<PAGE>

                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

(Mark One)

X      Quarterly report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934 for the quarterly period ended September 30, 1999

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    000-26696
                          ---------


                           BIOMETRIC SECURITY CORP.
                           ------------------------
            (Exact Name of Registrant as Specified in its Charter)


                  Wyoming                              98-0204725
                  -------                              ----------
       State or other jurisdiction of              (I.R.S. Employer
       incorporation or organization               Identification No.)

Suite 1940, 400 Burrard Street, Vancouver, British Columbia, Canada  V6C 3A6
-------------------------------------------------------------------  -------
(Address of Principal Executive Offices)                             (Zip Code)

Registrant's telephone number, including area code   (604) 687-4144
                                                     --------------

     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 and 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 [_]


               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS


     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

     Not Applicable

                   APPLICABLE ONLY TO CORPORATE REGISTRANTS

     The number of outstanding shares of the Registrant's common stock on
October 29, 1999 was 58,124,208

                                       1
<PAGE>

CURRENCY AND EXCHANGE RATES
---------------------------

     All dollar amounts set forth in this report are in Canadian dollars, except
where otherwise indicated. The following table sets forth (i) the rates of
exchange for the Canadian dollar, expressed in U.S. dollars, in effect at the
end of each of the periods indicated; (ii) the average of the exchange rates in
effect on the last day of each month during such periods; (iii) the high and low
exchange rate during such periods, in each case based on the noon buying rate in
New York City for cable transfers in Canadian dollars as certified for customs
purposes by the Federal Reserve Bank of New York.

<TABLE>
<CAPTION>
                                             Years ending December 31,
                                Nine
                               months      1998       1997       1996       1995
                                ended    ---------  ---------  ---------  --------
                               9/30/99

----------------------------------------------------------------------------------
<S>                           <C>        <C>        <C>        <C>        <C>
Rate at end of Period           $0.6805    $0.6504    $0.6999    $0.7301   $0.7323
----------------------------------------------------------------------------------
Average Rate During Period      $0.6710     0.6740     0.7197     0.7333    0.7285
----------------------------------------------------------------------------------
High Rate                       $0.6891     0.7105     0.7487     0.7513    0.7527
----------------------------------------------------------------------------------
Low Rate                        $0.6535     0.6341     0.6945     0.7245    0.7023
----------------------------------------------------------------------------------
</TABLE>

     On November 2, 1999 the noon buying rate in New York City for cable
transfer in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank of New York was $0.6807 U.S. = $1.00 Canadian.

     Forward-Looking Statements
     --------------------------
     Certain of the information contained in this Form 10-Q constitutes
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and other applicable laws or regulatory policies.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. Although the Company has attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that can cause actual results not to be as anticipated,
estimated or intended. There can be no assurance that such statements will prove
to be accurate as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements.

                                       2
<PAGE>

                               TABLE OF CONTENTS


PART I             FINANCIAL INFORMATION

Item 1  Financial Statements

        Consolidated Balance Sheets as at September 30, 1999, December 31, 1998
          and September 30, 1998
        Consolidated Statements of Operations and Deficit for the Three Month
          and Nine Month periods ended September 30, 1999 and 1998
        Consolidated Statements of Cash Flows for Nine Month period ended
          September 30, 1999 and 1998
        Notes to Consolidated Financial Statements

Item 2  Management's Discussion and Analysis of Financial Condition and
        Results of Operations

Item 3  Quantitative and Qualitative Disclosures about Market Risk


PART II            OTHER INFORMATION

Item 1  Legal Proceedings

Item 2  Changes in Securities and Use of Proceeds

Item 3  Defaults upon Senior Securities

Item 4  Submission of Matters to a Vote of Security Holders

Item 5  Other Information

Item 6  Exhibits and Reports on Form 8-K

Signatures

                                       3
<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1    FINANCIAL STATEMENTS


BIOMETRIC SECURITY CORP.
CONSOLIDATED BALANCE SHEET
(Expressed in Canadian Dollars)
(unaudited)


<TABLE>
<CAPTION>
===========================================================================================================
<S>                                                  <C>               <C>                <C>
                                                      September 30,    December 31,       September 30,
                                                          1999             1998               1998
                                                                         Restated           Restated
                                                                         (Note 5)           (Note 5)
===========================================================================================================
ASSETS

CURRENT ASSETS
   Cash                                                $    65,563       $   245,182      $    362,198
   Accounts receivable                                      20,228            55,076           178,743
   Prepaid expenses and deposits                            11,782             9,257             5,906
-----------------------------------------------------------------------------------------------------------
                                                            97,573           309,515           546,847

Equipment and leasehold improvements                        68,216            60,758            71,422
Investment (Note 5)                                      3,206,491         2,196,355         2,282,731
-----------------------------------------------------------------------------------------------------------

                                                      $  3,372,280      $  2,566,628      $  2,901,000
===========================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                   $    592,117      $    148,262      $    167,661
   Loan payable                                                  -           150,775                 -
 ----------------------------------------------------------------------------------------------------------
                                                           592,117           299,037           167,661

