOR POS ACCESS - MEDIAN FEE CHARGED - 1998

<TABLE>
<CAPTION>
ALL BANK SIZES COMBINED
--------------------------------------------------------------------------------
<S> <C>
Percentage of banks charging fees for Access 21.0%
Per POS transaction fee $ 0.40
Monthly fee $ 1.60
Annual fee $12.00
--------------------------------------------------------------------------------
SOURCE: AMERICAN BANKERS ASSOCIATION
</TABLE>

CREDIT CARD TRANSACTIONS

Visa, MasterCard and AMEX are the dominant credit card issuers in North America.
While transaction volumes detailed in Tables below may lag those of paper-based
cheques, increasingly cheques are regarded as an anchor piece of identification
that enables the cheque writing process. Moreover, the convenience of credit
cards has positioned them as the "backbone" of emerging consumer transactions on
the Internet.

Visa is the consistent leader among credit card issuers. The market shares of
the top US credit card issuers is displayed in figure below. In the last 10
years, Visa has maintained its commanding lead in the US in each year with
annual market shares staying within the tight range of 44.6% - 48.8%.

----------
(5) 'Checks and Balances', Thomas G. Holland, Security Management, August 1999,
Vol. 43, Issue 8, p. 76.

9
<PAGE>

FIGURE 3: US CREDIT CARD MARKET SHARE 1999

[GRAPH]

SOURCE: 'CREDIT CARD ISSUER'S GUIDE 2001 EDITION',
CREDIT CARD NEWS, JULY 15, 2000.

Transaction volumes fluctuate somewhat more than the market shares of leading
credit card issuers. In total terms, transaction volumes have fluctuated between
11-23% over the last 10 years. Table following shows that global charge volumes
for US credit card issuers are growing somewhat more quickly than domestic
charge volumes.

US CHARGE VOLUME OF MAJOR US CREDIT CARDS US$ BILLIONS

<TABLE>
<CAPTION>
YEAR VISA % UP MASTERCARD % UP AMEX % UP TOTAL %UP

<S> <C> <C> <C> <C> <C> <C> <C> <C>
1990 150.3 18 92.6 12 77.6 8 337.0 15
1991 162.0 8 98.2 6 76.6 -1 358.6 6
1992 179.8 11 111.5 14 82.0 7 400.8 12
1993 214.6 19 137.2 23 89.8 10 474.4 18
1994 270.9 26 169.9 24 101.2 13 581.4 23
1995 340.5 26 198.0 16 115.2 14 701.2 21
1996 393.1 15 220.6 11 131.0 14 798.3 14
1997 431.8 10 246.2 12 150.5 15 884.5 11
1998 474.6 10 275.6 12 165.6 10 973.8 10
1999 535.0 13 303.7 10 186.4 13 1,095.7 13
-------------------------------------------------------------------------------------------------------
SOURCE: VISA, MASTERCARD, AMEX FROM 'CREDIT CARD ISSUER'S GUIDE 2001
EDITION', CREDIT CARD NEWS, JULY 15, 2000, P. 3-4.
</TABLE>

GLOBAL CHARGE VOLUME OF MAJOR US CREDIT CARDS US$ BILLIONS

<TABLE>
<CAPTION>
YEAR VISA % UP MASTERCARD % UP AMEX % UP TOTAL %UP
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1990 332.4 24.0 199.6 23.0 111.5 12.0 643.5 21.0
1991 384.4 16.0 220.6 11.0 111.5 0.0 716.8 11.0
1992 444.2 16.0 258.1 147.0 117.6 5.0 819.9 14.0
1993 519.0 17.0 309.4 20.0 124.1 6.0 952.5 16.0
1994 630.6 22.0 389.9 26.0 140.9 14.0 1,161.4 22.0
1995 746.0 18.0 489.3 26.0 162.5 15.0 1,397.8 20.0
1996 984.9 25.0 552.8 13.0 184.3 13.0 1,722.0 23.0
1997 1,188.0 21.0 602.1 11.0 209.2 14.0 1,999.3 16.0
1998 1,374.0 16.0 651.3 8.0 227.5 9.0 2,251.7 13.0
1999 1,630.0 18.6 725.9 11.5 254.1 11.7 2,610.0 15.9
-------------------------------------------------------------------------------------------------------
SOURCE: VISA, MASTERCARD, AMEX FROM 'CREDIT CARD ISSUER'S GUIDE 2001
EDITION', CREDIT CARD NEWS, JULY 15, 2000, P. 3-4.
</TABLE>

As with cheques, fraud is only one part of the losses financial institutions
experience as part of running a dynamic transaction medium. Table below shows
that credit card fraud experienced by US financial institutions has dropped in
recent years. Table below also shows that charge offs, which include such items
as personal bankruptcy where credit card companies have been unable to collect
on all debts, has swelled in magnitude to roughly 4 times the losses due to
fraud. The message here for vendors of security equipment is that fraud is only
one component of the losses institutions experience when they extend credit card
services.

10
<PAGE>

US BANK CARD FRAUD $US MILLIONS

<TABLE>
<CAPTION>
BANK CARD FRAUD % UP CHARGE OFFS % UP
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 734.0 7,500
1995 710.0 - 3% 10,500 + 40%
1996 751.5 + 6% 17,400 + 66%
1997 794.4 + 6% 22,400 + 29%
1998 687.4 - 13% 21,000 - 6%
1999 660.1 - 4% 24,900 + 19%
----------------------------------------------------------------------------------------------
SOURCE: 'CREDIT CARD ISSUER'S GUIDE 2001 EDITION',
CREDIT CARD NEWS, JULY 15, 2000, P. 3-4.
</TABLE>

DEBIT/POS TRANSACTIONS

In the United States there are an estimated 200 million debit cards in
circulation.(6) Many factors have driven the popularity of debit cards
including the ability of non-financial institutions to brand themselves using
what was formerly a "bank" card. Moreover the blend in usage between ATM
cards and debit cards blurs this category. As was pointed out earlier, more
merchants in North America are allowing customers to withdraw cash in excess
of purchase, and this small service adaptation has opened the door for
increased convenience and reduced ATM service charges.(7)

Three companies dominate US network service providers for POS transactions.(8)
Star Systems is the largest provider that after its acquisition of Honor
Technologies in 1998 resulted in 88.1 million transactions by March of 1999. The
second largest POS service provider is Interlink that is owned by Visa. In March
of 1999, Interlink was processing 20.4 million transactions per month. The third
largest service provider is NYCE that by March of 1999 was posting 15.6 million
transactions per month.

A debit card or ATM transaction is generally a 3-step process that occurs over
dedicated telephone lines. At the point of sale, a processor ensures that a PIN
in encrypted and sends an electronic message to the network service provider's
processor. The network service provider queries the financial institution's
processor to ensure that the PIN is correct and that there are sufficient funds
for the transfer. The network service provider relays this information to the
point of sale where the physical transaction takes place. The entire POS
transaction generally takes 5-10 seconds to authorize. Later in the day, the
network service provider will provide a summary settlement to the financial
institution and the merchant at the POS.

It is important to note that POS/debit transaction volumes depicted in Table 44
are based on a survey of only 28 small banks, 28 medium sized banks and 15 large
banks located in the US. While the survey findings are limited in scope, they do
tend to show that large banks also tend to dominate online and offline POS/Debit
Card transactions. This may represent a commercial and merchant perception that
larger banks are more secure or offer more complete POS solutions.

POS/DEBIT CARD TRANSACTION VOLUME - AVERAGE PER BANK - 1998

<TABLE>
<CAPTION>
BANK ASSETS IN MILLIONS OF DOLLARS
--------------------------------------------------------
UNDER $300 $300 - $999 $1,000 PLUS
COMMUNITY BANK MID-SIZE BANKS LARGE BANKS
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Online # of Transactions 21,938 163,684 302,586
Online Dollar amount (in $ thousands) $ 1,201 $ 5,257 $ 10,179
------------------------------------------------------------------------------------------------------
Offline # of Transactions 63,333 416,952 7,166,131
Offline Dollar amount (in $ thousands) $ 2,317 $ 12,634 $ 336,006
------------------------------------------------------------------------------------------------------
SOURCE: AMERICAN BANKERS ASSOCIATION
</TABLE>

Table below shows that POS/Debit card losses for the banks in the same survey
are quite modest. Small banks on average experience a couple of thousand dollars
of losses per year while larger banks generally experience about a

----------
(6) 'Check Electronifiction: Next Step in Electronic Payments', TRANSACTION
TIMES, July/August 2000, Published by Star Systems Inc.
(7) 'POS Networks', DEBIT CARD DIRECTORY 2000, p. 21.
(8) 'POS Networks', DEBIT CARD DIRECTORY 2000, p. 21.

11
<PAGE>

hundred thousand dollars worth of losses. As was discussed earlier, this level
of loss was the point of some debate. Benchmark Research followed this up with
Jane Yao, one of the ABA analysts that authored the ABA Retail Bank survey.
According to Ms. Yao, a variety of reasons may have contributed to financial
institutions under reporting actual losses. Suggestions from Ms. Yao included
limited communication between bank departments and the possibility that
individual losses may have been recorded as operating expenses. Actual versus
reported losses are a hotly contested issue between representatives of the
banking and security industries.(9)

CONSUMER & MERCHANT POS/DEBIT CARD LOSSES - AVERAGE PER BANK - 1998

ECOMMERCE TRANSACTIONS (B2C)

ECommerce is a transaction medium that is rapidly gaining mainstream acceptance
in North America. To a great extent, actual transactions use network backbones
established by credit card companies who are keen to capitalize on their use as
a default medium with new Internet specific media. The increasing pervasiveness
of transactions over PCs and the promise of transactions over mobile platforms
have inspired security measures both at the log on stage and at the network
level.

