SSTY form 15c2-11
General Instructions
Complete this formto initiate or resume quotations in the OTC Bulletin Board® Service, the Pink Sheets®, or any other
comparable quotation medium. By completing this form, your firm is representing that it has satisfied all applicable
requirements of Securities and Exchange Commission (SEC) Rule 15c2-11 and the filing and information
requirements of NASD Rule 6740. It is not necessary to file this application if a member qualifies for the
piggyback or another exception provided by paragraphs (f)(1)-(5) of Rule 15c2-11.
File this form with NASD Regulation, Inc. at least three business days before initiating or resuming the quotation of any OTC
(non-Nasdaq) equity security in any quotation medium.
Send the completed form, a photocopy of the completed form, and two copies of the required issuer information to the NASD
OTC Compliance Unit, 9509 KeyWestAvenue, Rockville, MD 20850-3389. If you have any questions, please
call the OTC Compliance Unit at (240) 386-5100.
Please check the applicable quotation medium(s): _ OTC Bulletin Board X Pink Sheets _ Other ______________
(Form 211 Addendum also required) (name of quotation medium)
Part 1 – Issuer and Security Information
Please provide the information requested below:
1. Exact name of issuer and predecessor (if any) SURE TRACE SECURITY CORP, SEE ATTACHED
2. Address of principal executive offices 1615 WALNUT STREET 3RD FLOOR
PHILADELPHIA, PA 19103
Telephone number of principal executive offices 215-972-6999
3. Type of security (check one) X Domestic Security _ ADR _ Foreign Security _ DPP
4. State of incorporation UTAH Country of incorporation USA
5. Complete title and class of security to be quoted COMMON STOCK
6. Symbol of security (if assigned) SSTY / CMXS (prior to Feb. 2003) CUSIP (if assigned) 86866 W 101
7. Par or stated value of security $0.001
8. Total securities outstanding at the end of the issuer’s most recent fiscal year 125,460,294
9. Name and address of transfer agent Securities Transfer Corporation, 2591 Dallas Parkway, Ste. 102
Frisco, TX 75034
F O R M 2 1 1
As of February 2002 FORM 211 1
Form 211 ( continued)
10. Price of initial quotation entry Bid ____________ Ask ____________ _ No price at this time
If you are entering a bid and/or ask price now, you must also provide a clear statement of the following information:
The basis upon which the priced entry was determined:
___________________________________________N/A______________________________________________
____________________________________________N/A_____________________________________________
The factors considered in making that determination:
____________________________________________________________________________________________
____________________________________________________________________________________________
Part 2 – Required Issuer Information
Please check the applicable box (just one) that corresponds to the category of issuer information accompanying this application. To
determine the applicable category, carefully review paragraphs (a)(1)-(5) of Rule 15c2-11 under the Securities Exchange Act of
1934 (1934 Act) and paragraph (g), which defines “reasonably current” information for purposes of paragraph (a)(5).
Please provide two copies of all required information along with this completed form.
RECENT OFFERINGS
_ (a)(1) Please provide the prospectus which became effective less than 90 calendar days prior to filing this Form 211, as
specified by Section 10(a) of the Securities Act of 1933 (1933 Act).
SEC Effective Date:______________________ Date Security(ies) Issued: ________________________
_ (a)(2) Please provide the offering circular which became effective less than 40 calendar days prior to filing this Form 211,
as provided for under Regulation A under the 1933 Act.
SEC Effective Date:______________________ Date Security(ies) Issued: ________________________
_ (a)(3) REPORTING COMPANIES
Please provide:
_ The issuer’s most recent annual report filed pursuant to Section 13 or 15(d) of the 1934 Act or the annual
statement referred to in Section 12(g)(2)(G)(i) of the 1934 Act.
_ Quarterly and other current reports filed after the issuer’s most recent annual report or statement.
Please list below each report or statement supplied with this form.
Report or Statement Date Report or Statement Date
______________________________ ___________ ______________________________ ___________
______________________________ ___________ ______________________________ ___________
______________________________ ___________ ______________________________ ___________
______________________________ ___________ ______________________________ ___________
______________________________ ___________ ______________________________ ___________
As of February 2002 FORM 211 2
Form 211 ( continued)
_ (a)(4) FOREIGN PRIVATE ISSUERS*
Please provide information furnished to the Securities and Exchange Commission pursuant to Rule 12g3-2(b) of
the 1934 Act since the beginning of the issuer’s last fiscal year.
Please list below the information supplied with this form.
