Filed by Digital Biometrics, Inc. pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act
of 1934.
Subject Company: Digital Biometrics, Inc.
Registration No.: 333-51526
The following is a presentation script for remarks by John Metil, President of
Digital Biometrics, Inc., at an investor briefing held on December 15, 2000.
Other presenters at the briefing included Dr. Joseph Atick and Robert F.
Gallagher. Neither Dr. Atick nor Mr. Gallagher spoke from prepared scripts;
accordingly, their remarks were not included here. This filing also includes
descriptions of a slide presentation made at the same investor briefing.
Presentation script for John Metil
GOOD AFTERNOON.
I AM JOHN METIL, THE PRESIDENT OF DIGITAL BIOMETRICS. ON BEHALF OF DIGITAL
BIOMETRICS AND VISIONICS, I AM PLEASED TO WELCOME YOU TO THIS INVESTOR BRIEFING
ON THE PROPOSED MERGER BETWEEN OUR TWO COMPANIES.
BEFORE WE START OUR PRESENTATIONS, THERE ARE SOME LEGAL REMINDERS WE MUST
COMMUNICATE.
FIRST, PLEASE NOTE THAT THE PRESENTATION MATERIALS AND COMMENTS WHICH WE WILL
OFFER TODAY CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS
AND UNCERTAINTIES THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED ON THE BASIS OF SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS ARE MADE BASED ON MANAGEMENT'S BELIEFS, AS WELL AS ASSUMPTIONS MADE
BY, AND INFORMATION CURRENTLY AVAILABLE TO, MANAGEMENT PURSUANT TO THE
"SAFE-HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. FOR A MORE COMPLETE DESCRIPTION OF THESE AND OTHER RISK FACTORS WHICH MAY
AFFECT FUTURE PERFORMANCE, PLEASE SEE "RISK FACTORS" IN THE PRELIMINARY FORM S-4
AND UNDER ITEM 7 OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 2000.
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ALSO, OUR COMMUNICATIONS WITH YOU MUST BE GUIDED BY THE SEC'S M&A RULE 10-B-5
AND REG FD. AS YOU KNOW, WE HAVE RECENTLY FILED A PRELIMINARY REGISTRATION
STATEMENT ON FORM S-4, AND IN OUR DISCUSSION TODAY WE MUST FOCUS OUR COMMENTS ON
SUBJECTS THAT ARE DISCUSSED IN THE S-4 OR THAT ARE OTHERWISE PUBLIC INFORMATION.
NOW TO OUR PRESENTATIONS . . .
DIGITAL BIOMETRICS HAS HAD THE STRATEGIC GOAL OF EXPANDING THE PRODUCTS WE OFFER
AND THE MARKETS WE SERVE. THIS IS KEY FOR US TO ACCELERATE OUR GROWTH AND
INCREASE SHAREHOLDER VALUE.
WE BELIEVE THAT THE MERGER WITH VISIONICS IS THE BEST STEP WE CAN TAKE TO
ACCOMPLISH THESE THINGS. IN COMBINING THESE TWO COMPANIES AND CREATING SOMETHING
NEW, WE ARE LEVERAGING THE STRENGTHS OF EACH, ACCELERATING THE OPPORTUNITY TO
ACHIEVE OUR STRATEGIC GOALS, AND ENABLING EACH OF OUR SHAREHOLDER GROUPS TO HAVE
MORE, SOONER, THAN WE COULD ON OUR OWN INDEPENDENT PATHS.
THIS AFTERNOON, WE WILL BEGIN OUR PRESENTATIONS WITH DR. JOSEPH ATICK, THE CEO
AND CO-FOUNDER OF VISIONICS AND ONE OF THE INVENTORS OF THE COMPANY'S
INDUSTRY-LEADING FACIAL RECOGNITION TECHNOLOGY. DR. ATICK WILL DESCRIBE THE
CURRENT VISIONICS BUSINESS, THE STRATEGIC OPPORTUNITIES WHICH VISIONICS SEES IN
THE MARKET AND HOW THE MERGER ENABLES US TOGETHER TO ADDRESS THESE
OPPORTUNITIES.
I WILL THEN DESCRIBE THE DIGITAL BIOMETRICS PERSPECTIVE WHICH LED US TO CONCLUDE
THAT A MERGER WITH VISIONICS WAS THE SINGLE MOST POWERFUL, TRANSFORMATIONAL MOVE
WE COULD MAKE TO LEVERAGE THE STRENGTHS OF DBI INTO SUBSTANTIAL NEW
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OPPORTUNITIES. I WILL THEN SKETCH OUR COMMON VIEW OF THE MERGED COMPANY.
BOB GALLAGHER, OUR NEW CHIEF FINANCIAL OFFICER, WILL THEN PRESENT THE FINANCIAL
PICTURE FOR THE COMBINED COMPANY.
