<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                            ------------------------
 
                                   FORM 10-K
(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
 
                    FOR THE FISCAL YEAR ENDED JUNE 30, 1997
 
                                       OR
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
                         FOR THE TRANSITION PERIOD FROM

                       --------------- TO ---------------
 
                         COMMISSION FILE NUMBER: 1-9641
 
                              IDENTIX INCORPORATED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
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<S>                                                           <C>
                      CALIFORNIA                                                     94-2842496
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)           (IRS EMPLOYER IDENTIFICATION NO.)
510 NORTH PASTORIA AVENUE, SUNNYVALE, CALIFORNIA                                       94086
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                        (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:                               (408) 731-2000

      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: COMMON STOCK, NO PAR VALUE

      SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE 

      NAME OF EACH EXCHANGE ON WHICH REGISTERED:             AMERICAN STOCK EXCHANGE
</TABLE>
 
     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 requirements for the past 90 days.  Yes [X]  No [ ]
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ______
 
     The aggregate market value of the voting stock held by non-affiliates of
the registrant on August 29, 1997, based upon the closing price of the common
stock on the American Stock Exchange for such date, was approximately
$188,463,000. Shares of common stock held by each officer and director and by
each person who owns 5% or more of the outstanding common stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.
 
     The number of outstanding shares of the registrant's common stock on August
29, 1997 was 24,986,861.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of the Definitive Proxy Statement expected to be filed with the
Securities and Exchange Commission on or about September 24, 1997 and to be used
in connection with the Annual Meeting of Shareholders expected to be held
October 30, 1997 are incorporated by reference in Part III of this Form 10-K.
 
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                               TABLE OF CONTENTS
 
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Item 1.     BUSINESS....................................................................    1
Item 2.     PROPERTIES..................................................................   20
Item 3.     LEGAL PROCEEDINGS...........................................................   20
Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.........................   20
Item 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......   21
Item 6.     SELECTED FINANCIAL DATA.....................................................   21
Item 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
            OPERATIONS..................................................................   22
Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................................   28
Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
            DISCLOSURE..................................................................   48
Item 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........................   48
Item 11.    EXECUTIVE COMPENSATION......................................................   48
Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............   48
Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................   48
Item 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K............   49
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                                     PART I
 
ITEM 1. BUSINESS
 
     The statements in this Annual Report on Form 10-K that relate to future
plans, events or performance are forward-looking statements. Actual results
could differ materially due to a variety of factors, including the factors
described under "Risk Factors" and the other risks described in this Annual
Report on Form 10-K. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
 
OVERVIEW
 
     Identix Incorporated ("Identix" or the "Company") is a leader in designing,
developing, manufacturing and marketing products for the capture or comparison
of fingerprints for security, anti-fraud, law enforcement and other
applications. Identix's products are classified into two groups: (i) biometric
identity verification ("Bio-ID") products that verify the identity of an
individual through the unique biological characteristics of a fingerprint and
(ii) biometric imaging products that capture forensic quality fingerprint images
directly from an individual's fingers for law enforcement and other
applications. At the core of Identix's Bio-ID and biometric imaging products are
proprietary fingerprint capture technologies developed through the application
of Identix's expertise in optics and image processing. The Company's products
also employ proprietary algorithms, application software and high resolution
printing technology. Identix's technologies and know-how enable it to produce
biometric solutions for a broad range of commercial and governmental
applications. The Company provides information technology, engineering and
management consulting services to private and public sector clients through a
wholly owned subsidiary, ANADAC, Inc. ("ANADAC"). ANADAC's services support the
development, installation, integration and operation of hardware and software
technology solutions, including Identix products, for a variety of client
operating environments. The Company's other subsidiaries and division include:
Fingerscan Pty Ltd. ("Fingerscan"), a manufacturer and integrator of Bio-ID
products, Biometric Applications and Technology, Inc. ("BA&T"), acquired on July
23, 1997, a developer of biometric and "smart" card applications and solutions
and Identification Services Division, a provider of fingerprinting services for
employee and applicant screening to commercial and government entities.
 
BIOMETRIC INDUSTRY OVERVIEW
 
     Fingerprints have a long history of being used as a means of verifying the
identity of individuals. Fingerprint identification has its origins in law
enforcement. In the 1800s, law enforcement agencies began using fingerprints to
link suspects with crime scenes or objects associated with crimes. Today, the
use of fingerprints in law enforcement is standard practice. Fingerprints are
well suited for positive identification because it is believed that each
individual's fingerprints contain a unique pattern, distinguishable from the
fingerprint patterns of the rest of the population. The process of capturing,
storing, retrieving and comparing fingerprints has become increasingly automated
as a result of advances in optics, electronics and computing. These advances
have enabled fingerprint identification technology to be used to confirm an
individual's identity for a variety of commercial and governmental applications.
 
BIO-ID
 
     The costs of fraud are estimated to be in the billions of dollars each year
in the United States alone. In addition, damages resulting from security
breaches, such as unauthorized persons gaining improper access to confidential
information, may not be quantifiable, but can be equally as serious.
Accordingly, the ability to verify the identity of a specific individual is of
critical importance for security and anti-fraud purposes. Numerous times each
day a person is required to identify himself with something the individual has
in his possession or with the knowledge of certain information, such as:
automated teller machine ("ATM") cards and personal identification numbers
("PINs") to transact business at an ATM; passwords to log-on to a computer or a
computer network; keys, cards or passwords to enter the workplace; PINs,
passwords and account numbers to make a commercial transaction online; credit
cards to make a credit purchase; time card to begin work; and a driver's license
to write a check or transact business at a bank.

--------- 
     The Company has adopted ONE DIGIT PIN(TM), TouchNet II(TM), TouchSafe
II(TM), TouchLock II(TM), TouchClock II(TM), TouchBlock(TM), TouchPrint(TM),
TouchPrint 600(TM), TouchView(TM), I(3)(TM), DocuColor(TM), Fingerscan(TM),
Fingerlan I(TM), Fingerlan II(TM) and Fingerlan III(TM) as trademarks. The
Fingerscan name and logo are registered in Australia.
 
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     Despite the importance of being able to verify the identity of an
individual, the most common verification methods used generally cannot provide
positive identification that a person is in fact the individual who that person
represents himself to be or is rightfully in possession of the physical object
or information that is being used to confirm identity. Keys, credit cards, ATM
cards and card keys can be lost or stolen. Passwords, account numbers or other
information used for identity verification can be divulged to or intercepted by
unauthorized users through electronic means and otherwise. In the workplace,
time-and-attendance information can be improperly altered by an employee
punching the time card for a tardy or absent co-worker.
 
     A more accurate method of verifying identity is to analyze some unique
biological characteristic of an individual, known as "biometric" verification,
to verify that person's identity before allowing the requested access or
authorization. Examples of unique biological characteristics that can be used to
identify an individual include fingerprints, eye retina blood vessel patterns,
hand geometry, voice, signature and face structure. Although biometric systems
potentially provide a more accurate means of identification than traditional
non-biometric methods, until recently their use has been limited by the cost and
technological complexity of developing the equipment to read and record unique
biological data and to use that data to distinguish one individual from the next
and by the computer processing power and speed needed to perform those
functions. In order to compete with non-biometric systems, Bio-ID systems must
be fast, highly reliable and cost effective.
 
     Bio-ID systems have the potential to be used in a broad range of
applications, including ATMs, computer database and network security,
point-of-sale terminals, electronic commerce and communications, and intranet
and Internet security.
 
BIOMETRIC IMAGING
 
     Fingerprinting has gained widespread acceptance and has become increasingly
more useful for law enforcement purposes because of the advances made in the
process of capturing, storing, retrieving, and comparing fingerprint data. The
Henry System, developed approximately 100 years ago, made the process of
manually comparing fingerprints manageable by developing a system of
characterizing fingerprints by different ridge patterns. The ability to
characterize fingerprints by ridge patterns enabled the development of computer
systems capable of comparing one fingerprint against large databases of
fingerprints. Developed in the 1970s, these systems, known as Automated
Fingerprint Identification Systems ("AFIS"), use minutia based recognition
algorithms that detect fingerprint characteristics to accomplish fingerprint
matching.
 
     Until the late 1980s, fingerprint collection was done by the traditional
"ink-and-roll" process. This process starts at the local law enforcement agency
where usually three or more complete sets of ink-and-roll prints are taken, one
for the local agency, one to be mailed to the state and one to be mailed to the
FBI. When the FBI receives the card, the card is run through a scanner which
creates a digital image of the fingerprint. The AFIS then compares the digital
image with the existing database of fingerprints to check the identity of an
individual and also adds that fingerprint image into the database.
 
     While the advent of AFIS systems significantly improved the ability to
compare fingerprints against large databases of fingerprints, the process of
collecting ink-and-roll cards, mailing those cards to the agency that maintains
the AFIS and scanning the fingerprint image into the AFIS often creates a
bottleneck in the system. The fingerprinting process can be complicated by a
lack of cooperation of the person being fingerprinted, the need to take multiple
sets of prints and operator error. In its 1995 fiscal year, the FBI received
approximately 40,000 fingerprint cards daily from local law enforcement and
other governmental agencies throughout the United States, which has led to
delays in scanning the cards into the FBI's AFIS. The
 
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FBI may reject the ink-and-roll cards it receives if the prints are smudged or
are entered in the wrong area of the card. If the FBI rejects the card, the
local agency is often required to locate the individual and have a set of
fingerprints taken again. As a result of the foregoing factors, the time between
taking a set of fingerprints and receiving the results of the search may take
several days or weeks, and the suspect often must be released before the search
results are obtained.
 
     In the late 1980s, live-scan technology, also known as biometric imaging,
was made commercially available to permit the inkless electronic capture of
fingerprint images. Identix was one of the first companies to develop and
commercialize live-scan systems. Live-scan systems electronically capture and
create a digitized image of the fingerprint directly from a person's finger. The
digitized fingerprint image captured by the live-scan unit can be compared to a
database of fingerprint images at the local agency if it has an AFIS and/or the
image can be electronically relayed to a state agency where it can be compared
against a larger database. In addition, because the fingerprint images are
captured electronically, any number of cards can be printed from one set,
eliminating the need to roll the fingerprint image numerous times. If the
fingerprint is misaligned or is entered in the wrong area of the card, the
live-scan system detects this error during the process allowing the operator to
reroll the appropriate fingerprint.
 
     The United States and certain international law enforcement communities are
in the process of converting from manual ink-and-roll fingerprint capture to
live-scan fingerprint capture. In the United States, the FBI has undertaken a
major program to upgrade its Identification Division and has announced that its
goal is to bring its new identification facility on-line and to receive a
majority of fingerprint submissions electronically by the late 1990s. As a
result of increased automation at the federal and state levels, a number of law
enforcement agencies have procured live-scan fingerprint systems.
 
     In addition to law enforcement applications, the ability to capture a
forensic quality fingerprint image electronically and compare that fingerprint
with a database of fingerprint images has other important applications, such as
screening potential foster parents, conducting employee background checks
(including jobs in federal or state government, child care, securities or
gaming), checking whether an applicant for a driver's license has received a
license under a different name in that state, or ensuring that welfare benefits
are paid to only qualified recipients.
 
IDENTIX TECHNOLOGY
 
     The Company believes that the following core technological competencies
will enable it to address the opportunities presented in the developing
biometric product markets:
 
     Optics and Image Processing Expertise. At the core of the Company's Bio-ID
and biometric imaging products are proprietary fingerprint capture technologies
developed through the application of the Company's optics and image processing
expertise. The fingerprint capture devices operate by passing a beam of light
through an inverted prism located directly under the acrylic surface (the
"platen") on which the finger is placed. A series of reflections is experienced
by the beam of light as it strikes the platen, forming an initial image that
accurately corresponds to the pattern of ridges and valleys of the fingerprint.
The reflected light passes through a series of lenses before reaching a camera
system that records the image information.
 
     The design of the fingerprint capture device for the Company's Bio-ID
systems is different than that of the capture devices for the Company's
biometric imaging systems. Fingerprint capture devices for biometric imaging
systems must meet forensic quality standards required for identifying
individuals from within large AFIS systems. To meet these stringent standards,
the Company has applied its optics and image processing expertise to develop a
system that captures very high resolution images. The result is a fingerprint
capture unit that produces rolled finger and "slap" (four fingers at once)
images at 600 dots per inch and 500 dots per inch, respectively.
 
     The requirements for Bio-ID units are very different. Bio-ID applications
demand low prices and small size, but do not require image resolution as high as
biometric imaging products. To address this market, the Company has applied its
optics and image processing expertise to produce a fingerprint capture device
that is a
 
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fraction of the cost and size of a fingerprint capture device for an imaging
system, but with high enough resolution to provide reliable identity
verification.
 
     Algorithms, Software and Printing Expertise. The Company's products also
employ proprietary algorithms, application software and high resolution printing
technology. The Company's Bio-ID products use the Company's patented fingerprint
analysis algorithms which permit the user considerable latitude in finger
placement during use, reducing the need to monitor finger location. The
algorithms, embedded in a proprietary application specific integrated circuit
("ASIC") are designed to accommodate considerable user error as well as
fingerprints which are difficult to read. Moreover, the Bio-ID system software,
through the use of menus and instructions, allows easy selection of customer
options and provides guidance in customizing system use. The Bio-ID systems also
have self-diagnostic features to check internally their own operation during
start up, to monitor continuously their status during operations and to provide
an information file on certain component failures or malfunctions.
 
     The Company has developed an advanced networking software system for
configuring and controlling a network of local and remote TouchLock IIs which is
designed to run on a single personal computer. This software creates and
maintains databases of user fingerprint templates and transaction data for
detailed analysis of the network activity. In addition, the Company has
developed software application programs employing the Company's Bio-ID products
or third party smart card products for use in applications such as computer
network access, Internet browser security, time and attendance, medical records
access, banking transaction authorization and access control.
 
     The Company's live-scan products contain a number of proprietary software
features, including data management software and software for digitizing and
processing fingerprint data in accordance with stringent FBI standards. The
Company's expertise in networking and systems integration has allowed it to
implement large-scale systems in some of the largest law enforcement agencies in
the United States to automate and improve the efficiency of the criminal
identification process. In addition, the Company has developed proprietary
quality assurance software that can tell the operator if a smudged or otherwise
unreadable fingerprint image was captured, allowing the operator to recapture
the image and has developed capture sequence control software that detects
sequence errors resulting from the accidental rolling of the wrong finger for
placement on the fingerprint card.
 
BIO-ID PRODUCTS
 
     The Company's Bio-ID products operate by comparing an individual's
fingerprint with the mathematical characterization ("template") of that
individual fingerprint entered at the time of enrollment into the system's
memory or on a smart card (a card similar to a credit card with an embedded
computer chip and memory that stores a mathematical characterization of a
fingerprint) or magnetic strip card. The user enters a personal identification
number and then places his finger on the platen of the Bio-ID system. The system
compares the finger placed on the platen with the stored fingerprint data
associated with the identification number to confirm the user's identity. If the
fingerprint and the stored template match, the user is positively identified and
access or transaction processing is authorized. If the fingerprint and the
stored template do not match, access or transaction processing is denied. See
"Identix Technology."
 
     TouchSafe II and TouchNet II. TouchSafe II is used for controlling access
to computer data, for authorizing business transactions such as electronic funds
transfers and for other applications. TouchSafe II is configured to be connected
to a personal computer to provide user authentication. TouchSafe II provides the
necessary electronics to interface with personal computers. In addition,
TouchSafe II can be integrated with Identix or custom developed software for
identifying individuals using smart card applications. Pursuant to an agreement
with Oracle Corporation ("Oracle"), Identix developed TouchNet II, an enhanced
version of TouchSafe II, for securing access to computers and networks. The
Company believes TouchNet II can also be modified to provide identity
authentication on computer networks for electronic commerce. TouchNet II is a
combination verification and encryption Bio-ID product which can be used as a
peripheral with intranet computer appliances and other networked personal
computers. TouchNet II features encryption security which encodes and decodes
communications and fingerprint data for heightened security. TouchNet II is
 
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designed to interface with security software developed by Oracle and other
companies for customers' protection.
 
     TouchLock II. TouchLock II is an access control system which may be used in
many different applications, including securing access to physical space such as
ATMs and buildings, or authorizing financial transactions. TouchLock products
have been installed in the Pentagon and in banks and industrial plants around
the world. These products may be connected in a network configuration through a
personal computer and have the flexibility to permit access to designated entry
points, thereby allowing a customer to install different levels of security at
different locations within the same system. TouchLock II is also marketed under
the name Fingerscan internationally.
 
     TouchClock II. TouchClock II is specifically designed for employee
time-and-attendance applications, to be used as an alternative to, or in
conjunction with, traditional punchcard time-and-attendance systems. The
TouchClock II can track an individual's time of arrival and departure as well as
breaks. TouchClock II is based on the same core proprietary technology as
TouchLock II.
 
     TouchBlock. The Company sells a fingerprint identification kit to original
equipment manufacturers ("OEMs") consisting of a tooled optics subsystem, custom
integrated circuit, and supporting software modules which allows biometric
identification to be integrated into third party OEM systems employing
microprocessor based architectures. Most of the Company's TouchBlock sales to
date have been for time-and-attendance, ATM servicing and point-of-sale
applications.
 
     FingerLan III. FingerLan III is system management software designed to
allow the authorized system manager the ability to limit access of specific
individuals to certain times or to certain locations, as well as to create an
audit trail of all entries, alarms, enrollments, system changes and impostor
attempts. FingerLan III is compatible with Microsoft Windows. FingerLan III is
also marketed under the name TouchLan III.
 
     Application Software. The Company's Bio-ID software products comprise two
major categories: applications developed internally and software interfaces to
third party products. Applications developed internally include FingerLan III,
Windows system secure sign-on and hard disk security. Software interfaces
include interfaces to smart card readers for the storage of data and fingerprint
templates and to Oracle databases.
 
BIOMETRIC IMAGING PRODUCTS
 
     TouchPrint 600. The Company's TouchPrint products are computer-based,
inkless live-scan systems that electronically scan and capture forensic quality
fingerprint images directly from an individual's finger. The fingerprint images
then can be printed using a laser printer or transmitted over telephone lines to
AFIS systems for identification matching at local, state or federal agencies.
TouchPrint was designed for use by law enforcement agencies as a more accurate
and efficient method of recording fingerprint information than the conventional
"ink-and-roll" method. The TouchPrint 600 workstation and printer system was the
first system accredited under the FBI's new Image Quality Specifications ("IQS")
standard. Accreditation to this specification is required for direct electronic
submission of fingerprint images to the FBI's integrated AFIS currently under
development. In addition to law enforcement applications, there are other
applications for the TouchPrint systems, including background checks of
prospective employees by public and private sector employers. A standard
configuration of a TouchPrint 600 system consists of a high resolution scanner
with digital signal and video processing boards, multi processing application
software, a multi-tasking computer, monitors and a laser printer.
 
     TouchPrint 600 Card Scan System. The TouchPrint 600 Card Scan System
provides digitization of inked fingerprint images that were originally recorded
on 10-print card stock. The TouchPrint 600 Card Scan System is used primarily by
lower volume booking sites that want to participate in an electronic fingerprint
identification network. The TouchPrint Card Scan System has a flat-bed scanner
on which the user places the inked fingerprint card. The System checks for
lateral and angular misalignment of the card, digitizes the complete card,
applies automatic contrast equalization and extracts the digital image of each
individual
 
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fingerprint on the card. The digitized fingerprint record can be forwarded
electronically for identification processing by a local or state AFIS or for
archive at a central records repository.
 
     TouchPrint 600 PalmScanner. The TouchPrint 600 PalmScanner is an inkless
live-scan system that electronically scans and captures forensic quality palm
images directly from an individual's palm. The TouchPrint 600 PalmScanner can be
integrated with existing TouchPrint 600 live-scan networks. The palm images can
be transmitted to identification bureaus for examination using existing
TouchPrint 600 software.
 
     TouchView II. TouchView II is specifically designed to capture and display
a high resolution video fingerprint image on a customer-supplied workstation.
TouchView is used primarily by system integrators as an optical live-scan
fingerprint capture device which supplies fingerprint images to computerized
fingerprint database systems for identification matching. The Company's
TouchView single-finger imager is used for civilian applications in welfare
fraud prevention, immigration and border control, and motor vehicle licensing.
TouchView is incorporated into turnkey systems by several OEMs.
 
     I(3) Workstation. The Identix I(3) workstation is a point-of-booking system
that integrates mugshot capture capability with Identix's TouchPrint live-scan
fingerprinting system. The I(3) workstation is designed to be integrated with
the Company's DocuColor mugshot and image file management system. The I(3)
workstation links the key elements of the criminal identification process,
including fingerprints, mugshots, biographical data, documents, arrest data and
criminal investigation files, to provide law enforcement agencies with a system
for consolidating criminal justice information. The I(3) workstation is a
modular booking workstation equipped with a live-scan system and photo capture
camera, file server, investigative workstation, document scanner and color
printer.
 
