First TruBrand customer

 May 5 2016

Spectra Systems Corporation

("The Company" or "Spectra Systems")

First TruBrandTM customer adopts smartphone authentication technology

Spectra Systems, a leading supplier of authentication technology for banknotes, brand authentication and tax stamps, is pleased to announce that it has entered into a six year supply contract with a Chinese manufacturer of labels for linens for the use of our new breakthrough technology, TruBrandTM which enables for the physical, non-image based, authentication of products using a smartphone.

This contract represents the first important adoption of the technology and will begin January of 2017. The contract requires minimum annual high margin materials revenues of $0.30m beginning 2018 whether or not such materials are ordered and has a minimum total value of $1.65m. The delivery of these materials to the new customer will not require additional staffing at the Company and will contribute significantly to our earnings.

The Board anticipates that sales of materials to this customer will provide a valuable first reference for the technology and help drive sales, particularly in China.

Dr. Nabil Lawandy, CEO of Spectra Systems, stated: "This is a milestone for Spectra and is critical for the acceleration of sales of this new enabling technology. TruBrandTM eliminates the need for costly readers and allows the consumer to authenticate the product themselves. TruBrand™ has a multitude of applications including very large scale, multibillion unit products such as tobacco in China and could be a transformative source of revenue for the company. In addition to brand authentication, our family of our other smartphone based technology variants which includes TruStampTM and TruNoteTM will also benefit from this first adoption. TruNoteTM, our banknote authentication version, like TruBrandTM, can authenticate and denominate banknotes in any environment, including absolute darkness, making the technology ideal for visually impaired individuals."

"The Board is very pleased to see additional long term contracted revenue growth in areas outside of the banknote industry and is pleased to confirm that the Company is on track with expectations for the year."

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