Currently, credit cards are the backbone payment system for e-tailers. Web
companies pay a premium to conduct credit card based transactions with
consumers, and the fraud that does occur appears to be a manageable cost of
doing business. In a June 2000 survey conducted by ActivMedia Research, of 736
web businesses surveyed only 3% indicated that fraud was a "regular and
substantial" problem.(10) This finding is at odds with an August 2000 survey by
Gartner Group which determined that 1.15% of all online transactions are
fraudulent while only 0.6-0.9% of all off line transactions are fraudulent.(11)
Many variables may account for the different findings, but a likely reason is
that e-tailers are less experienced than traditional retailers and may consider
a given level of fraud the cost of doing business using an emerging medium.

Network service providers recognize that these pioneering retailers are prepared
to pay a premium to use their systems. In Gartner's survey of 160 companies, it
was determined that on average credit card companies, which are the current
backbone of internet transactions, offer e-tailers discount rates of 2.5% plus
30 cents per transaction versus an average of 1.5% plus 30 cents to traditional
retailers. Additional costs faced by e-tailers include the cost to enter
"internet payment gateways" which can add as much as $0.50 per transaction.

The Gartner survey also found that e-tailers pay more than traditional retailers
when it comes to handling charge backs. According to the survey, e-tailers spend
4 times as much as traditional retailers when it comes to resolving this
customer service function. The reason for this is that in traditional
transactions there is a signed sales slip, which verifies the transaction and
takes the onus off the retailer. Online transactions have no such documentation.

Besides the correlation between increased anonymity and increased propensity for
fraud, it may be that traditional retailers simply have more experience and
expertise at handling various customer service issues. In the ActivMedia survey,
Lands End was quoted as saying that since it had launched its online catalogue
it had experienced no increase in fraudulent activity.

PKI is a very likely companion to emerging biometrics servicing secured online
transactions. Existing American and Canadian legislation recognizing the
validity of digital signatures is an important consideration. As of May of 1999
the Canadian Payments Association announced its intention of becoming the root
Certification Authority (root CA) for a

----------
(9) 'Checks and Balances', Thomas G. Holland, Security Management, August 1999,
Vol. 43, Issue 8, p. 76.
(10) 'Retail Fraud More Prevalent for Online Vendors', Linda Rosencrance,
Computer World, July 24, 2000, Vol. 34, Issue 30, p. 20.
(11) 'Retail Internet Fraud is Twelve Times Higher Than Offline Fraud', August
2000, Gartner Group Inc., Stamford Connecticut.

12
<PAGE>

PKI system in Canada so that individuals and businesses would be able to make
secure transactions over the Internet. The root CA qualifies certification
authorities with the power to issue digital certificates to clients wishing to
conduct transactions over the Internet. By March of 2000 the CPA had completed
technical specifications for a Canadian PKI system and was awaiting requests for
proposal from its members.

Electronic bill payment has been a much-visited concept since the early 1980's.
The persistent problem has been that consumers require one location for all of
their bills and are not prepared to navigate many myriad systems to accomplish
this task. Add this consumer preference to the standoff between banks and
billers where each has waited for the other to make the first move and it
becomes clear why paper cheques persist. Electronic bill presentment is further
discussed in Section 4 as it applies to evolving pilot programs by major
financial institutions experimenting with various forms of Internet financial
transaction media and biometric safeguards.

Fraud schemes on the Internet have been with us for several years now. Security,
confidentiality, and privacy questions undermine the credibility of the Internet
as a medium for financial exchange. Measures like PKI and biometric safeguards
may be either the key to cleaning up this medium or the forerunners of
safeguards on a private (more secure) parallel version of the Internet. For the
record, initial fraud schemes on the Internet, which relate to consumers merit
mention. Going back to 1997, the American Institute of Certified Public
Accountants (AICPA) determined that the following 10 fraud schemes were most
common at that time(12):
- On-line services - work at home schemes
- Merchandise sale - Prizes and sweepstakes
- Auctions - Credit card offers
- Pyramid schemes - Books
- Internet business opportunities - Magazine subscriptions

BANKING AND FINANCIAL TRANSACTION FRAUD

In terms of need, initial implementations will probably flow from the highest
value/highest risk transactions down to progressively lower value/lower risk
transactions.(13) Using this rationale, corporate cash management should be the
first candidate. Ben Miller the publisher of the Personal Identification
Newsletter has commented, "if you're sending a message to swap a $100 million
derivative you want to be surer someone with the necessary authority said it."
After corporate cash management, credit cards are the next most likely step for
implementation.

BANKING AND FINANCIAL TRANSACTION SECURITY MEASURES

INTERNAL SECURITY MEASURES

Financial institutions are reticent to report incidents of internal theft for
public relations purposes.(14) Atalla Inc, a hardware security division at
Tandem claims that 70% of banking fraud is conducted with an insider.
Therefore internal security represents a large opportunity. Some limited
reporting has occurred on the types of internal crimes these institutions
generally experience. In banks, these problems generally revolve junior
employees that either steal customer cheques or enter into arrangements with
criminals. Sometimes professional criminals find work in the accounts payable
(or even the mail room) of corporations. When corporations have sloppy
internal controls, these kinds of theft can occur for several months.

BANKING AND FINANCIAL BIOMETRIC INITIATIVES

The enthusiasms with which financial institutions have pursued biometric
safeguards contradict the relatively low transaction losses reported by the ABA.
Actual losses are a hotly contested issue where security industry
representatives have an incentive to over report losses and financial
institution representatives have an incentive to under state actual losses. Some
estimates going back to 1998 suggest that banks need chequing account deposits
of $200 per account as a hedge against all forms of fraud. The primary reason
transaction fraud is so significant is the

----------
(12) 'Fraud on the Internet', Northern Chapter of the International
Association of Financial Crime Investigators, 1997.
(13) Entire paragraph derived from 'Biometrics comes to Life', Orla
O'Sullivan, editor, www.banking.com.
(14) Entire paragraph derived from 'Checks and Balances', Thomas Holland,
Security Management, August 1999, Vol. 43, Issue 8, p. 76.

13
<PAGE>

proliferation of access points (ATMS, telephone banking, Internet etc.)
available to conduct financial transactions. As the volume of individuals and
transactions continue to increase through these access points, so to will the
technology needed to secure these transactions.

Several major financial services institutions are currently piloting a variety
of biometric technologies. In addition to the obvious applications, such as
account access or internal network security, a variety of other novel solutions
are being deployed and investigated. These solutions are being deployed at the
ATM and teller level, in web-based applications, and in securities transactions.
As more customers and clients decide to transact business remotely, industry
observers believe there will be an increasing need to authenticate users on both
ends. And while certificate-based infrastructures can determine that a certain
PC or organization is on the other end, and a Private Key infrastructure can
determine that a message has not been modified or read in transaction, only
biometrics can determine that a given individual authorized or initiated a
transaction.

As with electronic bill presentment, the need to find consensus between
businesses, financial institutions and consumers has a delaying effect. The
International Biometrics Group has noted some major developments in the
financial services world listed below. Some of these initiatives have been
actively pursued and some will never proceed beyond pilot projects.

- ING Direct is providing finger-scan biometric authentication for
online banking customers.

- BACOB Bank in Belgium is piloting voice verification for customer
account access.

- Chase Bank is piloting finger scan technology.

- Bank United has integrated iris recognition into a number of its
ATM's.

- Wells Fargo owns a 40% stake in InnoVentry, which provides biometric
face verification at its check-cashing ATM's.

- Charles Schwab is piloting biometric technologies for account access.

- A Mexican institution is distributing payroll and executing automated
purchases with smart cards and biometrics.

- The FSTC (Financial Services Technology Consortium) is participating
in IBG's major round of IT Security and e-commerce testing this
summer.

Implementations that go beyond pilot programs are the exception and underline
the porous receptivity of this market to new trial systems. In a presentation
to the US Senate in 1998 the Purdue Credit Union extolled easy member
acceptance of a trial system, yet two years later there is no indication that
Purdue Credit Union has maintained its trial. In May of 1999, Bank United
which was mentioned in the bulleted list (above) trumpeting an alliance with
Diebold and Sensar Inc for an Iris recognition system at three of its
branches in the United States. At the time, Bank One was running 12 pilot
tests in 9 countries.(15) Since then Bank One does not seem to have gone
beyond this pilot.

With software and hardware at acceptable cost levels what remains is the
development of consensus around a smaller set of solutions and commitment to a
network platform. During this hiatus, the impetus seems to be to get involved in
as many new pilot programs as possible. Activity and engagement through such
initiatives as voluntary trials opens the door to wider consumer understanding
and imaginative administrative thought when it comes to linking new biometric
technologies with legacy systems.