Information Date
___________________________________________ __________________________________
___________________________________________ __________________________________
___________________________________________ __________________________________
___________________________________________ __________________________________
X (a)(5) NON-REPORTING AND ALL OTHER COMPANIES*
The applicant must make the issuer information filed in conjunction with section (a)(5) of this form available
upon request to any person expressing an interest in a proposed transaction with the subject security filed.
Please provide the issuer’s most recent balance sheet, profit and loss and retained earnings statements, equivalent
financial information for the two prior fiscal years for the issuer or any predecessor company, and the documents
that support the information provided in this form.
a. Describe the issuer’s business. _______________SEE ATTACHED_________________________________
________________________________________________________________________________________
b. Describe the products or services offered by the issuer. _____SEE ATTACHED_______________________
________________________________________________________________________________________
c. Describe the issuer’s facilities. __________SEE ATTACHED_______________________________________
________________________________________________________________________________________
d. List the name(s) of the current Chief Executive Officer(s) and members of the Board of Directors of the issuer.
James Mackay, Chairman; Michael Cimino, vice chair & Pres.; William Chan, CEO & Dir.;
Jean-Gilles Subervie, CTO & Dir.; Cameron Moriarty, COO & Dir.
e. Is the member firm submitting this form, or any person associated with it, affiliated directly or indirectly
with the issuer?
__N__ (Y/N) If yes, what is the affiliation?____________________________________________________
f. Is the quotation being published or submitted on behalf of any other broker/dealer? __N___ (Y/N)
If yes, what is the name of the broker or dealer?__________________________________________________
g. Is the quotation being published or submitted directly or indirectly on behalf of the issuer or any director,
officer, or any person who is directly or indirectly the beneficial owner of more that 10% of the outstanding
units or shares of any equity security of the issuer? __N__ (Y/N) If yes, what is the name of the person, and
what is the basis for any exemption under the federal securities laws for any sales of such securities on behalf
of this person?
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
* Effective March 31, 1998, foreign equity securities (including those represented by ADRs) are not admitted to the OTC Bulletin Board Service unless the issuer has
registered the security pursuant to Section 12 of the 1934 Act.
As of February 2002 FORM 211 3
Form 211 ( continued)
Part 3 – Supplemental Information
Please review paragraphs (b)(1)-(3) of Rule 15c2-11 and provide the information requested below.
(b)(1) Describe the circumstances surrounding the submission of this application. Include the identity of any
person(s) for whom the quotation is being submitted and any information provided to your firm by such person(s).
___________________________________________________________________________________________
___________________________________________________________________________________________
(b)(2) Has the issuer or its predecessor (if any) been subject to a trading suspension order issued by the SEC during
the past 12 months? If a trading suspension order has been issued, provide two copies of the order or of the SEC’s
public release announcing the trading suspension order.
Please check the applicable box: X Trading suspension order or release enclosed. _ Not applicable.
(b)(3) Provide any material information, including adverse information, regarding the issuer, that your firm is aware of or
has in its possession (Do not list information already provided in Part 2). If your firm does not possess such
information, please state “None” below.
Identify any applicable information by title and date. ________________________________________________
___________________________________________________________________________________________
As of February 2002 FORM 211 4
Form 211 ( continued)
Part 4 – Certification
The undersigned must have a reasonable basis for believing that the information accompanying this form is accurate in all
material respects and that the sources of the information are reliable.
By signing this document, I acknowledge and certify that my member firm has a reasonable basis for believing that the
information accompanying this form is accurate in all material respects and that the sources of the information are reliable
(“affirmative review obligation”) as required by Rule 15c2-11 under the 1934 Act and NASD Rule 6740. I understand and
acknowledge that this affirmative review obligation applies to all subsequent submissions made in connection with this Form
211 application. Further, I certify that I have examined this form and, to the best of my knowledge and belief, it is true, correct,
and complete. I understand and acknowledge that copies of this form, accompanying documents, and subsequent submissions
made in connection with this Form 211 application may be provided to the Securities and Exchange Commission, or other
regulatory agencies, Pink Sheets LLC, and to the public upon request through the Pink Sheets LLC.
Name, title, and signature of member firm employee to contact regarding information contained in this Form 211 application.
Name _____________________________________________________Title ____________________________________
Signature___________________________________________________
Phone _____________________________________________________Fax_____________________________________
Name, title, and signature of the registered principal of the member firm responsible for this Form 211 application, and all
subsequent submissions made in connection with this application.
Name _____________________________________________________Title ____________________________________
Signature___________________________________________________Date____________________________________
Firm Name _________________________________________________________________________________________
(Member firm must be a Pink Sheets LLC subscriber if application is for the Pink Sheets.)