AFTER BOB'S PRESENTATION, WE WILL BE HAPPY TO ANSWER ANY QUESTIONS. FOR THOSE OF
YOU WHO ARE ABLE TO STAY AFTER THE QUESTION-AND-ANSWER SESSION, WE WILL BE
DEMONSTRATING OUR FACIAL RECOGNITION AND IBIS PRODUCTS.
BUT FIRST, I WOULD LIKE TO INTRODUCE THE MEMBERS OF THE DBI AND VISIONICS
MANAGEMENT TEAMS WHO ARE HERE TODAY.
LET ME NOW TURN THE PODIUM OVER TO DR. JOSEPH ATICK . . .
[JOSEPH ATICK AND BOB GALLAGHER DID NOT SPEAK FROM PREPARED TEXT. TEXT CONTINUES
WITH JOHN METIL'S REMARKS]
THANK YOU VERY MUCH, JOSEPH.
I WOULD LIKE TO BEGIN MY PART OF TODAY'S DISCUSSION BY CONTINUING WITH THE THEME
OF THE BUSINESS LOGIC FOR THE MERGER, BUT FROM THE PERSPECTIVE OF THE DIGITAL
BIOMETRICS SHAREHOLDERS.
DBI HAS BUILT AN OPERATIONS CAPABILITY WHICH LEADS THE INDUSTRY IN THE DESIGN,
ASSEMBLY, DEPLOYMENT, INTEGRATION AND SUPPORT OF THE MOST COMPLEX BIOMETRIC
SYSTEMS ON THE MARKET. OUR IBIS SYSTEM FOR REMOTE, WIRELESS, REAL-TIME
IDENTIFICATION IS AN EXAMPLE OF A BIOMETRIC NETWORK APPLIANCE IMPLEMENTATION
WITH A SCALABLE INFORMATION SYSTEMS AND COMMUNICATIONS INFRASTRUCTURE.
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DBI HAS BUILT AN ORGANIZATION WITH VERY VALUABLE TECHNICAL AND OPERATING SKILLS,
ALONG WITH THE BUSINESS INFRASTRUCTURE--SUCH AS SALES, FIELD SUPPORT, PROJECT
MANAGEMENT, CORPORATE FINANCE AND ACCOUNTING--TO BACK THEM UP. UP TO NOW,
HOWEVER, WE HAVE APPLIED THESE CAPABILITIES ONLY TO THE FORENSIC-GRADE LIVE-SCAN
FINGERPRINTING BUSINESS.
THIS IS OUR FIRST KEY POINT: THROUGH OUR MERGER WITH VISIONICS WE ARE ABLE TO
DIRECTLY LEVERAGE THESE STRENGTHS INTO THE EMERGING MARKETS FOR FACIAL
RECOGNITION.
AS JOSEPH DESCRIBED IN HIS PRESENTATION AND THIS CHART ILLUSTRATES, OUR FIRST
VENTURE TOGETHER IS THE ENCAPSULATION OF THE FACE-IT ENGINE INTO A BIOMETRIC
NETWORK APPLIANCE. WE EXPECT THIS TECHNICAL DEFINITION OF OUR CAPTURE DEVICES TO
BE VALUABLE IN ITSELF IN FACIAL RECOGNITION APPLICATIONS, AND WE FURTHER EXPECT
THAT BY LEVERAGING DBI'S PRODUCTIZATION AND MANUFACTURING SKILLS WE WILL HAVE A
SIGNIFICANT TIME-TO-MARKET ADVANTAGE. BUT WE ALSO THINK THAT BY RE-DEFINING OUR
CURRENT LIVE-SCAN OFFERINGS AS BIOMETRIC NETWORK APPLIANCES WE WILL IMPROVE THE
FUNCTIONALITY AND CONNECTIVITY OF THESE PRODUCTS, ESPECIALLY IN COMMERCIAL
MARKETS. THESE WILL REQUIRE INVESTMENT OVER THE NEXT TWELVE TO TWENTY-FOUR
MONTHS, WHICH WE WILL MANAGE IN THE RESULTS-ORIENTED CONSERVATIVE FISCAL STYLE
WHICH IS ENGRAINED IN THE CULTURE OF BOTH DBI AND VISIONICS. BUT WE BELIEVE THE
PAYOFF IS IN MAINTAINING AND EXTENDING THE LEADS WE HAVE IN THE MARKETS WE
SERVE.
WHICH BRINGS US TO OUR SECOND VITAL POINT: BY LEVERAGING DBI'S OPERATING
STRENGTHS WITH VISIONICS FACIAL RECOGNITION MARKET
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PRESENCE, THE MERGED COMPANY WILL HAVE SUBSTANTIALLY GREATER MARKET POTENTIAL
THAN DBI WOULD HAVE HAD ON ITS OWN.
