Press Release

TraceGuard  Technologies  Inc.  announces  the reaching of a definitive  license
agreement with TraceTrack Technology Ltd.

New York & Tel Aviv, February 16, 2006, 08:00 EST - TraceGuard Technologies Inc.
(TCGD.OB)  announced  today that it has reached a definitive  license  agreement
with  TraceTrack  Technology  Ltd. for a technology  related to automatic  trace
collection needed for advanced detection of explosive materials in luggage.

This technology,  combined with other  technologies which are being developed by
TraceGuard  Technologies  Inc., and are in the process of being filed for patent
protection, provide TraceGuard with a wide base for the development of a line of
products for the homeland security market.

The continuing  stream of terror attacks across the world since 9/11 has further
heightened   concern  for  security  in   transportation   systems,   places  of
entertainment,  and any location  where people  gather.  Security  agencies have
identified concealed explosive devices as posing a significant potential threat,
where even a small amount of explosives can prove to be lethal.

Air transport  security  remains a top  priority.  The scale of the challenge is
clear when one considers  that over 1.6 billion  pieces of luggage were screened
in US airports alone during 2005. By 2010,  this is expected to exceed 2 billion
pieces.

At present,  when an item of carry-on luggage is being flagged by X-Ray systems,
a swab or a small hand-held  vacuum device is used to manually collect traces of
suspect substances. This procedure only samples the exterior surface of the bag.
The swab is then manually run through a  sophisticated  trace chemical  analyzer
that checks for residue of explosives.

The first product  anticipated to be launched by TraceGuard is CarrySafe,  which
is being  developed to enhance and automate the  collection  of explosive  trace
particles  from carry-on  baggage.  CarrySafe's  uniqueness is in its ability to
automatically  collect  the  particles  from  outside & inside of luggage  being
screened for the possibility of containing explosives.

TraceGuard's  chairman,  Dr. Ehud Ganani, a former CEO of IMI (Israeli  Military
Industries)  and  formerly VP  Marketing  & Business  Development  with  Rafael,
Israel's military  technology  powerhouse.  According to Dr. Ganani, "We believe
that the introduction of TraceGuard's  technology into the screening  process at
airports will enhance efforts to detect explosives.  Our unique trace collection
system will  automate the  detection  process and deliver a much faster and more
efficient level of screening."

In addition,  says Ganani.  "We hope to reduce actual  search time,  which means
that  travelers  will have more time for  shopping  and dining  prior to flight.
Another  advantage is that  TraceGuard  technology  will be a natural  add-on to
existing X-Ray systems for baggage screening.  Further,  since our technology is
less  dependent  on  operator  skill,  experience,  as  well as  motivation  and
alertness, further labor savings may be possible."

During the past few  months,  TraceGuard  and its Israeli  R&D  subsidiary  have
assembled an impressive  team of engineers,  scientists and business  executives
with proven  credentials  in security and  technology.  The team includes  Chief
Executive  Officer Mr. Meir Zucker,  a former fighter pilot with wide experience
in heading technological  start-ups; VP Engineering and Product Management,  Mr.
Gil Perlberg, who holds several patents in the field of semiconductor processes,
and has broad  experience  in managing  large R&D teams;  Dr. Bob Roach,  former
university  professor at Georgia Tech, who performed research on behalf of NASA,
the US Air Force and several  major  aerospace  firms;  and  several  additional
scientists and staff members.




Safe Harbor Statement:
Statements in this document that are not purely historical are forward-looking
statements. Forward-looking statements in this release include statements
regarding: the commercialization of explosive collection technologies. Actual
outcomes and TraceGuard's actual results could differ materially from those in
such forward-looking statements. Factors that could cause actual results to
differ materially include risks and uncertainties such as the inability to
finance the planned development of the technology, inability to hire appropriate
staff to develop the technology, unforeseen technical difficulties in developing
the technology, inability to market the product we produce, among other factors,
all of which could among other things, delay or prevent product release or cause
our company to fail. For further risk factors see the risk factors filed with
the SEC on Edgar.

    Meir Zucker
    President & CEO
    1-866 401 5969
    Meir.zucker@traceguard.net