AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER  1, 2003
                          REGISTRATION NO. 000-50373

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                            ------------------------

                                   FORM 10-SB
                          PRE-EFFECTIVE AMENDMENT NO. 1
                 GENERAL FORM FOR REGISTRATION OF SECURITIES OF
                             SMALL BUSINESS ISSUERS

                        UNDER SECTION 12 (B) OR 12 (G) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                            ------------------------

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
             (Exact name of Registrant as specified in its charter)
                            ------------------------
          DELAWARE                           8744                    80-0025175
(State or other Jurisdiction of   (Primary Standard Industrial     (IRS Employer
 Incorporation or organization)    Classification Code Number)        I.D. No.)

                            ------------------------
                                91 HILL AVENUE NW
                        FORT WALTON BEACH, FLORIDA 32548
                                 (850) 796-0909
                           (850) 244-9560 (FACSIMILE)
   (Address, including zip code, and telephone and facsimile numbers, including
                                  area code, of
                         registrant's executive offices)
                            ------------------------
                             THE COMPANY CORPORATION
                        2711 CENTERVILLE ROAD, SUITE 400
                           WILMINGTON, DELAWARE 19808
                                 (800) 818-0204
                            (302) 636-5454 (FACSIMILE)
    (Name, address, including zip code, and telephone and facsimile numbers,
                    including area code of agent for service)
                            ------------------------

          Securities to be registered under Section 12 (b) of the Act:

     Title  of  each  class                    Name  of  each  exchange on which
     to  be  registered                        each  class  is to be registered

     None                                      None

          Securities to be registered under Section 12 (g) of the Act:

                    Common Stock, par value $.0001 per share
                                (Title of class)

                        Copies of Communications Sent to:
                            ADAM S. GOTTBETTER, ESQ.
                             KEVIN F. BARRETT, ESQ.
                           GOTTBETTER & PARTNERS, LLP
                         488 MADISON AVENUE, 12TH FLOOR
                            NEW YORK, NEW YORK 10022
                    TEL: (212) 400-6900 - FAX: (212) 400-6901


                                        1



                                               TABLE OF CONTENTS
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                                                                                                           PAGE
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PART I

ITEM 1.  DESCRIPTION OF BUSINESS, INCLUDING RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . .     3
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS. . . . . . . . . . . . . . . . . . .     9
ITEM 3.  DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . .    17
ITEM 5.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS . . . . . . . . . . . . . . . . . .    17
ITEM 6.  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
ITEM 7.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . .    21
ITEM 8.  DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

PART II

ITEM 1.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY  AND RELATED STOCKHOLDER MATTERS    23
ITEM 2.  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    23
ITEM 3.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . .    24
ITEM 4.  RECENT SALES OF UNREGISTERED SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
ITEM 5.  INDEMNIFICATION OF OFFICERS AND DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . .    25

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

PART III

ITEM 1.  INDEX TO EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    27







                                        2

                    PART I - ITEM 1.  DESCRIPTION OF BUSINESS

Overview
--------

     Spectrum  Sciences  & Software Holdings Corp. has had significant financial
problems.  The  auditor's  opinion on our financial statements indicates that it
was  prepared  under  the  assumption  that  we  continue  as  a  going concern.
Nevertheless, our independent auditor believes that there is "substantial doubt"
that  we  will  be able to continue as a going concern.  In part because we have
incurred  recurring  losses  from  operations and have a net capital deficiency.

     Further  we  have  significant  debt, some of which is in default, which is
described  in  more  detail  below.

SUMMARY  OF  CORPORATE  HISTORY

     Spectrum  Sciences  &  Software,  Inc, a Florida corporation, was formed in
1982 for the purpose of providing engineering, science and technological support
services  for  the  United  States  Department  of  Defense.

     Silva  Bay  International, Inc., a Delaware corporation, was formed in 1998
for the purpose of locating and recovering rare and valuable aircraft. Silva Bay
International,  Inc.  had no operations and no revenue from inception in 1998 to
the  time  of  the  acquisition  of Spectrum Sciences & Software, Inc. in April,
2003.  Silva  Bay  International,  Inc.'s  common  stock  has been traded on the
Electronic  Pink  Sheets  as a non-reporting company under the symbol SIVY since
2000.

     On  April  2,  2003,  Silva Bay International, Inc., a Delaware corporation
acquired  Spectrum Sciences & Software, Inc., a Florida corporation, in exchange
for  the  issuance  of 2,500,000 shares of common stock (taking into account the
forward two for one stock split of April 9, 2003). Spectrum Sciences & Software,
Inc.  is  now the wholly owned subsidiary of Silva Bay International, Inc. Donal
R.  Myrick  had  been  the  sole  shareholder, president and founder of Spectrum
Sciences & Software, Inc. Silva Bay International, Inc. retained the services of
Mr.  Donal R. Myrick as president pursuant to a three year employment agreement.
Mr.  Myrick  is  also  the  chairman  of  the  board  of  directors.

     The sole shareholder of Spectrum Sciences & Software, Inc. entered into the
acquisition  transaction, which resulted in him giving up 87% of his company due
to  the  dire  financial  circumstances that Spectrum was in. In anticipation of
this  acquisition, an  immediate  capital  infusion  of  approximately  $500,000
occurred  from  a  director  of Silva Bay which allowed the company to stave off
bankruptcy  and  continue working with its creditors, mainly SouthTrust Bank, in
renegotiating  loan  agreements.  The acquisition transaction has had a positive
impact  on  negotiations  due  to  the  capital  infusion into the company which
resulted  in  payments  to  SouthTrust  Bank  which  reduced  loan  balances.

     On  April  8,  2003,  Silva  Bay  International,  Inc.  changed its name to
Spectrum  Sciences  &  Software Holdings Corp. ("Spectrum" or the "Company"). On
April  9, 2003 the National Association of Securities Dealers issued the Company
a  new  trading  symbol.  The  Company's  trading  symbol changed from "SIVY" to
"SPSC".  All  of the Company's operations are conducted through its wholly owned
subsidiary  Spectrum  Sciences  &  Software,  Inc. On April 9, 2003, the Company
effectuated  a  two  for  one  forward split of its common stock. The Company is
located  at:  91 Hill Avenue NW, Fort Walton Beach, Florida 32548; the telephone
number  is  (850)  796-0909.

BUSINESS

     The  Company  provides  engineering,  science  and  technological  support
services  for  the  United  States  Department  of  Defense.

     The  Company  has  three  operating  divisions:

     1)  Manufacturing  Division.  We  manufacture  aerospace  ground  support
equipment,  missile,  munitions  and  material  handling  equipment, specialized
shipping  and  storage  containers;  and  a  variety  of precision parts for the
sustaining  of  military  equipment.


                                        3


     2)  Engineering  and  Information  Technology  Services.  Engineering  and
Information  Technology  Services  provides  technical services to support range
safety,  hazard  analysis  and  mitigation,  mission  planning,  weapon  system
simulations,  weapons  safety  footprint  development,  and  ballistic analysis.
Additionally,  this  division  performs  a  wide variety of environmental impact
analysis  to  include:  preparation of environmental impact statements, aircraft
noise  analysis  and noise impact assessments, airspace usage analysis, airspace
environmental  impact  assessments,  and  use  compatibility  studies.

     3)  Management  Services.  Management  Services  provides  operations  and
maintenance  of  United  States  Air  Force  air-to-ground  bombing  and gunnery
training  ranges.  We  also  provide  for  complete  base operations services to
include:  armed  base  security,  fire  department  operations, grounds and road
maintenance, civil engineering, runway operations, airbase tower operations, and
base  wide  communications.

COMPETITION

     The  market  for  our  products is highly competitive. We face a variety of
domestic  and  foreign  competitors  including  divisions  of  Ahntech,  Arcata
Associates,  Artic  Slope  Manufacturing  Technology,  Tybrin  and  Science
Applications  International Corp. Many of our competitors are larger than we are
and  have  substantially  greater  financial  and  other  resources.

