ActivCard's audit committee has begun the process of identifying and selecting a new independent registered accounting firm to audit the Company's financial statements for the fiscal year ending December 31, 2004.

During the three years that Deloitte was engaged as ActivCard's independent registered public accounting firm, there have been no disagreements between ActivCard and Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures that, if not resolved to the satisfaction of Deloitte, would have caused it to make reference to the subject matter of the disagreement in connection with its reports.

"We have begun interviewing other accounting firms to replace Deloitte and although the change in accounting firms will likely cause some delay in our financial reporting and internal control testing and may impact our ability to comply with Section 404 of the Sarbanes-Oxley Act by the end of 2004, we do not expect there to be any long-term impact from this change," said Ben C. Barnes, ActivCard's Chief Executive Officer. "There have been no disagreements between ActivCard and Deloitte on any accounting or financial reporting matters and Deloitte has indicated that it will assist with the transition to a new accounting firm. We look forward to establishing a good relationship with our new auditors and to finding an accounting firm that is able to assist us following our recent restructuring initiatives."