Audited results for year ended 31 December 2025

Spectra Systems Corporation

30 March 2026

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Spectra Systems Corporation

Audited results for the twelve months ended 31 December 2025

Spectra Systems Corporation (the "Company"), a leader in machine-readable high speed banknote authentication, brand protection technologies, and gaming security software, is pleased to announce its results for the twelve months ended 31 December 2025.

Financial highlights

·  Revenue of $64,284k (2024: $49,191k) up 30.7%

·  Adjusted EBITDA¹ up 82.9% at $27,307k (2024: $14,929k)

·  Adjusted PBTA¹ up 109.4% to $25,243k (2024: $12,054k)

·  Adjusted earnings per share² up 100% to US 37.8 cents (2024: US 18.9 cents)

·  Cash generated from operations of $10,107k (2024: $9,899k)

·  Unrestricted cash of $14,820k (2024: $13,354k) and debt³ of $3,256k (2024: $4,359k) at 31 December

·  Restricted cash of $3,180k (2024: $2,063k) on 31 December 2025

·  The Board is declaring an annual dividend of $0.136 per share (2024: $0.116) to be paid in July 2026

¹ Before stock compensation expense, excludes non-controlling interest, and gain on expiration of contingent liability related to Cartor Security Printers (CSP) acquisition

² Before amortization and stock compensation expense, excludes non-controlling interest, and gain on expiration of contingent liability related to Cartor Security Printers (CSP) acquisition

³ Cartor Holding Limited debt acquired on 21 December 2023 as part of the Cartor Security Print

Operational highlights:

·  First sensors delivered to our customer resulting in $5.7M payment in 2025.

·  Sensor Maintenance contract executed with our customer worth approximately $6.7M from 2026-2030.

·  $4M, four-year hybrid stamp contract, with a fifth-year option, awarded to our secure printing group in the UK.

·  House note with Fusion substrate and covert machine readability produced with Brazilian central bank printers, Casa de Moeda 

·  Successful print trials of our smartphone authentication technology with Police Office of a major middle eastern country

·  Gaming software security business produced record revenues and profitability

Commenting on the results, Nabil Lawandy, Chief Executive Officer, said:

"Through the execution of our sensor contract, the Company has achieved its highest profitability since its inception. Revenue and earnings were driven by partial completion of the sensor order for our long-standing customer and cash was fueled by the first deliveries in December of 2025. EPS has more than doubled over last year with a 133% increase. Our cash position has remained strong and will be further increased in 2026 as we deliver the remaining sensors to our customer. In addition, the delivery of sensors lowers the restricted component of our cash with the delivery of more sensors in 2026. Our gaming software group has seen a major turnaround to profitability which we expect will continue going forward. In addition, in 2025, the Security Print Group (SPG) has undertaken successful print tests with the government authority issuing drivers licenses, marriage certificates, and other secure documents in a major middle eastern country further opening the door to adoption of our smartphone technology for multiple opportunities, and particularly tax stamps.

SPG, formed through the acquisition of Cartor Security Printers (CSP), continues our efforts to qualify and commercialize our Fusion polymer substrate with qualifications already achieved with two major private banknote printers and one government printworks. All three of these qualifications have resulted in impressive house notes which drive our marketing efforts.

Despite delays which are part of the sales cycle with government customers, we have and will continue to navigate through the opportunities with unstoppable determination to achieve growth through sales of our Fusion Substrate and smartphone technology in the near future.

Spectra Systems Corporation

Dr. Nabil Lawandy, Chief Executive Officer

Tel: [phone]

Zeus (Nominated Adviser and Joint Broker)

James Joyce / James Bavister/ Andrew de Andrade (Investment Banking)

Fraser Marshall (Corporate Broking)

Tel: [phone]

Allenby Capital Limited (Joint Broker)

Nick Naylor / James Reeve (Corporate Finance)

Amrit Nahal / Tony Quirke (Sales and Corporate Broking)

Tel: [phone]

The person responsible for arranging the release of this announcement on behalf of the Company is Dr. Nabil Lawandy, Chief Executive Officer of the Company.

Chief Executive Officer's statement

We are delighted to report that we outperformed the 2024 earnings results with revenue for the year up 30.7% at $64,284k (2024: $49,191k), This increase was primarily driven by sensor production revenue recognition of $22,024K and related hardware sales of $7,335K which are part of the development contract scheduled for completion in 2026. In addition, we had a strong demand for our materials, a very sizable increase in our gaming software security business and the full integration of CSP into our operations

As a result of the increased revenue, adjusted EBITDA (before stock compensation expense, non-controlling interest, and gain on expiration of contingent liability related to Cartor Security Printers (CSP) acquisition) for the year increased 82.9% to $27,307k compared to the prior year of $14,929k. Our debt has been further reduced by 25% while our unrestricted cash increases, resulting in a cash to debt ratio of 4.5.

