The continued version of part two.
Suretrace Security Inc.
Part 2
Suretrace Security’s bold and smart decision to go after China market
Before I go into the recent events that lead up to the signing of the service agreement that True Product ID Technology (Beijing) Limited signed with the National Brand Cartel Anti-Counterfeiting Cooperation Network – Brand315 where the contract calls for the joint venture to mark 2 billion labels of the top brands in China, I want to go back for a moment and give a timeline of events leading up to 5/26/2005 when the company’s new President and Vice Chair Mr. Michael Cimino took over.
As I stated in part one, the brief company history from sec filings. Here is the timeline:
1983 – White Cloud Exploration – to seek profitable business opportunities.
1991 – White Cloud merger with ATI was cancelled due to accounting difficulties.
1997 – William C Meier acquired common stock in White Cloud Exploration.
2000 – White Cloud Exploration acquires Cormax Business Solutions LTD.
2002 – Identex files patent in U.S. App# 10/094,297
2003 – White Cloud Exploration acquired all of the issued and outstanding shares
Of Identification Technologies Inc. a private Alberta corporation (“Identex”}
Immediately following the acquisition if Identex , the company changed its name to Sure Trace Security Corporation.
Now what becomes interesting is what happened between the acquisition of Identex in January of 2003 up to May 26th 2005 when Michael Cimino took over as President. Here is the information that I have looked at and my personal opinion of what happened.
After the Identex acquisition, Suretrace decided to go after the existing markets that Identex had been working on. These markets included loss prevention, authentification and anti-counterfeiting products throughout Canada on a direct sale basis. The client list included Bombardier, Ford Canada, GM Canada, Stelco Steel, Irving Oil, Toronto Transit and Atomic Energy of Canada.
Identex manufacturers a chemical formulation known as "taggant", which is forensic fluid often likened to DNA. Once applied to the surface of literally any asset (tools & equipment), it actually sinks beneath the surface and bonds with the asset on a molecular basis. Removal of the mark is extremely difficult without obvious damage to the asset. The taggant can withstand extreme abrasion; extended baths in acids and solvents, and even 3,0000F (2,4000F melts glass). Once applied, ownership can be guaranteed with certainty. For example, two identical assets owned by two different companies can be correctly identified as to which asset belongs to which owner with 100% accuracy, 100% of the time.
Continuing with my thought from the previous paragraph, after the Identex acquisition, Sure Trace decided to go after these existing markets. Then on September 11th 2001 when The United States was attacked by terrorists, the company included in their marketing plan security issues such as passports, immigration documents, currency, personnel id badges, airspace security, authentification of art collections, lottery tickets, casino checks and playing cards. With the use of Identex’s taggant and Niton’s scanner. The company admitted at the time that the Niton scanner was not the ultimate solution.
In my opinion the marketing of loss prevention, authentification and anti-counterfeiting products to Identex’s existing clients mentioned earlier was just not bringing in enough revenue or maybe Sure Trace realized at that time that the biggest market for their product line was in China. I believe the latter is the case. This I believe is when Mr. James Mackay decided his vision for the company would be changed. The new focus would be on the biggest market in the world – China. I do believe that some of Identex’s clients still have the potential of being clients of Sure Trace in the future, however once Sure Trace is recognized as the Chinese Government’s standard solution for anti-counterfeiting efforts, authentification, tracking and many other uses, then and only then will we be able to prove to the rest of the world the unique value and effectiveness of our products and services.
Continuing with the timeline:
5/2003 – Resignation of old Accountant and engagement of new accountant.
4/2004 – Code of ethics for senior financial officers and the principal executive officer of Sure Trace established.
This is the time period when I believe Mr. James Mackay realized he had a big problem on his hands. He had financial officers and executive officers of the company trying to destroy the company and steal the technology and clients.
5/26/2005 Mr. Michael Cimino is retained as the new President and Vice-Chairman. Mr. Cimino, will coordinate and oversee the structure of any resulting relationship between the company and its Chinese partners.
