<PAGE>
                       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, 2001 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)


           Delaware                                       94-2842496
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation of organization)


100 Cooper Court, Los Gatos, California                    95032
 ---------------------------------------                 ----------
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number, including area code (408) 335-1400


     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:

                        36,867,903 shares of Common Stock
                             as of October 31, 2001

<PAGE>

                              IDENTIX INCORPORATED

                                      INDEX

PART I   FINANCIAL INFORMATION

       Item 1     Unaudited Financial Statements

                  Condensed Consolidated Balance Sheets -
                  September 30, 2001 and June 30, 2001 ......................  3

                  Condensed Consolidated Statements of Operations -
                  Three months ended September 30, 2001 and 2000 ............  4

                  Condensed Consolidated Statements of Cash Flows -
                  Three months ended September 30, 2001 and 2000 ............  5

                  Notes to Condensed Consolidated Financial Statements ......  6

       Item 2     Management's Discussion and Analysis of Financial

                  Condition and Results of Operations  ...................... 11

       Item 3     Quantitative and Qualitative Disclosures about Market Risk. 22

PART II  OTHER INFORMATION

       Item 1     Legal Proceedings ......................................... 23

       Item 2     Changes in Securities ..................................... 23

       Item 6     Exhibits .................................................. 23

       Signature ............................................................ 23


                                       2
<PAGE>

                              IDENTIX INCORPORATED
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                  SEPTEMBER 30,       JUNE 30,
                                                                                  -------------------------------
                                                                                      2001              2001
                                                                                  -------------     -------------
<S>                                                                               <C>               <C>
                                   ASSETS

Current assets:
   Cash and cash equivalents .................................................    $  12,078,000     $  20,777,000
   Accounts receivable, net ..................................................       19,080,000        23,154,000
   Inventories ...............................................................        7,141,000         6,089,000
   Prepaid expenses and other assets .........................................        1,982,000         1,768,000
                                                                                  -------------     -------------
       Total current assets ..................................................       40,281,000        51,788,000
Property and equipment, net ..................................................        5,454,000         4,587,000
Intangibles and other assets .................................................        4,060,000         4,287,000
Goodwill .....................................................................       22,792,000        22,792,000
                                                                                  -------------     -------------
               Total assets ..................................................    $  72,587,000     $  83,454,000
                                                                                  =============     =============

                                   LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
                                          STOCK AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable ..........................................................    $   7,888,000     $  10,595,000
   Accrued compensation ......................................................        4,890,000         4,658,000
   Other accrued liabilities .................................................        1,535,000         1,275,000
   Deferred revenue ..........................................................        3,872,000         4,218,000
                                                                                  -------------     -------------
       Total current liabilities .............................................       18,185,000        20,746,000
Other liabilities ............................................................          111,000            56,000
                                                                                  -------------     -------------
       Total liabilities .....................................................       18,296,000        20,802,000
                                                                                  -------------     -------------

Redeemable convertible preferred stock, $0.01 par value; 2,000,000 shares
   authorized; 234,558 shares issued and
   outstanding at September 30 and June 30, 2001 .............................        3,702,000         3,702,000
                                                                                  -------------     -------------
Shareholders' equity:
   Common stock, $0.01 par value; 100,000,000 shares authorized 36,717,487
      and 36,601,242 shares issued and outstanding at September 30 and
      June 30, 2001 ..........................................................          368,000           366,000
   Additional paid-in capital ................................................      144,717,000       144,604,000
   Accumulated deficit .......................................................      (94,315,000)      (85,839,000)
   Accumulated other comprehensive loss ......................................         (181,000)         (181,000)
                                                                                  -------------     -------------
       Total shareholders' equity ............................................       50,589,000        58,950,000
                                                                                  -------------     -------------
               Total liabilities, redeemable convertible
                 preferred stock and shareholders' equity ....................    $  72,587,000     $  83,454,000
                                                                                  =============     =============
</TABLE>


   The accompanying notes are an integral part of these condensed consolidated
                             financial statements.


                                       3
<PAGE>


                              IDENTIX INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED
                                                                         SEPTEMBER 30,
                                                                 ------------------------------
                                                                     2001              2000
                                                                 ------------      ------------
<S>                                                              <C>               <C>
REVENUES:
   Product revenues ........................................     $  6,056,000      $  7,897,000
   Services revenues .......................................       10,708,000        12,197,000
                                                                 ------------      ------------
       Total revenues ......................................       16,764,000        20,094,000
                                                                 ------------      ------------
COST AND EXPENSES:
   Cost of product revenues ................................        4,088,000         4,716,000
   Cost of services revenues ...............................        9,930,000        11,057,000
   Research, development and engineering ...................        2,613,000         2,164,000
   Marketing and selling ...................................        3,451,000         3,207,000
   General and administrative ..............................        3,528,000         2,667,000
   Amortization of acquired intangible assets ..............          233,000           832,000
   Restructuring charge for workforce reduction ............        1,712,000                --
   Preferred stock and warrant expense .....................               --         1,259,000
                                                                 ------------      ------------
       Total costs and expenses ............................       25,555,000        25,902,000
                                                                 ------------      ------------
Loss from operations .......................................       (8,791,000)       (5,808,000)
Interest and other income (expense), net ...................          222,000           399,000
Interest expense ...........................................               --           (22,000)
                                                                 ------------      ------------
Loss before income taxes, equity interest in income of joint
  venture and cumulative effect of a change in accounting
  principle ................................................       (8,569,000)       (5,431,000)
Benefit (provision) for income taxes .......................            1,000           (17,000)
                                                                 ------------      ------------
Loss before equity interest in income of joint venture
  and cumulative effect of a change in accounting principle        (8,568,000)       (5,448,000)
Equity interest in income of joint venture .................           92,000            71,000
                                                                 ------------      ------------
Loss before cumulative effect of a change in accounting
  principle ................................................       (8,476,000)       (5,377,000)
Cumulative effect of a change in accounting principle ......               --        (1,998,000)
                                                                 ------------      ------------
NET LOSS ...................................................     $ (8,476,000)     $ (7,375,000)
                                                                 ============      ============

BASIC AND DILUTED NET LOSS PER SHARE:
 Loss before cumulative effect of a change in accounting
   principle ...............................................     $      (0.23)     $      (0.16)
 Cumulative effect of a change in accounting principle .....               --             (0.06)
                                                                 ------------      ------------
 Net loss per share ........................................     $      (0.23)     $      (0.22)
                                                                 ============      ============
WEIGHTED AVERAGE COMMON SHARES USED IN BASIC
   AND DILUTED LOSS PER SHARE COMPUTATION ..................       36,629,000        33,208,000
</TABLE>



