As filed with the Securities and Exchange Commission on June 2, 1998
Registration No. 333-43791
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-1
ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DIGITAL BIOMETRICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3571 41-1545069
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification
Number)
5600 ROWLAND ROAD
MINNETONKA, MINNESOTA 55343
(612) 932-0888
(Address and telephone number, including area code, of registrant's principal
executive offices)
COPIES TO:
JOHN J. METIL AVRON L. GORDON, ESQ.
CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER THOMAS F. STEICHEN, ESQ.
5600 ROWLAND ROAD BRIGGS AND MORGAN
MINNETONKA, MINNESOTA 55343 PROFESSIONAL ASSOCIATION
(612) 942-9880 2400 IDS CENTER
(Name and telephone number, including area code, MINNEAPOLIS, MN 55402
of agent for service of process) (612) 334-8400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after the effective date of this Registration Statement.
If any of the securities being registered on Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID
SECTION 8(a) MAY DETERMINE.
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<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 2, 1998
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DIGITAL BIOMETRICS, INC.
3,771,429 SHARES OF COMMON STOCK
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This Prospectus relates to the sale of up to 3,771,429 shares of
Common Stock (the "Shares"), par value $.01 per share (the "Common Stock"), of
Digital Biometrics, Inc. (the "Company") that may be offered for sale for the
account of certain persons as stated herein under the heading "Principal and
Selling Stockholders (the "Selling Shareholders"). The Shares being offered by
the Selling Stockholders hereunder are (i) shares issuable upon conversion of
the Company's 8% Convertible Subordinated Debentures, due December 1, 2000, and
interest thereon, and (ii) shares issuable upon the exercise of certain Common
Stock purchase warrants. No period of time has been fixed within which the
Shares covered by this Prospectus may be offered or sold.
The Company's Common Stock is traded on the Nasdaq National Market
System under the symbol "DBII." On May 29, 1998, the last reported sale price of
the Company's Common Stock on the Nasdaq National Market System was $1.69 per
share.
The Selling Stockholders have advised the Company that sales of the
Shares by them, or by their pledgees, donees, transferees or other successors in
interest, may be made from time to time in the over-the-counter market, through
negotiated transactions or otherwise, at market prices prevailing at the time of
sale or at negotiated prices. The Shares may be sold by one or more of the
following methods without limitation: (a) a block trade in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may purchase and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) an exchange distribution in
accordance with the rules of such exchange; (d) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; (e) privately
negotiated transactions; (f) short sales; and (g) a combination of any such
methods of sale. Sales may be made pursuant to this Prospectus to or through
broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
Common Stock for whom such broker-dealer may act as agent or to whom they may
sell as principal, or both (which compensation as to a particular broker-dealer
may be in excess of customary commissions). One or more supplemental
prospectuses will be filed pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Securities Act"), to describe any material arrangements
for the sales of the Shares when such arrangements are entered into by any of
the Selling Stockholders and any other broker-dealers that participate in the
sale of the Shares.
The Selling Stockholders and any broker-dealers or other persons
acting on their behalf in connection with the sale of the Shares may be deemed
to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit realized by them on the resale of
the Shares as principals may be deemed to be underwriting commissions under the
Securities Act. As of the date hereof, there are no special selling arrangements
between any broker-dealer or other person and any Selling Stockholder.
The Company will not receive any part of the proceeds of any sales
of Shares pursuant to this Prospectus. Pursuant to the terms of registration
rights granted to the Selling Stockholders, the Company will pay all the
expenses of registering the Shares, except for selling expenses incurred by the
Selling Stockholders in connection with this offering, including any fees and
commissions payable to broker-dealers or other persons, which will be borne by
the Selling Stockholders. In addition, such registration rights provide for
certain other usual and customary terms, including indemnification by the
Company of the Selling Stockholders against certain liabilities arising under
the Securities Act. See "Plan of Distribution."
THE SHARES INVOLVE CERTAIN RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF
THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June ___, 1998
<PAGE>
TABLE OF CONTENTS
Available Information..........................................................3
Incorporation of Certain Documents by Reference................................3
Prospectus Summary.............................................................5
Risk Factors...................................................................6
Use of Proceeds...............................................................11
Principal and Selling Stockholders............................................12
Plan of Distribution..........................................................14
Legal Matters.................................................................15
Experts.......................................................................16
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company pursuant to the Exchange
Act may be inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. In addition, the
Company's Common Stock is quoted on the Nasdaq National Market System. Reports,
proxy and information statements and other information concerning the Company
can be inspected and copied at the Public Reference Room of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission a registration statement
on Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information, exhibits and undertakings set forth in the
Registration Statement, certain parts of which are omitted as permitted by the
rules and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement which may be inspected and copied in
the manner and at the sources described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (File No.
0-18856) with the Commission pursuant to the Exchange Act are incorporated into
this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year
ended September 30, 1997, filed on December 23, 1997, as
amended by Form 10-K/A on March 23, 1998.
(b) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1997, filed on
February 13, 1998.
(c) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1998, filed on May 14,
1998.
(d) The Company's Definitive Schedule 14A (Proxy Statement),
filed on February 24, 1998, relating to the Company's
Annual Meeting of Stockholders held on April 8, 1998.
(e) The description of the Company's common stock contained
in its Registration Statement on Form S-1 (File No.
333-43791), filed on January 7, 1998, and as amended by
Pre-Effective Amendment No. 1, filed on January 13,
1998, and Post-Effective Amendment No. 1, filed on
February 19, 1998.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained herein or in a document all or any portion
of which is incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this
<PAGE>
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom
this Prospectus is delivered, upon written or oral request of any such person, a
copy of any or all of the foregoing documents (other than exhibits to such
documents which are not specifically incorporated by reference in such
documents). Written requests for such copies should be directed to the Company
at 5600 Rowland Road, Minnetonka, Minnesota 55343, Attention: Chief Financial
Officer. Telephone requests may be directed to the office of the Chief Financial
Officer of the Company at (612) 932-0888.
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION, INCLUDING "RISK FACTORS" AND THE FINANCIAL STATEMENTS AND
NOTES THERETO, APPEARING OR INCORPORATED BY REFERENCE ELSEWHERE IN THIS
PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT
CAUSE OR CONTRIBUTE TO SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN "RISK FACTORS," ELSEWHERE IN THIS PROSPECTUS AND IN THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1997.
THE COMPANY
Digital Biometrics, Inc. develops, manufactures, markets and
integrates computer-based products and services for the identification of
individuals. The Company is a leading vendor of products employing "biometric"
technology, the science of identifying individuals by measuring distinguishing
biological characteristics. The Company's principal product is the TENPRINTER(R)
system for "live-scan" fingerprint capture used mainly in law-enforcement
applications. The TENPRINTER is a computer-based system with patented
high-resolution optics which captures, digitizes, prints and transmits
forensic-grade fingerprint images.
