Dow Jones 10623.62 +94.96 1:30 pm PST, January 21, 2004  NASDAQ 2142.45 -5.53 For info, visit access.smallcapnetwork.com S & P 500 1147.62 +8.85 To be removed, please click here Russell 2000 597.48 -0.50 VOLUME 04: ISSUE 4  Feature: Spectrum - Zero Debt plan turbocharges prospects. Market Notes on SUNW, NT and LU. Spectrum Sciences (OTCBB: SPSC) announced today (release attached) that  it is tackling its small debt position and plans to be debt-free by the end of fiscal 2004. This feat shouldn't be too difficult: the company has some non-core real estate holdings it intends to liquidate. Current debt equals $2.4 million backstopped by real estate assets with an appraised value of $2.75 million. (Click for our January 7th background piece) Risk oriented investors are strongly encouraged to accumulate Spectrum shares in anticipation of significant deals this year. The company kicked off 2004 with a $3.7 million contract. We believe the best is yet to come. Further, due to the company's improved and improving financial position, its bank has restructured its debt, saving Spectrum $120,000 a year. Not a huge amount, investors might think, but nonetheless a brick in the road to its swift debt elimination. The restructuring will increase cash flow, and serve to decisively move the company's prospects forward. With annual revenues of roughly $13 million and growing, 2004 is shaping up to be the breakout year for Spectrum. Trade volumes have increased significantly in the last few weeks as Spectrum blips on more investors' radar screens. After the pullback in December we anticipate that the shares will breakout above the November high of $1.91. This small cap company has positive and growing earnings as well as a compelling price to sales ratio of 2.5 times--which should become even better as deals are announced over the next couple of months. Spectrum's price to sales ratio evidences a strong base from which, we believe, the company will return handsomely for investors over the next 12 months. Spectrum is a news and deal driven company. To date, it has secured a number of significant contracts that will add to the top-line immediately. With today's announcement of debt restructuring and elimination by fiscal year end 2004 (as at December), the bottom line will get a large boost as well. In essence, the company's financial health and prospects look very bright for both the short and the long term. The kinds of deals the company trolls for have the potential not just to add incremental revenue, but also to increase revenues quickly and exponentially. In this age of searching for "The Next Big Thing" investors should not lose sight of standard investment tenets: that good companies with great markets, savvy management and cutting edge products should not be overlooked. Don't overlook Spectrum.   Press Release Spectrum Sciences Announces Significant Debt Restructuring Wednesday January 21, 4:02 pm ET Company Notes Substantial Progress in Commitment to Enhancing Cash Flow and Improving Balance Sheet # FORT WALTON BEACH, Fla., Jan. 21 /PRNewswire-FirstCall/ -- Spectrum Sciences & Software Holdings Corp. (OTC Bulletin Board: SPSC - News), highly focused on Homeland Security through the provision of full service, quality solutions to complex and diverse government matters, announced today the completion of a significant debt restructuring with its principal lender.(Logo: http://www.newscom.com/cgi-bin/prnh/20031209/FLTU018LOGO ) The restructuring agreement, executed on December 31, 2003 with SouthTrust Bank, the company's principal lender, extends the maturity dates on all outstanding indebtedness, resulting in a more favorable long-term classification. Pursuant to the terms of the restructuring, the company and SouthTrust agreed to extended terms of the company's total debt of approximately $2.4 million, reclassifying approximately $1.7 million as long term. The bank's agreement is largely based on Spectrum's performance and improving financial condition. On a current basis, the company has liquidated approximately $1.8 million in principal, representing approximately 60% of the original debt. In addition, with the extension of the maturity dates of the loans, the debt payments are reduced by an annualized $120,000. Consistent with the Spectrum 2004 strategic plan is the company's intention to liquidate an additional $1.7 million in real estate loans through the sale of the attendant real estate holdings, currently with an estimated appraised value of approximately $2.75 million. The $1.7 million represents a significant portion of the company's total $2.4 million in bank debt. "Pursuant to our 2004 strategic plan, we are fully committed to creating a debt free company by the conclusion of our fiscal year," stated Nancy Gontarek, chief financial officer for Spectrum. "The bank restructuring is an important component in our mission of improving cash flow, enhancing our balance sheet and improving efficiencies." 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 matters. 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 Air Force, Army, Navy and many of our allied nations. Spectrum also operates and manages the largest air-to-ground bombing range, located in Gila Bend, in the United States. The Information Technology Division provides a full range of IT services including web site development and hosting, software development and GIS services. Our manufacturing division is ISO 9001/2000-qualified and provides a broad array of manufacturing services for both commercial and Department of Defense customers. To find out more about Spectrum, visit our website at www.specsci.com Forward-Looking Statements 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. For Investor Relations questions contact: Steve Cook, (steve.cook@specsci.com) 800-368-5278 ext 44.   MARKET NOTES Lots of email regarding our opinions on Lucent, Nortel and Sun Micro. Analysts--late to the party as usual--are waking up to the fact that these behemoths may well prosper again. Lucent, for example, has just announced its second quarterly profit in a row.  SmallCap readers were buying Lucent at under $2 in August of 2003; after hitting $5 and change last week, the stock has settled in the $4.50 area as the earnings lustre wears off.  Nortel perked up over $7 and now trades at a respectable $6.85. SmallCap readers were alerted a year ago at $1.83.  SUN Micro has moved to $5.65 from our October alert at $3.48. If you followed our advice and got in around those Alert levels, we reiterate that a partial sale would be prudent. Not to put too fine a point on it, but if you can sell enough--say, up to half--to reduce your cost base to zero or better, do it. Holding a stock for the long term is much easier and objectivity is maintained if there is no financial risk. You may quote me.... As Wall Street follows us in on these stocks, there may well be more upside. We like to buy when everyone hates or ignores a stock. The reverse is also true.  Using the markets instead of getting used by them is always more fun and profitable. That's why we're here: to help you benefit from those situations that result in both enhanced returns and capital preservation.     We Value Your Feedback Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 3525 Del Mar Heights Rd #334 San Diego, CA 92130 Unsubscribe Here D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. 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