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                                                                    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:

o     all of the information in this quarterly report on Form 10-QSB;

o     the risk factors described in the Company's Form 10-KSB filed with the
      Securities and Exchange Commission on March 31, 2003; and

o     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 contained in the 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 this quarterly report. You should not place undue
reliance on forward-looking statements.

Limited Operating History; History of Losses

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 $6,951,393
and $3,020,704 in the years ended December 31, 2002 and December 31, 2001,
respectively and incurred net losses of $3,099,574 and $4,440,741 in the nine
months ended September 30, 2003 and 2002, 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.

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, 2002 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.

Need for Additional Financing

The Company will be required to seek additional financing to fund its operations
during the remainder of the 2003 fiscal year. There is no assurance that the
Company will be able to secure financing or that such financing will be obtained
on terms favorable to the Company. Failure to obtain adequate financing could
result in significant delays in development of new products and a substantial
curtailment of Imagis' operations.

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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, ID-2000, and ChildBase. 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
six (6) to twelve (12) 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. 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 may need to hire a number of
technical and sales personnel. 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 its
President and Chief Executive Officer and two software developers, the Company
does not currently maintain "key man" insurance for any senior management or
other key employees.

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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 face and image recognition systems and arrest and booking
systems 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.

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. See also "Item 1 - Business -
Competition".

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.

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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.

Involvement of Directors and Officers 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.

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Strategic Alliance with OSI

The Company entered into a share subscription agreement and ancillary business
agreements with OSI, a diversified global developer, manufacturer and seller of
optoelectronic based components and systems. The Company issued to OSI 1,166,667
common shares and 291,667 warrants, each warrant to purchase one common share
exercisable until July 8, 2004, at an exercise price of US$1.50 per share, at an
aggregate purchase price of US$1,750,000. The subscription agreement provides
for an adjustment to the purchase price through the issuance of additional
shares if the Company issues common shares or other securities convertible into
or exercisable for common shares in another financing (with some exceptions)
prior to July 9, 2003, at a price less than US$1.50 per share. The warrants
provide for a similar adjustment as to the number of warrants and exercise price
in the event of such an issuance. The Company agreed to designate one nominee of
OSI to its Board of Directors, and OSI has designated Deepak Chopra, its Chief
Executive Officer and a director, who was subsequently appointed as a director
of Imagis. As a result of its purchase of the shares and warrants, OSI has
become a significant shareholder of Imagis.

In connection with OSI's purchase of shares and warrants, on July 8, 2002, the
Company entered into the following additional agreements with OSI:

      i.    Product Development and Marketing Agreement ending July 8, 2004.
            Under this agreement, the Company formed a strategic alliance with
            OSI to develop mutually agreed integrated airport and transportation
            security products using its facial recognition technologies and
            OSI's security products. The Company agreed to form an internal
            transportation security group and commit a minimum of US$125,000 to
            develop these products and operate this group. Imagis will receive a
            royalty for all sales made by OSI of products developed under this
            agreement.

      ii.   Software Developer Services Agreement. Under this agreement, Imagis
            agreed to engage, and OSI agreed to make available, the services of
            software engineers and equipment in OSI's software development
            facility in Hyderabad, India. The Company agreed to pay to OSI a
            minimum of US$125,000 during the term of the agreement which expires
            on December 31, 2004.

      iii.  Joint Venture Letter of Intent. Under this letter of intent, upon
            OSI's establishment of a Brazilian entity to oversee marketing,
            sales, service and assembly and marketing of OSI's products, in
            Brazil and the establishment of an office in Brazil, Imagis will
            invest US$250,000 for a 20% equity ownership in that entity.

      iv.   the Company has agreed that, subject to regulatory approval, the
            exercise price of the warrants for the purchase of 291,667 shares,
            issued in conjunction with the private placement to OSI completed
            during 2002, will be reduced from US$1.50 (CDN$2.28) to the same
            price per share as that afforded the investors under the financing
            currently under negotiation.

      v.    the Company has agreed to pay OSI a management fee of US$250,000 on
            or before March 20, 2004.

There can be no assurance that the relationships with OSI will prove to be
successful in the future or will result in any material revenue for the Company.

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

During the second quarter of 2002, the Company entered into a strategic alliance
agreement with Sanyo Semiconductor Company and Intacta to form Zixsys (formerly
known as SecurityART Inc.). Zixsys 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. During the quarter ended
September 30, 2002 Imagis acquired the rights to Intacta's royalties' payable
under the strategic alliance agreement for consideration of US$150,000. During
the fourth quarter of the year the Company acquired all patents held by Intacta
outside the United States in consideration of US$50,000. There can be no
assurance that the relationship with Zixsys or the integration of technologies
with Zixsys will prove to be successful in the future or will result in any
material revenue for the Company.

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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 TSX Venture Exchange 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 competitors, 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, 2002. 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.