New York, November 14, 2007  — e-Smart® Technologies, Inc. (Pink Sheets: ESMT – News; “e-Smart®” or the “Company”) responds as follows to the press release issued by IDsmart in which a series of serious allegations are made regarding e-Smart® Technologies, Inc. and which e-Smart® hereby refutes as untrue, inaccurate and misleading. IDsmart is operated by Michael Gardiner, the same individual who, last year, plead guilty to securities fraud charges in the U.S. District Court, District of Nevada relating to a scheme in which it was alleged that he and others claimed that they could create gold from volcanic ash. Thereafter, Gardiner managed to persuade certain e-Smart® employees to provide him access to the Company’s technology and wrongfully converted e-Smart®’s proprietary technology to create his latest venture and dubbed it IDsmart, a variation on e-Smart®’s name — in May of 2006

Based on the above-stated events, e-Smart® filed a lawsuit against Michael Gardiner and others on September 11, 2006 [U.S. Dist. Court Case No. C-06-5528], alleging fraud and conversion among other causes of action. In that action, the court issued an order prohibiting Gardiner from using e-Smart®’s proprietary technology, anything derived from that technology, and anything obtained from e-Smart®’s consultants and/or employees that was developed during the employment or consultancy. Discovery continues and the litigation is being vigorously pursued by e-Smart®.

More recently, Gardiner and IDsmart filed an action challenging the issuance of Patent 7,278,025, a lawsuit that suggests that Gardiner realizes that any product that he or IDsmart would produce would infringe on the awarded e-Smart® Patent. Missing from the IDsmart press release is the fact that e-Smart®’s parent has filed a motion to dismiss the subject action which will be heard on February 1, 2008.

Mary Grace, CEO of e-Smart® Technologies, stated that, “These statements issued by Michael Gardiner are just the most recent example of planned intentional and wrongful conduct that began with the theft of the technology then the effort to use that stolen technology to compete with e-Smart®, and now continues with his use of untrue, inaccurate and misleading statements to try to damage the company. We haven’t tolerated this behavior in the past and we certainly will not tolerate it going forward,” said Grace.

e-Smart® has initiated a formal investigation into the Gardiner/IDsmart press release as to whether these statements constitute yet another act of securities fraud by Gardiner and intends to pursue to the fullest extent all legal recourse available for any new violations and damages resulting from the release and/or the allegations and actions stated therein.

e-Smart® Technologies, Inc., is the exclusive supplier of the Biometric Verification Security™ (BVS2™) system, the Super Smart Card™ system technology and related system technologies for Asia, Africa and the US, which e-Smart® believes to be the world’s first smartcard of its kind with an on-card sensor and a full match on-card (MoC) system and other unique technologies for secure biometric ID verification. e-Smart®’s next generation technologies allow governments, public and private institutions, healthcare providers and insurers, companies large and small, to provide a superior level of protection. The Super Smart Card™ system technology and BVS2™ security system can secure countries from criminal and terrorist threats, stop ID and payment fraud, along with identity theft in connection with physical and logical access and financial transactions, including telephone, Internet payment and other financial and data related transactions all while protecting individual privacy.

SAFE HARBOR STATEMENT
Statements in this news release that relate to future plans, financial results or projections, events or performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. While these statements are made to convey to the public the Company’s progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent the management’s opinion. While management believes such representations to be true and accurate based on information available to the Company at this time, actual results may differ materially from those described.

 

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