<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-Q


(Mark one)
  X  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
---- Act of 1934.


For the quarterly period ended September 30, 1997 or

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

For the transition period from                to 
                               --------------    -----------------

Commission File Number:  1-9641
                         ------

                              IDENTIX INCORPORATED
             (Exact name of registrant as specified in its charter)

                        
         California                                      94-2842496
----------------------------------           -----------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.)
 incorporation of  organization)
                 
510 N. Pastoria Avenue, Sunnyvale, California               94086
------------------------------------------------     --------------------
     (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code (408) 731-2000
                                                   --------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. YES X   NO
                                            ----   ----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

                       25,010,111 shares of Common Stock
                             as of October 31, 1997
<PAGE>   2


                              IDENTIX INCORPORATED
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                     SEPTEMBER 30,        JUNE 30,
                                                                         1997               1997
                                                                     ------------       ------------
<S>                                                                  <C>                <C>         
                                                                     (UNAUDITED)

ASSETS
   Current assets:
     Cash and cash equivalents                                       $  1,165,000       $  2,510,000
     Accounts receivable, less allowance for doubtful accounts
       and sales returns of $671,000 and $625,000                      21,886,000         18,737,000
     Inventories                                                        5,983,000          5,295,000
     Prepaid expenses and other assets                                    738,000            323,000
                                                                     ------------       ------------
        Total current assets                                           29,772,000         26,865,000

   Property and equipment, net                                          2,457,000          2,567,000
   Intangibles and other assets                                         3,057,000          3,008,000
                                                                     ------------       ------------
          Total assets                                               $ 35,286,000       $ 32,440,000
                                                                     ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY
   Current liabilities:
     Notes payable to banks                                          $  2,692,000       $  1,919,000
     Accounts payable                                                   6,818,000          6,314,000
     Accrued compensation                                               1,760,000          1,515,000
     Other accrued liabilities                                          1,436,000          1,079,000
     Deferred revenue                                                   1,007,000            561,000
                                                                     ------------       ------------
        Total current liabilities                                      13,713,000         11,388,000

   Deferred revenue                                                        52,000             65,000
   Other liabilities                                                       89,000             89,000
                                                                     ------------       ------------
        Total liabilities                                              13,854,000         11,542,000
                                                                     ------------       ------------

   Commitments and contingencies (Note 5)

   Shareholders' equity:
     Common stock, no par; 50,000,000 shares authorized;
        24,988,861 and 24,942,778 shares issued and outstanding        51,388,000         51,283,000
     Accumulated deficit                                              (29,678,000)       (30,204,000)
     Cumulative translation adjustment                                   (278,000)          (181,000)
                                                                     ------------       ------------
        Total shareholders' equity                                     21,432,000         20,898,000
                                                                     ------------       ------------
          Total liabilities and shareholders' equity                 $ 35,286,000       $ 32,440,000
                                                                     ============       ============
</TABLE>


       See accompanying notes to these consolidated financial statements.


                                       1
<PAGE>   3


                              IDENTIX INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                       SEPTEMBER 30,
                                                  1997               1996
                                              ------------       ------------
<S>                                           <C>                <C>         

Revenues:
   Net product revenues                       $  8,907,000       $  6,379,000
   Services revenues                             9,943,000          5,700,000
                                              ------------       ------------
     Total revenues                             18,850,000         12,079,000
                                              ------------       ------------

Costs and expenses:
   Cost of product revenues                      4,136,000          3,372,000
   Cost of services revenues                     8,564,000          4,650,000
   Research, development and engineering         1,037,000            537,000
   Marketing and selling                         2,206,000          1,666,000
   General and administrative                    2,404,000          1,768,000
                                              ------------       ------------


     Total costs and expenses                   18,347,000         11,993,000
                                              ------------       ------------

Income from operations                             503,000             86,000
Other income (expense), net                         44,000             (9,000)
Interest income (expense), net                     (21,000)           (67,000)
                                              ------------       ------------

Net income                                    $    526,000       $     10,000
                                              ============       ============


Net income per common and
  common equivalent share                     $       0.02       $       0.00
                                              ============       ============

Weighted average common
  and common equivalent shares                  25,625,000         25,572,000
                                              ============       ============
</TABLE>


       See accompanying notes to these consolidated financial statements.


                                       2
<PAGE>   4

                              IDENTIX INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                              FOR THE THREE MONTH PERIOD
                                                                  ENDED SEPTEMBER 30,
                                                            -----------------------------
                                                                1997              1996
                                                            -----------       -----------
<S>                                                         <C>               <C>        
Cash flows from operating activities:
  Net income                                                $   526,000       $    10,000
Adjustments to reconcile net income to net
  cash used for operating activities:
  Depreciation and amortization                                 557,000           461,000
  Amortization of deferred revenue                             (332,000)         (147,000)
  Changes in assets and liabilities:
     Accounts receivable                                     (3,149,000)       (3,058,000)
     Inventories                                               (688,000)          792,000
     Prepaid expenses and other assets                         (415,000)         (288,000)
     Accounts payable                                           504,000          (569,000)
     Accrued compensation                                       245,000           (73,000)
     Other accrued liabilities                                  357,000           399,000
     Deferred revenue                                           765,000           123,000
                                                            -----------       -----------

Net cash used for operating activities                       (1,630,000)       (2,350,000)
                                                            -----------       -----------

Cash flows used for investing activities:
  Capital expenditures                                         (205,000)         (639,000)
  Additions to intangibles and other assets                    (291,000)         (245,000)
  Cash received in acquisitions                                    --               6,000
                                                            -----------       -----------

Net cash used for investing activities                         (496,000)         (878,000)
                                                            -----------       -----------

Cash flows provided by financing activities:
  Borrowings under bank lines of credit                       3,688,000         6,178,000
  Payments under bank lines of credit                        (2,915,000)       (3,726,000)
  Principal payments on long-term note                             --             (27,000)
  Proceeds from sale of common stock and warrants, net          105,000             7,000
  Other, net                                                       --               2,000
                                                            -----------       -----------

Net cash provided by financing activities                       878,000         2,434,000
                                                            -----------       -----------

Effects of exchange rate changes on cash
  and cash equivalents                                          (97,000)           24,000
                                                            -----------       -----------

Net decrease in cash and cash equivalents                    (1,345,000)         (770,000)

Cash and cash equivalents at beginning of period              2,510,000           981,000
                                                            -----------       -----------

Cash and cash equivalents at end of period                  $ 1,165,000       $   211,000
                                                            ===========       ===========
</TABLE>


       See accompanying notes to these consolidated financial statements.


                                       3
<PAGE>   5
IDENTIX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      BASIS OF PRESENTATION

        These accompanying consolidated financial statements and related notes
        are unaudited. However, in the opinion of management, all adjustments
        (consisting only of normal recurring adjustments) which are necessary
        for a fair presentation of the financial position and results of
        operations for the interim period have been included. These consolidated
        financial statements should be read in conjunction with the audited
        consolidated financial statements and notes thereto for the fiscal year
        ended June 30, 1997 included in the Company's Form 10-K. The results of
        operations for the three months ended September 30, 1997 are not
        necessarily indicative of results to be expected for the entire fiscal
        year, which ends on June 30, 1998.