(It is very interesting that on 5/26/2005 Mr. Michael Cimino is appointed new President and Vice-Chairman and the very next day the company comes out with this press release:)
Sure Trace Team En Route to Beijing, China; Group Includes Chairman, New Head of Operations & Sales, CTO and Other Outside Technical Advisors - Multiple Demonstrations Planned
May 27, 2005
PHILADELPHIA--(BUSINESS WIRE)--May 27, 2005--Sure Trace Security Corporation (OTC:SSTY) has today announced that, in response to a request from our Chinese associates, it is dispatching its presentation team to Beijing, China. The Chairman is already en route and plans to stay in China, at the request of our hosts, for an extended period of time, in order to be the company's cultural liaison as the parties take the first steps in building what the company hopes is a long term relationship.
He will be joined over the next few days by the newly appointed head of Operations & Sales, Mr. Ron Bell, as well as by our Chief Technology Officer, Mr. Grahame Entwistle. The team will also include additional members made up of expert technical & scientific advisors who are well versed in the specific technology that the company will demonstrate.
After the initial phase and demonstration stage, the company's new President and Vice-Chair, Mr. Michael Cimino, will coordinate and oversee the structure of any resulting relationship between the company and its Chinese partners, with the input and assistance of the full team.
About Sure Trace Security Corporation
Sure Trace is one of the premier systems integrators for anti-counterfeiting and security surveillance applications and a world-class provider of integrated tracking devices. The company intends to deliver turnkey solutions, both onshore and offshore, 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.
It is my opinion that James Mackay had been working with Mr. Cimino for quite some time. The time between April of 2004 when the company established the code of ethics up to the date that Cimino came on board, I believe that they were working together in the secret talks to bring on Cimino as President and restructure the company. Ask yourself this question, how the heck can the company hire Cimino on 5/26/2005 and then come out of the gate the day after on 5/27/2005 with a Sure Trace Team en route to Beijing, a new head of operations and sales Mr. Ron Bell, a new CTO Mr. Grahame Entwistle and other outside technical and scientific advisors. We have multiple demonstrations planned. Also how could Mackay and Cimino have developed relationships with its Chinese joint venture partners Sure Trace Asia Ltd and Suneray all in just one day. It is obvious that the two had been working on restructuring the company for the entire year between April 2004 and May of 2005.
(From the date of the May 27th press release and Sure Trace sending their team en route to Beijing, I believe they knew they needed to strengthen their relationships with the Chinese joint venture partners. As Cimino stated…while others may still be just knocking at the door, the Chinese Government itself, through Suneray has already invited us in… So in less than a month on June 17th 2005 Sure Trace comes out with another huge press release and more major accomplishments.)
Sure Trace Strengthens Chinese Connection; Company Increases Its Equity Stake In China Joint Venture Vehicle; Sure Trace Asia Ltd. To Become Wholly Owned Subsidiary
June 17, 2005
PHILADELPHIA--(BUSINESS WIRE)--June 17, 2005--
New CEO Added; China Demos Successfully Completed
Sure Trace Security Corporation (OTC:SSTY) (the "Company") announced that, because of its completion of a highly successful demonstration of the Company's capabilities in Beijing, China, it has been able to reshape the framework of its China joint venture. The Company will now hold a majority interest in the joint venture vehicle as opposed to a minority position.
The vehicle, Sure Trace Asia Ltd. (STA), will become a subsidiary of SSTY. The Company will now own 85% of STA instead of 40%. STA and Beijing Suneray Communication Co. Ltd. (Suneray) have an exclusive relationship to bring the Company's technologies into China, Macau & Hong Kong. The joint venture will share the costs and profits on a 50/50 basis.
Mr. William Chan, of Hong Kong, who was instrumental in bringing the Suneray deal to STA, has also agreed to become the CEO of both SSTY and STA. He will also sit on both Boards and will be located in the Company's Hong Kong office. Mr. Cimino will be President and Vice-Chairman of both companies and operate out of the Company's home office in Philadelphia.