     We  compete  on  the basis of product offerings, price, product and systems
quality,  technology  and  ongoing  customer service and support. Our ability to
compete  for  defense  contracts  depends  on  a  variety of factors, including:

     -    Our  corporate  and  key  personnel  backgrounds  and  qualifications;
     -    The  effectiveness  and  innovation  of  our  research and development
          programs;
     -    Our  proven  past  performance  history;
     -    Our  ability  to offer better program performance than our competitors
          at  a  lower  cost;  and
     -    The  readiness of our facilities, equipment and personnel to undertake
          the  programs  for  which  we  compete.

     In  programs  where  we  are  the sole-source provider, other suppliers may
compete against us only if the customer chooses to reopen the particular program
to  competition.  Approximately  4%  of  our total contract revenue for the year
ended  December  31,  2002  was  derived  from  sole-source  business.

     Furthermore,  our  Engineering and Information Technology Services division
contains advanced technology derived from internal research and development that
creates  high  barriers  to  entry.  Since  January  1,  1998,  we  have  spent
approximately $500,000 in research and development, in large part, in support of
advanced  technology.

SUPPLIERS  AND  MATERIALS

     Our  in-house  manufacturing  primarily  consists  of assembly of purchased
parts.  Accordingly,  we  do  not  use  significant amounts of raw materials. We
purchase  manufactured  component  parts  for  our  assemblies  from  various
independent  suppliers.  These  parts are normally not purchased under long-term
contracts  unless  a long-term sales contract with one of our customers requires
it.  We are not dependent on any one supplier and maintain back-up suppliers for
all  critical  components.  We  do  not  consider  the  prices  of our purchased
component  parts to be volatile.  However, any delay in our suppliers' abilities
to  obtain  necessary  parts  may affect our ability to meet customer production
needs.

REGULATORY  MATTERS  AND  GOVERNMENT  CONTRACTS

     Substantially  all of our contract revenue resulted from contracts with the
Department  of  Defense,  prime  contractors  that  identified the Department of
Defense  as  the  ultimate purchaser or other United States Government agencies.
United  States  Government  business  is  performed under fixed-price contracts.

     Under  U.S.  Government  regulations,  certain  costs,  including  certain
financing  costs, portions of research and development costs, lobbying expenses,
certain  types  of  legal expenses and certain marketing expenses related to the
preparation  of  bids  and  proposals,  are not allowed for pricing purposes and
calculation of contract reimbursement rates under flexibly-priced contracts. The


                                        4


U.S.  Government  also  regulates the methods under which costs are allocated to
U.S.  Government  contracts.  We are subject to a variety of audits performed by
U.S.  Government agencies.  The Defense Contract Audit Agency, or DCAA, performs
these  audits  on  behalf  of  the  U.S.  Government.

     U.S.  Government  contracts  are, by their terms, subject to termination by
the  U.S.  Government  for  either its convenience or default by the contractor.
Fixed-price  contracts  provide for payment upon termination for items delivered
to  and  accepted  by  the  U.S.  Government  and,  if  the  termination  is for
convenience,  for  payment of fair compensation of work performed plus the costs
of  settling  and  paying  claims by terminated subcontractors, other settlement
expenses  and  a  reasonable  profit  on  the  costs  incurred.  If  a  contract
termination  is  for  default,  however,

     -    the  contractor  is  paid  an  amount  agreed  upon  for completed and
          partially  completed  products  and  services  accepted  by  the  U.S.
          Government;
     -    the  U.S.  Government  is  not  liable for the contractor's costs with
          respect  to  unaccepted items, and is entitled to repayment of advance
          payments  and  progress  payments,  if  any, related to the terminated
          portion  of  the  contract;  and
     -    the  contractor  may  be  liable for excess costs incurred by the U.S.
          Government  in  procuring  undelivered  items  from  another  source.

     In  addition  to  the  right  of  the  U.S.  Government  to terminate, U.S.
Government  contracts  are  conditioned  upon  the  continuing  availability  of
Congressional  appropriations.  Congress  usually appropriates funds for a given
program  on  a  September 30 fiscal year basis, even though contract performance
may  take  many  years.  Consequently,  at  the  outset  of a major program, the
contract  is  usually  partially  funded  and  additional  monies  are  normally
committed  to  the  contract  by the procuring agency only as appropriations are
made  by  Congress  for  future  fiscal  years.

INTELLECTUAL  PROPERTY  RIGHTS

     We  own  several proprietary software and hardware products, these products
are  not  protected  by  any  patents  or  copyrights.

ENVIRONMENTAL  MATTERS

     Our  operations  include  the  use,  generation  and  disposal of hazardous
materials.  We  are  subject  to  various U.S. federal, state and local laws and
regulations  relating  to  the  protection  of  the environment, including those
governing the discharge of pollutants into the air and water, the management and
disposal  of  hazardous substances and wastes, the cleanup of contaminated sites
and the maintenance of a safe workplace. We believe that we have been and are in
substantial  compliance with environmental laws and regulations and that we have
no  liabilities  under environmental requirements that we would expect to have a
material  adverse  affect  on  our  business, results of operations or financial
condition.  In  the past two years, we have not incurred material costs relating
to  environmental  compliance.

EMPLOYEES

     As  of  October  1, 2003, we had approximately 135 employees. Approximately
15%  of  our  employees  are  engaged  in manufacturing, 7% of our employees are
engaged  in  engineering,  research and development and 73% of our employees are
engaged in range operations and maintenance, and 5% of our employees are engaged
in  sales,  marketing,  product  support and general administration. None of our
employees  are  represented by a union or are covered by a collective bargaining
agreement.  All of our employees are based in the United States. We consider our
employee  relations  to  be  satisfactory.

RISK  FACTORS

     Investing  in  our  common stock involves a high degree of risk. You should
carefully  consider  the  risks  and  uncertainties  described  below before you
purchase  any  of  our common stock. All of the known material risks inherent in
this  offering  are  addressed  below. These risks and uncertainties are not the
only  ones  we face. Unknown additional risks and uncertainties, or ones that we
currently  consider  immaterial,  may  also  impair  our  business  operations.


                                        5


     If  any  of  these  risks  or  uncertainties  actually occur, our business,
financial  condition  or  results  of  operations  could be materially adversely
affected.  In  this  event  you  could  lose  all  or  part  of your investment.

UNLESS  WE  RAISE AN ADDITIONAL FOUR MILLION DOLLARS WE WILL NOT BE ABLE TO FUND
OUR  OPERATIONS  AND  YOU  MAY  NOT  BE ABLE TO SELL YOUR SHARES, THEREFORE YOUR
INVESTMENT  WOULD  BE  A  COMPLETE  LOSS.

     We  will need approximately $1 million of additional working capital within
the  next  twelve  months to pay down vendors and amounts we owe to continue our
current operations.  Based on our current operations, we believe we can continue
to operate for an additional 8 months.  We will need an additional $3 million of
working capital to refinance or pay off our debt with SouthTrust Bank within the
next  year.  We  will  attempt  to obtain this capital through borrowing or from
selling  our  stock privately.  Failure to maintain such funding within the next
twelve  months  would  likely  prohibit  us  from  continuing  our  operations.
Therefore  you  may be unable to sell your shares and your investment would be a
complete  loss.

OUR  CURRENT  LIABILITIES EXCEED OUR CURRENT ASSETS, WHICH MAY MAKE IT DIFFICULT
FOR US TO CONTINUE OPERATIONS AND TO OBTAIN ADDITIONAL FINANCING THAT WE NEED TO
CONTINUE OUR OPERATIONS AND WE MAY BE FORCED INTO BANKRUPTCY;  THEREFORE YOU MAY
BE  UNABLE  TO  SELL  YOUR  SHARES  AND  YOUR INVESTMENT MAY BE A COMPLETE LOSS.