Address____________________________________________________________________________________________
City _______________________________________________________State______________Zip___________________
Member firm BD# or CRD# ___________________________________Market Maker Identifier ____________________
As of February 2002 FORM 211 5
1
THIS STATEMENT HAS NOT BEEN FILED WITH THE NASD OR ANY OTHER REGULATORY AGENCY
PART 1
Item 1. Business
The Company was incorporated July 22, 1983 as White Cloud Exploration, Inc., under the laws of Utah for the purpose
of obtaining capital to seek potentially profitable business opportunities.
In 1997, the Company acquired two entities: Watchout, a California corporation, and Goldpoint International, a limited
liability company. In November 1998, the Company changed its name to Watchout!
On August 31, 2000, the Company acquired all of the issued and outstanding shares of common stock of Cormax
Business Solutions, Ltd. in exchange for the issuance of 25,100,000 shares of our common stock. For purposes of the
transaction, the shares were valued at $.30 per share for a total consideration of $7,530,000. The transaction was
subject to receipt of certain documentation, which was received by the Company on September 9, 2000.
On March 7, 2001, the Company filed an amendment to its articles of incorporation changing its name to Cormax
Business Solutions Inc.
On April 1, 2001 Cormax Business Solutions Inc. purchased a 100% interest in Expanded Systems Solutions Inc.
("Expanded Systems"). Cormax purchased Expanded Systems from Novalink for $200,000 USD. Expanded Systems
is a wholly owned subsidiary of Cormax Business Solutions Inc. Expanded Systems operations have been
discontinued.
On January 29, 2002, the Company acquired all of the issued and outstanding shares of Identification Technologies
Inc., a private Alberta corporation ("Identex"), in exchange for 1 million shares of the Company's Series B Preferred
Stock. Immediately following the acquisition of Identex, the Company changed its name to Sure Trace Security
Corporation (“sure Trace”). Identex, the wholly owned subsidiary changed its name to I.D.ology Laboratories Inc.
("I.D.ology") on June 18th, 2003.
Overview of Business
Product Summary
The Sure Trace technology is comprised of three components:
1. Synthetic DNA (SDNA or taggant) which is uniquely formulated for each product to be marked or tagged
2. Scanning Gun to read the SDNA present on a product in order to reveal the identity of the marked item
3. KMAC, the dynamic database system designed to maintain product attributes associated with each SDNA
formulation
SDNA
SDNA is a complex of chemical compounds comprised of 15 inorganic elements for use on a client-specific and
product-specific basis. SDNA offers almost limitless, unique formulations by changing the ratio of the elements.
By combining a unique ratio of some or all of the inorganic elements above, a distinct compound is formulated – a
distinct code which will be invisibly attached to a product or the product’s packaging.
SDNA can be incorporated in the manufacturing process of a product or placed onto the label, ink or paper on the
packaging. Once applied to a product, that asset can be analyzed anytime by using Sure Trace’s X-ray florescence
scanner to determine the proper identity of the asset, its authenticity, ownership or any other data programmed by Sure Trace and the client to be revealed.
There are a number of critical factors that determine the selection of elements:
Cost
Availability
Conflicts with spectral analysis
Boiling point
Host material composition
Delivery method
With consideration of the critical factors, a mixture of the elements using a unique set of ratios is formed. Depending
on the product to be tagged, the mixture can be added in its powder form to the manufacturing process of the product
or packaging. Additionally, if a taggant solution is desired, a water or alcohol based solution can be formed.
The process and method of applying the taggant to a product must be developed jointly between the client and Sure
Trace in order to ensure both the proper application of the taggant as well as integrity of the product being tagged.
Upon the development of the taggant and proper application to the product, archival of the unique code will take place
using the X-ray fluorescence scanner and KMAC database system.
X-RAY FLUORESCENCE SCANNER
XRF Spectrometry is used to identify elements in a substance and quantify the amount of those elements present to
determine the elemental composition of a material. An element is identified by its characteristics X-ray emission
wavelength or energy. The amount of an element present is quantified by measuring the intensity of its characteristic
emission.
The XRF scanner employed by Sure Trace easily and quickly identifies and quantifies elements over a wide dynamic
concentration range, from PPM levels up to virtually 100% by weight. It is important to note that the scanner will not
destroy the sample being analyzed.
The XRF scanner utilizes the iPAQ Pocket PC from Hewlett Packard that allows for greater software intelligence and
upgradeability. The use of the iPAQ leverages the multi-billion dollar R&D efforts of Intel, HP and Microsoft for
portable analytical instrumentation.