The Company also offers high-resolution single-fingerprint capture
products for commercial and governmental identification applications. To
capitalize on opportunities outside of its traditional law enforcement market,
the Company recently established a systems integration services business focused
on civil and commercial markets.
The Company has also developed a prototype player tracking system
for the gaming industry called TRAK-21(TM). On March 16, 1998, the Company
signed a definitive agreement with Grand Casinos, Inc. forming a new joint
venture company to further develop, test and market the TRAK-21 automated player
tracking system. Deployment of a system based on TRAK-21 technology in a Grand
Casino property is anticipated in fiscal 1998. The Company's initial membership
interest in the joint venture is 51%.
During fiscal 1997, virtually all of the Company's revenues were
derived from sales of TENPRINTER systems and related maintenance fees.
Approximately 89% of customer accounts receivable at September 30, 1997 were
from government agencies, of which 39% was from a single customer. For the last
three fiscal years, sales to three customers in 1997 accounted for 43% of
revenues, sales to two customers in 1996 accounted for 30%, and sales to two
customers in 1995 accounted for 52%. Export sales were 5%, 15% and 21% of total
revenues, for the years ended September 30, 1997, 1996 and 1995, respectively.
The Company's strategy is to continue to market TENPRINTER systems
to law enforcement agencies, but also to expand the Company's product and
services offerings as well as its served markets. The law enforcement market for
live-scan biometric products is well established. The Company believes, however,
that there is increasing interest from other governmental and commercial markets
in using biometric identification technologies and products to improve security
and to assure proper access. The Company intends to aggressively pursue these
emerging opportunities, as well as opportunities in the Systems integration
business.
The Company was organized in 1985 as a Minnesota corporation under
the name C.F.A. Technologies, Inc., was reincorporated in Delaware in 1986 and
changed its name to Digital Biometrics, Inc. in 1990. The Company's offices and
facilities are located at 5600 Rowland Road, Minnetonka, Minnesota 55343, and
its telephone number is (612) 932-0888.
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TENPRINTER(R), SQUID(R) and the Company's mechanical hand logo have been
registered as trademarks with the U.S. Patent and Trademark Office. The Company
has applied for registration of the TRAK-21(TM) trademark. In addition,
FC-5(TM), FC-6(TM), FC-7(TM), FC-11(TM), FC-21(TM) and FC-22(TM) are trademarks
of the Company.
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY IS HIGHLY
SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH AN INVESTMENT IN THE SHARES OF
COMMON STOCK OFFERED HEREBY.
INFORMATION CONTAINED IN THIS PROSPECTUS MAY CONTAIN
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE USE OF THE
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE," OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR
COMPARABLE TERMINOLOGY. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED. POTENTIAL PURCHASERS OF THE COMPANY'S COMMON STOCK ARE CAUTIONED NOT
TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS WHICH SPEAK ONLY AS
OF THE DATE HEREOF.
CONTINUING LOSSES AND GENERAL BUSINESS RISKS
The Company has incurred net operating losses in each quarter since
inception. As of September 30, 1997, the Company had an accumulated deficit of
$35.3 million. The Company incurred a net loss of $6.3 million for the fiscal
year ended September 30, 1997, a net loss of $2.9 million for the six months
ended March 31, 1998, and anticipates that it will continue to incur net losses
on an annual basis, at least through fiscal 1998. Future operating results will
depend on many factors, including, among others, demand for and acceptance of
the Company's products and services, including ongoing acceptance of maintenance
and other services purchased by existing customers, the ability of the Company
to control costs, the ability of the Company to develop, market and deploy new
products and services and to build profitable revenue streams around those new
offerings, the ability of the Company to manage the concentration of accounts
receivable and other credit risks in large customers, the ability of the Company
to create and maintain satisfactory distribution and operations relationships
with AFIS vendors, the Company's success in attracting and retaining key
personnel, the availability of funding where customer procurements are dependent
on state or federal government grants and general tax funding, the timely and
cost-effective availability of product components, and the ability of the
Company to successfully integrate technologies and businesses it may acquire in
the future. In addition, markets for the Company's products and services are
characterized by significant and increasing competition, and the Company's
financial results may be adversely affected by the actions of existing and
future competitors, including the development of new technologies, the
introduction of new products, and price reductions by such competitors to gain
or retain market share. There can be no assurance that the Company's revenues
will grow in future periods or, if they do grow, that the Company will ever
become profitable or generate positive cash flow.
WORKING CAPITAL AND LIQUIDITY
Due primarily to continuing operating losses, the Company has not
achieved positive cash flow. The Company has been and continues to be reliant on
outside capital to sustain its operations. Although the Company believes that
cash and cash equivalents, accounts receivable and working capital provided from
operations, together with available financing sources, are sufficient to meet
current and foreseeable operating requirements, including the investment
required to capitalize on new business opportunities, such belief is subject to
a number of contingencies beyond the Company's control. Risks related to the
Company's ability to maintain adequate working capital and liquidity include,
among others, the continued availability of bank credit after the expiration of
the Company's current accounts receivable line of credit in May 1998, renewal of
which is expected, but cannot be assured, the availability of future tranches of
capital under the terms of the Company's 8% Convertible Subordinated Debenture
Purchase Agreement entered into in December 1997, and the Company's ability to
satisfy contract requirements to insure payment by customers of accounts
receivable at such times and in such amounts as to enable the Company to meet
its payment obligations. The Company has previously experienced problems from
time to time in satisfying customer contract requirements and other negotiated
commitments, particularly with respect to contracts which involve the delivery
of new products or systems. These problems have resulted in substantial
<PAGE>
increased costs associated with the installation and service of such systems.
There can be no assurance that additional financing will be available if
required, or that if additional financing is available, that it will be on terms
that are acceptable or favorable to the Company.
LOCAL GOVERNMENTAL CREDIT CONSIDERATIONS
The Company extends substantial credit to state and local
governments in connection with sales of products to law enforcement agencies.
Approximately 89% and 70% of customer accounts receivable at September 30, 1997
and 1996, respectively, were from government agencies, of which 39% and 40%,
respectively, were from a single customer. Sales to three customers in fiscal
1997 accounted for 43% of revenues; sales to two customers in fiscal 1996
accounted for 30% of revenues; and sales to two customers in fiscal 1995
accounted for 52% of revenues. Sales to sizeable customers requiring large and
sophisticated networks of TENPRINTER systems and peripheral equipment often
include technical requirements which may not be fully known at the time of
order. In addition, contracts may specify performance criteria which must be
satisfied before the customer accepts products or services. Collection of
accounts receivable may be dependent on completion of customer requirements,
which may be unpredictable and not fully understood at the time of acceptance of
the order by the Company, and may involve investment of additional Company
resources. These investments of additional resources are accrued when amounts
can be estimated but may be uncompensated and negatively impact profit margins
and the Company's liquidity.