CURRENTLY, WE OFFER BIOMETRIC SYSTEMS AND SERVICES FOR FORENSIC LIVE-SCAN
FINGERPRINTING APPLICATIONS. THIS INCLUDES LAW ENFORCEMENT, OF COURSE. IT ALSO
INCLUDES GROWING DEMAND FOR OUR SYSTEMS AND EXPERTISE TO ASSIST IN
FINGERPRINT-ENABLED APPLICANT BACKGROUND CHECKS. THIS HAS BEEN THE IMPETUS
BEHIND OUR RECENT SALES SUCCESSES WITH FEDERAL GOVERNMENT AGENCIES INCLUDING THE
INS, THE POSTAL SERVICE, THE CENSUS BUREAU AND MANY OTHERS. WE ALSO SEE AN
EMERGING MARKET AMONG EMPLOYERS--GOVERNMENTAL AND PRIVATE ENTERPRISE--WHO WANT
TO WANT TO KNOW FOR SURE THAT PROSPECTIVE EMPLOYEES DO NOT HAVE DISQUALIFYING
CRIMINAL BACKGROUNDS. FINANCIAL INSTITUTIONS, SCHOOL SYSTEMS, UTILITIES AND
AIRPORTS ARE EARLY ADOPTERS IN THIS MARKET SEGMENT. TO BUILD AND LEAD THIS
MARKET REQUIRES A HIGH LEVEL OF EXPERTISE IN HOW TO ACCESS AND DELIVER
INFORMATION FROM THE NATIONAL CRIMINAL RECORDS DATABASE MAINTAINED BY THE FBI
BACK TO EMPLOYERS. THIS IS A TECHNICAL AND MANAGEMENT CHALLENGE, BUT ONE IN
WHICH OUR SKILLS IN CONNECTIVITY AND INTEGRATION ARE WELL SUITED FOR MARKET
LEADERSHIP.
WE ARE ALSO ENTERING THE MARKET FOR REAL-TIME WIRELESS IDENTIFICATION SYSTEMS
WITH OUR IBIS OFFERING WHICH IS BEING PILOTED IN HENNEPIN COUNTY AND SOUTHERN
CALIFORNIA.
WE HAVE DONE WELL IN RECENT YEARS, AND ARE VERY PROUD OF OUR TRACK RECORD.
NONETHELESS, WE ARE WELL AWARE OF THE LIMITATIONS OF OUR CURRENT MARKETS. WE
ESTIMATE THE LIVE-SCAN MARKET TODAY IS PERHAPS $60 MILLION IN REVENUE FOR ALL OF
THE VENDORS OF THESE SYSTEMS WORLDWIDE. WE HAVE ABOUT 35 TO 40%
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OF THE MARKET. OVER THE LAST FIVE YEARS THE LIVE-SCAN MARKET HAS BEEN GROWING AT
AN AVERAGE RATE OF ABOUT 20% PER YEAR, BUT AS THOSE OF YOU WHO HAVE FOLLOWED US
KNOW WELL, ON A QUARTERLY AND EVEN AN ANNUAL BASIS, THIS GROWTH HAS BEEN A VERY
BUMPY, VOLATILE RIDE. THE IBIS OPPORTUNITY IS EARLY STAGE AND DIFFICULT TO
QUANTIFY, BUT WE THINK THAT MOBILE WIRELESS IDENTIFICATION FOR LAW ENFORCEMENT
AND OTHER SECURITY APPLICATIONS COULD GROW TO BE LARGER THAN OUR LIVE-SCAN
BUSINESS IN FOUR TO FIVE YEARS. WHILE WE ARE VERY PLEASED WITH THE OPPORTUNITY,
SUCCESS WOULD INCREASE THE CONCENTRATION OF OUR BUSINESS IN THE PUBLIC SECTOR.
AS THIS CHART SHOWS, BY ENTERING THE FACIAL RECOGNITION FIELD THROUGH THE
VISIONICS MERGER, WE ADD A VERY SIGNIFICANT NUMBER OF NEW MARKETS. FACIAL
RECOGNITION IS INDEED A TECHNOLOGY WITH MASS APPEAL, AS DEMONSTRATED BY THE
INDUSTRY-LEADING BREADTH OF APPLICATIONS IN WHICH THE FACE-IT ENGINE IS
EMPLOYED. VISIONICS CURRENTLY HAS MANY PARTNERS--VARS, OEMS, INTEGRATORS AND
SOFTWARE DEVELOPERS--ACTIVELY DEVELOPING OR MARKETING SOLUTIONS BASED ON THE
FACE-IT ENGINE. THE MARKETS THEY ARE ADDRESSING HAVE SEVERAL CHARACTERISTICS
THAT ARE VERY APPEALING TO US.
FIRST, THE MOST EXCITING APPLICATIONS OF THE VISIONICS TECHNOLOGY ARE IN
COMMERCIAL MARKETS. WHILE VISIONICS HAS A GOOD BUSINESS IN LAW ENFORCEMENT AND
GOVERNMENTAL ID SOLUTIONS, IT IS AT THE FOREFRONT OF THE COMMERCIAL ADOPTION OF
BIOMETRIC TECHNOLOGY.