CONTINGENT LIABILITY (Notes 2 and 8(b))                    657,052                 -                 -

SHAREHOLDERS' EQUITY
   Share capital (Note 2)                               18,066,406        13,128,263        12,992,076
   Shares subscribed                                             -           660,592                 -
Deficit                                                (15,943,295)      (11,521,264)      (10,258,737)
-----------------------------------------------------------------------------------------------------------
                                                         2,123,111         2,267,591         2,733,339
-----------------------------------------------------------------------------------------------------------

                                                      $  3,372,280      $  2,566,628      $  2,901,000
============================================================================================================
</TABLE>

On Behalf of the Board of Directors


/s/ Robert Chase                               /s/ Wayne Johnstone
----------------------                         ----------------------
Director                                       Director

<PAGE>

BIOMETRIC SECURITY CORP.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(Expressed in Canadian Dollars)
(unaudited)


<TABLE>
<CAPTION>
========================================================================================================================
                                                       For the Three Months Ended          For the Nine Months Ended
                                                    September 30,     September 30,     September 30,     September 30,
                                                        1999              1998              1999              1998
========================================================================================================================
<S>                                              <C>               <C>               <C>               <C>
REVENUE
   Interest (Note 5)                               $        449      $     10,253      $      4,688      $     75,856
------------------------------------------------------------------------------------------------------------------------
EXPENSES
   Professional fees and registration costs             349,150           205,251           881,418           451,364
   Business consultants                                  66,200            28,856           163,594            52,456
   Amortization                                           2,785            (3,029)            7,687             6,398
   Finder's fee (Note 5)                                 53,667            21,467           114,850            75,135
   Foreign exchange                                          20            13,233             1,266               879
   Interest and bank charges                                167               484             1,362             1,171
   Management fees                                       32,100            29,009            96,300            89,009
   Office expenses                                       15,626            62,631            84,230            99,365
   Listing costs                                         15,929            15,770            58,263            51,340
   Salaries, wages and administration                    16,049            24,408            65,375            62,079
   Travel and accommodation                              32,188            25,890           124,503            83,960
------------------------------------------------------------------------------------------------------------------------
                                                        583,881           423,970         1,598,848           973,156
------------------------------------------------------------------------------------------------------------------------
                                                       (583,432)         (413,717)       (1,594,160)         (897,300)

SHARE OF LOSS OF BII                                 (1,432,699)         (304,769)       (3,003,074)         (304,769)
RECOVERY (WRITE-OFF) OF
RESOURCE PROPERTIES                                      10,348           185,339           175,203        (4,620,138)
LOSS ON DISPOSAL OF ASSETS                                    -           (12,240)                            (39,827)
------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD                              (2,005,783)         (545,387)       (4,422,031)       (5,862,034)

DEFICIT, BEGINNING OF PERIOD                        (13,937,512)       (9,713,350)      (11,521,264)       (4,396,703)
------------------------------------------------------------------------------------------------------------------------

DEFICIT, END OF PERIOD                             $(15,943,295)     $(10,258,737)     $(15,943,295)     $(10,258,737)
========================================================================================================================

LOSS PER SHARE                                     $      (0.05)     $      (0.03)     $      (0.10)     $      (0.32)
========================================================================================================================
</TABLE>

<PAGE>

BIOMETRIC SECURITY CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(unaudited)


<TABLE>
<CAPTION>
=========================================================================================================
                                                                        1999                 1998
=========================================================================================================
<S>                                                               <C>                   <C>
OPERATIONS
 Loss for the period                                               $    (4,422,031)       $  (5,862,034)
 Items not involving cash:
   Depreciation                                                              7,687                6,398
   Loss on disposal of assets                                                    -               39,827
   (Gain) Write-off of mineral properties                                 (175,203)           4,620,138
   Changes in non-cash working capital items                               476,178             (274,839)
   Share of losses of BII                                                3,003,074              304,769
   Non-cash fees                                                           114,850               75,135
----------------------------------------------------------------------------------------------------------

                                                                          (995,445)          (1,090,606)
----------------------------------------------------------------------------------------------------------

FINANCING
   Issue of common shares, net                                           4,819,753              529,250
   Repayment of loan                                                      (150,775)                -
----------------------------------------------------------------------------------------------------------
                                                                         4,668,978              529,250
----------------------------------------------------------------------------------------------------------
INVESTMENTS
   Capital assets                                                          (15,145)             (20,945)
   Mineral properties                                                      175,203               50,378
   Proceeds on disposal of fixed assets                                          -              151,511
   Increase in investment (Note 5)                                      (4,013,210)          (2,587,500)
----------------------------------------------------------------------------------------------------------
                                                                        (3,853,152)          (2,406,556)
----------------------------------------------------------------------------------------------------------
CHANGE IN CASH                                                            (179,619)          (2,967,912)

CASH, BEGINNING OF PERIOD                                                  245,182            3,330,110
----------------------------------------------------------------------------------------------------------

CASH, END OF PERIOD                                                $        65,563        $     362,198
==========================================================================================================
</TABLE>


<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)
================================================================================
1.  CONTINUING OPERATIONS

    These financial statements have been prepared in accordance with accounting
    principles applicable to a going concern, which assumes that the Company
    will realize its assets and discharge its liabilities in the ordinary course
    of business. At September 30, 1999 the Company has a working capital
    deficiency of approximately $495,000. The ability of the Company to settle
    its liabilities as they come due and to fund its commitments and ongoing
    operations is dependent upon the ability of the company to obtain additional
    equity financing. The recoverability of the Company's investment in BII is
    dependent upon the establishment of profitable commercial operations in BII,
    the ability of the Company to obtain additional debt or equity financing to
    fund BII or the proceeds from the disposition of the Company's interest in
    BII.