LAW ENFORCEMENT MARKET CHARACTERISTICS RESULTING IN IRREGULAR REVENUE CYCLES
The Company's performance in any one reporting period is not
necessarily indicative of sales trends or future performance. Law enforcement
agencies are subject to political and budgetary constraints and the nature of
the law enforcement market and government procurement processes are expected to
continue to result in irregular and unpredictable revenue cycles for the
Company. In many instances, customer procurements are dependent on the continued
availability of state or federal government grants and general tax funding. The
Company's ability to become profitable will depend on its ability to continually
find new customers for its products, to maintain its existing customer base in
an increasingly competitive market, and to enter new markets with new products
and services.
PUBLIC CONTRACT CONSIDERATIONS
Currently, the Company's live-scan products are marketed primarily
to law enforcement agencies. The Company markets directly or on an OEM basis to
customers who supply products to law enforcement agencies. Sales to law
enforcement agencies are dependent on the availability of funding for equipment
purchases, the timing of agency budget and purchasing cycles and political
constraints. As public agencies, prospective purchasers are also subject to
public contract requirements which vary from jurisdiction to jurisdiction.
Future sales to law enforcement agencies will depend on the Company's ability to
meet public contract requirements, certain of which may be onerous or even
impossible for the Company to satisfy. In addition, public contracts frequently
are awarded only after formal competitive bidding processes, which have been and
may continue to be protracted. There can be no assurance that the Company will
be awarded any of the contracts for which its products are bid or, if awarded,
that substantial delays or cancellations of purchases will not result from
protests initiated by losing bidders. Public contracts may contain provisions
that permit cancellation in the event that funds are unavailable to the public
agency.
GOVERNMENT STANDARDS AND REQUIREMENTS
Certain of the Company's products are required to meet standards
such as image resolution and image quality as determined by either state and
federal government agencies or other standard setting authorities. These
standards have been subject to change and the Company cannot predict standards
that may be imposed on its products in the future. Failure to meet current or
future standards may adversely affect the business operations of the Company as
sales to government agencies are dependent on compliance with government
requirements.
<PAGE>
NEED TO UPGRADE PRODUCTS AND DEVELOP NEW TECHNOLOGIES
The ability of the Company to compete successfully in the biometrics
market will depend, in part, upon its ability to continually advance its
technology and to develop and market new products and services. Continued
participation by the Company in the law enforcement market for live-scan systems
requires the investment of Company resources in continuous upgrading of the
Company's products and technology sufficient for the Company to compete and meet
regulatory and statutory standards. There can be no assurance that such
resources will be available to the Company or that the pace of product and
technology development established by management will be adequate to meet the
competitive requirements of the marketplace.
GAMING MARKET ENTRY RISKS
On March 16, 1998, the Company signed a definitive agreement with
Grand Casinos, Inc. forming a new joint venture company to further develop, test
and market the TRAK-21 automated player tracking system. Deployment of a system
based on TRAK-21 technology in a Grand Casino property is anticipated in fiscal
1998. The Company's initial membership interest in the joint venture is 51%. The
joint venture is susceptible to the normal business risks customary to a
start-up operation. In particular, although prototype models of TRAK-21 have
been successfully demonstrated, there can be no assurance that this technology
will operate as required in live casino environments or that products based on
TRAK-21 technology will be accepted by customers. In addition, it has not been
determined whether or not the TRAK-21 system will be able to compete, on the
basis of price and performance, with player tracking systems of competitors
whose systems have been marketed for longer periods of time. There can be no
assurance, therefore, that the joint venture will be profitable to the Company.
SYSTEMS INTEGRATION AND NEW PRODUCT OPPORTUNITIES
The Company has recently established a systems integration division
designated as its Integrated Information Solutions Division ("IIS"). This is a
startup operation with the normal risks attendant to the establishment of a new
business. The ability of this new enterprise to ultimately generate revenues and
profits is as yet undetermined. The Company believes it must invest significant
resources to attract key employees, build a technical infrastructure and market
the capabilities of the division to prospective customers prior to attracting
any significant base of customers. It cannot be known whether sufficient profits
will ultimately be generated to provide a return on this investment. While the
Company believes that it has identified areas of market opportunity not well
served by current participants, competition can be expected to increase and such
potential competitors may have greater financial, technical, marketing and other
resources than the Company.
There can be no assurance that the Company will be able to attract
and retain systems integration personnel necessary for the success of IIS, which
depends significantly upon the efforts and performance of its personnel.
YEAR 2000 IMPACT ON COMPUTER SYSTEMS
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, in approximately two years, computer
systems and software used by many companies may need to be upgraded to comply
with such "Year 2000" requirements.
In June 1996, the Company began converting its computer systems
enabling proper processing of transactions in the Year 2000 and beyond. The
operating system vendor has made software upgrades available to make its
software compatible with Year 2000. The Company will also test its application
software to ensure compatibility with Year 2000. The Company presently believes
that, with modifications to existing software and conversions to new software,
Year 2000 compatibility will not pose significant operational problems for the
Company's computer systems as so modified and converted, although there can be
no assurance that unforeseen difficulties or costs will not arise.
<PAGE>
LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY
The Company is dependent on proprietary technology. The Company
currently relies upon a combination of patents, copyrights, trademarks and trade
secrets to establish and protect its proprietary rights in its products. The
Company maintains as proprietary the portions of the technology incorporated in
its products. A number of United States patents have been issued to the Company
and additional United States patent applications are pending which cover various
aspects of the TENPRINTER system and SQUID system technologies. Although
additional features of the Company's products may be patentable, the Company has
chosen to preserve these features as trade secrets rather than applying for
patent protection. There can be no assurance that the steps taken by the Company
to protect its proprietary rights will be adequate to prevent misappropriation
of its technology or that the Company's competitors will not independently
develop technologies that are substantially equivalent or superior to the
Company's technology. In addition, the laws of some foreign countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States. No assurance can be given that any patents currently held or
issued to the Company in the future will not be challenged, invalidated or
circumvented or that the rights granted thereunder will provide competitive
advantages. Further, patents may be issued in the future to other companies
covering features incorporated into the TENPRINTER system or other products of
the Company.
The Company has incurred substantial costs in seeking enforcement of
its patents and could incur substantial costs in defending itself against patent
infringement claims by others. The Company is not aware of any patents held by
others that would prohibit the use of technology current used by the Company.
Any infringement claims, with or without merit, could be time-consuming, result
in costly litigation, cause product shipment delays or require the Company to
enter into royalty or licensing agreements. Such royalty or licensing
requirements, if required, may not be available on terms acceptable to the
Company or at all, which could have a material adverse effect upon the Company's
business, operating results and financial condition.
The Company has not been successful in enforcing its patent rights
against Identix, Inc. ("Identix"), a competitor, and is appealing an adverse
ruling in pending litigation.
DEPENDENCE ON SUPPLIERS
Certain of the components included in the Company's products are
obtained from a single supplier. The loss of supply from such supplier or a
significant increase in price from such supplier could have a material adverse
effect on the Company. In addition, the loss of a limited source supplier may
result in the Company having to incur additional development costs to establish
alternative sources.