     DocuColor. The DocuColor mugshot and image file management system is an
image management system that provides the capability to create an "electronic
file folder" containing color video images, document images, fingerprints, forms
and digitized data. The system provides compact storage and easy retrieval of a
large volume of criminal justice information such that a user can, by querying
the system and utilizing certain physical characteristics of a suspect, produce
from a search of thousands of suspect records a photo line-up for comparison.
The system operates on a personal computer workstation. A digital video camera
is used for capturing color photographs and a high resolution scanner is used to
digitize documents to store in an electronic file folder. A high-capacity
relational database is used to index and store information and images. Images
and data from the electronic file folders can be displayed on high resolution
monitors or printed on black and white or color printers. The DocuColor system
provides full networking capabilities to allow multiple users access to a
central database and image storage system.
 
FINGERPRINT SERVICES
 
     The Company believes that there is significant demand for fingerprint
services and in June 1996 acquired Innovative Archival Solutions, Inc. ("IAS"),
which provides fingerprint services in two states using the Company's biometric
imaging systems. The business of IAS is now being conducted as the Company's
Identification Services Division. Certain employers require a background check,
including a fingerprint check, as a condition of employment. Persons who apply
to be postal workers, stock brokers, bus drivers, security guards, health care
workers, foster parents, school teachers, daycare providers and insurance
brokers must be fingerprinted. Usually, an applicant is required to go to a
police station for ink fingerprinting and then submit the fingerprint card to
the employer for submission to the state authorities or the FBI to perform a
background investigation. This process usually takes several weeks to complete
and often the inked cards are rejected as unreadable. If the fingerprint card is
rejected, an applicant then must go through the process again, which can delay
an applicant's start date. In some cases, employers or agencies find themselves
with such a backlog of applicants awaiting fingerprinting that they allow
applicants to start the job without the background check being complete, placing
the employer at risk if an applicant has a criminal record.
 
     The fingerprint services business provides the applicant and employer with
the following advantages: fingerprinting takes place in a non-police
environment; background checks can be completed more quickly, allowing the
applicant to begin work sooner; re-submissions can be done automatically; the
rejection of cards
 
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because of poor print quality is virtually eliminated; and employers may not be
subject to the unnecessary risk of discovering that an employee who has begun
work may have a criminal record.
 
     Currently, fingerprint services are provided by the Company in two states
through mobile units which are dispatched from a central location and make
periodic visits to different locales. The fingerprint services business
maintains an "800" number which people can call to find out the most convenient
location for them to have fingerprints taken and, if the location is serviced by
a mobile unit, when the mobile unit will be at that location. The applicant then
makes an appointment and provides all the necessary background information over
the phone. On August 8, 1997, Identix signed a letter of intent with
Baltimore-based Sylvan Learning Systems to form a joint venture that will
provide fingerprint services at Sylvan Learning Systems locations for a variety
of potential users.
 
ANADAC SERVICES
 
     The Company provides information technology, engineering and management
consulting services to private and public sector clients through ANADAC, which
is headquartered in Arlington, Virginia. ANADAC's services support the
development, installation, integration and operation of hardware and software
technology solutions, including Identix products, for a variety of client
operating environments. ANADAC provides such services through the following
groups and subsidiary:
 
     Information Technology Group. ANADAC's Information Technology Group ("IT
Group") provides business process analysis and business process engineering as
well as system design, development, integration and implementation services to
automate a client's workflow thereby improving operational efficiency and
solving business problems. The IT Group's solutions incorporate a variety of
technologies such as digital imaging, biometric imaging, rastor to vector
conversion, networking, relational database development and management,
telecommunications and integration of nonhomogeneous software and hardware into
a single homogeneous environment.
 
     The Company believes there is a significant opportunity to provide
businesses and government agencies imaging solutions to address work flow
inefficiencies. Since most business processes involve some sort of paper
documentation, imaging technologies play an important role in developing
business solutions that improve storage, distribution and access efficiency. The
IT Group focuses on providing acquisition, design, development and integration
support for imaging systems in a variety of different applications ranging from
law enforcement to office and business applications to automated storage and
retrieval. The IT Group utilizes the Company's DocuColor image file management
system to provide customers a file management system that allows users to
capture, catalog, index, store and retrieve data, digital video images and
document images using a file folder paradigm. The IT Group also develops and
implements biometric imaging solutions using the Company's products. For
example, the IT Group has been the system integrator for the Maryland Department
of Public Safety ("MDPS"), whereby the IT Group integrated the Company's
TouchPrint 600 live-scan fingerprinting system with the Company's DocuColor
mugshot and file management system to provide MDPS a statewide fingerprint and
mug shot verification system designed to provide fast and accurate suspect
verification among Maryland's state law enforcement entities. The IT Group also
designs and implements other imaging systems using "off-the-shelf" or
commercially available products that satisfy its clients' requirements.
 
     The IT Group has used internally developed technology to develop the
Identix General Services Administration ("GSA") computerized catalog that
enables federal and state agencies to call up specifications and pricing, then
order GSA sanctioned equipment and services. Through the GSA computerized
catalog, Identix eliminates the need for federal and state agencies to compete
each contract by negotiating and receiving price approval under US Government
guidelines. Originally the IT Group implemented the GSA computerized catalog for
internal use; now however, the IT Group allows third parties for a fee to sell
through its GSA computerized catalog.
 
     Systems Engineering Group. ANADAC's System Engineering Group is a leader in
providing consulting, scheduling, project monitoring, financial and contract
management planning and implementing system acquisition programs in both the
public and private sectors. The Systems Engineering Group, with its
 
                                        7
<PAGE>   10
 
extensive expertise in planning and executing system procurements, also assists
clients in developing requests for proposals ("RFPs"), evaluating proposals and
providing the detailed analytical and comparative data required to make a
selection. In September 1995, ANADAC's System Engineering Group was awarded a
contract for program management engineering services by the Naval Sea Systems
Command in support of the AEGIS Combat Shipbuilding Program. The contract
generated approximately $7 million in revenue in the base year, and is estimated
to have a total contract value of approximately $38 million over a five-year
period if all contract options are exercised. There can be no assurance that any
contract extensions will be exercised or that funding will be provided beyond
the base year.
 
     Facilities Engineering Group. ANADAC's Facilities Engineering Group
provides strategic program management, including monitoring and cost control,
facility engineering audits, assessments, inspections and maintenance management
and construction management from design reviews to claims consulting.
 
     System Dynamics, Inc. ANADAC's wholly owned subsidiary System Dynamics,
Inc. provides demographic data information and services principally to Fortune
500 companies for use in lobbying Federal and state legislatures.
 
     A substantial portion of ANADAC's business comes from government agencies,
which subjects the business to certain additional risks. See "Risk
Factors -- Fluctuations in Quarterly Results" "Risk Factors -- Uncertainty
Related to Contracts for Services with Government Agencies," and "Risk
Factors -- Other Public Agency Contract Considerations."
 
PRODUCT DEVELOPMENT
 
     The Company considers research, development and engineering to be a vital
part of its operating discipline and continues to make substantial investments
in research, development and engineering to enhance the performance and
functionality, and in certain cases reduce the costs, of its existing products
and to increase its product offerings. The Company's expenditures for research,
development and engineering totaled $2,335,000, $1,486,000, and $1,582,000, in
the fiscal years ended June 30, 1997, 1996 and 1995, respectively. In addition,
research, development and engineering expenditures funded by customers were
$269,000, $255,000, and $381,000 in the fiscal years ended June 30, 1997, 1996
and 1995, respectively.
 
     The Company's development programs have focused primarily on: the next
generation Bio-ID device which is being developed to be faster, more reliable
and cost effective than currently available devices; development of the next
generation live-scan system and; development of a palm scanner using a patented
curved platen design to be marketed to law enforcement agencies that maintain or
wish to maintain palm print data as an additional means of verifying identity.
 
CUSTOMERS
 
     The Company markets its Bio-ID and biometric imaging products directly and
through distributors, VARs, system integrators, OEMs and other business partners
("Resellers"). A partial list of the Company's Resellers include: (i) for Bio-ID
products, Accu-Time Systems, Fujitsu Australia Limited and ADI, Inc.; (ii) for
biometric imaging products, North American Morpho Systems, Inc. ("Morpho") and
NEC Technologies, Inc. The following is a partial list of the Company's end
users: (i) for Bio-ID products, Bank Central Asia, Armaguard, and Canovi Bank;
(ii) for biometric imaging products, New York City Police Department, California
Department of Justice, U.S. Immigration and Naturalization Service and the
States of Texas, Arizona and Ohio.
 
SALES, MARKETING AND SUPPORT
 
     The Company markets its Bio-ID and biometric imaging product lines directly
to end users through its internal sales force, and indirectly through authorized
agents, distributors, value added resellers ("VARs"), system integrators and
OEMs.
 
     Bio-ID Products. The Company's Bio-ID products are sold through a worldwide
network of direct sales personnel, distributors, system integrators, VARs and
OEMs. This sales organization is divided into five regions: Australia, Asia, the
Americas, Europe and Middle East and Africa. Sales activity is concentrated in
the markets of database and
 
                                        8
<PAGE>   11
 
network access security, banking (financial transactions), time-and-attendance,
access control and government (personal verification). The Company has or plans
to have sales, service, product marketing and application engineering expertise
in each regional sales office to provide the customers with complete sales and
maintenance support.
 
     In addition to marketing Bio-ID products directly through its own sales
force, the Company's strategy is to establish relationships with other companies
that are experts in specific market areas. The Company is working with strategic
collaborators to replace or supplement PINs and passwords with fingerprint
identity verification for a variety of applications. An extensive infrastructure
already exists for many of the markets in which the Company wishes to
participate. In such cases, the Company has and will pursue relationships with
companies that have strong positions in these markets. For example, the Company
developed a biometric database access security product in cooperation with
Oracle as part of Oracle's strategy to enhance the security of its flagship
database product. See "Risk Factors -- Dependence on Collaborative Partners for
Product Distribution."
 
     Sales activity varies widely from single access control devices sold by a
dealer or system integrator to complicated, networked solutions sold by several
companies working cooperatively, such as time-and-attendance, building access
and financial transaction authorization. The success of these sales depends on
the Company's ability to provide integrated solutions that are usually software
based. The majority of the service and support activities relate to these
software and integration issues.
 
     Biometric Imaging Products. The Company's biometric imaging products are
marketed primarily through a direct sales force in North America located in four
regional offices. For international sales, the Company uses both a direct sales
force and international sales representatives. Identix also teams with two major
AFIS vendors, NEC and Morpho, to provide TouchPrint 600 systems or OEM versions
thereof for law enforcement applications. In addition, the Company works closely
with skilled system integrators for civil and commercial applications of its
biometric imaging technology. The Company develops proposals, either directly or
in cooperation with its partners, and is often directly involved in negotiating
the contract terms.
 
     The Company's TouchPrint 600 live-scan system is generally sold through a
competitive bid process based on a RFP. Funding for such projects often comes
from federal, state and local agencies. The funding, proposal, contract
negotiation and implementation process can extend over several months or years,
although for existing customers that are adding to or upgrading their systems,
the sales cycle is considerably shorter and these sales often are not required
to go through the bid process.
 
     Product Support. Installation and maintenance support comes from the
Company's 24 hour/7 days per week Help Desk, regional technical staffs as well
as the Company's engineering staff. This support generally includes travel to
the customer site to explain the technical operation of the system, clarify the
configurations, detail any necessary software customization and define the
integration issues. The systems are then installed and supported by the
Company's Help Desk, regional staffs and the Identix trained system integrators,
VARs or partners.
 
     The Company's biometric imaging products carry a 90-day warranty and
extended service and warranty are offered through a choice of maintenance
contracts. The Company's Bio-ID products carry a one year warranty and
additional support is available for a fee after the expiration of the warranty
period. For equipment produced by other companies, the Company passes on to its
customers the standard warranties provided by those manufacturers.
 
     ANADAC Services. Historically, a significant portion of ANADAC's revenues
have been generated from contracts with the Department of Defense ("DOD"). To
diversify the reliance on one customer, ANADAC has increased its marketing
efforts to other government agencies and commercial entities. The marketing
efforts for each group within ANADAC are led by one business development person
and the head of the group.
 
                                        9
<PAGE>   12
 
BACKLOG
 
     Product sales are generally made pursuant to purchase orders, which are
subject to cancellation upon payment of a 25% restocking payment. The Company
typically ships its products within sixty days of receipt of an order. For its
services business, amounts in backlog are often not funded and, even if they are
funded, are subject to cancellation by the contracting agency. Accordingly, the
Company believes that backlog at any given time cannot be considered a
meaningful indicator of future financial performance.
 
PATENTS AND TRADE SECRETS
 
     The Company's ability to compete effectively will depend in part on its
ability to maintain the proprietary nature of its technology, products and
manufacturing processes. The Company principally relies upon patent, copyright,
trade secret and contract law to establish and protect its proprietary rights.
The success of the Company's products business will depend in part on its
proprietary technology and the Company's protection of such technology. The
Company holds the following patents: one United States patent expiring in 2002
and ten foreign patents on one version of the Company's optical fingerprint
reading device; one United States patent expiring in 2008 and five foreign
patents on a fingerprint analysis algorithm; one United States patent expiring
in 2012 covering an enhanced method of recording a fingerprint; and one United
States patent expiring in 2013 on the Company's curved platen design palm
scanner. Identix has an ongoing policy of filing patent applications to seek
protection for novel features of its products and currently has three patent
applications pending in the United States and one in a foreign country.
 
     No assurance can be given that the claims allowed on any patents held by
the Company will be sufficiently broad to protect the Company's technology. In
addition, no assurance can be given that any patents issued to the Company will
not be challenged, invalidated or circumvented or that the rights granted
thereunder will provide competitive advantages to the Company. The loss of
patent protection on the Company's technology or the circumvention of its patent
protection by competitors could have a material adverse effect on the Company's
ability to compete successfully in its products business. There can be no
assurance that any existing or future patent applications by the Company will
result in issued patents with the scope of the claims sought by the Company, or
at all, that any current or future issued or licensed patents, trade secrets or
know-how will afford sufficient protection against competitors with similar
technologies or processes, or that any patents issued will not be infringed upon
or designed around by others. In addition, there can be no assurance that others
will not independently develop proprietary technologies and processes which are
the same as or substantially equivalent or superior to those of the Company.
Further, there can be no assurance that the Company has not or will not infringe
prior or future patents owned by others, that the Company will not need to
acquire licenses under patents belonging to others for technology potentially
useful or necessary to the Company, or that such licenses will be available to
the Company, if at all, on terms acceptable to the Company.
 
     Litigation, which could result in substantial cost to the Company and
diversion of management attention, may also be necessary to enforce any patents
issued to the Company or to determine the scope and validity of other parties'
proprietary rights. For example, the Company is engaged in litigation with a
competitor regarding an alleged infringement by the Company of the competitor's
patent. If the outcome of any such litigation is adverse to the Company, its
business could be adversely affected. To determine the priority of inventions,
the Company may have to participate in interference proceedings declared by the
United States Patent and Trademark Office or oppositions in foreign patent
offices, which could result in substantial cost to the Company and limitations
on scope or validity of the Company's patents. See Item 3 "Legal Proceedings."
 
     The Company also relies on trade secrets and proprietary know-how which it
seeks to protect by confidentiality agreements with its employees and
consultants and with third parties. There can be no assurance that these
agreements will not be breached, that the Company will have adequate remedies
for any breach, or that its trade secrets and proprietary know-how will not
otherwise become known or be independently discovered by others. See "Risk
Factors -- Protection of Proprietary Technology" and Item 3 "Legal Proceedings."
 
                                       10
<PAGE>   13
 
COMPETITION
 
     The markets for Bio-ID products and biometric imaging systems are extremely
competitive and are characterized by rapid technological change, both as a
result of technical developments exploited by competitors, the changing
technical needs of the customers and frequent introductions of new features. In
addition, the Company is experiencing intense price competition in the law
enforcement and Bio-ID market. The Company expects competition to increase as
other companies introduce additional and more competitive products. In order to
compete effectively in this environment, the Company must continually be able to
develop and market new and enhanced products and market such products at
competitive prices. There can be no assurance that the Company will be able to
make the technological advances necessary to compete successfully in its
products business. Some of the Company's present and potential competitors have
financial, marketing and research resources vastly greater than those of the
Company. Existing and new competitors may enter or expand their efforts in the
Company's product markets, or develop new products to compete against the
Company's products. No assurance can be given that the Company's competitors
will not develop new technologies or enhancements to existing products or
introduce new products that will offer superior price or performance features or
that new products or technologies will not render obsolete the products of the
Company. For example, other companies are currently developing or have developed
other methods of biometric identification such as hand geometry, face structure,
voice recognition, signature recognition or retina scanning, which could
significantly reduce the potential market for the Company's products if
successfully developed and commercialized. The Company's Bio-ID products also
face competition from non-biometric technologies such as traditional key, card
and surveillance systems, PIN numbers and similar traditional verification
methods.
 
     The Company believes that the most important competitive factors for Bio-ID
products are the degree of security provided, ease of use, price and
reliability. In applications such as controlled access to computers, ATMs and
electronic funds transfer, the Company faces competition from technologies
relying on PIN numbers or passwords. In competing with these nonbiometric
products, the Company believes that the most important competitive issue is the
trade-off between the additional security provided by positive personal
identification and the higher price. In some instances, however, products using
nonbiometric technologies may be complementary to, rather than competitive with,
the Company's Bio-ID products. For example, card key systems can be integrated
with Bio-ID systems to supply different levels of security within a facility.
 
     The Company believes that the most important competitive factors for the
biometric imaging products are the quality of fingerprint images, ease of use,
price and reliability. The Company is aware of other companies that are
currently marketing live-scan products competing with Identix's TouchPrint
products.
 
     In its services business, the Company faces substantial competition from
professional services providers of all sizes in the government professional
services market. ANADAC is increasingly being required to bid on firm
fixed-price ("FFP") and similar contracts that result in greater performance
risk to ANADAC. If ANADAC is not able to maintain a competitive cost structure,
support specialized market niches, retain its highly qualified personnel or
align with technology leaders, its ability to compete successfully will be
materially and adversely affected.
 
MANUFACTURING
 
     The Company limits its manufacturing activities to the assembly and testing
of proprietary subassemblies, final system assembly and functional testing.
Printed circuit board assemblies are fabricated by highly automated outside
suppliers for assembly and testing. The Company believes this would permit rapid
expansion of production capacity to meet any significant increase in product
demand. The Company believes that the cost of material and fabricated
subassemblies will decline if manufacturing volume increases. Quality control
tests are performed at all stages of the manufacturing process.
 
     The Company currently uses certain components which are sole sourced, the
most important of which are the charge couple devices and ASICs for the Bio-ID
products and the charge couple devices for the biometric imaging products. The
partial or complete loss of supplies available from sole or limited sources of
supply or the delay in receiving supplies from these sources could result in
delays in manufacturing and shipping of
 
                                       11
<PAGE>   14
 
products to customers and require the incurrence of development and other costs
to establish alternative sources of supply. While the Company attempts to
maintain a few months worth of inventory on sole sourced components, it may take
the Company several months to locate alternative supplies if required, or
redesign its products to accommodate components from different suppliers. If the
Company is required to seek alternative suppliers, there can be no assurance
that the Company will be able to obtain such components within the time frames
required by the Company at an affordable cost, or at all. Any delays resulting
from suppliers failing to deliver components on a timely basis in sufficient
quantities or of sufficient quality or any significant increase in the price of
components from existing or alternative suppliers could have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Risk Factors -- Dependence on Sole and Limited Sources of Supply; Risks
Associated with Implementation of Larger Scale Manufacturing Capabilities."
 
EMPLOYEES
 
     On June 30, 1997, Identix had 143 employees working in its products
business, of whom 26 were engaged in research, development and engineering, 45
in production, production support and fingerprint capture services, 52 in sales,
marketing and field service and 20 in general administration and finance. On
June 30, 1997, Identix had 218 employees working in its services business, of
whom 192 were service providers, 10 were engaged in sales and marketing and 16
were engaged in general administration and finance. None of Identix's employees
is represented by a union and Identix has never experienced a work stoppage.
Management considers its employee relations to be good.
 
                                  RISK FACTORS
 
     The Company's future operations, financial performance, business and share
price may be affected by a number of factors, including the following, any of
which could cause actual results to vary materially from anticipated results or
from those expressed in any forward-looking statements made by the Company in
this Annual Report on Form 10-K or in other reports, press releases or other
statements issued from time to time.
 