     Our  current  liabilities  exceed  our  current  assets,  which may make it
difficult  for  us to continue our operations and to obtain additional financing
that  we  need  to continue our operations.  Further, our creditors may force us
into  bankruptcy.  Therefore  you  may  be  unable  to sell your shares and your
investment  may  be  a  complete  loss.


COST  OVER-RUNS  ON OUR CONTRACTS COULD SUBJECT US TO LOSSES OR ADVERSELY EFFECT
OUR  FUTURE  BUSINESS.

     Under  fixed-price  contracts, we receive a fixed price irrespective of the
actual  costs we incur, and consequently, any costs in excess of the fixed price
are  absorbed  by  us.  If  our  costs  exceed  the  contract ceiling or are not
allowable under the provisions of the contract or applicable regulations, we may
not  be  able  to  obtain  reimbursement  for  all such costs. Under fixed-price
contracts,  if  we  are unable to control costs we incur in performing under the
contract,  our  financial  condition  and  operating results could be materially
adversely  affected.  Cost  over-runs  also  may adversely affect our ability to
sustain  existing  programs  and  obtain  future  contract  awards.

THE  UNITED STATES INTERNAL REVENUE SERVICE HAS OBTAINED A LIEN IN THE AMOUNT OF
$173,041.01  AGAINST  SPECTRUM  FOR  UNPAID  PAYROLL  TAXES.

     On  April  21,  2003,  the  IRS  obtained a lien against any and all of our
assets  in  the  amount  $173,041.01.  This lien is due to unpaid payroll taxes,
interest  and  penalties  for  2000  payroll taxes.  Spectrum has entered into a
payment  arrangement  acceptable  to  the  IRS,  which is $5,000 per month until
the  balance is paid off.  The balance of approximately $117,583 remains for the
Trust  Fund portion and accumulated interest and penalties.  If we are unable to
satisfy  the payment obligations of the agreement with the IRS the IRS may place
a  levy  on  our operating bank account funds in order to satisfy the Trust Fund
portion  of  the  debt, which may result in the termination of business and your
investment  becoming  worthless.

OUR  LOAN  AGREEMENTS  WITH  SOUTHTRUST  BANK  IN  THE  AMOUNT  OF APPROXIMATLEY
$2,624,435  ARE  IN  DEFAULT.

     Our engineering, manufacturing, research and development and administrative
offices  are  in  Fort Walton, Florida.  We own the land and building.  However,


                                        6


the  mortgage  is with SouthTrust Bank. We are in default on our loan agreements
with  SouthTrust  Bank  in  the  amount of approximately $2,624,435. We recently
signed  a  forbearance  agreement  (Amendment  to  Extension and Modification of
Loans)  with  SouthTrust Bank which extended the loan agreement to September 25,
2003.  We  are  currently  negotiating  with  SouthTrust  Bank for an additional
forbearance  of  these  loans,  however  we may be unsuccessful. These defaulted
loans  could  result  in  the  termination  of our business and the loss of your
investment.

WE  OWE  ONE  OF  OUR  DIRECTORS  $427,500.

     As  of  October  1,  2003,  we  owe $427,500, to Brannon Capital, Inc., the
beneficial  owner  of which is Dwain Brannon, one of our directors. This loan is
due  November  30, 2003. This debt will have a negative impact on our cash flow.

OUR  LOAN  AGREEMENTS  MAY RESTRICT OUR ABILTY TO FINANCE OUR FUTURE OPERATIONS.

     Our  loan  agreements  with  SouthTrust  Bank  limit  our  ability  to seek
additional  loans  and  to engage in other business arrangements such as mergers
and  acquisitions.

OUR  INDEPENDENT  AUDITORS  HAVE  ISSUED A "GOING CONCERN" OPINION REGARDING THE
SUBSTANTIAL  DOUBT  ABOUT  OUR  ABILTY  TO  CONTINUE  AS  A  GOING  CONCERN.

     The  auditor's  opinion  on  our financial statements indicates that it was
prepared  under  the  assumption  that  we  continue  as  a  going  concern.
Nevertheless, our independent auditor believes that there is "substantial doubt"
that  we  will  be able to continue as a going concern.  In part because we have
incurred  recurring  losses  from  operations and have a net capital deficiency.
Therefore, we might not achieve profitability, our business may fail and you may
loose  all  of  your  investment.

WE ARE DEPENDENT UPON DONAL R. MYRICK, OUR FOUNDER AND CEO, ANY REDUCTION OF HIS
ROLE  IN  SPECTRUM  WOULD  HAVE  A  MATERIAL  ADVERSE  EFFECT.

     The  success  of  Spectrum  is dependent on the vision, knowledge, business
relationships  and  abilities  of Spectrum's founder and Chief Executive Officer
and  director  Donal  R.  Myrick.  Any  reduction  of  Mr.  Myrick's role in the
business  would  have  a  material  adverse  effect on Spectrum.  Mr. Myrick has
signed  a three year employment agreement to serve as president of Spectrum that
will  take  effect upon Spectrum becoming a publicly reporting company under the
1934  Act,  as  amended  (which  is  60  days  after  the date this registration
statement  was  first filed with the U.S. Securities and Exchange Commission) or
upon  the  first  day  of  trading for Spectrum on the Over the Counter Bulletin
Board  (the  "OTCBB").

WE  DEPEND  UPON  THE  UNITED STATES DEPARTMENT OF DEFENSE FOR ALMOST ALL OF OUR
SALES.

     We  depend  upon  the  United  States  Department of Defense for 99% of our
sales.  If  we  were to loose what is essentially our only customer our business
would likely fail.  Further, any reduction in the U.S. defense budget may result
in  a  material  adverse  effect  upon  our  business.

UNLESS  AN  ACTIVE  PUBLIC  MARKET DEVELOPS FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE  TO  SELL  YOUR  SHARES,  AND THEREFORE YOUR INVESTMENT WOULD BE A COMPLETE
LOSS.

     There  has  been  no  active public market for our common stock.  An active
trading  market  may  never  develop or, if developed, it may not be maintained.
Failure  to develop or maintain an active trading market could negatively affect
the  price  of  our  securities,  and you may be unable to sell your shares, and
therefore  your  investment  would  be  a  complete  loss.

A DEFAULT JUDGMENT IN THE AMOUNT OF $139,019.97, PLUS INTEREST AND ATTORNEY FEES
WAS  ENTERED  AGAINGST  SPECTRUM  IN  JANUARY,  2003  BY  THE  TRIDENT  COMPANY.

     On  or  about  January  13,  2003,  The  Trident  Company secured a default
judgment  in  Oklahoma in the amount of $139,019.97, plus interest in the amount
of $1,780.88, and attorney fees in the amount of $2,500.  The action The Trident
Company  v.  Spectrum Manufacturing, Inc. and Spectrum Sciences & Software, Inc.


                                        7


is  Case  No.  CJ-2002-07042  in  the  district  Court  of Tulsa County State of
Oklahoma.  The  default judgment arises from a debt owed by Spectrum to Trident.
The  parties  have  negotiated  a payment schedule.  (The current balance of the
amount  owed  to  Trident  is  $69,495,  as  of  August  29,  2003.)