   The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       4
<PAGE>


                              IDENTIX INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                               THREE MONTHS ENDED
                                                                                 SEPTEMBER 30,
                                                                        ------------------------------
                                                                            2001              2000
                                                                        ------------      ------------
<S>                                                                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss .......................................................     $ (8,476,000)     $ (7,375,000)
   Adjustments to reconcile net loss to net cash used for operating
     activities:
       Depreciation ...............................................          605,000           428,000
       Loss (gain) on disposal of property and equipment ..........           44,000            (1,000)
       Amortization of intangible assets ..........................          257,000           944,000
       Recognition of deferred revenue ............................       (2,077,000)       (1,445,000)
       Equity interest in income of joint venture .................          (92,000)          (71,000)
       Stock compensation expenses ................................          254,000            62,000
       Inventory reserves .........................................         (163,000)            6,000
       Allowance for doubtful accounts ............................           25,000           125,000
       Preferred stock and warrant expense ........................               --         1,259,000
   Changes in assets and liabilities:
       Restricted cash ............................................               --        (3,154,000)
       Accounts receivable ........................................        4,049,000        (4,376,000)
       Inventories ................................................         (889,000)       (1,871,000)
       Prepaid expenses and other assets ..........................         (214,000)         (749,000)
       Accounts payable ...........................................       (2,707,000)        1,310,000
       Accrued compensation .......................................          (22,000)         (265,000)
       Other accrued liabilities ..................................          407,000          (335,000)
       Deferred revenue ...........................................        1,731,000         7,398,000
                                                                        ------------      ------------
   Net cash used for operating activities .........................       (7,268,000)       (8,110,000)
                                                                        ------------      ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures ...........................................       (1,523,000)         (362,000)
   Proceeds from the sale of property and equipment ...............            7,000                --
   Additions to intangibles and other assets ......................          (30,000)         (445,000)
                                                                        ------------      ------------
   Net cash used for investing activities .........................       (1,546,000)         (807,000)
                                                                        ------------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under bank lines of credit ..........................               --         1,756,000
   Payments under bank lines of credit ............................               --          (356,000)
   Proceeds from sales of common and preferred stock ..............          115,000         4,982,000
                                                                        ------------      ------------
   Net cash provided by financing activities ......................          115,000         6,382,000
                                                                        ------------      ------------
Net decrease in cash and cash equivalents .........................       (8,699,000)       (2,535,000)
Cash and cash equivalents at period beginning .....................       20,777,000        15,620,000
                                                                        ------------      ------------
Cash and cash equivalents at period end ...........................     $ 12,078,000      $ 13,085,000
                                                                        ============      ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   Cash paid during the period for interest .......................     $         --      $     22,000
</TABLE>


   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.


                                       5
<PAGE>


                              IDENTIX INCORPORATED
                      THREE MONTHS ENDED SEPTEMBER 30, 2001
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Basis of Presentation

     These accompanying condensed 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 periods presented have been included. These condensed
     consolidated financial statements should be read in conjunction with the
     audited condensed consolidated financial statements and notes thereto for
     the fiscal year ended June 30, 2001 included in the Company's Form 10-K.
     The results of operations for the three months ended September 30, 2001 are
     not necessarily indicative of results to be expected for the entire fiscal
     year, which ends on June 30, 2002.

     During the quarter ended September 30, 2001, the Company changed its
     presentation of deferred revenue and the related accounts receivable to
     exclude such amounts from the consolidated financial statements. Prior
     year's amounts have been reclassified to conform to the current year's
     presentation, as follows:

<TABLE>
<CAPTION>
                                                                      SEPTEMBER 30,        JUNE 30,
                                                                      ------------------------------
                                                                          2001               2001
                                                                      ------------      ------------
<S>                                                                   <C>               <C>
      Accounts receivable gross .................................     $ 20,358,000      $ 25,609,000
      Deferred revenue offset against related accounts receivable       (1,278,000)       (2,455,000)
                                                                      ------------      ------------
      Accounts receivable per balance sheet .....................     $ 19,080,000      $ 23,154,000
                                                                      ============      ============
</TABLE>


2.   Need for Additional Financing

     While the Company believes that cash flows from operations, together with
     existing working capital and available lines of credit, may be adequate to
     fund the Company's cash requirements through fiscal 2002, the Company may
     need to raise additional debt or equity financing within the next nine
     months. If successful in raising additional debt or equity financing, the
     Company may not be able to do so on terms that are not excessively dilutive
     to existing stockholders or less costly than existing sources of debt
     financing. Failure to secure additional financing in a timely manner and on
     favorable terms could have an adverse impact on the Company's financial
     performance and stock price and require the Company to implement certain
     cost reduction initiatives and curtail certain of its operations.

     At September 30, 2001, the Company's wholly owned subsidiary, IPS, was in
     technical default of one of its bank line of credit covenants. The Company
     is in the process of obtaining a waiver of default from the bank for the
     breach of the covenant. There can be no assurances the Company will be able
     to obtain a waiver or that terms of the waiver will be favorable to the
     Company. At September 30, 2001 there were no borrowings on the lines of
     credit.

3.   Inventories

     Inventories are stated at the lower of standard cost (which approximates
     actual cost determined on a first-in, first-out method) or market and
     consisted of the following:

<TABLE>
<CAPTION>
                                         SEPTEMBER 30,     JUNE 30,
                                          -------------------------
                                             2001           2001
                                          ----------     ----------
<S>                                       <C>            <C>
     Purchased parts and materials ..     $3,079,000     $1,603,000
     Work-in-process ................      1,296,000      1,260,000
     Finished goods, including spares      2,766,000      3,226,000
                                          ----------     ----------
                                          $7,141,000     $6,089,000
                                          ==========     ==========
</TABLE>


     The Company provides for obsolete, slow moving or excess inventories in the
     period when obsolescence or inventory in excess of expected demand is first
     identified. During the three months ended September 30, 2001, the Company
     physically disposed of $126,000 of inventory, which had been provided for
     at June 30, 2001. In addition, the Company sold or used



                                       6
<PAGE>


     $205,000 of inventory which had been previously provided for at June 30,
     2001.


4.   Sale of Series A Redeemable Convertible Preferred Stock and Warrant

     In July 2000, the Company entered into a Securities Purchase Agreement with
     Motorola, Inc. ("Motorola"), whereby the Company sold 234,558 shares of
     Series A Redeemable Convertible Preferred Stock (the "Series A Preferred
     Stock") at $15.99 per share, resulting in cash proceeds to the Company of
     $3,702,000, net of issuance costs. The sale of the Series A Preferred Stock
     was exempt from registration under applicable securities laws. However,
     Motorola has demand registration rights, which were effective beginning on
     January 7, 2001.

     In connection with the issuance of the Series A Preferred Stock, the
     Company also issued Motorola a warrant to purchase 187,647 shares of the
     Company's common stock at $17.11 per share. The warrant is immediately
     exercisable and expires on July 7, 2005. The Company determined the fair
     value of the warrant using the Black-Scholes option pricing model. Based on
     the net cash proceeds received from the sale of Series A Preferred Stock of
     $3,702,000, the relative fair values of the Series A Preferred Stock and
     the warrant totaled $2,443,000 and $1,259,000, respectively. The relative
     fair market value of the warrant was credited to additional paid-in capital
     within shareholders' equity. The Company recognized a one-time preferred
     stock and warrant expense of $1,259,000 relating to the embedded beneficial
     conversion feature within the Series A Preferred Stock.

5.   Restructuring Charge for Workforce Reduction

     In June 2001, the Company initiated a restructuring of its worldwide
     operations to reduce costs and increase operational efficiencies. In
     connection with the restructuring, in July 2001, the Company initiated a
     workforce reduction of approximately 42 employees, or 10% of its worldwide
     workforce. The workforce reduction resulted in a $1,712,000 charge during
     the quarter ended September 30, 2001 relating primarily to severance and
     fringe benefits. Related cash payments of $992,000 were made during the
     quarter ended September 30, 2001. The remaining liability at September 30,
     2001 of $720,000 is included in accrued compensation in the condensed
     consolidated balance sheets. The Company expects that this amount will be
     paid by June 30, 2002.

6.   Earnings Per Share

     Basic earnings per share are computed by dividing net income (loss)
     available to common shareholders by the weighted average number of common
     shares outstanding during the period. Diluted earnings per share gives
     effect to all dilutive potential common shares outstanding during the
     period, including redeemable convertible preferred stock as well as stock
     options and warrants, using the treasury stock method.

     Options and warrants to purchase 7,255,344 and 5,762,165 shares of common
     stock were outstanding at September 30, 2001 and 2000, respectively, but
     were not included in the computation of diluted net loss per share as their
     effect was anti-dilutive. Also 234,558 shares of redeemable convertible
     preferred stock were outstanding at September 30, 2001 and are convertible
     into 235,553 shares of common stock, but were not included in the
     computation of diluted net loss per share as their effect was
     anti-dilutive.

     Shares held under the Company's employee stock ownership plan are treated
     as outstanding for purposes of computing earnings per share amounts.

7.   Comprehensive Loss

     Other comprehensive loss includes charges or credits to equity that are not
     the result of transactions with owners. Accumulated other comprehensive
     loss consists of foreign currency translation adjustments. As the Company
     substantially liquidated its foreign operation in February 1998, there has
     been no other comprehensive income (loss) from that date.