Electronic billing is a reasonable model for the chicken and egg predicament
faced by biometric vendors trying to penetrate financial institutions. Financial
institutions have legacy systems handling high transaction volumes with
merchants, businesses and consumers. As long as some of the publics those

----------
(15) 'Bank United, Diebold and Sensar, Inc. Introduct the nation's First Iris
Recognition ATM to Texas Consumers', Bank United Press Release, May 13, 1999.

14
<PAGE>

financial institutions remain with existing transaction systems there is a
strong temptation to dabble with pilot programs and wait and see. However, at
some point, a combination of low unit costs and potential cost savings reach a
point where major players commit to a new way of doing business. In this
instance, electronic bill presentment is an excellent model for the adoption of
biometric technology for mainstream financial transactions.

The other large American contender in the race to enable Internet based
transactions is Direct Exchange. Visa has combined with Cisco Systems and Sun
Microsystems to develop its DirectExchange network.(16) The proposed network
will effectively double Visa's current network capacity with the ability to
process 10,000 messages per second and $100 billion in transactions per year.
The system is also meant to accommodate customers using PCs as well as mobile
eCommerce customers using cell phones, and PDAs. While the system has been
designed to accommodate biometric identifiers, none at this point have been
specified.

Relating the advanced efforts of electronic bill presentment back to biometrics,
it is interesting to ask why e-billing has become a persuasive solution for
major players now. Earlier the CPSA view of the cost of alternative payment
methods was presented. As a counterpoint, the founder of CheckFree claims that
paper bills cost $0.85 to transact versus $0.40 for electronic bills. This cost
saving combined with the wide penetration of personal computers and comfort with
basic web navigation have coalesced and persuaded major players to commit.

Earlier sections of this document have demonstrated the large gaps in functional
security offered by existing transaction systems. There is a great demand for
fast, accurate authentication that biometric systems can provide. Continued
improvements in technology will bring increased performance at a lower cost.
Like the penetration of home computers, it will take several years of
experimentation for the general public to go from suspicion to enthusiasm.
Biometric authentication, however, is not a magical solution that solves all
security concerns. Moreover, authentication will most be layered with
complimentary technologies and procedures that build consensus with all the
publics involved in financial transactions. A complete systems approach that
addresses a variety of security, functional, operational and cost considerations
is always necessary. The growth of biometric technology will place greater
demand on both biometric system developers and users to work together to address
a number of issues, including privacy, testing, infrastructure and standards.

2) Nature of the Internet Business

One entity of the Registrant's business is an Internet-based entertainment
division that provides a virtual casino entertainment complex (CasinoInterPlex)
as a central meeting place for Web Gamblers.

As well as providing a portal to its own company-operated gambling
facilities, the Website provides an interchange environment that allows Web
Gamblers to visit other Internet Casino sites that are business members of the
CasinoInterPlex.

Business members of the CasinoInterPlex are independent Internet Casino
Operators who not only benefit from additional traffic to their websites, but
also by utilizing the various e-commerce-related services of the Company and
sharing in CasinoInterPlex earnings by participating in the revenue sharing
program.

Although its business activities have not yet commenced, the Registrant's
business revenue will be derived from three principal areas: licensee fees,
earnings participation and Company owned and operated sites.

----------
(16) Entire paragraph derived from 'Major E-Payment Initiatives Combat Online
Fraud: Visa and Citigroup Roll Out Payment Infrastructures Designed to Meet
Customer Demand, Cheryl Rosen, InformationWeek, July 24, 2000, Isue 796, p.38.

15
<PAGE>

The Internet Casino Industry today is very new. For example, the oldest
being in operation for approximately 4 years. Because of this relative youth,
the market is still very much fragmented and customers, or Web Gamblers, have
not yet developed strong preferences or unshakeable product loyalty.

This potentially high profitable market remains largely open and available
to any Internet Casino Operator who can not only deliver a product that is
innovative and entertaining, but who can also demonstrate the ability to deliver
that product in a fashion that is fair, equitable and efficient. CasinoInterPlex
plans to provide that type of service and by doing so, to set the standard for
Internet Casino Operators.

CasinoInterPlex will be amongst the first Internet Casino Operators to
employ cutting-edge, innovative technologies that include web cameras, voice
over data lines, wireless forms of communication links, and other e-commerce
services. These enhancements and services, that will be available to all
CasinoInterPlex business members, were previously too expensive or unavailable
for most individual Internet Casino Operators to provide. Business membership in
the CasinoInterPlex will allow these business member operators to provide their
patrons with a much greater sense of fairness and security.

CasinoInterPlex is a virtual landscape, offering the Web Gambler a number
of Web Complexes and Towers to explore. Each virtual structure offers a series
of floors with various activities available on each floor.

Upon electronic selection, the Web Gambler is delivered into an
entertainment area of choice. Each entertainment area is occupied by a discrete
CasinoInterPlex Tenant (Internet Casino Operation), who is registered and
eligible to receive benefits from the CasinoInterPlex profit sharing program.
All conduct and site operations are governed and regulated by the Company to
maintain the integrity of the CasinoInterPlex operation.

As Web Gamblers enter the main site they can obtain gambling chips and
tokens from the CasinoInterPlex Bank (which clears all CasinoInterPlex
transactions). All transactions occur on a secure site, which uses a high level
of encryption to encode, and then transfer all credit card and personal
information. As security and anonymity are assured, the Web Gambler can then
start exploring with confidence in the CasinoInterPlex.

The Web Gambler is characteristic of the click, zoom and gone Web Surfer
mentality - the CasinoInterPlex caters to that urge. The CasinoInterPlex profit
sharing program rewards those Internet Casino Operators who deliver a Web
Gambler to another business member of the CasinoInterPlex. The recipient
Internet Casino Operator pays a commission to the House and the Internet Casino
Operator who delivers a Web Gambler to another business member's site.

Any Internet Casino Operator who allows the Web Gambler to leave the
CasinoInterPlex forfeits the final "Opening" commission. This provides a
built-in incentive for each business member to promote the sites of other
CasinoInterPlex business members.

CasinoInterPlex uses a powerful search engine to find specific targeted
Tenants (for variety and uniqueness), and then attracts them to the
CasinoInterPlex, and all its products and services. The Tenants who occupy the
virtual space can continue to conduct their business in the usual fashion, plus
have the opportunity to open the doors to the CasinoInterPlex, at no risk.

The CasinoInterPlex Company owned site feature all classic casino games,
such as: Blackjack, Video Poker, Slots, and Roulette, as well as new
International games like Pai Gow, Sic Bo, plus cultural favorites like the
Chinese Majiang, the Japanese Pachinko, and international sports betting like
the Brazilian Hiline.

Bets on CasinoInterPlex are placed with chips or tokens that are purchased
by Web Gamblers and paid for with either credit cards, bank wire transfers, or
checks (OAC). The CasinoInterPlex Bank processes all purchase transactions and
payouts.

16
<PAGE>

Further revenue generation occurs at the site level through banner and
classified advertising, and direct marketing. Web Gambler memberships will also
be available through subscription to Casino-zone and affinity programs.

In the short term, CasinoInterPlex expects to gain a modest default market
share in this exclusive industry. Time and exposure will increase market share
in direct proportion to the desirability of the various CasinoInterPlex member
sites and the promotional activities of the business membership.

RISK FACTORS, BANKING AND FINANCIAL TRANSACTIONS MARKETS (SECURITY)

LACK OF OPERATIONS AND PROFITABILITY

The Registrant is in the development stage and has no history of operations and
profits in the Banking and Financial Transaction Security markets.

UNCERTAINTY OF COMMERCIAL SUCCESS

Although the Registrant is optimistic about its revenues and profitability
prospects, there can be no assurances of commercial success.

COMPETITION

The Registrant is subject to competition in the Banking and Financial
Transaction Security markets from other companies. These competitors have been
in the business longer than the Registrant and may have larger, more
sophisticated and better financed organizations.

NEED FOR ADDITIONAL FINANCING

The Registrant will require additional financing in order to complete on the
licensing and option agreement covering Gesture Recognition Technologies
specific to the Banking and Financial Transaction markets. There are no
assurances that such financing will be forth coming or that it can be obtained
on terms favorable to the Registrant.

DEPENDENCE ON DSI DATOTECH SYSTEMS INC.

The Registrant is largely dependent upon the efforts and abilities of DSI
Datotech Systems Inc.'s technical groups to succeed in the Gesture Recognition
Technologies Banking and Financial Transactions markets. There are no assurances
that the Registrant can be successful in operating in this business without the
full co-operation of DSI Datotech Systems Inc.

RISK FACTORS, INTERNET GAMING

LACK OF OPERATIONS AND PROFITABILITY.

The Registrant is in the pre-operational development stage and has no
history of operations or profits in the Internet gaming industry.

UNCERTAINTY OF COMMERCIAL SUCCESS.

Although the Registrant is optimistic about its revenue and profitability
prospects, there can be no assurances of commercial success of its
CasinoInterPlex product. Furthermore, the Internet gaming industry is relatively
new and in the midst of rapid change, growth and uncertainty. There can be no

17
<PAGE>

assurance that the Registrant will be able to keep up with the pace of
technological change or fund its growth.

COMPETITION.

The Registrant is subject to competition in the Internet based
entertainment business from other companies that compete with similar products
and services. These competitors have been in the business longer than the
Registrant and may have larger and more sophisticated organizations with
better-experienced and larger executive and operating staffs. There can be no
assurance that the Registrant's prospects will not be adversely affected by
competition from these companies.