2.  SHARE CAPITAL
    a) Authorized: Unlimited (1998 - 100,000,000) common shares without par
       value.
    b) Issued:

<TABLE>
<CAPTION>
                                                                Shares           Amount
---------------------------------------------------------------------------------------------
<S>                                                          <C>              <C>
    Balance, December 31, 1997                                  16,448,962     $  12,387,691

    Issued during the year for cash by way of:
      Private placements                                         4,035,000           605,250
      Exercise of options                                          100,000            23,000
    Issued during the year for finder's fee                        250,450            75,135
---------------------------------------------------------------------------------------------
                                                                20,834,412        13,091,076
    Allotted during the year for:
      Finder's fee (Note 5)                                         82,292            24,687
      Carrying charges (Note 6)                                     65,789            12,500
---------------------------------------------------------------------------------------------
    Balance, December 31, 1998                                  20,982,493        13,128,263

    Issued during the period for cash by way of:
      Private placements                                        11,666,666         1,750,000
      Exercise of warrants                                         100,000            15,000
---------------------------------------------------------------------------------------------
                                                                32,749,159        14,893,263
    Issued during the period for cash by way of:
      Private placement                                         11,666,665         1,750,000
      Exercise of warrants                                       2,885,551           462,833
---------------------------------------------------------------------------------------------
                                                                47,301,375        17,106,096

    Issued during the period for finder's fee (Note 5)             382,833           114,850
    Issued during the period for cash by way of:
      Private placement                                         10,000,000         2,000,000
      Exercise of warrants                                         235,000            39,950
    Less: share issue costs                                              -          (537,438)
---------------------------------------------------------------------------------------------
                                                                57,919,208        18,723,458
    Less: contingent liability (Note 8)                         (3,285,260)         (657,052)
---------------------------------------------------------------------------------------------
    Balance, September 30, 1999                                 54,633,948       $18,066,406
=============================================================================================
</TABLE>


<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)
================================================================================

2.   SHARE CAPITAL  (continued)

     c)   Private Placements

     During the three month period ended March 31, 1999 the Company completed
     brokered and non-brokered private placements that totalled 11,666,666 units
     at $0.15 per unit for gross proceeds of $1,750,000. Each unit consisted of
     one common share and one non-transferable share purchase warrant
     exercisable at $0.15 per share in the first year and $0.17 per share in the
     second year. The agent for the brokered private placement was paid a
     commission totaling $100,000 and 1,000,000 broker warrants exercisable at
     $0.15 per share in the first year and $0.17 per share in the second year.

     During the three month period ended June 30, 1999 the Company completed a
     brokered private placement of 11,666,665 units at $0.15 per unit to raise
     gross proceeds of up to $1,750,000. Each unit consisted of one common share
     and one non-transferable share purchase warrant exercisable at $0.15 per
     share in the first year and $0.17 per share in the second year. The agent
     was paid a commission totaling $160,000, payable in cash, and 1,600,000
     broker warrants exercisable at $0.15 per share in the first year and $0.17
     per share in the second year.

     During the three month period ended September 30, 1999 the Company
     completed a brokered private placement of 10,000,000 units at $0.20 per
     unit to raise gross proceeds of up to $2,000,000. Each unit consisted of
     one common share and one non-transferable share purchase warrant
     exercisable at $0.20 per share in the first year and $0.23 per share in the
     second year. The agent was paid a commission totaling $186,000, payable in
     cash, and 1,500,000 broker warrants exercisable at $0.20 per share in the
     first year and $0.23 per share in the second year.

     d)   At September 30, 1999 the company reserved in respect of options and
          warrants:

          Options:

<TABLE>
<CAPTION>
          Number of Shares        Exercise Price           Expiry Date
          ----------------        --------------           -----------
<S>                               <C>                      <C>

                   750,000           $    0.22             April 16, 2001
                 1,180,000           $    0.23             January 28, 2001
                    50,000           $    0.32             July 6, 2000
                   100,000           $    0.20             August 28, 2000
          ----------------
                 2,080,000
          ================
</TABLE>


<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)

================================================================================
          Warrants:

<TABLE>
<CAPTION>
          Number of Shares        Exercise Price           Expiry Date
          ----------------        --------------           -----------

<S>                               <C>                      <C>
                  1,745,000            $  0.17             March 31, 2000
                    455,000            $  0.17             September 10, 2000
                 11,281,115            $  0.15             January 29, 2000
                                                           January 29, 2001
                 13,266,665            $  0.15             April 15, 2000
                                       $  0.17             April 15, 2001
                 11,500,000            $  0.15             July 22, 2000
                                       $  0.17             July 22, 2001
       -----------------------
                 38,247,780
       =======================
</TABLE>

3.    RELATED PARTY TRANSACTIONS

      Fees of $227,189 (1998--$117,759) were charged by directors or companies
      affiliated with them for management, consulting and administrative
      services.