8.   Adoption of SFAS No. 142, "Goodwill and Other Intangible Assets"

                                       7
<PAGE>

     The results of operations for the quarter ended September 30, 2001 include
     the effect of adopting the Financial Accounting Standards Board, or FASB,
     Statement of Financial Accounting Standards No. 142, or SFAS No. 142,
     "Goodwill and Other Intangible Assets" as of July 1, 2001. The adoption of
     SFAS No. 142 resulted in a reduction of intangible amortization expense of
     $599,000 for the quarter ended September 30, 2001. This reduction
     represents the amount of amortization of goodwill that arose from the
     Company's April 1999 acquisition of Identicator Technologies, Inc. and
     that, in accordance with SFAS No. 142, are no longer subject to
     amortization. Goodwill and indefinite-life intangible assets are no longer
     subject to amortization, but are instead subject to periodic (at minimum,
     on an annual basis) impairment testing. Intangible assets that have finite
     useful lives will continue to be amortized over their useful lives. The
     goodwill test for impairment consists of a two-step process that begins
     with an estimation of the fair value of a reporting unit. The first step is
     a screen for potential impairment and the second step measures the amount
     of impairment, if any. In accordance with SFAS No. 142, the Company has six
     months from the initial date of adoption to complete the first step of the
     transitional goodwill impairment testing. At September 30, 2001 the Company
     had not yet completed the fist step of the transitional goodwill impairment
     testing and accordingly, the potential impact on the Company's financial
     position and results of operations as a result of the transitional
     impairment testing is still being assessed by management.

     A reconciliation of previously reported net loss and net loss per share to
     the amounts adjusted for the exclusion of goodwill amortization is as
     follows:

<TABLE>
<CAPTION>
                                                                                     THREE MONTHS ENDED
                                                                                        SEPTEMBER 30,
                                                                               ----------------------------
                                                                                  2001             2000
                                                                               -----------      -----------
<S>                                                                            <C>              <C>
     Reported net loss ....................................................    $(8,476,000)     $(7,375,000)
     Add:  Goodwill amortization ..........................................             --          599,000
                                                                               -----------      -----------
     Adjusted net loss ....................................................    $(8,476,000)     $(6,776,000)
                                                                               ===========      ===========

     Basic and diluted net loss per share:

       Reported net loss ..................................................    $     (0.23)     $     (0.22)
       Goodwill amortization ..............................................             --             0.02
                                                                               -----------      -----------
       Adjusted net loss ..................................................    $     (0.23)     $     (0.20)
                                                                               ===========      ===========
</TABLE>


9.   Recent Accounting Pronouncements

     In October 2001, the FASB issued Statement of Financial Accounting
     Standards No. 144 or SFAS No. 144, "Accounting for the Impairment or
     Disposal of Long-Lived Assets". SFAS No. 144 addresses financial accounting
     and reporting for the impairment of long-lived assets and for long-lived
     assets to be disposed. SFAS No. 144 will be effective for fiscal years
     beginning after December 15, 2001. The Company is currently evaluating the
     impact of SFAS No. 144, but does not expect that its adoption on July 1,
     2002 will have a material effect on its financial statements.



                                       8
<PAGE>

10.  Reportable Segments Data

     The Company has determined that its reportable segments are those based on
     its method of internal reporting. The Company's reportable segments are
     Imaging, Security, Government Services and Fingerprinting Services.
     Management has organized the Company on product lines. The Company's
     reportable segments are strategic business units that offer different
     products and services and include inter-segment revenues, corporate
     allocations and administrative expenses. Revenues are attributed to the
     reportable segment of the sales or service organizations, and costs
     directly and indirectly incurred in generating revenues are similarly
     assigned. Segment information is as follows:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                   ------------------------------
                                                       2001               2000
                                                   ------------      ------------
<S>                                                <C>               <C>
     Total revenues:
        Imaging ..............................     $  4,899,000      $  6,364,000
        Security .............................        1,157,000         1,533,000
        Government Services ..................       11,187,000        13,151,000
        Elimination of inter-segment revenues          (479,000)         (954,000)
                                                   ------------      ------------
                                                   $ 16,764,000      $ 20,094,000
                                                   ============      ============
     Depreciation and amortization:
        Imaging ..............................     $    356,000      $    247,000
        Security .............................          364,000           926,000
        Government Services ..................          142,000           199,000
                                                   ------------      ------------
                                                   $    862,000      $  1,372,000
                                                   ============      ============
     Interest and other income (expense), net:
        Imaging ..............................     $     51,000      $     87,000
        Security .............................           75,000           175,000
        Government Services ..................           10,000            69,000
        Fingerprinting Services ..............           86,000            68,000
                                                   ------------      ------------
                                                   $    222,000      $    399,000
                                                   ============      ============
     Interest expense:
        Imaging ..............................     $         --      $         --
        Security .............................               --                --
        Government Services ..................               --            22,000
                                                   ------------      ------------
                                                   $         --      $     22,000
                                                   ============      ============
     Net income (loss):
        Imaging ..............................     $ (2,002,000)     $ (2,090,000)
        Security .............................       (5,530,000)       (5,774,000)
        Government Services ..................       (1,121,000)          349,000
        Fingerprinting Services ..............          177,000           140,000
                                                   ------------      ------------
                                                   $ (8,476,000)     $ (7,375,000)
                                                   ============      ============
     Capital expenditures:
        Imaging ..............................     $     93,000      $    151,000
        Security .............................           71,000            57,000
        Government Services ..................        1,359,000           154,000
                                                   ------------      ------------
                                                   $  1,523,000      $    362,000
                                                   ============      ============
</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                SEPTEMBER 30,     JUNE 30,
                                ---------------------------
                                    2001            2001
                                -----------     -----------
     Identifiable assets:
<S>                             <C>             <C>
        Imaging ...........     $27,018,000     $33,838,000
        Security ..........      28,392,000      30,579,000
        Government Services      17,177,000      19,037,000
                                -----------     -----------
                                $72,587,000     $83,454,000
                                ===========     ===========
</TABLE>


11.  Foreign Operations Data

     In geographical reporting, revenues are attributed to the geographical
     location of the sales and service organizations:

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED
                                                    SEPTEMBER 30,
                                           --------------------------------
                                              2001                 2000
                                           -----------          -----------
<S>                                        <C>                  <C>
Total revenues:
     North America ..............          $16,424,000          $19,089,000
     International ..............              340,000            1,005,000
                                           -----------          -----------
                                           $16,764,000          $20,094,000
                                           ===========          ===========
</TABLE>


<TABLE>
<CAPTION>
                                           SEPTEMBER 30,         JUNE 30,
                                           --------------------------------
                                               2001                2001
                                           ------------         -----------
<S>                                        <C>                  <C>
Identifiable assets:
   North America .....................     $71,769,000          $82,420,000
   International......................         818,000            1,034,000
                                           -----------          -----------
                                           $72,587,000          $83,454,000
                                           ===========          ===========
</TABLE>


                                       10
<PAGE>

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


Item 2.

     The statements in this report on Form 10-Q 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. The Company undertakes no
obligation to publicly update these forward-looking statements to reflect events
or circumstances that occur after the date hereof or to reflect the occurrence
of unanticipated events.