FOR INSTANCE, IN THE FINANCIAL SERVICES SEGMENT, INNOVENTRY NOW HAS 750 OF ITS
SELF-SERVICE BANKING MACHINES DEPLOYED USING FACE-IT AND THEIR NETWORK IS
RAPIDLY EXPANDING.
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IBM HAS LICENSED FACE-IT TO ACCOMPANY ITS ULTRA PORT CAMERA, AN OPTION WITH ITS
A, T AND X SERIES THINK-PADS.
SAFLINK, KEYWARE AND BIONETRIX INCLUDE FACE-IT IN WINDOWS NT LOGON PRODUCTS.
VIRAGE USES FACE-IT IN A SEARCH ENGINE FOR USE BY THE NEWS MEDIA IN CATALOGUING
AND SEARCHING MULTI-MEDIA DATABASES FOR THE FACES OF NEWSMAKERS.
FACE-IT IS EMBEDDED IN SEVERAL SURVEILLANCE SOLUTIONS FOR PHYSICAL SECURITY,
INCLUDING A MOST INTERESTING CASINO APPLICATION FROM GRIFFIN INVESTIGATIONS FOR
CATCHING CARD CHEATS. A NUMBER OF PARTNERS ARE WORKING ON CORPORATE ID SOLUTIONS
COUPLED WITH PHYSICAL ACCESS AND SURVEILLANCE, POTENTIALLY REDEFINING THE LEVEL
OF AUTOMATION AND INTEGRATION IN CORPORATE SECURITY.
THESE MARKETS ARE ALL EARLY STAGE. SOME MAY FALL OUT. BUT WE SEE STRONG EVIDENCE
THAT THE POWER OF THE VISIONICS FACIAL RECOGNITION TECHNOLOGY TO GIVE MACHINES
THE ABILITY TO RECOGNIZE HUMANS IS A CORE TECHNOLOGY FOR THE FUTURE, ACROSS A
WIDE RANGE OF COMMERCIAL APPLICATIONS.
SECOND, THIS IS A BUSINESS WITH A MODEL FOR RECURRING REVENUE. IN MANY
INSTANCES, THE LICENSING ARRANGEMENTS FOR VISIONICS TECHNOLOGY INVOLVE PER-USE
FEES. INNOVENTRY, FOR INSTANCE, FALLS INTO THIS CATEGORY. THIS IS A MODEL FOR
HIGH GROSS MARGINS AND, IN TIME, GREATER STABILITY AND PREDICTABILITY OF
REVENUES THAN WE CURRENTLY EXPERIENCE.
THIRD, FOR MANY APPLICATIONS FACIAL RECOGNITION IS THE ONLY BIOMETRIC THAT
EITHER WORKS OR LEVERAGES AN EXISTING
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INFRASTRUCTURE. IF YOU THINK A CARD CHEAT IS WALKING INTO YOUR CASINO, ARE YOU
GOING TO USE SIGNATURE VERIFICATION TO STOP HIM? IF YOU THINK A TERRORIST MIGHT
ENTER YOUR AIRPORT, ARE YOU GOING TO CHECK EVERY TRAVELER'S DNA TO FIND OUT? IF
YOUR CELL PHONE ALREADY HAS A CAMERA BUILT IN, ARE YOU GOING TO PAY EXTRA FOR A
FINGERPRINT READER THAT HAS NO OTHER USE? FROM A BUSINESS PERSPECTIVE, FACIAL
RECOGNITION IS THE IDEAL BIOMETRIC: IT IS HIGH IN RELIABILITY, AND REQUIRES NO
SUBJECT PARTICIPATION OR EVEN KNOWLEDGE. FURTHERMORE, THE TECHNOLOGY IS HIGHLY
COMPLEX, PATENT PROTECTED AND VERY DIFFICULT FOR A POTENTIAL COMPETITOR TO
REPLICATE.
FOURTH, THE APPLICATIONS WHICH WE HAVE DISCUSSED TODAY ARE NOT AN EXHAUSTIVE
LIST. WE HAVE ENVISIONED SEVERAL POTENTIAL NEW APPLICATIONS WHICH RELY ON THE
BIOMETRIC NETWORK APPLIANCE ENCAPSULATION WHICH WE ARE PRODUCING TOGETHER. THESE
ARE APPLICATIONS WHICH CAN ONLY BE ACCOMPLISHED WITH FACIAL RECOGNITION, IN
APPLICATIONS AREAS WHERE A NEED EXISTS BUT WITH NO CURRENT SOLUTION.
