In response to the events of the last month, including the bus and subway attacks in London, the shopping mall attack in Netanya, Israel and the hotel and resorts attack in Egypt, Secretary of U.S. Homeland Security, Michael Chertoff, wrote in a Washington Post editorial that “catastrophic attacks on mass transit infrastructure have the potential to kill thousands – and preventing them must be a primary focus of federal resources.”

The Homeland Security Secretary explained that nearly $11 billion has been proposed or already allocated in state and federal budgets to “increase protection through hardening of assets, greater police presence during high alerts, additional detection and surveillance equipment, increased inspections, and expanded use of explosives-sniffing dog teams.” The Secretary further explained that “this is why we have gone to great lengths since Sept. 11 to provide law enforcement and intelligence personnel with enhanced tools and information to better identify, track and apprehend terrorists before they are able to strike.”

For obvious reasons, we at e-Smart couldn’t agree more with the Secretary that the level of success in combating this phantom enemy will most certainly be based on law enforcement’s ability to identify those suspected of terrorist connections and prevent further deadly attacks. It is no secret to our shareholders that we believe, and experts agree, that our products – the Biometric Verification Security System™ (BVS2)™ along with the Super Smart Card™ and Super Smart Passport™ are the needed “enhanced tools,” and we are diligently working to bring this tool to the attention of the Secretary.

Meanwhile, other nation’s around the world are keying into the extraordinary capabilities of the BVS2™ and Super Smart Card™ and on July 25th we were honored and excited to celebrate the inaugural “roll out” of our Super Smart Card – the e-Smart/Mybi multi-application Super Smart Card – in Busan, (Pusan) Korea. The elaborate ceremony, seeped in Korean cultural tradition, was sponsored by the Busan City Government, Pusan Bank, Busan Chamber of Commerce and Industry, Busan Bus Association, Urban Transit Authority, Daewoo International Corp., Korea’s major broadcasting bureaus and Korea’s major daily newspapers.

Attending the evening ceremony, which culminated in the formal signing of the Digital Busan Card Globalizing Proclamation, were distinguished guests and Korean and other government officials from China’s Ministry of Information Industry, MII, and China’s Ministry of Construction, Indonesia’s Primrose Group (former IBRA principals), Singapore Technologies, Inc., and two former mayors of Busan, who had the vision to make Busan a “digital city,” and Mr. Nam-Sik, Hur, the current Mayor of Busan, whom we presented with the first of 5 million e-Smart/Mybi Super Smart Cards™. e-Smart’s contract calls for delivering a minimum of 5 million e-Smart-Mybi Super Smart Cards™ to Mybi’s existing and new users initially in the Busan area and 9 other major cities where the Mybi system operates and then throughout Korea.

Earlier in the day, these same officials, dignitaries and private sector representatives attended a luncheon where the new e-Smart/Mybi Smart Card™ first was demonstrated and then were taken on a four-hour tour to a number of locations around Busan and provided a hands-on look at the new e-Smart/Mybi Smart Card™, visiting the Seomyon Subway Station, Busan Bank, Dong-Ah University and, just prior to returning for the Proclamation Ceremony, all were treated to a McDonald's ice cream cone and in each of these places payment was made or services obtained with the new e-Smart/Mybi Smart Card™.

It was an extraordinary day and, it is fair to say, all in attendance were extremely impressed with the simplicity, convenience, security and safety the e-Smart/Mybi Smart Card™ will offer the citizens of Busan. The union of e-Smart Technologies, Inc., and Mybi Co., Ltd., the creator of the Mybi Automated Fare Collection system and Mybi prepaid payment system in Busan and 9 other major cities in Korea, provides an unparalleled system of digital service in Busan and Korea.

We were pleased that the major newspaper in Korea, The Kookje Daily News, ran front-page coverage of the demonstration of the e-Smart/Mybi Smart Card™ and Proclamation Signing Ceremony, as did the other major newspapers, and the event also was picked up by the major television networks in Korea. We are currently working to get some of these film clips and news articles on the Company’s website along with a number of photographs taken during the day tour and evening ceremony.

A great deal of time and effort has been focused on the roll out of the e-Smart/Mybi Smart Card™ in Busan, Korea, which was a huge success, and which officially marked a major milestone for e-Smart, the transition from a research & development company for accounting purposes to an operational company for accounting purposes due to the concrete commercialization of our products. In addition, we also have been busy on a number of other events and projects, including the signing of the “Teaming Agreement” with Samsung S1 Corporation, a member of the Samsung family of companies. As you may recall from our press release in May, e-Smart and Samsung S1 Corporation will cooperate on identifying projects in Asia and around the world, combining the advanced technology offered by the e-Smart Super Smart Card™ with the expertise of Samsung S1’s security systems solutions. As this project goes forward I will keep you updated on new developments.

Also, in June I was honored to be a featured speaker at the Asian Casinos Expo 2005 where I had the opportunity to explain how e-Smart’s advanced biometric technology will insure greater security to the gaming industry. The Expo was attended by the major players in the gaming industry including, William Weidner, President and COO of the Las Vegas Sands Corp., Richard, Mirman, Senior V.P. of Business Development, Harrah’s Entertainment, USA, Ciaran Carruthers, General Manager Galaxy Casino S.A., Macau and Peter Bacon, CEO of Sun International, South Africa. In the gaming industry, the bottom line is the bottom line and with the increased use of on-line gaming tens-of-billions of dollars is at stake so there was great interest in finding solutions to eliminating theft and financial fraud, underage and other illegal gaming. It was a great opportunity to provide information to the leaders in this industry about our advanced biometric system and how it will help eliminate theft and financial fraud in the gaming industry.

Following the speech in Singapore, in June, July and now in August, I, with our e-Smart team, have been in Asia working on moving our projects forward with our Asian partners specifically in Korea, China, Indonesia and Thailand, and we will keep you updated on the progress.

Finally, we were very pleased that e-Smart Technologies was featured on the July cover of the Korean edition of SecurityWorld Magazine, one of the world’s leading providers of security information. The eight-page “Special Report” provided a flattering review of e-Smart products, including information on the Biometric Verification Security System™ (BVS2)™ and the Super Smart Card™ and its multiple applications, which we are currently having translated and will post on the website as soon as possible. In addition to Security World Magazine, the Korea Herald featured e-Smart’s technologies in their CEO profile in the Business Section, which is posted on the website, and most of the Biometric Publications published the information from our Press Release about the event and rollout in Pusan, including Newsis, Money Today, Maeil Business Newspaper and the Digital Times, which we will also post on the website.

With the inaugural roll out of the Super Smart Card™ it is a very exciting time for all of us at e-Smart. We have never lost sight of our goal - to provide the most advanced biometric technology - so that citizens of the world will be safe and secure in every aspect of their every day lives. Now, e-Smart is ready to provide what Secretary Chertoff calls the “advanced tools” as “prevention systems” to combat the world’s fastest growing crimes and threats, ID & financial fraud and terrorist attacks, in Asia, the US and around the world.