NEED FOR ADDITIONAL FINANCING.

The Registrant will require additional financing in order to establish
profitable operations. There is no assurance that such financing will be
forthcoming, or that it can be obtained on terms favorable to the Registrant.

DEPENDENCE ON MANAGEMENT.

The Registrant is largely dependent upon the efforts and abilities of its
management team to succeed in the Internet based entertainment business. The
management team has particular experience and gaming industry contacts. There is
no assurance that the Registrant can be successful in operating the business, if
the services of the management team become unavailable.

COMPLIANCE WITH TERRITORIAL LAWS AND REGULATIONS.

There currently exists a great deal of uncertainty and disagreement over
whether existing laws and regulations apply to Internet gambling and whether
territorial governments have the authority and/or ability to govern commerce on
the Internet. Although the Registrant believes that its business is in full
compliance with territorial laws and regulations, there are no assurances that a
territorial jurisdiction, or agency thereof, will not charge the Registrant with
the contravention of a law or regulation. Furthermore, there are no assurances
that the government of a territorial jurisdiction will not enact a new law or
regulation that would make the Registrant's business unlawful.

c) REPORTS TO SECURITY HOLDERS

1) On May 26, 2000 the company filed with the Security and Exchange
Commission a SEC Form 10-SB Registration Statement in order to become a fully
reporting company. An amended Form 10-SB/A1 was further filed on June 21, 2000,
clarifying questions raised by the SEC. This Registration Statement became
automatically effective as of 60 days from the date of filing and consequently
the Registrant is required to file annual reports in accordance with the
Securities Exchange Act of 1934.

2) The company has filed the following reports with the SEC:

DATE FILED FORMS CIK CODE COMPANY NAME FORMAT
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
05-26-2000 10-12G 1101046 Great Bear Investments Inc [text]
05-26-2000 10SBI2G 1101046 Great Bear Investments Inc [text]
06-21-2000 10SBI2G/A 1101046 Great Bear Investments Inc [text]
09-28-2000 NT 10-K 1101046 Great Bear Investments Inc [text]
</TABLE>

3) The public may read and copy any materials filed with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, DC. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding

18
<PAGE>

issuers that file electronically with the SEC. The address of that site is
(http://www.sec.gov). The Registrant's Internet address is www.sigbio.com.

ITEM 2. DESCRIPTION OF PROPERTIES

The Registrant's principal office is located at 3838 Camino Del Rio North, Suite
333, San Diego, CA, 92108. This office acts as the Registrant's U.S. office and
is approximately 1,300 square feet and is shared with the Registrant's U.S.
Counsel at no cost to the Registrant.

Biometrics Security, Inc.'s biometric security business is located at 214-1118
Homer St, Vancouver and covers a space of approximately 400 sq. ft. This space
is leased under a two year contract at $1050 USD per month.

ITEM 3. LEGAL PROCEEDINGS

The Registrant is not involved in any legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

An Action by Written Consent of the Shareholders of Great Bear
Investments, Inc. provided for the consent and adoption of the following during
the fourth quarter of the fiscal year of this report.

1) Approval for the corporation to undertake a forward share
split of four (4) new shares for each one (1) share issued by the corporation.

2) Approval of the acquisition, subject to the appropriate due
diligence, of BIOMETRICS SECURITY INC., via the issuance of 38,256,665 post
forward split shares of restricted stock in exchange for all of the issued and
outstanding shares of BIOMETRICS SECURITY, INC.

3) Approval to Amend Article FIRST of the Articles of
Incorporation to change the corporation name to "SECURITY BIOMETRICS, INC."

CONSENT OF SHAREHOLDERS (APPROVED)

<TABLE>
<S> <C>
Shares authorized to vote 3,125,000
Shares voted for consent 1,855,000
a) For 1,855,000
b) Against 0
Percentage of shares in favor of consent 59.26%
</TABLE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

a) MARKET INFORMATION: The Registrant's common stock was cleared
for trading by NASD on the National Quotation Bureau Pink Sheets on May 3, 2000
with the trading symbol "GBIV". No priced quotation had been entered until July
27, 2000. On July 21, 2000 the company rolled forward their shares on a (4) four
new for (1) one old share basis and changed its name to Security Biometrics
Inc., new trading symbol SBTI, National Quotation Bureau "Pink Sheets". As of
September 24, 2000, there were 50,756,665 shares of the Registrant's common
stock issued and outstanding.

The Registrant's common stock trades on the NASD OTC Pink Sheets under the
symbol SBTI. The Registrant's common stock price as of the close of business on
September 29, 2000, was $5.125 per share.

19
<PAGE>

PRICE RANGE: The following is the range of the high and low bids for the
Registrant's common stock for each quarter within the last two fiscal years as
determined by the over-the-counter market. Quotations reflect inter-dealer
prices, without retail market, markdown or commission and may not represent
actual transactions.

<TABLE>
<CAPTION>
----------------- ----------------------------- ----------------------------- -----------------------------
1998 1999 2000
QUARTER ----------------------------- ----------------------------- -----------------------------
HIGH BID LOW BID HIGH BID LOW BID HIGH BID LOW BID
----------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
March
----------------- -------------- -------------- -------------- -------------- -------------- --------------
June
----------------- -------------- -------------- -------------- -------------- -------------- --------------
September $14.00 $4.00
----------------- -------------- -------------- -------------- -------------- -------------- --------------
December
----------------- -------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

HOLDERS: The Registrant has approximately 120 common stock shareholders.

DIVIDENDS: The Registrant has never paid a cash dividend. It is the present
policy of the Registrant to retain any extra profits to finance growth and
development of the business. Therefore, the Registrant does not anticipate
paying cash dividends on its common stock in the foreseeable future.

b) RECENT SALES OF UNREGISTERED SECURITIES

RECENT SALES: The Registrant had the following stock issuances on March 1, 2000.
All of these shares were sold by the officers and directors of the Registrant
and no underwriters were utilized.

1) On March 22, 1999, 2,000,000 shares of common stock at $.005
per share were issued pursuant to a Regulation D, Rule 504 Offering for a total
Offering of $10,000.

2) On May 26, 1999, 855,000 shares of common stock at $.03 per
share were issued to the Directors of the Registrant for a total offering of
$26,650.

3) On June 6, 1999, 70,000 shares of common stock at $.05 per
share were issued for consulting services.

4) On September 30, 1999, 200,000 shares of common stock at $.05
per share were issued pursuant to a Regulation D, Rule 504 Offering for a total
offering of $10,000.

b) EXEMPTIONS FROM REGISTRATION: With respect to the issuance of
the 2,000,000 common shares listed at Item 1 and the 200,000 common shares
listed at item 4, such issuances were made in reliance upon the private
placement exemptions provided by Section 4(2) of the Securities Act of 1933 as
amended, (the "Act"), SEC Regulation D, Rule 504 of the Act and Nevada Revised
Statutes Sections 78.211, 78.215, 78.3784, 8.3785 and 78.3791) collectively the
"Nevada Statutes").

With respect to the issuance of the 855,000 common shares listed at item 2 and
the 70,000 shares listed at item 3, such issuances were made in reliance upon
the private placement exemptions provided by Section 4(2) of the Act and the
Nevada Statutes.

In each instance, each of the share purchasers had access to sufficient
information regarding the Registrant so as to make an informed investment
decision. More specifically, each purchaser signed either a written Subscription
Agreement or a Consulting Agreement with respect to their financial status and
investment sophistication wherein they warranted and represented, among other
things, the following:

1. That they had the ability to bear the economic risks of investing in
the shares of the Registrant.

20
<PAGE>

2. That they had sufficient knowledge in financial, business, or
investment matters to evaluate the merits and risks of the investment.

3. That they had a certain net worth sufficient to meet the suitability
standards of the Registrant.

4. That the Registrant has made available to them, his counsel and his
advisors, the opportunity to ask questions and that he has been given access to
any information, documents, financial statements, books and records relative to
the Registrant and an investment in the shares of the Registrant.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

ITEM 6.1 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION FOR BANKING
AND FINANCIAL TRANSACTION SECURITY

PHASE I: SECURITY BIOMETRICS, INC. OPTIONS TO LICENSE DSI DATOTECH SYSTEMS
INC. GESTURE RECOGNITION TECHNOLOGY

Security Biometrics Inc. has optioned to license from DSI Datotech Systems Inc.
its existing proprietary property, which is all intellectual property rights in
the Gesture Recognition Technology (the "Technology"), including without
limitation, (i) any and all patent applications filed worldwide based upon the
Technology, including any and all continuations, divisions and
continuations-in-part thereof, and all patents, inventor's certificates, utility
models and the like issuing therefrom worldwide, including any and all
re-examinations, reissues, renewals and extensions thereof, (ii) any
copyrightable or copyrighted works based upon the Technology, including computer
software and computer programs, (iii) any confidential or proprietary know-how
and information regarding the Technology, (iv) any trademarks and trade names
associated with the Technology, whether or not registered, and (v) all fixed
representations, hardware, hard copies, computer-readable media and other
tangible implementation of the Technology (collectively, the "Proprietary
Property"), patent rights, copyrights, trademarks and trade secret rights.
"Existing Proprietary Property" shall also include patent rights in the
Technology that are pending as of the date hereof.