     Should  Trident  fail  to  receive any payments with five (5) business days
from  the  Date Due, Spectrum shall be deemed in default of this Stipulation and
Agreement  and  the  following  shall  occur:

1.     Trident  may  immediately  have  entered  and  filed of record the Agreed
Journal  Entry  of  Judgment in the Oklahoma Action in the amount of $103,215.98
principal,  accrued  interest  in the amount of $7,183.81 as of May 3, 2003 with
interest  thereafter  at the rate of ten percent (10%) per annum until paid, and
$7,642.14  in attorneys' fees.  Said amount shall accrue interest at the rate of
ten  percent  (10%) per annum until paid.  Contemporaneously therewith, Trident,
through  counsel,  will  record  a  Partial  Release  and Satisfaction of Agreed
Journal  Entry of Judgment for the total sum of all payments received by Trident
pursuant  to  this  Agreement;  and

2.     Trident  shall  be  entitled  to proceed with domestication of the Agreed
Journal  Entry of Judgment in Florida, and Spectrum shall waive any objection to
the  domestication and enforceability of the Agreed Journal Entry of Judgment in
Florida.


IN  DECEMBER  2002, THREE SPECTRUM EMPLOYEES EACH FILED COMPLAINTS FOR VIOLATION
OF  CIVIL  RIGHTS,  DISCRIMINATION,  HARASSMENT,  HOSTILE  WORK  ENVIRONMENT AND
RETALIATION  AGAINST  SPECTRUM  IN THE UNITED STATES DISTRICT COURT, DISTRICT OF
ARIZONA.

In  December, 2002, three Spectrum employees each filed complaints for violation
of  civil  rights,  discrimination,  harassment,  hostile  work  environment and
retaliation  in the United States District Court, District of Arizona.  The case
numbers  for  these  complaints are: CIV '02 2621 PHX MHM; CIV '02 2619 PHX DKD;
and CIV '02 2620 PHX FJM.  In January, 2003, Spectrum filed answers to all three
complaints,  denying  all  allegations  of wrongdoing.  All three plaintiffs are
claiming  "undue  stress  and  anxiety"  from Spectrum's actions.  There were no
damage  amounts  specified  in any of the actions. The plaintiffs are requesting
the  following:

A.   Compensatory  damages, plus special incidental damages in such a sum as may
     be  proven  at  trial;
B.   For  punitive  damages  in  such  a  sum  as  my  be  proven  at  trial;
C.   For  cost  for  the  suit;
D.   For  attorney's  fees;  and
E.   For  other  such  relief  as  the  Court  deems  just  and  proper.

Spectrum  does  not  know  what  the  outcome  of  this  litigation  will  be.

WE MAY NOT QUALIFY FOR OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD INCLUSION, AND
THEREFORE  YOU  MAY  BE  UNABLE  TO  SELL  YOUR  SHARES.

     Upon  the  effectiveness  of this registration statement we will attempt to
have  our common stock eligible for quotation on the Over-the-Counter Electronic
Bulletin Board ("OTCBB" or "Bulletin Board"). OTCBB eligible securities includes
securities  not listed on NASDAQ or a registered national securities exchange in
the  U.S.  and  that are also required to file reports pursuant to Section 13 or
15(d)  of the Securities Act of 1933, and the company is current in its periodic
securities  reporting  obligations.  For  more  information on the OTCBB see its
website  at www.otcbb.com. If for any reason, however, any of our securities are
not  eligible  for continued quotation on the Bulletin Board or a public trading
market  does  not  develop, purchasers of the shares may have difficulty selling
their  securities  should  they desire to do so. If we are unable to satisfy the
requirements  for  quotation  on  the  Bulletin Board, any trading in our common
stock  may  continue  to be conducted in the over-the-counter market in what are
commonly referred to as the "pink sheets".  As a result, an investor may find it
more  difficult  to dispose of, or to obtain accurate quotations as to the price
of,  the  securities  offered  hereby.  The above-described rules may materially
adversely  affect  the  liquidity  of  the  market  for  our  securities.


                                        8


THE  PRICE  OF  OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY AND YOU COULD LOOSE
ALL  OR  PART  OF  YOUR  INVESTMENT.

     Our  common stock is currently traded on the "Over the Counter Pink Sheets.
The price of our common stock may fluctuate significantly.  You may loose all or
part  of  your  investment.

OUR  STOCK  IS  SUBJECT  TO  THE  PENNY  STOCK  RULES.

     Broker-dealer  practices  in connection with transactions in "penny stocks"
are  regulated  by  certain  rules  adopted  by  the  Securities  and  Exchange
Commission.  Penny  stocks  generally are equity securities with a price of less
than  $5.00  (other  than  securities  registered on certain national securities
exchanges  or  quoted on the NASDAQ Stock Market provided that current price and
volume  information  with respect to transactions in such securities is provided
by  the  exchange or system). The rules require that a broker-dealer, prior to a
transaction  in  a  penny  stock  not otherwise exempt from the rules, deliver a
standardized  risk  disclosure  document  that  provides information about penny
stocks  and  the  risks  in  the penny stock market. The broker-dealer also must
provide  the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in connection with the
transaction  and  monthly  account  statements  showing the market value of each
penny  stock  held  in  the customer's account. In addition, the rules generally
require  that  prior  to  a transaction in a penny stock, the broker-dealer must
make  a  special  written  determination  that  the  penny  stock  is a suitable
investment  for  the  purchaser and receive the purchaser's written agreement to
the  transaction.  These disclosure requirements may have the effect of reducing
the  liquidity of penny stocks.  Because our securities are subject to the penny
stock  rules,  investors  may  find  it more difficult to sell their securities.

CAUTIONARY  NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS

     This  prospectus  contains  certain  financial  information  and statements
regarding  our  operations  and financial prospects of a forward-looking nature.
Although  these statements accurately reflect management's current understanding
and beliefs, we caution you that certain important factors may affect our actual
results  and  could  cause  such  results  to  differ  materially  from  any
forward-looking  statements  which  may be deemed to be made in this prospectus.
For  this  purpose,  any  statements  contained in this prospectus which are not
statements  of  historical  fact may be deemed to be forward-looking statements.
Without  limiting  the  generality  of  the  foregoing,  words  such  as, "may",
"intend",  "expect",  "believe",  "anticipate",  "could",  "estimate", "plan" or
"continue"  or  the negative variations of those words or comparable terminology
are  intended  to identify forward-looking statements. There can be no assurance
of  any  kind  that  such  forward-looking  information  and  statements will be
reflective  in any way of our actual future operations and/or financial results,
and  any  of such information and statements should not be relied upon either in
whole  or  in  part  in  connection  with  any decision to invest in the shares.


                                        9

      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

     The  following  discussion  should  be  read  in  conjunction  with  our
consolidated  financial  statements,  including  the  related  notes,  appearing
elsewhere  in  this  prospectus.  The following discussion and analysis contains
forward-looking  statements  that  involve  risks and uncertainties.  Our actual
results  could  differ significantly from those discussed in the forward-looking
statements as a result of the various factors set forth under "Risk Factors" and
elsewhere  in  this  prospectus.

Overview
--------

     Spectrum  Sciences  & Software Holdings Corp. provides engineering, science
and  technological support services for the United States Department of Defense.

     We  earn  our  revenue  on  fixed-price  contracts  with  the United States
Department  of  Defense.  In a fixed-price contract, the price is not subject to
adjustment  based  on  cost  incurred  to  perform  the  required work under the
contract.  Under  fixed-price  contracts we agree to perform for a predetermined
contract  price.  Although fixed-price contracts generally permit the Company to
keep  profits  if costs are less than projected, the Company bears the risk that
increased  or


                                       10


unexpected costs may reduce profit or cause the Company to sustain losses on the
contracts.

     We  use  the  percentage-of-completion method of accounting for fixed-price
contracts  and,  therefore,  matches revenue with the cost incurred on each unit
produced  at  the  time the Company recognized its sale based on the estimate of
gross  profit  margin  the  Company  expects  to  receive  over  the life of the
contract.  The  Company  currently  evaluates its estimates of gross margin on a
monthly  basis.  In addition, the Company uses the cumulative catch-up method to
recognize  its changes in estimates of sales and gross margins during the period
in  which  those  changes  are  determined.  The Company charges any anticipated
losses  on  a contract to operations as soon as those losses are determined. The
principal  components  of  the Company's contract cost of revenue are materials,
subcontractor  costs, labor and overhead. The Company charges all of these costs
to  the  respective  contracts  as  incurred.