        The consolidated financial statements include the accounts of Identix
        Incorporated (the "Company") and its wholly owned subsidiaries: ANADAC,
        Inc. ("ANADAC"), Fingerscan Pty Limited ("Fingerscan") and Biometric
        Applications and Technologies, Inc. ("BA&T"). The Company acquired
        Fingerscan on March 26, 1996. The Company accounted for the acquisition
        of Fingerscan as a purchase. The Company acquired BA&T on July 23, 1997.
        The Company accounted for the acquisition of BA&T as a pooling of
        interests. Accordingly, the consolidated statement of operations and
        consolidated statement of cash flows for the three month period ended
        September 30, 1996 have been restated to include the accounts and
        results of operations of BA&T and the consolidated balance sheet as of
        June 30, 1997 has been restated to include the accounts and results of
        operations of BA&T. In addition, the Company acquired Innovative
        Archival Solutions, Inc. ("IAS") on June 30, 1996. The Company accounted
        for the acquisition of IAS as a pooling of interests. On October 1,
        1996, IAS was merged into Identix. All significant intercompany balances
        and transactions have been eliminated in consolidation.

2.      INVENTORIES

        Inventories are stated at the lower of cost (determined on the first-in,
        first-out cost method) or market. Inventories consisted of the
        following:

<TABLE>
<CAPTION>
                                                        SEPTEMBER 30,        JUNE 30,
                                                            1997               1997
                                                        -----------        -----------
<S>                                                     <C>                <C>       

    Purchased parts and materials                        $2,585,000         $3,027,000
    Work-in-process                                       1,850,000          1,076,000
    Finished goods, including spares                      1,548,000          1,192,000
                                                        -----------        -----------
                                                         $5,983,000         $5,295,000
</TABLE>

3.      NET INCOME PER SHARE

        Net income per common and common equivalent share is computed using the
        weighted average number of common shares outstanding during the period
        after considering the effect of common stock options and warrants under
        the treasury method. Common stock options and warrants have been
        excluded from the computation when their effect is anti-dilutive.

        In February 1997, the Financial Accounting Standards Board ("FAS")
        issued Statement of Financial Accounting Standards No. 128, "Earnings
        per Share" ("SFAS 128"). This statement is effective for the Company's
        interim period ended December 31, 1997. The statement redefines earnings
        per share under Generally Accepted Accounting Principles. Under the new
        standard, primary earnings per share is replaced by basic earnings per
        share and fully diluted earnings per share is replaced by diluted
        earnings per share. The adoption of SFAS 128 would not have a material
        impact on the Company's earnings per share for the three month period
        ended September 30, 1997.



                                       4
<PAGE>   6

4.      RECENT ACCOUNTING PRONOUNCEMENTS

        In June 1997, FAS issued Statement of Financial Accounting Standards No.
        130 "Reporting Comprehensive Income" ("SFAS 130"). This statement is
        effective for the Company's fiscal year ending June 30, 1999. The
        statement establishes presentation and disclosure requirements for
        reporting comprehensive income. Comprehensive income includes charges or
        credits to equity that are not the result of transactions with owners.
        The Company plans to adopt the disclosure requirements and report
        comprehensive income as part of the Consolidated Statements of
        Shareholders' Equity as required under SFAS 130, and expects there to be
        no material impact on the Company's financial position and results of
        operations as a result of the adoption of this new accounting standard.

        In June 1997, FAS issued Statement of Financial Accounting Standards No.
        131 "Disclosures about Segments of an Enterprise and Related
        Information" ("SFAS 131"). This statement is effective for the Company's
        fiscal year ending June 30, 1999. The statement requires the Company to
        report certain financial information about operating segments in
        complete sets of financial statements of the Company and in condensed
        financial statements of interim periods. It also requires that the
        Company report certain information about its products and services, the
        geographic areas in which it operates and its major customers. The
        method FAS chose for determining what information to report is referred
        to as the "management approach". The management approach is based on the
        way that management organizes the segments within the enterprise for
        making operating decisions and assessing performance. The Company's
        management has not yet completed its assessment of how the "management
        approach" will impact segment disclosures.

5.      CONTINGENT LIABILITIES

        The Company has been named as a defendant in a class action lawsuit,
        which was filed in October 1996 in the United States District Court for
        the Northern District of California. Certain executive officers of the
        Company are also named as defendants. The plaintiff purports to
        represent a class of all persons who purchased the Company's common
        stock between January 31, 1996 and August 26, 1996 (the "Class Period").
        The complaint alleges claims under the federal securities laws and
        California laws. The plaintiff alleges that the Company and certain of
        its executive officers made false and misleading statements regarding
        the Company that caused the market price of its common stock to be
        "artificially inflated" during the Class Period. The complaint does not
        specify the amount of damages sought. The Company has established a
        reserve for the Company's estimated expenses in connection with the
        lawsuit. The Company and its officers deny the allegations and will
        vigorously pursue resolution of the claims.

        On May 31, 1995, Digital Biometrics, Inc. ("DBI"), a competitor, filed a
        lawsuit in the United States District Court in the Northern District of
        California against the Company alleging that certain of the Company's
        TouchPrint products violate a DBI patent and seeking injunctive relief
        and unspecified damages. The lawsuit has no implication for other
        Identix products. On August 22, 1996, the Court granted the Company's
        motion determining that the TouchPrint 600 does not infringe the patent.
        On December 7, 1996, the Court issued another ruling determining that
        the predecessor product of the TouchPrint 600, the TouchPrint 900
        product, did not infringe the patent. As a result, the Court entered
        judgment in favor of Identix and awarded Identix its costs of suit. On
        January 7, 1997, DBI filed a Notice of Appeal. Oral argument on that
        appeal was held before the Federal Circuit Court of Appeals on October
        8, 1997 and the matter is under consideration by the Court.


                                       5
<PAGE>   7

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

Identix Incorporated ("Identix" or "the Company") designs, develops,
manufactures and markets comprehensive solutions for the capture or comparison
of fingerprints for security, fraud prevention, law enforcement and other
applications. Identix's products are classified into two groups: (i) biometric
identity verification ("Bio-ID") products that verify the identify of an
individual through the unique biological characteristics of a fingerprint and
(ii) biometric imaging products that electronically capture forensic quality
fingerprint images directly from an individual's fingers for law enforcement and
other applications. The Company's principal Bio-ID products are TouchNet II*,
TouchSafe II*, TouchLock II*, TouchClock II*, TouchBlock II*. The Company's
principal biometric imaging products are TouchPrint 600*, TouchView II*, I(3)
Workstation* and DocuColor*. The Company provides information technology,
engineering and management consulting services to private and public sector
clients through a wholly owned subsidiary, ANADAC, Inc. ("ANADAC"). ANADAC's
services support the development, installation, integration, and operation of
hardware and software technology solutions, including Identix products, for a
variety of client operating environments.

On March 26, 1996, the Company acquired Fingerscan Pty Limited ("Fingerscan"), a
privately held Australian-based company that designs and markets Bio-ID
products. Fingerscan had been a long-standing Identix OEM partner integrating
Identix fingerprint identification technology into Fingerscan's fingerprint
identity and verification products and systems. The acquisition was accounted
for as a purchase. Accordingly, the Company's financial statements include the
results of Fingerscan from the date of acquisition.

