EXHIBIT 99.1

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - SAFE HARBOR FOR
FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides
a safe-harbor for forward-looking statements made by public companies. This
safe-harbor protects a company from securities law liability in connection with
forward-looking statements if the company complies with the requirements of the
safe-harbor. As a public company, the Company has relied and will continue to
rely on the protection of the safe harbor in connection with its written and
oral forward-looking statements.

When evaluating the Company's business, you should consider:

- all of the information in this quarterly report on Form
10-QSB;
- the risk factors described in the Company's Form 10-KSB
filed with the Securities and Exchange Commission on March 21, 2002; and
- the risk factors described below.

RISK FACTORS

Although the Company believes that the expectations reflected
in its forward-looking statements are reasonable, the Company cannot guarantee
future results, levels of activity, performance or achievements or other future
events. Moreover, neither the Company nor anyone else assumes responsibility for
the accuracy or completeness of forward-looking statements. You should consider
the Company's forward-looking statements in light of the following risk factors
and other information in this quarterly report. If any of the risks described
below occurs, the Company's business, results of operation and financial
condition could differ from those projected in its forward-looking statements.
The Company is under no duty to update any of its forward-looking statements
after the date of the quarterly report. You should not place undue reliance on
forward-looking statements.

Limited Operating History; History of Losses;
Increased Expenses

The Company commenced operations in March 1998 and,
therefore, has only a limited operating history upon which an evaluation of its
business and prospects can be based. The Company and its predecessors incurred
net losses of $3,020,704 and $3,010,031 in the years ended December 31, 2001 and
December 31, 2000, respectively and incurred net losses of $647,888 and
$625,909 in the quarters ended March 31, 2001 and 2000, respectively. The
Company has never been profitable and there
can be no assurance that, in the future, the Company will be profitable on a
quarterly or annual basis.  The Company plans to increase its operating expenses
to expand its sales and marketing operations, fund greater levels of research
and development, broaden its customer support capabilities and increase its
administration resources. In view of the rapidly evolving nature of the
Company's business and markets and limited operating history, the Company
believes that period-to-period comparisons of financial results are not
necessarily meaningful and should not be relied upon as an indication of future
performance.

The Auditors Report on the Company's December 31, 2001
Consolidated Financial Statements includes additional comments by the auditor on
Canada-United States reporting differences that indicate the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

New Product Development

The Company expects that a significant portion of its future
revenue will be derived from the sale of newly introduced products and from
enhancement of existing products, such as CABS and ID-2000.  The Company's
success will depend in part upon its ability to enhance its current products and
to install such products in end-user applications on a timely and cost-effective
basis. In addition, the Company must

---

develop new products that meet changing
market conditions, including changing customer needs, new competitive product
offerings and enhanced technology. There can be no assurance that the Company
will be successful in developing and marketing on a timely and cost-effective
basis, new products and enhancements that respond to such changing market
conditions. If the Company is unable to anticipate or adequately respond on a
timely or cost-effective basis to changing market conditions, to develop new
software products and enhancements to existing products, to correct errors on a
timely basis or to complete products currently under development, or if such new
products or enhancements do not achieve market acceptance, the Company's
business, financial condition, operating results and cash flows could be
materially adversely affected. In light of the difficulties inherent in software
development, the Company expects that it will experience delays in the
completion and introduction of new software products.

Lengthy Sales Cycles

The purchase of a computerized arrest and booking system is
often an enterprise-wide decision for prospective customers and requires the
Company (directly or through its business partners) to engage in sales efforts
over an extended period of time and to provide a significant level of education
to prospective customers regarding the use and benefits of such systems. In
addition, an installation generally requires approval of a governmental body
such as municipal, county or state government, which can be a time-intensive
process and require months before a decision to be made. Due in part to the
significant impact that the application of CABS has on the operations of a
business and the significant commitment of capital required by such a system,
potential customers tend to be cautious in making acquisition decisions. As a
result, the Company's products generally have a lengthy sales cycle ranging from
three (3) to nine (9) months. Consequently, if sales forecast from a specific
customer for a particular quarter are not realized in that quarter, the Company
may not be able to generate revenue from alternative sources in time to
compensate for the shortfall. The loss or delay of a large contract could have a
material adverse effect on the Company's quarterly financial condition,
operating results and cash flows, which may cause such results to be less than
analysts' expectations. Moreover, to the extent that significant contracts are
entered into and required to be performed earlier than expected, operating
results for subsequent quarters may be adversely affected.

