Dow Jones 10781.16 -53.72 7:44 am PST, February 17, 2005  NASDAQ 2071.66 -15.77 For info, visit access.smallcapnetwork.com S & P 500 1203.92 -6.42 Change your subscription status here Russell 2000 636.40 -2.45 VOLUME 05: ISSUE 13  Feature: Spectrum - Another Very Big Deal, Again. On Monday, we noted Spectrum Science's (OTCBB: SPSC) announcement of its major acquisition of Canadian firm M&M Engineering.  Thursday, the company announced (release below) that it has entered into a letter of intent (LOI) to acquire privately owned Virginia-based Horne Engineering Services. The terms of the deal have not been disclosed as yet, although if past history with Spectrum is any guide, we suspect the details will be beneficial to both parties and their respective shareholders.  We believe that once the deal with Horne Engineering completes, Spectrum will represent a diversified technical solutions company that investors will want to accumulate at these levels and on any dips with an eye to significant future growth.  We have said over the months since we re-issued our Spectrum Trading Alert on August 5th 2004 at $1.30, that stop losses are prudent, both to protect profits for those who own the shares and reduce volatility on new purchases. Currently we have a stop loss at the $2 level for those reasons. Yes, a very big deal. With over 200 employees in 18 locations in the US, Horne Engineering "delivers technology and technical engineering solutions to challenging problems in the areas of energy and environment, transportation, and national security". Oh yes, it gets better. Way better. For 2004, the profitable Horne had revenues of nearly $26 million. Average annual revenues for 2001-2003 were approximately $26.4 million. The company has quality relationships with virtually all levels of Government, including the Department of Defense, Department of Homeland Security and the Department of Energy to name just a few. CEO Darryl Horne, who, once the deal is consummated, is slated to take the helm of the 'new' Spectrum as President and CEO, personally founded Horne Engineering (www.horne.com) in 1990. Combining the constituent revenues of Spectrum, M&M Engineering and Horne (once completed), the resultant entity--by our calculation-- has a revenue base of roughly $65-$70 million going into 2005. The synergies appear excellent to increase that revenue number, in our view, as each party brings their complimentary strengths to the company.  Over the past year for example, Horne has announced contracts (among many) to provide nationwide support services to the Transportation Security Administration, integrated security services at Andrews Airforce Base, has teamed with partner Bechtel National to provide procurement support on Iraq Infrastructure as well as 2 contracts to support Natural Resource Management Planning with the US Army at two locations. Strengthening already strong management. And, as mentioned, Horne brings executive management depth that will only serve to strengthen Spectrum's already impressive team, which has brought the company to this point from virtually nowhere a short few years ago and will continue to be an integral part of future growth.  Spectrum has delivered partnerships in the last few weeks that, once all are completed, will literally transform it into a diversified technical product and service company with deepened and expanded influence within targeted local and national government agencies, a significant foothold in the oil and mining services sector, and streamlined management to take advantage of those revenue streams.  Further, it has done this against a backdrop of quickly moving the company into sound fundamental shape with a good cash position, no debt and a decent order backlog. I received an email from a reader asking if Spectrum would seek a more senior listing based on its share price and recent events. I have no information as to this eventuality, but in my opinion, it wouldn't surprise me. I also have no information on the timing of the completion of the Horne deal, but I suspect the parties will move with all speed to consummate, as the relationship looks extremely beneficial to the respective shareholders. We will obviously bring you details here or on the SCBLOG once received.     PRESS RELEASE Spectrum Sciences & Software Enters into Letter of Intent to Purchase Horne Engineering Services, Inc. Thursday February 17, 7:00 am ET  Alliance Would Create A Leading Technological Solutions Company FORT WALTON BEACH, Fla.--(BUSINESS WIRE)--Feb. 17, 2005--Spectrum Sciences & Software Holdings Corp. (OTCBB: SPSC - News), highly focused on homeland security through the provision of full-service, quality solutions to complex and diverse government initiatives, announced that it has entered into a letter of intent (LOI) to acquire all of the issued and outstanding shares of Horne Engineering Services, Inc., a profitable technology and technical engineering solutions firm with 2004 revenues (unaudited) of approximately $25.8 million. Economic terms of the transaction were not disclosed at this time in accordance with the confidentiality agreement between the parties. Upon closing of the proposed transaction, Darryl K. Horne, the President and CEO of Horne Engineering, would be appointed as President and Chief Executive Officer of Spectrum, and Michael M. Megless, CFO of Horne, would be appointed as CFO of Spectrum. Mr. Horne and Mr. Megless would also be appointed to Spectrum's Board of Directors. Kelvin D. Armstrong, Karl Heer and William Ham would continue as directors of Spectrum, and Mr. Ham and Nancy C. Gontarek, Spectrum's current CEO and CFO respectively, would remain as operating management of the existing operations of Spectrum Sciences, Inc. Spectrum believes that Horne Engineering has created a platform for dramatic growth and that Horne has a proven management team and the infrastructure necessary for Spectrum's advancement as a significant force in the technical solutions field. Founded by Darryl Horne in 1990 and headquartered in Falls Church, Virginia, Horne Engineering has forged strong relationships with many top-tier companies, such as Bechtel National Inc. and Battelle Memorial Institute, and Government Agencies, such as Department of Homeland Security and the U.S. Army Corps of Engineers. The combination of Spectrum and Horne should strengthen and expand these relationships. The transactions contemplated by the LOI are subject to certain conditions, including:  *  Satisfactory completion of due diligence by Spectrum and  Horne;  *  Completion of a mutually agreeable definitive transaction  documents; and  *  Approval of the respective Boards of Directors of Spectrum and  Horne, and of the stockholders of Horne. About Spectrum Sciences & Software Holdings Corp. Spectrum Sciences & Software Holdings Corp. is highly focused on Homeland Security through the provision of full service, quality solutions to complex and diverse government initiatives. Spectrum is dedicated to providing innovative, dependable and cost-effective products and services to a broad range of government customers and is headquartered in Fort Walton Beach, Florida. Founded in 1982, the company currently has over 130 employees. Primary markets include engineering services, operation, maintenance, information technology and manufacturing. Spectrum provides and maintains Software Model Development and Safety Footprint Development to the United States Air Force, the United States Army, the United States Navy and many of our allied nations. The Information Technology Division provides a full range of IT services including web site development and hosting, software development and GIS services. The company's manufacturing division is ISO 9001/2000-qualified and provides a broad array of services for both commercial and Department of Defense customers. To find out more about Spectrum, visit our website at http://www.specsci.com. About Horne Engineering Services, Inc. Headquartered in Falls Church, Virginia, and with over 200 employees working in eighteen locations throughout the United States, Horne Engineering is a technology and technical engineering solutions firm whose primary service areas are national security, energy and environment, and transportation. Clients include the Department of Defense, U.S. Agency for International Development, Department of Homeland Security, Federal Aviation Administration, National Aeronautics and Space Administration, Department of Energy and other federal, state, local, commercial, and industrial clients. Partners include Bechtel National, Inc., Battelle Memorial Institute, and Staubach. Horne Engineering is an equal opportunity employer. More information about HORNE ENGINEERING can be found at http://www.horne.com. Cautionary Statement This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, risks set forth in documents filed by the company from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by, or on behalf of, the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.  Contact:  Spectrum Sciences & Software Holdings Corp. Steve Cook, 800-368-5278 Steve.cook@specsci.com Source: Spectrum Sciences & Software Holdings Corp.   We Value Your Feedback Got comments, questions or suggestions? 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