On June 30, 1996, the Company acquired Innovative Archival Solutions, Inc.
("IAS"), a privately held company which provides fingerprinting services using
the Company's biometric imaging products. The acquisition was accounted for as a
pooling of interests. Accordingly, the Company's fiscal 1996 consolidated
financial statements include the accounts and results of operations of IAS. For
the periods prior to fiscal 1996, the effects of the combination with IAS were
not significant, and the Company has not restated those years to include the
accounts and operations of IAS. On October 1, 1996, IAS was merged into Identix.

On July 23, 1997, the Company acquired Biometric Applications and Technology,
Inc. ("BA&T"), a privately held developer of biometric and "smart" card
applications and solutions. BA&T had been a software development partner that
integrated its software with Identix's Bio-ID products. The acquisition was
accounted for as a pooling of interests. Accordingly, the Company's fiscal 1997
consolidated financial statements include the accounts and results of operations
of BA&T. For the periods prior to fiscal 1997, the effects of the combination
with BA&T were not significant, and the Company has not restated those years to
include the accounts and results of operations of BA&T.

On September 30, 1997, the Company entered into a joint venture agreement with
Sylvan Learning Centers, Inc. for the purpose of providing fingerprinting
services through Sylvan's testing centers nationwide. As of October 1, 1997, the
business of IAS is being conducted through the joint venture.

The statements in this report that relate to future plans, events, or
performance are forward-looking statements. Actual results, events and
performance may differ materially due to a variety of factors including the
factors described under "Risk Factors" below. Readers are cautioned not to place
undo reliance on these forward-looking statements, which speak only as of the
date hereof. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.


---------- (*) The Company's has adopted TouchNet II(TM), TouchSafe II(TM),
TouchLock II(TM), TouchClock II(TM), TouchBlock II(TM), TouchPrint 600(TM),
TouchView II(TM), I(3) Workstation(TM) and DocuColor(R) as trademarks.


                                       6
<PAGE>   8

IDENTIX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED . . .

RESULTS OF OPERATIONS

Revenues

Revenues for the three month period ended September 30, 1997 were $18,850,000
compared to $12,079,000 for the same period in the prior fiscal year. For the
three month period ended September 30, 1997 the increase in revenues of 56% is
due to increases in the Company's net product revenues and services revenues.

The Company's net product revenues were $8,907,000 for the three month period
ended September 30, 1997 compared to $6,379,000 for the same period in the prior
fiscal year. For the three month period ended September 30, 1997, the increase
in net product revenues of 40% was due to increase shipments of both the
Company's biometric imaging and Bio-ID product lines. International sales
accounted for $2,537,000 or 28% of the Company's net product revenues for the
three month period compared to $1,265,000 or 20% for the same period in the
prior fiscal year. The increase is due to the increase of Bio-ID sales through
Fingerscan and increased international biometric imaging product sales. The
Company expects international sales to continue to represent a significant
portion of net product revenues although the percentage may fluctuate from
period to period. The Company's international sales are denominated in U.S.
dollars except for sales by Fingerscan which are denominated in Australian
dollars. The Company actively monitors its foreign currency exchange exposure
and, if significant, will take action to reduce foreign exchange risk. To date,
the Company has not entered into any hedging transactions. The overall impact of
currency fluctuations on operating results was not significant for the three
month period ended September 30, 1997. For the three month period ended
September 30, 1997, the Company's net products revenue included one customer
that accounted for 12% of total revenues. For the three month period ended
September 30, 1996, the Company's net products revenue included a different
customer that accounted for 15% of total revenues.

The Company's services revenues were $9,943,000 for the three month period ended
September 30, 1997 compared to $5,700,000 for the same period in the prior
fiscal year. The increase in services revenues of 74% for the three month period
ended September 30, 1997 was due primarily to increases in U.S. government
purchases through the Company's General Services Administration ("GSA") contract
which is operated and maintained by ANADAC. The GSA contract allows government
agencies to purchase, without a formal competitive bid process, the Company's
services and products as well as third party services and products at agreed
upon rates and prices, respectively. The Company and the General Services
Administration negotiate the rates and prices annually or as new services or
products are added. The majority of the Company's services revenues are
generated directly from contracts with the U.S. government, principally the
Department of Defense ("DOD"). For the three month period ended September 30,
1997, revenues directly from the DOD and from other U. S. government agencies
accounted for 87% of the Company's total services revenues compared to 76% for
the same period in the prior fiscal year. The increase is due to U.S. government
agency purchases through the GSA contract.

The Company's services business generates a significant amount of its revenues
from cost plus fixed fee ("CPFF") contracts, which accounted for approximately
22% of its services revenues for the three month period ended September 30,
1997, compared to 45% for the same period in the prior fiscal year. The decrease
in the percentage of services revenues generated by CPFF contracts is due to the
increase in third party services purchased through the GSA contract. CPFF
contracts provide for the reimbursement of allowable costs, including indirect
costs plus a fee or profit. The Company's services business also generates
revenue from time-and-materials ("T&M") contracts and from firm fixed-price
("FFP") contracts. During the three month period ended September 30, 1997, the
Company derived approximately 25% of its services revenues from T&M and FFP
contracts compared to 34% for the same period in the prior fiscal year. The
decrease in the percentage of services revenues generated by T&M and FFP
contracts is due to the increase in third party services purchased through the
GSA contract. T&M contracts typically provide for payment of negotiated hourly
rates for labor incurred plus reimbursement of other allowable direct and
indirect costs. FFP contracts provide for a fixed price for stipulated services
or products, regardless of the costs incurred, which may result in losses from
cost overruns. The Company has experienced a shift in its contract base from
CPFF to T&M and FFP type contracts. The Company assumes greater performance risk
on T&M and FFP contracts and the failure to accurately estimate ultimate costs
or to control costs during performance of the work can result in reduced profit
margins or losses. There can be no assurance that the Company's services
business will not incur cost overruns for any FFP and T&M contracts it is
awarded. In addition, revenues generated from contracts with government agencies
are subject to audit and subsequent adjustment by negotiation between the
Company and representatives of such government agencies. ANADAC is currently
undergoing an audit by the Defense Contract Audit Agency for the period from
January 1, 1993 to June 30, 1995. 



                                       7
<PAGE>   9

IDENTIX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED . . .

Gross Margin

Gross margin on net product revenues was 54% for the three month period ended
September 30, 1997 as compared to 47% for the same period in the prior fiscal
year. The increase in gross margin was primarily due to (i) the favorable
product mix of higher gross margin products, (ii) cost reductions in certain
components of the biometric imaging and Bio-ID product lines and (iii)
increased manufacturing efficiencies resulting from the increase in unit volume.
The Company expects gross margins to fluctuate in future periods due to changes
in the product mix, the costs of components and competition in the industry.

Gross margin on services revenues was 14% for the three month period ended
September 30, 1997 as compared to 18% for the same period in the prior fiscal
year. The decrease in gross margin was primarily due to an increase in third
party services purchased through the GSA contract maintained by ANADAC. When the
Company sells third party services through the GSA contract, the Company earns a
fee based on a percentage of the third party services purchased. The fee earned
on third party services is typically less than the fee earned on services
directly provided by the Company.