The option to licensed Items shall mean the interfaces and software for
executing banking and financial transactions. The exclusive licensing right is
for the exploitation of the Technology worldwide through a license agreement.
Security Biometrics Inc. has paid to DSI Datotech Systems Inc., $320,000 US
Dollars fully creditable towards the US$ 8 million, which may be owed to
Datotech pursuant to the execution of the License Agreement.

Datotech Technology will develop for Security Biometrics, Inc. a gesture
recognition based technology that will demonstrate, beyond any reasonable doubt
their potential for biometric security applications utilizing a PC system based
multi-touch gesture recognition. Datotech commits to use its best efforts to
make this prototype available, at a charge of $3,000,000 US Dollars to Security
Biometrics Inc., within 12 months of the delivery of $3,000,000 US Dollars to
Datotech. This charge of $3,000,000 US Dollars is fully creditable towards the
US$8 million that may be owed to Datotech

Security Biometrics Inc. has a genuine interest in commercializing the
Technology but shall not be obligated to exercise the Option granted hereunder
and may refuse to execute the License Agreement.

PHASE II: FINANCIAL REQUIREMENTS TO EXECUTE THE OPERATIONAL PLAN

In consideration of the option granted to Security Biometrics Inc. hereunder,
Security Biometrics Inc. shall pay Datotech the amount of $320,000 US Dollars,
which shall be fully creditable towards any amounts due Datotech under the
License Agreement. Said $320,000 US Dollars shall be due and payable within two
months of the signing of this Option Agreement. Security Biometrics Inc. shall
pay Datotech $3,000,000 US Dollars within eleven months of signature of the
Option Agreement. Datotech will exclusively apply the $3,000,000 payment towards
the development of the Prototype. "Prototype" shall mean a device using Datotech
Technology that will demonstrate, beyond any reasonable doubt, multi-touch
gesture recognition

21
<PAGE>

and individual gesture patterns utilizing a PC system. Datotech commits to use
its best efforts to make this prototype available at this charge of $3,000,000
US Dollars to Security Biometrics Inc., within 12 months of the delivery of this
$3,000,000 US Dollars to Datotech. Upon the exercise by Security Biometrics Inc.
of the Option granted hereunder and the signing of the License Agreement,
Security Biometrics Inc. shall pay Datotech the amount of $8 Million US Dollars
less the above amount of $3,320,000 US Dollars paid to Datotech within the terms
of this Agreement. Security Biometrics Inc. must exercise its Option within
three months of the time a reasonably acceptable prototype is made available to
Security Biometrics Inc. by Datotech. In addition, Security Biometrics Inc. or
its assignee grants to Datotech a perpetual non-dilative twenty percent (20%)
Common Share Interest in Security Biometrics Inc. or the assignee of the Option
and License Agreements upon the signing of the Licensing Agreement.

Security Biometrics Inc. intends to finance the US$8 million cash requirement in
order to develop the GRT based security technology and exercise the worldwide
license through the following series of financings:

- US$5 million to cover development costs and general corporate use
- US$25 million to develop the marketing and business development team

ITEM 6.2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION FOR INTERNET
GAMING

The first year of operation, the period covered by the Registrant's business
plan, will be a development phase during which the Registrant will be putting
its Web site in place, establishing its relationships with various service
providers, securing gaming software and government licenses, testing its
facilities, and developing staffing and promotional plans for the second year's
operational phase.

The Registrant has the benefit of executive officers that have the expertise and
wherewithal to undertake most of the planning, research and development for the
project. During the term of its business plan, product Research and Development
(R&D) will be minimal. The Registrant has no plans to develop any of its own
products and will not be undertaking any product research during the first year.
Instead, like the vast majority of its competitors, the Registrant will contract
with software suppliers to lease its gaming products on a pay-as-you-go basis.
The minimal R&D costs that the Company will incur will be as a result of
sourcing and acquiring suppliers. These costs are included in the relevant
expenditure categories listed below.

The Registrant has no plans to hire staff during the period covered by its
initial business plan. All work requiring outside expertise is being contracted.
Software and service providers are being contracted in a fashion that will
enable the Company to provide the best games and facilities available on a
strictly monthly pay-as-you-go service fee basis. This will greatly reduce the
requirement for up-front cash and allow the Registrant added flexibility in its
promotional activities beginning in year two.

FINANCIAL REQUIREMENTS.

The Registrant has financed its development activities to date from
sales of common stock to a limited number of investors. The Registrant lacks
sufficient funds to commence operations and the implementation of its growth
strategy is dependent upon its ability to raise equity financing through future
private placements.

The Registrant is seeking to raise in excess of $200,000 through a
private offering, which is expected to provide adequate capital to sustain the
Registrant's growth over the next year.

The following schedule provides a summary of the anticipated
expenditures by major area of activity.

<TABLE>
<CAPTION>
EXPENDITURES
<S> <C>
Web Site Development $72,000

22
<PAGE>

Web Server $25,000
ISP & Hosting Services $10,000
Software $10,000
Contract Negotiations $10,000
Travel & Accommodations $10,000
Gaming License $25,000

Advertising & Promotion $25,000
Communications $6,000
--------

TOTAL: $200,000
========
</TABLE>

WEB SITE DEVELOPMENT. Web Site Design and Development will be the
backbone of the operation and will begin on completion of the above funding. It
will be done on a contract basis and will be continual throughout the first
year.

WEB SERVER. Initially, web site development will be facilitated on
equipment supplied by the contract web site developer. Towards the end of the
first 12 months, CasinoInterplex will purchase its own equipment and have
software loaded in readiness for Phase II, the start of regular commercial
operations in year two.

ISP & HOSTING SERVICES. ISP and Hosting Services involve several
aspects of the CasinoInterplex operation. Initially, a modest monthly fee will
be paid to the contract web design and development company for hosting the
CasinoInterplex web site on their server. Towards the end of the year, the
Company will establish its own server and pay the necessary licensing,
telecommunications, and ISP fees.

SOFTWARE. The software costs indicated above is for the basic operating
system and administrative software necessary to run the web server.

CONTRACT NEGOTIATIONS. This expenditure item refers to consulting and
legal fees associated with negotiating the games software license(s) and
securing a government gaming license to operate an online casino.

TRAVEL AND ACCOMMODATIONS. This item refers to costs associated with
the travel necessary to secure a gaming license, the game software license(s)
and a suitable Service Provider.

GAMING LICENSE. The government license required to operate an Internet
Gaming Facility.

ADVERTISING AND PROMOTION. Advertising and promotion costs encompass a
number of items, such as Affiliate Program Software, promotional materials,
banner advertising, meeting expenses and print advertising. These costs are
relatively low at this time, because the bulk of advertising and promotion will
take place after the first 12 months, when the company enters into its
operational phase.

COMMUNICATIONS. Communications costs refer to expenditures on
telecommunications, postage and courier charges. They will occur on an ongoing
basis throughout the year.

As indicated previously, the first year of operation will be a
development phase, whereby the Company will be putting its web site in place,
establishing its relationships, with various service providers, securing gaming
software and government licenses, and testing its facilities and developing
staffing plans and promotional activities for the second year's operational
phase.

CasinoInterplex is fortunate in that its executive officers have the
expertise and wherewithal necessary to undertake themselves most of the planning
and development work required during the first year.

23
<PAGE>

The Company has no plans to hire staff during the first 12 months. All
work requiring outside expertise is being contracted. Software and service
providers too are being retained in a fashion that will enable the company to
provide the best games and facilities available on a strictly pay-as-you-go
monthly service fee basis. This will greatly reduce the requirement for up-front
cash and allow the company added flexibility in its promotional activities that
will begin in earnest in year two.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Financial Statements are referred to in Item 13, listed in Part F/S and
filed and included elsewhere herein as a part of this Annual Report on Form
10-KSB.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

The Registrant's principal independent accountant has not resigned,
declined to stand for re-election, nor were they dismissed. The principal
accountant's report on the financial statements for the last year contains no
adverse opinion or disclaimer of opinion, nor were they modified as to
uncertainty, audit scope, or accounting principles. There have been no
disagreements with any former accountants or any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth information regarding the directors,
executive officers, promoters and control persons of the Registrant as of June
30, 2000.

NAME AGE POSITION TERM SERVED SINCE
---- --- -------- ---- ------------
<S> <C> <C> <C> <C>
1. Alan Wilson 49 President/ 1 year March 12, 2000
Director

2. Tanis Cornwall 54 Secretary/ 1 year March 12, 2000
Director

3. Michael Tomlinson 34 Director 1 year March 12, 2000
</TABLE>

The following table sets forth information regarding the directors, executive
officers, promoters and control persons of the Registrant as of the date hereof.

NAME AGE POSITION TERM SERVED SINCE
<S> <C> <C> <C> <C>
1. George Gould 62 President/ 1 year July 19, 2000
Director

2. Tanis Cornwall 54 Secretary/ 1 year March 12, 2000
Director

3. Kenneth Barr 50 Director 1 year Sept. 29, 2000
</TABLE>

1. MR. GOULD'S career in the Finance Industry started in 1961, where he
worked for 12 years. In 1973, he began a career in banking, where he held
various senior management positions

2. MS. CORNWALL graduated from the University of British Columbia with a
B.Sc. (Agri.) in 1970. Since 1983, as a self-employed businesswoman, she has
been involved in the investment field.