Having generated cash from operations of $10,107k (2024: $9,899k), cash at the end of the period was $14,820k (2024: $13,354k), excluding approximately $3,180k of restricted cash and investments (2024: $2,063k). This also follows the $5,612k paid to shareholders during June 2025 in the form of the Company's dividend of $0.116 per share.

Review of Operations

Physical and Software Authentication Business

The Physical and Software Authentication Systems business generated revenue of $42,722k (2024: $30,958k) and Adjusted EBITDA of $24,896k (2024: $13,299k). Authentication Systems revenues and earnings were driven by sensor manufacturing.  Optical materials sales in 2025 were in line with 2024 with several new opportunities being generated for potential sales in 2026. One of these opportunities with the groundwork being done in 2025 led to the 2026 consummation of a significant tax stamp contract with HMRC which includes the security printing group as well as authentication systems from the USA arm of the company. Additional groundwork in the form of print trials in 2025 is expected to lead to high margin authentication revenues from the use of our smartphone technology.

On the software security side of the Company's business, the Secure Transactions Group generated an Adjusted EBITDA of $1,892k (2024: $(8)k) on revenue of $3,786k (2024: $1,956k). The turnaround of this segment has resulted in a high level of profitability in 2025 which we expect to continue to grow at the levels of $500k-$800k in 2026. Key drivers for this growth are the new business and the expected renewal of several contracts over the next few years, opening the door to higher pricing with a reduced contractor staffing.

Security Printing Business (CSP)

CSP generated revenue of $17,776k (2024: 16,277k) and adjusted EBITDA of $519k (2024: 1,638k) for the period ending 31 December 2025. During 2025, additional development expenses of $265,000 were required to complete additional substrate requirements, specific to a middle eastern central bank. We expect to receive full qualification by the middle eastern central bank as well as a small first test order in 2026.  Our marketing in 2025 have resulted in a request to provide pricing as we begin the second phase of a qualification process with an Asian central bank for Fusion with machine-readable substrate capabilities as well as sensors for high-speed authentication. Two other central banks, one in Asia and one in south America have requested sample substrates for preliminary evaluation.in 2026.  In addition to continued execution on the polymer substrate, the security printing business was successful in winning a new contract for higher margin hybrid stamps worth $4M over four years.  The hybrid stamp business is expected to grow through an increase in the volume of stamps from this new customer as well as increased adoption of hybrid stamps throughout the EU over the next few years.

The restructuring plan for CSP has resulted in a staff reduction of 17 individuals at the Wolverhampton plant with three of the redundancies being management employees. The closure of the France operation has been reevaluated in light of French legal requirements and minor complications relating to transferring equipment utilized for Royal Mail production to the UK facility. The proposed timeline has been reset to the end of the third quarter of 2026, after which we would expect to begin benefiting from the reduced costs and sharper management focus related to that operation. We would maintain a sales staff of four individuals in France in order to service customers requiring EU based contract management. The restructuring plan has already had an impact through the reduction of staff and in the UK as well as a shift of focus to contracted revenues.

The analysis for the security printing group to generate profits in 2026 and going forward as well as increasing of the effective margin on Fusion polymer substrate depends on a significant part of the gravure machine labour costs being allocated to other contracts. One of the most critical contracts for this plan is renewal of the Royal Mail contract. The tender for this renewal was issued in early 2025 and it was stated in the documents that contract award would take place in June 2025. During the tender process, EP Group agreed to buy International Distribution Services (IDS), the owner of Royal Mail. The takeover was approved by the British government in December 2024 and was set to be finalized by April 30, 2025, after securing all final regulatory conditions. Due to the new ownership, previous delivery practices were suspended affecting our H1 results, and to date, there has not been a fully approved and signed contract.  Despite not yet having an executed contract with Royal Mail, Spectra is highly confident that we will be awarded the contract once the new management has adjusted to the changes. Business has continued as normal during the interim between contract termination and the new contract execution. Royal Mail has continued to place individual orders in line with what would have been part of the new contract.

Prospects

The Company continues to have number of new short-term and long-term prospects. Short-term opportunities are expected in the 2026-2028 period, and the long-term opportunities are expected in the 2028-2031-time frame.

The short-term opportunities include:

·  Delivery of all sensors to our customer and increasing cash significantly

·  Qualification of our polymer substrate with a second central bank in addition to the middle eastern central bank we are currently engaged with.

·  Expansion of the higher margin hybrid stamp sales to two additional postal authorities

·  Adoption of our smartphone technology and sale of our materials for several billion tax stamps per annum

·  Increasing profits in security printing through innovative technology that lowers paper costs

Long-term opportunities include:

·  Increase of covert authentication material sales

·  Covert materials sales for passports in conjunction with partners

·  Spirits tracking with two-level continuous ink jet materials developed for major well positioned company in tax and revenue stamps.