WE ARE CONVINCED THAT WE HAVE A TECHNOLOGY WITH MASS APPEAL. OUTSIDE
PROGNOSTICATORS SEEM TO AGREE. IDC RECENTLY ISSUED A REPORT PROJECTING THAT
FACIAL RECOGNITION WILL BE A $100 MILLION MARKET BY 2004. THE INTERNATIONAL
BIOMETRICS GROUP MAINTAINS THAT THE BIOMETRIC AUTHENTICATION MARKET WILL BE $600
MILLION BY 2003. WE BELIEVE THESE FORECASTS ARE OPTIMISTIC, AND IN PARTICULAR
THAT THESE MARKETS WILL DEVELOP SLOWER THAN THE FORECASTERS THINK. BUT WE
BELIEVE THE TRENDS IN EACH OF THE MARKETS WHERE FACIAL RECOGNITION CAN PLAY A
PART IN IMPROVING APPLICATIONS ARE VERY FAVORABLE. FOR INSTANCE, THE
INTERNATIONAL AIR TRANSPORT ASSOCIATION ESTIMATES THAT THE
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NUMBER OF AIRLINE CHECK-INS WILL DOUBLE TO 3 BILLION OVER THE NEXT TEN YEARS.
THE SURVEILLANCE SYSTEMS MARKET WAS ABOUT $2.5 BILLION IN 1999 AND IS FORECAST
TO GROW TO $3.6 BILLION IN 2004. AND AS THOSE OF YOU WHO HAVE SHOPPED FOR A PC
RECENTLY KNOW, CAMERAS ON PCs ARE BECOMING COMMON. IT IS VERY DIFFICULT TO
PREDICT THE TIMING OF THE ADOPTION OF AN EMERGING TECHNOLOGY. BUT IT IS CLEAR TO
US THAT VISIONICS IS BY FAR THE LEADER IN FACIAL RECOGNITION TECHNOLOGY AND,
JUST AS IMPORTANT, IN ESTABLISHING CHANNEL PARTNER RELATIONSHIPS TO TAKE THE
TECHNOLOGY TO THE END USER.
SO, WHEN WE HAVE COMPLETED THIS MERGER, WHO ARE WE?
OUR PORTFOLIO OF BUSINESSES WILL LOOK LIKE THIS:
o THE MATURING BUSINESS OF FORENSIC-GRADE FINGERPRINTING FOR LAW
ENFORCEMENT, WHICH IS THE FOUNDATION OF OUR REVENUES
o THE DEVELOPING BUSINESS OF ENABLING BACKGROUND CHECKS FOR
EMPLOYERS AND GOVERNMENT AGENCIES
o THE INNOVATIVE NEW APPLICATION OF WIRELESS TECHNOLOGY TO
MOBILE IDENTIFICATION
o AND THE MANY OPPORTUNITIES FOR THE EMERGING BIOMETRIC
TECHNOLOGY OF FACIAL RECOGNITION
WE ARE A TECHNOLOGY COMPANY FOCUSED ON BIOMETRICS AND BEYOND, OFFERING
FINGERPRINT AND FACIAL RECOGNITION BIOMETRICS, ALONG WITH SUPPORTING TECHNICAL
AND INTEGRATION SERVICES, TO IMPROVE THE DELIVERY OF VERTICAL MARKET
APPLICATIONS. WE DO SO FOR WHAT WE BELIEVE IS THE BROADEST RANGE OF VERTICAL
MARKETS
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SERVED BY ANY BIOMETRICS FIRM. WE DISTRIBUTE OUR PRODUCTS AND SERVICES THROUGH
THE BEST MIX OF DIRECT AND INDIRECT CHANNELS APPROPRIATE TO THE VERTICAL MARKETS
WE SERVE. AND AT OVER $25 MILLION IN REVENUE AND GROWING, WE ARE AMONG THE
REVENUE LEADERS IN OUR INDUSTRY.
I WILL NOW TURN THIS FORUM OVER TO BOB GALLAGHER, WHO WILL REVIEW THE FINANCIAL
PROFILE OF OUR NEW COMPANY.
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[DBI LOGO]
[VISIONICS LOGO]
DIGITAL BIOMETRICS/
VISIONICS
CORPORATION
SHAREHOLDER PRESENTATION
DECEMBER 15, 2000
Copyright (C) 1999-2000 Visionics Corporation
(C) 1999-2000 Visionics Corporation
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements that are subject to
certain risks and uncertainties that may cause actual results to differ
materially from those projected on the basis of such forward-looking statements.
Such forward-looking statements are made based on management's beliefs, as well
as assumptions made by, and information currently available to, management
pursuant to the "safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995. For a more complete description of these and other risk
factors which may affect the future performance of Digital Biometrics, see "Risk
Factors" in the preliminary Form S-4 and under Item 7 of the company's Annual
Report on Form 10-K for the fiscal year ended Sept. 30, 2000.
SPEAKERS TODAY
VISIONICS:
o Dr. Joseph Atick, CEO and Co-Founder
DIGITAL BIOMETRICS:
o John Metil, President
o Bob Gallagher, Chief Financial Officer
1
<PAGE>
[DBI LOGO]
[VISIONICS LOGO]
VISIONICS: THE COMPANY, ITS TECHNOLOGY
& ITS OPPORTUNITIES.