     We  expense  operating  costs  such as selling, general and administrative,
internal research and development costs and bid and proposal costs in the period
incurred.  The  major  components  of these costs are compensation and overhead.
Capitalized  debt  issuance  costs  are amortized over their useful lives. Since
January 1, 2002, the Company has been subject to a new accounting standard under
which  it  no  longer  amortizes  goodwill,  although  it must test its goodwill
periodically  for  impairment.

     The  Company's  results  of  operations, particularly its revenue and gross
profits,  and  its  cash  flows  may  vary  significantly  from period to period
depending  upon  the  timing  of  delivery of finished products and the terms of
contracts.  As  a  result,  period-to-period  comparisons  may  show substantial
changes  disproportionate  to  the  Company's  underlying  business  activity.
Accordingly,  the  Company  does  not  believe  that  its  quarterly  results of
operations  are  necessarily  indicative  of  results  for  future  periods.

SUMMARY  OF  SPECTRUM  SCIENCES  &  SOFTWARE,  INC.  ACQUISITION

     Our  president,  Donal  R.  Myrick,  owned and operated Spectrum Sciences &
Software,  Inc., a Florida S-Corporation since its formation in 1982.  Silva Bay
International, Inc. acquired Spectrum Sciences & Software, Inc. in April 2003 in
exchange  for  the  issuance  of  2,500,000 shares of common stock to Mr. Myrick
(taking  into account the forward two for one stock split of April 9, 2003).  We
have  continued  to  operate  the business of Spectrum Sciences & Software, Inc.
since  our  acquisition  of  its  business  under  the name "Spectrum Sciences &
Software Holdings, Inc."  The business the Company acquired, Spectrum Sciences &
Software,  Inc.,  has  been  in operation for 21 years prior to our acquisition,
whereas  prior  to  this  acquisition  the  Company  (previously named Silva Bay
International,  Inc.)  had  no  operations  and  no  revenues.

     The  acquisition of Spectrum Sciences & Software, Inc. was accounted for in
accordance  with  Statement  of  Financial  Accounting Standard ("SFAS") No. 141
"Business  Combinations"  ("SFAS 141"), which requires all business combinations
initiated  after  June  30,  2001 to be accounted for under the purchase method.
SFAS  No.  141  also  sets  forth guidelines for applying the purchase method of
accounting  in  the  determination  of  intangible  assets,  including  goodwill
acquired in a business combination, and expands financial disclosures concerning
business  combinations.  The  assets  acquired  and  liabilities  assumed  were
recorded  at  estimated  fair  values  as determined by our management, based on
information  available  and  on  assumptions  as  to  future  operations.

PLAN  OF  OPERATION

     Silva  Bay  International, Inc. acquired Spectrum Sciences & Software, Inc.
in  April  2003.  In  April  2003  we  changed  our  name to Spectrum Sciences &
Software  Holdings  Corp.  We  provide  engineering,  science  and technological
support  services  for  the  United  States government.  Our revenues are earned
primarily  from  contracts  with  the Department of Defense of the United States
Government.  Our  goal  is  to grow our current business through acquisitions of
other  small, private defense contractors in exchange for our common stock.  Our
plan  of operations has two major components:  financing our current operations,
and  launching  our  acquisition  strategy.

     MINIMUM 12 MONTH REQUIREMENTS.  Although our cash balances were $264,832 at
June  30, 2003, we are essentially out of working capital to pursue our business
and acquisition plans. Based on an analysis of our liabilities, we are dependent


                                       11


on  the  cooperation  of  our  creditors to permit us to continue to operate. An
analysis  of  our  accounts  payable and accrued and other liabilities indicates
that  our  largest  payables  at  October  1,  2003,  are:  SouthTrust  Bank
(approximately  $2,624,435)  Environmental  Management,  Inc.  (approximately
$245,000),  Washington  Group,  International  (approximately $94,715), Internal
Revenue  Service (approximately $117,583) and The Trident Company (approximately
$69,495).  These  creditors  are  aware  of  our  weak  financial  position. The
continued  cooperation  of these creditors is not assured. The terms of the debt
with  SouthTrust  Bank are as follows: unsecured $762,787 at a floating interest
rate  currently  at  6.00%,  which  matured on September 25, 2003; $1,549,033 at
8.5%,  maturing  in October 1, 2004; $122,455 at 4.5% interest rate, maturing on
August  13,  2006; and $190,160 at 8.75% interest rate, maturing on December 27,
2004;  the  Washington Group, International: principal payments of $20,600 until
the  balance is paid. The IRS has accepted our proposal of a lump sum payment of
$25,000  (paid  April  24,  2003) and monthly payments of $5,000 per month until
balance  is  paid.  The  Trident Company has accepted our proposal of a lump sum
payment  of  $25,000  (paid  May  2, 2003) and monthly payments of approximately
$8,880  until  balance  is  paid.

     We  will need approximately $1 million of additional working capital within
the  next  twelve  months to pay down vendors and amounts we owe to continue our
current operations.  Based on our current operations, we believe we can continue
to operate for an additional 8 months.  We will need an additional $3 million of
working capital to refinance or pay off our debt with SouthTrust Bank within the
next  year.  We  will  attempt  to obtain this capital through borrowing or from
selling  our  stock  privately.

     We  presently have no commitments for the additional financing necessary to
continue  our  operations.  If  we  are  unsuccessful  in  obtaining  sufficient
financing,  we  may  be  forced  to  curtail  all of our activities. Our plan of
operations  and capital requirements are also dependent upon a number of factors
such  as  those described elsewhere in this registration statement. Any new debt
agreements  that  we  would enter into would be unsecured as the majority of our
assets currently secure our existing debt. Current agreements with our creditors
will  negatively  impact  our  ability  to obtain additional refinancing for our
current  debt  and  to  obtaining  future  capital  at  favorable  terms if such
financing  becomes  available.

TERMS  OF  THE  AGREEMENTS  REACHED  WITH  CREDITORS

     The balance of the priority notes due to SouthTrust Bank at October 1, 2003
is  $762,787.  The  priority  notes  matured on September 25, 2003. Spectrum has
requested a credit extension from SouthTrust for the amount due on September 25,
2003.  The  default  of  the  priority  notes  of $762,787 on September 25, 2003
resulted  in  all loans with SouthTrust Bank, totaling approximately $2,624,435,
becoming  due.

     There  is no repayment agreement established with Environmental Management,
Inc.  (EMI).  There  is  no  litigation  between  EMI  and  Spectrum.

     The  $427,500  note  to  Brannon  Capital  is  due  on  November  30, 2003.

     As  of September 1, 2003 Spectrum has remained compliant with all repayment
agreements.  As of September 1, 2003 the principal balances on the notes due per
repayment  agreements  as  follows:

     Trident Metals; $69,495 owed, next payment due by October 15, 2003 in the
     ---------------
amount  of  $8,880,  then  approximately  7  more  payments due in the amount of
$8,880.

     Washington  Group,  Int'l: $94,715 owed, next payment due by October 10,
     -------------------------
2003  in  the  amount  of  $20,600,  then  approximately  3 1/2 more payments of
approximately  $20,600.

     Internal  Revenue Service: $117,583 owed, next payment due by October 10,
     -------------------------
2003 $5,000, and approximately 23 more monthly payments of $5,000 to satisfy the
debt.

