STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT (the "Agreement") is made effective the
January 2, 2004 between IQ BIOMETRIX, INC., a Delaware corporation (the
"Company"), and the consultant to the Company whose name appears on the
signature page hereof under the caption Todd DeMatteo ("Optionee").

                                    RECITALS:

         A. The Company has retained Optionee as a consultant to provide
consulting services to assist in the conduct of the Company's business (such
services are referred to hereinafter as the "Consulting Services").

         B. In order to provide incentives for the furnishing of Consulting
Services by Optionee, the Company has determined to grant to Optionee the right
to acquire certain shares of the Company's common stock with par value of $0.01
per share (hereinafter called "Common Stock"), all as provided more fully
hereinafter, all subject to the terms, provisions and conditions of this
Agreement.

                                   WITNESSETH:

         1. GRANT OF STOCK OPTION; PURCHASE PRICE; VESTING; EXPIRATION DATE. The
Company hereby grants to Optionee the right to purchase 30,000 shares of Common
Stock at a per-share purchase price of $1.28, pursuant to the terms, provisions
and conditions of this Agreement (the shares of Common Stock pursuant to which
Optionee shall acquire the right to purchase are referred to hereinafter as the
"Option Shares"). The exercise price of each such Option Share is equal to the
fair market value of the common stock on the day of such grant. The option
granted hereby shall become vested and exercisable with respect to all of such
Option Shares immediately upon the issuance of the option by the Company
pursuant to the terms of a certain Second Engagement Letter To Hire Services
made effective October 1, 2003. The option granted hereunder shall expire with
respect to any particular Option Shares Five (5) years after such option becomes
vested with respect to such shares. In the event of Optionee's death prior to
the otherwise applicable expiration date, the option created by this Agreement
(to the extent then vested) shall be exercisable for one year after Optionee's
death by the legal representative of the estate of Optionee or the person(s) who
acquires the rights of Optionee hereunder by bequest or inheritance as a result
of the death of Optionee.

         2. EXERCISE. Subject to the limitations contained herein, Optionee may
exercise the option created pursuant to this Agreement with respect to vested
Option Shares at any time after it becomes effective and such Option Shares
vest. If Optionee or Optionee's successor fails to exercise the option created
under this Agreement with respect to any vested Option Shares on or before the
expiration date provided for herein with respect to such Option Shares, the
option with respect to such vested Option Shares shall expire on such expiration
date and be of no further force and effect. The option to purchase granted
hereunder shall be exercised by giving written notice to the Company in
compliance with this Agreement. Such notice shall state the number of vested
Option Shares with respect to which the option is being exercised and shall
contain a check made payable to the Company in the amount of: (a) the number of
options to be exercised under such notice; time, (b) the exercise price stated
herein. Each exercise of an option pursuant to this Agreement shall be deemed to
be an exercise with respect to the Option Shares having the earliest expiration
date, if any

         3. ADJUSTMENTS.

         (a) If the outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the per share purchase price of the Option Shares in

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effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If the outstanding shares of Common Stock shall be combined into a smaller
number of shares, the per share purchase price of the Option Shares in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the per share purchase price of the Option
Shares, the number of Option Shares purchasable upon the exercise of the Option
shall be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of the Option immediately prior to
such adjustment, multiplied by the per share purchase price of the Option Shares
in effect immediately prior to such adjustment, by (ii) the per share purchase
price of the Option Shares in effect immediately after such adjustment.

         (b) If there shall occur any capital reorganization or reclassification
of the Common Stock (other than a change in par value or a subdivision or
combination as provided for in subsection (a) immediately above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, or the
payment of a liquidating distribution then, as part of any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution,
lawful provision shall be made so that Optionee shall have the right thereafter
to receive upon the exercise hereof (to the extent, if any, still exercisable)
the kind and amount of shares of stock or other securities or property which
Optionee would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, as the case may be, Optionee had held the number of shares of
Common Stock which were then purchasable upon the exercise of the Option. In any
such case, appropriate adjustment (as reasonably determined by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of Optionee
such that the provisions set forth in this Section 3 (including provisions with
respect to adjustment of the per share purchase price of the Option Shares)
shall thereafter be applicable, as nearly as is reasonably practicable, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of the Option.