PRODUCT WARRANTY
During the third quarter of fiscal 1997, the Company added $524,000
to its reserves for product warranty obligations. The Company believes that this
addition to its reserves will be adequate to address customer warranty
obligations arising from past product sales. There is, however, a risk that the
Company may, for unforeseen reasons, be required to repair or replace products
currently installed in customer locations or reimburse customers for products
that fail or are determined not to be in compliance with contractual
requirements or agency rules or regulations, and that actual costs may exceed
the Company's reserves.
RELIANCE ON KEY PERSONNEL
The success of the Company depends significantly upon the efforts of
its key personnel and may, in the future, depend on the ability to attract
additional key personnel. The loss of the services of key employees may have a
materially adverse effect on the Company's business, operating results and
financial condition.
<PAGE>
COMPETITION IN LIVE-SCAN MARKET
The market for biometric identification devices in general, and the
market for live-scan systems in particular, is characterized by significant and
increasing competition. The most likely sources of additional competition are
(i) entities currently outside the live-scan systems market but otherwise
involved in biometric identification systems or (ii) one or more of the
companies presently manufacturing AFIS systems, which may already be developing,
or which may undertake to develop, a competitive live-scan product. NEC
Technologies, in particular, currently markets a live-scan product, the LS-21,
which includes features and components manufactured by Identix. These
competitors may have financial, technical, marketing and other resources
significantly greater than those of the Company. There can be no assurance that
the Company's products will be able to compete successfully with the products of
its competitors. The Company's business, operating results and financial
condition may be adversely affected by the actions of existing and future
competitors, including the development of new technologies, the introduction of
new products, and price reductions by such competitors to gain or retain market
share.
MARKETING AND OEM RELATIONSHIPS
The Company has established numerous marketing and/or strategic
relationships with other companies and has sold a significant amount of its
product through OEM relationships. In addition, the Company is pursuing
significant sales opportunities which, in large part, are dependent upon the
efforts of these strategic partners. The loss of one or more of these
relationships may have an adverse material effect on the business operations of
the Company.
LEGAL PROCEEDINGS
On June 1, 1995, the Company filed a complaint for patent
infringement against Identix, of Sunnyvale, California, in the United States
District Court for the Northern District of California. The complaint alleged
that Identix willfully and deliberately infringed a Company patent and sought,
among other things, an injunction prohibiting further infringement as well as
unspecified monetary damages. Identix responded to the complaint alleging, among
other purported defenses, non-infringement and patent invalidity. On August 27,
1996, the judge assigned to the case granted a partial summary judgment in favor
of Identix, dismissing the Company's claims of patent infringement with respect
to Identix's Touchprint 600 product line. A predecessor product, the Touchprint
900, received a similar ruling in favor of Identix on December 20, 1996. In
January 1997, the Company filed an appeal of the court's decision of
non-infringement. These appeals are decided by the Federal Circuit which is a
Court of Appeals in Washington D.C. On October 8, 1997, the appeal was argued
before the Court. As of the date of this Prospectus, no appellate decision has
been issued. Further, a prediction of the final outcome of the appeal is not
possible. In the event the Company does not prevail in this litigation, its
competitive position could be adversely affected.
NO CASH DIVIDENDS
The Company has paid no cash dividends on its Common Stock and does
not intend to pay cash dividends in the foreseeable future. The Company
presently intends to retain future earnings, if any, for use in its business.
IMPACT OF SALE OF SHARES; DILUTION DUE TO CONVERSION OF CONVERTIBLE DEBENTURES,
AND EXERCISE OF OPTIONS AND WARRANTS
As of December 31, 1997, the Company had 12,417,001 shares of Common
Stock outstanding, and had warrants and options outstanding to purchase an
additional 1,823,393 shares of Common Stock, a majority of which are exercisable
at prices ranging from $1.5625 to $3.125 per share. In addition, on December 1,
1997 and March 11, 1998, the Company collectively sold an aggregate of
$1,000,000 principal amount of 8% Convertible Subordinated Debentures due
December 1, 2000 (the "Debentures"). In March 1998, $500,000 of the Debentures,
plus $10,784 of accrued interest thereon were converted into an aggregate of
527,225 shares of Common Stock at
<PAGE>
an average conversion price of $.097 per share. The Company may sell up to an
additional $1.5 million of the Debentures. The conversion of such debt would be
related to the fair market value of the Company's Common Stock at the time of
issuance or conversion of such debt. The sale of the Common Stock offered hereby
and the sale of additional Common Stock which may become eligible for sale in
the public market from time to time upon conversion of debt and the exercise of
warrants and options may be dilutive to existing holders of Common Stock and
could have the effect of depressing the market price of the Company's Common
Stock.
VOLATILITY OF MARKET PRICE OF COMMON STOCK
From September 30, 1995 to May 29, 1998, the market price of the
Company's Common Stock has varied significantly from $8.125 to $1.156 per share.
Fluctuations in the market price may result from many factors, including but not
limited to irregularities in quarter to quarter operating results, general
market conditions, significant events and industry conditions, including
activities of the various government agencies and activities of the Company's
competitors. Some or all of the conditions which affect the market price are
beyond the control of the Company and may result in adverse changes to the price
of the Common Stock.
EFFECT OF CERTAIN ANTI-TAKEOVER LAWS AND STOCKHOLDERS' RIGHTS PLAN
Certain provisions of the Delaware General Corporation Law and the
Rights Agreement between the Company and Norwest Bank Minnesota, National
Association, adopted by the Company effective May 2, 1996 (the "Rights Plan"),
may have the effect of discouraging, delaying or preventing a change in control
of the Company or unsolicited acquisition proposals. Section 203 of the Delaware
General Corporation Law restricts business combinations with interested
stockholders without board approval. Pursuant to the Rights Plan, the Company
declared a dividend of one common share purchase right (the "Right") for each
outstanding share of Common Stock. Each Right will entitle the holder thereof to
purchase from the Company after the Distribution Date (as described below), a
number of shares of Common Stock to be determined under the Rights Plan at an
initial purchase price of $35, subject to adjustment. One additional Right is
deemed delivered with each share of Common Stock subsequently issued by the
Company. The Rights become exercisable on the first day after the earlier of (i)
ten business days after the public announcement of the acquisition by a person
or group of 15% or more of the outstanding Common Stock or (ii) ten business
days after the commencement, or the first public announcement, of an intention
to acquire through tender or exchange offer 15% or more of the outstanding
Common Stock (the "Distribution Date"). In the event that the Company does not
have sufficient authorized but unissued shares of Common Stock to permit the
delivery of the required number of shares upon the exercise in full of the
Rights, then each Right shall entitle the holder thereof to purchase the number
of shares of Common Stock equal to a fraction determined under the Rights Plan.
The Rights Plan may discourage certain types of transactions involving an actual
or potential change in control of the Company which could be beneficial to the
Company or its stockholders.
USE OF PROCEEDS
The Shares offered hereby will be sold by the Selling Stockholders.
The Company will not receive any of the proceeds from the sale of the Shares by
the Selling Stockholders. See "Principal and Selling Stockholders."