CRITICAL  ACCOUNTING  POLICIES

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  are based upon our financial statements, which have been prepared in
accordance  with  accounting principals generally accepted in the United States.
The  preparation  of  these  financial  statements  requires  management to make


                                       12


estimates  and  assumptions  which  affect the amounts reported in the financial
statements  and determine whether contingent assets and liabilities, if any, are
disclosed  in  the  financial  statements.  On an ongoing basis, we evaluate our
estimates  and  assumptions,  including  those  related  to long-term contracts,
product  returns,  bad  debts,  inventories,  fixed  asset  lives, income taxes,
environmental  matters,  litigation  and  other  contingencies.  We  base  our
estimates  and  assumptions on historical experience and on various factors that
are  believed  to  be  reasonable under the circumstances, including current and
expected  economic  conditions,  the  results of which form the basis for making
judgments  about  the  carrying  values  of  assets and liabilities that are not
readily  apparent from other sources.  Actual results may differ materially from
our  estimates  under  different  assumptions  or  conditions.

     We  believe  that the following critical accounting policies, among others,
affect our more significant estimates and assumptions used in the preparation of
our  financial  statements:

     Revenue  recognition.     We  recognize revenue and profit on substantially
all  of  our  contracts using the percentage-of-completion method of accounting,
which  relies  on  estimates  of total expected contract revenues and costs.  We
follow  this  method  since  reasonably dependable estimates of the revenues and
costs  applicable  to  various  stages of the contracts can be made.  Recognized
revenues  and  profit  are  subject  to  revisions  as  the projects progress to
completion.  Revisions  to  the  profit  estimates  are charged to income in the
period  in  which  the  facts  that  give  rise  to  the revisions become known.

     Inventory  Valuation.  We  review  our  inventory  balances to determine if
inventories  can  be  sold  at  amounts  equal to or greater than their carrying
value.  The  review includes identification of slow-moving inventories, obsolete
inventories, and discontinued products or lines of products.  The identification
process includes analysis of historical performance of the inventory and current
operational  plans  for  the inventory as well as industry and customer-specific
trends.  If  our actual results differ from management expectations with respect
to  the  selling  of  our  inventories  at  amounts equal to or greater than our
carrying  amounts,  we  would  be  required  to  adjust  our  inventory  values
accordingly.

     Net  operating  loss  carryforwards.  We have not recognized the benefit in
our  financial  statements  with  respect  to  the  approximately $1,000,000 net
operating loss carryforward for federal income tax purposes as of June 30, 2003.
This  benefit  was  not recognized due to the possibility that the net operating
loss  carryforward  would  not  be  utilized, for various reasons, including the
potential  that  we might not have sufficient profits to use the carryforward or
that  the  carryforward  may  be  limited  as  a result of changes in our equity
ownership.  We  intend  to  use  this  carryforward to offset our future taxable
income.  If we were to use any of this net operating loss carryforward to reduce
our  future  taxable  income  and  the  Internal  Revenue  Service  were to then
successfully  assert  that our carryforward is subject to limitation as a result
of  capital  transactions  occurring  in 2002 or otherwise, we may be liable for
back  taxes,  interest  and,  possibly,  penalties  prospectively.

     Impairment  of  Long  Lived Assets.  We assess the impairment of long-lived
assets  on  an  ongoing  basis  and  whenever events or changes in circumstances
indicate  that  the carrying value may not be recoverable based upon an estimate
of  future  undiscounted  cash flows.  Factors we consider that could trigger an
impairment  review  include  the  following:  (i)  significant  underperformance
relative  to  expected  historical  or  projected future operating results; (ii)
significant  changes  in  the  manner  of  our use of the acquired assets or the
strategy  for  our  overall  business;  (iii)  significant  negative industry or
economic  trends;  (iv)  significant  decline in our stock price for a sustained
period;  and  (v)  our  market  capitalization  relative  to  net  book  value.

     When  we  determine that the carrying value of any long-lived asset may not
be  recoverable  based upon the existence of one or more of the above indicators
of  impairment, we measure impairment based on the difference between an asset's
carrying value and an estimate of fair value, which may be determined based upon
quotes  or a projected discounted cash flow, using a discount rate determined by
our management to be commensurate with our cost of capital and the risk inherent
in  our  current  business  model,  and  other  measures  of  fair  value.


                                       13


RESULTS  OF  OPERATIONS

     The  following  tables  set  forth  selected financial data from continuing
operations  on  a  consolidated  and  segment basis for the three and six months
ended June 30, 2003 and 2002 and for the years ended December 31, 2002 and 2001.
The  segment  tables,  shown  below,  exclude  certain  charges, which are shown
separately.  The  following numbers are presented as if Silva Bay International,
Inc.  would have acquired Spectrum Sciences & Software, Inc. on January 1, 2001.

COMPARISON  OF  THE  THREE  MONTHS  ENDED  JUNE  30,  2003  AND  JUNE  30,  2002

CONSOLIDATED  OVERVIEW
                              FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Sales                $ 3,443,000  100.0%     $ 2,799,000  100.0%
    Cost of Sales          3,011,000   87.5%       2,775,000   99.1%
                         -------------------     -------------------
    Gross Margin         $   432,000   12.5%     $    24,000    0.9%

     Overall  sales  for  the  three-months ended June 30, 2003 increased by 23%
compared  to  the same period in 2002 due to increased marketing activity during
2003.  Gross  margin  as  a  percentage  of  sales improved by 1289% due to cost
controls  put  in  place  in  during  the  last  quarter  of  2002.

MANAGEMENT SERVICES

                                 FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Sales                $ 2,345,000  100.0%     $ 2,164,000  100.0%
    Cost of Sales          2,254,000   96.1%       2,164,000  100.0%
                         -------------------     -------------------
    Gross Margin         $    91,000    3.9%     $         0    0.0%

     Sales in the Management Services segment increased approximately 8% for the
three-month  period  ended  June  30,  2003  compared  to 2002. The increases in
revenue  are primarily due to the scheduled increases in reimbursable labor cost
under  the  Service Contract Act and increased contract modifications requesting
additional  range  services.

     Gross  margin  for  the  three-month period ended June 30, 2003 improved by
$91,000  due to improved cost efficiencies that were implemented during December
2002.

ENGINEERING  AND  INFORMATION  TECHNOLOGY  SERVICES  SEGMENT

                                 FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Sales                $ 435,000  100.0%       $ 182,000  100.0%
    Cost of Sales          211,000   48.5%         118,000   64.8%
                         -------------------     -------------------
    Gross Margin         $ 224,000   51.5%       $  64,000   35.2%

     Sales  in  the  Engineering  and  Information  Technology  Services segment
increased  approximately  139% for the period ended June 30, 2003 as compared to
the  same  period in 2002. Increased sales were a result of scheduled completion
of  backlog  software  development  tasks  for  the  Safe-Range  program.

     Gross  margin,  as  a  percent of sales, increased approximately 46% due to
cost  controls  put  in  place  in  during  the  last  quarter  of  2002.


                                       14


MANUFACTURING  SEGMENT

                                 FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Sales                $ 664,000  100.0%       $ 454,000  100.0%
    Cost of Sales          546,000   82.2%         493,000  108.6%
                         -------------------     -------------------
    Gross Margin         $ 118,000   17.8%       $ (39,000)  (8.6)%

     Sales in the Manufacturing segment increased 46% for the three-month period
ended  June  30, 2003 as compared to 2002. The increase in revenue is due to the
expansion  of  the  customer  base  for  the  Spectrum  manufactured  products.

     Gross  margin improved by $157,000 due to increased cost controls that were
implemented  in  December  2002.

OPERATING  EXPENSES

                                 FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Selling, general
     and administrative  $ 275,000  100.0%       $ 149,000  100.0%

Selling,  general  and  administrative  expenses.    Selling,  general  and
administrative  ("SG&A")  expenses were $275,000 and $149,000 in the three-month
period  ending  June 30, 2003 and 2002, respectively.  This increase of $126,000
or 85% is due to increased legal and accounting costs associated with the filing
of  a  registration  statement  with  the  Securities  and  Exchange Commission.