Research, Development and Engineering

Research, development and engineering expenses were $1,037,000 or 12% of net
product revenues for the three month period ended September 30, 1997 compared to
$537,000 or 8% of net product revenues for the same period in the prior fiscal
year. For the three month period ended September 30, 1997, the Company had no
research, development and engineering expenditures funded by customers compared
to $125,000 for the same period in the prior fiscal year. The increase in
research, development and engineering expenses is primarily due to the addition
of engineering staff and related expenses to further develop and enhance the
Company's products including BA&T's Bio-ID software application suites. The
Company believes that investment in research and development is critical to
maintaining a strong technological position in the industry and therefore
expects research, development and engineering expenses to continue to increase
in absolute dollars in future fiscal 1998 quarters.

Marketing and Selling

Marketing and selling expenses were $2,206,000 or 12% of total revenues for the
three month period ended September 30, 1997 compared to $1,666,000 or 14% of
total revenues for the same period in the prior fiscal year. The increase in
marketing and selling expenses is due to the increased staffing and expenses to
(i) promote the Company's products and services, (ii) expand international sales
and distribution and (iii) expand its customer service organization.

General and Administrative

General and administrative expenses were $2,404,000 or 13% of total revenues for
the three month period ended September 30, 1997 compared to $1,768,000 or 15% of
total revenues for the same period in the prior fiscal year. The increase in
general and administrative expenses was primarily due to an increase in staffing
and other related administrative expenses to support the growth in operations
including BA&T's operations and to an increase in litigation reserves and
expenses to $423,000 for the three months ended September 30, 1997 compared to
$328,000 in the same period in the prior fiscal year.


                                       8
<PAGE>   10
IDENTIX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED . . .

Other Income and Expense

For the three month period ended September 30, 1997 other income was $44,000
compared to other expense of $9,000 for the same period in the prior fiscal
year.

Net Interest Expense

Net interest expense was $21,000 for the three month period ended September 30,
1997 compared to $67,000 for the same period in the prior fiscal year. The
difference was due to reduced borrowings under the Company's lines of credit
during the three month period ended September 30, 1997 compared to the same
period in the prior fiscal year.

During the three month period ended September 30, 1997, the weighted average
interest rate paid by the Company on its borrowings under line of credit (the
"Identix Line of Credit") was 8.5%. The weighted average interest rate paid by
ANADAC on borrowings under its bank line of credit (the "ANADAC Line of Credit")
during the three-month period ended September 30, 1997 was 8.5%.


LIQUIDITY AND CAPITAL RESOURCES

The Company financed its operations during the three months ended September 30,
1997 primarily from its existing working capital at June 30, 1997 and borrowings
under the Identix Line of Credit and the ANADAC Line of Credit. As of September
30, 1997, the Company's principal sources of liquidity consisted of $16.1
million of working capital including $1.2 million in cash and cash equivalents,
the Identix Line of Credit and the ANADAC Line of Credit.

The Identix Line of Credit is a $6,000,000 bank line of credit secured by the
personal property of Identix. Under the bank line of credit, the Company may
borrow up to 80% of eligible accounts receivable and may borrow up to 50% of
eligible inventory. Amounts drawn bear interest at the bank's prime rate of
interest (8.5% at September 30, 1997). The line of credit expires on August 28,
1998. At September 30, 1997, $1,600,000 was outstanding and $4,400,000 was
available under the Identix Line of Credit. The Identix Line of Credit agreement
contains financial and operating covenants, including restrictions on the
Company's ability to pay dividends on the Company's common stock.

The ANADAC Line of Credit is a $6,000,000 bank line of credit secured by
ANADAC's accounts receivable and certain other assets. Under the ANADAC Line of
Credit, ANADAC may borrow against qualified accounts receivable. Amounts drawn
bear interest at the bank's prime rate of interest (8.5% at September 30, 1997).
The line of credit expired on October 31, 1997. At September 30, 1997,
$1,092,000 was outstanding and $4,712,000 was available under the ANADAC Line of
Credit. The ANADAC Line of Credit agreement contains financial and operating
covenants. ANADAC has entered into a new bank line of credit with the same bank
to replace the ANADAC line of credit. The new line of credit is a $6,000,000
line of credit secured by ANADAC'S accounts receivable and certain other assets.
Under the new line of credit, ANADAC may borrow against qualified accounts
receivable. Amounts drawn bear interest at the bank's prime rate of interest.
The new line of credit expires on November 30, 1998.


                                       9
<PAGE>   11
IDENTIX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED . . .

The Company's operating activities used cash of $1,630,000 during the three
months ended September 30, 1997. Net income of $526,000 and increases in
deferred revenue of $765,000 and accounts payable of $504,000 were offset by
increases in accounts receivable of $3,149,000 and inventory of $688,000. The
increase in deferred revenue was primarily due to an increase in the number of
live-scan systems under maintenance contracts. The increase in accounts payable
was due to financing the increase in inventories and timing of vendor payments.
The increase in accounts receivable was due primarily to an increase in total
revenues and the increase in inventories was due primarily to the stocking of
certain inventory for the Company's Bio-ID and biometric imaging product lines.

Net cash used in investing activities during the three months ended September
30, 1997 was $496,000 due primarily to purchases of property and equipment of
$205,000 and additions to intangibles and other assets of $291,000.

Net cash provided by financing activities during the three months ended
September 30, 1997 was $878,000 due primarily to increased net borrowings
against the Company's lines of credit.

Identix did not have any material capital expenditure commitments as of
September 30, 1997.

The Company believes that cash flow from operations together with existing
working capital and two bank lines of credit maintained by the Company will be
adequate for the Company's cash requirements for fiscal 1998. However, the
Company may require additional equity or debt financing beyond the amounts
currently forecasted by the Company to meet its working capital or capital
equipment needs. There can be no assurance that the Company would be able to
obtain such financing or that the terms of financing would be favorable to the
Company.


                                       10
<PAGE>   12
IDENTIX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED . . .

RISK FACTORS

        The Company's future operation, financial performance, business and
share price may be affected by a number of factors, including the following, any
of which could cause actual results to vary materially from anticipated results
or from those expressed in any forward-looking statements made by the Company in
this Report on Form 10-Q for the three month period ended September 30, 1997, or
in other reports, press releases or other statements issued from time to time.