JOSEPH J. ATICK
CEO
Copyright (C) 1999-2000 Visionics Corporation
OVERVIEW: WHO WE ARE
o Leading FACE RECOGNITION TECHNOLOGY PROVIDER.
o Human faces--just like fingerprints--contain identity specific patterns
that can be automatically detected, analyzed & matched by software
algorithms.
o Visionics has become a leader in the biometric industry by developing
this into a powerful enabling technology--called FACEIT(R)
FACEIT(R) works from ordinary images or cameras. It automatically:
1. DETECTS & TRACKS
[Picture]
Faces in a crowd with circles on faces identified.
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2. SEGMENTS & CONVERTS INTO FACEPRINTS
10011001010
10101000001
11110101010
10101010101
01010101001
[Pictures]
Identified faces in crowd with individual faces in separate pictures.
3. MATCHES & RECOGNIZES
In a crowd
In motion
At a distance
& in real time.
(Matching Speed: 1 mil/sec)
10011001010
10101000001
11110101010
10101010101
01010101001
[Pictures]
Identified person compared with Datebase photos
OVERVIEW: THE ALGORITHM
LOCAL FEATURE ANALYSIS
Describes faces in terms of spatial relationships among local landmarks.
Similar to minutiae-based finger algorithms.
Repeatedly shown superior to all other algorithms including EIGENFACES.
[Pictures]
Faces with Local Feature Points identified.
3
<PAGE>
OVERVIEW: ORIGINS
o FOUNDED in 1994 by team that discovered the fundamental algorithms.
Formerly at Rockefeller & Princeton.
o HEADQUARTERED in USA, in Exchange Place, on the Jersey City side of the
New York Harbor.
o VISIONICS LTD.--European subsidiary in UK.
OVERVIEW: LEADERSHIP
o TODAY, VISIONICS' LEADERSHIP IS MEASURED IN:
Advanced Technology
Market Penetration & Share
Brand Recognition & Visibility
World-Renowned Technical Team
Biometric Revenue
o WE HAVE ACCOMPLISHED ALL OF THE ABOVE WHILE MAINTAINING FISCAL PRUDENCE
AND RESPONSIBILITY
OVERVIEW: WHY FACE?
GREAT LEVERAGE One technology platform, huge no. of applications.
BEYOND BIOMETRICS Many high value apps with no competition from other
biometrics.
HIGH ADOPTION POTENTIAL Works with legacy image databases
Familiar & natural to end-users.
Rides existing camera & emerging video
communication infrastructure.
4
<PAGE>
BUSINESS STRATEGY
Focus Enabling Technology VISIONICS
[ARROW] [ARROW]
Empower Applications/Products/Solutions PARTNER NETWORK
[ARROWS UP AND DOWN] [ARROW]
Expand Diverse Market Segments END-USERS
BUSINESS STRATEGY (CONT'D)
FOCUSED TECHNOLOGY
DIVERSIFIED APPLICATIONS.
THESE INCLUDE:
Target Industry Applications & Uses
Financial Self service, ATMs, online banking, E/M transactions.
IT Security Computer & network logon, monitoring, data security.
Travel Automated Check-in & boarding systems.
Security Access control (facilities, borders, home)
Surveillance (CCTV-shoplifters, casinos, terrorists).
Time & Attendance.
Law Enforcement Mugshot & Booking Systems.
ID Solutions National Ids, passports, driver's licenses, visas, welfare,
voter registration, corporate badging systems.
Datamining Photo-based search engines.
Advertising Targeted content delivery. Consumer research.
Toy Industry Smart toys and robots.
5
<PAGE>
SELECT PARTNERS
[Pictures]
Company logo's for identified select partners:
InnoVentry, IBM, Polaroid, Lockheed Martin
Datacard Wordwide, Infomix, Unisys, Intergraph
Graphco, IWS, Printrack International Inc., Anadac
On Track Innovations Ltd, Mer, Police Central, EDS, Virage, Meta Data
SAFLINK, Imaging Automation, Sony, Keyware Technologies
Try in on, Griffin, BioNetrix, View Systems, Exigent International
PRODUCTS
o DEVELOPMENT TOOL KITS
Identification SDK
Verification SDK
(Surveillance SDK)
o RUN-TIME ENGINE COMPONENTS
Software modules. Different grades depending on desired performance,
database size & capabilities.
REVENUE PRODUCTION
DEVELOPER NETWORK
[ARROW]
SDK SALE [ARROW]
IA SERVICES
[ARROW] [ARROW]
PARTNER NETWORK
LICENSE FEES
[LINE] MAINTENANCE
6
<PAGE>
LICENSE FEES
Engine price essentially scales with
PER ENROLLMENT
+
PER TRANSACTION*
GROWTH STRATEGY
o SCALABILITY.
o D&P NETWORKS.
o GLOBAL PRESENCE.
o BRAND.
