Spectra (di/ S) Regulatory News (SPSC)

January 30, 2014

Spectra Systems Corporation

("Spectra Systems" or the "Company")

G8 Central Bank New Generation Materials and Sensor Program Cancellation and Trading Update

The Board is disappointed that a G8 central bank customer which has been funding the materials and sensor development for a new generation technology has notified the Company that it has decided to cancel this program. To date the company has demonstrated a functional sensor prototype and has had numerous successful trials of the material incorporated in the embodiment of use by the central bank.

Spectra Systems continues to own all of the developed intellectual property, specific covert materials and sensor designs developed under this program. In addition, it expects that the specific materials and data will be unclassified and will be available to the Company to use commercially with another central bank customer.

Importantly the Board is pleased to announce that phosphour sales have in the last three months recovered to levels not experienced since 2011.

In addition it expects Spectra System's performance for the year ended 31 December 2013 to be in line with market expectations. The Board expects to release the Company's preliminary results for the year ended 31 December 2013 in April 2014.

Nabil Lawandy, Spectra System's CEO, stated:

"The manner in which this program came to an abrupt halt is gravely disappointing and a loss to the central bank which has spent over $1MM in development of materials and sensor design. Trials were performed over the last year with success and in the last technical discussions, enthusiasm was evident for the project and the success in the refinements made over the last year. In fact, a final large scale test before incorporation into banknotes had been scheduled for 24 February of this year.

We are now free to take this fully completed technology to other central banks as a ready package paid for by the central bank rather than shareholders. We will pursue this aggressively.

In the meantime, this will have minimal impact on market expectations as only negligible revenues relating thereto had been anticipated in such expectations. In addition, this decision by the G8 central bank is not expected to have any impact on current generation business with the central bank to whom we will continue to deliver upgraded sensors throughout the year.

Whilst this news is disappointing, the Board is delighted that phosphour sales have recovered to previous levels."

Enquiries:

Spectra Systems Corporation

Dr. Nabil Lawandy, Chief Executive Officer Tel: +1 (0) 401 274 4700

WH Ireland Limited

Chris Fielding (Head of Corporate Finance) Tel: +44 (0) 20 7220 1650