FLUCTUATIONS IN QUARTERLY RESULTS
 
     The Company's quarterly operating results have in the past been, and will
continue to be, subject to significant variations resulting from a number of
factors, many of which are outside of the Company's control and any one of which
could substantially affect the Company's results of operations for any
particular fiscal period. The Company's revenues in any period have been, and in
the near term are expected to be, derived from large orders from a limited
number of customers, which in most cases are government agencies or resellers
who sell the Company's products to government agencies. Accordingly, revenues in
a particular quarter will be dependent upon the timing and size of major orders
and the timing of recognition of revenues from those orders. Government agencies
are subject to political and budgetary constraints and orders from them may be
canceled or substantially delayed or the receipt of revenues or payments
substantially delayed due to political and budgetary processes or other
scheduling delays relating to the contract or bidding process. In addition, the
Company's contracts with local government agencies may be contingent upon
availability of matching funds from state or federal entities. Other factors
which can result in fluctuations in quarterly results of operations include
budgetary and purchasing cycles of government agencies; changes in the mix of
products and services sold; the pricing of existing and future products by the
Company's competitors; the introduction of new or enhanced products by the
Company or its competitors and the market acceptance thereof; expenses related
to, and results of, litigation; percentage of and costs associated with firm
fixed price ("FFP") contracts and time-and-materials ("T&M") contracts; the
availability and cost of key components; and fluctuations in general economic
conditions. The Company also may choose to reduce prices or to increase spending
in response to competition or to pursue new market opportunities, all of which
may adversely affect the Company's business, financial condition and results of
operations. Further, the lead time for ordering parts and materials and building
the Company's products can be many months and the Company orders parts and
materials and builds products based on its forecasted demand for the products.
If demand for the Company's products lags significantly behind the Company's
forecasts, the Company runs the risk of building too large an
 
                                       12
<PAGE>   15
 
inventory, which may adversely affect cash flow and may result in writeoffs or
writedowns of inventory because of product obsolescence. Due to the foregoing
factors, the Company's operating results may be below the expectations of public
market analysts and investors in some future quarters, which would likely result
in a decline in the trading price of the common stock. The Company believes that
period-to-period comparisons of its results of operations should not be relied
upon as indications of future performance. See Item 7 "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
 
DEPENDENCE UPON NEW AND UNCERTAIN MARKETS; UNCERTAINTY OF MARKET ACCEPTANCE
 
     Substantially all of the Company's product revenues to date have been, and
for the foreseeable future are anticipated to be, derived from Bio-ID products
and biometric imaging products. These products represent new technologies which
have not gained widespread commercial acceptance. In particular, Bio-ID products
represent a new approach to identity verification which has only been used in
limited applications to date. The expansion of the market for the Company's
products depends on a number of factors, including the cost and reliability of
the Company's products and products of competitors, customers' perception of the
perceived benefits of these products, public perceptions of the intrusiveness of
these products and the manner in which agencies are using the fingerprint
information collected, public confidence as to confidentiality of private
information, customers' satisfaction with the Company's products, and publicity
regarding these products. Public objections have been raised to the use of
biometric products for some applications on civil liberties grounds. The
Company's future success is dependent upon the development and expansion of
markets for Bio-ID products and biometric imaging products both domestically and
internationally. In addition, even if markets develop for Bio-ID products and
additional markets develop for biometric imaging products, there can be no
assurance that the Company's products will gain wide market acceptance in these
markets. A number of factors may limit the market acceptance of the Company's
products, including the performance and price of the Company's products compared
to competitive products or technologies, the practicalities of developing the
infrastructure necessary to support certain Bio-ID applications such as ATMs and
point-of-sale applications, the nature of technological innovations and new
product development activities by the Company and its competitors, and the
extent of marketing efforts by the Company's collaborators or partners. If the
markets for the Company's products fail to develop or develop more slowly than
anticipated or if the Company's Bio-ID products fail to gain wide market
acceptance, or biometric imaging products lose market share, the Company's
business, financial condition and results of operations would be materially and
adversely affected.
 
COMPETITION AND TECHNOLOGICAL CHANGE
 
     The markets for Bio-ID products and biometric imaging systems are extremely
competitive and are characterized by rapid technological change, both as a
result of technical developments exploited by competitors, the changing
technical needs of the customers and frequent introductions of new features. In
addition, the Company is experiencing intense price competition in the law
enforcement market and, to a lesser extent, price competition in the markets
where the Company sells its Bio-ID products. The Company expects competition to
increase as other companies introduce additional and more competitive products.
In order to compete effectively in this environment, the Company must
continually be able to develop and market new and enhanced products and market
those products at competitive prices. There can be no assurance that the Company
will be able to make the technological advances necessary to compete
successfully in its products business. Some of the Company's present and
potential competitors have financial, marketing and research resources
substantially greater than those of the Company. Existing and new competitors
may enter or expand their efforts in the Company's product markets, or develop
new products to compete against the Company's products. No assurance can be
given that the Company's competitors will not develop new technologies or
enhancements to existing products or introduce new products that will offer
superior price or performance features or that new products or technologies will
not render obsolete the products of the Company. For example, other companies
are developing currently or have developed other methods of biometric
identification such as hand geometry, face structure, voice recognition,
signature recognition or retina scanning, which could significantly reduce the
potential market for the Company's products if successfully developed and
commercialized. The Company believes that to remain competitive in
 
                                       13
<PAGE>   16
 
the future it will need to invest increasing financial resources in research and
development. The Company's Bio-ID products also face competition from
nonbiometric technologies such as traditional key, card and surveillance
systems, PINs and similar traditional verification methods.
 
     In its services business, the Company faces substantial competition from
professional services providers of all sizes in the government professional
services market. ANADAC is increasingly being required to bid on FFP and similar
contracts that result in greater performance risk to ANADAC. If ANADAC is not
able to maintain a competitive cost structure, support specialized market
niches, retain its highly qualified personnel or align with technology leaders,
its ability to compete successfully will be materially and adversely affected.
See Item 1 "Business -- Competition."
 
DEPENDENCE ON NEW PRODUCT INTRODUCTIONS
 
     The Company's future success will depend upon its ability to address the
needs of the market by enhancing its current products and by developing and
introducing new products on a timely basis that keep pace with technological
developments and emerging industry standards (including FBI accreditation
standards), respond to evolving customer requirements and achieve market
acceptance. The development of new, technologically-advanced products and
product enhancements is a complex and uncertain process requiring high levels of
innovation, as well as the accurate anticipation of technological and market
trends. Any failure by the Company to anticipate or adequately respond to
technological developments or end user requirements, or any significant delays
in product development or introduction, could result in a loss of
competitiveness or revenue. There can be no assurance that the Company will be
successful in developing and marketing product enhancements or new products on a
timely basis if at all, that the Company will not experience difficulties that
could delay or prevent the successful development, introduction and sale of
these products, or that any of its new products and product enhancements will
adequately meet the requirements of the marketplace and achieve market
acceptance. If the Company is unable, for technological or any other reason, to
develop, introduce and sell its products in a timely manner, the Company's
business, financial condition and results of operations would be materially and
adversely affected. In addition, because a number of the Company's biometric
imaging products and Bio-ID products are incorporated into systems marketed by
other companies, or are co-marketed together with other products or services
sold by other companies, the failure to introduce products in a timely manner
may cause such companies to seek alternative suppliers or marketing partners.
From time to time, the Company or its present or future competitors may announce
new products, capabilities or technologies that have the potential to replace
the Company's existing products. There can be no assurance that announcements of
currently planned or other new products will not cause customers to delay or
alter their purchasing decisions in anticipation of such products, which could
have a material adverse effect on the Company's business, financial condition
and results of operations. In addition, new product introductions may contribute
to fluctuations in quarterly operating results or result in the early
obsolescence of the Company's products, because customers may forego ordering
the Company's existing products. If the Company's new products have reliability
or quality problems, the Company may experience reduced orders, higher
manufacturing costs, delays in collecting accounts receivable and additional
service and warranty expense.
 
UNCERTAINTY RELATED TO CONTRACTS FOR SERVICES WITH GOVERNMENT AGENCIES
 
     During fiscal 1997, the Company's services business derived approximately
77% of its revenue directly from contracts relating to the DOD and other U.S.
Government agencies. Because of budget cuts affecting the DOD, services revenues
from the DOD have been declining. The Company has been expanding its services
business to other government agencies and commercial organizations, but there
can be no assurance that the results of these efforts will be substantial enough
to offset any further decline in revenue from the DOD. There can be no assurance
that the Company's services business will not be adversely affected by further
cuts in the DOD budget.
 
     During fiscal 1997, the Company derived approximately 46% of services
revenues from T&M contracts and FFP contracts. T&M contracts typically provide
for payment of negotiated hourly rates for labor incurred plus reimbursement of
other allowable direct and indirect costs. FFP contracts provide for a fixed
price for stipulated services or products, regardless of the costs incurred,
which may result in losses from cost overruns.
 
                                       14
<PAGE>   17
 
The Company anticipates that revenues from FFP and T&M contracts will increase
as a percentage of its total services revenues. The Company assumes greater
performance risk on FFP and T&M contracts and the failure to estimate accurately
ultimate costs or to control costs during performance of the work can result in
reduced profit margins or losses. There can be no assurance that the Company's
services business will not incur such overruns for any FFP and T&M contracts it
is awarded. In addition, revenues generated from contracts with government
agencies are subject to audit and subsequent adjustment by negotiation between
the Company and representatives of such government agencies. If such revenues
are audited, there can be no assurance that no adjustments would be made and
that such adjustments would not have a material adverse effect on the Company's
business, financial condition and results of operations. See Item 1
"Business -- ANADAC Services," Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Item 8 Note 1 of Notes to
Consolidated Financial Statements.
 
OTHER PUBLIC AGENCY CONTRACT CONSIDERATIONS
 
     A majority of the Company's revenues are derived from the sale of products
and services to governmental agencies or OEMs who sell products to government
agencies. Government agencies frequently require provisions in contracts that
are not standard in private commercial transactions, such as bonding
requirements and provisions permitting the purchasing agency to cancel the
contract without penalty if funding for the contract is no longer available or
is not obtained. As public agencies, the Company's prospective customers are
also subject to public agency contract requirements which vary from jurisdiction
to jurisdiction. Future sales to public agencies will depend on the Company's
ability to meet public agency contract requirements, certain of which may be
onerous or even impossible for the Company to satisfy. In addition, public
agency contracts are frequently awarded only after formal competitive bidding
processes, which have been and may continue to be protracted, and typically
contain provisions that permit cancellation in the event that funds are
unavailable to the public agency. There can be no assurance that the Company
will be awarded any of the contracts for which its products are bid or, if
awarded, that substantial delays or cancellations of purchases will not result
from protests initiated by losing bidders. See Item 1 "Business -- Sales and
Marketing."
 
DEPENDENCE ON COLLABORATIVE PARTNERS FOR PRODUCT DISTRIBUTION
 
     The Company's strategy for the distribution of certain of its products
requires entering into various arrangements with corporate collaborators. These
agreements often are of short duration, terminable with little or no notice, and
subject to periodic amendment. Although the Company believes that its
collaborative partners and the systems integrators with which it works have an
economic motivation to promote or use the Company's products, the amount and
timing of resources to be devoted to these activities are not within the control
of the Company. There can be no assurance that such parties will actively
promote the Company's products or pursue installations which use the Company's
equipment, that any distribution or other arrangements with the Company will not
be terminated or renegotiated or that the Company will derive any revenues from
such arrangements. The Company intends to continue to seek collaborative
arrangements to commercialize certain of its products. There can be no assurance
that the Company will be able to negotiate acceptable collaborative arrangements
in the future or that current or future collaborative arrangements will be
successful.
 
RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION
 
     Approximately 31% and 13% of the Company's net product revenues were for
foreign installations in fiscal 1997 and 1996, respectively. A key component of
the Company's strategy is to continue expansion into international markets.
There can be no assurance that the Company will be able to market, sell and
deliver its products in these foreign countries. In addition to the uncertainty
as to the Company's ability to expand its international presence, there are
certain risks inherent in foreign operations, including longer accounts
receivable payment cycles in certain countries, general economic conditions in
each country, seasonal reductions in business activity during the summer months
in Europe and certain other parts of the world, delays in or prohibitions on
exporting products resulting from export restrictions for certain technologies
(such as encryption technology), fluctuations in foreign currencies,
fluctuations in the U.S. Dollar which can
 
                                       15
<PAGE>   18
 
increase the sales price of the Company's products in local currencies, loss of
revenue, property and equipment from expropriation, nationalization, war,
insurrection, terrorism and other political risks, the overlap of different tax
structures, risks of increases in taxes and other government fees and
involuntary renegotiation of contracts with foreign governments. The Company is
also at risk from changes in foreign and domestic laws, regulations and policies
governing foreign operations. There can be no assurance that laws or
administrative practice relating to taxation, foreign exchange or other matters
of countries within which the Company operates or will operate will not change.
Any such change could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the laws of foreign
countries treat the protection of proprietary rights differently from, and may
not protect the Company's proprietary rights to the same extent as, laws in the
United States.
 
     The Company's international sales are denominated in U.S. dollars, except
sales by Fingerscan which are denominated in Australian dollars. The Company
actively monitors its foreign currency exchange exposure and, if significant,
will take appropriate action to reduce foreign exchange risk. To date, the
Company has not entered into hedging transactions.
 
DEPENDENCE ON LARGE ORDERS BY CUSTOMERS
 
     The Company's revenues have principally consisted, and will continue to
consist principally, of large orders from a limited number of customers. While
the individual customers may vary from period to period, the Company is
nevertheless dependent upon these large orders for a substantial portion of its
total revenues. There can be no assurance that the Company will be able to
obtain large orders on a consistent basis. The Company's inability to obtain
sufficient large orders would have a material adverse effect on the Company's
business, financial condition and results of operations. Moreover, the timing
and shipment of such orders may cause the operating results of the Company in
any given quarter to differ from projections of securities analysts, which could
adversely affect the trading price of the Company's common stock. Losses arising
from customer disputes regarding shipping schedules, product condition or
performance, or the Company's inability to collect accounts receivable from any
major customer could also have a material adverse effect on the Company's
business, financial condition and results of operations.
 
     Orders for the Company's biometric imaging products are often subject to
delays associated with the lengthy approval processes that typically accompany
large capital expenditures by government agencies. The Company's total revenues
depend in significant part upon the decision of a government agency to adopt and
integrate the Company's systems, which often involves a significant capital
commitment as well as significant future support costs. Similar delays may also
be experienced from government agencies procuring the Company's services. The
Company often has a lengthy sales cycle while the customer evaluates and
receives approvals for the purchase of the Company's products or services. Any
significant failure by the Company to receive an order after expending
significant funds and effort could have a material adverse effect on its
business, financial condition and results of operations. It may be difficult to
predict accurately the sales cycle of any large order. In the event one or more
large orders fail to be shipped as forecasted for a fiscal quarter, the
Company's total revenues and operating results for such quarter could be
materially and adversely affected. In addition, even if the Company receives
such an order, the order may be contingent upon availability of matching funds
from state or federal entities or may be canceled or receipt of revenues may be
substantially delayed due to political and budgetary processes.
 
RISK OF PRODUCT DEFECTS AND FAILURE TO MEET PERFORMANCE CRITERIA
 
     Complex products such as those offered by the Company may contain
undetected or unresolved defects or may fail initially to meet customers'
performance criteria when first introduced or as new versions are released.
There can be no assurance that, despite testing by the Company, defects or
performance flaws will not be found in new products or new versions of products
following commercial release or that performance failures will not result,
causing loss of market share, delay in or loss of market acceptance, additional
warranty expense or product recall. In addition, the failure of products to meet
performance criteria could result in delays in recognition of revenue and higher
operating expenses during the period required to correct and such defects. There
is a risk, that for unforeseen reasons, the Company may be required to repair or
replace a
 
                                       16
<PAGE>   19
 
substantial number of products in use or to reimburse persons for products that
fail to work or meet strict performance criteria. Any such occurrence could have
a material adverse effect on the Company's business, financial condition and
results of operations. The Company does carry product liability insurance, but
there can be no assurance that existing coverage is adequate for current
operations or will be adequate for future operations. The Company's business
could be adversely affected by the assertion of product liability claims.
 
PROTECTION OF PROPRIETARY TECHNOLOGY
 
     The Company's ability to compete effectively will depend in part on its
ability to maintain the proprietary nature of its technology, products and
manufacturing processes. The Company principally relies upon patent, copyright,
trade secret and contract law to establish and protect its proprietary rights.
The success of the Company's products business will depend in part on its
proprietary technology and the Company's protection of such technology. The
Company holds United States and foreign patents covering certain of its products
and technologies and has other patent applications pending. No assurance can be
given that the claims allowed on any patents held by the Company will be
sufficiently broad to protect the Company's technology. In addition, no
assurance can be given that any patents issued to the Company will not be
challenged, invalidated or circumvented or that the rights granted thereunder
will provide competitive advantages to the Company. The loss of patent
protection on the Company's technology or the circumvention of its patent
protection by competitors could have a material adverse effect on the Company's
ability to compete successfully in its products business. There can be no
assurance that any existing or future patent applications by the Company will
result in issued patents with the scope of the claims sought by the Company, or
at all, that any current or future issued or licensed patents, trade secrets or
know-how will afford sufficient protection against competitors with similar
technologies or processes, or that any patents issued will not be infringed upon
or designed around by others. In addition, there can be no assurance that others
will not independently develop proprietary technologies and processes which are
the same as or substantially equivalent or superior to those of the Company.
Further, there can be no assurance that the Company has not or will not infringe
prior or future patents owned by others, that the Company will not need to
acquire licenses under patents belonging to others for technology potentially
useful or necessary to the Company, or that such licenses will be available to
the Company, if at all, on terms acceptable to the Company. Litigation, which
could result in substantial cost to the Company and diversion of management
attention, may also be necessary to enforce any patents issued to the Company or
to determine the scope and validity of other parties' proprietary rights. For
example, the Company is engaged in litigation with DBI regarding an alleged
infringement by the Company of a DBI patent. See Item 3 "Legal Proceedings." If
the outcome of any such litigation is adverse to the Company, its business could
be adversely affected. To determine the priority of inventions, the Company may
have to participate in interference proceedings declared by the United States
Patent and Trademark Office or oppositions in foreign patent offices, which
could result in substantial cost to the Company and limitations on the scope or
validity of the Company's patents. The Company also relies on trade secrets and
proprietary know-how which it seeks to protect by confidentiality agreements
with its employees and consultants and with third parties. There can be no
assurance that these agreements will not be breached, that the Company will have
adequate remedies for any breach, or that its trade secrets and proprietary
know-how will not otherwise become known or be independently discovered by
others.
 
RISKS ASSOCIATED WITH MANAGING EXPANSION OF OPERATIONS
 
     The Company has experienced significant growth in recent years and believes
that in order to be successful it must continue to grow rapidly. In order to
grow rapidly, the Company will be required to expand, train and manage its
employee base, particularly skilled technical, marketing and management
personnel. Rapid growth will also require an increase in the level of
responsibility for both existing and new management and will require the Company
to implement and improve operational, financial and management information
procedures and controls. The Company competes with some of the major technology,
consulting and software companies in seeking to attract qualified personnel.
There can be no assurance that the management skills and systems currently in
place will be adequate or that the Company will be able to manage effectively
any significant growth it experiences and to hire or assimilate new personnel
necessary to pursue its growth
 
                                       17
<PAGE>   20
 
strategy. Any failure to adequately manage growth could materially and adversely
affect the Company's business, financial condition and results of operations.
 
DEPENDENCE UPON SOLE AND LIMITED SOURCES OF SUPPLY; RISKS ASSOCIATED WITH
IMPLEMENTATION OF LARGER SCALE MANUFACTURING CAPABILITIES
 
     Certain of the components included in the Company's products are obtained
from a single source or a limited group of suppliers, the most important of
which are the charge coupled devices and ASICs for the Bio-ID products and the
charge coupled devices for the biometric imaging products. The Company has no
long term agreements with any of its suppliers. Although the Company seeks to
reduce dependence on these sole and limited sources of suppliers, the partial or
complete loss of certain of these sources or the delay in receiving supplies
from these sources could result in delays in manufacturing and shipping of
products to customers and require the incurrence of development and other costs
to establish alternative sources of supply. While the Company attempts to
maintain a few months worth of inventory on sole sourced components, it may take
the Company several months to locate alternative suppliers if required, and/or
to re-tool its products to accommodate components from different suppliers. If
the Company is required to seek alternative suppliers, there can be no assurance
that the Company will be able to obtain such components within the time frames
required by the Company at an affordable cost, or at all. Any delays resulting
from suppliers failing to deliver components on a timely basis in sufficient
quantities and of sufficient quality or any significant increase in the price of
components from existing or alternative suppliers could have a material adverse
effect on the Company's business, financial condition and results of operations.
 