4.    DIRECTORS

      Mr. R. Kamm
      Mr. R. Chase
      Mr. W. Rand
      Mr. C. Idziszek
      Mr. W. Johnstone

5.    INVESTMENT

<TABLE>
<CAPTION>
                                                                    September         September
                                                                       1999              1998
                                                              -----------------------------------
 <S>                                                             <C>               <C>
      Investment, at cost...                                     $   7,484,565     $    2,587,500
      Share of losses of BII                                        (4,278,074)          (304,769)
       ---------------------------------------------------------------------------------------------
                                                                 $   3,206,491     $    2,282,731
====================================================================================================
</TABLE>
      During 1998 the company entered into an agreement to purchase convertible
      debentures entitling the Company to acquire a 45% interest in Biometric
      Identification Inc. ("BII"), subject to dilution by a 15% stock option
      plan that is to be instituted by BII and subsequent financings by BII.
      Financings completed after the Company acquired the US $5,000,000 of
      debentures of BII would further dilute the Company's interest. BII is in
      need of additional funding and is seeking significant financings from
      other parties. Should BII be successful in raising the additional funds
      the Company's interest in BII could be reduced to approximately 20%. BII
      is a private California-based company in the business of

<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)

================================================================================

5.   INVESTMENT (continued)

     developing, manufacturing and marketing fingerprint recognition technology.
     Under the terms of the agreement, the company had the right to acquire up
     to US $5,000,000 of convertible debentures to be issued by BII. The
     debentures have a term of five years from the date of the closing of the
     first acquisition and bear interest at the lowest interest rate imputed
     under the U.S. Internal Revenue Code. During the three month period ended
     September 30, 1999 the Company completed its acquisition of BII debentures
     totaling US $5,000,000 in accordance with the terms of the agreement. This
     investment was initiated by a related party which assigned its interest to
     the Company in exchange for a fee up to US $145,000, plus reimbursement of
     its expenses. The related party elected to take this fee in the form of
     715,575 common shares as a deemed price of $0.30 per share. These shares
     were issued in pro-rata tranches on the same basis the debentures were
     purchased by the Company.

     During the third quarter of 1999, the Company determined that it had the
     ability to exercise significant influence over the operating, financing and
     investing activities of BII. In addition, the Company determined that the
     investment in convertible debentures could be considered to be similar in
     nature to an equity investment in BII. As a result of these two factors,
     the Company changed the method of accounting for its investment in BII from
     the fair value method, as an available-for-sale investment, to the equity
     method, effective in 1999. In accordance with U.S. Accounting Principles
     Board Opinion No. 18 "The Equity Method of Accounting for Investments in
     Common Stock", the Company's financial statements for 1998 have been
     restated to reflect this change.

     Under the equity method, the cost of the investment is adjusted for the
     company's share of post-acquisition earnings or losses of BII, as if the
     Company had converted its BII debentures into shares of BII at the time of
     each acquisition. The excess of the cost of its investment over the
     Company's share of the net assets of BII, which has been allocated by the
     Company to BII's technology rights, is being amortized on a straight-line
     basis over five years. The Company has recorded $3,003,074 as its share of
     the loss of BII for the nine months ended September 30, 1999, and
     $1,275,000 as its share of the loss of BII for the period ended December
     31, 1998 and $304,769 as its share of the loss of BII for the period ended
     September 30, 1998. In addition, previously reported foreign exchange
     losses of $178,069 at June 30, 1999 and gains of $85,875 as at December 31,
     1998 and $9,000 as at September 30, 1998 and a deferred exchange gain of
     $81,000 as at September 30, 1998 related to this investment have been
     reversed, and accrued interest income of $55,922 as at June 30, 1999 and
     $79,989 as at December 31, 1998 have been eliminated in connection with
     this change. The overall result of this change was to reduce investment as
     at June 30, 1999 by $2,889,092 and as at December 31, 1998 by $1,440,864
     and as at September 30, 1998 by $394,769, increase loss for the six months
     ended June 30, 1999 by $1,448,228, or $0.04 per share and for the year
     ended December 31, 1998 by $1,440,864, or $0.08 per share and for the nine
     months ended September 30, 1998 by $313,769 or $0.01 per share and increase
     deficit as at June 30, 1999 by $2,889,092 and as at December 31, 1998 by
     $1,440,864 and as at September 30, 1998 by $313,769.