IMPAIRMENT LOSS

                                 FOR THE 3 MONTHS ENDED JUNE 30,
                                  2003                    2002
                         -------------------     -------------------
    Impairment Loss      $ 146,000  100.0%       $       0  100.0%

     Impairment  Loss.  On  April 3, 2003, Spectrum Sciences & Software Holdings
Corp.  (formerly  Silva  Bay International, Inc.) entered into an asset purchase
agreement  to  purchase  all  of the assets and assume all of the liabilities of
Spectrum  Sciences  &  Software,  Inc. in exchange for the issuance of 2,500,000
shares of our common stock.  As a result of the acquisition, Spectrum Sciences &
Software,  Inc. will have access to additional capital markets.  The acquisition
was  accounted  for  under  the  purchase method of accounting; accordingly, the
purchase price was allocated to reflect the fair value of assets and liabilities
acquired  at the date of acquisition.  Due to the composition of the majority of
the  governing  body  and  senior  management  of  the Company being the same as
Spectrum  Sciences  &  Software,  Inc.  prior  to the April 3, 2003 acquisition,
Spectrum  Sciences  &  Software,  Inc.  has  been  deemed  to  be the accounting
acquirer.  As of the date of the acquisition, management has determined that the
goodwill has no value; therefore, an impairment charge of approximately $146,000
has  been  recorded  during  the  three  month  period  ended  June  30,  2003.

OTHER  INCOME  AND  EXPENSES

     Interest  income  and expense, net.    Net interest expense was $80,000 and
$76,000  for  the three-month period ended June 30, 2003 and 2002, respectively.

     Other  income and expense, net.    Net other income was $38,000 and $27,000
for  the  three  month  period  ended June 30, 2003 and 2002, respectively.  The
increase  of  $11,000 or 41% was due to a reduction of the penalties we incurred
during  2002  for  late  payment  of  payroll  taxes.

     COMPARISON  OF  SIX MONTHS ENDED JUNE 30, 2003 AND  JUNE 30, 2002

CONSOLIDATED  OVERVIEW

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Sales                $  6,716,000  100.0%    $  5,622,000  100.0%
    Cost of Sales           6,054,000   90.1%       5,462,000   97.2%
                         -------------------     -------------------
    Gross Margin         $    662,000    9.9%    $    160,000    2.8%

Overall  sales for the six-months ended June 30, 2003 increased by approximately
19%  compared  to  the  same period in 2002.  This increase can be attributed to
increased  marketing  activity of our services.  Gross margin as a percentage of
sales  improved  by  253%  due  to cost controls that we implemented in December
2002.


                                       15


MANAGEMENT SERVICES

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Sales                $ 4,638,000  100.0 %    $ 4,312,000  100.0%
    Cost of Sales          4,465,000   96.3 %      4,316,000   99.9%
                         -------------------     -------------------
    Gross Margin         $   173,000    3.7 %    $    (4,000)   0.1%

     Sales in the Management Services segment increased approximately 8% for the
six-month  period ended June 30, 2003 compared to 2002. The increases in revenue
are  primarily  due  to the scheduled increases in reimbursable labor cost under
the  Service  Contract  Act  and  increased  contract  modifications  requesting
additional  range  services.

     Gross  margin  for  the  six-month  period  ended June 30, 2003 improved by
approximately  $177,000.  This  increase  was  due  to  cost  control  that  was
established  during  December 2002 which included a reduction of the work force.

ENGINEERING  AND  INFORMATION  TECHNOLOGY  SERVICES

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Sales                $   764,000  100.0%     $   451,000  100.0%
    Cost of Sales            449,000   58.8%         255,000   56.5%
                         -------------------     -------------------
    Gross Margin         $   315,000   41.2%     $   196,000   43.5%

     Sales  in  the  Engineering  and  Information  Technology  Services segment
increased  approximately  69%  for the period ended June 30, 2003 as compared to
the  same period in 2002.  Increased sales were a result of scheduled completion
of  backlog  software  development  tasks  for  the  Safe-Range  program.

     Gross  margin,  as a percent of sales, decreased by approximately 5% due to
increased  labor  costs  as  a  result  of  hiring  additional employees in this
division.

MANUFACTURING  SEGMENT

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Sales                $ 1,315,000  100.0%     $   859,000  100.0%
    Cost of Sales          1,140,000   86.7%         891,000  103.7%
                         -------------------     -------------------
    Gross Margin         $   175,000  13.3%      $   (32,000)  (3.7%)

     Sales  in  the Manufacturing segment increased 53% for the six-month period
ended  June  30, 2003 as compared to 2002. The increase in revenue is due to the
expansion  the  customer  base  for  the  Spectrum  manufactured  products.

     Gross  margin  increased by $207,000 due to the improved cost controls that
were  implemented  in  December  2002.

OPERATING  EXPENSES

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Selling, general
     and administrative      440,000  100.0%         291,000  100.0%


                                       16


     Selling,  general  and  administrative  expenses.  Selling,  general  and
administrative  ("SG&A")  expenses  were $440,000 and $291,000 for the six month
period  ending  June  30,  2003  and  2002,  respectively.  This  increase  of
approximately $149,000 or 51% was due to increased costs associated with general
liability insurance and legal costs and accounting fees associated with filing a
registration  statement  with  the  Securities  and  Exchange  Commission.

IMPAIRMENT LOSS

                              FOR THE SIX MONTHS ENDED JUNE 30,
                                 2003                  2002
                         -------------------     -------------------
    Impairment Loss      146,000  100.0%               0  100.0%

     Impairment  Loss.  On  April 3, 2003, Spectrum Sciences & Software Holdings
Corp.  (formerly  Silva  Bay International, Inc.) entered into an asset purchase
agreement  to  purchase  all  of the assets and assume all of the liabilities of
Spectrum  Sciences  &  Software,  Inc. in exchange for the issuance of 2,500,000
shares of our common stock.  As a result of the acquisition, Spectrum Sciences &
Software,  Inc. will have access to additional capital markets.  The acquisition
was  accounted  for  under  the  purchase method of accounting; accordingly, the
purchase price was allocated to reflect the fair value of assets and liabilities
acquired  at the date of acquisition.  Due to the composition of the majority of
the  governing  body  and  senior  management  of  the Company being the same as
Spectrum  Sciences  &  Software,  Inc.  prior  to the April 3, 2003 acquisition,
Spectrum  Sciences  &  Software,  Inc.  has  been  deemed  to  be the accounting
acquirer.  As of the date of the acquisition, management has determined that the
goodwill has no value; therefore, an impairment charge of approximately $146,000
has  been  recorded  during  the  six  month  period  ending  June  30,  2003.

OTHER  INCOME  AND  EXPENSES

     Interest  income and expense, net.    Net interest expense totaled $149,000
and  $168,000  for  the  six  month  periods  ended  June  30,  2003  and  2002,
respectively.  The  decline  of  $19,000 or 11% was a result of lower prevailing
interest  rates  and  lower  average  loan  balances.

     Other  income and expense, net.    Net other income in the six months ended
June 30, 2003 was $72,000 compared to other income of $71,000 in 2002. Our other
income  consists  primarily  of  rental  income received from L3 Communications,
(formerly  Raytheon).

     COMPARISON  OF  YEARS  ENDED  DECEMBER  31,  2002  AND  DECEMBER  31,  2001

CONSOLIDATED  OVERVIEW

                                  YEARS ENDED DECEMBER 31,
                                 2002                  2001
                         -------------------     -------------------
    Sales                $12,262,000  100.0%     $11,874,000  100.0%
    Cost of Sales         11,876,000   94.5%      11,033,000   92.9%
                         -------------------     -------------------
    Gross Margin         $   386,000   5.5%     $   840,000    7.1%

     Overall  sales  from  continuing operations for the year ended December 31,
2002  increased  compared  to 2001. As indicated below, the Range Operations and
Maintenance  saw  modest growth over the prior year while depressed markets have
impacted  the  Manufacturing  segment.