     Historically, the volume of the Company's production requirements for the
law enforcement and public sectors has not placed significant capacity
constraints on the Company's manufacturing and assembling capabilities. However,
as the Company begins to market its products for potentially larger volume
commercial applications such as time-and-attendance and computer database
security, the Company may be required to fulfill larger orders in a short period
of time and to implement measures to decrease product costs. There can be no
assurance that the Company will be able to scale-up its manufacturing and
assembling capacities to fulfill such orders and to decrease manufacturing
costs. Any failure by the Company to implement higher volume manufacturing or
reduce product costs for commercial applications could have a material adverse
effect on the Company's business, financial condition and results of operations.
See Item 1 "Business -- Manufacturing."
 
RISKS ASSOCIATED WITH ACQUISITIONS
 
     As part of its business strategy, the Company intends to acquire assets and
businesses principally relating to or complementary to its current operations.
The Company acquired Fingerscan in March 1996, IAS in June 1996 and BA&T in July
1997. These and any other acquisitions by the Company will be accompanied by the
risks commonly encountered in acquisitions of companies. Such risks include,
among other things, potential exposure to unknown liabilities of acquired
companies or to acquisition costs and expenses exceeding amounts anticipated for
such purposes; fluctuations in the Company's quarterly and annual operating
results due to the costs and expenses of acquiring and integrating new
businesses; the difficulty and expense of assimilating the operations and
personnel of the companies; the potential disruption of the Company's ongoing
business and diversion of management time and attention; the inability of
management to maximize the Company's financial and strategic position by the
successful incorporation of acquired technology; the maintenance of uniform
standards, controls, procedures and policies; the impairment of relationships
with and possible loss of key employees and customers as a result of changes in
management; the incurrence of amortization expenses if an acquisition is
accounted for as a purchase; and dilution to the shareholders of the Company if
the consideration for the acquisition consists of stock. In addition, the
difficulty of integrating certain companies may be increased by geographic
distances. There can be no assurance that the Company will be successful in
overcoming these risks or any other problems encountered in connection with such
acquisitions.
 
                                       18
<PAGE>   21
 
DEPENDENCE UPON KEY PERSONNEL; NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL
 
     The Company's success will depend upon its ability to retain its current
senior management team and key technical, marketing and sales personnel and its
ability to identify, attract and retain additional highly qualified personnel.
The Company's employees may voluntarily terminate their employment with the
Company at any time, and competition for qualified employees, especially
engineers, is intense. The process of locating additional personnel with the
combination of skills and attributes required to carry out the Company's
strategy is often lengthy. The loss of the services of key personnel, or the
inability to attract additional qualified personnel, could have a material
adverse effect on the Company's business, financial condition and results of
operations.
 
SECURITIES CLASS ACTION
 
     The Company has been named as a defendant in a class action lawsuit which
was filed in October 1996 in the United States District Court for the Northern
District of California. Certain executive officers of the Company are also named
as defendants. The plaintiff purports to represent a class of all persons who
purchased the Company's common stock between January 31, 1996 and August 26,
1996 (the "Class Period"). The complaint alleges claims under the federal
securities laws and California law. The plaintiff alleges that the Company and
certain of its executive officers made false and misleading statements regarding
the Company that caused the market price of its common stock to be "artificially
inflated" during the Class Period. The complaint does not specify the amount of
damages sought. The Company has established a reserve for the Company's estimate
of the legal expenses to seek dismissal of the lawsuit. The Company and its
officers deny the allegations and will vigorously defend this action. There can
be no assurance that the Company will prevail in its defense of the lawsuit and
that judgments against the Company will not be material.
 
VOLATILITY OF STOCK PRICE
 
     The stock market has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of the common stock, like
the stock prices of many technology companies, has been, and may continue to be,
highly volatile. Variations in quarterly operating results, the timing and
volume of procurements for the Company's products and services, announcements of
technological innovations or new products or services by the Company or by the
Company's competitors, announcements regarding product pricing by the Company or
its competitors, failure of the Company to meet earnings or revenue projections
of market analysts, the commencement of litigation, the developments in or
outcome of any litigation, developments in patent or other proprietary rights,
and economic and other external factors, among other factors, may have a
material adverse effect on the market price of the common stock. See Item 5
"Market for Registrant's Common Equity and Related Stockholder Matters."
 
SHARE HOLDINGS OF ASCOM HOLDING
 
     As of June 30, 1997, Ascom USA Inc. ("Ascom"), beneficially owned
approximately 21% of the outstanding common stock. This concentration of
ownership may have the effect of delaying or preventing a change in control of
the Company. The Company is a party to a Voting Trust Agreement ("Voting Trust
Agreement") with Ascom whereby Ascom deposited all of its 5,177,824 shares of
the Company's common stock ("Voting Stock") into a voting trust ("Voting
Trust"). The Trustee has voting control of the Voting Stock. The Trustee is a
member of the Board of Directors of the Company. The Voting Trust
Agreement expires in 2004. Ascom has preemptive rights with respect to
issuance's of the Company's securities and registration rights with respect to
the securities it holds. The Company's ability to obtain additional financing on
favorable terms in the future may be adversely affected by the existence of
these preemptive rights and registration rights See Item 12 "Security Ownership
of Certain Beneficial Owners and Management."
 
                                       19
<PAGE>   22
 
ITEM 2. PROPERTIES
 
     Identix leases approximately 40,000 square feet of space in Sunnyvale,
California for manufacturing, research and administration. The monthly lease
payments are $33,000 a month plus taxes, insurance and maintenance costs and the
lease expires in 2001. Fingerscan leases office space in Australia, London and
Singapore with an aggregate net monthly lease payment of $14,000. Identix also
services customers from sales offices in California, Washington, New Jersey,
Georgia, Virginia, Illinois and Michigan. The Company operates its
fingerprinting services business from an office in Illinois. ANADAC leases
approximately 42,000 square feet in four locations in Virginia with aggregate
monthly lease payments of $83,000, which leases expire in 2000. ANADAC also
services customers from offices leased in Mississippi, Maryland, and Virginia.
The Company believes that its facilities are adequate for its operations for the
foreseeable future.
 
ITEM 3. LEGAL PROCEEDINGS
 
     The Company has been named as a defendant in a class action lawsuit which
was filed in October 1996 in the United States District Court for the Northern
District of California. Certain executive officers of the Company are also named
as defendants. The plaintiff purports to represent a class of all persons who
purchased the Company's common stock between January 31, 1996 and August 26,
1996 (the "Class Period"). The complaint alleges claims under the federal
securities laws and California law. The plaintiff alleges that the Company and
certain of its executive officers made false and misleading statements regarding
the Company that caused the market price of its common stock to be "artificially
inflated" during the Class Period. The complaint does not specify the amount of
damages sought. The Company has established a reserve for the Company's estimate
of the legal expenses to seek dismissal of the lawsuit. The Company and its
officers deny the allegations and will vigorously defend this action.
 
     On May 31, 1995, Digital Biometric, Inc. ("DBI"), a competitor, filed a
lawsuit in the United States District Court in Northern District of California
against the Company alleging that certain of the Company's TouchPrint products
violate a DBI patent and are seeking injunctive relief and unspecified damages.
The lawsuit has no implication for other Identix products. On August 22, 1996,
the Court granted the Company's motion determining that the TouchPrint 600 does
not infringe the patent. On December 7, 1996, the Court issued another ruling
determining that the predecessor product of the Touchprint 600, the Touchprint
900 product, did not infringe the patent. As a result, the Court entered
judgment in favor of Identix and awarded Identix its cost of suit. On January 7,
1997, DBI filed a Notice of Appeal and the matter is now pending before the
Federal Circuit Court of Appeals.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
 
     No matters were submitted to a vote of security-holders during the fourth
quarter of the fiscal year ended June 30, 1997.
 
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The executive officers of Identix, and their ages as of June 30, 1997, are
as follows:
 
<TABLE>
<CAPTION>
         NAME           AGE                                 POSITION
----------------------  ----    ----------------------------------------------------------------
<S>                     <C>     <C>
Randall C. Fowler.....   58     President, Chief Executive Officer and Director
Harrison N. Walther...   60     President and Chief Executive Officer of ANADAC and Director
James P. Scullion.....   41     Executive Vice President, Chief Financial Officer and Secretary
Daniel F. Maase.......   53     Vice President, Engineering
Gary Cauble...........   46     Vice President, Manufacturing
</TABLE>
 
     Randall C. Fowler, Chairman of the Board of Directors, President and Chief
Executive Officer of the Company, positions he has held since 1982.
 
     Harrison N. Walther has been a director of the Company since February 1995.
Mr. Walther is the President and Chief Executive Officer of ANADAC. Mr. Walther
joined ANADAC in 1982. He served as
 
                                       20
<PAGE>   23
 
Vice President of ANADAC from 1982 through 1984 and Executive Vice President
from 1984 through 1985 before assuming the duties of President in 1986.
 
     James P. Scullion has been Executive Vice President and Chief Financial
Officer of the Company since July 1996 and, from 1990 to 1996, he was Vice
President, Finance and Chief Financial Officer of the Company. From 1986 to
1990, he was Vice President, Finance and Chief Financial Officer at DataTrak,
Inc., a manufacturer of security access systems.
 
     Daniel F. Maase, Vice President, Engineering, joined the Company in
November 1988 and was elected Vice President, Engineering in December 1988.
Prior to joining Identix he was an Operations Manager at Varian Associates, a
manufacturer of instruments and microwave power devices, medical equipment and
semiconductors, from 1987 to 1988.
 
     Gary Cauble, Vice President, Manufacturing, joined the Company in August
1995. Prior to joining the Company, from 1990 to 1995, he was assistant Division
Manager/Operations Manager at Bell Industries.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's common stock is listed on the American Stock Exchange
("AMEX") under the symbol IDX.
 
     The following table sets forth the range of high and low closing prices as
reported on the AMEX for the fiscal periods indicated.
 
<TABLE>
<CAPTION>
                                                                   HIGH       LOW
                                                                   ----       ---
            <S>                                                    <C>        <C>
            YEAR ENDED JUNE 30, 1997
            Fourth Quarter.......................................  11  1/4      7  7/16
            Third Quarter........................................  12  3/4      8  3/8
            Second Quarter.......................................  10  3/4      7  1/4
            First Quarter........................................  13  7/8      8  3/16
            YEAR ENDED JUNE 30, 1996
            Fourth Quarter.......................................  19           9  5/8
            Third Quarter........................................  14  3/8     10  1/2
            Second Quarter.......................................  14  3/4      9  13/16
            First Quarter........................................  16  3/8      6  7/16
</TABLE>
 
     The last reported sale price of the common stock on the AMEX on July 31,
1997 was $9.94. As of July 31, 1997, there were 1,177 shareholders of record.
 
     The Company has not paid any cash dividends on its common stock during the
last five fiscal years. The Company currently intends to retain any earnings for
use in its business and does not anticipate paying any cash dividends in the
foreseeable future. In addition, the Company's bank lines of credit restrict the
Company's ability to pay dividends.
 
ITEM 6. SELECTED FINANCIAL DATA
 
     The selected consolidated financial data set forth below with respect to
the Company's statements of operations for each of the three fiscal years in the
period ended June 30, 1997 and with respect to the balance sheets at June 30,
1997 and 1996 are derived from the Company's consolidated financial statements
included elsewhere in this Annual Report on Form 10-K which have been audited by
Price Waterhouse LLP, independent accountants. Consolidated statement of
operations data for the year ended June 30, 1994 and 1993, and consolidated
balance sheet data at June 30, 1995, 1994 and 1993 have been derived from
audited financial statements of the Company not included in this Annual Report
on Form 10-K. The following selected consolidated financial data should be read
in conjunction with the consolidated financial statements for Identix and the
notes thereto appearing in Item 8 of this Annual Report on form 10-K and
"Management's
 
                                       21
<PAGE>   24
 
Discussion and Analysis of Financial Condition and Results of Operations"
appearing in Item 7 of this Annual Report on Form 10-K. Historical operating
results are not necessarily indicative of the results that may be expected in
any future period.
 
<TABLE>
<CAPTION>
                                                        FISCAL YEAR ENDED JUNE 30,
                                         ---------------------------------------------------------
                                          1997        1996          1995        1994        1993
                                         -------     -------       -------     -------     -------
                                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>         <C>           <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenues...............................  $52,390     $38,541       $27,014     $20,135     $11,926
Net income(loss).......................    1,250      (3,441)(1)      (715)     (2,596)     (3,094)
Net income(loss) per share.............     0.05       (0.15)        (0.04)      (0.14)      (0.20)
Number of shares used in per share
  calculation..........................   25,136      23,485        19,371      18,304      15,264
BALANCE SHEET DATA:
Cash and cash equivalents..............  $ 2,505     $   981       $ 3,842     $   799     $ 2,303
Working capital........................   15,755      14,914         9,571       3,588       4,011
Total assets...........................   32,279      27,107        18,104      10,593      11,515
Long-term debt and convertible debt....       --         127            --         500         605
Shareholders' equity...................   21,081      19,472        12,274       5,751       6,430
</TABLE>
 
---------------
 
(1) Includes a $4.7 million write-off of acquired in-process research and
    development related to the acquisition of Fingerscan Pty Ltd.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
OVERVIEW
 
     Identix Incorporated designs, develops, manufactures and markets two
categories of products for security, anti-fraud, law enforcement and other
applications: (i) biometric identification ("Bio-ID") products that identify an
individual through the unique biological characteristics of a fingerprint and
(ii) biometric imaging products that capture forensic quality fingerprint images
directly from an individual's fingers for law enforcement and other
applications. The Company's principal Bio-ID products are TouchNet II(TM),
TouchSafe II(TM), TouchLock II(TM), TouchClock II(TM) and TouchBlock(TM), and
the Company's principal biometric imaging products are TouchPrint 600(TM),
TouchView II(TM), I(3) Workstation(TM) and DocuColor(TM). The Company provides
information technology, engineering and management consulting services to
private and public sector clients through its wholly owned subsidiary ANADAC.
ANADAC's services support the development, installation, integration and
operation of hardware and software technology solutions, including Identix
products, for a variety of client operating environments. The Company acquired
ANADAC in October 1992. The acquisition was accounted for as a purchase.
 
     On March 26, 1996, the Company acquired Fingerscan, a privately-held
Australian-based company that designs and markets Bio-ID products. Fingerscan
had been a long-standing Identix OEM partner integrating Identix fingerprint
identification technology into Fingerscan's fingerprint identity and
verification products and systems. The acquisition was accounted for as a
purchase. Accordingly, the Company's fiscal 1996 consolidated financial
statements include the results of Fingerscan from the date of acquisition. See
Item 8 Note 2 of Notes to Consolidated Financial Statements.
 
     On June 30, 1996, the Company acquired IAS, a privately-held company which
provides fingerprinting services using the Company's biometric imaging systems.
The acquisition was accounted for as a pooling of interests. The Company's
fiscal 1996 consolidated financial statements include the accounts and
operations of IAS. For fiscal 1995, the effects of the combination with IAS were
not significant and the Company has not restated fiscal year 1995 to include the
accounts and operations of IAS. IAS has been merged into Identix, and the
business of IAS is now being conducted as the Company's Identification Services
Division. See Item 8 Note 2 of Notes to Consolidated Financial Statements.
 
                                       22
<PAGE>   25
 
     On July 23, 1997, the Company acquired BA&T, a privately held developer of
biometric and "smart" card applications and solutions. BA&T had been a software
development partner that integrated its software into Identix's Bio-ID products.
The acquisition was accounted for as a pooling of interests. See Item 8 Note 11
of Notes to Consolidated Financial Statements.
 
     YEARS ENDED JUNE 30, 1997 AND 1996
 
     Revenues. Revenues for fiscal 1997 were $52,390,000 compared to $38,541,000
for fiscal 1996. The increase in revenues of 36% for fiscal 1997 was due to
increases in both net product revenues and services revenues.
 
     The Company's net product revenues were $26,499,000 for fiscal 1997
compared to $16,565,000 for fiscal 1996. The increase of 60% in net product
revenues for fiscal 1997 was due primarily to increased shipments of the
Company's Bio-ID products, primarily in international markets, and TouchPrint
600 product line and increased fingerprint services. International sales
represented $8,178,000 or 31% of the Company's net product revenues for fiscal
1997 compared to $2,198,000 or 13% for fiscal 1996. The Company expects
international sales to continue to represent a significant portion of net
product revenues, although the percentage may fluctuate from period to period.
The Company's international sales are denominated in U.S. dollars, except sales
by Fingerscan which are denominated in Australian dollars. The Company actively
monitors its foreign currency exchange exposure and, if significant, will take
appropriate action to reduce foreign exchange risk. To date, the Company has not
entered into hedging transactions. The overall impact of currency fluctuations
on operating results was not significant in fiscal 1997 or fiscal 1996. In
fiscal 1997, the Company's products business had no customers which represented
more than 10% of total revenues. In fiscal 1996, the Company's products business
had one customer which represented 14% of total revenues. This customer is a
prime contractor on certain contracts for which the Company supplied products as
a subcontractor.
 
     The Company's services revenues were $25,891,000 for fiscal 1997 compared
to $21,976,000 for fiscal 1996. The increase of 18% in services revenues for
fiscal 1997 was due to increased contract revenues from both U.S. Government and
commercial clients. The majority of the Company's services revenues are
generated from contracts with the U.S. Government, principally the DOD. For
fiscal 1997, revenues directly from the DOD and from other U.S. Government
agencies accounted for 77% of the Company's total services revenues compared to
78% for fiscal 1996.
 
     The Company's services business generates a significant amount of its
revenues from cost plus fixed fee ("CPFF") contracts, which accounted for 39% of
its services revenues for fiscal 1997 compared to 43% for fiscal 1996. CPFF
contracts provide for the reimbursement of allowable costs, including indirect
costs plus a fee or profit. The Company's services business also generates
revenue from T&M and FFP contracts. During fiscal 1997, the Company derived
approximately 46% of services revenues from T&M contracts and FFP contracts
compared to 41% for fiscal 1996. T&M contracts typically provide for payment of
negotiated hourly rates for labor incurred plus reimbursement of other allowable
direct and indirect costs. FFP contracts provide for a fixed price for
stipulated services or products, regardless of the costs incurred, which may
result in losses from cost overruns. The Company anticipates that revenues from
FFP and T&M contracts will increase as a percentage of its total services
revenues. The Company assumes greater performance risk on FFP and T&M contracts
and the failure to estimate accurately ultimate costs or to control costs during
performance of the work can result in reduced profit margins or losses. There
can be no assurance that the Company's services business will not incur such
cost overruns for any FFP and T&M contracts it is awarded. In addition, revenues
generated from contracts with government agencies are subject to audit and
subsequent adjustment by negotiation between the Company and representatives of
such government agencies.
 
     Gross Margin. Gross margin on net product revenues was 50% for fiscal 1997
compared to 47% for fiscal 1996. The increase in gross margin for fiscal 1997
compared to fiscal 1996 was primarily due to (i) the favorable mix of Bio-ID and
bio-imaging product sales, (ii) cost reductions in certain components and (iii)
increased manufacturing efficiencies because of the increase in unit volume and
the absorption of manufacturing overhead resulting from higher production
levels.
 
                                       23
<PAGE>   26
 
     Gross margin on services revenues was 20% for fiscal 1997 compared to 18%
for fiscal 1996. The increase in the gross margin on services revenues was
primarily due to increased gross margins on revenues generated by ANADAC's
information technology group.
 
     Gross margin on total revenues was 35% for fiscal 1997 compared to 31% for
fiscal 1996. In the future, the Company expects its gross margins to be affected
by several factors, including the mix of products sold and services provided,
competition, introduction of new products, access to distribution channels and
fluctuations in labor and material costs.
 
     Research, Development and Engineering. Research, development and
engineering expenses were $2,335,000 or 9% of net product revenues for fiscal
1997 compared to $1,486,000 or 9% of net product revenues for fiscal 1996. In
addition, for fiscal 1997 and 1996, research, development and engineering
expenditures funded by customers were $269,000 and $255,000, respectively. The
increase in research, development and engineering expenses, in absolute dollars,
is primarily due to the inclusion of research, development and engineering
expenses incurred by Fingerscan to develop and maintain certain Bio-ID products,
and in general, the addition of engineering staff and related expenses to
further develop and enhance the Company's products, including the Company's
introduction of the Touchprint 600 Card Scan System and the new TouchPrint
printer line. The Company believes that investment in research and development
is critical to maintaining a strong technological position in the industry and
therefore expects research, development and engineering expenses to continue to
increase in absolute dollars in fiscal 1998.
 