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth, as of April 30, 1998, the number of
shares of Common Stock beneficially owned by (i) each person known to be the
beneficial owner of five percent or more of the Common Stock, (ii) each
director, (iii) each executive officer named in the Summary Compensation Table
above, (iv) all officers and directors as a group and (v) the Selling
Stockholders, and as adjusted to reflect the sale of the shares of Common Stock
offered hereby. Any shares reflected in the following table which are subject to
an option or a warrant are deemed to be outstanding for the purpose of computing
the percentage of Common Stock owned by the option or warrant holder but are not
deemed to be outstanding for the purpose of computing the percentage of Common
Stock owned by any other person. Except as otherwise indicated, each beneficial
owner has sole voting and investment power over the outstanding shares of which
he has beneficial ownership.
Name of Beneficial Owner or Group Shares Beneficially Owned(1)
- ------------------------------------- ---------------------------------
Number Percent
------------- ------------
Perkins Capital Management Inc....... 1,297,600 10.0%
730 East Lake Street
Wayzata, Minnesota 55391
Gordon L. Bramah..................... 895,935 6.9%
Littlemoore House
Eckington, Sheffield S31 9EF
England
Bramah Limited....................... 895,435 6.9%
Littlemoore House
Eckington, Sheffield S31 9EF
England
John E. Haugo........................ 14,076 *
Stephen M. Slavin(2)................. 114,577 *
George Latimer(3).................... 39,626 *
C. McKenzie Lewis III(4)............. 71,655 *
James C. Granger(5).................. 98,320 *
John J. Metil(6)..................... 36,613 *
Barry A. Fisher(7)................... 26,521 *
Roman A. Jamrogiewicz(8)............. 35,037 *
Michel R. Halbouty(9)................ 25,000 *
All officers and directors as a group (9 persons) 461,426 3.5%
- -------------------
* Indicates an amount less than one percent.
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth
in the regulations of the Commission and, accordingly, may include
securities owned by or for, among others, the spouse, children or
certain other relatives such person as well as other securities as
to which the person has or shares voting or investment power or has
the right to acquire within 60 days. The same shares may be
beneficially owned by more than one person.
(2) Includes 77,077 shares of Common Stock owned by Mr. Slavin and
37,500 shares of Common Stock that may be acquired subject to
options.
(3) Includes 32,126 shares of Common Stock beneficially owned by Mr.
Latimer and an option for 7,500 shares of Common Stock.
<PAGE>
(4) Includes 23,655 shares of Common Stock beneficially owned by Mr.
Lewis and an option and a warrant for the purchase of an aggregate
of 48,000 shares of Common Stock.
(5) Includes 14,987 shares of Common Stock owned by Mr. Granger and
options for the purchase of an aggregate of 83,333 shares of Common
Stock.
(6) Includes 3,280 shares of Common Stock owned by Mr. Metil and an
option for the purchase of 33,333 shares of Common Stock.
(7) Includes 1,521 shares of Common Stock owned by Mr. Fisher and an
option for he purchase of 25,000 shares of Common Stock.
(8) Includes 1,704 shares of Common Stock owned by Mr. Jamrogiewicz and
an option for the purchase of 33,333 shares of Common Stock.
(9) Includes an option for the purchase of 25,000 shares of Common Stock
by Mr. Halbouty.
The following table sets forth, as of the date hereof, the name of
each Selling Stockholder, certain beneficial ownership information with respect
to the Selling Stockholders, and the number of Shares that may be sold from time
to time by each pursuant to this Prospectus. There can be no assurance that all
of the Shares offered hereby will be sold. Because a Selling Stockholder may
offer by this Prospectus all or some part of the Common Stock which he or she
holds, no estimate can be given as of the date hereof as to the amount of Common
Stock actually to be offered for sale by a Selling Stockholder or as to the
amount of Common Stock that will be held by a Selling Stockholder upon the
termination of such offering. See "Plan of Distribution." Shares shown below as
beneficially owned are presented based upon information received from the
Selling Stockholders, or from representatives of the Selling Stockholders, in
connection with the preparation of the Registration Statement on Form S-3, of
which this Prospectus is a part. Shares not outstanding but deemed beneficially
owned by virtue of the right of a person or member of a group to acquire them
within 60 days are treated as outstanding only when determining the amount and
percentage owned by such person.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
SHARES SHARES SHARES
BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED SHARES OWNED UPON OWNED UPON
PRIOR TO OFFERED COMPLETION OF COMPLETION OF
NAME OF SELLING STOCKHOLDER OFFERING HEREBY THE OFFERING THE OFFERING
- --------------------------- -------- ------ ------------ ------------
<S> <C> <C> <C> <C>
KA Investments LDC 397,647(1) 3,174,186(2) -0- -0-
David B. Johnson 46,875(3) 46,875(3) -0- -0-
Paul R. Kuehn 46,875(3) 46,875(3) -0- -0-
Eldon C. Miller 15,625(3) 15,625(3) -0- -0-
Stanley Rahm 15,625(3) 15,625(3) -0- -0-
</TABLE>
- ------------------
(1) Includes (i) the number of shares of Common Stock issuable upon
conversion of $500,000 of the Debentures purchased in the Tranche 2
Closing, assuming conversion at the conversion price in effect on
March 11, 1998 (which price will fluctuate from time to time based
on changes in the market price of the Common Stock and provisions in
the Debentures, for determining the conversion price) and (ii) the
number
<PAGE>
of shares issuable upon exercise of warrants issued to KA in
connection with the Tranche 1 and Tranche 2 Closings.
(2) Assumes that KA purchases all of the Debentures for an aggregate of
$2,000,000 and converts interest thereon into Common Stock. In order
to provide for (i) fluctuations in the market price of the Common
Stock, (ii) provisions in the Debentures for determining the
conversion price of the Debentures and (iii) shares of Common Stock
which may be issued in payment of interest on the Debentures, the
aggregate number of shares issuable on conversion of the Debentures
exceeds the aggregate number of shares of Common Stock issuable upon
conversion of the Debentures, and interest thereon at conversion
price in effect on the date hereof. The number of shares in this
column represents the sum of (a) 200% of the aggregate number of
shares of Common Stock issuable upon conversion of $2,000,000 of the
Debentures and interest thereon, assuming the Debentures were issued
on March 11, 1998 and held to maturity at the conversion price on
that date, and (b) 75,000 shares issuable upon exercise of warrants
issued in connection with the Debentures.
(3) Assumes the full exercise of the MJK Warrant, which has been
assigned to the Selling Shareholder to the extent of Shares in this
column to be sold. MJK acted as the Company's placement agent in
connection with the private placement of the Debentures with KA in
December 1997. In connection with the private placement, the Company
paid commissions to and reimbursed MJK for certain expenses, and
issued the MJK Warrant to MJK. Except for the foregoing, there has
been no material relationship between the Selling Stockholders and
the Company or its affiliates within the past three years.
