Mytec Technologies signs agreement to acquire Biometric Identification to accelerate commercial development, solidify global leadership TSE Symbol: MYT New company to be called Bioscrypt Inc. TORONTO, Dec. 21 /CNW-AsiaNet/ - In a move designed to create a global powerhouse in the emerging biometrics market Mytec Technologies Inc. (Mytec), signed an agreement to acquire Biometric Identification, Inc. (BII). The acquisition will be completed by way of a merger of BII with a newly formed, wholly-owned California subsidiary of Mytec. BII, a privately held company based in Sherman Oaks, California, is a leading provider of advanced biometric authentication solutions. The up to US$25 million transaction, which will be effected using a combination of cash and common shares of Mytec, has been approved by the Board of Directors of each company. The transaction is subject to the approval of The Toronto Stock Exchange and the approval of shareholders of Mytec and BII and is expected to close in the first calendar quarter of 2001. Both Mytec and BII are leaders in fingerprint pattern recognition technology, and own and have rights to 15 patents for technologically advanced biometric solutions. BII is an industry leader in fingerprint algorithm licensing, embedded solutions, and devices for diverse markets including physical access and time and attendance, while Mytec is primarily focussed on wired and wireless applications such as enterprise systems, PDAs, and mobile telephones. Concurrent with the closing of the acquisition and subject to approval of its shareholders, Mytec proposes to change its name to "Bioscrypt Inc." to better reflect Mytec's and BII's specialization in biometric technology. Bioscrypt will be headquartered in Toronto and will through Bioscrypt, Inc., the California corporation surviving from the merger, maintain its United States operations in Sherman Oaks. "The acquisition of BII will give us a commanding lead in biometric technology as well as the critical mass to pursue profitable growth," said Pierre Donaldson, President and CEO of Mytec, who will become President and CEO of Bioscrypt. "The powerful combination of our core technologies - which should heighten our technological leadership as well as expand our range of solutions - and our complementary strengths in sales and distribution - which will be fortified by BII's foothold in the US market - will significantly enhance our ability to become a profitable biometrics company within the next two years." Founded in 1995 with sales of approximately US$4 million in fiscal 2000, BII's fingerprint readers and terminals are sold through globally renowned organizations, including ADI, Honeywell, Northern Computers, Simplex and Tyco. End user installations include sites at Etrade, VISA, Intel, NASA, GTE, IBM, and Turner Broadcasting. The clear biometric leader in Latin and South America, BII's first large-scale commercial installation, in 1997, was for the Venezuelan National Congress, which uses BII's Veriprint(TM) 2000 to monitor attendance and voting. "With one of the industry's strongest team of biometrics experts, an installed base of more than 10,000 biometric units, a set of immediately deployable solutions, and a clear go-to-market strategy, Bioscrypt will be strongly positioned at the industry forefront," said Donaldson. "While the biometrics industry is still in its early stage, we believe this transaction will allow us to quickly establish leadership of a market with tremendous growth potential." According to a recent market research firm Frost & Sullivan, the user authentication device market in the US alone is expected to expand from US$200 million in 1999 to US$2.6 billion by 2006. Roger Nordby, BII's President and CEO, said, "The time is right for this business combination. Our industry is on the cusp of significant growth, both in traditional markets - such as physical access security - and emerging markets for wireless e-commerce devices such as two-way pagers, personal digital assistants, and mobile phones. Bioscrypt will be better able to offer solutions for both wired and wireless applications than either BII or Mytec alone. Together, we can give customers much more than any other biometrics company." "We anticipate a very smooth integration since our two organizations are highly complementary from a cultural, technological, and marketing standpoint," said Donaldson. "Our intention is to quickly combine our product offerings and carry forward with our strategy of targeting OEMs in both wireless and wired markets. This transaction should lead to strong growth and job creation in the years ahead." About Biometric Identification (www.biometricid.com) Based in Sherman Oaks, California, Biometric Identification, Inc. is a leading provider of advanced user authentication solutions. Its product offering consists of fingerprint enabled authorization software readers, smart card solutions, and tandalone OEM identification modules forconvenient and secure access to everything from an enterprise to a front door. BII is a 1995 spin-off of Arete Associates, a US technology think-tank focused on product development for the US Department of Defense. About Mytec (www.mytec.com) Mytec Technologies Inc. develops and licenses advanced biometric technologies - software and standalone hardware - to original equipment manufacturers and other customers requiring state-of-the-art user authentication. Using fingerprints or other biometrics, Mytec's Bioscrypt(TM) technology and products provide unparalleled authentication that goes well beyond traditional identity methods such as passwords or entry cards to enable secure wireless, network, and physical applications. Mytec is based in Toronto, Canada, and its shares are listed on The Toronto Stock Exchange under the symbol MYT. Conference Call For a live audio broadcast discussion of the acquisition, hosted by Pierre Donaldson, President and CEO and Shamit Khosla, Chief Financial Officer, please go to the website www.mytec.com at 11:00 a.m. EST on Thursday, December 21, 2000. A recorded version will be archived there for the next 60 days. Forward-looking statements in this news release are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties. For further information: contact: Pierre Donaldson, President and CEO, Mytec Technologies Inc., (416) 467-3300; Roger Nordby, President and CEO, Biometric Identification, Inc., (818) 501-3908; For media information, contact: David Terry, President, ITPR, (416) 642-6357; Julia Webb, VP Sales & Marketing, Biometric Identification, Inc., (818) 501-3908/ (MYT.)