     Marketing and Selling. Marketing and selling expenses were $7,824,000 or
15% of total revenues for fiscal 1997 compared to $4,958,000 or 13% of total
revenues for fiscal 1996. The increase in marketing and selling expenses was due
to the inclusion of Fingerscan's marketing and selling expenses for the entire
year in fiscal 1997 and increased staffing and expenses to (i) promote the
Company's products and services, (ii) expand international sales and
distribution and (iii) expand its customer service organization. The Company
expects marketing and selling expenses to increase in absolute dollars in fiscal
1998 as the Company continues to expand sales, marketing and customer service
activities.
 
     General and Administrative. General and administrative expenses were
$7,129,000 or 14% of total revenues for fiscal 1997 compared to $4,431,000 or
11% of total revenues for fiscal 1996. The increase in general and
administrative expenses was primarily due to (i) the additional administrative
expenses related to the operations of Fingerscan, (ii) litigation reserves and
expenses of $736,000 related to a patent infringement lawsuit filed by a
competitor and a class action suit filed against the Company compared to
litigation reserves and expenses of $390,000 for fiscal 1996 (See Note 10 of
Notes to Consolidated Financial Statements) and (iii) an increase in staffing
and related administrative expenses. The Company expects spending for general
and administrative expenses to increase in absolute dollars in fiscal 1998.
 
     Write-off of Acquired In-Process Research and Development. On March 26,
1996, the Company acquired Fingerscan, a privately-held Australian-based company
that designs and markets Bio-ID products. The excess of the purchase price over
the fair market value of the assets purchased and liabilities assumed was
$5,280,000, of which $4,723,000 was allocated to in-process research and
development, based on an independent appraisal, and was written-off in the
quarter ended March 31, 1996. See Note 2 of Notes to Consolidated Financial
Statements.
 
     Other Income and Expense. Net other income was $210,000 during fiscal 1997
compared to $211,000 during fiscal 1996. In fiscal 1997, other income was
primarily related to an export market development grant related to a
subsidiary's export sales. In fiscal 1996, net other income was primarily
related to the proceeds from a licensing agreement related to one of the
Company's trademarks.
 
     Interest Income and Expense. Net interest expense of $211,000 was incurred
by the Company during fiscal 1997 compared to net interest income of $85,000 for
fiscal 1996. The difference was due to increased borrowings against the
Company's line of credit (the "Identix Line of Credit") and lower cash balances
for temporary investments during fiscal 1997 compared to fiscal 1996.
 
     The weighted average interest rate paid by the Company on the Identix Line
of Credit for fiscal 1997 was approximately 8.5%. During fiscal 1996, Identix
did not borrow against the Identix Line of Credit. The
 
                                       24
<PAGE>   27
 
weighted average interest rate paid on ANADAC's line of credit (the "ANADAC Line
of Credit") for fiscal 1997 and fiscal 1996 was approximately 8.3% and 8.5%,
respectively.
 
     Income Taxes. No federal income taxes were paid or accrued in fiscal 1997
and fiscal 1996 due to the use of net operating loss ("NOL") carryforwards in
fiscal 1997 and operating losses incurred in fiscal 1996. The Company had
federal NOL carryforwards of approximately $25.7 million as of June 30, 1997
that may be applied to reduce future taxable income. However, under the Tax
Reform Act of 1986, a corporation's ability to use its NOLs may be impaired or
limited in certain circumstances, including a cumulative stock ownership change
of more than 50% over a three year period (an "ownership change"). Management
believes that the Company's public offering of units in January 1993 caused the
Company to experience an ownership change under these provisions. As a result,
there is an annual limitation on the utilization of the Company's NOL
carryforwards incurred prior to the ownership change of $2.5 million. The NOL
carryforwards expire on various dates through fiscal 2011.
 
     YEARS ENDED JUNE 30, 1996 AND 1995
 
     Revenues. Revenues for fiscal 1996 were $38,541,000 compared to $27,014,000
for fiscal 1995. The increase in revenues of 43% for fiscal 1996 was due to
increases in both net product revenues and services revenues.
 
     The Company's net product revenues were $16,565,000 for fiscal 1996
compared to $9,025,000 for fiscal 1995. The increase of 84% in net product
revenues for fiscal 1996 was primarily due to increased shipments of the
Company's TouchPrint products and the inclusion of IAS revenues. Revenues from
the sale of Bio-ID products were relatively unchanged as a result of the
increase from the inclusion of Fingerscan revenues being offset by a decrease in
revenues from TouchBlock sales to OEMs. International sales represented
$2,198,000 or 13% of the Company's net product revenues for fiscal 1996 compared
to $2,904,000 or 32% for fiscal 1995. In fiscal 1996, the Company's products
business had one customer which represented 14% of total revenues. This customer
is a prime contractor on certain contracts for which the Company supplied
product as a subcontractor. In fiscal 1995, there were no non-U.S. Government
customers that accounted for more than 10% of total revenues.
 
     The Company's services revenues were $21,976,000 for fiscal 1996 compared
to $17,989,000 for fiscal 1995. The increase of 22% in services revenues for
fiscal 1996 was due to increased contract revenues from U.S. Government.
Revenues directly from the DOD and from other U.S. Government agencies for
fiscal 1996 accounted for 78% of the Company's total services revenues compared
to 62% for fiscal 1995. Revenues from CPFF contracts accounted for 43% of its
services revenues for fiscal 1996 compared to 47% for fiscal 1995. Revenues from
FFP and T&M contracts accounted for 41% of services revenues for fiscal 1996 and
fiscal 1995.
 
     Gross Margin. Gross margin on net product revenues was 47% for fiscal 1996
compared to 40% for fiscal 1995. The increase in gross margin for fiscal 1996
compared to fiscal 1995 was primarily due to (i) increased manufacturing
efficiencies because of the increase in unit volume and the absorption of
manufacturing overhead resulting from higher production levels, (ii) sales of
new higher gross margin products introduced in mid and late fiscal 1995, (iii)
higher gross margin on net product revenues generated by Fingerscan and IAS and
(iv) inclusion in cost of product revenues for fiscal 1995 of a write down of
inventories related to certain mature products. Gross margin on services
revenues was 18% for fiscal 1996 compared to 14% for fiscal 1995. The increase
in the gross margin on services revenues was mainly due to applying semi-fixed
overhead costs across a larger labor base. Gross margin on total revenues was
31% for fiscal 1996 compared to 22% for fiscal 1995.
 
     Research, Development and Engineering. Research, development and
engineering expenses were $1,486,000 or 9% of net product revenues for fiscal
1996 compared to $1,582,000 or 18% of net product revenues for fiscal 1995. In
addition, for fiscal 1996 and 1995, research, development and engineering
expenditures funded by customers were $255,000 and $381,000, respectively.
 
                                       25
<PAGE>   28
 
     Marketing and Selling. Marketing and selling expenses were $4,958,000 or
13% of total revenues for fiscal 1996 compared to $2,465,000 or 9% of total
revenues for fiscal 1995. The increase in marketing and selling expenses was due
to increased staffing and expenses to promote the Company's products and
services and to expand its customer service organization. In addition, marketing
and selling expenses for fiscal 1996 reflected the inclusion of marketing and
selling activity related to the operations of Fingerscan from March 26, 1996 and
IAS for all of fiscal 1996.
 
     General and Administrative. General and administrative expenses were
$4,431,000 or 11% of total revenues for fiscal 1996 compared to $2,650,000 or
10% of total revenues for fiscal 1995. The increase in general and
administrative expenses was primarily due to the additional administrative
expenses related to the operations of Fingerscan and IAS, expenses of $390,000
related to a lawsuit filed by a competitor (See Note 10 of Notes to Consolidated
Financial Statements), the increase in lease expense as the Company's services
business moved into larger facilities in August 1995 and the Company's products
business leased additional space for its manufacturing operations in April 1996,
and an increase in staffing.
 
     Write-off of Acquired In-Process Research and Development. On March 26,
1996, the Company acquired Fingerscan. The excess of the purchase price over the
fair market value of the assets purchased and liabilities assumed was
$5,280,000, of which $4,723,000 was allocated to in-process research and
development, based on an independent appraisal, which was written-off in the
quarter ended March 31, 1996. See Note 2 of Notes to Consolidated Financial
Statements.
 
     Other Income and Expense. Net other income was $211,000 during fiscal 1996
compared to net other expense of $27,000 in fiscal 1995. In fiscal 1996, net
other income is primarily related to the proceeds from a licensing agreement
related to one of the Company's trademarks.
 
     Interest Income and Expense. Net interest income of $85,000 was generated
during fiscal 1996 compared to net interest expense of $203,000 generated during
fiscal 1995. The increase in interest income during fiscal 1996 was due
primarily to the investment of proceeds received from the exercise of
outstanding warrants in June and July 1995.
 
     During fiscal 1996, Identix did not borrow against the Identix Line of
Credit. The weighted average interest rate paid on the Identix Line of Credit
for fiscal 1995 was approximately 9.9%. The weighted average interest rate paid
on the ANADAC Line of Credit for fiscal 1996 and 1995 was approximately 8.5% and
8.4%, respectively.
 
     Income Taxes. No federal income taxes were paid or accrued in fiscal 1996
and 1995 due to operating losses. The Company realized an income tax benefit of
$136,000 during fiscal 1995 related to the application of a loss carryback to
taxes paid in prior years by ANADAC.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company financed its operations during fiscal 1997 primarily from
income from operations, its existing working capital at June 30, 1996 and
borrowings under the Identix Line of Credit and the ANADAC Line of Credit. As of
June 30, 1997, the Company's principal sources of liquidity consisted of $15.8
million in working capital as well as $6,861,000 available under the Identix
Line of Credit and the ANADAC Line of Credit.
 
     The Identix Line of Credit is a $5,000,000 bank line of credit secured by
all of the personal property of Identix. Under the bank line of credit, the
Company may borrow up to 80% of eligible accounts receivable. Amounts drawn bear
interest at the bank's prime rate of interest (8.50% at June 30, 1997). The
Identix Line of Credit expires on October 3, 1997. At June 30, 1997, the Company
had no borrowings and $2,993,000 was available under this line of credit. The
Identix Line of Credit agreement contains financial and operating covenants,
including restrictions on the Company's ability to pay dividends on the
Company's common stock.
 
     The ANADAC Line of Credit is a $6,000,000 bank line of credit secured by
ANADAC's accounts receivable and certain other assets. Under the ANADAC Line of
Credit, ANADAC may borrow against eligible accounts receivable. Amounts drawn
bear interest at the bank's prime rate of interest (8.50% at
 
                                       26
<PAGE>   29
 
June 30, 1997). The line of credit expires on October 31, 1997. At June 30,
1997, $1,919,000 was outstanding and $3,868,000 was available under the ANADAC
Line of Credit. The ANADAC Line of Credit agreement includes, among other
things, certain financial and operating covenants.
 
     On August 29, 1997, the Company renegotiated the Identix Line of Credit.
The new Identix Line of Credit is a $6,000,000 bank line of credit. Under the
new Identix Line of Credit, the Company may borrow up to 80% of eligible
accounts receivable and up to 50% of eligible inventory. Amounts drawn bear
interest at the bank's prime rate of interest. The new Identix Line of Credit
expires on August 28, 1998. The new Identix Line of Credit contains financial
and operating covenants including restrictions on the Company's ability to pay
dividends on the Company's common stock.
 
     The Company's operating activities provided net cash of $3.6 million due
primarily to net income of $1,250,000 plus adjustments for non-cash depreciation
and amortization of $973,000, an increase in accounts payable of $2,929,000 and
an increase in deferred revenue of $1,014,000. The increase in accounts payable
was primarily due to financing the increase in inventories and the timing of
vendor payments. The increase in deferred revenue is primarily due to (i) an
increase in the number of live-scan systems under maintenance contracts and (ii)
an increase in advance payments for fingerprint services under contract. These
sources of cash from operating activities were offset, in part, by increases in
accounts receivable of $2,347,000 primarily due to the growth in overall
revenues and in inventory of $831,000 primarily due to the stocking of certain
inventory for the Company's Bio-ID and bio-imaging product lines.
 
     The Company's investing activities used net cash of $2.3 million primarily
due to (i) the purchase of property and equipment of $1,350,000 to support the
growth of research, development and engineering and the expansion of sales,
marketing and distribution and (ii) the addition to intangibles and other
assets of $975,000 primarily related to capitalized software development costs.
 
     The Company's financing activities provided net cash of $364,000 primarily
due to the net proceeds from the exercise of stock options and warrants.
 
     Identix did not have any material capital expenditure commitments as of
June 30, 1997.
 
     The Company believes that cash flow from operations together with existing
working capital and available bank credit will be adequate for the Company's
cash requirements through fiscal 1998. However, the Company may require
additional equity or debt financing beyond the amounts currently forecasted by
the Company to meet its working capital or capital equipment needs. There can be
no assurance that the Company would be able to obtain such financing or that the
terms of financing would be favorable to the Company.
 
FORWARD-LOOKING STATEMENTS
 
     The statements in this Annual Report on Form 10-K that relate to future
plans, events or performance are forward-looking statements that involve risks
and uncertainties, including risks that the markets for Bio-ID and biometric
imaging products and fingerprint services fail to develop or develop more slowly
than anticipated, that competitors develop products with superior price or
performance features, that the Company is unable to develop and market new or
enhanced products in response to technological developments or end user
requirements on a timely basis or at all, that the Company's collaborative
partners do not actively promote the Company's products or pursue installations
which use the Company's equipment, that the Company incurs cost overruns for
fixed price contracts, that the Company experiences declining demand for its
products or services, that the Company becomes subject to additional litigation,
that the Company is unable to protect its intellectual property rights, that
orders from government agencies are canceled or substantially delayed or the
receipt of revenues substantially delayed, that the Company fails to hire or
retain key personnel, that the Company experiences disruptions of supplies from
sole or limited source suppliers, that the Company is not profitable in future
periods or that the Company requires additional capital to fund its operations.
Actual results, events and performance may differ materially. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
publicly release any revisions to these forward-looking statements that may be
 
                                       27
<PAGE>   30
 
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF IDENTIX INCORPORATED
 
     In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) on page 49 present fairly, in all material
respects, the financial position of Identix Incorporated and its subsidiaries at
June 30, 1997 and 1996, and the results of their operations and their cash
flows for each of the three years in the period ended June 30, 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
 
/s/ PRICE WATERHOUSE LLP
 
Price Waterhouse LLP
 
San Jose, California
August 5, 1997
 
                                       28
<PAGE>   31
 
                              IDENTIX INCORPORATED
 
                          CONSOLIDATED BALANCE SHEETS
 
                                     
<TABLE>
<CAPTION>
                                                                            JUNE 30,
                                                                  -----------------------------
                                                                      1997             1996
                                                                  ------------     ------------
<S>                                                               <C>              <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................  $  2,505,000     $    981,000
Accounts receivable, less allowance for doubtful accounts and
  sales returns of $625,000 and $488,000........................    18,678,000       16,331,000
Inventories.....................................................     5,295,000        4,464,000
Prepaid expenses and other assets...............................       321,000          266,000
                                                                  ------------     ------------
          Total current assets..................................    26,799,000       22,042,000
Property and equipment, net.....................................     2,472,000        2,218,000
Intangibles and other assets....................................     3,008,000        2,847,000
                                                                  ------------     ------------
          Total assets..........................................  $ 32,279,000     $ 27,107,000
                                                                   ===========      ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks..........................................  $  1,919,000     $  1,846,000
Accounts payable................................................     6,238,000        3,309,000
Accrued compensation............................................     1,446,000        1,185,000
Other accrued liabilities.......................................       880,000          426,000
Current portion of long-term debt...............................            --          106,000
Deferred revenue................................................       561,000          256,000
                                                                  ------------     ------------
          Total current liabilities.............................    11,044,000        7,128,000
Deferred revenue................................................        65,000          293,000
Long-term debt..................................................            --          127,000
Other liabilities...............................................        89,000           87,000
                                                                  ------------     ------------
          Total liabilities.....................................    11,198,000        7,635,000
                                                                  ------------     ------------
Commitments and contingencies (Notes 9 and 10)
Shareholders' equity:
  Common stock no par; 50,000,000 shares authorized; 24,492,778
     and 24,320,464 shares issued and outstanding...............    50,546,000       50,024,000
  Accumulated deficit...........................................   (29,284,000)     (30,534,000)
  Cumulative translation adjustment.............................      (181,000)         (18,000)
                                                                  ------------     ------------
          Total shareholders' equity............................    21,081,000       19,472,000
                                                                  ------------     ------------
          Total liabilities and shareholders' equity............  $ 32,279,000     $ 27,107,000
                                                                   ===========      ===========
</TABLE>
 
              The accompanying notes are an integral part of these
                       consolidated financial statements.
 
                                       29
<PAGE>   32
 
                              IDENTIX INCORPORATED
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                              FISCAL YEAR ENDED JUNE 30,
                                                      -------------------------------------------
                                                         1997            1996            1995
                                                      -----------     -----------     -----------
<S>                                                   <C>             <C>             <C>
Revenues:
  Net product revenues..............................  $26,499,000     $16,565,000     $ 9,025,000
  Services revenues.................................   25,891,000      21,976,000      17,989,000
                                                      -----------     -----------     -----------
          Total revenues............................   52,390,000      38,541,000      27,014,000
                                                      -----------     -----------     -----------
Costs and expenses:
  Cost of product revenues..........................   13,218,000       8,722,000       5,445,000
  Cost of services revenues.........................   20,633,000      17,958,000      15,493,000
  Research, development and engineering.............    2,335,000       1,486,000       1,582,000
  Marketing and selling.............................    7,824,000       4,958,000       2,465,000
  General and administrative........................    7,129,000       4,431,000       2,650,000
  Write-off of acquired in-process research and
     development....................................           --       4,723,000              --
                                                      -----------     -----------     -----------
          Total costs and expenses..................   51,139,000      42,278,000      27,635,000
                                                      -----------     -----------     -----------
Income (loss) from operations.......................    1,251,000      (3,737,000)       (621,000)
Other income (expense), net.........................      210,000         211,000         (27,000)
Interest income (expense), net......................     (211,000)         85,000        (203,000)
                                                      -----------     -----------     -----------
Income (loss) before income tax benefit.............    1,250,000      (3,441,000)       (851,000)
Income tax benefit..................................           --              --         136,000
                                                      -----------     -----------     -----------
Net Income (loss)...................................  $ 1,250,000     $(3,441,000)    $  (715,000)
                                                      ===========     ===========     ===========
Net Income (loss) per common and common equivalent
  share.............................................  $      0.05     $     (0.15)    $     (0.04)
                                                      ===========     ===========     ===========
Weighted average common and common equivalent
  shares............................................   25,136,000      23,485,000      19,371,000
</TABLE>
 
              The accompanying notes are an integral part of these
                       consolidated financial statements.
 
                                       30
<PAGE>   33
 
                              IDENTIX INCORPORATED
 
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                      COMMON STOCK                        AMOUNT
                                  ---------------------                EQUIVALENT TO   CUMULATIVE
                                   NUMBER OF             ACCUMULATED    GUARANTEED     TRANSLATION
                                    SHARES      AMOUNT     DEFICIT       ESOP DEBT     ADJUSTMENT    TOTAL
                                  -----------  --------  -----------   -------------   ----------   -------
<S>                               <C>          <C>       <C>           <C>             <C>          <C>
BALANCE JUNE 30, 1994............  18,785,112  $ 32,304   $ (26,448)       $(105)        $   --     $ 5,751
  Sale of common stock under
     stock option plans..........     367,703       579                                                 579
  Sale of common stock in private
     placement...................     500,000     1,351                                               1,351
  Sale of common stock related to
     warrant exercise............   1,701,398     4,703                                               4,703
  Conversion of Sundance note to
     common stock................     166,666       500                                                 500
  Amount equivalent to guaranteed
     ESOP debt...................                                            105                        105
  Net loss for the year..........                              (715)                                   (715)
                                   ----------   -------    --------        -----          -----     -------
BALANCE JUNE 30, 1995............  21,520,879    39,437     (27,163)          --             --      12,274
  Sale of common stock under
     stock option plans..........     679,724     1,569                                               1,569
  Sale of common stock related to
     warrant exercise............   1,295,885     3,559                                               3,559
  Issuance of common stock
     related to acquisition of
     Fingerscan Pty Ltd..........     668,976     5,459                                               5,459
  Issuance of common stock
     related to acquisition
     of Innovative Archival
     Solutions...................     155,000                    70                                      70
  Cumulative translation
     adjustment..................                                                           (18)        (18)
  Net loss for the year..........                            (3,441)                                 (3,441)
                                   ----------   -------    --------        -----          -----     -------
BALANCE JUNE 30, 1996............  24,320,464    50,024     (30,534)          --            (18)     19,472
  Sale of common stock under
     stock option plans..........      66,739       190                                                 190
  Sale of common stock related to
     warrant exercise............     105,575       332                                                 332
  Cumulative translation
     adjustment..................                                                          (163)       (163)
  Net income for the year........                             1,250                                   1,250
                                   ----------   -------    --------        -----          -----     -------
BALANCE JUNE 30, 1997............  24,492,778  $ 50,546   $ (29,284)          --         $ (181)    $21,081
                                   ==========   =======    ========        =====          =====     =======
</TABLE>
 
              The accompanying notes are an integral part of these
                       consolidated financial statements.
 
