Dear Shareholders,

As most of you already are aware from several public announcements made in the last few weeks, a number of important changes have taken place within the Company and I’m pleased to have the opportunity to provide a more detailed report of our efforts on your behalf.

First, in order to bring to the Company the experience and expertise necessary for e-Smart Technologies to move forward and achieve its goals, Charlie R. Black, Jr., one of the nation’s leading public affairs professionals and long-time political strategist, and Gary S. Messina, a specialist in IT Infrastructure, e-Commerce and emerging technologies with more than two-decades of design, development and deployment of technology strategies and policies with the Department of Justice Immigration and Naturalization Service and the Department of Homeland Security, were appointed to the Board and will serve for one year. Messrs Black and Messina will join the new Board for 2006-2007, which will also include Board members; Elliott H. Cole, Thomas J. Volpe and myself.

Furthermore, on June 1, 2006, a Definitive Information Statement (DEF 14C) was filed with the Securities and Exchange Commission, alerting shareholders of an increase in the number of shares of our Common Stock, $.001 par value per share, from 200,000,000 to 500,000,000, which became effective in mid-July. This action was taken as the first step in the Company’s reorganization and recapitalization plan, which was previously detailed and reported, but was not made effective at that time, as a result of the capital liquidity opportunity about which we advised. We are working on finalizing an alternative to the first plan, for the benefit of the Company and shareholders and in preparation for filing an application to list the Company the American Stock Exchange. We will be providing you with additional information regarding all of the above in the near future.

While much time has been devoted to bringing the liquidity opportunity to fruition, the e-Smart management team around the world continues to make industry leaders and government representatives aware of the enormous advantages of the Biometric Verification Security System™ and the Super Smart Card™ and Super Smart Passport™. In October of 2005 I delivered the keynote address at the Annual Meeting of the Central Station Alarm Association in Oahu, Hawaii and in November I also was a featured speaker at the 4th International Interoperability Testing Workshop and Conference on E-Passports (InterFest) in Singapore.

I was pleased to have the opportunity in November of last year to demonstrate the unique applications of e-Smart’s technology as a featured speaker at the “Children in Slavery” – The 21st “Century” Summit at Georgetown University in Washington, D.C. And, in early May of this year, I delivered a keynote address at the 4th Middle East & Africa Card Technology Exhibition and Conference in Cairo, Egypt. It was an enormously successful conference and exhibition and there is great interest in e-Smart’s advanced biometric technologies throughout Africa and the Middle East.

Additionally, e-Smart has been well represented in Asia with Mr. Richard Kim, the Company’s Managing Director of e-Smart Korea, speaking at the 6th Annual CardTech Korea Conference in early July and e-Smart’s Chief Representative in Singapore, Bobby Pang, was a featured speaker at the 11th Annual Asian Casinos Executive Summit (ACE) on July 24th.

Detailed information about each of these conferences can be found on the Company’s new website www.e-smart.com. Also, a special e-mail has been set up for all of you, our dear and loyal shareholders, which is shareholderrelations@e-smart.com


I look forward to providing you with more information about all of the above and new developments in the near future and in the meantime will continue to work hard on your behalf for the success of our Company.