FLUCTUATIONS IN QUARTERLY RESULTS

The Company's quarterly operating results have in the past been, and will
continue to be, subject to significant variations resulting from a number of
factors, many of which are outside of the Company's control and any one of which
could substantially affect the Company's results of operations for any
particular fiscal period. The Company's revenues in any period have been, and in
the near term are expected to be, derived from large orders from a limited
number of customers. Accordingly, revenues in a particular quarter will be
dependent upon the timing and size of major orders and the timing of recognition
of revenues from those orders. A majority of the Company's revenues are derived
from the sale of products and services either directly to governmental agencies
or original equipment manufacturers ("OEMs"), systems integrators or resellers
who sell products and services to government agencies. Government agencies are
subject to political and budgetary constraints and orders from them may be
canceled or substantially delayed or the receipt of revenues or payments
substantially delayed due to political and budgetary processes or other
scheduling delays relating to the contract or bidding process. In addition, the
Company's contracts with local government agencies may be contingent upon
availability of matching funds from state or federal entities. Other factors
which can result in fluctuations in quarterly results of operations include
budgetary and purchasing cycles of government agencies; changes in the mix of
products and services sold and the mix of product sales by distribution
channels; the pricing of existing and future products by the Company's
competitors; the introduction of new or enhanced products by the Company or its
competitors and the market acceptance thereof; expenses related to, and results
of, litigation; percentage of and costs associated with FFP contracts and T&M
contracts; the availability and cost of key components; and fluctuations in
general economic conditions. The Company also may choose to reduce prices or to
increase spending in response to competition or to pursue new market
opportunities, all of which may adversely affect the Company's business,
financial condition and results of operations. Further, the lead time for
ordering parts and materials and building the Company's products can be many
months and the Company orders parts and materials and builds products based on
its forecasted demand for the products. If demand for the Company's products
lags significantly behind the Company's forecasts, the Company runs the risk of
building too large an inventory, which may adversely affect cash flow and may
result in write-offs or writedowns of inventory because of product obsolescence.
Due to the foregoing factors, the Company's operating results may differ from
the expectations of securities analysts and investors, which could adversely
affect the trading price of the Company's common stock. The Company believes
that period-to-period comparisons of its results of operations should not be
relied upon as indications of future performance.

DEPENDENCE UPON NEW AND UNCERTAIN MARKETS; UNCERTAINTY OF MARKET ACCEPTANCE

        Substantially all of the Company's product revenues to date have been,
and for the foreseeable future are anticipated to be, derived from Bio-ID
products and biometric imaging products. These products represent new
technologies, which have not gained widespread commercial acceptance. In
particular, Bio-ID products represent a new approach to identity verification,
which has only been used in limited applications to date. The expansion of the
market for the Company's products depends on a number of factors, including the
cost and reliability of the Company's products and products of competitors,
customers' perception of the perceived benefits of these products, public
perceptions of the intrusiveness of these products and the manner in which
agencies are using the fingerprint information collected, public confidence as
to confidentiality of private information, customers' satisfaction with the
Company's products and publicity regarding these products. Public objections
have been raised as to the use of biometric products for some applications on
civil liberties grounds. The Company's future success is dependent upon the
development and expansion of markets for Bio-ID products and biometric imaging
products both domestically and internationally. In addition, even if markets
develop for Bio-ID products and additional markets develop for biometric imaging
products, there can be no assurance that the Company's products will gain wide
market acceptance in these markets. A number of factors may limit the market
acceptance of the Company's products, including the performance and price of the
Company's products compared to competitive products or 


                                       11
<PAGE>   13


technologies, the practicalities of developing the infrastructure necessary to
support certain Bio-ID applications such as ATMs and point-of-sale applications,
the nature of technological innovations and new product development activities
by the Company and its competitors, and the extent of marketing efforts by the
Company's collaborators or partners. If the markets for the Company's products
fail to develop or develop more slowly than anticipated or if the Company's
Bio-ID products fail to gain wide market acceptance, or biometric imaging
products lose market share, the Company's business, financial condition and
results of operations would be materially and adversely affected.

COMPETITION AND TECHNOLOGICAL CHANGE

The markets for Bio-ID products and biometric imaging systems are extremely
competitive and are characterized by rapid technological change, both as a
result of technical developments exploited by competitors, the changing
technical needs of customers and frequent introductions of new features. The
Company expects competition to increase as other companies introduce additional
and more competitive products. In order to compete effectively in this
environment, the Company must continually be able to develop and market new and
enhanced products and market those products at competitive prices. There can be
no assurance that the Company will be able to make the technological advances
necessary to compete successfully in its products business. Some of the
Company's present and potential competitors have financial, marketing and
research resources substantially greater than those of the Company. Existing and
new competitors may enter or expand their efforts in the Company's product
markets, or develop new products to compete against the Company's products. No
assurance can be given that the Company's competitors will not develop new
technologies or enhancements to existing products or introduce new products that
will offer superior price or performance features or that new products or
technologies will not render obsolete the products of the Company. For example,
other companies are developing currently or have developed other methods of
biometric identification such as retinal blood vessel or iris pattern, hand
geometry, voice and facial structure, which could significantly reduce the
potential market for the Company's products if widely adopted. In addition,
several companies, including Philips Electronics N.V., Harris Corporation, Sony
Corporation, SGS-Thomson Microelectronics, Inc. and Veridicom, Inc., are
developing semiconductor or optically-based direct contact fingerprint image
capture devices that could compete directly with the Company's Bio-ID image
capture devices. The Company's Bio-ID products also face competition from
non-biometric technologies such as traditional key, card and surveillance
systems, PINs and similar traditional verification methods. The Company believes
that in an effort to remain competitive in the future it will need to invest
increasing financial resources in research and development.

        In its services business, the Company faces substantial competition from
professional services providers of all sizes in the government professional
services market. ANADAC is increasingly being required to bid on FFP and similar
contracts that result in greater performance risk to ANADAC. If ANADAC is not
able to maintain a competitive cost structure, support specialized market
niches, retain its highly qualified personnel or align with technology leaders,
its ability to compete successfully will be materially and adversely affected.

DEPENDENCE ON NEW PRODUCT INTRODUCTIONS

        The Company's future success will depend upon its ability to address the
needs of the market by enhancing its current products and by developing and
introducing new products on a timely basis that keep pace with technological
developments and emerging industry standards (including FBI accreditation
standards), respond to evolving customer requirements and achieve market
acceptance. The development of new, technologically-advanced products and
product enhancements is a complex and uncertain process requiring high levels of
innovation, as well as the accurate anticipation of technological and market
trends. Any failure by the Company to anticipate or adequately respond to
technological developments or end user requirements, or any significant delays
in product development or introduction, could result in a loss of
competitiveness or revenue. There can be no assurance that the Company will be
successful in developing and marketing product enhancements or new products on a
timely basis if at all, that the Company will not experience difficulties that
could delay or prevent the successful development, introduction and sale of
these products, or that any of its new products and product enhancements will
adequately meet the requirements of the marketplace and achieve market
acceptance. If the Company is unable, for technological or any other reason, to
develop, introduce and sell its products in a timely manner, the Company's
business, financial condition and results of operations would be materially and
adversely affected. In addition, because a number of the Company's biometric
imaging products and Bio-ID products are incorporated into systems marketed by
other companies, or are co-marketed together with other products or services
sold by other companies, the failure to introduce products in a timely manner
may cause such companies to seek alternative suppliers or 


                                       12
<PAGE>   14
marketing partners. From time to time, the Company or its present or future
competitors may announce new products, capabilities or technologies that have
the potential to replace the Company's existing products. There can be no
assurance that announcements of currently planned or other new products will not
cause customers to delay or alter their purchasing decisions in anticipation of
such products, which could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, new
product introductions may contribute to fluctuations in quarterly operating
results or result in the early obsolescence of the Company's products, because
customers may forego ordering the Company's existing products. If the Company's
new products have reliability or quality problems, the Company may experience
reduced orders, higher manufacturing costs, delays in collecting accounts
receivable and additional service and warranty expense.