Suneray, incorporated in Beijing, China, is legally authorized by People's Republic of China as an agent for the organization and implementation of the Unified Coding Rules for Products and Services, a compulsory national standard of the People's Republic of China.
Mr. Cimino, the Company President said, "This is a promising deal for the shareholders of Sure Trace. We have formed a joint venture with a major gatekeeper for the Chinese government, for the introduction of the types of technologies that we provide. In effect, the door to China is wide open to us... while others may still be just knocking at the door, the Chinese government itself, through Suneray, has already invited us in... That gives us a strong competitive advantage... especially given that we have successfully completed the demonstration stage of the process."
"Now that we also own a majority interest in STA, I believe we have further protected the interests of Sure Trace's shareholders and increased the value of the Company's holdings," said Cimino.
(Wow things are really heating up now! With highly successful demonstrations in Beijing, the reshaping of the China joint venture 85% rather than 40% as a result of those successful demonstrations, Mr. William Chan of Hong Kong now on board, who in my opinion is a huge part of our success and it is stated that Suneray is legally authorized by Peoples Republic of China as an agent for the organization and implementation of the Unified Coding Rules for Products and Services, a compulsory national standard of the Peoples Republic of China. “The door to China is wide open to us.”)
As part of Sure Trace’s vision to provide a complete anti-counterfeiting, brand and product authentication and security products, they have been working on acquiring Globe Staff Consulting and Sensor Media Corporation. It was stated that Sure Trace chose to concentrate on the efforts in closing its deal with Suneray first and then using the connections developed through Suneray to build markets for SSTY in China and the ability to obtain contracts for the fingerprint imaging systems, solar collection systems and TV back-plane systems.
China Joint Venture Meets With 2008 Chinese Olympic Officials; Sure Trace Completes Globe Staff Acquisition; Acquisition Restructured; Company Issues Restricted Shares As Purchase Price
July 12, 2005
PHILADELPHIA--(BUSINESS WIRE)--July 12, 2005--Sure Trace Security Corporation (OTC:SSTY) is pleased to announce that it has completed the acquisition of Globe Staff Consulting (GSC).
Unlike the prior acquisition agreement, the main consideration for the purchase was the issuance of restricted stock. The restructured agreement reduced the cash requirements contained in the earlier purchase document, which will free up resources for the Company's China initiative and other endeavors.
Michael Cimino, the Company's President said, "Our Chairman, Jim Mackay, was instrumental in this renegotiation of the acquisition price. Not only did the Company drastically reduce the purchase price, the Company was able to deliver another technology to the Chinese market that it has been clamoring for and to further enhance our overall perceived usefulness to the Joint Venture. We recognized a market need and found the way to deliver what they wanted."
Recently, GSC has conducted successful demonstrations of its Globe Track technology with two major international security companies, within the past few weeks and both companies have expressed a strong interest regarding GSC's products and services. Additionally, the French Government has referred a major industry representative to SSTY, via its GSC connections regarding a bold anti-counterfeiting measure aimed at the worldwide retail goods market.
Additionally, our Chinese joint venture, Sure Trace Technology (Beijing) Limited, has also met with the 2008 Chinese Olympic Committee. Our partner Suneray had presented our anti-counterfeit technology to the Committee for use in tickets, merchandise and credentials as well as GSC's Geo Track technology for use involving the participants in the games.
Also, our Chinese counterpart, Suneray has indicated to our management that several companies will be positioned to begin exploiting the Joint Venture's solutions involving tobacco, documents, to produce and other retail items.
