Sure Trace Releases Shareholder Update; Company Files Litigation Against Former Officials of Sure Trace; Company is Cooperating

Sure Trace Security Corporation (OTC:SSTY) announced
that it has filed a lawsuit against various former officers, directors
or representatives of Sure Trace, and their newly formed company,
alleging that the defendants have violated non-competition agreements
with Sure Trace, misappropriated business opportunities belong to Sure
Trace, and engaged in other wrongful conduct designed to damage Sure
Trace.
   The lawsuit was filed in the United States District Court for the
Eastern District of Pennsylvania on August 9, 2005. It is captioned
Sure Trace Security Corporation v. James Barry, et al., Case No.
2:05-cv-04216-HB. The case has been assigned to United States District
Judge Harvey Bartle III and can be accessed via the U.S. District
Court's PACER website at https://ecf.paed.uscourts.gov/.
   Sure Trace had previously engaged counsel to investigate the
matter, which led to the filing of the lawsuit. It has also engaged
counsel to represent Sure Trace in an ongoing formal investigation by
the Securities and Exchange Commission, as well as an inquiry being
conducted by the Royal Canadian Mounted Police.
   Sure Trace management has learned that both investigations appear
to focus on whether certain press releases issued by Sure Trace during
2004 and 2005 made proper disclosures of the matters discussed in the
releases. Sure Trace's management believes that some of the releases
were issued at a time when some of the individuals who have been sued
by Sure Trace were in control of Sure Trace.
   Sure Trace management has pledged to cooperate fully with both the
SEC and the RCMP. That cooperation is ongoing. Sure Trace's counsel
has communicated with the SEC in response to questions raised by the
SEC staff, and will continue to do so. Comparable cooperation is
ongoing with the RCMP. Although Sure Trace is confident that present
management has committed no wrongdoing, it has decided not to engage
in a public airing of the issues, including the motivations of those
who appear to have piqued the interest of the SEC and the RCMP to
conduct their investigations. "We will let the facts speak for
themselves in our dealings with the regulators," said Mr. Cimino. "At
the same time," Mr. Cimino said, "we will fight hard against ongoing
attempts by others to besmirch our company and its officers and
directors." He also stated: "Personal attacks against individuals
associated with Sure Trace are disgusting and demeaning to those
making those attacks." He called on those making the attacks to "cease
and desist" from further personal attacks.
   Mr. Cimino also said that the company continues to work on the
development of business alliances in China and the Philippines. Sure
Trace and its Chinese joint venture partner conducted a public
demonstration last week of Sure Trace's basic technologies. Further
developments will be publicly disclosed when warranted.

   About Sure Trace Security Corporation

   Sure Trace produces integrators for anti-counterfeiting and
security surveillance applications and is a provider of integrated
tracking devices. The Company intends to deliver turnkey solutions for
governments, armed forces, and industry, through its own proprietary
technology and through aggregating the technology, products, and
services of third parties via licensing agreements and or joint
ventures. For more information go to: www.suretrace.com.
   The stock of Sure Trace has recently been suspended by the
Securities and Exchange Commission, but the suspension has ended by
its own terms. Management of Sure Trace is currently working with the
broker-dealer community and regulators to permit quotations to be
entered on the Pink Sheets as soon as possible. More information will
be provided to the public when circumstances warrant.
   SAFE HARBOR STATEMENT: This news release contains "forward-looking
statements" that are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. "Forward-looking
statements" describe future expectations, plans, results, or
strategies and are generally preceded by words such as "future",
"plan" or "planned", "will" or "should", "expected," "anticipates",
"draft", "eventually" or "projected". You are cautioned that such
statements are subject to a multitude of risks and uncertainties that
could cause future circumstances, events, or results to differ
materially from those projected in the forward-looking statements,
including the risks that our products may not achieve customer
acceptance or perform as intended, that we may be unable to obtain
necessary financing to continue operations and development, and other
risks. You should consider these factors in evaluating the
forward-looking statements included herein, and not place undue
reliance on such statements. The forward-looking statements are made
as of the date hereof and Sure Trace undertakes no obligation to
update such statements.