                                       31
<PAGE>   34
 
                              IDENTIX INCORPORATED
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                               FISCAL YEAR ENDED JUNE 30,
                                                       ------------------------------------------
                                                           1997           1996           1995
                                                       ------------   ------------   ------------
<S>                                                    <C>            <C>            <C>
Increase (decrease) in cash and cash equivalents:
  Net income (loss)..................................  $  1,250,000   $ (3,441,000)  $   (715,000)
  Adjustments to reconcile net income (loss) to net
     cash provided by or used for operating
     activities:
     Depreciation....................................     1,096,000      1,045,000        707,000
     Amortization of intangibles.....................       814,000        492,000        523,000
     Amortization of deferred revenue................      (937,000)      (408,000)      (204,000)
     Write-off of acquired in-process research and
       development...................................            --      4,723,000             --
  Changes in assets and liabilities, net of effects
     of acquisitions:
     Accounts receivable.............................    (2,347,000)    (7,966,000)    (4,089,000)
     Accounts receivable from Ascom Hasler...........            --             --        177,000
     Inventories.....................................      (831,000)    (1,719,000)      (283,000)
     Prepaid expenses and other assets...............       (55,000)       253,000       (318,000)
     Accounts payable................................     2,929,000      1,484,000         58,000
     Accrued compensation............................       261,000        169,000         98,000
     Other accrued liabilities.......................       454,000       (299,000)        15,000
     Deferred revenue................................     1,014,000        437,000        172,000
                                                       ------------   ------------   ------------
  Net cash provided by or used for operating
     activities......................................     3,648,000     (5,230,000)    (3,859,000)
                                                       ------------   ------------   ------------
Cash flows used in investing activities:
  Capital expenditures...............................    (1,350,000)    (1,951,000)      (989,000)
  Additions to intangibles and other assets..........      (975,000)      (898,000)      (210,000)
  Cash received in acquisitions......................            --        180,000             --
  Proceeds from sale of property and equipment.......            --             --         14,000
                                                       ------------   ------------   ------------
  Net cash used in investing activities..............    (2,325,000)    (2,669,000)    (1,185,000)
                                                       ------------   ------------   ------------
Cash flow provided by financing activities:
  Borrowings under bank lines of credit..............    16,530,000     14,361,000     14,708,000
  Payments under bank lines of credit................   (16,457,000)   (14,666,000)   (13,254,000)
  Borrowings under long-term note....................            --        318,000             --
  Principal payments on long-term note...............      (233,000)       (85,000)            --
  Proceeds from sale of common stock and warrants,
     net ............................................       522,000      5,128,000      6,633,000
  Other, net.........................................         2,000             --             --
                                                       ------------   ------------   ------------
  Net cash provided by financing activities..........       364,000      5,056,000      8,087,000
                                                       ------------   ------------   ------------
Effect of exchange rate changes on cash and cash
  equivalents........................................      (163,000)       (18,000)            --
                                                       ------------   ------------   ------------
Net increase (decrease) in cash and cash
  equivalents........................................     1,524,000     (2,861,000)     3,043,000
Cash and cash equivalents at beginning of year.......       981,000      3,842,000        799,000
                                                       ------------   ------------   ------------
Cash and cash equivalents at end of year.............  $  2,505,000   $    981,000   $  3,842,000
                                                       ============   ============   ============
</TABLE>
 

 
                                       32
<PAGE>   35
Supplemental disclosures of cash flow information:
 
<TABLE>
<CAPTION>
                                                               FISCAL YEAR ENDED JUNE 30,
                                                       ------------------------------------------
                                                           1997           1996           1995
                                                       ------------   ------------   ------------
<S>                                                    <C>            <C>            <C>
Cash paid during the year for interest...............      $206,000       $172,000       $233,000
</TABLE>
 
Non-cash investing and financing activities:
 
     On June 30, 1995, the Company, at its option, converted a $500,000 note to
Sundance Venture Partners, L.P. ("Sundance") into 166,666 shares of the
Company's common stock (Note 6).
 
     On March 26, 1996, the Company acquired Fingerscan Pty Ltd. ("Fingerscan")
pursuant to a share purchase agreement whereby Fingerscan became a wholly owned
subsidiary of the Company (Note 2). The acquisition was accounted for as a
purchase as follows:
 
<TABLE>
                <S>                                                <C>
                Cash.............................................  $  156,000
                Accounts receivable..............................     152,000
                Inventory........................................     234,000
                Property and equipment, net......................      23,000
                Intangibles and other assets.....................     581,000
                In-process research and development..............   4,723,000
                                                                   ----------
                                                                   $5,869,000
                                                                   ==========
                Accounts payable and other accruals..............  $  393,000
                Accrued compensation.............................      17,000
                Common stock.....................................   5,459,000
                                                                   ----------
                                                                   $5,869,000
                                                                   ==========
</TABLE>
 
              The accompanying notes are an integral part of these
                       consolidated financial statements.
 
                                       33
<PAGE>   36
 
                              IDENTIX INCORPORATED
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1 -- THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
 
     Identix Incorporated (the "Company") designs, manufactures, develops and
markets two categories of products for security, anti-fraud, law enforcement and
other applications: (i) biometric identity verification ("Bio-ID") products that
identify an individual through the unique biological characteristics of a
fingerprint and (ii) biometric imaging products that capture forensic quality
fingerprint images from an individual's fingers for law enforcement and other
applications. The Company provides information technology, engineering and
management consulting services to private and public sector clients through its
wholly owned subsidiary ANADAC, Inc. ("ANADAC"). To date, the principal
geographical markets for the Company's products are the Americas, Asia, Europe
and Australia.
 
     On March 26, 1996, the Company acquired Fingerscan pursuant to a share
purchase agreement whereby Fingerscan became a wholly owned subsidiary of the
Company. The acquisition was accounted for as a purchase (Note 2).
 
     On June 30, 1996, the Company acquired Innovative Archival Solutions
("IAS") pursuant to a share purchase agreement. The acquisition was accounted
for as a pooling of interests (Note 2).
 
     Ascom USA Inc., a sister subsidiary of Ascom Hasler AG, a Swiss Company,
owned approximately 21.1% of the Company's common stock at June 30, 1997 (Note
6).
 
BASIS OF CONSOLIDATION
 
     The consolidated financial statements include the accounts of Identix
Incorporated and its wholly owned subsidiaries ANADAC and Fingerscan; all
significant intercompany balances and transactions have been eliminated in
consolidation. In the consolidated statements of operations, the Company has
reclassified certain other income and expense accounts for fiscal 1996 and
fiscal 1995 to be consistent with fiscal 1997.
 
REVENUE RECOGNITION
 
     Revenue from product sales is recognized in accordance with the terms of
sale, generally upon shipment by the Company, provided no significant vendor
obligations remain and collection of the receivable is deemed probable. Extended
service and maintenance contract revenue is deferred and recognized ratably over
the life of the service period of the related agreement.
 
     The majority of the Company's services are performed for the U.S.
Government under various cost-reimbursable, time and material and fixed-price
contracts. Revenues for cost-plus fixed fee contracts are recognized as costs
are incurred, including a proportionate amount of the fee earned. Revenues on
time-and-materials contracts are recognized to the extent of billable rates
times hours worked plus materials expense incurred. Revenues on fixed-price
contracts are generally recognized on the percentage-of-completion method based
on costs incurred in relation to total estimated costs. Unbilled accounts
receivable at June 30, 1997 represent revenue accrued which becomes billable
upon attainment of contract milestones. Provisions for estimated contract losses
are recorded in the period such losses are determined.
 
     Services revenues directly from contracts with the U.S. Government,
principally with the Department of Defense, were approximately 77% of total
services revenues for fiscal 1997, 78% for fiscal 1996 and 62% for fiscal 1995.
Contract costs for services revenues to the U.S. Government, including indirect
expenses, are subject to audit and subsequent adjustment by negotiation between
the Company and U.S. Government representatives. Revenues are recorded in
amounts expected to be realized upon final settlement. Audits of ANADAC's costs
have been completed by the Defense Contract Audit Agency through December 31,
1992. No material adjustments have been made, and ANADAC does not anticipate
adjustments for any open years that would have a material effect on the
consolidated financial statements.
 
                                       34
<PAGE>   37
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
MAJOR CUSTOMER AND INTERNATIONAL REVENUES
 
     In fiscal 1997, the Company had no non-U.S. Government customers that
accounted for more than 10% of total revenues. In fiscal 1996 one non-U.S.
Government customer in the Company's products business accounted for 14% of
total revenues. In fiscal 1995, there were no non-U.S. Government customers that
accounted for more than 10% of total revenues.
 
     Net product revenues included international revenues of $8,178,000 in
fiscal 1997, $2,198,000 in fiscal 1996 and $2,904,000 in fiscal 1995.
 
CASH AND CASH EQUIVALENTS
 
     Cash equivalents consist of highly liquid investments with a maturity of
three months or less when purchased. These investments consist of income
producing securities, which are readily convertible to cash and are stated at
cost, which approximates market.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The carrying value of the Company's financial instruments, including cash,
cash equivalents, accounts receivable, accounts payable, accrued expenses and
liabilities approximate fair value due to their short maturity.
 
CONCENTRATION OF CREDIT RISK
 
     The Company performs on-going credit evaluations of its customers'
financial condition and limits the amount of credit extended when deemed
necessary. The Company maintains an allowance for potential credit losses which
is based upon the expected collectibility of all accounts receivable. Management
believes that any risk of loss is significantly reduced due to the Company's
substantial number of government customers. The write-off of uncollectible
amounts in current and prior years has been insignificant.
 
     Currently, the Company's policy is to limit its exposure in financial
instruments by investing its excess cash in deposits with major banks in money
market securities. The Company, by policy, limits the amount of exposure to any
one financial institution.
 
INVENTORIES
 
     Inventories are stated at the lower of cost (determined on the first-in,
first-out cost method) or market. The Company provides for obsolete, slow moving
or excess inventories in the period when obsolescence or inventory in excess of
annual demand is first identified.
 
PROPERTY AND EQUIPMENT
 
     Property and equipment are stated at cost. Depreciation is computed using
the straight-line method with the estimated useful lives of the assets ranging
from two to five years. Amortization of equipment held under capital leases and
leasehold improvements is computed using the straight-line method and the
shorter of the remaining lease term or the estimated useful life of the related
equipment or improvements. Repair and maintenance costs are expensed as
incurred.
 
INTANGIBLES AND OTHER ASSETS
 
     Intangible assets include goodwill, purchased technology, capitalized
contract rights and capitalized software development costs. Goodwill and
purchased technology are amortized over five to seven years. Capitalized
contract rights are amortized over the terms of the related contracts, usually
one to five years.
 
                                       35
<PAGE>   38
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     The Company accounts for software development costs in accordance with
Statement of Financial Accounting Standards No. 86 "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed." Accordingly,
certain software development costs incurred are capitalized after technological
feasibility has been demonstrated. Technological feasibility is determined when
planning, designing, coding and testing have been completed according to design
specifications. Commencing with product introduction, such capitalized amounts
are amortized on a product-byproduct basis at the greater of the amount computed
using (a) the ratio of current revenues for a product to the total of current
and anticipated future revenues or (b) the straight-line method over the
remaining estimated economic life of the product. Generally, the Company assigns
an estimated economic life of one to five years to capitalized software costs.
Amortization of capitalized software costs is charged to cost of product
revenues and cost of services revenues. Research and development expenditures
are charged to research and development in the period incurred.
 
     In fiscal 1996, the Company adopted Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." Accordingly, the Company evaluates asset
recoverability at each balance sheet date or when an event occurs that may
impair recoverability of the asset. The Company determines the recoverability of
the carrying amount of each intangible asset by reviewing the following factors:
the undiscounted value of expected operating cash flows in relation to its net
capital investments, the estimated useful or contractual life of the intangible
asset, the contract or product supporting the intangible asset, and in the case
of purchased technology and capitalized software development costs, the Company
periodically reviews the recoverability of the assets value by evaluating its
products with respect to technological advances, competitive products and the
needs of its customers. During fiscal 1997, the Company did not incur any
long-lived asset impairment losses.
 
PRODUCT WARRANTY
 
     The Company provides a warranty for manufacturing and material defects on
all units sold. A reserve for warranty costs, based on estimates made by
management utilizing projected costs to repair units, is recorded at the time of
sale and periodically adjusted to reflect actual experience.
 
INCOME TAXES
 
     Deferred tax assets and liabilities are recognized for the expected tax
consequences of temporary differences between the income tax bases of assets and
liabilities and the amounts reported for financial reporting purposes for all
periods presented (Note 7).
 
STOCK BASED COMPENSATION
 
     The Company accounts for its employee and director stock option and
employee stock purchase plans in accordance with provisions of the Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). During 1995, the Financial Accounting Standards Board ("FAS") issued
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123"). SFAS 123, effective for fiscal years beginning after
December 31, 1995, provides an alternative to APB 25, but allows companies to
account for employee and director stock-based compensation under the current
intrinsic value method as prescribed by APB 25. The Company has continued to
account for its employee and director stock option plans in accordance with APB
25. Additional pro forma disclosures as required under SFAS 123 are presented in
Note 5.
 
COMPREHENSIVE INCOME
 
     In June 1997, FAS issued Statement of Financial Accounting Standards No.
130 "Reporting Comprehensive Income" ("SFAS 130"). This statement is effective
for the Company's fiscal year ending June 30,
 
                                       36
<PAGE>   39
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
1999. The statement establishes presentation and disclosure requirements for
reporting comprehensive income. Comprehensive income includes charges or credits
to equity that are not the result of transactions with owners. The Company plans
to adopt the disclosure requirements and report comprehensive income as part of
the Consolidated Statements of Shareholders' Equity as required under SFAS 130,
and expects there to be no material impact on the Company's financial position
and results of operations as a result of the adoption of this new accounting
standard.
 
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
 
     In June 1997, FAS issued Statement of Financial Accounting Standards No.
131 "Disclosure About Segments of an Enterprise and Related Information" ("SFAS
131"). This statement is effective for the Company's fiscal year ending June 30,
1999. The statement requires the Company to report certain financial information
about operating segments in complete sets of financial statements of the Company
and in condensed financial statements of interim periods. It also requires that
the Company report certain information about its products and services, the
geographic areas in which it operates and its major customers. The method FAS
chose for determining what information to report is referred to as the
"management approach". The management approach is based on the way that
management organizes the segments within the enterprise for making operating
decisions and assessing performance. The Company's management has not yet
completed its assessment of how the "management approach" will impact segment
disclosures.
 
FOREIGN CURRENCY TRANSLATION
 
     The Company's foreign subsidiary uses the local currency as the functional
currency. Accordingly, assets and liabilities are translated using exchange
rates in effect at the end of the period, and for the operation in the local
currency environment, revenue and expense items are translated at average rates
of exchange for the period. Gains or losses from translation of foreign
operations where the local currency is the functional currency are included as a
separate component of shareholders' equity.
 
EARNINGS PER SHARE
 
     Earnings per share is based on the weighted average number of common and
common equivalent shares outstanding during the period.
 
     In February 1997, FAS issued Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" ("SFAS 128"). This statement is effective for the
Company's interim period ended December 31, 1997. The statement redefines
earnings per share under Generally Accepted Accounting Principles. Under the new
standard, primary earnings per share is replaced by basic earnings per share and
fully diluted earnings per share is replaced by diluted earnings per share. If
the Company adopted SFAS No. 128, the Company's basic earnings per share and
diluted earnings per share would have been:
 
<TABLE>
<CAPTION>
                                                                     JUNE 30,
                                                            ---------------------------
                                                            1997       1996       1995
                                                            -----     ------     ------
        <S>                                                 <C>       <C>        <C>
        Basic Earnings Per Share..........................  $0.05     $(0.15)    $(0.04)
        Diluted Earnings Per Share........................  $0.05     $(0.15)    $(0.04)
</TABLE>
 
     The Company will adopt SFAS No. 128 in the reporting period ending after
December 15, 1997.
 
MANAGEMENT ESTIMATES AND ASSUMPTIONS
 
     The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
 
                                       37
<PAGE>   40
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 2 -- ACQUISITIONS
 
FINGERSCAN
 
     On March 26, 1996, the Company acquired Fingerscan, a privately-held
Australian-based company that designs and markets Bio-ID products, pursuant to a
share purchase agreement whereby Fingerscan became a wholly owned subsidiary of
the Company. In accordance with the share purchase agreement, the Company issued
668,976 shares of the Company's common stock to the shareholders of Fingerscan.
The Company's results for fiscal 1996 include the operations of Fingerscan from
the date of acquisition.
 
     The acquisition was accounted for using the purchase method of accounting.
Accordingly, the purchase price has been allocated to the assets purchased and
the liabilities assumed based upon the fair values at the date of acquisition.
Based upon an appraisal by an investment banking firm, the value of the 668,976
shares of the Company's common stock issued in the acquisition was determined to
be $5,459,000 reflecting a 32% discount for certain restrictions related to the
resale of the common stock issued to purchase Fingerscan. The excess of the
purchase price over the fair market value of the net tangible assets acquired
aggregated approximately $5,280,000, of which $4,723,000 was allocated to
inprocess research and development and $557,000 was allocated to other
intangibles including acquired technology. An independent appraisal was
performed which used the income approach to determine the fair value of
Fingerscan and its identifiable assets, including the portion of the purchase
price attributed to the in-process research and development. The income approach
includes an analysis of the markets, completion costs, cash flows, other
required assets, contributions made by core technology and risks associated with
achieving such cash flows. The developmental products acquired were evaluated in
context of Interpretation 4 of SFAS No. 2 and SFAS No. 86 and the identified
in-process research and development was expensed in accordance with these
provisions as technological feasibility had not yet been reached. At the time of
acquisition, the in-process research and development charges represented a
multiple of approximately 19 times Fingerscan's trailing twelve month research
and development expenditures. The Company amortizes the amount allocated to
other intangibles including acquired technology over a five-year period.
 
     The following unaudited pro forma information presents a summary of
consolidated results of operations of the Company and Fingerscan as if the
acquisition had occurred at the beginning of the respective periods. The pro
forma combined statements of operations do not include the adjustment for the
non-recurring write-off of acquired in-process research and development. The net
income per share is based on the average number of shares of common stock of
Identix outstanding during the period plus the common shares issued by Identix
to acquire Fingerscan. These pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of what operating
results would have been had the acquisition actually taken place on the assumed
dates or of operating results which may occur in the future.
 
<TABLE>
<CAPTION>
                                                              FISCAL YEAR ENDED JUNE
                                                            ---------------------------
                                                               1996            1995
                                                            -----------     -----------
        <S>                                                 <C>             <C>
        Net revenues......................................  $39,883,000     $29,703,000
        Net income........................................  $   966,000     $   278,000
        Net income per share..............................  $      0.04     $      0.01
</TABLE>
 
IAS
 
     On June 30, 1996, pursuant to a share purchase agreement, the Company
issued 155,000 shares of the Company's common stock to acquire IAS, a privately
held company. The acquisition has been accounted for as a pooling of interests.
The Company's fiscal 1996 consolidated financial statements include the accounts
and operations of IAS. For fiscal 1995, the effects of the combination with IAS
were not significant and the Company has not restated the fiscal 1995
consolidated financial statements to include the accounts and operations of IAS.
 
                                       38
<PAGE>   41
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     In connection with the acquisition of IAS, the Company incurred costs of
approximately $40,000 primarily for transaction and professional fees, before
tax. Adjustments have been made to eliminate significant intercompany
transactions.
 