OVERVIEW

     Identix Incorporated provides leading-edge fingerprint biometric
authentication security platforms and solutions for commercial and government
marketplaces. The Company offers hardware, software and consulting services to
protect information, control access, and maintain privacy and trust. A world
leader in biometric technology, Identix believes it has more fingerprint
biometric installations worldwide than any other company. Identix' products and
services are classified into three groups: (i) Security solutions that verify
the identity of an individual through the unique physical biological
characteristics of a fingerprint including itrust, Identix' Security software
solution that integrates authentication, access rights and administration as a
managed network security service to safeguard information sharing and data
transfer on open wired and wireless networks; (ii) Imaging solutions that
electronically capture forensic quality fingerprint images that can be
transmitted to Automated Fingerprint Identification Systems ("AFIS"); and (iii)
information technology, engineering and consulting services, including the
installation and integration of Identix products primarily to public sector
agencies. The Company's solutions employ industry leading optical fingerprint
capture technologies, proprietary algorithms and customizable application
software suites. Identix' technologies and intellectual property enable it to
produce Security and Imaging solutions for commercial, federal, state and local
government customers worldwide. The Company provides public sector services
through Identix Public Sector, Inc. ("IPS"), a wholly owned subsidiary of the
Company. Identix also formed a joint venture, Sylvan/Identix Fingerprinting
Centers, LLC ("SIFC"), in September 1997 with Sylvan Learning Systems, Inc.
("Sylvan"), for the purpose of providing fingerprinting services for a variety
of civilian applications. In June 2001, Identix launched its first itrust
security solution offering. itrust is supported in part by Motorola, Inc.
("Motorola") and VeriSign Capital Management, Inc. ("VeriSign") investments in
Identix.

     The results of operations for the quarter ended September 30, 2001 include
the effect of adopting the Financial Accounting Standards Board, or FASB,
Statement of Financial Accounting Standards No. 142, or SFAS No. 142, "Goodwill
and Other Intangible Assets" as of July 1, 2001. The adoption of SFAS No. 142
resulted in a reduction of intangible amortization expense of $599,000 for the
quarter ended September 30, 2001. This reduction represents the amount of
amortization of goodwill that arose from the Company's April 1999 acquisition of
Identicator Technologies, Inc. and that, in accordance with SFAS No. 142, are no
longer subject to amortization. Goodwill and indefinite-life intangible assets
are no longer subject to amortization, but are instead subject to periodic (at
minimum, on an annual basis) impairment testing. Intangible assets that have
finite useful lives will continue to be amortized over their useful lives. The
goodwill test for impairment consists of a two-step process that begins with an
estimation of the fair value of a reporting unit. The first step is a screen for
potential impairment and the second step measures the amount of impairment, if
any. In accordance with SFAS No. 142, the Company has six months from the
initial date of adoption to complete the first step of the transitional goodwill
impairment testing. At September 30, 2001 the Company had not yet completed the
fist step of the transitional goodwill impairment testing and accordingly, the
potential impact on the Company's financial position and results of operations
as a result of the transitional impairment testing is still being assessed by
management.

RESULTS OF OPERATIONS

Revenues

     Revenues for the three months ended September 30, 2001 were $16,764,000
compared to $20,094,000 for the same period in the prior fiscal year. The
decrease in revenues of 17% was due to decreases in both product and service
revenues. In the three months ended September 30, 2001 and 2000, the Company had
one customer, the U.S. Department of Defense ("DOD"), which accounted for 47%
and 48% of total revenue, respectively.

                                       11
<PAGE>

     Product revenues were $6,056,000 for the three months ended September 30,
2001, compared to $7,897,000 for the same period in the prior fiscal year. The
decrease in product revenues of 23% was due to a decrease in sales of Imaging
solutions products and services, primarily live-scan systems and customer
service programs.

     International sales accounted for $340,000 or 6% of the Company's product
revenues for the three months ended September 30, 2001 compared to $1,005,000 or
13% for the same period in the prior fiscal year. The decrease in international
sales for the three months was due to fewer security product sales in Europe
and strategic restructuring in Asia and South America. The Company's
international sales are predominately denominated in U.S. dollars, and 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.

     Services revenues were $10,708,000 for the three months ended September 30,
2001 compared to $12,197,000 for the same period in the prior fiscal year. The
decrease in services revenues of 12% for the three months ended September 30,
2001 was primarily related to a lower level of activity during the quarter from
IPS' General Services Administration "GSA" Schedule. The majority of the
Company's services revenues are generated directly from contracts with the U.S.
government, principally the DOD. For the three months ended September 30, 2001,
revenues directly from the DOD and from other U. S. government agencies
accounted for 88% of the Company's total services revenues compared to 90% for
the same period in the prior fiscal year.

     The Company's services business generates a significant amount of its
revenues from firm fixed-price ("FFP") contracts and from time-and-materials
("T&M") contracts. During the three months ended September 30, 2001 the Company
derived 90% of services revenues from FFP and T&M and contracts. During the
three months ended September 30, 2000 the Company derived 92% of services
revenues from FFP and T&M and contracts. 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. T&M contracts typically provide for payment
of negotiated hourly rates for labor incurred plus reimbursement of other
allowable direct and indirect costs. 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. The Company's services business also generates revenues from cost plus
fixed fee ("CPFF") contracts, which accounted for approximately 10% and 8% of
its services revenues for the three months ended September 30, 2001 and 2000.
CPFF contracts provide for the reimbursement of allowable costs, including
indirect costs plus a fee or profit. 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.
IPS is currently being audited by the Defense Contract Audit Agency for the
period from July 1, 1997 to June 30, 2000.

     Gross margin on product revenues was 33% for the three months ended
September 30, 2001 and 40% for the three months ended September 30, 2000. The
decrease in product gross margin for the three months ended September 30, 2001
reflects continued market price pressures and volumes lower than forecast. The
Company expects gross margins to fluctuate in future periods due to changes in
the product mix, the costs of components and the competition in the industry.

     Gross margin on services revenues was 7% for the three months ended
September 30, 2001 as compared to 9% for the same period in the prior fiscal
year. The decrease in gross margin for the three months was primarily due to
lower margin equipment sales under certain service and equipment supply
contracts.

Research, Development and Engineering

     Research, development and engineering expenses were $2,613,000 or 43% of
product revenues for the three months ended September 30, 2001 compared to
$2,164,000 or 27% of product revenues 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 Security and Imaging products. The
Company believes investment in research and development is critical in
maintaining a strong technological position in the industry.

Marketing and Selling

     Marketing and selling expenses were $3,451,000 or 21% of total revenues for
the three months ended September 30, 2001 compared to $3,207,000 or 16% of total
revenues for the same period in the prior fiscal year. The increase in marketing
and selling expenses was primarily due to increased staffing and advertising to
promote the Company's products and services.

General and Administrative

                                       12
<PAGE>

     General and administrative expenses were $3,528,000 or 21% of total
revenues for the three months ended September 30, 2001 compared to $2,667,000 or
13% of total revenues for the same period in the prior fiscal year. The increase
in general and administrative expenses was primarily due to increased staffing
and related administrative expenses to support future growth and development of
supporting infrastructure.

Restructuring Charge for Workforce Reduction

     In June 2001, the Company initiated a restructuring of its worldwide
operations to reduce costs and increase operational efficiencies. In connection
with the restructuring, in July 2001, the Company initiated a workforce
reduction of approximately 42 employees, or 10% of its worldwide workforce. The
workforce reduction resulted in a $1,712,000 charge during the quarter ended
September 30, 2001 relating primarily to severance and fringe benefits. Related
cash payments of $992,000 were made during the quarter ended September 30, 2001.
The remaining liability at September 30, 2001 of $720,000 is included in accrued
compensation in the condensed consolidated balance sheets. The Company expects
that this amount will be paid by June 30, 2002. The Company expects that the
workforce reduction resulting from the restructuring will eventually reduce our
operating expenses by approximately $1.0 million on a quarterly basis.

Preferred Stock and Warrant Expense

     In connection with the private sale of shares of Series A Preferred Stock
and warrant in July 2000 to Motorola, the Company recognized a one-time
preferred stock and warrant expense of $1,259,000 relating to the embedded
beneficial conversion feature within the Series A Preferred Stock.

Interest and Other Income (Expense), net

     For the three months ended September 30, 2001, interest and other income
(expense), net was $222,000 compared to $399,000 for the same period in the
prior fiscal year. The decrease in interest and other income (expense), net was
primarily due to a decrease in interest income generated from investing the
proceeds from the sale of both common and preferred stock. Interest and other
income for the periods ending September 30, 2001 and 2000 was primarily composed
of interest income of $178,000 and $334,000, respectively and license fees from
SIFC of $86,000 and $68,000, respectively.