<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)

================================================================================
6.   LOAN PAYABLE

     During 1998, a company affiliated with a director loaned the Company a
     total of $250,000. The loan was unsecured, non-interest bearing and was due
     on December 26, 1998. A total of $99,225 of the loan was repaid on December
     29, 1998, and the balance of the loan of $150,775 was repaid subsequent to
     December 31, 1998. The Company issued 65,789 shares at a deemed price of
     $0.19 per share as allowed for under the rules of the Vancouver Stock
     Exchange, as consideration for the loan.

7.   MINERAL PROPERTIES

     During the year ended December 31, 1998 the Company changed its principal
     business activity from mineral exploration to the development of
     fingerprint identification systems and wrote-off its mineral exploration
     expenditures.

<TABLE>
<CAPTION>
                                                                 1999                   1998
==================================================================================================
<S>                                                      <C>                   <C>
ACQUISITION COSTS                                         $      -               $      -
---------------------------------------------------------------------------------------------------
EXPLORATION AND DEVELOPMENT
EXPENDITURES
   Access costs                                                  -                       772
   Assays                                                        -                     2,882
   Communication                                                 -                       332
   Contract drilling, excavation and trenching                   -                      -
   Contract labour and supervision                               -                     3,289
   Data acquisition and analysis                                 -                     1,537
   Equipment and field supplies                                  -                     5,417
   Field administration                                          -                    16,895
   Field car rental and transportation                           -                     3,499
   Geological and geophysical                                    -                    69,281
   Insurance                                                     -                     5,762
   Legal and other                                               -                    23,936
   Travel and accommodation                                      -                     1,359
---------------------------------------------------------------------------------------------------

                                                                 -                   134,961
---------------------------------------------------------------------------------------------------

                                                                 -                   134,961

MINERAL PROPERTIES, BEGINNING OF PERIOD                          -                 4,670,516
---------------------------------------------------------------------------------------------------

                                                                 -                 4,805,477

LESS:  AMOUNTS WRTTEN-OFF                                        -                (4,805,477)
---------------------------------------------------------------------------------------------------

MINERAL PROPERTIES, END OF PERIOD                         $      -               $      -
===================================================================================================
</TABLE>

<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)

     The Company continues to hold several Argentine properties and has entered
     into an agreement to grant Inlet Resources Ltd. ("Inlet) an option to
     purchase up to a 100% interest in these properties. Under the terms of the
     agreement, the Company granted Inlet an option to purchase up to 90% of the
     properties, over a three year period, with a buyout of the remaining 10%
     for US $2,000,000. During the first year the agreement required Inlet to
     pay the Company US $150,000 in stages, issue the Company 100,000 shares and
     complete a US $650,000 work program to earn a 50% interest in the
     properties. During the second and third years the agreement provides that
     Inlet will pay the Company a total of US $600,000 in stages, issue 200,000
     shares and complete work commitments totalling US $1,500,000 to earn an
     additional 40% interest in the properties. To September 30, 1999 the
     Company had received US $150,000 and 100,000 shares relating to the option
     agreement.

8.   CONTINGENCIES:

     a)  Uncertainty due to the Year 2000 Issue:

         The Year 2000 issue arises because many computerized systems use two
         digits rather than four to identify a year. Date-sensitive systems may
         recognize the year 2000 as 1900 or some other date, resulting in errors
         when information using year 2000 dates is processed. In addition,
         similar problems may arise in some systems which use certain dates in
         1999 to represent something other than a date. The effect of the Year
         2000 Issue may be experienced before, on, or after January 1, 2000,
         and, if not addressed, the impact on operations and financial reporting
         may range from minor errors to significant systems failure which could
         affect an entity's ability to conduct normal business operations. It is
         not possible to be certain that all aspects of the Year 2000 Issue
         affecting the Company, including those related to the efforts of
         investees, suppliers or other third parties, will be fully resolved.

     b)  Contingent Liability

         The Company continued its jurisdiction of incorporation from British
         Columbia to the State of Wyoming, effective November 10, 1998, and has
         proposed to continue from Wyoming back into British Columbia in 1999.
         In the course of their review of the Company's proposal, the United
         States Securities and Exchange Commission (the "SEC") had advised the
         Company that they believe the original continuance to Wyoming was an
         event that would have required the filing of a registration statement
         with the SEC. As a result, the Company appears to have been in
         technical violation of the U.S. Securities Act of 1933 (the "Act") and
         holders of shares of the Company, at the time of the original
         continuance to Wyoming may have common law remedies under the Act. The
         Company complied with applicable Canadian disclosure requirements at
         the time of transfer and offered all shareholders the right to dissent
         and no shareholders exercised this right.

         In May 1999 the Company filed a registration statement with the SEC
         offering U.S. holders of shares of the Company, at the time of
         continuance, the right to have their shares repurchased by the Company
         at their fair market value at the time of the original continuance.

         A provision for the contingent liability has been recorded in these
         accounts as a reduction of share capital. Any amount not repurchased by
         the Company on expiry of the repurchase offer will be reclassified to
         share capital.