DEPENDENCE ON STRATEGIC RELATIONSHIPS FOR PRODUCT DISTRIBUTION

        The Company's strategy for the distribution of certain of its products
requires entering into various strategic relationships with OEMs, systems
integrators and resellers. Some of these relationships are formalized in
agreements; however, such agreements are often terminable with little or no
notice, and subject to periodic amendment. Although the Company believes that
the OEMs, systems integrators and resellers with which it works have an economic
motivation to promote or use the Company's products, the amount and timing of
resources to be devoted to these activities are not within the control of the
Company. There can be no assurance that such parties will actively promote the
Company's products or pursue installations which use the Company's equipment,
that any distribution or other arrangements with the Company will not be
terminated or renegotiated or that the Company will derive any revenues from
such arrangements. The Company intends to continue to seek strategic
relationships to distribute and sell certain of its products. There can be no
assurance that the Company will be able to negotiate acceptable strategic
relationships in the future or that current or future strategic relationships
will be successful.

PUBLIC AGENCY CONTRACT CONSIDERATIONS

        A majority of the Company's revenues are derived from the sale of
products and services either directly to governmental agencies or to OEMs,
systems integrators or resellers who sell products to government agencies.
Government agencies frequently require provisions in contracts that are not
standard in private commercial transactions, such as bonding requirements and
provisions permitting the purchasing agency to cancel the contract without
penalty if funding for the contract is no longer available or is not obtained.
As public agencies, the Company's prospective customers are also subject to
public agency contract requirements, which vary from jurisdiction to
jurisdiction. Future sales to public agencies will depend on the Company's
ability to meet public agency contract requirements, certain of which may be
onerous or even impossible for the Company to satisfy. In addition, public
agency contracts are frequently awarded only after formal competitive bidding
processes, which have been and may continue to be protracted, and typically
contain provisions that permit cancellation in the event that funds are
unavailable to the public agency. 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.

UNCERTAINTY RELATED TO CONTRACTS FOR SERVICES WITH GOVERNMENT AGENCIES

        During the three months ended September 30, 1997 and fiscal 1997, the
Company derived approximately 87% and 77%, respectively, of its services revenue
directly from contracts relating to the DOD and other U.S. Government agencies.
Loss of any material government contract due to budget cuts or otherwise could
have a material adverse effect on the Company's business, financial condition
and results of operations.

        During the three months ended September 30, 1997 and fiscal 1997, the
Company derived approximately 25% and 46%, respectively, of services revenues
from T&M contracts and FFP contracts. T&M contracts typically provide for
payment of negotiated hourly rates for labor incurred plus reimbursement of
other allowable direct and indirect costs. FFP contracts provide for a fixed
price for stipulated services or products, regardless of the costs incurred,
which may result in losses from cost overruns.

        The Company anticipates that revenues from FFP and T&M contracts will
continue to represent a significant percentage of its total services revenues.
The Company assumes greater performance risk on FFP and T&M contracts and the
failure to estimate accurately ultimate costs or to control costs during
performance of the work can result in reduced profit 


                                       13
<PAGE>   15


margins or losses. There can be no assurance that the Company's services
business will not incur such overruns for any FFP and T&M contracts it is
awarded. In addition, revenues generated from contracts with government agencies
are subject to audit and subsequent adjustment by negotiation between the
Company and representatives of such government agencies. ANADAC is currently
undergoing an audit for the period from July 1, 1992 to June 30, 1995. While the
Company believes that the results of the ANADAC audit will have no material
effect on the Company's revenues, there can be no assurance that no adjustments
will be made and that, if made, such adjustments will not have a material
adverse effect on the Company's business, financial condition and results of
operations. 

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

        During the three months ended September 30, 1997 and fiscal 1997, the
Company's net product revenues from international sales were 28% and 31%,
respectively. A key component of the Company's strategy is to continue expansion
into international markets. There can be no assurance that the Company will be
able to market, sell and deliver its products in these foreign countries. In
addition to the uncertainty as to the Company's ability to expand its
international presence, there are certain risks inherent in foreign operations,
including longer accounts receivable payment cycles in certain countries,
general economic conditions in each country, seasonal reductions in business
activity during the summer months in Europe and certain other parts of the
world, delays in or prohibitions on exporting products resulting from export
restrictions for certain technologies (such as encryption technology),
fluctuations in foreign currencies, fluctuations in the U.S. dollar which can
increase the sales price of the Company's products in local currencies, loss of
revenue, property and equipment from expropriation, nationalization, war,
insurrection, terrorism and other political risks, the overlap of different tax
structures, risks of increases in taxes and other government fees and
involuntary renegotiation of contracts with foreign governments. The Company is
also at risk from changes in foreign and domestic laws, regulations and policies
governing foreign operations. There can be no assurance that laws or
administrative practices relating to taxation, foreign exchange or other matters
of countries within which the Company operates or will operate will not change.
Any such change could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the laws of foreign
countries treat the protection of proprietary rights differently from, and may
not protect the Company's proprietary rights to the same extent as, laws in the
United States.

        The Company's international sales are denominated in U.S. dollars,
except sales by Fingerscan which are denominated in Australian dollars. The
Company actively monitors its foreign currency exchange exposure and, if
significant, will take action to reduce foreign exchange risk. To date, the
Company has not entered into any hedging transactions.

DEPENDENCE ON LARGE ORDERS BY CUSTOMERS

        The Company's revenues have principally consisted, and will continue to
consist principally, of large orders from a limited number of customers. While
the individual customers may vary from period to period, the Company is
nevertheless dependent upon these large orders for a substantial portion of its
total revenues. There can be no assurance that the Company will be able to
obtain large orders on a consistent basis. The Company's inability to obtain
sufficient large orders would have a material adverse effect on the Company's
business, financial condition and results of operations. Moreover, the timing
and shipment of such orders may cause the operating results of the Company in
any given quarter to differ from the expectations of securities analysts, which
could adversely affect the trading price of the Company's common stock. Losses
arising from customer disputes regarding shipping schedules, product condition
or performance, or the Company's inability to collect accounts receivable from
any major customer could also have a material adverse effect on the Company's
business, financial condition and results of operations.

        Orders for the Company's biometric imaging products are often subject to
delays associated with the lengthy approval processes that typically accompany
large capital expenditures by government agencies. The Company's total revenues
depend in significant part upon the decision of a government agency to adopt and
integrate the Company's systems, which often involves a significant capital
commitment as well as significant future support costs. Similar delays may also
be experienced from government agencies procuring the Company's services. The
Company often has a lengthy sales cycle while the customer evaluates and
receives approvals for the purchase of the Company's products or services. Any
significant failure by the Company to receive an order after expending
significant funds and effort could have a material adverse effect on its
business, financial condition and results of operations. It may be difficult to
predict accurately the sales cycle of any 


                                       14
<PAGE>   16


large order. In the event one or more large orders fail to be shipped as
forecasted for a fiscal quarter, the Company's total revenues and operating
results for such quarter could be materially and adversely affected. In
addition, even if the Company receives such an order, the order may be
contingent upon availability of matching funds from state or federal entities or
may be canceled or receipt of revenues may be substantially delayed due to
political and budgetary processes.