The Company has agreed to bear all expenses (other than selling
commissions and fees) in connection with the registration and sale of the Shares
being offered by the Selling Stockholders in over-the-counter market
transactions or in negotiated transactions. See "Plan of Distribution."
PLAN OF DISTRIBUTION
The Selling Stockholders may, from time to time, sell all or a
portion of the Shares on the Nasdaq National Market, in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such market prices or at
negotiated prices. The Shares may be sold by the selling Stockholders by one or
more of the following methods, without limitation: (a) block trades in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus, (c) an exchange
distribution in accordance with the rules of such exchange, (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers,
(e) privately negotiated transactions, (f) short sales and (g) a combination of
any such methods of sale. In effecting sales, brokers and dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to participate.
Brokers or dealers may receive commissions or discounts from the Selling
Stockholders (or, if any such broker-dealer acts as agent for the purchaser of
such shares, from such purchaser) in amounts to be negotiated which are not
expected to exceed those customary in the types of transactions involved.
Broker-dealers may agree with the Selling Stockholders to sell a specified
number of such Shares at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for a Selling Stockholders, to
purchase as principal any unsold Shares at the price required to fulfill the
broker-dealer commitment to the Selling Stockholders. Broker-dealers who acquire
Shares as principal may thereafter resell such Shares from time to time in
transactions (which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above) in
the over-the-counter market or otherwise at prices and on terms then prevailing
at the time of sale, at prices then related to the then-current market price or
in negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such Shares commissions as described above. The
Selling Stockholders may also sell the Shares in accordance with Rule 144 under
the Securities Act, rather than pursuant to this Prospectus.
<PAGE>
To the extent required, the amount of the Shares to be sold,
purchase prices, public offering prices, the names of any agents, dealers or
underwriters, and any applicable commissions or discounts with respect to a
particular offer will be set forth by the Company in a Prospectus Supplement
accompanying this Prospectus or, if appropriate, a post-effective amendment to
the Registration Statement. The Selling Stockholders and agents who execute
orders on their behalf may be deemed to be underwriters as that term is defined
in Section 2(11) of the Securities Act and a portion of any proceeds of sales
and discounts, commissions or other seller's compensation may be deemed to be
underwriting compensation for purposes of the Securities Act.
Offers on sales of the Shares have not been registered or qualified
under the laws of any country, other than the United States. In order to comply
with the securities laws of certain states, if applicable, the Shares will be
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available.
From time to time the Selling Stockholders may engage in short
sales, short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and deliver the
Shares in connection therewith or in settlement of securities loans. From time
to time the Selling Stockholders may pledge their Shares pursuant to the margin
provisions of its customer agreements with its brokers. Upon a default by the
Selling Stockholders, the broker may offer and sell the pledged shares from time
to time.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Shares may not simultaneously engage in
market-making activities with respect to such securities for a period of two to
nine business days prior to the commencement of such distribution. In addition
to and without limiting the foregoing, each Selling Stockholder and any other
person participating in a distribution will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-2, 10b-6 and 10b-7, which provisions may limit the timing
of purchases and sales of any of the Shares by the Selling Stockholders or any
such other person. All of the foregoing may affect the marketability of the
Shares and the brokers' and dealers' ability to engage in market-making
activities with respect to such securities.
The Company has agreed to bear all expenses of registration and
distribution of the Shares being registered, which has been estimated as
$54,500. Any commissions, discounts, concessions or other fees, if any, payable
to broker-dealers in connection with any sale of the Shares will be borne by the
Selling Stockholder selling such Shares.
In accordance with the terms of the Warrants and the Registration
Rights Agreement entered into with KA, the Company has agreed to indemnify the
Selling Stockholders and their control persons with respect to certain
liabilities in connection with the sale of the Shares pursuant to this
Prospectus, including liabilities under the Securities Act and the Exchange Act.
In addition, the Selling Stockholders have agreed to indemnify the Company, its
directors, officers, agents and control persons against certain liabilities
incurred as a result of information provided by the Selling Stockholders for use
in this Prospectus. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
LEGAL MATTERS
The validity of the Shares will be passed upon by Briggs and Morgan,
Professional Association, Minneapolis, Minnesota, counsel to the Company.
<PAGE>
EXPERTS
The financial statements and financial statement schedule of Digital
Biometrics, Inc. as of September 30, 1997 and 1996 and for each of the years in
the three-year period ended September 30, 1997 have been incorporated by
reference herein and in the registration statement in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER DESCRIBED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR SINCE THE DATE OF ANY DOCUMENTS INCORPORATED
HEREIN BY REFERENCE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
---------------------
TABLE OF CONTENTS
---------------------
Page
Available Information........................................................ 3
Incorporation of Certain Documents
by Reference............................................................... 3
Prospectus Summary........................................................... 5
Risk Factors................................................................. 6
Use of Proceeds..............................................................11
Principal and Selling Stockholders...........................................12
Plan of Distribution.........................................................14
Legal Matters................................................................15
Experts.......................................................................6
================================================================================
3,771,429 SHARES
DIGITAL BIOMETRICS, INC.
COMMON STOCK
--------------------
PROSPECTUS
--------------------
_________________, 1998
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Company in connection with the sale and distribution of the Shares being
registered. All amounts shown are estimates, except the registration fee.
<TABLE>
<S> <C>
SEC registration fee....................................................... $ 1,769
Legal fees and expenses.................................................... 15,000*
Accounting fees and expenses............................................... 15,000*
Blue sky and related fees and expenses..................................... 231
Miscellaneous (including Transfer Agent, printing, NASDAQ listing fees) 22,500
---------
Total................................................................. $ 54,500
=========
*Estimated
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that directors
of the Company shall not be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director. The Company's
Bylaws provide that the Company shall indemnify to the fullest extent permitted
by law any person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative (a "Legal
Action"), whether such Legal Action be by or in the right of the corporation or
otherwise, by reason of the fact that such person is or was a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
any other enterprise. In addition, the Company's By-laws provide for
indemnification of any person made or threatened to be made a party to any Legal
Action by reason of the fact that such person is or was a director, officer,
employee or agent of the Company and is or was serving as a fiduciary of, or
otherwise rendering services to, any employee benefit plan of or relating to the
Company.
Section 145 of the Delaware General Corporation Law ("Delaware Law"
or "GCL") generally provides that a corporation is in certain circumstances
permitted, and in other circumstances may be required, to indemnify its
directors, officers and controlling persons against certain expenses (including
attorneys' fees) and other amounts paid in connection with certain threatened,
pending or completed civil, criminal, administrative or investigative actions,
suits or proceedings (including certain civil actions and suits that may be
instituted by or in the right of the Company) in which such persons were or are
parties, or are threatened to be made parties, by reason of the fact that such
persons were or are directors or officers of the Company. Section 145 also
permits the Company to purchase and maintain insurance on behalf of its
directors and officers against any liability which may be asserted against, or
incurred by, such persons in their capacities as directors or officers of the
Company or which may arise out of their status as directors or officers of the
Company, whether or not the Company would have the power to indemnify such
persons against such liability under the provisions of such Section. To date,
the Company has purchased such insurance.
