Sure Trace Security Corporation Shareholder Update.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--Feb. 5, 2004

Sure Trace Security Corporation (Sure Trace) (OTCBB:SSTY) is pleased to provide its shareholders with an update of corporate developments and activities.

Through its wholly owned subsidiary, I.D.OLOGY Laboratories Inc., the company devoted the spring and summer of 2003 to a rollout of its systems and development of key marketing relationships for the Loss Prevention market. Many pilot programs were initiated both directly by I.D.OLOGY sales staff and I.D.OLOGY's channel partners, most prominently ToolWatch Corporation of America. The recent announcements of site-wide roll-outs and expanded pilot programs are prime examples of those efforts coming to fruition. They clearly demonstrate the effectiveness of I.D.OLOGY's products and services.

Commencing in September 2003, I.D.OLOGY has focused marketing and sales efforts towards the much larger Anti-Counterfeiting products and services arena. By December 2003 the company had identified 5 specific client opportunities; these are within the vertical markets of Government (passport and currency), Tobacco, Clothing and Cable industries. These opportunities, if realized would collectively generate approximately $30 million in revenue per year. In each case I.D.OLOGY, by December, had successfully negotiated pricing and field authentication services, one of which included a passport application. However, one of these potential clients raised the issue of possible toxicity of the I.D.OLOGY Synthetic DNA (SDNA). Based on legal advice due to the potential for liability (however low), I.D.OLOGY determined that toxicity tests would be required for each client.

It was determined that mentioning the need for toxicity testing alone might appear to be a negative. Responding to this, I.D.OLOGY developed a Production Plan designed to address not only toxicity, but many other aspects of the clients' production process and security measures. The Production Plan includes a well-thought-out complete list of all of the client's potential concerns.

With regard to the toxicity issue, in the past, I.D.OLOGY has obtained favourable toxicology reports on the use of its SDNA for both the protection of itself and its customers in the Loss Prevention market. Referred to as Medical Safety Data Sheets within the industrial-manufacturing sector, I.D.OLOGY has never "failed" such a test and is very confident that it will "pass" such testing for its anti-counterfeit clients.

Throughout December and early January I.D.OLOGY developed the Production Plan approval process, which was designed to demonstrate that I.D.OLOGY was concerned with far more than toxicology, but was concerned with the entire component make-up of the client's products, their manufacturing processes, and security measures surrounding the use of its new security feature.

While this new Production Plan approach of obtaining the customers' approval has lengthened the sales process by an estimated 8-10 weeks, the higher level of customer involvement has increased customer satisfaction with the process and has increased the potential for an effective Anti-Counterfeiting program.

In short, this new approach has met with significant approval by the five original clients and, in addition, new prospective clients as they clearly see that I.D.OLOGY understands their needs and concerns in adding new or replacement security features to their products. Management feels confident that the use of the Production Plan approach will be successful with these initial five clients and looks forward to the hoped for full sign-off by these prospective clients and the initiation of full implementation of our Anti-Counterfeit Program. As stated above, their combined potential is expected to result in annualized revenue of approximately $30 million, based on full implementation. The company feels that these goals are attainable based on the relationships we have established with leaders in the Security Industry to help develop and evolve our products to meet our clients' needs.

About Sure Trace Security Corporation

Through its wholly owned subsidiary, I.D.OLOGY, Sure Trace manufactures and sells proprietary security products for Loss Prevention and Anti-Counterfeiting markets. At the heart of I.D.OLOGY's Anti-Counterfeit Program is our chemical code that we refer to as "Synthetic DNA" (SDNA). This chemical carries a specific blend of inorganic elements and rare earths that when read by our proprietary portable scanners produce a code or serial number. This serial number is customized to your company, a specific product line, a specific product run or more.

Sure Trace Security Corporation is committed to bringing advanced technologies and solutions from Chemical and Biometric Engineering, Hi Tech advanced scanning technology, and proven security procedures and solutions to large scale government security initiatives and enterprise wide facility and asset management projects for medium to large organizations. The Company is reviewing key alliance and acquisition opportunities to help it fast track growth and profitability. http://www.idologylabs.com ; http://www.suretrace.com

This press release contains forward-looking information within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Sure Trace to be materially different from the statements made herein.