Interest Expense

     Interest expense was nil for the three months ended September 30, 2001
compared to $22,000 for the same period in the prior fiscal year. The decrease
was due to no borrowings under the Identix or IPS Lines of Credit during the
three months ended September 30, 2001. The weighted average interest rate paid
on borrowings under the IPS Line of Credit during the three months ended
September 30, 2000 was 9.5%.

Benefit (Provision) for Income Taxes

     The Company recorded a state franchise tax refund of $1,000 for the three
months ended September 30, 2001 and a provision of $17,000 for the three months
ended September 30, 2000 which consisted of certain state franchise taxes.

Equity Interest in Income of Joint Venture

     The equity interest in joint venture represents the Company's 50% share of
the results of SIFC. For the three months ended September 30, 2001, our equity
interest in joint venture income was $92,000 compared to $71,000 for the same
period in the prior fiscal year. The increase in the equity interest was due to
an increase net income of SIFC.

Liquidity and Capital Resources

     The Company financed its operations during the three months ended September
30, 2001 from its working capital at June 30, 2001. As of September 30, 2001,
the Company's principal sources of liquidity consisted of $22,096,000 of working
capital including $12,078,000 in cash and cash equivalents. In addition, the
Company had $8,980,000 available for future borrowings under bank lines of
credit.

     The Identix Line of Credit, ("Identix Line of Credit"), provides for up to
the lesser of $7,500,000 or 80% of the Company's eligible accounts receivable.
Loans secured by substantially all of the assets of the Company and bear
interest at the bank's prime rate of interest

                                       13
<PAGE>

plus two percent (7.5% at September 30, 2001). The Line of Credit expires on
September 30, 2002. At September 30, 2001, there was no amount outstanding and
$3,546,000 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 its common stock.

     The IPS Line of Credit, ("IPS Line of Credit"), is a $6,000,000 bank line
of credit collateralized by IPS's accounts receivable and certain other assets.
Under the IPS Line of Credit, IPS may borrow against qualified accounts
receivable. Amounts drawn bear interest at the bank's prime rate of interest
(5.5% at September 30, 2001). The Line of Credit expires on June 30, 2002. At
September 30, 2001, there were no borrowings and $5,434,000 was available under
the IPS Line of Credit. The IPS Line of Credit agreement contains financial and
operating covenants. At September 30, 2001 the Company was in technical default
on one of its IPS Line of Credit covenants. The Company is in the process
of obtaining a waiver of default from the bank for the breach of the covenant.
There can be no assurances the Company will be able to obtain a waiver or that
the terms of the waiver will be favorable to the Company.

     The Company used cash for operating activities of $7,268,000 during the
three months ended September 30, 2001 as compared to $8,110,000 for the same
period in the prior fiscal year. The primary use of cash for the three months
ended September 30, 2001 was due to (i) the net loss of $8,476,000 which
includes a one-time charge for restructuring expense of $1,712,000, depreciation
of $605,000 and amortization of $257,000, (ii) a decrease in accounts receivable
of $4,049,000 partially offset by a decrease in accounts payable of $2,707,000
and an increase in inventories of $889,000. The primary use of cash during the
three months ended September 30, 2000 was due to (i) the net loss of $7,375,000
which includes a one-time charge for preferred stock and warrant expense of
$1,259,000, amortization of $944,000, depreciation of $428,000, and (ii) an
increase in accounts receivable of $4,376,000 and restricted cash of $3,154,000,
partially offset by increases in accounts payable of $1,310,000 and inventories
of $1,871,000.

     The Company used cash of $1,546,000 for investing activities during the
three months ended September 30, 2001 consisting primarily of purchases of
property and equipment of $1,523,000. During the three months ended September
30, 2000, the Company used cash of $807,000 for investing activities for the
purchase of property and equipment of $362,000 and additions to intangible
assets of $445,000.

     The Company generated cash of $115,000 from the exercise of stock options
during the three months ended September 30, 2001 as compared to financing of
$6,382,000 for the same period in the prior fiscal year. Financing activities
for the three months ended September 30, 2000, consisted of proceeds from the
sale of the Company's Series A Preferred Stock of $3,702,000, net of issuance
costs, the sale of common stock of $1,280,000 and net borrowings of $1,400,000
under the IPS line of credit.

     The Company did not have any material capital expenditure commitments as of
September 30, 2001.

     While the Company believes that cash flows from operations, together with
existing working capital and available lines of credit, may be adequate to fund
the Company's cash requirements through fiscal 2002, the Company may need to
raise additional debt or equity financing within the next nine months. The
Company may not be able to obtain additional debt or equity financing. If
successful in raising additional debt or equity financing, the Company may not
be able to do so on terms that are not excessively dilutive to existing
stockholders or less costly than existing sources of debt financing. Failure
to secure additional financing in a timely manner and on favorable terms could
have an adverse impact on our financial performance and stock price and
require us to implement certain cost reduction initiatives and curtail certain
of our operations.

Recent Accounting Pronouncements

     In October 2001, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 144 or SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses
financial accounting and reporting for the impairment of long-lived assets and
for long-lived assets to be disposed. SFAS No. 144 will be effective for fiscal
years beginning after December 15, 2001. The Company is currently evaluating the
impact of SFAS No. 144, but does not expect that its adoption on July 1, 2002
will have a material effect on its financial statements.


RISK FACTORS

     This report on Form 10-Q contains forward-looking statements that involve
risks and uncertainties. The Company's business, operating results, financial
performance, and share price may be materially adversely affected by a number of
factors, including but not limited to the following risk factors, any one 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-


                                       14
<PAGE>

Q or in other reports, press releases or other statements issued from time to
time. Additional factors that may cause such a difference are set forth in the
annual report on Form 10-K.

     Our business will not grow unless the market for biometric solutions
expands both domestically and internationally.

     Our product revenues and a portion of our service revenues are derived from
the sale of biometric products and service. Biometric solutions have not gained
widespread commercial acceptance. We cannot accurately predict the future growth
rate, if any, or the ultimate size of the biometric technology market. The
expansion of the market for our products and services depends on a number of
factors including without limitation:

     -    the cost, performance and reliability of our products and services and
          the products and services of competitors;

     -    customers' perception of the perceived benefit of biometric solutions;

     -    public perceptions of the intrusiveness of these solutions and the
          manner in which firms are using the fingerprint information collected;

     -    public perceptions regarding the confidentiality of private
          information;

     -    customers' satisfaction with our products and services; and

     -    marketing efforts and publicity regarding these products and services.

     Certain groups have publicly objected to the use of biometric products for
some applications on civil liberties grounds and legislation has been proposed
to regulate the use of biometric security products. Even if biometric markets
develop, our products and services may not gain wide market acceptance. Even if
biometric solutions gain wide market acceptance, our products and services may
not adequately address the market requirements.

We face intense competition from other biometric solution providers as well as
identification and security systems providers.

     A significant number of established and startup companies have developed or
are developing and marketing software and hardware for fingerprint biometric
security applications that currently compete or will compete directly with those
products designed, developed and sold under our Security line of products. Some
of these companies have developed or are developing and marketing semiconductor
or optically based direct contact fingerprint image capture devices. Other
companies have developed or are developing and marketing other methods of
biometric identification such as retinal blood vessel or iris pattern, hand
geometry, voice and facial structure. If one or more of these technologies or
approaches were widely adopted, it would significantly reduce the potential
market for our products. Our Security products also compete with non-biometric
technologies such as certificate authorities, and traditional key, card,
surveillance systems and passwords. Many competitors offering products that are
competitive with our Security products and services have significantly more cash
and resources than we do. The biometric security market is a rapidly evolving
and intensely competitive market, and we believe that additional competitors may
yet enter the market and become significant long-term competitors.

     The products designed, developed and sold under Imaging line of products
face intense competition from a number of competitors who are actively engaged
in developing and marketing livescan products, including Visionics, Inc.,
Heinemann Biometric Systems GmbH, CrossMatch GmbH and Printrak.