Section 102 of the Delaware Law allows a corporation, in its
Certificate of Incorporation, to eliminate the personal liability of its
directors to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, other than liability for (i) any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) any transaction from which the director derived an
improper personal benefit and (iv) unlawful payment of dividends or unlawful
stock purchases or redemptions.
The Company has entered into an indemnification agreement (the
"Indemnification Agreement") with each of its directors pursuant to which the
Company has agreed to indemnify and hold harmless such individuals to the full
extent permitted by law against all costs, charges and expenses (including
attorneys fees), judgments, fines and amounts in paid in settlement actually and
reasonably incurred by them in the following situations.
<PAGE>
(1) The Company shall indemnify a director of the
Company (the "Indemnitee") to the fullest extent provided by
applicable law and to such greater extent as applicable law may
thereafter from time to time permit when he was or is a party or is
threatened to be made party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was or had agreed to
become a director of the Company, or is or was serving or had agreed
to serve at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in
connection with the defense or settlement thereof or any appeal
therefrom, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests
of the Company, and, with respect to any criminal action or
proceedings, had no reasonable cause to believe his conduct was
unlawful.
(2) The Company shall indemnify Indemnitee to the
fullest extent provided by applicable law and to such greater extent
as applicable law may thereafter from time to time permit when he
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by or in
the right of the Company to procure a judgment in its favor by
reason of the fact that he is or was or had agreed to become a
director of the Company, or is or was serving or had agreed to serve
at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against all costs, charges and expenses (including
attorneys' fees) judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee in connection with
the defense or settlement thereof or any appeal therefrom if he
acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the Company, and except
that no indemnification shall be made in respect of any claim, issue
or matter as to which Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the Court
of Chancery or the court in which such action, suit or proceeding
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such amounts which the Court of Chancery or such other court
shall deem proper.
(3) Pursuant to Section 145(f) of Delaware Law, without
limiting any right which Indemnitee may have pursuant to Section 2
of the Indemnification Agreement, the Certificate, the Bylaws, the
GCL, any policy of insurance or otherwise, but subject to the
limitations on the maximum permissible indemnity which may exist
under applicable law at the time of any request for indemnity
hereunder determined as contemplated by Section 4(a) of the
Indemnification Agreement, the Company shall indemnify Indemnitee
against any amount which he is or becomes legally obligated to pay
relating to or arising out of any claim made against him because of
any act, failure to act or neglect or breach of duty, including any
actual or alleged error, misstatement or misleading statement, which
he commits, suffers, permits or acquiesces in while acting in his
capacity as a director of the Company, or, at the request of the
Company, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
The payments which the Company is obligated to make pursuant to
Section 3 of the Indemnification Agreement shall include, without
limitation, damages, judgments, settlements and charges, costs,
expenses, expenses of investigation and expenses of defense of legal
actions, suits, proceedings or claims and appeals therefrom, and
expenses of appeal, attachment or similar bonds; provided, however
that the Company shall not be obligated under Section 3(a) of the
Indemnification Agreement to make any payment in connection with any
claim against Indemnitee: (i) to the extent of any fine or similar
governmental imposition which the Company is prohibited by
applicable law from paying which results from a final, nonappealable
order; or (ii) to the extent based upon or attributable to
Indemnitee gaining in fact a personal profit to which he was not
legally entitled, including without limitation profits made from the
purchase and sale by Indemnitee of equity securities of the Company
which are recoverable by Company pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended, and profits arising
from transactions in publicly traded securities of the Company which
were effected by Indemnitee in violation of Section 10(b) of the
Securities Exchange Act of 1934, as amended, including Rule 10b-5
promulgated thereunder; or (iii) subject to the provisions of
Section 7(c) of the Indemnification Agreement, to the extent based
upon or
<PAGE>
attributable to any actions, suits or proceedings initiated or
brought voluntarily by Indemnitee and not by way of defense, but
indemnification may be provided by the Company if the Board finds it
to be appropriate.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS.
Exhibit
3.1 The Company's Certificate of Incorporation, as amended
(incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March
31, 1998, filed May 14, 1998, File No. 0-18856).
3.2 The Company's Bylaws, as amended (incorporated by
reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1997, filed on
December 24, 1997, File No. 0-18856).
4.1 Specimen Common Stock Certificate (incorporated by
reference to the Registrant's Registration Statement on
Form S-1, effective August 14, 1991, File No. 33-41080).
4.2 8% Convertible Subordinated Debenture Due December 1,
2000 dated December 1, 1997 between the Company and KA
Investments LDC (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997, filed on December 24,
1997, File No. 0-18856).
4.3 Rights Agreement dated May 2, 1996 between the Company
and Norwest Bank, Minnesota, National Association, as
Rights Agent (incorporated by reference to the
Registrant's Registration on Form 8-A filed on May 9,
1996, File No. 0-18856).
10.1 Convertible Subordinated Debenture Purchase Agreement
dated December 1, 1997 between Company and KA
Investments LDC (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997, filed on December 24,
1997, File No. 0-18856).
10.2 Warrant dated December 1, 1997 between the Company and
KA Investments LDC for the purchase of 15,000 shares of
the Company's Common Stock (incorporated by reference to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.3 Warrant dated December 1, 1997 between the Company and
Miller Johnson & Kuehn, Inc. for the purchase of 125,000
shares of the Company's Common Stock (incorporated by
reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1997, filed on
December 24, 1997, File No. 0-18856).
10.4 Warrant dated March 18, 1997 between the Company and C.
McKenzie Lewis for the purchase of 8,000 shares of the
Company's Common Stock (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997, filed on December 24,
1997, File No. 0-18856).
10.5 Warrant dated August 25, 1997 issued October 23, 1997
between the Company and Dennis Wendell for the purchase
of 125,000 shares of the Company's Common Stock
(incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September
30, 1997, filed on December 24, 1997, File No. 0-18856).
10.6 Warrant dated September 25, 1997 issued October 23, 1997
between the Company and Jeffrey Whalen for the purchase
of 50,000 shares of the Company's Common Stock
(incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September
30, 1997, filed on December 24, 1997, File No. 0-18856).
10.7 Warrant dated September 1997 issued December 13, 1997
between the Company and Joseph VanLoy for the purchase
of 50,000 shares of the Company's Common Stock
(incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September
30, 1997, filed on December 24, 1997, File No. 0-18856).
<PAGE>
10.8 Warrant dated January 27, 1997 between the Company and
Andcor Companies, Inc. for the purchase of 10,000 shares
of the Company's Common Stock (incorporated by reference
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.9 Warrant dated January 27, 1997 between the Company and
Andcor Companies, Inc. for the purchase of 10,000 shares
of the Company's Common Stock (incorporated by reference
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.10 Registration Rights Agreement dated December 1, 1997
between the Company and KA Investments LDC (incorporated
by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed
on December 24, 1997, File No. 0-18856).