24
<PAGE>

3. MR. BARR brings to Security Biometrics' Board of Directors over 30
years of business judgment in successfully bringing new high technologies to the
market.

Mr. Barr is currently President and CEO of Combined Telecom Inc., a
facilities-based national competitive local exchange carrier, providing a full
suite of communications services. Prior to that, Mr. Barr was the Chief
Operating Officer of Cygnal Technologies, a leading provider of communications
services across Canada.

Mr. Barr also served as President - Business Communications Systems,
for Lucent Technologies, Canada, for six years. At that time, he was also the
Executive Vice-President and Chief Operating Officer of the Canadian holding
company for Lucent Technologies Canada. Mr. Barr also served as Vice President
of TTS and Nortel's Director of Marketing.

ITEM 10. EXECUTIVE COMPENSATION.
Note: Presently no compensation or remuneration is being awarded to any
individual or entity.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)

<TABLE>
<CAPTION>
------------------------ ----------------- -------------------- --------------------- -----------------------
PERCENT OF TOTAL
NUMBER OF OPTIONS/SARS
SECURITIES GRANTED TO EXERCISE OR BASE
NAME UNDERLYING EMPLOYEES IN PRICE ($/SH) EXPIRATION DATE
OPTIONS/SARS FISCAL YEAR
GRANTED (#)
------------------------ ----------------- -------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Kenneth Barr 250,000 25.64% $1.00 August 21, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
George Gould 250,000 25.64% $1.00 August 21, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
George Davis 150,000 9.75% $1.00 August 21, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
George Lensen 100,000 9.75% $1.00 August 31, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
Stephen Henry 250,000 25.64% $1.00 August 21, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
Fazilat Chaudnary 25,000 2.56% $1.00 August 31, 2005
------------------------ ----------------- -------------------- --------------------- -----------------------
</TABLE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information as to the shares of common stock
owned as of September 29, 2000.

I. Each person who beneficially owns so far as the Registrant has been
able to ascertain, more than 5% of the 50,756,665 outstanding shares of
the Registrant.

II. Each director.

III. Each of the officers named in the summary compensation table.

IV. All the directors and officers as a group unless otherwise indicated in
the footnotes on the table is subject to community property laws where
applicable, the persons as to whom the information is given has sole investment
power over the shares of common stock.

<TABLE>
<CAPTION>
NAME PRINCIPAL BENEFICIAL OWNER NUMBER OF SHARES PERCENT
---- -------------------------- ---------------- -------
<S> <C> <C> <C>
1. Gesture Recog- CIBC Trust and Merchant 37,500,000 74.27%
nition Techno- Bank (Barbados) Limited
logies (GRT) Beneficiaries:
International "Jason Taylor" and "Candice Taylor"

25
<PAGE>

Limited.

2. George Gould 0 0%

3. Kenneth Barr 0 0%

4. Tanis Cornwall 1,140,000 2.25%
</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

WAYNE TAYLOR/JASON AND CANDICETAYLOR

Wayne Taylor is the original owner of the License and option agreement that was
assigned to Biometrics Security Inc. and is the father of Jason and Candice
Taylor.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS: The following documents are filed herein as Exhibit
Numbers 2, 3, 5, 6 and 7 as required by Part III of Form 1-A:

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
2 CHARTER AND BY-LAWS

2.1 Certificate of Amendment of Articles of
Incorporation of Great Bear Investments,
Inc. changing name to "SECURITY BIOMETRICS,
INC."

2.2 Articles of Incorporation of Biometrics
Security, Inc.

2.3 By-Laws of Biometrics Security, Inc.

3 NONE INSTRUMENTS DEFINING THE RIGHTS OF SECURITY
HOLDERS

5 NONE VOTING TRUST AGREEMENTS

6 MATERIAL CONTRACTS

6.1 Stock Exchange Agreement between Security
Biometrics, Inc. and Biometric Security,
Inc. Shareholders

6.2 Consulting Agreement between Security
Biometrics, Inc. and LK & Z Advisory
International, Inc.

6.3 Exclusive License Agreement and Option
Agreement Between DSI Datatech Systems Inc.
and Biometrics Security, Inc.

7 NONE MATERIAL FOREIGN PATENTS

27 FINANCIAL DATA SCHEDULE
</TABLE>

(b) REPORTS ON FORM 8-K: None

26
<PAGE>

PART F/S

The following financial statements are submitted pursuant to
the information required by Item 310 of Regulation S-B.

FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<S> <C>
FS-1 Security Biometrics, Inc. Audited Balance Sheets as of
June 30, 2000 and 1999.

FS-2 Security Biometrics, Inc. Audited Statements of Loss
For The Periods Ended June 30, 2000 and 1999.

FS-3 Security Biometrics, Inc. Audited Statements of
Stockholders' Equity For The Periods Ended
June 30, 2000 and 1999.

FS-4 Security Biometrics, Inc. Audited Statements of Cash
Flows For The Periods Ended June 30, 2000 and 1999.
</TABLE>

ITEM 14. SUBSEQUENT EVENTS

1. On July 19, 2000, Mr. Michael Tomlinson resigned and Mr. George Gould
was appointed as a director of the company.

2. On September 8, 2000, Mr. Alan Wilson resigned as the company president
and director and Mr. George Gould was appointed the acting President.

3. On September 12, 2000, Security Biometrics, Inc. (SBTI), Biometrics
Security, Inc. (BSI), and a majority of BSI Shareholders have agreed to exchange
all of the Shares of BSI for Shares of SBTI on a Share for Share basis. This
makes Biometrics Security, Inc. a 100% wholly owned subsidiary of Security
Biometrics, Inc.

Biometrics Security, Inc. is in the business to specifically develop, market
under license and sell static and dynamic biometric technologies specific to the
security applications of banking and financial transactions. These include, but
are not limited to: dynamic Gesture Recognition Technology (GRT), static
biometric finger and palm print systems, retinal scanning and voice recognition
systems. GRT is a dynamic system that interprets hand gestures or signatures
using sophisticated software algorithms performed on patented proprietary touch
pads. GRT is deemed superior to existing pen input and existing signature
recognition technologies.

Biometrics Security, Inc. is positioning itself as a key provider of biometric
security interfaces that will offer a wide array of "end to end" solutions
targeted to specific multi-trillion dollar banking and financial transaction
markets.

4. Mr. George W. Lensen, R. Craig Barton and George Davis effective
September 15, 2000 was appointed to the company's Advisory Board.

27
<PAGE>

George W. Lensen's career as an officer in the Royal Canadian Mounted Police
covered a period of some 25 years at which time he retired as an inspector. Mr.
Lensen brings to the advisory board extensive experience and expertise in the
fields of forensic identification and biometric applications, and is considered
an expert on photography, physical and footwear evidence and pioneered work in
fingerprint detection with the 7,8 Benzo-flavone process.

Mr. Lensen was responsible for all Crime Stopper and Crime Prevention programs
in British Columbia.

He has a MBA Masters of Business Administration in International Management, and
is currently the President of Smart Tips International and Chief Executive
Officer of TRS International.

R. Craig Barton is the President, C.E.O. and C. O.O. of Barton Insurance Brokers
LTD. He began his career with the organization in 1973 in Prince George, British
Columbia. Since becoming President in 1986, Barton Insurance Brokers Ltd. is now
the largest insurance brokerage in the province with over 50 locations
throughout British Columiba. In 1999, the company joined Hub International
Limited, publicly trading on the Toronto Stock Exchange. R. Craig Barton also
holds the positions of Director and Vice President of Hub International Limited.
Mr. Davis is a barrister and Solicitor specializing in lender liability
litigation, asset protection through living estate planning and corporate
reorganization both in Canada and the USA. He is a Single Practitioner at George
Davis and Company Law Corp. from 1989 to present. Mr. Davis' clients include
some of the largest banks both domestically and internationally, the Government
of Canada - consultant of bankruptcy law and examiner of Trustees in
bankruptcies.

5. The Company retained the services of LK & Z Advisory International Inc.

LK&Z Advisory International Inc., with offices in Calgary, Montreal and Zurich,
offers Public Relations, Investor Awareness and introductory services to North
American corporations, in Europe, as well as advisory services on Private
Placements, Mergers and Acquisitions. The company maintains strong working
relationships with Private Investors, European Institutional Investors,
Portfolio Managers, Bankers, Financial Analysts, Market Makers, and Financial
Journalists.

LK&Z Advisory International Inc., in conjunction with its European Associates,
will assist Security biometrics by introducing the company to its broad base of
investors in the European Investment community. This exposure to the European
community will provide Security Biometrics with a broader potential shareholder
base and a large pool of potential sources of capital for future financing.

28
<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
AUDITED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

<PAGE>

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

A. FINANCIAL STATEMENTS

Report of independent certified public accountants

Balance sheets, June 30, 2000 and 1999

Statements of loss for the periods ended
June 30, 2000 and 1999

Statements of stockholders' equity for the periods ended
June 30, 2000 and 1999

Statements of cash flows for the periods ended
June 30, 2000 and 1999

Notes to financial statements

B. FINANCIAL STATEMENT SCHEDULES

Schedules are omitted because of the absence of the conditions under which they
are required, or because the information required by such omitted schedule is
contained in the financial statements or the notes thereto.