Growth Strategy
o SCALABILITY
ENCAPSULATE TECHNOLOGY INTO SCALABLE COMPONENTS:
o SHORT TERM:
Net-Appliances (scalability through connectivity).
o LONG TERM:
Embedded Platforms (DSP, ASIC).
7
<PAGE>
Growth Strategy
SCALABILITY (CONT'D)
Broaden platforms on which technology runs. Required for long-term mass
market penetration.
Computers Network Appliances DSP ASIC
[ARROW]
Growth Strategy
SCALABILITY (CONT'D)
Identification systems, Datamining, IT security.
Surveillance, Advertising, Human Traffic Management, Scalable wireless
transactions.
Access control, time and attendance; self service kiosks.
Gaming consumer devices.
Typical Apps Enabled
[Pictures]
Computer, Network Appliance, DSP, ASIC
Growth Strategy
SCALABILITY (CONT'D)
MERGER WITH DBI ALLOWS US TO
o ACCOMPLISH SCALABILITY:
DBI's expertise in biometric hardware & system development
enables us to design & produce new encapsulations of our
technology that are scalable.
o Enter NEW COMMERCIAL MARKETS & deepen penetration of existing ones.
8
<PAGE>
Growth Strategy
SCALABILITY (CONT'D)
BIOMETRIC NETWORK APPLIANCES
o Deployment ready dedicated hardware devices. Three kinds, optimized to:
i. Capture & Communicate biometric data.
ii. Convert raw data into templates.
iii. Match Templates.
Growth Strategy
SCALABILITY (CONT'D)
ULTIMATE GOAL
FACE RECOGNITION ON ANY DEVICE CONNECTED TO ANY CAMERA SENSOR.
Growth Strategy
D&P NETWORKS
o EXPAND DEVELOPER NETWORK.
o SPEED D-TO-P TRANSITION: IA SERVICES.
o IMPROVE D&P NETWORK SUPPORT.
9
<PAGE>
Growth Strategy
GLOBAL PRESENCE
PRESENCE in key geographic markets is a priority.
EUROPE: Significant market potential.
GROW subsidiary Visionics Ltd.
Current geographic breakdown of Visionics activities.
Percent
North America 66
Europe 15
Asia Pacific & Japan 14
Rest of World 5
Growth Strategy
BRAND
BUILD END-USER LOYALTY & BRAND RECOGNITION.
The analog of Intel(R) inside.
In different markets may take a different form.
Communicate to end-user the benefits of FaceIt(R) technology
over imitation & other biometric options.
OPPORTUNITY STAGING
o OVER THE NEXT 3-5 YRS:
Government
[ARROW]
Commercial
[ARROW]
Consumer
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MASS MARKET OPPORTUNITIES
o FINANCIAL: MOBILE COMMERCE.
o TRAVEL.
o SMART INFORMATION DELIVERY.
The Future
THE MOBILE REVOLUTION
o 3G NETWORKS
MOBILE PHONES WILL BECOME PERSONAL GATEWAYS TO THE WORLD OF
VOICE, DATA, VIDEO, INTERNET/INTRANET, COMMERCE, DIGITAL
WALLET, ON DEMAND INFORMATION & INTERACTIVE MULTIMEDIA
COMMUNICATION.
[Pictures]
Phones with video cameras.
11
<PAGE>
[Pictures]
Devices with video cameras.
MOBILE COMMERCE 230 million people will be conducting wireless financial
transactions.
$100 billion per year. With more than a billion transactions. (Tower Group, Aug.
00)
[Table]
Number of people conducting wireless transactions
2000 2005
Americas 0.7 60
Europe 4.1 86
Asia Pacific 4.7 84
The Future
POSITIONING
o GOOD NEWS: MOBILE COMMERCE IS A SCALING OF AN APPLICATION WE ARE
INVOLVED IN TODAY.
FINANCIAL TRANSACTION.
12
<PAGE>
Today
FINANCIAL TRANSACTIONS
LARGEST CONSUMER BIOMETRIC APPLICATION TO DATE
Uses FaceIt(R) in RPMs that offer banking services for the unbanked.
* 750 machines already in the field.
* 1,000,000 enrolled users (*40,000 enrollments per month).
* 2.5 million facial transactions.
Transaction engine is WAP enabled, can receive transactions from phones in the
future.
INNOVENTRY
Subsidiary of Wells Fargo.
[Picture]
Banking services machine with video camera and FaceIt installed.
Today
CONSUMER DEVICES
IBM
SONY
[Pictures]
Computers with video cameras.