10.11 Agreement and General Release dated October, 1997
between the Company and Glenn M. Fishbine (incorporated
by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed
on December 24, 1997, File No. 0-18856).
10.12 $3.5 million Receivables Financing Line of Credit
effective October 1, 1996, between the Company and
Norwest Business Credit (incorporated by reference to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.13 Lease for Company premises dated November 7, 1989
(incorporated by reference from the Company's
Registration Statement on Form S-18, effective December
6, 1990, File No. 33-36939C).
10.14 Amendment to Lease for Company Premises dated March 11,
1996 (incorporated by reference to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No.
0-18856).
10.15 1990 Stock Option Plan, as amended (incorporated by
reference to the Registrant's Registration on Form 10-Q
for the fiscal quarter ended March 31, 1997, filed on
May 15, 1997, File No. 0-18856).
10.16 1992 Restricted Stock Plan (incorporated by reference
from the Company's Registration Statement on Form S-1,
effective March 11, 1993, File No. 33-58650).
10.17 1998 Stock Option Plan (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1998, filed on May 14,
1998, File No. 0-18856).
10.18 Form of Director Indemnification Agreement entered into
between Company and outside directors (incorporated by
reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1997, filed on
December 24, 1997, File No. 0-18856).
11.1 Computation of Net Earnings (Loss) Per Common Share
(incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March
31, 1998, filed on May 14, 1998, File No. 0-18856).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney. *
- -------------------------------
* Previously Filed.
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the provisions summarized in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that (1) for purposes
of determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance on Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective and (2) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this amendment on Form S-3 and has duly caused
this Amendment No. 2 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of Minneapolis,
Minnetonka on the 2nd day of June, 1998.
DIGITAL BIOMETRICS, INC.
By /s/ James C. Granger
--------------------------------
James C. Granger
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
Signature Title Date
- --------- ----- ----
/s/ James C. Granger Chief Executive Officer, June 2, 1998
- ---------------------------- President and Director
James C. Granger (Principal Executive Officer)
/s/ John J. Metil Chief Operating Officer and June 2, 1998
- ---------------------------- Chief Financial Officer
John J. Metil (Principal Accounting Officer)
*
- ---------------------------- Director
Stephen M. Slavin
* Director
- ----------------------------
George Latimer
* Director
- ----------------------------
C. McKenzie Lewis III
* Director
- ----------------------------
John E. Haugo
* By: /s/ John J. Metil June 2, 1998
----------------------------
John J. Metil
Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS.
Exhibit
3.1 The Company's Certificate of Incorporation, as amended (incorporated
by reference to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998, filed on May 14, 1998, File
No. 0-18856).
3.2 The Company's Bylaws, as amended (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
4.1 Specimen Common Stock Certificate (incorporated by reference to the
Registrant's Registration Statement on Form S-1, effective August
14, 1991, File No. 33-41080).
4.2 8% Convertible Subordinated Debenture Due December 1, 2000 dated
December 1, 1997 between the Company and KA Investments LDC
(incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
4.3 Rights Agreement dated May 2, 1996 between the Company and Norwest
Bank, Minnesota, National Association, as Rights Agent (incorporated
by reference to the Registrant's Registration on Form 8-A filed on
May 9, 1996, File No. 0-18856).
10.1 Convertible Subordinated Debenture Purchase Agreement dated December
1, 1997 between Company and KA Investments LDC (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997, filed on December 24, 1997,
File No. 0-18856).
10.2 Warrant dated December 1, 1997 between the Company and KA
Investments LDC for the purchase of 15,000 shares of the Company's
Common Stock (incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September 30, 1997,
filed on December 24, 1997, File No. 0-18856).
10.3 Warrant dated December 1, 1997 between the Company and Miller
Johnson & Kuehn, Inc. for the purchase of 125,000 shares of the
Company's Common Stock (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.4 Warrant dated March 18, 1997 between the Company and C. McKenzie
Lewis for the purchase of 8,000 shares of the Company's Common Stock
(incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.5 Warrant dated August 25, 1997 issued October 23, 1997 between the
Company and Dennis Wendell for the purchase of 125,000 shares of the
Company's Common Stock (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.6 Warrant dated September 25, 1997 issued October 23, 1997 between the
Company and Jeffrey Whalen for the purchase of 50,000 shares of the
Company's Common Stock (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-8856).
10.7 Warrant dated September 1997 issued December 13, 1997 between the
Company and Joseph VanLoy for the purchase of 50,000 shares of the
Company's Common Stock (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.8 Warrant dated January 27, 1997 between the Company and Andcor
Companies, Inc. for the purchase of 10,000 shares of the Company's
Common Stock (incorporated by reference to the
<PAGE>
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.9 Warrant dated January 27, 1997 between the Company and Andcor
Companies, Inc. for the purchase of 10,000 shares of the Company's
Common Stock (incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September 30, 1997,
filed on December 24, 1997, File No. 0-18856).
10.10 Registration Rights Agreement dated December 1, 1997 between the
Company and KA Investments LDC (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.11 Agreement and General Release dated October, 1997 between the
Company and Glenn M. Fishbine (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
10.12 $3.5 million Receivables Financing Line of Credit effective October
1, 1996, between the Company and Norwest Business Credit
(incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.13 Lease for Company premises dated November 7, 1989 (incorporated by
reference from the Company's Registration Statement on Form S-18,
effective December 6, 1990, File No. 33-36939C).
10.14 Amendment to Lease for Company Premises dated March 11, 1996
(incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed on December
24, 1997, File No. 0-18856).
10.15 1990 Stock Option Plan, as amended (incorporated by reference to the
Registrant's Registration on Form 10-Q for the fiscal quarter ended
March 31, 1997 filed on May 15, 1997, File No. 0-18856).
10.16 1992 Restricted Stock Plan (incorporated by reference from the
Company's Registration Statement on Form S-1, effective March 11,
1993, File No. 33-58650).
10.17 1998 Stock Option Plan (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998, filed on May 14, 1998, File No. 0-18856).
10.18 Form of Director Indemnification Agreement entered into between
Company and outside directors (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed on December 24, 1997, File No. 0-18856).
11.1 Computation of Net Earnings (Loss) Per Common Share (incorporated by
reference to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1998, filed on May 14, 1998, File No.
0-18856).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney. *
- ----------------------------
* Previously Filed.
Exhibit 23.2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S CONSENT
The Board of Directors and Stockholders
Digital Biometrics, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-3 of Digital Biometrics, Inc., of our reports dated November 21, 1997, except
as to note 14(a) which is as of November 24, 1997, and note 14(b) which is as of
December 1, 1997, relating to the balance sheets of Digital Biometrics, Inc. as
of September 30, 1997 and 1996, and the related statements of operations,
stockholders' equity and cash flows for each of the years in the three-year
period ended September 30, 1997 and the related schedule, which reports appear
in the September 30, 1997 annual report on Form 10-K/A and to the reference to
our Firm under the heading "Experts" in the prospectus.
/s/KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 2, 1998