<PAGE>

[LETTERHEAD]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To The Board of Directors and Stockholders
Security Biometrics, Inc.
(Formerly Great Bear Investments, Inc.)

We have audited the accompanying balance sheets of Security Biometrics, Inc.
(formerly Great Bear Investments, Inc.) (a development stage enterprise) as of
June 30, 2000 and 1999, and the related statements of loss, stockholders'
equity, and cash flows for the periods then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about 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.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Security Biometrics, Inc.
(formerly Great Bear Investments, Inc.) (a development stage enterprise) as of
June 30, 2000 and 1999, and the results of its operations and cash flows for the
periods then ended, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company is not currently engaged in a business and has
suffered losses from development stage activities to date, which raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 5. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ BATEMAN & CO., INC., P.C.

Houston, Texas
October 10, 2000

<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

2000 1999
--------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,262 $ 25,650
Prepaid expenses - 2,954
--------------- ---------------
Total current assets 2,262 28,604
--------------- ---------------
Total assets $ 2,262 $ 28,604
=============== ===============

LIABILITIES
Current liabilities
Accounts payable and accrued expenses $ 4,126 $ -
Accounts payable, related party 10,548
--------------- ---------------
Total current liabilities 14,674 -
--------------- ---------------

Commitments and contingencies - -

STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 100,000,000 shares authorized,
3,125,000 and 2,925,000 shares issued and outstanding 3,125 2,925
Capital in excess of par value 46,025 36,225
Deficit accumulated during the development stage (61,562) (10,546)
--------------- ---------------
Total stockholders' equity (12,412) 28,604
--------------- ---------------
Total liabilities and stockholders' equity $ 2,262 $ 28,604
=============== ===============

</TABLE>

THE ACCOMPANYING NOTES ARE AN ITEGRAL PART OF THESE STATEMENTS.

<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF LOSS FOR THE PERIODS ENDED
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

INCEPTION, INCEPTION,
March 12, 1999 March 12, 1999
through Year Ended through
June 30, June 30, JUNE 30,
2000 2000 1999
------------------- ------------------ -------------------
<S> <C> <C> <C>
Revenues $ - $ - $ -
------------------- ------------------ -------------------

General and administrative expenses 61,562 51,016 10,546
------------------- ------------------ -------------------
Total operating expenses 61,562 51,016 10,546
------------------- ------------------ -------------------
(Loss) before taxes (61,562) (51,016) (10,546)
------------------- ------------------ -------------------

Provision (credit) for taxes on income:
Current - - -
Deferred - - -
------------------- ------------------ -------------------
Total provision (credit) for taxes on income - - -
------------------- ------------------ -------------------
Net (loss) $ (61,562) $ (51,016) $ (10,546)
=================== ================== ===================

Basic earnings (loss) per common share $ (0.02) $ (0.01)
================== ===================

Weighted average number of shares outstanding 3,075,273 1,923,740
================== ===================

</TABLE>

THE ACCOMPANYING NOTES ARE AN ITEGRAL PART OF THESE STATEMENTS.

<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE PERIODS ENDED
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

DEFICIT
ACCUMULATED
CAPITAL IN DURING THE
COMMON STOCK EXCESS OF DEVELOPMENT
SHARES AMOUNT PAR VALUE STAGE TOTAL
--------------- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INCEPTION, MARCH 12, 1999 - $ - $ - $ - $ -
Stock issued for cash 2,855,000 2,855 32,795 - 35,650
Stock issued for services 70,000 70 3,430 - 3,500
Development stage net (loss) - - - (10,546) (10,546)
--------------- ----------- -------------- ------------- -------------
BALANCES, JUNE 30, 1999 2,925,000 $ 2,925 $ 36,225 $ (10,546) $ 28,604
--------------- ----------- -------------- ------------- -------------

Stock issued for cash 200,000 $ 200 $ 9,800 $ - $ 10,000
Development stage net (loss) - - - (51,016) (51,016)
--------------- ----------- -------------- ------------- -------------
BALANCES, JUNE 30, 2000 3,125,000 3,125 46,025 (61,562) (12,412)
=============== =========== ============== ============= =============

</TABLE>

THE ACCOMPANYING NOTES ARE AN ITEGRAL PART OF THESE STATEMENTS.

<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

INCEPTION, INCEPTION,
MARCH 12, 1999 MARCH 12, 1999
THROUGH YEAR ENDED THROUGH
JUNE 30, JUNE 30, JUNE 30,
2000 2000 1999
---------------- ------------------- ------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (61,562) $ (51,016) $ (10,546)

Adjustments to reconcile net (loss) to cash provided (used)
by developmental stage activities:
Stock issued for services 3,500 - 3,500
Decrease (increase) in prepaid expenses - 2,954 (2,954)
(Decrease) increase in accounts payable and accrued
liabilities 4,126 4,126 -
(Decrease) increase in accounts payable, related party 10,548 10,548 -
---------------- ------------------- ------------------
Net cash provided (used) by operating
activities (43,388) (33,388) (10,000)
---------------- ------------------- ------------------

Cash flows from investing activities: - - -
---------------- ------------------- ------------------

Cash flows from financing activities:
Proceeds from sale of common stock 45,650 10,000 35,650
---------------- ------------------- ------------------
Net cash provided (used) by financing activities 45,650 10,000 35,650
---------------- ------------------- ------------------

Net increase (decrease) in cash and equivalents 2,262 (23,388) 25,650

Cash and equivalents, beginning of period - 25,650 -
----------------- ------------------- ------------------
Cash and equivalents, end of period $ 2,262 $ 2,262 $ 25,650
================= =================== ==================

Supplemental cash flow disclosures:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes - - -
Non-cash financing and investing activities:
Stock issued for services 3,500 - 3,500

</TABLE>

THE ACCOMPANYING NOTES ARE AN ITEGRAL PART OF THESE STATEMENTS.

<PAGE>

SECURITY BIOMETRICS, INC.
(FORMERLY GREAT BEAR INVESTMENTS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Following is a summary of the Company's organization and significant accounting
policies:

ORGANIZATION AND NATURE OF BUSINESS - Security Biometrics, Inc. (the
Company) is a Nevada corporation, incorporated on March 12, 1999 as
Great Bear Resources, Inc.; it changed its name to Great Bear
Investments, Inc. on May 12, 1999, and then subsequently changed its
name to Security Biometrics, Inc. on August 11, 2000 (see "Subsequent
events"). The Company is based in Vancouver, British Columbia, Canada,
and has adopted a fiscal year end of June 30.

During the year ended June 30, 2000, it was the Company's intent to be
an internet-based entertainment company that provides a virtual casino
entertainment complex, known as CasinoInterPlex, as a central meeting
place for Web Gamblers. This planned complex is an interchange
environment that allows Web Gamblers to visit other CasinoInterPlex
sites. It also will provide e-commerce related solutions to collect and
distribute earnings on behalf of all participants of the
CasinoInterPlex revenue sharing program. Although its business
activities have not yet commenced, the CasinoInterPlex business revenue
is expected to be derived from license fees, earnings participation and
the CasinoInterPlex owned and operated web sites. The company has
obtained a registered web site name and is in the process of obtaining
a casino license.

Subsequent to June 30, 2000, the Company acquired all of the
outstanding stock of Biometrics Security, Inc. (see "Subsequent
events"). Biometrics Security, Inc. intends to develop, market under
license, and distribute dynamic biometric technologies specific to the
security applications of banking and financial transactions. These
include but are not limited to dynamic gesture recognition technology
(GRT), and dynamic signature verification (DSV). It is intended that
these systems will use sophisticated software algorithms and be
performed on proprietary touchpads.

To date, the Company's activities have been limited to its formation
and the raising of equity capital. Biometrics Security, Inc. is also a
development stage company. In its current development stage, management
anticipates incurring substantial additional losses as it implements
its business plan.

BASIS OF PRESENTATION - The accounting and reporting policies of the
Company conform to generally accepted accounting principles applicable
to development stage enterprises.

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 amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The Company's
periodic filings with the Securities and Exchange Commission include,
where applicable, disclosures of estimates, assumptions, uncertainties
and concentrations in products and markets which could affect the
financial statements and future operations of the Company.

<PAGE>

CASH AND CASH EQUIVALENTS - For purposes of the statement of cash
flows, the Company considers all cash in banks, money market funds, and
certificates of deposit with a maturity of less than three months to be
cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL
INSTRUMENTS - The Company has adopted Statement of Financial Accounting
Standards number 119, DISCLOSURE ABOUT DERIVATIVE FINANCIAL INSTRUMENTS
AND FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying amounts of cash,
accounts payable, and accrued expenses approximate fair value because
of the short maturity of these items. These fair value estimates are
subjective in nature and involve uncertainties and matters of
significant judgment, and, therefore, cannot be determined with
precision. Changes in assumptions could significantly affect these
estimates. The Company does not hold or issue financial instruments for
trading purposes, nor does it utilize derivative instruments in the
management of its foreign exchange, commodity price or interest rate
market risks.

FEDERAL INCOME TAXES - Deferred income taxes are reported for timing
differences between items of income or expense reported in the
financial statements and those reported for income tax purposes in
accordance with Statement of Financial Accounting Standards number 109
ACCOUNTING FOR INCOME TAXES, which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases, and for tax loss and credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides deferred
taxes for the estimated future tax effects attributable to temporary
differences and carryforwards when realization is more likely than not.