·  Further expansion of hybrid stamps for vapes in the EU

The combination of these prospects will allow the Company to accelerate its revenue and earnings growth over the coming years. We continue to develop technologies with our expanded security printing capabilities and expertise to remain a technology leader in the authentication industry and to offer our shareholders growth through innovation and dedication, serving both new and existing customers.

Dividend

With the Company having the eleventh year of sustainable profits and reaching their highest levels since our inception, we are pleased to pay a dividend of $0.136/share to our shareholders Our dividend policy takes account of the Group's profitability, underlying growth, and maintenance of sufficient cash reserves and will continue to be in proportion to our profits going forward. The Board therefore intends to pay an annual dividend of $0.136 per share on July 17, 2026 to shareholders of record as of July 3, 2026 (ex-dividend date is July 2, 2026).

Nabil M. Lawandy Chief Executive Officer March 30, 2026

Consolidated statements of income

for the years ended 31 December:

	2025	2024
	Audited	Audited
	USD '000	USD '000
Revenue
Product	$  56,655	$  43,052
Service	7,629	6,139
Total revenues	64,284	49,191
Cost of sales	27,212	25,702
Gross profit	37,072	23,489
Operating expenses
Research and development	2,697	2,161
General and administrative	8,984	8,392
Sales and marketing	1,089	1,457
Total operating expenses	12,770	12,010
Operating profit	24,302	11,479
Interest income	168	150
Interest expense	(155)	(198)
Foreign currency reversal	132	(127)
Extinguishment of contingent consideration	2,367	-
Profit before taxes	26,814	11,304
Income tax expense	6,769	2,802
Net income	20,045	8,502
Net loss attributable to noncontrolling interest	(11)	(18)
Net income attributable to Spectra Systems Corporation	$  20,056	$  8,520
Earnings per share
Basic	$    0.42	$    0.18
Diluted	$    0.41	$    0.17

All of the Group's operations are continuing.

Consolidated statements of comprehensive income

for the years ended 31 December:

	2025	2024
	Audited	Audited
	USD '000	USD '000
Net income	$  20,045	$  8,502
Other comprehensive income (loss)
Unrealized gain / (loss) on currency exchange	667	(294)
Reclassification for realized loss in net income	(132)	127
Total other comprehensive gain / (loss)	535	(167)
Comprehensive income	20,580	8,335
Net loss attributable to non-controlling interest	(11)	(18)
Comprehensive income attributable to Spectra Systems Corporation	$  20,591	$  8,353

Consolidated balance sheets as of 31 December:

		2025	2024
		Audited	Audited
		USD '000	USD '000
Current assets
Cash and cash equivalents		$  14,820	$  13,354
Trade receivables, net of allowance		2,906	3,000
Unbilled and other receivables		14,806	4,597
Inventory		8,027	6,206
Prepaid expenses		872	1,152
Total current assets		41,431	28,309
Non-current assets
Property, plant and equipment, net		8,232	9,048
Operating lease right of use assets, net		4,946	5,684
Intangible assets, net		13,040	13,511
Investments		100	95
Restricted cash		3,180	2,063
Deferred tax assets, net		1,381	2,093
Other assets		58	171
Total non-current assets		30,937	32,665
Total assets		$  72,368	$  60,974
Current liabilities
Accounts payable		$  4,248	$  3,631
Accrued expenses and other liabilities		1,482	1,034
Line of credit		391	453
Operating lease liabilities, short term		647	798
Taxes payable		3,223	1,423
Third party loans		2,023	1,711
Deferred revenue		2,719	4,967
Total current liabilities		14,733	14,017
Non-current liabilities
Operating lease liabilities, long term		4,484	4,969
Third party loans		1,233	2,648
Contingent consideration		-	2,513
Deferred revenue		560	499
Total non-current liabilities		6,277	10,629
Total liabilities		21,010	24,646
Stockholders' equity
Common stock		483	482
Additional paid-in capital - common stock		57,702	57,605
Accumulated other comprehensive income/(loss)		156	(378)
Treasury Stock		(36)	-
Accumulated deficit		(7,491)	(21,936)
Total Spectra Systems stockholders' equity		50,814	35,773
Non-controlling interest		544	555
Total stockholders' equity		51,358	36,328
Total liabilities and stockholders' equity		$  72,368	$  60,974

Statements of cash flows

for the year ended 31 December:

	2025	2024
	Audited	Audited
	USD '000	USD '000
Cash flows from operating activities
Net income	$  20,045	$  8,502
Adjustments to reconcile net income to net cash provided by operating activities:
Extinguishment of contingent consideration	(2,531)	-
Depreciation and amortization	2,903	3,194
Stock-based compensation expense	98	192
Lease expense	102	11
Deferred taxes	468	(228)
Changes in operating assets and liabilities
Accounts receivable	238	752
Unbilled and other receivables	(10,195)	(3,200)
Inventory	(1,595)	258
Prepaid expenses and other assets	406	445
Accounts payable	311	912
Accrued expenses and taxes payable	2,056	1,140
Deferred revenue	(2,199)	(2,079)
Net cash provided by operating activities	10,107	9,899
Cash flows from investing activities
Restricted cash and investments	(1,117)	(1,550)
Payment of patent and trademark costs	(308)	(689)
Purchases of property, plant and equipment	(186)	(745)
Net cash used in investing activities	(1,611)	(2,984)
Cash flows from financing activities
Repurchase of stock	(36)	-
Dividends paid	(5,612)	(5,595)
Third party loan principal payment	(1,365)	(1,129)
Line of credit	(48)	(139)
Net cash used in financing activities	(7,061)	(6,863)
Effect of exchange rate on cash and cash equivalents	31	49
Net increase (decrease) in cash and cash equivalents	1,466	101
Cash and cash equivalents, beginning of year	13,354	13,253
Cash and cash equivalents, end of year	$  14,820	$  13,354
Noncash investing activities
Contingent consideration	-	-
Equity used for investment in CSP	-	1,278
Acquisition of patents included in accounts payable	-	68

Notes to financial information

1.  Basis of preparation

This report was approved by the Directors on the 25th day of March 2026.

This financial information has been prepared using the recognition and measurement principles of US Generally Accepted Accounting Principles.

The principal accounting policies used in preparing the annual results are those the Company expects to apply in its financial statements for the year ending 31 December 2025 and are unchanged from those disclosed in the Company's Annual Report for the year ended 31 December 2024.

2.  Earnings per share

The calculation of basic earnings per share is based on the net income divided by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by considering the dilutive impact of common stock equivalents under the treasury stock method as if they were converted into common stock as of the beginning of the period or as of the date of grant, if later. Excluded from the calculation of diluted earnings per common share for the years ended 31 December 2025 and 2024 were 132,000 and nil shares, respectively. The following table shows the calculation of basic and diluted earnings per common share.

	Full Year to 31 Dec 2025	Full Year to 31 Dec 2024
Numerator:
Net income	$  20,055,896	$  8,520,046
Denominator:
Weighted average common shares	48,289,071	48,023,360
Effect of dilutive securities:
Stock Options	621,332	935,229
Diluted weighted average common shares	48,910,403	48,958,589
Earnings per common share:
Basic:	$    0.42	$    0.18
Diluted:	$    0.41	$    0.17

3.  Copies of this statement are available to the public on the Company's website at http://www.spsy.com.

4.  Reclassification: Certain reclassifications have been made to prior period amounts in order to confirm to current period presentation.

5.  Nature of financial information

The Preliminary Announcement set out above is an extract from the forthcoming Annual Report and Accounts and does not represent statutory accounts for Spectra Systems Corporation. The statutory accounts of Spectra Systems Corporation in respect of the period ended 31 December 2025 will be delivered to the Registrars of Companies before the Company's Annual General Meeting.

It is anticipated that the Annual Report and Accounts will be circulated to shareholders of Spectra Systems Corporation by March 2026. The Annual Report and Accounts will also be made available on the Company's website at: Investor Relations | World Lead In Security Technology | Spectra Systems .

Appendix - Reconciliation of Non-GAAP measures

The Company publishes certain additional information in a non-statutory format in order to provide readers with an increased insight into the underlying performance of the business. Reconciliations to the GAAP measures are shown in the following tables:

	2025	2024
	USD '000	USD '000
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA):
Operating profit	$  24,302	$  11,479
Depreciation	2,045	2,690
Amortization	851	560
Stock compensation	98	182
Operating loss  noncontrolling interest	11	18
Stock compensation  noncontrolling interest	-	(10)
Adjusted EBITDA	$  27,307	$  14,919
Adjusted profit before taxes and amortization (PBTA):
Profit before taxes	$  26,814	$  11,304
Gain on extinguishment of contingent consideration	(2,531)
Amortization	851	560
Stock compensation	98	182
Operating loss  noncontrolling interest	11	18
Stock compensation  noncontrolling interest	-	(10)
Adjusted PBTA	$  25,243	$  12,054
Adjusted earnings per share:
Adjusted PBTA	$  25,243	$  12,054
Income tax expense	(6,769)	(2,802)
Adjusted earnings	$  18,474	$  9,252
Diluted weighted average common shares	48,910,403	48,958,589
Adjusted earnings per share	$    0.378	$    0.189

1 Before stock compensation expense, excludes non-controlling interest, and gain on expiration of contingent liability related to Cartor Security Printers

2 Before amortization and stock compensation expense, excludes non-controlling interest, and gain on expiration of contingent liability related to Cartor Security Printers (CSP) acquisition

 

END