KMAC
The XRF Fluorescence scanner will be deployed for analysis of the SDNA. Essentially, the scanner reads the SDNA
previously applied to a product. A local database is then queried to determine whether the SDNA matches a valid product.
KMAC is the secure database/communication mechanism that enables the scanner to convert the SDNA analysis into
meaningful product or ownership information.
Using the iPAQ/Windows CE based allows Sure Trace to move subsets of the product database to the actual scanner
based upon a unique identifier of the scanner and client company information. This allows for each client/scanner
combination to have either a shared or independent set of items available in its local database. KMAC offers the
ability to have all scanners either scan for all of the products in the database or for certain segments of the database.
This approach offers complete flexibility to the client.
The local database can be maintained via two methods:
1. Manually: Simply click on the update icon on the iPAQ to update the local database
2. Automatically: Automatic updates tied to time or certain triggering events such as turning on the iPAQ
Additionally, iPAQ systems leverage WiFi communications that allows multiple scanners to be implemented without
the need for a computer system with which to synchronize. The iPaq will connect directly to the central database for
updating. If necessary, WEP can be implemented to encrypt LAN traffic between the scanner and the Wireless
Access Point. SSL will encrypt the traffic over the internet.
The local database provides immediate lookups of valid/invalid SDNA. Speed is of the essence and there is simply no
substitute for immediate lookups into a local database.
Hosted Database
A proprietary database stores all relevant SDNA formulations and product information. Each taggant formulation is
obtained during the production and all associated information for the target product will be catalogued.
Frequently, selected fields of the database will be replicated (copied) to the local scanners based upon a username
logon that will identify which products are authorized to be scanned by that particular company/scanner combination.
It is possible to have government level scanners that can scan the entire database, but to maintain client
confidentiality, certain information will not be revealed on the scanner.
Each time the scanner database is updated, a record is maintained in the central database identifying the customer,
scanner and date of last update. This ensures that all appropriate information is available to the scanner when needed.
Any abnormal access to the central database can also be flagged and investigated.
Statistics gathered by the scanner and the central database can be available to the client.
Production Lots: It may be desirable to track production lots. In this case a new SDNA code must be formulated for
each lot and enable the client to track lots and along its distribution chain.
The database architecture will utilize an industry standard, multi-tiered approach.
4
Business Development
We are attempting to position Sure Trace to become a global solutions provider for government agencies and
commercial clients in the fields of loss-prevention, anti-counterfeiting and document security. Our forensic markers
can be verified in multiple applications using a proprietary handheld scanner.
Sure Trace uses chemical compounds that are referred to as elemental tagging to work the various assets and items
that are to be protected. Elemental tagging is the process of applying an inorganic chemical formulated on a client-by
client or application-by-application basis, to assets. Sure Trace refers to its elemental tagging product as synthetic
DNA, and this process we believe can be likened to invisible bar coding.
Our marking process involves the application of a combination of inorganic elements. The elements penetrate the
surface of an object and bond to the object at a molecular level. The method of application can vary depending on the
item to be marked. The coded elements may be placed on an object using a colorless carrier rendering them invisible
to the human eye or can include a fluorescent element so it can be detected under ultra violet light.
The specific ratios of elements that make up the synthetic DNA create a unique identity code for a specific client or a
specific project/division/product or production run within the client’s area of concern. The number of potential mix
ratios or identity codes is in the billions. We have tested and proven our product’s capability to introduce synthetic
DNA into a manufactured product during the manufacturing process. This enables us to invisibly attach information
about the product via the synthetic DNA.
Sure Trace offers three programs based on our synthetic DNA application:
- Loss Prevention Program
- Anti-Counterfeit Program
- Document Security Program
Loss-Prevention Program
The loss-prevention program is designed to help assist our clients reduce theft by its employees and/or subcontractors.
As an organization issues, or makes available assets to its employee population it invariably experiences some degree
of theft from that community. While in many cases this amounts to paperclips, or pencils, it is common for tools and
portable electronic devices to be removed without authorization.
Through our Loss Prevention Program our labels are affixed to the asset, and the synthetic DNA is applied over top of
the label. The chemicals permeate through perforations on the labels bonding molecularly with the asset. Even if the
label is forcibly removed, our synthetic DNA remains intact. The permanence of the synthetic DNA ensures that the
asset can be identified with complete accuracy.