<PAGE>

BIOMETRIC SECURITY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)

===================================================================

9.  SUBSEQUENT EVENTS

    Subsequent to September 30, 1999 the Company held a general meeting of its
    shareholders at which time the shareholders, among other things, approved
    the consolidation of the Company's share capital on the basis of one post-
    consolidated share for each five pre-consolidated shares.

<PAGE>

ITEM 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     Overview
     --------

     On June 12, 1998, the Company entered into an agreement (the "BII
Agreement") to acquire up to US $5,000,000 of convertible debentures to be
issued by Biometric Identification, Inc. ("BII"), a private California
corporation.  The Company's principal business now consists of its investment in
BII.

     BII is currently controlled by Arete Associates ("Arete") which is
also a private California corporation.  Arete has been a Department of Defense
research and development contractor for over 20 years specializing in sensor
systems and pattern recognition software development.  Many of Arete's
mathematicians and physicists helped develop the BII fingerprint identification
technology.  This technology has been exclusively licensed to BII by Arete.
Pursuant to the BII Agreement, the Company has invested US $5,000,000 in
convertible debentures issued by BII.  If all rights of conversion were
exercised, the Company would hold approximately 45% of the issued shares of BII.
This 45% interest is subject to dilution from shares issued under a 15% stock
option plan which would reduce BMS's interest to 38.25%.  Financings completed
after the acquisition of the US $5,000,000 of debentures of BII would further
dilute BMS's interest.  BII is in need of additional funding and is currently
seeking significant financings from other parties.  Should BII be successful in
raising these additional funds from other parties, BMS's interest in BII could
be reduced to approximately 20%.

     As of July 31, 1999, the Company had purchased US $5,000,000, of the
convertible debentures of BII pursuant to the BII Agreement.

     The convertible debentures bear interest at the lowest interest rate
imputed under the U.S. Internal Revenue Code and, if not converted, will become
payable five years after the closing date of the first acquisition, which was
June 12, 1998.

     The Company may exercise its rights of conversion at any time.  The
convertible debentures will automatically be converted on the earlier of an
initial public offering by BII or the acquisition of BII by a third party.

     While the Company is not legally obligated to exercise its rights of
conversion, the Company's intention is, in due course, if business conditions
warrant, to exercise all of the conversion rights.  If all rights of conversion
are exercised, the Company would hold 45% of the issued shares of the common
stock of BII, prior to dilution resulting from the issuance of shares on
exercise of options granted under BII's stock incentive plan and subject to
additional dilution resulting from future grants of stock options or under
certain additional financings which may be undertaken by BII.

     The parties have also agreed that BII may be merged into or acquired by the
Company.  The parties have agreed to examine this from a tax, securities and
commercial perspective to determine the best structure for this potential
merger.

                                      14



<PAGE>

     For additional information on the Company's investment in BII, see the
Company's Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the Securities and Exchange Commission on March 31, 1999.

     Current Capital Resources and Liquidity
     ---------------------------------------

     Since inception, the Company's capital resources have been limited.  Since
cash generated from operations has been nominal, the Company has had to rely
upon the sale of equity and debt securities for cash required for investments
and operations, among other things.  As at September 30, 1999, the Company had a
working capital deficiency of approximately $494,544.

     Since the Company is unlikely to have cash flow in the near future, the
Company will have to continue to rely upon equity and debt financing during such
period. There can be no assurance that financing, whether debt or equity, will
always be available to the Company in the amount required at any particular time
or for any particular period or, if available, that it can be obtained on terms
satisfactory to the Company.  The Company does not have any commitments for
material capital expenditures over either the near or long term and none are
presently contemplated over normal operating requirements.

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Results of Operations
---------------------

     For the three and nine month periods ended September 30, 1999 the Company
incurred net losses of $2,005,783 and $4,422,031 resulting in losses per share
of $0.05 and $0.10 respectively.  The losses for the three and nine-month
periods ended September 30, 1999 result from cash and short term investment
earnings of $449 and $4,688 less expenses of $583,881 and $1,598,848 and the
Company's share of losses in the operations of Biometric Identification Inc. of
$1,432,699 and $3,003,074 respectively.  In addition, the Company realized
mineral property recoveries of $10,348 and $175,203 in the three and nine-month
periods ended September 30, 1999.  This is compared to net losses for the three
and nine-month periods ended September 30, 1998 of $545,387 and $5,862,034 and
losses per share of $0.03 and $0.32.  The losses for the three and nine month
periods ended September 30, 1998 resulted from cash and short term investment
earnings of $10,253 and $75,856 less expenses of $423,970 and $973,156 less the
Company's share of losses in the operations of Biometric Identification Inc. of
$304,769 for the three and nine month periods and losses on the disposal of
equipment of $12,240 and $39,827 respectively. In addition, the Company wrote-
off mineral property costs totalling $4,620,138 which increased the loss for the
nine-month period ended September 30, 1998 and recovered $185,339 of resource
property costs for the three month period ended September 30, 1998.

     Administrative costs in the three and nine-month periods ended September
30, 1999 increased 38% and 64% respectively over 1998 primarily as a result of
the Company incurring increased professional fees and registration costs,
finders fees and consulting costs.