         (c) for purposes of this Section, a change in control shall be deemed
to have occurred upon (i) the event of a merger, consolidation, share exchange
or reorganization, unless the stockholders of the Company, immediately before
such merger, consolidation, share exchange or reorganization, own, directly or
indirectly immediately following such merger, consolidation, share exchange or
reorganization, more than fifty percent (50%) of the combined voting power of
the outstanding voting securities of the corporation that is the successor in
such merger, consolidation, share exchange or reorganization in substantially
the same proportion as their ownership of the voting securities immediately
before such merger, consolidation, share exchange or reorganization or (ii) an
agreement for the sale or other disposition of all or substantially all of the
assets of IQB. In the event of a change of control, the Company shall give
notice to the Registered Holder to such effect at least 30 days prior to the
proposed date of the change in control. Notwithstanding anything else contained
herein, in the event of a change in control, 100% of the then unvested shares
shall immediately become vested shares upon the giving of the Company's notice
pursuant to the preceding sentence.

         4. SHARES RESERVED. The Company will, at all times during the term of
this Agreement, reserve and keep available such number of its common shares as
will be sufficient to satisfy the requirements of this Agreement and will pay
all fees and expenses necessarily incurred by the Company in connection with the
issuance of such shares. In the event that the Company should fail to maintain a
public market for such underlying shares while such Options are outstanding,
then, at the election and sole discretion of the Optionee, the Company will
redeem all such Options from the Optionee at a dollar amount equal to the number
of outstanding Options multiplied by the exercise price of each such Option,
less Fifty Percent (50%).

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         5. RESTRICTION ON ISSUANCE OF SHARES; LEGENDS. The Company will not be
obligated to sell any Option Shares hereunder unless the Option Shares are at
the time exempt from registration under the Securities Act of 1933, as amended,
and applicable state securities laws. Optionee shall make such investment
representations to the Company and shall consent to the imposition of such
legends on the stock certificates as are necessary, in the opinion of the
Company's counsel, to secure to the Company an appropriate exemption from
applicable securities laws.

         6. SUCCESSORS. This Agreement will be binding upon any successor of the
Company.

         7. NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a
shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.

         8. TRANSFERABILITY. The Optionee may assign this Agreement in whole or
in part so long as a copy of such assignment is also provided to the Company
contemporaneously therewith. The Company and any assignee shall thereafter be
bound to the terms and conditions of this Agreement as though they were the
original parties hereto.

         9. WITHHOLDING TAXES. Upon exercise of any portion of this option and
notice from the Company to Optionee, Optionee shall pay to the Company the
amount of withholding income tax required to be withheld by the Company from
compensation to Optionee and in turn paid by the Company to the U.S. Internal
Revenue Service.

         10. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered or mailed, first class, with postage prepaid, to:

                  if to the Company, addressed to:

                           IQ Biometrix, Inc.
                           39111 Paseo Padre Parkway
                           Suite 304
                           Fremont CA 94538

                  if to Optionee, addressed to the address for notice set forth
                  beneath Optionee's signature below;

or to such other address for notice as either party shall hereafter notify the
other party in writing, from time to time.

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first set forth above.

                                   "COMPANY"

                                   IQ BIOMETRIX, INC.


                                   By: /s/ Michael Walsh
                                       -------------------------------
                                       Michael Walsh, CFO

                                   "OPTIONEE"

                                   /s/ Todd DeMatteo
                                   -----------------------------------
                                   Todd DeMatteo

                                   By:________________________________

                                   Name:______________________________

                                   Title:_____________________________

                                   Address for Optionee:

                                   291 7th Avenue, PH
                                   New York, NY 10001

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