Dependence on a Small Number of Customers

The Company derives a substantial portion of its revenues,
and it expects to continue to derive a substantial portion of its revenues in
the near future, from sales to a limited number of customers, in particular the
Alameda County, California police departments through Orion Scientific Systems,
Inc. Unless and until
the Company further diversifies and expands its customer base, the Company's
success will depend significantly upon the timing and size of future purchase
orders, if any, from its largest customers, as well as their product
requirements, financial situation, and, in particular, the successful deployment
of services using the Company's products. The loss of any one or more of these
customers, significant changes in their product requirements, delays of
significant orders could have a material adverse affect upon the Company's
business, operating results and financial condition.



Dependence on Key Personnel

The Company's performance and future operating results are
substantially dependent on the continued service and performance of its senior
management and key technical and sales personnel. The Company intends to hire a
number of additional technical and sales personnel. See "Note Regarding
Forward-Looking Statements." Competition for such personnel is intense, and
there can be no assurance that the Company can retain its key technical, sales
and managerial employees or that it will be able to attract or retain highly
qualified technical and managerial personnel in the future. The loss of the
services of any of the Company's senior management or other key employees or the
inability to attract and retain the necessary technical, sales and managerial
personnel could have a material adverse effect upon its business, financial
condition, operating results and cash flows. With the exception of Andy
Amanovich, the Company's Chief Technology Officer, and David Lutes, the
Company's Chief Engineer, the Company does not currently maintain
"key man" insurance for any senior management or other key
employees.

---

Dependence on Marketing Relationships

The Company's products are primarily marketed by its business
partners. The Company's existing agreements with business partners are
nonexclusive and may be terminated by either party without cause. Such
organizations are not within the control of the Company, are not obligated to
purchase products from the Company and may also represent and sell competing
products. There can be no assurance that the Company's existing business
partners will continue to provide the level of services and technical support
necessary to provide a complete solution to its customers or that they will not
emphasize their own or third-party products to the detriment of the Company's
products. The loss of these business partners, the failure of such parties to
perform under agreements with the Company or the inability of the Company to
attract and retain new business with the technical, industry and application
experience required to market the Company's products successfully could have a
material adverse effect on the Company's business, financial condition,
operating results and cash flows.

Additionally, with respect to most sales, the Company
supplies products and services to a customer through a third-party supplier
acting as a project manager or systems integrator. In such circumstances, the
Company has a sub-contract to supply its products and services to the customer
through the prime contractor. In these circumstances, the Company is at risk
that situations may arise outside of its control that could lead to a delay,
cost over-run or cancellation of the prime contract which could also result in
a delay, cost over-run or cancellation of the Company's sub-contract. The
failure of a third-party supplier to supply its products and services or perform
its contractual obligations to the customer in a timely manner could have a
material adverse effect on the Company's financial condition, results of
operations and cash flows.

Competition

The markets for arrest and booking systems, and facial
recognition software are highly competitive. Numerous factors affect the
Company's competitive position, including supplier competency, product
functionality, performance and reliability of technology, depth and experience
in distribution and operations, ease of implementation, rapid deployment,
customer service and price.

The Company primarily competes in the arrest and booking
systems market with ImageWare Software, Smith & Wesson and Spillman. The
Company's primary competitors in the facial recognition software market with
Miros (Trueface), Viisage Technology (Viisage Gallery) and Visionics
(FaceIt).

Certain of the Company's competitors have substantially
greater financial, technical, marketing and distribution resources than the
Company. As a result, they may be able to respond more quickly to new or
emerging technologies and changing customer requirements, or to devote greater
resources to the development and distribution of existing products. There can be
no assurance that the Company will be able to compete successfully against
current or future competitors or alliances of such competitors, or that
competitive pressures faced by it will not materially adversely affect its
business, financial condition, operating results and cash flows.

Proprietary Technology

The Company's success will be dependent upon its ability to
protect its intellectual property rights. The Company relies principally upon a
combination of copyright and trade secret laws, non-disclosure agreements and
other contractual provisions to establish and maintain its rights. The source
codes for the Company's products and technology are protected both as trade
secrets and as unpublished copyrighted works. To date, the Company has not
applied for any patents or trademarks. As part of its confidentiality
procedures, the Company enters into nondisclosure and confidentiality agreements
with each of its key employees, consultants, distributors, customers and
corporate partners, to limit access to and distribution of its software,
documentation and other proprietary information. There can be no assurance that
the Company's efforts to protect its intellectual property rights will be
successful. Despite the Company's efforts to protect its intellectual property
rights, unauthorized third-parties, including competitors, may be

---

able to copy
or reverse engineer certain portions of the Company's software products, and use
such copies to create competitive products.

Policing the unauthorized use of the Company's products is
difficult, and, while the Company is unable to determine the extent to which
piracy of its software products exists, software piracy can be expected to
continue. In addition, the laws of certain countries in which the Company's
products are or may be licensed do not protect its products and intellectual
property rights to the same extent as do the laws of Canada and the United
States. As a result, sales of products by the Company in such countries may
increase the likelihood that its proprietary technology is infringed upon by
unauthorized third-parties.