     Separate net revenues, net income and related per share data amounts of the
combined entities for the year ended June 30, 1996 are presented in the
following table:
 
<TABLE>
<CAPTION>
                                    IDENTIX           IAS        ADJUSTMENTS     COMBINED
                                  -----------     -----------    ----------     -----------
        <S>                       <C>             <C>            <C>            <C>
        Net revenues............. $37,208,000     $ 2,194,000    $ (861,000)    $38,541,000
        Net income (loss)........ $(3,557,000)        256,000    $ (140,000)    $(3,441,000)
        Net loss per share.......                                               $     (0.15)
</TABLE>
 
NOTE 3 -- BALANCE SHEET DETAIL
 
<TABLE>
<CAPTION>
                                                                     JUNE 30,
                                                            ---------------------------
                                                               1997            1996
                                                            -----------     -----------
        <S>                                                 <C>             <C>
        Accounts receivable:
          Commercial and other............................  $11,855,000     $12,677,000
          United States Government:
             Billed.......................................    5,277,000       2,573,000
             Unbilled.....................................    1,730,000       1,094,000
          Employee receivables............................      441,000         475,000
          Less: allowance for doubtful accounts and sales
             returns......................................     (625,000)       (488,000)
                                                            -----------     -----------
                                                            $18,678,000     $16,331,000
                                                            ===========     ===========
        Inventories:
          Purchased parts and materials...................  $ 3,027,000     $ 2,869,000
          Work-in-process.................................    1,076,000         429,000
          Finished goods, including spares................    1,192,000       1,166,000
                                                            -----------     -----------
                                                            $ 5,295,000     $ 4,464,000
                                                            ===========     ===========
        Property and equipment:
          Manufacturing, test and office equipment........  $ 5,231,000     $ 4,167,000
          Furniture and fixtures..........................    1,194,000       1,118,000
          Leasehold improvements..........................      127,000         244,000
                                                            -----------     -----------
                                                              6,552,000       5,529,000
          Less: accumulated depreciation and
             amortization.................................   (4,080,000)     (3,311,000)
                                                            -----------     -----------
                                                            $ 2,472,000     $ 2,218,000
                                                            ===========     ===========
        Intangibles and other assets:
          Goodwill and deferred acquisition costs.........  $ 1,370,000     $ 1,271,000
          Purchased technology............................    1,334,000       1,334,000
          Capitalized software costs......................    2,367,000       1,652,000
          Less: accumulated amortization..................   (2,516,000)     (1,703,000)
                                                            -----------     -----------
                                                              2,555,000       2,554,000
        Other assets......................................      453,000         293,000
                                                            -----------     -----------
                                                            $ 3,008,000     $ 2,847,000
                                                            ===========     ===========
</TABLE>
 
                                       39
<PAGE>   42
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 4 -- LINES OF CREDIT
 
     The Company has a $5,000,000 bank line of credit (the "Identix Line of
Credit") secured by substantially all of the personal property of the Company.
Under the Identix Line of Credit, the Company may borrow up to 80% of eligible
accounts receivable. Amounts drawn bear interest at the bank's prime rate of
interest (8.50% at June 30, 1997). The line of credit expires on October 3,
1997. At June 30, 1997, there were no borrowings and $2,993,000 was available
under the Identix Line of Credit. The line of credit agreement contains
financial and operating covenants including restrictions on the Company's
ability to pay dividends on the Company's common stock.
 
     ANADAC has a $6,000,000 bank line of credit and outstanding balances bear
interest at the bank's prime lending rate (8.50% at June 30, 1997) and are
payable upon demand. Available borrowings under the line are based upon eligible
accounts receivable. The line of credit expires October 31, 1997. At June 30,
1997, $1,919,000 was outstanding and $3,868,000 was available under the ANADAC
Line of Credit. The line of credit agreement includes, among other things,
certain financial and operating covenants.
 
     On August 29, 1997, the Company renegotiated the Identix Line of Credit.
The new Identix Line of Credit is a $6,000,000 bank line of credit. Under the
new Identix Line of Credit, the Company may borrow up to 80% of eligible
accounts receivable and up to 50% of eligible inventory. Amounts drawn bear
interest at the bank's prime rate of interest. The new Identix Line of Credit
expires on August 28, 1998. The new Identix Line of Credit contains financial
and operating covenants including restrictions on the Company's ability to pay
dividends on the Company's common stock.
 
NOTE 5 -- CAPITAL STOCK
 
COMMON STOCK
 
     On October 19, 1994, the Company sold in a private placement 500,000 shares
of common stock at $2.75 per share to two institutional investors. The Company
received net proceeds of $1,351,000.
 
     On March 26, 1996, the Company issued 668,976 shares to acquire Fingerscan
(Note 2).
 
     On June 30, 1996, the Company issued 155,000 shares to acquire IAS (Note
2).
 
EMPLOYEE STOCK OPTIONS
 
     In May 1983, the Company adopted an incentive stock option plan which
expired in 1993 ("1983 Plan"). Under the 1983 Plan, the Company reserved a total
of 2,000,000 shares of the Company's common stock. In October 1992, the Company
adopted the 1992 Incentive Stock Option Plan ("1992 Plan"). The 1992 Plan will
expire in 2002. A total of 1,000,000 shares of the Company's common stock has
been reserved for issuance under the 1992 Plan. In July 1995, the Company
adopted the Identix Incorporated Equity Incentive Plan ("1995 Plan"). The 1995
Plan will expire in 2005. In October 1996, the Company amended the 1995 Plan so
that a total of 1,250,000 shares of the Company's common stock is reserved for
issuance under the 1995 Plan. The 1995 Plan provides for the discretionary award
of options, restricted stock, stock purchase rights, performance shares or any
combination of these awards to eligible employees, including executive officers
and consultants. In August 1995, the Company adopted the Non-Employee Directors
Stock Option Plan ("Directors Plan"), under which nonqualified stock options are
granted to non-employee directors on a formula basis. A total of 250,000 shares
of the Company's common stock is reserved for issuance under the Directors Plan.
 
     Under the 1983, 1992, and 1995 Plans, options are granted for a period of
10 years, and all grants of incentive stock options must be made at a price at
least equal to the then fair market value of the Company's common stock at the
date of grant. All grants of nonstatutory stock options must be made at a price
of at least
 
                                       40
<PAGE>   43
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
85% of the then fair market value of the Company's common stock at the date of
grant. Options generally vest on a monthly basis over a period of two to five
years.
 
     Under the Directors Plan, options are granted for a period of 10 years at
an exercise price equal to the fair market value of the Company's common stock
on the date of the grant. Upon election or appointment, each director of the
Company who is not an officer or employee of the Company, receives an option to
purchase 10,000 shares of the Company's common stock; provided, however, that if
a director was appointed to the Board of Directors after six months of the date
of the annual meeting of shareholders at which directors are elected, that
director receives an option to purchase 5,000 shares of the Company's common
stock. Thereafter, each director receives an option to purchase 10,000 shares of
the Company's common stock on the date of the first meeting of the Board of
Directors of the Company following the annual meeting of the shareholders at
which directors are elected. Options vest quarterly over a one year period from
the date of grant.
 
     Upon the acquisition of ANADAC, the Company assumed the options outstanding
under ANADAC's Incentive Stock Option Plan ("ANADAC Plan") obligating the
Company to issue up to 544,613 shares of the Company's common stock. The options
assumed under the ANADAC Plan are incentive stock options with expirations dates
through 2001. All outstanding options were fully vested as of October 23, 1992,
the acquisition date, and are subject to antidilution adjustments for stock
splits or stock dividends.
 
     The following table summarizes the Company's stock option activity and
related information for the past three years:
 
<TABLE>
<CAPTION>
                                                            SHARES       OPTIONED      WEIGHTED
                                                           AVAILABLE      SHARES       AVERAGE
                                                           FOR GRANT    OUTSTANDING     PRICE
                                                           ---------    -----------    --------
    <S>                                                    <C>          <C>            <C>
    BALANCE AT JUNE 30, 1994.............................    241,958     1,679,280      $ 2.22
    Options granted......................................   (241,500)      241,500      $ 3.03
    Options exercised....................................         --      (367,703)     $ 1.47
    Options canceled.....................................     74,173       (74,173)     $ 3.34
    Options canceled and expired.........................    (27,625)      (24,000)     $ 2.32
                                                           ---------     ---------      ------
    BALANCE AT JUNE 30, 1995.............................     47,006     1,454,904      $ 2.48
    Options reserved upon adoption of the 1995 Plan......  1,000,000            --         
    Options reserved upon adoption of the Directors
      Plan...............................................    250,000            --         
    Options granted......................................   (730,000)      730,000      $ 9.28
    Options exercised....................................         --      (679,724)     $ 2.28
    Options canceled.....................................     29,291       (29,291)     $ 5.93
    Options canceled and expired.........................         --        (8,000)     $ 2.75
                                                           ---------     ---------      ------
    BALANCE AT JUNE 30, 1996.............................    596,297     1,467,889      $ 5.85
    Options authorized upon adoption of amendment
      to 1995 Plan.......................................    250,000            --          
    Options granted......................................   (933,350)      933,350      $ 9.31
    Options exercised....................................         --       (66,739)     $ 2.73
    Options canceled.....................................    260,534      (260,534)     $10.55
    Options canceled and expired.........................         --          (150)     $ 4.00
                                                           ---------     ---------      ------
    BALANCE AT JUNE 30, 1997.............................    173,481     2,073,816      $ 6.90
                                                           =========     =========      ======
</TABLE>
 
     As of June 30, 1997 options for approximately 1,211,897 common shares were
exercisable under the 1983, 1992, 1995, Directors and ANADAC Plans.
 
                                       41
<PAGE>   44
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     The following table summarizes significant option groups outstanding at
June 30, 1997 and related weighted average prices and lives as follows:
 
<TABLE>
<CAPTION>
                            OPTIONS OUTSTANDING                                      OPTIONS EXERCISABLE
---------------------------------------------------------------------------     ------------------------------
    RANGE OF
    EXERCISE          NUMBER          WEIGHTED AVERAGE     WEIGHTED AVERAGE      NUMBER       WEIGHTED AVERAGE
     PRICE            OUTSTANDING      REMAINING LIFE       EXERCISE PRICE      OF SHARES      EXERCISE PRICE
-----------------     -----------     ----------------     ----------------     ---------     ----------------
<S>                   <C>             <C>                  <C>                  <C>           <C>
  $1.33-$3.00           515,360             5.60                $ 2.46           447,683           $ 2.42
  $3.19-$5.31           181,925             6.51                $ 3.26           169,958           $ 3.23
  $7.06-$9.25           725,383             9.06                $ 7.31           383,116           $ 7.22
 $10.06-$12.25          651,148             9.10                $10.96           211,140           $10.99
</TABLE>
 
PRO FORMA DISCLOSURES
 
     The Company accounts for its stock option plans in conformity with APB 25
and has adopted the additional pro forma disclosure provisions of SFAS 123.
 
     All options were granted at an exercise price equal to the fair market
value of the Company's common stock at the date of grant. The weighted average
fair value at date of grant for options granted during 1997 and 1996 were $4.85
and $4.83 per option, respectively. The fair value of options at date of grant
was estimated using the Black-Scholes model with the following assumptions:
 
<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED
                                                                     JUNE 30
                                                               -------------------
                                                               1997           1996
                                                               ----           ----
            <S>                                                <C>            <C>
            STOCK OPTIONS:
            Expected life (years)............................     4              4
            Risk free interest rate..........................  6.32%          5.85%
            Volatility.......................................    60%            60%
            Dividend yield...................................    --             --
</TABLE>
 
     Had compensation expense for the Company's stock-based compensation plans
been determined based on the methods prescribed by SFAS No. 123, the Company's
net income and net income per common and common equivalent share would have been
as follows:
 
<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                                                                  JUNE 30
                                                         -------------------------- 
                                                            1997           1996
                                                         ----------     -----------
            <S>                                          <C>            <C>
            Net income (loss):
              As reported..............................  $1,250,000     $(3,441,000)
              Pro forma................................  $ (161,000)    $(3,813,000)
            Net income (loss) per common and common
              equivalent shares:
              As reported..............................  $     0.05     $     (0.15)
              Pro forma................................  $    (0.01)    $     (0.16)
</TABLE>
 
     Because the SFAS 123 pro forma disclosure applies only to options granted
subsequent to July 1, 1995, its pro forma effect will not be fully reflected
until subsequent years. The effects on pro forma disclosures of applying SFAS
123 are not likely to be representative of the effects on pro forma disclosures
in future years.
 
EMPLOYEE STOCK OWNERSHIP PLAN
 
     The ANADAC, Inc. Employee Stock Ownership Plan ("ESOP") enables eligible
employees of ANADAC to share in the growth of the Company through the
acquisition of common stock. The ESOP provides for the Company, at its
discretion, to make contributions of up to 10% of each participant's base
salary. The amount of compensation expense related to the ESOP is based upon the
common stock allocated
 
                                       42
<PAGE>   45
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
to participants. The Company's expense for ESOP was $158,000 in fiscal 1997,
$183,000 in fiscal 1996 and $148,000 in fiscal 1995.
 
WARRANTS
 
     Under certain private transactions authorized by the Board of Directors of
the Company from 1992 through 1994, warrants to purchase 395,160 shares of the
Company's common stock were issued at exercise prices ranging from $2.125 to
$3.75 per share. At June 30, 1997, warrants from these transactions to purchase
65,000 shares of the Company's common stock were outstanding, of which 25,000
expire in September 1997 and 40,000 expire in January 1999.
 
     On March 18, 1992, the Company issued Sundance a warrant to purchase 25,575
shares of the Company's common stock at $3.00 per share. Sundance exercised the
warrant in March 1997 (Note 6).
 
     In connection with closing the bank line of credit in December 1992, the
Company issued to the bank a warrant to purchase 30,000 shares of the Company's
common stock at $2.69 per share. The bank exercised the warrant in May 1996.
 
     Warrants to purchase 2,250,000 shares of the Company's common stock at
$3.00 per share were issued as part of a public offering in 1993. Also, as part
of the public offering, the Company issued the underwriter a warrant to purchase
45,000 units at an exercise price of $12.00 per unit, each unit consisting of
five warrants to purchase common stock and one share of series A Preferred Stock
convertible into five shares of common stock. On June 6, 1995, the Company
announced that on July 6, 1995 it would redeem, for $0.05 per warrant, all
warrants issued in the public offering not exercised by July 5, 1995. All
warrants were exercised or redeemed. As part of the warrant redemption, the
Company entered into a standby underwriting agreement whereby the underwriter
would purchase for $3.00 per share all unexercised warrants related to the
warrant redemption. Pursuant to the agreement, the underwriter purchased 3,210
of the unexercised warrants.
 
     On December 15, 1994, the Company issued warrants to purchase 250,000
shares of its common stock for $3.00 per share, expiring January 27, 1998, to an
investment banking firm and certain of its officers and employees for providing
services to the Company. The warrant holders exercised the warrants in August
1995.
 
     At June 30, 1997, warrants to purchase 65,000 shares of the Company's
common stock were outstanding.
 
NOTE 6 -- RELATED PARTY TRANSACTIONS AND CONVERTIBLE DEBT
 
     On March 18, 1992, the Company entered into a convertible promissory note
and warrant purchase agreement with Sundance. Larry J. Wells is a general
partner of Anderson and Wells Company, the general partner of Sundance. Mr.
Wells became a member of the Company's Board of Directors in May 1992. Under the
agreement, the Company received $500,000 from Sundance in exchange for a
promissory note. Interest on the note accrued at 10% and was payable quarterly.
On June 30, 1995, the Company, at its option, converted the note into 166,666
shares of the Company's common stock. As additional consideration for the note,
the Company issued Sundance a warrant to purchase 25,575 shares of the Company's
common stock at $3.00 per share (Note 5). The closing price of the Company's
common stock on March 18, 1992 was $3.50.
 
     As of June 30, 1997, Ascom USA Inc. ("Ascom") beneficially owned 5,177,824
or approximately 21.1% of the Company's outstanding common stock (the "Voting
Stock"). The Company is a party to a Voting Trust Agreement with Ascom (the
"Agreement") whereby Ascom deposited all of its shares of the Company's common
stock held by Ascom into a voting trust. The trustee of the voting trust is on
the Company's Board of Directors and has voting control of the Voting Stock. The
Voting Trust Agreement expires in 2004. In consideration for Ascom entering into
the Agreement, the Company granted Ascom certain additional registration rights
with respect to the Voting Stock, modified certain contractual transfer
 
                                       43
<PAGE>   46
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
restrictions with respect to the Voting Stock and granted Ascom price
protections regarding certain sales of Voting Stock.
 
     Patrick H. Morton is a member of the Company's Board of Directors and
presently owns 38% of Integrated Manufacturing Solutions, Inc. ("IMS"), a
manufacturer of integrated circuit boards, that provides manufacturing services
to the Company. IMS billed the Company approximately $427,000 in fiscal 1997.
Amounts outstanding to IMS at June 30, 1997 were approximately $81,000. The
Company did not do business with IMS prior to fiscal 1997.
 
NOTE 7 -- INCOME TAXES
 
     The following is a reconciliation between statutory federal income taxes
and the provision for income taxes:
 
<TABLE>
<CAPTION>
                                                                        JUNE 30,
                                                         ---------------------------------------
                                                           1997           1996           1995
                                                         ---------     -----------     ---------
<S>                                                      <C>           <C>             <C>
Tax expense (benefit) at statutory rate................  $ 438,000     $(1,204,000)    $(298,000)
State taxes net of federal benefit.....................     80,000              --            --
Release of valuation allowance.........................   (578,000)             --            --
Benefit of operating losses not recognized.............         --       1,174,000       132,000
Other..................................................     60,000          30,000        30,000
                                                         ---------     -----------     ---------
                                                         $      --     $        --     $(136,000)
                                                         ---------     -----------     ---------
</TABLE>
 
     Deferred tax assets (liabilities) comprise the following:
 
<TABLE>
<CAPTION>
                                                                             JUNE 30,
                                                                    ---------------------------
                                                                       1997            1996
                                                                    -----------     -----------
<S>                                                                 <C>             <C>
Federal and state loss and credit carryforwards...................  $ 9,200,000     $ 9,600,000
Depreciation and amortization.....................................       80,000          93,000
Inventory reserves and basis differences..........................      222,000         324,000
Compensation accruals.............................................      244,000         150,000
Accounts receivable and sales reserves............................      237,000          47,000
Other.............................................................      280,000         281,000
                                                                    -----------     -----------
Gross deferred tax assets.........................................   10,263,000      10,495,000
                                                                    -----------     -----------
Unbilled accounts receivable......................................   (1,014,000)       (520,000)
Capitalized software..............................................     (535,000)       (165,000)
Other.............................................................     (283,000)       (187,000)
                                                                    -----------     -----------
Gross deferred tax liabilities....................................   (1,832,000)       (872,000)
                                                                    -----------     -----------
Net deferred tax asset before valuation allowance.................    8,431,000       9,623,000
Deferred tax assets valuation allowance...........................   (8,431,000)     (9,623,000)
                                                                    -----------     -----------
Total net deferred tax asset......................................  $        --     $        --
                                                                    ===========     ===========
</TABLE>
 
     The deferred tax asset valuation allowance is attributed to U.S. Federal,
State and foreign deferred tax assets. Management believes sufficient
uncertainty exists regarding the realizability of these assets, such that a full
valuation allowance is required.
 
     As of June 30, 1997, the Company has a federal net operating loss
carryforwards of approximately $25.7 million for financial reporting and income
tax purposes, which is available to offset future taxable income. The
carryforwards expire on various dates through fiscal 2011. Under the Tax
Reform Act of 1986, the amounts of and the benefit from net operating losses
that can be carried forward may be impaired or
 
                                       44
<PAGE>   47
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
limited in certain circumstances, including a cumulative stock ownership change
of more than 50% over a three-year period. As a result of the public offering in
January 1993, a change of ownership occurred, causing an annual limitation on
the utilization of the net operating loss carryforwards, incurred prior to the
ownership change, of approximately $2.5 million.
 
     During fiscal 1995, the Company realized an income tax benefit of $136,000
related to the application of a loss carryback to recover taxes paid in prior
years by ANADAC.
 
NOTE 8 -- FOREIGN OPERATIONS DATA
 
     In geographical reporting, revenues are attributed to the geographical
location of the sales and service organizations, and costs directly and
indirectly incurred in generating revenues are similarly assigned. International
Bio-ID sales are distributed through Fingerscan. On March 26, 1996, the Company
acquired Fingerscan, the Company's only foreign based sales and service
organization. For fiscal 1996, Fingerscan's revenues from unaffiliated customers
and identifiable assets were less than 10% of consolidated total revenues and
total assets, respectively. In fiscal year 1995, the Company did not have any
foreign based sales and service organizations that had more than 10% of
consolidated total revenues or total assets, respectively.
 
<TABLE>
<CAPTION>
                                                          FISCAL YEAR ENDED JUNE 30, 1997
                                                          -------------------------------
            <S>                                           <C>
            Net revenues from unaffiliated customers:
              North America.............................            $43,152,000
              Asia-Pacific..............................              9,238,000
                                                                    -----------
                                                                    $52,390,000
                                                                    -----------
            Operating results:
              North America.............................            $ 2,994,000
              Asia-Pacific..............................                 30,000
              General corporate expenses................             (1,774,000)
                                                                    -----------
                                                                    $ 1,250,000
                                                                    -----------
            Identifiable assets:
              North America.............................            $26,918,000
              Asia-Pacific..............................              5,361,000
                                                                    -----------
                                                                    $32,279,000
                                                                    -----------
</TABLE>
 
     Intercompany transfers are at prices sufficient to recover a reasonable
profit. These transfers are eliminated in the consolidated financial statements.
Intercompany transfers of products from North America to other regions were
$3,814,000.
 
