NEW MARKETING STATUS REPORT

The following positive developments have taken place in the countries listed below:

1. Australia:
   The Australian Customs Service has placed a second order for several thousand kits to be used at customs offices that have not started using these kits yet. Additionally, we were asked to provide training on use of the kit to Australian customs officers at three customs offices: Melbourne, Perth and Sydney.
   The potential of the Australian Customs Service alone is estimated at many ten thousand kits a year. There are at least 3,000 employees in customs-related positions in Australia.
   The training sessions will be conducted during the last half of October.
   During this trip we will strengthen our relationship with the Queensland Police Service (contacts have been established for some time), and we may be able to agree on a timeframe for use of the kits by this police department and by police departments in other states.
   I-Teq Management from Sydney which represents the company in Australia, will schedule meetings with other players in the police and civilian market.
   See the letter from the Australian company
   
   Yaacov
   
   Today I had a conversation with Kim WOO from Australian Customs, where he is
   reordering the Identa Drug Detection Kits to extend the current trial to
   ports that had not previously taken part in the trial. This is good news!!
   
   We also discussed that he would like you to come back to Australia to train
   the Customs personnel, as you had previously offered. The timing for this
   would be week commencing 20 October in Perth ( if possible)and week
   commencing 27 October for Melbourne and Sydney. I said I will contact you
   and determine your schedule so that we can try to fit in with your timing.
   I asked Kim Woo to pay for your airfare to Perth, but he was unwilling to do
   this, and had hoped you could fly to Australia via Perth. I do not believe
   this is possible, so I will leave it up to you if you want to train the
   Customs people in Perth (4.5 hours travel time from Sydney) or just
   concentrate on Sydney and Melbourne. Customs do have some issues with
   colour identification that would be part of the training program.
   
   Are you able to come back to Australia at this time to run training programs
   for Customs personnel on the use of the Identa range. this could be the
   breakthrough that we need, not only with Customs but with the Queensland
   police force as well.
   
   
2. Argentina:
   We received a new order for several thousand kits from the Argentinean police. It should be noted that this is the fourth order placed by this customer over the past year.
   The potential for sale of kits to police entities in Argentina is quite large, and with the improvement of the economy (after the crisis two years ago), there is hope that orders will continue to increase.
   At this point there is no activity to introduce products to the Argentinean civilian market.
   
   
3. South Africa:
   The company`s representatives in South Africa are in advanced discussions with the South African Customs Service and police, as well as with civilian entities. We expect to receive an initial order from said South African entities in the near future.
   On the way to Australia, we will also go to South Africa for professional meetings targeted at introducing our products in this important market. See the letter received from the South African company.
   
   "We have had a successful meeting with the Customs/ SARS and will be seeing the Border Police shortly. Some questions have arisen which I would like to ask:
   What is the Shelf Life of the products?
   Will a test for LSD become available through Identa?
   Can we get a costing on the Stinger case (i.e.law Enforcment Market kits) for professionals and a listing of how we can purchase the various items i.e. what denominations and packaging are they supplied in so that I can now place an order.
   
   Bobby Hamman"
   
   
4. The companies representing us in Brazil and Indonesia (as promised in the previous press release) are as follows:
   Brazil: Reesimex Ltd. - Below is a company profile.
   
   REESIMEX INTERNATIONAL TRADE LTD. was established in 1995 by Mr. E. Semmel and Mr. I. Greenberg, after they both left Clal International Trade Ltd, when that (and other) company`s activities were ceased in the framework of a corporate restructuring within the Clal Israel Group. Clal International Trade Ltd. was a wholly owned subsidiary within that Group. Mr. Semmel was managing director of a group of companies within the Group and Mr. Greenberg was Manager of Foreign Trade Activities.
   
   Both in Reesimex, as well as in their earlier positions in Clal, Messrs. Semmel and Greenberg deal primarily with the Brazilian market. Mr. Semmel is Brazilian born and through various business and personal connections, in the private as well as in the public sector (in federal, state and municipal levels) has been involved in dealing with the Brazilian market for over 30 years.
   
   During the Clal years, a special program involving countertrade between Israel and Brazil and special authorizations from the Israeli Ministry of Trade and Commerce and its Brazilian counterpart, produced a program through which over US$200 M in bilateral trade was carried out (all through Clal International Trade Ltd.) in the about 4 years that the program existed. (NOTE: the special agreements were finally cancelled in 1992 when both Brazil and Israel removed existing trade barriers.)
   
   In addition to financial activities, such as trade finance, countertrade, barter, clearing and forfaiting and ad hoc trading activities in raw materials, commodities and various industrial products, some of the major projects completed over the years, or currently being dealt with in the Brazilian market include:
   
   
   • establishment of a radio communications system for the State Police in the State of Sao Paulo;
   • sale of computerized, education equipment to various Brazilian universities;
   • sale of CT (computerized tomograph) Scanners to government hospitals in the State of Sao Paulo;
   • establishment of a long distance (via satellite transmission) learning/training system in the State of Rio Grande de Sul;
   • sale of public security programs/training/equipment to police forces in various states;
   • water and waste water purification and irrigation projects in various states;
   • various educational/training programs for several universities/private foundations in several Brazilian states;
   • various projects dealing with traffic and transport, such as vehicle registration,
     roadside truck scales, street and highway lighting, access control and tracking of transport containers, CCTV and other road security systems, and others:

   For each of these (and other) projects, Reesimex works in conjunction with different Brazilian companies according to the specific type of project involved and according to the specific type of buyer involved (municipal, state or federal government sector or private sector).
   
   From the very nature of these and other programs, their execution involved the full range of activities related to these programs including planning and development of the project, marketing, financing, shipping of equipment, installation, training, after sales service, etc.
   
   Indonesia: PPL Ltd., a subsidiary of one of the large Israeli conglomerates. In Indonesia we already have had positive initial contacts with police entities.
   
   Identa Corp. develops, manufactures, and distributes proprietary on-site drugs-of-abuse testing products for the professional and civil markets. The Company`s products include rapid test kits for the detection of Marijuana/Hashish, Ecstasy, Cocaine/Crack, and Heroin.