     We expect competition to increase and intensify in the near term in both
the Security and Imaging markets. Companies competing with us may introduce
products that are competitively priced, that have increased performance or
functionality or that incorporate technological advances not yet developed or
implemented by us. Some present and potential competitors have financial,
marketing, research, and manufacturing resources substantially greater than
ours.

     In order to compete effectively in this environment, we must continually
develop and market new and enhanced products at competitive prices and must have
the resources available to invest in significant research and development
activities. The failure to do so could have a material adverse effect on our
business operations, financial results and stock price.

We may need to raise additional equity or debt financing within the next nine
months.

                                       15
<PAGE>

     As of September 30, 2001, we had $22,096,000 in working capital, which
included $12,078,000 in cash and cash equivalents and restricted cash.
Additionally, the Company had available the lesser of $7,500,000 or 80% of the
Company's eligible accounts receivable under the Identix line of credit and IPS
had available up to $6,000,000 under IPS' line of credit.

     While we believe that cash flows from operations, together with existing
working capital and available lines of credit, may be adequate to fund our cash
requirements through fiscal 2002, we may need to raise additional debt or equity
financing within the next nine  months. We may not be able to obtain additional
debt or equity financing. If successful in raising additional financing, we may
not be able to do so on terms that are not excessively dilutive to existing
stockholders or less costly than existing sources of financing. At September
30, 2001, we were in technical default on one of our bank line of credit
covenants. We are in the process of obtaining a waiver of default from the bank
for the breach of the covenant. There can be no assurances that we will be able
to obtain a waiver or that the term of the waiver will be favorable to us.
Failure to secure additional financing in a timely manner and on favorable terms
could have a material adverse impact on our financial performance and stock
price and require us to implement certain cost reduction initiatives and curtail
certain of our operations. At September 30, 2001 there were no borrowings on
the lines of credit.

Future growth depends in part on the success of itrust, a relatively new
business activity with little operating history.

     Our future growth, to some extent, will depend on the success of itrust.
itrust was formed in July 2000 and has a limited operating history. itrust's
success will depend on many factors, including, but not limited to:

     -    our ability to form additional collaborative partnerships that will
          contribute technical and commercial value to itrust and contribute to
          the division's growth;

     -    the demand for our Security products and itrust services;

     -    our ability to successfully and rapidly manufacture, disseminate and
          deploy biometric enabled products and itrust services;

     -    the ability and willingness of our collaborative partners to
          successfully and rapidly promote, manufacture, disseminate and deploy
          biometric enabled products and itrust services;

     -    the levels of competition in the space for Internet and Wireless Web
          security services;

     -    the perceived need for secure communications and commerce in such
          markets;

     -    our ability to successfully introduce new products and services; and

     -    our ability to expand its operations and attract integrate, retain and
          motivate qualified sales, marketing, and research and development
          personnel.

     A significant number of established and startup companies have developed or
are developing and marketing security and/or authentication solutions that
currently compete or will compete directly with itrust's solutions. Some of
these companies have significantly more cash and resources than we do, and may
currently offer a broader or more robust range of solutions than those currently
available through the itrust offering. The wired and wireless security and
authentication marketplace is a rapidly evolving and intensely competitive
market and we believe that additional competitors may yet enter the market and
become significant long-term competitors.

     We have experienced net losses in the last two fiscal years and expect
additional losses in the future. itrust is not expected to contribute
significant revenues to our results in the foreseeable future. At the same time,
however, we will incur significant costs in the design, development,
manufacture, sale and deployment of itrust products and services and in the
execution of itrust's business plan. In part because of the significant
investment we will make in itrust, we expect to incur substantial additional
losses in the foreseeable future.

In our services business, we face substantial competition from professional
service providers of all sizes in the government marketplace.

     IPS is increasingly being required to bid on firm fixed price and similar
contracts that result in greater performance risk to IPS. If IPS is not able to
maintain a competitive cost structure, support specialized market niches, retain
highly qualified


                                       16
<PAGE>

personnel or align with technology leaders, we may lose our ability to compete
successfully in the services business.

The biometrics industry is characterized by rapid technological change and
evolving industry standards, which could render existing products obsolete.

     Our future success will depend upon our ability to develop and introduce a
variety of new products and services and enhancements to these new product and
services in order to address the changing, sophisticated needs of the
marketplace. Delays in introducing new products and services and its
enhancements or the failure to offer innovative products and services at
competitive prices may cause customers to forego purchases and of our products
and services and purchase those of our competitors.

Our financial and operating results often vary significantly from quarter to
quarter and may be negatively affected by a number of factors.

     Our financial and operating results may fluctuate from quarter to quarter
because of the following reasons:

     -    downturns in the US, North American or international economies;

     -    reduced demand for products and services caused by competitors;

     -    price reductions, the introduction of new competitors, or the
          introduction of enhanced products or services from new or existing
          competitors;

     -    reduced pricing and/or increased spending in response to competition
          or new market opportunities;

     -    changes in the mix of products and services we or our distributors
          sell;

     -    cancellations, delays or contract amendments by government agency
          customers;

     -    the lack of availability of government funds;

     -    litigation costs;

     -    expenses related to acquisitions;

     -    other one-time financial charges;

     -    the lack of availability or increase in cost of key components; and

     -    the inability to successfully manufacture in volume certain of our
          products that may contain complex designs and components.


     Additionally, certain of our Imaging products often have a lengthy sales
cycle while the customer evaluates and receives approvals for purchase. If,
after expending significant funds and effort, we fail to receive an order, a
negative impact on our financial results and stock price could result.

     It is difficult to predict accurately the sales cycle of any large order
for any of our products. If we do not ship one or more large orders as forecast
for a fiscal quarter, our total revenues and operating results for that quarter
could be materially and adversely affected.

     Further, the lead-time for ordering parts and materials and building our
Security or Imaging products can be many months. As a result, we must order
parts and materials and build our products based on forecasted demand. If demand
for our products lags significantly behind our forecasts, we may produce more
products than we can sell, which can result in cash flow problems and write-offs
or write-downs of obsolete inventory.

We derive a majority of our services revenue from government contracts, which
are often non-standard, involve competitive bidding and may be subject to
cancellation without penalty.

                                       17
<PAGE>

     Government contracts frequently include provisions that are not standard in
private commercial transactions. For example, government contracts may include
bonding requirements and provisions permitting the purchasing agency to cancel
the contract without penalty in certain circumstances. As public agencies, our
prospective customers are also subject to public agency contract requirements
that vary from jurisdiction to jurisdiction. Some of these requirements may be
onerous or impossible 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 impose provisions that permit cancellation in the
event that funds are unavailable to the public agency. There is a risk that we
may not be awarded any of the contracts for which we bid or, if awarded, that
substantial delays or cancellations of purchases may follow as a result of
protests initiated by losing bidders. In addition, local government agency
contracts may be contingent upon availability of matching funds from federal or
state entities.

     For the quarter ended September 30, 2001, we derived approximately 88% of
our services revenue directly from contracts relating to the DOD and other U.S.
Government agencies. The loss of a material government contract due to budget
cuts or otherwise could have a severe negative impact on our financial results
and stock price.

     For the quarter ended September 30, 2001, we derived approximately 90% of
our services revenue from time-and-materials ("T&M") contracts and
firm-fixed-price ("FFP") contracts. We assume certain performance risk on these
contracts. If we fail to estimate accurately ultimate costs or to control costs
during performance of the work, our profit margins may be reduced and we may
suffer losses. In addition, revenues generated from government contracts are
subject to audit and subsequent adjustment by negotiation with representatives
of the government agencies. The Defense Contract Audit Agency is currently
auditing IPS for the periods from July 1, 1997 to June 30, 2000. While we
believe that the results of such audit will have no material effect on our
profits, if made, such adjustments may have a material adverse effect on our
business, financial condition and results of operations.

We rely in part upon OEM and distribution partners to distribute our products,
and we may be adversely affected if those parties do not actively promote our
products or pursue installations that use our equipment.