RISKS ASSOCIATED WITH ACQUISITIONS

        As part of its business strategy, the Company intends to acquire assets
and businesses principally relating to or complementary to its current
operations. The Company acquired Fingerscan in March 1996, IAS in June 1996 and
BA&T in July 1997. These and any other acquisitions by the Company will be
accompanied by the risks commonly encountered in acquisitions of companies. Such
risks include, among other things, potential exposure to unknown liabilities of
acquired companies or to acquisition costs and expenses exceeding amounts
anticipated for such purposes; fluctuations in the Company's quarterly and
annual operating results due to the costs and expenses of acquiring and
integrating new businesses; the difficulty and expense of assimilating the
operations and personnel of the companies; the potential disruption of the
Company's ongoing business and diversion of management time and attention; the
inability of management to maximize the Company's financial and strategic
position by the successful incorporation of acquired technology; the maintenance
of uniform standards, controls, procedures and policies; the impairment of
relationships with and possible loss of key employees and customers as a result
of changes in management; the incurrence of amortization expenses if an
acquisition is accounted for as a purchase; and dilution to the shareholders of
the Company if the consideration for the acquisition consists of the Company's
equity. In addition, the difficulty of integrating certain companies may be
increased by geographic distances. There can be no assurance that the Company
will be successful in overcoming these risks or any other problems encountered
in connection with such acquisitions.

RISK OF PRODUCT DEFECTS AND FAILURE TO MEET PERFORMANCE CRITERIA

        Complex products such as those offered by the Company may contain
undetected or unresolved defects or may fail initially to meet customers'
performance criteria when first introduced or as new versions are released.
There can be no assurance that, despite testing by the Company, defects or
performance flaws will not be found in new products or new versions of products
following commercial release or that performance failures will not result,
causing loss of market share, delay in or loss of market acceptance, additional
warranty expense or product recall. In addition, the failure of products to meet
performance criteria could result in delays in recognition of revenue and higher
operating expenses during the period required to correct such defects. There is
a risk, that for unforeseen reasons, the Company may be required to repair or
replace a substantial number of products in use or to reimburse persons for
products that fail to work or meet strict performance criteria. Any such
occurrence could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company does carry product
liability insurance, but there can be no assurance that existing coverage is
adequate for current operations or will be adequate for future operations. The
Company's business could be materially and adversely affected by the assertion
of product liability claims.

PROTECTION OF PROPRIETARY TECHNOLOGY

        The Company's ability to compete effectively will depend in part on its
ability to maintain the proprietary nature of its technology, products and
manufacturing processes. The Company principally relies upon patent, copyright,
trade secret and contract law to establish and protect its proprietary rights.
The success of the Company's products business will depend in part on its
proprietary technology and the Company's protection of such technology. The
Company holds United States and foreign patents covering certain of its products
and technologies and has other patent applications pending. Identix has an
ongoing policy of filing patent applications to seek protection for novel
features of its products.

        No assurance can be given that the claims allowed on any patents held by
the Company will be sufficiently broad to protect the Company's technology. In
addition, no assurance can be given that any patents issued to the Company will
not be challenged, invalidated or circumvented or that the rights granted
thereunder will provide competitive advantages to the Company. The loss of
patent protection on the Company's technology or the circumvention of its patent
protection by competitors could have a material adverse effect on the Company's
ability to compete successfully in its products business. 


                                       15
<PAGE>   17


There can be no assurance that any existing or future patent applications by the
Company will result in issued patents with the scope of the claims sought by the
Company, or at all, that any current or future issued or licensed patents, trade
secrets or know-how will afford sufficient protection against competitors with
similar technologies or processes, or that any patents issued will not be
infringed upon or designed around by others. In addition, there can be no
assurance that others will not independently develop proprietary technologies
and processes, which are the same as, substantially equivalent or superior to
those of the Company. Further, there can be no assurance that the Company has
not or will not infringe prior or future patents owned by others, that the
Company will not need to acquire licenses under patents belonging to others for
technology potentially useful or necessary to the Company, or that such licenses
will be available to the Company, if at all, on terms acceptable to the Company.

        Litigation, which could result in substantial cost to the Company and
diversion of management attention, may also be necessary to enforce any patents
issued to the Company or to determine the scope and validity, of other parties'
proprietary rights. For example, the Company is engaged in litigation with a
competitor regarding the scope of a competitor's patent. If the outcome of any
such litigation is adverse to the Company, its business, financial condition and
results of operations could be materially and adversely affected. To determine
the priority of inventions, the Company may have to participate in interference
proceedings declared by the United States Patent and Trademark Office or
oppositions in foreign patent offices, which could result in substantial cost to
the Company and limitations on the scope or validity of the Company's patents.

        The Company also relies on trade secrets and proprietary know-how which
it seeks to protect by confidentiality agreements with its employees and
consultants and with third parties. There can be no assurance that these
agreements will not be breached, that the Company will have adequate remedies
for any breach, or that its trade secrets and proprietary know-how will not
otherwise become known or be independently discovered by others.

RISKS ASSOCIATED WITH MANAGING EXPANSION OF OPERATIONS

        The Company has experienced substantial growth in recent years and
believes that in order to be successful it must continue to grow rapidly. In
order to grow rapidly, the Company will be required to expand, train and manage
its employee base, particularly skilled technical, marketing and management
personnel. Rapid growth will also require an increase in the level of
responsibility for both existing and new management and will require the Company
to implement and improve operational, financial and management information
procedures and controls. The Company competes with some of the major technology,
consulting and software companies in seeking to attract qualified personnel.
There can be no assurance that the management skills and systems currently in
place will be adequate or that the Company will be able to manage effectively
any significant growth it experiences and to hire or assimilate new personnel
necessary to pursue its growth strategy. Any failure to adequately manage growth
could materially and adversely affect the Company's business, financial
condition and results of operations.

DEPENDENCE UPON SOLE AND LIMITED SOURCES OF SUPPLY; RISKS ASSOCIATED WITH
IMPLEMENTATION OF LARGER SCALE MANUFACTURING CAPABILITIES

        Certain of the components included in the Company's products are
obtained from a single source or a limited group of suppliers, the most
important of which are the charge coupled devices and application specific
integrated circuits ("ASICs") for the Bio-ID products and the charge coupled
devices for the biometric imaging products. The Company has no long term
agreements with any of its suppliers. Although the Company seeks to reduce
dependence on these sole and limited sources of suppliers, the partial or
complete loss of certain of these sources or the delay in receiving supplies
from these sources could result in delays in manufacturing and shipping of
products to customers. This may require the incurrence of development and other
costs to establish alternative sources of supply. While the Company attempts to
maintain a few months of inventory on sole source components, it may take the
Company several months to locate alternative suppliers if required, and/or to
re-tool its products to accommodate components from different suppliers. If the
Company is required to seek alternative suppliers, there can be no assurance
that the Company will be able to obtain such components within the time frames
required by the Company at an affordable cost, or at all. Any delays resulting
from suppliers failing to deliver components on a timely basis in sufficient
quantities and of sufficient quality or any significant increase in the price of
components from existing or alternative suppliers could have a material adverse
effect on the Company's business, financial condition and results of operations.