[DBI LOGO]
[VISIONICS LOGO]
THE MERGER FROM DBI
SHAREHOLDERS'
PERSPECTIVE
JOHN J. METIL
PRESIDENT
Copyright (C) 1999-2000 Visionics Corporation
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DBI SHAREHOLDER PERSPECTIVE
o Business Logic for the Merger
o The Merged Company
PRODUCT LEVERAGE
[Visionics Logo] [DBI Logo]
[ARROW]
New Encapsulation of Facial Recognition
Biometric Network Appliance
[ARROW]
NEW OPPORTUNITIES
ENABLED
[ARROW]
Improves
Existing
Products
LEVERAGES STRENGTHS INTO NEW MARKETS
CURRENT DBI PERSPECTIVE
o Forensic Live-Scan Fingerprinting
-Law Enforcement
o Fingerprint-Enabled Background Checks
-Civil
-Commercial
o Remote Wireless ID
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<PAGE>
COMBINED COMPANY'S MARKETS
o Forensic Live-Scan Fingerprinting
o Fingerprint-Enabled Background Checks
o Remote Wireless ID
COMBINED COMPANY'S MARKETS
o Forensic Live-Scan Fingerprinting
o Fingerprint-Enabled Background Checks
o Remote Wireless ID
o Financial Services
o IT Security
o Travel
o Physical Security
o Access Control
o Surveillance
o Time & Attendance
o Law Enforcement
o ID Solutions
o Advertising
o Games
o Datamining
THE APPEAL OF FACIAL RECOGNITION
o The Big Opportunities Are Commercial and Then Consumer
o Recurring Revenue Model
o Facial Recognition The Only Fit
o Biometrics and Beyond. . .
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<PAGE>
PORTFOLIO OF BUSINESSES
MARKET POTENTIAL
STAGE OF DEVELOPMENT
[Picture]
Forensic Fingerprinting
Law Enforcement
[Picture]
Commercial Fingerprint
Background Checks
[Picture]
IBIS
Wireless ID
System
[Picture]
Facial Recognition
o Financial Services
o IT Security
o Travel
o Physical Security
o Law Enforcement
o ID Solutions
o Advertising
o Games
o Datamining
WHO WE ARE
o Fingerprint and Facial Biometrics
o Leveraging Business Infrastructure
o Broadest Range of Vertical Markets
o Distribution Fit to the Market Opportunities
o A Revenue Leader
[DBI LOGO]
[VISIONICS LOGO]
A FINANCIAL VIEW OF THE MERGER
ROBERT GALLAGHER
CHIEF FINANCIAL OFFICER
Copyright (C) 1999-2000 Visionics Corporation
16
<PAGE>
A FINANCIAL VIEW OF THE
MERGED COMPANY
o FY00 Income Statement
o FY00 Balance Sheet
o Historical Revenue Growth trends
o Growth Drivers
o Areas of Investment
FY 00 INCOME STATEMENT
Historical Pro Forma
DBI Visionics Adjustments Results
Revenue 22,940 2,635 25,575
Cost of revenue 14,819 658 15,477
------- ------- -------
Gross margin 8,121 1,977 10,098
Operating expenses
Selling, general & development 7,676 3,382 11,058
Non-recurring charges 221 79 (300) 0
------- ------- ------- -------
7,897 3,461 (300) 11,058
------- ------- ------- -------
Income (loss) from operations $ 224 $(1,484) $ (300) $ (960)
FY 00 Balance Sheet
Historical Pro Forma
DBI Visionics Adjustments Results
Cash and equivalents 1,893 1,730 3,623
Other current assets 13,372 577 13,949
Total current assets 15,265 2,307 17,572
Long-term assets 981 1,352 2,333
16,246 3,659 19,905
======= ======= =======
Current liabilites 7,104 723 7,827
Long-term liabilites 0 544 544
------- ------- -------
Total liabilities 7,104 1,267 8,371
Stockholders' equity 9,142 2,392 11,534
16,246 3,659 19,905
======= ======= =======
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<PAGE>
COMBINED HISTORICAL REVENUE GROWTH TRENDS
1998 1999 2000
------ ------ ------
DBI 11,322 22,200 22,942
Visionics 1,892 2,623 2,634
Total 13,214 24,823 25,576
VISIONICS HISTORICAL REVENUE GROWTH TRENDS
1998 1999 FY 00
------ ------ ------
License 981 1,473 1,760
Services 911 1,150 875
Total 1,892 2,623 2,635
GROWTH DRIVERS
o Expansion in Developer Network
o Growth in Partner Product Offerings
o Successful launch of Mobile Wireless ID System (IBIS)
o Introduction of Biometric Network Appliance
o Market Acceptance of the Technologies
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<PAGE>
AREAS OF INVESTMENT
o Biometric Network Appliance
o Expansion of Partner Network
o FaceIt(R) Brand recognition
o Mobile Wireless ID System (IBIS)
o Build International Presence
o Market Acceptance of the Technologies
APPEAL OF THE MERGER
o Opportunity for faster growth
o Teaming with Recognized Industry Leader
o Leveraging skill sets
o Synergistic work force
[DBI LOGO]
[VISIONICS LOGO]
DIGITAL BIOMETRICS/
VISIONICS
CORPORATION
SHAREHOLDER PRESENTATION
DECEMBER 15, 2000
Copyright (C) 1999-2000 Visionics Corporation
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