     A significant portion of our product revenues comes from sales to partners
including OEMs, systems integrators, distributors and resellers. Some, but not
all, of these relationships are formalized in written agreements; however, even
where these relationships are formalized in written agreements, such agreements
are often terminable with little or no notice and subject to periodic amendment.
We cannot control the amount and timing of resources that our partners devote to
activities on our behalf.

     We intend to continue to seek strategic relationships to distribute,
license and sell certain of our products. We, however, may not be able to
negotiate acceptable relationships in the future and cannot predict whether
current or future relationships will be successful.

We rely heavily on products and services provided by International Technology
Concepts, Inc. ("IT Concepts").

     Both Imaging and Security purchase certain complete biometric security and
imaging products, components of products and research, development and
engineering services related to the development of products from IT Concepts.
itrust is also working with IT Concepts for the development of certain of
itrust's solutions. In turn IT Concepts subcontracts portions of its development
work to an affiliate in Russia and imports a portion of its engineering and
personnel resources from Russia under applicable immigration laws. In recent
years competition for a limited number of available visas for foreign
high-technology workers and/or consultants has intensified as more U.S.
companies have chosen to look abroad for supplemental research, development and
engineering resources. If we were to lose IT Concepts as a supplier of products
and engineering services, or if IT Concepts were prohibited or restricted from
importing a portion of its engineering requirements or resources, because of
lack of availability of applicable immigration visas or otherwise, we would be
required to find alternative suppliers of products and services or hire
additional engineering personnel to provide the services. This could require us
to incur significant additional research and development costs and delay
shipment of products to customers and the development of new technology and
products. There is a risk that we would not be able to find such personnel or
suppliers at a reasonable cost, or at all. Any delay in product development or
shipment could have a material adverse effect on our business, operations,
financial results and stock price.

                                       18
<PAGE>

Loss of sole or limited source suppliers may result in delays or additional
expenses.

     We obtain certain components and complete products from a single source or
a limited group of suppliers. We do not have long-term agreements with any of
our suppliers. We will experience significant delays in manufacturing and
shipping of products to customers if we lose these sources or if supplies from
these sources are delayed.

     As a result, we may be required to incur additional development,
manufacturing and other costs to establish alternative sources of supply. It may
take several months to locate alternative suppliers, if required, or to re-tool
our products to accommodate components from different suppliers. We cannot
predict if we will be able to obtain replacement components within the time
frames we require at an affordable cost, or at all. Any delays resulting from
suppliers failing to deliver components or products 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
severe negative impact on our financial results and stock price.

The success of our strategic plan to pursue sales in and source significant
research, development and engineering services from international markets may be
limited by risks related to socio-economic and political conditions in such
markets.

     For the fiscal year ended June 30, 2001, we derived approximately 6% of our
product revenues from international sales. We currently have a local presence in
the United Kingdom. We rely on products and services provided by IT Concepts,
which in turn relies on research, development and personnel support from Russia.
There is a risk that we may not be able to successfully market, sell and deliver
our products in foreign countries, or successfully rely on supplemental offshore
research and development resources.

     Risks inherent in marketing, selling and delivering products in, and
sourcing research and development services from, foreign and international
markets, include those associated with:

     -    regional economic conditions;

     -    delays in or prohibitions on exporting products resulting from export
          restrictions for certain products and technologies, including "crime
          control" products and encryption technology;

     -    loss of, or delays in importing products, services and intellectual
          property developed abroad, resulting from unstable or fluctuating
          social, political or governmental conditions;

     -    fluctuations in foreign currencies and the U.S. dollar;

     -    loss of revenue, property (including intellectual property) and
          equipment from expropriation, nationalization, war, insurrection,
          terrorism, criminal acts and other political and social risks;

     -    the overlap of different tax structures;

     -    seasonal reductions in business activity;

     -    risks of increases in taxes and other government fees; and

     -    involuntary renegotiations of contracts with foreign governments.

     In addition, foreign laws treat the protection of proprietary rights
differently from laws in the United States and may not protect our proprietary
rights to the same extent as U.S. laws. The failure of foreign laws or judicial
systems to adequately protect our proprietary rights or intellectual property,
including intellectual property developed on our behalf by foreign contractors
or subcontractors may have a material adverse effect on our business,
operations, financial results and stock price.

One stockholder owns a significant portion of our stock and may delay or prevent
a change in control or adversely affect the stock price through sales in the
open market.

                                       19
<PAGE>

     As of September 30, 2001, State of Wisconsin Investment Board owned
approximately 16% of the Company's outstanding common stock. The concentration
of large percentages of ownership in any single shareholder may delay or prevent
change in control of the Company. Additionally, the sale of a significant number
of our shares in the open market by a single shareholder or otherwise could
adversely affect our stock price.

Our products and certain of our services are complex, may contain undetected or
unresolved defects when sold or may not meet customer's performance criteria,
and may be difficult to successfully manufacture in volume.

     Performance failure in our products or certain of our services may cause
loss of market share, delay in or loss of market acceptance, additional warranty
expense or product recall, or other contractual liabilities. The complexity of
certain of our fingerprint readers may make the manufacturing and assembly
process of such products, especially in volume, complex. This may in turn lead
to delays or shortages in the availability of certain products. The negative
effects of any delay or failure could be exacerbated if the delay or failure
occurred in products or services (such as itrust services ) that provide
personal security, secure sensitive computer data, authorize significant
financial transactions or perform other functions where a security breach could
have significant consequences.

     If a product or service launch is delayed or is the subject of an
availability shortage because of problems with our ability to manufacture or
assemble the product or service successfully on a timely basis, or if a product
or service otherwise fails to meet performance criteria, we may lose revenue
opportunities entirely and/or experience delays in revenue recognition
associated with a product or service in addition to incurring higher operating
expenses during the period required to correct the defects. There is a risk that
for unforeseen reasons we may be required to repair or replace a substantial
number of products in use or to reimburse customers for products that fail to
work or meet strict performance criteria. We carry product liability insurance,
but existing coverage may not be adequate to cover potential claims.

Failure by us to maintain the proprietary nature of our technology, products and
manufacturing processes could have a material adverse effect on our business,
operating results, financial condition and stock price and on our ability to
compete effectively.

     We principally rely upon patent, trademark, copyright, trade secret and
contract law to establish and protect our proprietary rights. There is a risk
that claims allowed on any patents or trademarks we hold may not be broad enough
to protect our technology. In addition, our patents or trademarks may be
challenged, invalidated or circumvented and we cannot be certain that the rights
granted thereunder will provide competitive advantages to us. Moreover, any
current or future issued or licensed patents, trade secrets or know-how may not
afford sufficient protection against competitors with similar technologies or
processes, and the possibility exists that already issued patents or trademarks
may infringe upon third party patents or trademarks or be designed around by
others. In addition, there is a risk that others may independently develop
proprietary technologies and processes, which are the same as, substantially
equivalent or superior to ours, or become available in the market at a lower
price.

     There is a risk that we have infringed or in the future will infringe
patents or trademarks owned by others, that we will need to acquire licenses
under patents or trademarks belonging to others for technology potentially
useful or necessary to us, and that licenses will not be available to us on
acceptable terms, if at all.

     We may have to litigate to enforce our patents or trademarks or to
determine the scope and validity of other parties' proprietary rights.
Litigation could be costly and divert management's attention. An adverse outcome
in any litigation may have a severe negative impact on our financial results and
stock price. To determine the priority of inventions, we may have to participate
in interference proceedings declared by the United States Patent and Trademark
Office or oppositions in foreign patent and trademark offices, which could
result in substantial cost to the Company and limitations on the scope or
validity of our patents or trademarks.

     We also rely on trade secrets and proprietary know-how, which we seek to
protect by confidentiality agreements with our employees, consultants, service
providers and third parties. There is a risk that these agreements may be
breached, and that the remedies available to us may not be adequate. In
addition, our trade secrets and proprietary know-how may otherwise become known
to or be independently discovered by others.