(The next week Sure Trace enters into a binding agreement with Sensor Media Corp}
Sure Trace Licenses Additional Technology For Use In China; Company Also Offers Details Of Previous Acquisitions; Hires CFO
July 27, 2005
12:04 ET PHILADELPHIA--(Business Wire)--Jul 27, 2005--
Sure Trace Security Corporation (OTC:SSTY.u) has today announced that, it has entered into a binding agreement with Sensor Media Corporation (Sensor) through its subsidiaries, to utilize Sensor's licensed technology in China, Hong Kong and Macau. It has also been granted the sole option to acquire Sensor's threesubsidiaries described below within 120 days of the execution of the agreement upon mutually acceptable terms.
Sensor has indicated that it owns the Intellectual Property rights to various technologies which include solar collection systems, fingerprint imaging systems, and TV back-Plane systems. These technologies are held through Sensor's subsidiaries -- SMC Solar, SMC Biometrics and SMC TV. Sensor has licensed worldwide exclusive manufacturing and distribution rights for these technologies and has granted exclusive sub-licenses to its three wholly owned subsidiaries.
Sensor's subsidiaries (SMC Solar; SMC Biometrics; and SMC TV) have, in turn, granted SSTY an exclusive sub-license to utilize, market and also sub-license these technologies within certain territories and on the terms described below:
SMC Solar: Exclusive rights in China, Hong Kong & Macau (for solar collection technology). (a)
SMC Biometrics: Exclusive rights in China, Hong Kong & Macau (for fingerprint imaging technology). (b)
SMC TV: Exclusive rights in China, Hong Kong & Macau (for TV back-Plane technology). (b)
(a) After 120 days from the execution of the Agreement, the rights will become worldwide except for the following territories, where SMC already has existing contracts: Japan, Australia, New Zealand, Europe, Soviet Union and Africa).
(b) After 120 days, the rights will become worldwide.
Also, in response to inquiries from its shareholders SSTY wanted to clarify the details and chronology of the Globe Staff and Sensor acquisitions.
SSTY previously announced letters of intent with SMC Biometric and Globe StaffConsulting (GSC). Since then, SSTY chose to concentrate its efforts in closing its deal with Suneray Beijing, and then using the connections developed/introduced through Suneray to build markets for the SSTY, SMC Biometric and GSC products/technologies.
The terms of the prior acquisition agreements were not fully met, after signing, by the parties, so current management revisited the situations and found a way to restructure the deals to the Company's benefit and to the approval of both GSC and Sensor. In the case of the GSC deal, instead of paying GSC six million ($6,000,000) dollars as consideration for the purchase, the Company was able to acquire 100% of the stock of GSC in exchange for the assumption of certain liabilities of GSC which should amount to less than $600,000. The company also issued GSC 242.5 million restricted shares of SSTY common stock as consideration for the acquisition.
SSTY has also today announced that it has resigned an updated and renegotiated agreement with SMC Biometric Inc. and its parent company Sensor Media Corporation. Under the terms of the LOI, SSTY has a four month option to close the acquisition which management believes will allow it sufficient time to secure revenue contracts for the fingerprint technology.
With the Suneray agreement now executed and in effect SSTY has once again focused its attention to building out its line of security products. In fact SSTY has commenced talks with its Chinese partners directly and European connections via GSC. In effect, SSTY now has the time to enter into revenue producing contracts before it has to fully pay for the acquisitions.
The Company also today announced the hiring of Joseph J. Repko, CPA as its CFO.
Mr. Repko brings many talents to the Company. He founded a full service accounting firm in 1984 with clients in a wide range of industries and services including manufacturing, video production, publishing, banking, financial, medical services, mining, automotive services, nonprofit and government entities. The services provided for these clients include compilation review, audit, tax, MIS consultation, SEC filings, IPO's and foreign operations. It has offices in Springfield, Pennsylvania (a suburb of Philadelphia) and in Jupiter Florida. Mr. Repko will work both out of the Philadelphia headquarters and a Florida location, near the Company's auditors.
(Big things in the works now, new products, joint ventures in China!)