NOTE 9 -- COMMITMENTS
 
LEASES
 
     The Company currently occupies its headquarters and certain products
business facilities under a lease, which expires in April 2001 and is required
to pay taxes, insurance, and maintenance as well as monthly rental payments. The
Company leases office space for its services business under operating leases
expiring at various dates through 2001. The leases contain escalation provisions
requiring rental increases for increases in operating expense and real estate
taxes.
 
                                       45
<PAGE>   48
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     Future minimum lease payments for operating leases are as follows:
 
<TABLE>
                <S>                                                <C>
                Year ending June 30,
                1998.............................................  $1,675,000
                1999.............................................   1,482,000
                2000.............................................   1,364,000
                2001.............................................     923,000
                Thereafter.......................................          --
                                                                   ----------
                Total............................................  $5,444,000
                                                                   ==========
</TABLE>
 
     Total rental expense under operating leases was $1,788,000, $1,308,000 and
$1,135,000 for fiscal 1997, 1996 and 1995, respectively.
 
NOTE 10 -- CONTINGENT LIABILITIES
 
     The Company has been named as a defendant in a class action lawsuit which 
was filed in October 1996 in the United States District Court for the Northern
District of California. Certain executive officers of the Company are also named
as defendants. The plaintiff purports to represent a class of all persons who
purchased the Company's common stock between January 31, 1996 and August 26,
1996 (the "Class Period"). The complaint alleges claims under the federal
securities laws and California law. The plaintiff alleges that the Company and
certain of its executive officers made false and misleading statements regarding
the Company that caused the market price of its common stock to be "artificially
inflated" during the Class Period. The complaint does not specify the amount of
damages sought. The Company has established a reserve for the Company's estimate
of the legal expenses to seek dismissal of the lawsuit. The Company and its
officers deny the allegations and will vigorously defend this action.
 
     On May 31, 1995, Digital Biometric, Inc. ("DBI"), a competitor, filed a
lawsuit in the United States District Court in the Northern District of 
California against the Company alleging that certain of the Company's TouchPrint
products violate a DBI patent and seeking injunctive relief and unspecified
damages. The lawsuit has no implication for other Identix products. On 
August 22, 1996, the Court granted the Company's motion determining that the
TouchPrint 600 does not infringe the patent. On December 7, 1996, the Court
issued another ruling determining that the predecessor product of the TouchPrint
600, the TouchPrint 900 product, did not infringe the patent. As a result, the
Court entered judgment in favor of Identix and awarded Identix its cost of suit.
On January 7, 1997, DBI filed a Notice of Appeal and the matter is now pending
before the Federal Circuit Court of Appeals.
 
NOTE 11 -- SUBSEQUENT EVENT
 
     On July 23, 1997, pursuant to a share purchase agreement, the Company
issued 450,000 shares of the Company's common stock to acquire BA&T, a 
privately held company located in Kansas City, MO. BA&T develops and markets
biometric and "smart" card software applications and solutions and has been an
Identix software development partner. The acquisition has been accounted for as
a pooling of interests.
 
     In connection with the acquisition of BA&T, the Company incurred costs of
approximately $45,000 primarily for transaction and professional fees, before
tax.
 
                                       46
<PAGE>   49
 
                              IDENTIX INCORPORATED
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     Pro forma condensed combined statements of operations for the fiscal year 
ended June 30, 1997 and balance sheets as of June 30, 1997 are presented below.
For fiscal 1996 and 1995, the effects of the combination with BA&T were not
significant.
 
CONDENSED COMBINED BALANCE SHEETS AS OF JUNE 30,1997
 
<TABLE>
<CAPTION>
                                                                BIOMETRIC APPLICATIONS
                                                  IDENTIX           AND TECHNOLOGY           COMBINED
                                                -----------     ----------------------     -----------
<S>                                             <C>             <C>                        <C>
Assets:
Current assets................................. $26,799,000           $   66,000           $26,865,000
Property and equipment, net....................   2,472,000               95,000             2,567,000
Other noncurrent assets........................   3,008,000                   --             3,008,000
                                                -----------            ---------           -----------
                                                $32,279,000           $  161,000           $32,440,000
                                                ===========            =========           ===========
Liabilities:
Current liabilities............................ $11,044,000           $  344,000           $11,388,000
Noncurrent liabilities.........................     154,000                   --               154,000
Shareholders' equity...........................  21,081,000             (183,000)           20,898,000
                                                -----------            ---------           -----------
                                                $32,279,000           $  161,000           $32,440,000
                                                ===========            =========           ===========
</TABLE>
 
CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JUNE 30,
1997
 
<TABLE>
<S>                                             <C>             <C>                        <C>
Total revenues................................. $52,390,000           $  153,000           $52,543,000
Total costs and expenses.......................  51,139,000              854,000            51,993,000
                                                -----------            ---------           -----------
Operating income (loss)........................   1,251,000             (701,000)              550,000
Other income (expense), net....................      (1,000)             (31,000)              (32,000)
                                                -----------            ---------           -----------
Net income (loss).............................. $ 1,250,000           $ (732,000)          $   518,000
Net income per share...........................                                            $      0.02
</TABLE>
 
                                       47
<PAGE>   50
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this Item with respect to executive officers is
set forth in Part I of this Annual Report on Form 10-K and the information with
respect to the directors is incorporated by reference to the information set
forth under the caption "Election of Directors" in the proxy statement to be
used in connection with the 1997 Annual Meeting of the Shareholders (the "Proxy
Statement").
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information required by this Item is incorporated by reference to the
information set forth under the caption "Executive Compensation" in the Proxy
Statement.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this Item is incorporated by reference to the
information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this Item is incorporated by reference to the
information set forth under the caption "Certain Transactions" in the Proxy
Statement.
 
                                       48
<PAGE>   51
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
<TABLE>
    <S>   <C>                                                                              <C>
    (a)1  FINANCIAL STATEMENTS.
          The information required by this Item appears in Item 8 of this Annual Report
          on Form 10-K
          Report of Independent Accountants............................................      28
          Consolidated Balance Sheets..................................................      29
          Consolidated Statements of Operations........................................      30
          Consolidated Statements of Shareholders' Equity..............................      31
          Consolidated Statements of Cash Flows........................................      32
          Notes to Consolidated Financial Statements...................................      34
 
    (a)2  FINANCIAL STATEMENTS SCHEDULES.
 
          Schedule II     Valuation and Qualifying Accounts and Reserves
 
    (a)3  EXHIBITS.
           3.1 (2)      Registrant's Amended and Restated Articles of Incorporation, as
                        amended
           3.2 (2)      Registrant's Bylaws, as amended
          10.1 (1)      Identix's 1983 Incentive Stock Option Plan and forms of Incentive
                        Stock Option Agreement and Non-Statutory Stock Option Agreement
          10.2 (2)      Stock Option Agreement dated March 13, 1989 between Identix and Ascom
                        Hasler AG, as amended by Amendment Number 1 thereto dated April 20,
                        1989 and Amendment Number 2 thereto dated August 8, 1989
          10.3 (3)      Stock Purchase Agreement dated July 24, 1990 between Identix and Ascom
                        Hasler AG
          10.4 (4)      Stock Purchase Agreement and Amendment Number 3 to Stock Option
                        Agreement dated December 14, 1990 between Identix and Ascom Hasler AG
          10.5 (5)      Loan Agreement and Amendment Number 4 to Stock Option Agreement dated
                        December 12, 1991 between Identix and Ascom Hasler AG
          10.6 (5)      Convertible Promissory Note and Warrant Purchase Agreement dated March
                        18, 1992, and amended July 29, 1992 between Identix and Sundance
                        Venture Partners, L.P.
          10.7 (5)      Amended and Restated Agreement and Plan of Reorganization and Merger
                        Among Identix Incorporated, ANADAC, Inc. and Identix Acquisition
                        Corporation, dated August 27, 1992
          10.8 (2)      Registrant's 1992 Employee Stock Option Plan and forms of Incentive
                        Stock Option Agreement and Nonqualified Stock Option Agreement
          10.9 (2)      Loan Agreement dated October 30, 1992 between Identix and Ascom Hasler
                        AG
          10.10(2)      Loan and Security Agreement dated January 9, 1991 among Crestar Bank,
                        Defense Systems Concepts, Inc. and ANADAC, as amended August 5, 1992
                        and October 23, 1992
          10.11(2)      ANADAC 1984 Incentive Stock Option Plan and forms of Incentive Stock
                        Option Agreement and Nonstatutory Stock Option Agreement
          10.12(6)      Voting Trust Agreement with Respect to Capital Stock of Identix
                        Incorporated among Identix Incorporated, William E. Colby, and Ascom
                        Holding Inc. dated as of September 2, 1994
</TABLE>
 
                                       49
<PAGE>   52
 
<TABLE>
    <S>   <C>           <C>
          10.13 (6)     Amendment No. 5 to Stock Option Agreement among Identix Incorporated,
                        Ascom Hasler, Ltd., and Ascom Holding Inc. dated as of September 2,
                        1994
          10.14 (6)     Amendment to Registration Rights Agreement among Identix Incorporated,
                        Ascom Hasler, Ltd., and Ascom Holding Inc. dated as of September 2,
                        1994
          10.15 (7)     Office Building Lease dated May 18, 1995, between ANADAC, Inc. and
                        Charles Smith Management, Inc.
          10.16 (8)     Office Building Lease dated April 1, 1995 between ANADAC, Inc., and
                        U.S. AIR, Inc.
          10.17 (8)     Office Building Lease dated July 27, 1995 between ANADAC, Inc., and
                        Third Gould Limited Liability Company
          10.18 (8)     Registrant's 1995 Equity Incentive Plan
          10.19 (8)     Registrant's 1995 Nonemployee Directors Stock Option Plan
          10.20 (8)     Letter Agreement dated July 28, 1995 between Identix and Ascom Holding
                        Inc.
          10.21 (9)     AEGIS Combat Ship Building Contract Program
          10.22(10)     The fourth Amendment to Lease Agreement Dated June 15, 1988 for the
                        Company's corporate offices and manufacturing facility.
          10.23(10)     Security and Loan Agreement between the Company and Imperial Bank
                        dated October 4, 1996.
          10.24(11)     December 1996 Amendment to Loan and Security Agreement between ANADAC,
                        a wholly owned subsidiary of the Company, and Crester Bank dated
                        December 2, 1996.
          10.25(11)     Amended and Restated Revolving Note Agreement between ANADAC, a wholly
                        owned subsidiary of the Company, and Crestar Bank dated December 2,
                        1996.
          11.1          Statement of Computation of Earnings Per Share
          23.1          Consent of Price Waterhouse LLP, Independent Accountants
          24.1          Power of Attorney
          27.1          Financial Data Schedule
</TABLE>
 
---------------
 
<TABLE>
    <S>   <C>      <C>
                   Incorporated by reference to registrant's registration statement no.
           (1)     29-95551.
                   Incorporated by reference to registrant's registration statement no.
           (2)     33-55074.
           (3)     Incorporated by reference to the July 24, 1990 Form 8-K.
           (4)     Incorporated by reference to the December 14, 1990 Form 8-K.
           (5)     Incorporated by reference to the June 30, 1992 Form 10-K.
           (6)     Incorporated by reference to the September 30, 1994 Form 10-Q.
           (7)     Incorporated by reference to the March 31, 1995 Form 10-Q.
           (8)     Incorporated by reference to the June 30, 1995 Form 10-K.
           (9)     Incorporated by reference to the September 30, 1995 Form 10-Q.
          (10)     Incorporated by reference to the September 30, 1996 Form 10-Q.
          (11)     Incorporated by reference to the December 31, 1996 Form 10-Q.
    (b)   REPORTS ON FORM 8-K:
          No reports on Form 8-K were filed by the Company during the three months ended June
          30, 1997.
</TABLE>
 
                                       50
<PAGE>   53
 
                              IDENTIX INCORPORATED
 
                                  SCHEDULE II
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
 
<TABLE>
<CAPTION>
                                               BALANCE AT     ADDITIONS
                                               BEGINNING      CHARGED TO                     BALANCE AT
                 DESCRIPTION                   OF PERIOD       EXPENSE       DEDUCTIONS     END OF PERIOD
---------------------------------------------  ----------     ----------     ----------     -------------
<S>                                            <C>            <C>            <C>            <C>
Inventory Reserve:
Year ended June 30, 1995.....................   $ 147,000      $ 95,000       $     --        $ 242,000
                                                 ========      ========       ========         ========
Year ended June 30, 1996.....................   $ 242,000      $177,000       $ 75,000        $ 344,000
                                                 ========      ========       ========         ========
Year ended June 30, 1997.....................   $ 344,000      $284,000       $ 65,000        $ 563,000
                                                 ========      ========       ========         ========
Allowance for Doubtful Accounts:
Year ended June 30, 1995.....................   $ 519,000      $  5,000       $177,000        $ 347,000
                                                 ========      ========       ========         ========
Year ended June 30, 1996.....................   $ 347,000      $238,000       $ 97,000        $ 488,000
                                                 ========      ========       ========         ========
Year ended June 30, 1997.....................   $ 488,000      $500,000       $363,000        $ 625,000
                                                 ========      ========       ========         ========
</TABLE>
 
                                       51
<PAGE>   54
 
                                   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 California, has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Sunnyvale, State of California, on the 22nd day of
September 1997.
 
                                          IDENTIX INCORPORATED
 
                                          By:     /s/ RANDALL C. FOWLER
 
                                            ------------------------------------
                                            Randall C. Fowler, President,
                                            Chief Executive Officer and Director
 
                               POWER OF ATTORNEY
 
     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Randall C. Fowler and James P. Scullion,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Annual Report on Form 10-K and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
 
<TABLE>
<S>                                           <C>                           <C>
          /s/ RANDALL C. FOWLER               President, Chief Executive
------------------------------------------    Officer and Director
            Randall C. Fowler                 (Principal Executive
                                              Officer)                      September 22, 1997
 
          /s/ JAMES P. SCULLION               Executive Vice President,
------------------------------------------    Chief Financial Officer and
            James P. Scullion                 Secretary (Principal
                                              Financial and Accounting
                                              Officer)                      September 22, 1997
 
          /s/ RANDALL HAWKS, JR.              Director
------------------------------------------
            Randall Hawks, Jr.                                              September 22, 1997
 
          /s/ PATRICK H. MORTON               Director
------------------------------------------
            Patrick H. Morton                                               September 22, 1997
 
            /s/ FRED U. SUTTER                Director
------------------------------------------
              Fred U. Sutter                                                September 22, 1997
 
         /s/ HARRISON N. WALTHER              Director
------------------------------------------
           Harrison N. Walther                                              September 22, 1997
 
            /s/ LARRY J. WELLS                Director
------------------------------------------
              Larry J. Wells                                                September 22, 1997
 
              /s/ ED ZSCHAU                   Director
------------------------------------------
                Ed Zschau                                                   September 22, 1997
</TABLE>
 
                                       52
<PAGE>   55
 
                              IDENTIX INCORPORATED
 
                             1996 FORM 10-K REPORT
 
<TABLE>
<CAPTION>
                                                                                     SEQUENTIALLY
 EXHIBIT                                                                               NUMBERED
   NO.                                    DESCRIPTION                                   PAGES
----------  -----------------------------------------------------------------------  ------------
<S>         <C>                                                                      <C>
 3.1 (2)    Registrant's Amended and Restated Articles of Incorporation, as
            amended................................................................       --
 3.2 (2)    Registrant's Bylaws, as amended........................................       --
10.1 (1)    Identix's 1983 Incentive Stock Option Plan and forms of Incentive Stock
            Option Agreement and Non-Statutory Stock Option Agreement..............       --
10.2 (2)    Stock Option Agreement dated March 13, 1989 between Identix and Ascom
            Hasler AG, as amended by Amendment Number 1 thereto dated April 20,
            1989 and Amendment Number 2 thereto dated August 8, 1989...............       --
10.3 (3)    Stock Purchase Agreement dated July 24, 1990 between Identix and Ascom
            Hasler AG..............................................................       --
10.4 (4)    Stock Purchase Agreement and Amendment Number 3 to Stock Option
            Agreement dated December 14, 1990 between Identix and Ascom Hasler
            AG.....................................................................       --
10.5 (5)    Loan Agreement and Amendment Number 4 to Stock Option Agreement dated
            December 12, 1991 between Identix and Ascom Hasler AG..................       --
10.6 (5)    Convertible Promissory Note and Warrant Purchase Agreement dated March
            18, 1992, and amended July 29, 1992 between Identix and Sundance
            Venture Partners, L.P..................................................       --
10.7 (5)    Amended and Restated Agreement and Plan of Reorganization and Merger
            Among Identix Incorporated, ANADAC, Inc. and Identix Acquisition
            Corporation, dated August 27,1992......................................       --
10.8 (2)    Registrant's 1992 Employee Stock Option Plan and forms of Incentive
            Stock Option Agreement and Nonqualified Stock Option Agreement.........       --
10.9 (2)    Loan Agreement dated October 30, 1992 between Identix and Ascom Hasler
            AG.....................................................................       --
10.10(2)    Loan and Security Agreement dated January 9, 1991 among Crestar Bank,
            Defense Systems Concepts, Inc. and ANADAC, as amended August 5, 1992
            and October 23, 1992...................................................       --
10.11(2)    ANADAC 1984 Incentive Stock Option Plan and forms of Incentive Stock
            Option Agreement and Nonstatutory Stock Option Agreement...............       --
10.12(6)    Voting Trust Agreement with Respect to Capital Stock of Identix
            Incorporated among Identix Incorporated, William E. Colby, and Ascom
            Holding Inc. dated as of September 2,1994..............................       --
10.13(6)    Amendment No. 5 to Stock Option Agreement among Identix Incorporated,
            Ascom Hasler, Ltd., and Ascom Holding Inc. dated as of September 2,
            1994...................................................................       --
10.14(6)    Amendment to Registration Rights Agreement among Identix Incorporated,
            Ascom Hasler, Ltd., and Ascom Holding Inc. dated as of September 2,
            1994...................................................................       --
10.15(7)    Office Building Lease dated May 18, 1995, between ANADAC, Inc. and
            Charles Smith Management,Inc...........................................       --
10.16(8)    Office Building Lease dated April 1, 1995 between ANADAC, Inc., and
            U.S. AIR, Inc..........................................................       --
10.17(8)    Office Building Lease dated July 27, 1995 between ANADAC, Inc., and
            Third Gould Limited Liability Company..................................       --
10.18(8)    Registrant's 1995 Equity Incentive Plan................................       --
10.19(8)    Registrant's 1995 Nonemployee Directors Stock Option Plan..............       --
</TABLE>
<PAGE>   56
 
<TABLE>
<CAPTION>
                                                                                     SEQUENTIALLY
 EXHIBIT                                                                               NUMBERED
   NO.                                    DESCRIPTION                                   PAGES
----------  -----------------------------------------------------------------------  ------------
<S>         <C>                                                                      <C>
10.20 (8)   Letter Agreement dated July 28, 1995 between Identix and Ascom Holding
            Inc....................................................................       --
10.21 (9)   AEGIS Combat Ship Building Contract Program............................       --
10.22(10)   The fourth Amendment to Lease Agreement Dated June 15, 1988 for the
            Company's corporate offices and manufacturing facility.................       --
10.23(10)   Security and Loan Agreement between the Company and Imperial Bank dated
            October 4, 1996........................................................       --
10.24(11)   December 1996 Amendment to Loan and Security Agreement between ANADAC,
            a wholly owned subsidiary of the Company, and Crester Bank dated
            December 2, 1996.......................................................       --
10.25(11)   Amended and Restated Revolving Note Agreement between ANADAC, a wholly
            owned subsidiary of the Company, and CrestarBank dated December 2,
            1996...................................................................       --
11.1        Statement of Computation of Earnings Per Share.........................       --
23.1        Consent of Price Waterhouse LLP, Independent Accountants...............       --
24.1        Power of Attorney......................................................       --
27.1        Financial Data Schedule................................................       --
</TABLE>
 
---------------
 
 (1) Incorporated by reference to registrant's registration statement no.
29-95551.
 
 (2) Incorporated by reference to registrant's registration statement no.
33-55074.
 
 (3) Incorporated by reference to the July 24, 1990 Form 8-K.
 
 (4) Incorporated by reference to the December 14, 1990 Form 8-K.
 
 (5) Incorporated by reference to the June 30, 1992 Form 10-K.
 
 (6) Incorporated by reference to the September 30, 1994 Form 10-Q.
 
 (7) Incorporated by reference to the March 31, 1995 Form 10-Q.
 
 (8) Incorporated by reference to the June 30, 1995 Form 10-K.
 
 (9) Incorporated by reference to the September 30, 1995 Form 10-Q.
 
(10) Incorporated by reference to the September 30, 1996 Form 10-Q.
 
(11) Incorporated by reference to the December 31, 1996 Form 10-Q.