If we fail to adequately manage the size of our business, it could have a severe
negative impact on our financial results or stock price.

                                       20
<PAGE>

     We believe that in order to be successful we must appropriately manage the
size of our business. This may mean reducing costs and overhead in difficult
economic periods, and selectively growing in periods of economic expansion. In
addition, we will be required to implement operational, financial and management
information procedures and controls that are efficient and appropriate for the
size and scope of our operations. The management skills and systems currently in
place may not be adequate and we may not be able to manage any significant
reductions or growth effectively.

We may encounter difficulties in acquiring and effectively integrating
complementary assets and businesses.

     As part of our business strategy, we may acquire assets and businesses
principally relating to or complementary to our current operations. We acquired
Identicator Technology, Inc. ("Identicator Technology") in fiscal 1999, one
company in fiscal 1998 and two companies in fiscal 1996. These and any other
acquisitions by Identix are and will be accompanied by the risks commonly
encountered in acquisitions of companies. These risks include, among other
things:

     -    potential exposure to unknown liabilities of acquired companies;

     -    higher than anticipated acquisition costs and expenses;

     -    effects of costs and expenses of acquiring and integrating new
          businesses on our operating results and financial condition;

     -    the difficulty and expense of assimilating the operations and
          personnel of the companies;

     -    the potential disruption of our ongoing business;

     -    diversion of management time and attention;

     -    failure to maximize our financial and strategic position by the
          successful incorporation of acquired technology;

     -    the maintenance of uniform standards, controls, procedures and
          policies;

     -    loss of key employees and customers as a result of changes in
          management;

     -    the incurrence of amortization expenses; and

     -    possible dilution to our stockholders.

     In addition, geographic distances may make integration of businesses more
difficult. We may not be successful in overcoming these risks or any other
problems encountered in connection with any acquisitions.

Loss of current senior executives and key technical personnel would adversely
affect our business.

     Our personnel may voluntarily terminate their relationship with us at any
time, and competition for qualified personnel, especially engineers, is intense.
The process of locating additional personnel with the combination of skills and
attributes required to carry out our strategy could be lengthy, costly and
disruptive. We are dependent on the services of certain key personnel, including
the following:

Robert McCashin, Chairman of the Board and Chief Executive Officer, has nearly
30 years of domestic and international leadership experience and plays a key
role in directing the Company, its Board of Directors and its senior management
team.

James P. Scullion, President and Chief Operating Officer, and Daniel F. Maase,
Vice President and Chief Technical Officer, Imaging, have a combined total of 24
years experience with Identix and have a substantial amount of acquired
knowledge regarding Identix and the biometrics industry generally. Mr. Scullion
plays a major role in the development and execution of our strategic plan.

Grant Evans, Executive Vice President Strategy and Business Development, has a
central role in our business development ventures and itrust.

                                       21
<PAGE>

Yuri Khidekel, Vice President and Chief Software Technology Officer, Security,
and Yury Shapiro, Vice President and Chief Hardware Technology Officer,
Security, serve as key researchers and developers and manage the biometric
security research and development activities of IT Concepts, a key product and
service provider to the Company.

     If we lose the services of key personnel, or fail to replace the services
of key personnel who depart, we could experience a severe negative impact on our
financial results and stock price. In addition, there is intense competition for
highly qualified engineering and marketing personnel in the Silicon Valley where
we principally operate. The loss of the services of any key engineering,
marketing or other personnel or our failure to attract, integrate, motivate and
retain additional key employees could have a material adverse effect on our
business, operating and financial results and stock price.

Our business operations may be adversely affected in the event of an earthquake.

     Our corporate headquarters and most of our research and development
operations are located in Silicon Valley in Northern California, a region known
for dramatic seismic activity. An earthquake or other significant natural
disaster could have a material adverse impact on our business, financial
condition, operating results and stock price.

Item 3. Quantitative and Qualitative Disclosures about Market Risk


     Interest Rate Risk. The Company's exposure to market risk for changes in
interest rates relates primarily to the Company's cash equivalents and lines of
credit. The Company does not use derivative financial instruments. The Company's
cash equivalents are invested in money market accounts with major financial
institutions. Due to the short duration and conservative nature of the Company's
cash equivalents, their carrying value approximates their fair value. The
Company has performed an analysis to assess the potential effect of reasonably
possible near-term changes in interest rates. The effect of such rate changes is
not expected to be material to the Company's results of operations, cash flows
or financial condition.

     The Company primarily enters into debt obligations to support general
corporate purposes including working capital requirements and capital
expenditures. The Company is subject to fluctuating interest rates that may
impact, adversely or otherwise, its results of operation or cash flows for its
variable rate lines of credit and cash equivalents.

     Foreign Currency Exchange Rate Risk. Certain of the Company's foreign
revenues, cost of revenues and marketing expenses are transacted in local
currencies. As a result, the Company's results of operations and certain
receivables and payables are subject to foreign exchange rate fluctuations. The
Company does not currently hedge against foreign currency rate fluctuations.
Gains and losses from such fluctuations are not material to the Company's
consolidated results of operations or balance sheet.

                                       22
<PAGE>

PART II OTHER INFORMATION

     Item 1. Legal Proceedings

          The Company is not party to any material legal proceedings.

     Item 2. Changes in Securities

          None during the quarter ended September 30, 2001.

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

          (a) Exhibits

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

               10.37      Amendment No. 1 to Employment Agreement between
                          Identix and Robert McCashin, dated August 22,2001

               10.38      Amendment No. 1 to Compensation Continuation Agreement
                          between Identix and James P. Scullion, dated
                          August 22, 2001

               10.39      Amendment No. 1 to Employment Agreement between
                          Identix and Erik E. Prusch, dated August 22, 2001

               10.40      Amendment No. 1 to Employment Agreement between
                          Identix and Grant E. Evans, dated August 22, 2001

               10.41      Employment Agreement between Identix and Mark S.
                          Molina, dated August 22, 2001

               10.42      Employment Agreement between Identix and Linda Howard,
                          dated August 22, 2001

               10.43      Employment Agreement between Identix and Sunday Lewis,
                          dated August 22, 2001

               10.44      Employment Agreement between Identix and Valerie J.
                          Lyons, dated August 22, 2001

               10.45      Loan and Security Agreement between Identix and
                          Silicon Valley Bank, dated September 26, 2001

               10.46      Streamline Facility Agreement between Identix and
                          Silicon Valley Bank, dated September 26, 2001


          (b) During the three months ended September 30, 2001, no reports were
              filed on Form 8-K.


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, Identix Incorporated, a corporation
organized and existing under the laws of the State of Delaware, has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Los Gatos, State of California, on November 14, 2001.

                                        IDENTIX INCORPORATED


                                        BY: /s/ Erik E. Prusch
                                            ------------------------------------
                                        Erik E. Prusch
                                        Executive Vice President and
                                        Chief Financial Officer

                                       23
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number     Description
-------    -----------
<S>        <C>
10.37       Amendment No.1 to Employment Agreement between Identix and Robert McCashin, dated
            August 22,2001

10.38       Amendment No. 1 to Compensation Continuation Agreement between Identix and James
            P. Scullion, dated August 22, 2001

10.39       Amendment No. 1 to Employment Agreement between Identix and Erik E. Prusch, dated
            August 22, 2001

10.40       Amendment No. 1 to Employment Agreement between Identix and Grant E. Evans, dated
            August 22, 2001

10.41       Employment Agreement between Identix and Mark S. Molina, dated August 22, 2001

10.42       Employment Agreement between Identix and Linda Howard, dated August 22, 2001

10.43       Employment Agreement between Identix and Sunday Lewis, dated August 22, 2001

10.44       Employment Agreement between Identix and Valerie J. Lyons, dated August 22, 2001

10.45       Loan and Security Agreement between Identix and Silicon Valley Bank, dated
            September 26, 2001

10.46       Streamline Facility Agreement between Identix and Silicon Valley Bank, dated
            September 26, 2001
</TABLE>