                                       16
<PAGE>   18

        Historically, the volume of the Company's production requirements for
the law enforcement and public sectors has not placed significant capacity
constraints on the Company's manufacturing and assembling capabilities. However,
as the Company begins to market its products for potentially larger volume
commercial applications, the Company may be required to fulfill larger orders in
a short period of time and to implement measures to decrease product costs.
There can be no assurance that the Company will be able to scale-up its
manufacturing and assembling capacities to fulfill such orders and to decrease
manufacturing costs. Any failure by the Company to implement higher volume
manufacturing or reduce product costs for commercial applications could have a
material adverse effect on the Company's business, financial condition and
results of operations.

DEPENDENCE UPON KEY PERSONNEL; NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL

        The Company's success will depend upon its ability to retain its current
senior management team and key technical, marketing and sales personnel and its
ability to identify, attract and retain additional highly qualified personnel.
The Company's employees may voluntarily terminate their employment with the
Company at any time, and competition for qualified employees, especially
engineers, is intense. The process of locating additional personnel with the
combination of skills and attributes required to carry out the Company's
strategy is often lengthy. The loss of the services of key personnel, or the
inability to attract additional qualified personnel, could have a material
adverse effect on the Company's business, financial condition and results of
operations.

ONGOING LITIGATION

        The Company has been named as a defendant in a class action lawsuit,
which was filed in October 1996 in the United States District Court for the
Northern District of California. Certain executive officers of the Company are
also named as defendants. The plaintiff purports to represent a class of all
persons who purchased the Company's common stock between January 31, 1996 and
August 26, 1996 (the "Class Period"). The complaint alleges claims under the
federal securities laws and California law. The plaintiff alleges that the
Company and certain of its executive officers made false and misleading
statements regarding the Company that caused the market price of its common
stock to be "artificially inflated" during the Class Period. The complaint does
not specify the amount of damages sought. The Company has established a reserve
for the Company's estimated expenses in connection with the lawsuit. The Company
and its officers deny the allegations and will vigorously pursue resolution of
the claims. There can be no assurance that the Company will prevail in its
defense of the lawsuit and that judgments against the Company will not be
material.

        On May 31, 1995, Digital Biometric, Inc. ("DBI"), a competitor, filed a
lawsuit in the United States District Court in Northern District of California
against the Company alleging that certain of the Company's TouchPrint products
violate a DBI patent and seeking injunctive relief and unspecified damages. The
lawsuit has no implication for other Identix products. On August 22, 1996, the
Court granted the Company's motion determining that TouchPrint 600 does not
infringe the patent. On December 7, 1996, the Court issued another ruling
determining that the predecessor product of the TouchPrint 600, the TouchPrint
900 product, did not infringe the patent. As a result, the Court entered
judgment in favor of Identix and awarded Identix its cost of suit. On January 7,
1997, DBI filed a Notice of Appeal. Oral argument on that appeal was held before
the Federal Circuit Court of Appeals on October 8, 1997 and the matter is under
consideration by the Court.

VOLATILITY OF STOCK PRICE

        The stock market has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of the common stock, like
the stock prices of many technology companies, has been, and may continue to be,
highly volatile. Variations in quarterly operating results, the timing and
volume of procurements for the Company's products and services, announcements of
technological innovations or new products or services by the Company or by the
Company's competitors, announcements regarding product pricing by the Company or
its competitors, failure of the Company to meet earnings or revenue expectations
of securities analysts, the commencement of litigation, the developments in or
outcome of any litigation, developments in patent or other proprietary rights,
and economic and other external factors, among other factors, may have a
material adverse effect on the market price of the common stock.


                                       17
<PAGE>   19

SHARE HOLDINGS OF ASCOM HOLDING

        As of September 30, 1997, Ascom USA Inc. ("Ascom"), beneficially owned
approximately 21% of the outstanding common stock. This concentration of
ownership may have the effect of delaying or preventing a change in control of
the Company. The Company is a party to a Voting Trust Agreement ("Voting Trust
Agreement") with Ascom whereby Ascom deposited all of its 5,177,824 shares of
the Company's Common Stock ("Voting Stock") into a voting trust ("Voting
Trust"). The Trustee has voting control of the Voting Stock. The Voting Trust
Agreement expires in 2004. Ascom has preemptive rights with respect to issuances
of the Company's securities and registration rights with respect to the
securities it holds. The Company's ability to obtain additional financing on
favorable terms in the future may be adversely affected by the existence of
these preemptive rights and registration rights.


                                       18
<PAGE>   20

IDENTIX INCORPORATED

PART II         OTHER INFORMATION

        Item 1. Legal Proceedings

                The Company has been named as a defendant in a class action
                lawsuit, which was filed in October 1996 in the United States
                District Court for the Northern District of California. Certain
                executive officers of the Company are also named as defendants.
                The plaintiff purports to represent a class of all persons who
                purchased the Company's common stock between January 31, 1996
                and August 26, 1996 (the "Class Period"). The complaint alleges
                claims under the federal securities laws and California law. The
                plaintiff alleges that the Company and certain of its executive
                officers make false and misleading statements regarding the
                Company that caused the market price of its common stock to be
                "artificially inflated" during the Class Period. The complaint
                does not specify the amount of damages sought. The Company has
                established a reserve for the Company's estimated expenses in
                connection with the lawsuit. The Company and its officers deny
                the allegations and will vigorously pursue resolution of the
                claims.

                On May 31, 1995, Digital Biometrics, Inc. ("DBI"), a competitor,
                filed a lawsuit in the United States District Court in the
                Northern District of California against the Company alleging
                that certain of the Company's TouchPrint products violate a DBI
                patent and seeking injunctive relief and unspecified damages.
                The lawsuit has no implication for other Identix products. On
                August 22, 1996, the Court granted the Company's motion
                determining that the TouchPrint 600 does not infringe the
                patent. On December 7, 1996, the Court issued another ruling
                determining that the predecessor product of the TouchPrint 600,
                the TouchPrint 900 product, did not infringe the patent. As a
                result, the Court entered judgment in favor of Identix and
                awarded Identix its costs of suit. On January 7, 1997, DBI filed
                a Notice of Appeal. Oral argument on that appeal was held before
                the Federal Circuit Court of Appeals on October 8, 1997 and the
                matter is under consideration by the Court.




        Item 6. Exhibits and Reports on Form 8-K.

                (a)     Exhibits

                       Exhibit
                        Number  Description
                        ------  -----------

                        10.26   Security and Loan Agreement Between Identix
                                Incorporated and Imperial Bank

                        11.1    Statement of Computation of Earnings Per Share

                        27.1    Financial Data Schedule

                (b)     No reports on Form 8-K were filed by the Company during
                        the three month period ended September 30, 1997.


                                       19
<PAGE>   21

                              IDENTIX INCORPORATED

                                   SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                       IDENTIX INCORPORATED
                                       November 14, 1997




                                       BY: /s/James P. Scullion
                                          -------------------------------------
                                           James P. Scullion
                                           Executive Vice President,
                                           Chief Financial Officer and Secretary


                                       20
<PAGE>   22
                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
Exhibit 
Number         Description
------         -----------
<S>            <C>
10.26          Security and Loan Agreement Between Identix Incorporated and 
               Imperial Bank

11.1           Statement of Computation of Earnings Per Share

27.1           Financial Data Schedule
</TABLE>