(Next Live Television Demo Planned)
Sure Trace China Joint Venture Receives Governmental Approval; Live Television Demo Planned
July 29, 2005
09:58 ET PHILADELPHIA--(Business Wire)--Jul 29, 2005--
Sure Trace Security Corporation (OTC:SSTY.u) is pleased to announce that it has fully satisfied all the steps required by the Chinese government, both financial and technical, and has gained official approval of its joint venture, Sure Trace Technology (Beijing) Limited (the "JV"). The official signing, ratifying the venture company, took place in Beijing yesterday. In an unusual step, the official signing ceremony was carried live on the government owned national television station.
James Mackay, the Company's Chairman said, "After many months of often intense efforts, I am extremely pleased to finally announce that our technology has qualified and that the Company has met all financial requirements."
Additionally, the Company has announced that within the next week, in Beijing, it is planning a public demonstration of the JV's technology which will also be telecast live on Chinese national television.
(This next two press releases are the last ones before the sec halt, It is funny that James Mackay and William Chan who both participated in the joint venture signing ceremony on Live Television and are announcing live public demonstrations of its technology with an impressive line up of guests, with all of this happening the stock price is ready to explode, and it did. Unfortunately a couple days later on August 3rd we were halted.
Sure Trace China Joint Venture Announces List Of Scheduled Attendees For Live National TV Demo
August 1, 2005
PHILADELPHIA--(Business Wire)--Aug 01, 2005--
Sure Trace Security Corporation (OTC:SSTY.u) has planned live public demonstration, of its technology, which it expects to be telecast on Chinese national television (CCTV-1) within the next 10 days. Representatives of the government, customs, military, commercial banking and tobacco industries as well as representatives of the 2008 Olympic Committee are scheduled to be in attendance in Beijing, for the demonstration.
The Company, along with Beijing Suneray Zexin Technology Limited (Suneray) who has an exclusive relationship to bring the Company's technologies into China, Macau & Hong Kong, together formed Sure Trace Technology (Beijing) Limited (the "JV").
Michael Cimino, the Company's President and Vice-Chairman said, "Mr. James Mackay our Chairman and Mr. William Chan our CEO who both participated in last week's JV signing ceremony on live TV, have, through Suneray, our Joint venture partner, arranged quite an impressive line-up of guests... all of whom who have already been in discussions with Suneray concerning the commercial uses of the technology."
Sure Trace Plans Live Demo in Philippines; In Addition To Demos Planned In Beijing; Company Chairman Concludes Series Of Meetings In Philippines
August 2, 2005
10:22 ET PHILADELPHIA--(Business Wire)--Aug 02, 2005--
Sure Trace Security Corporation (OTC:SSTY.u) has today announced that, in response to a request from associates in the Philippines, it had dispatched its Chairman to conduct a series of meetings with government and industry officials.
As a result of these meetings, a second live television demonstration of the Company's technology will also be conducted in the Philippines in close proximity to the planned Beijing demo.
The Company also announced that it is switching the hosting of its web site from Canada to the US over the next few days and the site may be temporarily unavailable. When it returns, there will be pictures and press coverage of the JV signing ceremonies in Beijing and ultimately, video of the live television demonstrations.
(Sure Trace is halted from trading of its common stock by the SEC} Grrrrrrrrrrrrrrr
Sure Trace Responds to SEC Actions
August 4, 2005
9:00 ET PHILADELPHIA--(Business Wire)--Aug 04, 2005--
Sure Trace (OTC:SSTY.u) denies that there are any inaccuracies or inadequacies in news releases that warrant the halt of trading of its common stock by the SEC. The Company believes that the SEC, however well-intentioned, may have been misguided from sources intent on hurting the Company's business.
The Company will cooperate with the SEC and intends to provide the SEC with all relevant documents and other information as requested. Michael Cimino, the Company's CEO states, "After the SEC has had an opportunity to communicate with us and review any pertinent materials relating to our press releases, we are confident that they will agree that our stock should resume trading."
( I will end this part of my project for now, next I will give my opinions on why we got halted and continue with the stunning progress the company has made since August 3rd)
AI