Liquidity and Capital Resources
-------------------------------

     Cash flow from operations has not to date satisfied all of the Company's
operational requirements and cash commitments. With a working capital deficiency
of approximately $494,544 as at September 30, 1999, the Company must rely on
sales of debt and equity securities to meet its cash requirements to the extent
that they exceed cash

                                       15
<PAGE>

flow from operations. If the Company cannot raise the necessary financing
directly by way of debt, equity or other means, it may be forced to curtail its
operating activities. At this time, the Company is seeking but does not have
specific arrangements to obtain the additional financing. There is no assurance
that the Company will be successful in obtaining any such financing.

     During the three month period ended September 30, 1999, the Company:

     a)  Completed a $2,000,000 Private Placement. The private placement
         consisted of 10,000,000 units, brokered on a best efforts basis, at a
         price of $0.20 per unit for total proceeds of $2,000,000. Each unit
         consisted of one common share and one two-year non-transferable share
         purchase warrant. Each warrant is exercisable at a price of $0.20 per
         share in the first year and $0.23 per share in the second year.
         Remuneration paid to the broker for acting as agent consisted of a
         $186,000 commission payable in cash and a two year broker's warrant
         exercisable into 1,500,000 shares of the Company. The broker's warrants
         are exercisable at a price of $0.20 per share in the first year and
         $0.23 per share in the second year.

     b)  Invested an additional US$1,250,000 in BII debentures.

     c)  Announced a general meeting of the shareholders of the Company to be
         held on October 29, 1999, at which time the shareholders, among other
         things, voted to consolidate the Company's share capital on the basis
         of one post-consolidated share for each five pre-consolidated shares.
         (see Part II Item 5).

Balance Sheets
--------------

     Total cash and short-term investments at September 30, 1999, were $65,563
as compared to $245,182 at December 31, 1998 and $362,198 at September 30, 1998,
and had a working capital deficiency of $494,544 as at September 30, 1999,
compared to working capital of $10,478 at December 31, 1998 and $379,186 at
September 30, 1998.

     As at September 30, 1999, a total of $7,484,565 (US $5,000,000) had been
invested in debentures of BII.


Risk of Year 2000 Noncompliant Systems
--------------------------------------

     The year 2000 issue is a general term used to refer to certain business
implications of the arrival of the new millennium.  In simple terms, these
implications arise largely because it has been normal practice for computer
hardware and software to use only two digits rather than four to record the year
in date fields.  On January 1, 2000, when the year is designated as "00", many
computer systems could either fail completely or create erroneous data as a
result of misinterpretation of the year.  In some cases, date sensitive systems
may begin to fail prior to January 1, 2000.  The results of failures may range
from relatively minor processing inaccuracies to catastrophic system
malfunctions.  Failures may affect not only hardware and software used to
process every day business information but also the imbedded computers that
control plant machinery, robotics, office equipment, elevators and building
climate and security systems.

     The Company does not anticipate that it will experience significant year
2000 issues, because it utilizes commercial programs and systems that are
standard, Year 2000

                                       16
<PAGE>

compliant, business products. The Company is in the process of contacting its
principal suppliers to make sure that they are also Year 2000 compliant and
anticipates that it will have completed its assessment of suppliers by the
fourth quarter of 1999.

     The Company has asked BII to evaluate the products and services that BII
offers, as well as its information technology infrastructure, to determine
whether BII or its customers may have exposure to Year 2000 problems, and to
make inquiries of BII's key suppliers, to determine their readiness with respect
to Year 2000 problems.

     The Year 2000 problem is pervasive and complex and there can be no
assurance that the Company and BII have been or will be able to identify all of
the Year 2000 issues that may affect their products, services or internal
computer systems, or that any remedial efforts undertaken by the Company and BII
will adequately address any potential Year 2000 problems.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

           Not Applicable

PART II -- OTHER INFORMATION


ITEM 1     LEGAL PROCEEDINGS--see the Company's Form 10-Q for the quarter ended
March 31, 1999 filed May 15, 1999.

     Other than as disclosed below, no material legal proceedings are pending to
which the Company is a party or of which any of its properties is the subject.

     In October 1999, the SEC declared effective the registration statement
filed by the Company in connection with the Company's proposed offer to
repurchase the shares held by U.S. persons at the time of the Company's transfer
from British Columbia to the State of Wyoming, which took place as of November
10, 1998.  The Company commenced the repurchase offer in October 1999, offering
to repurchase 3,285,260 shares of its common stock outstanding as of November
10, 1998, at a cash price of Cdn. $0.20 (US$ 0.13) per share, plus interest, for
a total repurchase amount of Cdn. $657,052 (US$ 427,084), plus interest.  The
repurchase offer expired November 8, 1999 and the Company is currently reviewing
documentation submitted under the terms of the repurchase offer.

ITEM 2     CHANGES IN SECURITIES AND USE OF PROCEEDS

     The following transaction was effected in reliance upon the exemption from
United States securities law registration requirements provided by Regulation S
under the Securities Act because none of the securities were offered or sold in
the United States or to "US persons" other than "distributors" as those terms
are defined in Regulation S.