In addition, because third parties may attempt to develop
similar technologies independently, the Company expects that software product
developers will be increasingly subject to infringement claims as the number of
products and competitors in the Company's industry segments grow and the
functionality of products in different industry segments overlaps. There can be
no assurance that third parties will not bring infringement claims (or claims
for indemnification resulting from infringement claims) against the Company with
respect to copyrights, trademarks, patents and other proprietary rights. Any
such claims, whether with or without merit, could be time consuming, result in
costly litigation and diversion of resources, cause product shipment delays or
require the Company to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable
to the Company or at all. A claim of product infringement against the Company
and failure or inability of the Company to license the infringed or similar
technology could have a material adverse effect on its business, financial
condition, operating results and cash flows.

Exchange Rate Fluctuations

Because the Company's reporting currency is the Canadian
dollar, its operations outside Canada face additional risks, including
fluctuating currency values and exchange rates, hard currency shortages and
controls on currency exchange. The Company does not currently engage in hedging
activities or enter into foreign currency contracts in an attempt to reduce the
Company's exposure to foreign exchange risks. In addition, to the extent the
Company has operations outside Canada, it is subject to the impact of foreign
currency fluctuations and exchange rate charges on the Company's reporting in
its financial statements of the results from such operations outside Canada.
Since such financial statements are prepared utilizing Canadian dollars as the
basis for presentation, results from operations outside Canada reported in the
financial statements must be restated into Canadian dollars utilizing the
appropriate foreign currency exchange rate, thereby subjecting such results to
the impact of currency and exchange rate fluctuations.

Risk of Software Defects

Software products as complex as those offered by the Company
frequently contain errors or defects, especially when first introduced or when
new versions or enhancements are released. Despite product testing, the Company
has in the past released products with defects in certain of its new versions
after introduction and experienced delays or lost revenue during the period
required to correct these errors. The Company regularly introduces new versions
of its software. There can be no assurance that, despite testing by the Company
and its customers, defects and errors will not be found in existing products or
in new products, releases, versions or enhancements after commencement of
commercial shipments. Any such defects and errors could result in adverse
customer reactions, negative publicity regarding the Company and its products,
harm to the Company's reputation, loss or delay in market acceptance or required
product changes, any of which could have a material adverse effect upon its
business, results of operations, financial condition and cash flows.

Product Liability

The license and support of products by the Company may entail
the risk of exposure to product liability claims. A product liability claim
brought against the Company or a third-party that the Company is required to
indemnify, whether with or without merit, could have a material adverse effect
on the Company's business, financial condition, operating results and cash
flows.

---

Directors' and Officers' Involvement in Other
Projects

Many of the officers and directors of the Company serve as
directors, officers and/or employees of companies other than the Company. While
the Company believes that such officers and directors will be devoting adequate
time to effectively manage the Company, there can be no assurance that such
other positions will not negatively impact an officer's or director's duties for
the Company.

Strategic Alliance with Sanyo Semiconductor Company and
Intacta Technologies Inc. to form Zixsys Inc. (formerly known as SecurityART
Inc.)

The Company recently entered a strategic alliance agreement
with Sanyo Semiconductor Company and Intacta Technologies Inc. to form
Zixsys Inc. (formerly known as SecurityART Inc.), an entity that will integrate
the hardware and software
technologies of all three companies and thereafter market security products for
use in airports, buildings, laboratories, document authentication and
verification for passports, visas and ID cards. There can be no assurance that
this relationship or the integration of these technologies will prove to be
successful in the future or will result in any material revenue for the
Company.

Volatility of the Company's Share Price

The Company's share price has fluctuated substantially since
the Company's common shares were listed for trading on the Canadian Venture
Exchange ("CDNX)" and quoted on the Over-The-Counter Bulletin Board
("OTCBB"). The trading price of the Company's common shares is subject
to significant fluctuations in response to variations in quarterly operating
results, the gain or loss of significant orders, announcements of technological
innovations, strategic alliances or new products by the Company or its
competirors, general conditions in the securities industries and other events or
factors. In addition, the stock market in general has experienced extreme price
and volume fluctuations that have affected the market price for many companies
in industries similar or related to the Company and have been unrelated to the
operating performance of these companies. These market fluctuations may
adversely affect the market price of the Company's common shares.

Certain Shareholders May Exercise Control Over Matters
Voted Upon by the Company's Shareholders

Certain of the Company's officers, directors and entities
affiliated with the Company together beneficially owned a significant portion of
the Company's outstanding common shares as of December 31, 2001. While these
shareholders do not hold a majority of the Company's outstanding common shares,
they will be able to exercise significant influence over matters requiring
shareholder approval, including the election of directors and the approval of
mergers, consolidations and sales of the Company's assets. This may prevent or
discourage tender offers for the Company's common shares.