Anti-Counterfeit Program
We believe we have designed a process to integrate our synthetic DNA into our clients’ production processes with as
little interruption as possible. Medical safety data sheets are provided to clients as part of our production plan. This
assures our clients that the synthetic DNA will not adversely affect or alter their product or packaging quality.
We intend that the production plan include a comprehensive outline of how the field verification / investigation
program will be implemented. This portion of the plan describes how traditional sources of tips such as field sales
representatives, distribution chain intelligence reports, customer feedback and secret shoppers will be incorporated to
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trigger in-depth investigation by the client’s security/investigation firms. Options for pro-active scanning of product in
the retail chain will provide another source of counterfeit or contraband leads. This document also details the
procedures and policies for when these leads trigger an investigation by the security provider. Using highly qualified
independent security investigators provides critical chain of custody and evidence needed if the client pursues civil or
criminal suit against a counterfeit dealer or distributor.
The production plan produced from phase 1 investigation and development will include:
- production integration plan
- testing procedures and results
- durability, compatibility and toxicity analysis
- guidelines for ensuring appropriate levels of synthetic DNA in the
product markings
- results and recommendations from a threat / risk assessment
- definition of the awareness / education program
- demonstrations
- collateral provided to communicate your anti-counterfeit program
- field authentication program definition
- schedules, policies and procedures.
On completion of phase 1 the production plan is presented to the client detailing the exact procedures to begin full
implementation of the anti-counterfeit program (Phase 2).
We are currently targeting the following brand dependent industries with market visibility:
- automobile parts
- aircraft parts
- garment and apparel
- software
- sporting goods and memorabilia
- pharmaceuticals
- tobacco
- construction
- cable and telecommunications
Document-Security Program
The Document-Security program allows private-sector organizations to mark and verify critical documents such as
security and bond certificates, legal contracts, corporate identification cards etc. The public sector applications
include: national identification cards, passports and currency. Our synthetic DNA and hand-held scanner offer
immediate and absolute verification of original documents.
Our marking approach incorporates the after production approach from our loss prevention program. A segment of the
document can be marked with our synthetic DNA or incorporated into paper fibers, ink for stamps or ink for printing,
depending on the document makeup.
The document-security program is divided into two phases: the investigation and development phase and the
production plan phase. The investigation and development phase is where the ideal application of our synthetic DNA
is determined. Using third party testing we ensure no toxicity is introduced to the documents and that our synthetic
DNA is compatible. Through this testing protocol we can determine that the application will not de-nature the ink or
paper and that the appropriate amounts of synthetic DNA will be introduced to ensure an absolute read with the handheld
scanners. At this point a threat and risk assessment is provided to clients who are not familiar with the
safeguards, storage and handling of the security products.
Upon the successful completion of the first phase, the customer is presented with a production plan detailing how the
synthetic DNA is integrated into the document production process. Outlined is the complete implementation strategy
for placement of the document markings, third part toxicity analysis and provision for training the field personnel
using our hand-held scanner for authentication.
We believe that the anti-counterfeit and document-security programs are unique in the industry. We have taken a
comprehensive program approach to the development of these products. We are not simply providing chemicals to
our clients but rather delivering a complete solution.
We have identified a strong potential market in the form of high risk or high value documents such as:
- passports
- drivers’ licenses
- smart cards
- credit cards
- original art re-prints
Currently there are several products that have similar uses that are available in the security market. We feel our anticounterfeit,
loss prevention and document security programs have a competitive advantage over other available
products for the following reasons:
- Similar technologies that are attached or applied to the surface of items to be
identified are visible and can be subject to tampering or removal.
- Our process penetrates the surface to bond with the items at a molecular level and
can be either visible or completely covert.
- Our process provides portable positive real time identification with our hand-held
Scanner.
- Our code verification system is non-destructive.
- The elements that we use to create our codes are virtually indestructible; destroying
them requires the destruction of the marked asset.
- Once applied, the synthetic DNA does not need any ongoing maintenance and will
remain effective for the life of the asset.
- We believe that our total program of Education, Application, and Investigation is the
most comprehensive approach to Loss Prevention, Anti-Counterfeit and Document Security in the industry.
Distribution Methods
- Strategic alliances with selected global security organizations that provide security
audit consulting.
- Agent relationships with regional or national security investigation companies.
- Strategic alliances with asset management providers.
- Marketing contracts with key organizations in unique industry verticals throughout
the world.
Government Regulation
Sure Trace is not aware of any government regulations that might adversely affect its business.
Our manufacturing process involves the use of certain chemical compounds. The use of these compounds is regulated
and we have established a waste management and disposal system that complies with all government environmental
regulations.
