Stratus Services Group, Inc. Reports on Status of Negotiations With Certain Shareholders


MANALAPAN, N.J., Aug. 23, 2005 (PRIMEZONE) -- Stratus Services Group, Inc., the SMARTSolutions(TM) Company (OTCBB:SSVG), announced today that it continues to dialogue with Pinnacle Investment Partners, L.P. ("Pinnacle") and Essex & York, Inc. ("Essex"), in an attempt to resolve issues previously reported in the Company's Report on Form 10-Q for the quarter ended March 31, 2005, and the Company's Form 10-Q for the quarter ended June 30, 2005. Essex, the Underwriter of the Company's public offering of Common Stock and Warrants that was completed in August 2004, and Pinnacle, a holder of the Company's Common Stock and Series I Preferred Stock, expressed disappointment with the Company's fundamental performance and management issues. While the Company has had continuing discussions with these parties over the last several months in an attempt to avoid any potential litigation, the Company has not yet been able to reach a final resolution of all our differences, and there can be no assurance that the Company will be able to do so. Nevertheless, the Company's Board remains committed to working together with all parties to attempt to reach a mutually satisfactory result.

Stratus is a national provider of business productivity consulting and staffing services through a network of twenty-nine offices in seven states. Through its SMARTSolutions(TM) technology, Stratus provides a structured program to monitor and reduce the cost of a customer's labor resources. Through its Stratus Technology Services, LLC joint venture, the Company provides a broad range of information technology staffing and project consulting.

This news release includes forward-looking statements within the meaning of the federal securities laws that are subject to risks and uncertainties. Factors that could cause the Company's actual results and financial condition to differ from the Company's expectations include, but are not limited to, a change in economic conditions that adversely affects the level of demand for the Company's services, competitive market and pricing pressures, the availability of qualified temporary workers, the ability of the Company to manage growth through improved information systems and the training and retention of new staff, and government regulations.



            

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