     During the three month period ended September 30, 1999, the Company
completed a $2,000,000 Private Placement.  The private placement consisted of
10,000,000 units, brokered on a best efforts basis, at a price of $0.20 per unit
for total proceeds of $2,000,000.  Each unit consisted of one common share and
one two-year non-transferable share purchase warrant.  Each warrant is
exercisable at a price of $0.20 per share in the first year of and $0.23 per
share in

                                       17
<PAGE>

the second year. Remuneration paid to the broker for acting as agent consisted
of a $186,000 commission payable in cash and a two year broker's warrant
exercisable into 1,500,000 shares of the Company. The broker's warrants are
exercisable at a price of $0.20 per share in the first year and $0.23 per share
in the second year.

ITEM 3     DEFAULTS UPON SENIOR SECURITIES

      Not Applicable

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      See Item 5

ITEM 5    OTHER INFORMATION

The following matters were submitted to a vote of shareholders at the Company's
annual general meeting of shareholders, held on October 29, 1999.

Voters approved a proposal to fix the number of directors at five by a vote of
6,092,587 for and 3,936 against.  There were also 66,838 abstentions and 0
broker non-votes.

Voters elected five incumbent directors for one-year terms.  The vote tabulation
for individual directors was:

<TABLE>
<CAPTION>
Directors               Shares For         Shares Withheld     Shares Not Voted
---------               ----------         ---------------     ----------------
---------------------------------------------------------------------------------
<S>                 <C>                  <C>                  <C>
Robert M. Kamm          6,050,727           79,162             33,472
---------------------------------------------------------------------------------
Robert F. Chase         6,050,727           79,162             33,472
---------------------------------------------------------------------------------
Chester Idziszek        6,050,727           79,162             33,472
---------------------------------------------------------------------------------
William A. Rand         6,050,727           79,162             33,472
---------------------------------------------------------------------------------
Wayne Johnstone         6,050,727           79,162             33,472
---------------------------------------------------------------------------------
</TABLE>

Voters approved the appointment of KPMG LLP as the Company's independent
auditors by a vote of 6,114,759 for, 3,480 against and 10,006 withheld. There
were also 35,116 abstentions.

Voters approved a proposal to authorize the Company to undertake the
consolidation (reverse stock split) of the Company's issued share capital on the
basis of one new common share without par value for every five existing common
shares without par value by a vote of 5,741,206 for and 341,837 against.  There
were also 80,318 abstentions and 0 broker non-votes.

                                       18
<PAGE>

Voters approved a proposal to authorize the Company, if it does transfer to
British Columbia, to reduce its authorized capital to 100,000,000 common shares
without par value by a vote of 5,878,767 for and 143,251 against.  There were
also 141,343 abstentions and 0 broker non-votes.

Voters approved a proposal to authorize a change of the name of the Company by a
vote of 5,963,044 for and 93,145 against.  There were also 107,172 abstentions
and 0 broker non-votes.

     The Company's shareholders also voted on proposals to approve granting to
the directors, officers, employees and consultants of the Company of incentive
stock options to purchase common shares of the Company; and to authorize a
continuation (transfer) of the Company from the State of Wyoming to the Province
of British Columbia. The Company is currently reviewing with its Registrar the
vote counts on each of these proposals, since initial vote results indicated a
high number of abstentions.

     As disclosed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, filed on March 31, 1999, as amended, the Company has reached
an agreement to sell up to a 100% interest in 9 mineral properties comprising
93,709 hectares, located in the San Juan, Chubut, and Santa Cruz provinces of
Argentina, to Inlet Resources Ltd. ("Inlet").  In order to acquire a 90%
interest in the properties, Inlet must pay US$750,000 and issue 300,000 shares
to the Company over a three year period and complete a US$2,150,000 work
commitment.  Inlet may acquire the remaining 10% by the payment of US$2,000,000
to the Company.  A formal agreement was signed by the parties on January 21,
1999, and was approved as at February 15, 1999, by the Canadian regulatory
authorities.  To September 30, 1999 the Company received US$150,000 and 100,000
common shares of Inlet in accordance with the agreement.

ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K

a.   Exhibits

     3.1     Registrant's Articles of Continuance into the State of Wyoming*
     3.2.    Registrant's By-Laws, as amended*
     3.3     Registrant's Articles of Amendment re Authorized Stock*
     10.1    BII Agreement, dated June 12, 1998*
     10.2    Inlet Resources, Ltd. Agreement, dated January 21, 1998*
     27      Financial Data Schedule

     *    Filed with the Company's Annual Report on Form 10-K for the year ended
          December 31, 1998.

b.   No reports on Form 8-K have been filed during the quarter ended
          September 30, 1999.

                                       19
<PAGE>

                                   SIGNATURES

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

                                            BIOMETRIC SECURITY CORP.


                                            /s/ Robert Chase
Date:  November 9, 1999                     ------------------------------
                                            Robert Chase
                                            Chief Financial Officer and
                                            Duly Authorized Officer

                                       20