NET INCOME PER SHARE OF COMMON STOCK - The Company has adopted FASB
Statement Number 128, EARNINGS PER SHARE, which became effective for
periods ending after December 15, 1997, and simplified the standards
for computing earnings per share; it also makes them comparable to
international EPS standards. It replaces the presentation of primary
EPS with a presentation of basic EPS. It also requires dual
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic earnings
per share of common stock is computed by dividing net income by the
weighted average number of shares of common stock outstanding during
the period. The Company did not have a complex capital structure
requiring the computation of diluted earnings per share.

<PAGE>

NOTE 2 - CAPITAL STOCK:
Since its inception, the Company has issued shares of its common stock as
follows:

PRICE PER
DATE DESCRIPTION SHARES SHARE AMOUNT
-------------- -------------------------------------------- ---------------- -------------- ------------------
<S> <C> <C> <C> <C>
03/31/99 Shares issued for cash 2,000,000 $0.005 $10,000
05/26/99 Shares issued for cash 855,000 0.030 25,650
06/07/99 Shares issued for services 70,000 0.050 3,500
---------------- ------------------
06/30/99 Cumulative total 2,925,000 $39,150

09/30/99 Shares issued for cash 200,000 0.050 10,000
---------------- ------------------
06/30/00 Cumulative total 3,125,000 49,150
================ ==================

</TABLE>

The Company's articles of incorporation also authorize it to issue preferred
stock in one or more series and in such amounts as may be determined by the
Board of Directors. At June 30, 2000, no preferred stock series had been
created.

NOTE 3 - FEDERAL INCOME TAX:
The Company follows Statement of Financial Accounting Standards Number 109 (SFAS
109), ACCOUNTING FOR INCOME TAXES. Deferred income taxes reflect the net effect
of (a) temporary difference between carrying amounts of assets and liabilities
for financial purposes and the amounts used for income tax reporting purposes,
and (b) net operating loss carryforwards. No net provision for refundable
Federal income tax has been made in the accompanying statement of loss because
no recoverable taxes were paid previously. Similarly, no deferred tax asset
attributable to the net operating loss carryforward has been recognized, as it
is not likely to be realized.

The current provision for refundable Federal income tax consists of the
following:

2000 1999
------------------- -----------------
<S> <C> <C>
Refundable Federal income tax attributable to:
Current operations $17,400 $3,500
Less, Limitation due to absence of prior
year taxable income (17,400) (3,500)
------------------- -----------------
Net refundable amount - -
=================== =================

</TABLE>

<PAGE>

The cumulative tax effect at the expected rate of 34% of significant items
comprising the Company's net deferred tax amounts as of June 30, 2000 and 1999,
are as follows:

2000 1999
------------------- -----------------
<S> <C> <C>
Deferred tax asset attributable to:
Net operating loss carryover $20,900 $3,500
Less, Valuation allowance (20,900) (3,500)
------------------- -----------------
Net deferred tax asset - -
=================== =================

</TABLE>

At June 30, 2000, the Company had unused net operating loss carryovers which may
be used to offset future taxable income and which expire as follows:

EXPIRES JUNE 30, AMOUNT
----------------------------------------------------------------------- -----------------
<S> <C>
2014 $10,546
2015 51,016
-----------------
Total net operating loss carryover $61,562
=================

</TABLE>

NOTE 4 - RELATED PARTY TRANSACTIONS:
The Company paid $31,358 during the year ended June 30, 2000 and $7,046 during
the period ended June 30, 1999, in professional fees to an officer for legal
services. Prepaid expenses include $-0- and $2,954, paid to the same officer of
the company for legal services in the periods ended June 30, 2000 and 1999,
respectively.

Additionally, the company paid a relative of an officer and director of the
company $500 in 2000, for accounting services provided to the Company.

NOTE 5 - UNCERTAINTY, GOING CONCERN:
At June 30, 2000, the Company is not currently engaged in a business and has
suffered losses from development stage activities to date. Although management
is currently attempting to implement its business plan (see Note 1 above) and is
seeking additional sources of equity or debt financing, there is no assurance
these activities will be successful. Accordingly, the Company must rely on its
officers and directors to perform essential functions without compensation until
a business operation can be commenced. These factors raise substantial doubt
about the ability of the Company to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

NOTE 6 - COMMITMENTS:
The Company's principal place of business and corporate offices occupy
approximately 400 square feet of shared office space with several other
businesses. The company leases this space at $150 per month on a month to month
lease. The Company incurred rent expense of $2,100 during the year ended June
30, 2000.

NOTE 7 - SUBSEQUENT EVENTS:
On August 11, 2000, the Company changed its name to Security Biometrics, Inc.,
and was issued a new stock trading symbol, "SBTI."

On July 21, 2000, the Company effected a 1 for 4 stock split, under which
shareholders would receive 4 shares of stock for each 1 share then held. Then,
also on July 21, 2000, the Company signed a Letter of Intent with Biometrics
Security, Inc. to acquire all of the outstanding stock of Biometrics Security,
Inc. in exchange for 39,000,000 post-split shares of restricted stock.
Biometrics Security, Inc. is a newly formed corporation, which was created to
develop, market and sell static and dynamic biometric technologies specific to
the security applications of banking and financial transactions. As Biometrics
Security, Inc. is in the development stage, its business activities are
primarily related to expenses incurred in the formation of the company and the
raising of capital.

At September 15, 2000, the subsidiary, Biometrics Security, Inc. had:

- Raised capital of approximately $450,000 through the sale of
shares;

<PAGE>

- Acquired an option to license DSI Datotech Systems, Inc.
gesture recognition technology, which include the interfaces
and software for executing banking and financial transactions.
The option was acquired for initial cash consideration of
$320,000, which is fully creditable towards the $8,000,000
that may be owed to Datotech pursuant to the execution of the
License Agreement. The Company is obligated to pay Datotech
$3,000,000 within eleven months of signing the Option
Agreement. The balance of the $8,000,000 license agreement
must be paid within three months of delivery of a reasonably
acceptable prototype device using Datotech technology. In
addition, the Company will issue a perpetual non-dilutive
twenty percent (20%) Common Share Interest in Security
Biometrics, Inc., or the assignee of the Option and License
Agreements upon the signing of the Licensing Agreement.

- Cash resources remaining of $108,000.

NOTE 8 - NEW ACCOUNTING PRONOUNCEMENTS:
The Financial Accounting Standards Board has issued several new accounting
pronouncements, which may affect the Company in future years.

FASB Statement Number 130, REPORTING COMPREHENSIVE INCOME, became effective for
fiscal years beginning after December 15, 1997, and establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains, and losses) in a full set of general-purpose financial
statements. This Statement requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. The Company had no comprehensive income other than
net income during the current period.

FASB Statement Number 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
RELATED INFORMATION, became effective for fiscal years beginning after December
15, 1997, and establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. As the Company has only one business
segment, the pronouncement had no material effect during the current period.

FASB Statement Number 132, EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER
POSTRETIREMENT BENEFITS, became effective for fiscal years beginning after
December 15, 1997, and revises employers' disclosures about pension and other
postretirement benefit plans. It does not change the measurement or recognition
of those plans. It standardizes the disclosure requirements for pensions and
other postretirement benefits to the extent practicable, requires additional
information on changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis, and eliminates certain disclosures.
Since the Company has no pension or postretirement benefit plans, the
pronouncement had no effect in the current year.

FASB Statement Number 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES, becomes effective for fiscal years beginning after June 15, 1999,
and establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other

<PAGE>

contracts, (collectively referred to as derivatives) and for hedging activities.
The Company does not believe this pronouncement will have a material effect on
its financial statements in the near future.

FASB Statement Number 134, ACCOUNTING FOR MORTGAGE-BACKED SECURITIES RETAINED
AFTER THE SECURITIZATION OF MORTGAGE LOANS HELD FOR SALE BY A MORTGAGE BANKING
ENTERPRISE, becomes effective for fiscal years beginning after December 15,
1998. It is not expected to apply to the Company.

Emerging Issues Task Force Issue No. 00-2, ACCOUNTING FOR WEB SITE DEVELOPMENT
COSTS (EITF 00-2), becomes effective for periods beginning after June 30, 2000,
and establishes accounting and reporting standards for costs incurred to develop
a web site based on the nature of each cost. In general, the pronouncement
requires that costs incurred to develop a web site be capitalized and amortized
to expense over the expected useful life of the site. Currently, the Company has
not incurred web site development costs that require capitalization. To the
extent the Company begins to incur such costs in the future, the Company will
adopt the EITF 00-2's disclosure requirements in the quarterly and annual
financial statements for the year ending March 31, 2001.

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) or the exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated: October 12, 2000 SECURITY BIOMETRICS, INC.

BY:/s/ GEORGE GOULD
-------------------------
GEORGE GOULD
President, Chief Financial and
Accounting Officer, and Director

In accordance with the Exchange Act, this report has been signed below
by the following person on behalf of the Registrant and in the capacities and on
the date indicated.

Dated: October 11, 2000 /s/ TANIS CORNWALL
-------------------------
TANIS CORNWALL
Secretary, Treasurer and Director