MANAGEMENT  SERVICE

                                  YEARS ENDED DECEMBER 31,
                                 2002                  2001
                         -------------------     -------------------
    Sales                $ 8,761,000  100.0%     $ 8,239,000  100.0%
    Cost of Sales          8,681,000   99.1%       7,822,000   94.9%
                         -------------------     -------------------
    Gross Margin         $    80,000   0.9%     $   417,000    5.1%

     Sales  in  the Management Service segment increased 6.3% for the year ended
December  31,  2002 compared to 2001. The increases in revenue are primarily due
to  the increases in range patrolling and range maintenance work as added to the
contract.

     Gross  margin  as  a  percent of sales for the year ended December 31, 2002
decreased  compared  to  the  prior  year.  Operational  improvements, including
improved quality, material procurement and facility management, have contributed
to  improved  margins  compared  to  2001. In fiscal 2002, the decrease in gross
margin  was  a direct result of increased labor rates. Labor rates are specified
by  the  Department  of  Labor  in  accordance  with  the  Service Contract Act.

ENGINEERING  AND  INFORMATION  TECHNOLOGY  SERVICES

                                  YEARS ENDED DECEMBER 31,
                                 2002                  2001
                         -------------------     -------------------
    Sales                $ 1,095,000  100.0%     $ 1,017,000  100.0%
    Cost of Sales            570,000   52.1%         526,000   51.7%
                         -------------------     -------------------
    Gross Margin         $   525,000   47.9%     $   491,000   48.3%

                                       17


     Sales  in  the  Engineering  and  Information  Technology  Services segment
increased approximately 7.7% for the year ended December 31, 2002 as compared to
2001.  Increased sales were a result of increased delivery orders on the General
Services Administration contract.  This contract was signed in December 14, 1999
and expires in December 13, 2004.  Each delivery order under that contract has a
separate  performance  schedule.

     Gross  margin,  as  a percent of sales, remained consistent compared to the
prior  year.

MANUFACTURING  SEGMENT

                                  YEARS ENDED DECEMBER 31,
                                 2002                  2001
                         -------------------     -------------------
    Sales                $ 2,406,000  100.0%     $ 2,618,000  100.0%
    Cost of Sales          2,625,000 (109.1)%      2,607,000   99.6%
                         -------------------     -------------------
    Gross Margin         $  (219,000) (9.1)%     $    11,000    0.4%

     Sales  in  the  Manufacturing  segment  declined  8.1%  for  the year ended
December  31,  2002  as  compared  to  2001.  The  decline  in revenue is driven
primarily by the overall weakness in the U.S. economy and reduction in sales due
to  September 11, 2001.  In 2002, conditions were very weak in the Department of
Defense  markets  for  our  line  of  products  including aircraft and munitions
handling  equipment.

     Gross  margin  as  a percent of sales decreased by 166% in 2002 compared to
2001, primarily due to the operating holding loss on inventory of $289,000.  The
holding  loss  on  inventory  was  a  result  of  obsolete  equipment previously
purchased.  The  anticipation  was  to  sell  the  equipment  to  the  Federal
Government,  however,  due  to the decline in the government's requirements as a
result  of  the  terrorist attacks of September 11, 2001 and no adequate storage
facility,  the equipment deteriorated beyond economic repair.  Normal direct and
indirect  costs  decreased  by  9.1%, while revenues decreased only 8.1% for the
year.  Adjusting  for  the  inventory  reserve adjustments in 2002, gross margin
percentages  would  have  remained  consistent with prior year despite decreased
revenues,  as  we  adjusted our operations to the depressed market conditions by
lowering  overhead  and  reducing  spending.

     During  the  year  ended  December 31, 2001 the Company operations included
other  divisions  that are no longer active.  The cost of sales related to these
operations  was  $78,000,  which  is  included  in  cost of sales in the audited
financial  statements for the year ended December 31, 2001.  There were no sales
related  to  these  functions.

OPERATING  EXPENSES

                                  YEARS ENDED DECEMBER 31,
                                 2002                  2001
                         -------------------     -------------------
    Selling, general
     and administrative      465,000  100.0%         428,500  100.0%

Selling, general and administrative expense. Selling, general and administrative
("SG&A")  expenses  were  $465,000  in  2002 compared to $428,500 in 2001, a net
decrease  of  $36,500.

OTHER  INCOME  AND  EXPENSES

     Interest  income  and expense, net.    Net interest expense was $303,297 in
the  year  ended December 31, 2002, compared to net interest expense of $328,314
in  2001.  The  decline  in  interest  expense  is  a result of lower prevailing
interest  rates  and  lower  average  investment  balances.


                                       18


     Other  income  and  expense,  net.    Net other income in 2002 was $269,743
compared  to  other  income  of  $149,127  in  2001.  Our  other income consists
primarily of rental income received from L3 Communications, (formerly Raytheon).
The  additional  increase  from  the  prior  year  is  due  to  a one-time legal
settlement  payment  of  $175,000.

     Discontinued  operations.  During the second quarter of 2002, we decided to
divest  our  Yacht  Manufacturing  division.  We  completed  the disposal of the
division  in  the  fourth  quarter  of  2002. During 2002, we recorded a special
charge  of $407,000, which included the impairment of assets and closing related
expenses.

BACKLOG  BY  SEGMENT (UNAUDITED)



                   TOTAL         ENGINEERING AND       MANAGEMENT
                  COMPANY     INFORMATION TECHNOLOGY    SERVICES    MANUFACTURING
                ------------  ----------------------  ------------  -------------
                                                        
Year End 2001.    7,787,504               879,993       6,445,507        462,005
Year End 2002.    9,266,081             1,254,134       6,803,252      1,208,695

June  30, 2002    4,373,000             1,194,230       2,172,770      1,006,000
June  30, 2003    4,203,000             1,354,000       2,518,000        330,000


     It  is  expected  that  a  substantial  portion  of  funded backlog will be
converted  to  revenue during 2003 and 2004.  However, there can be no assurance
that  our  backlog  will  become  revenue  in  any particular period, if at all.

LIQUIDITY  AND  CAPITAL  RESOURCES

     We  had  cash  balances  totaling  approximately $265,000 at June 30, 2003.
During  the  past  fiscal  year,  our  principal sources of funds have been cash
generated  from  loans,  financing  activities  and  from continuing operations.

     We  will need approximately $1 million of additional working capital within
the  next  twelve  months to pay down vendors and amounts we owe to continue our
current operations.  Based on our current operations, we believe we can continue
to operate for an additional 8 months.  We will need an additional $3 million of
working capital to refinance or pay off our debt with SouthTrust Bank within the
next 8 months.  We will attempt to obtain this capital through borrowing or from
selling  our  stock privately.  Failure to maintain such funding within the next
eight  months  would  likely  prohibit  us  from  continuing  our  operations.

     We  currently  intend  to satisfy our long-term liquidity requirements from
cash  flow  from  operations  and  with the proceeds from future debt and equity
offerings.  However,  we  have  no  specific  plan  for  future  debt  or equity
offerings  nor  have  we  identified any source from which such funding could be
obtained.  Further,  our  long-term  liquidity  requirements will depend on many
factors,  including  but  not  limited  to,  various  risks  associated with our
business that affect our sales levels and pricing, our ability to recover all of
our  up-front  costs  related  to  future acquisitions, capital expenditures and
operating  expense  requirements  and there can be no assurance that we will not
need  to  raise  additional  funds  to  satisfy  them.


                    PART I - ITEM 3.  DESCRIPTION OF PROPERTY

PROPERTY

     Our  engineering, manufacturing and research and development activities and
administrative  offices  are  located  in  Fort  Walton  Beach,  Florida.


                                       19


     The  following  table  presents certain information on our leased and owned
operating  properties  as  of  October 1,  2003:



                                SQ.                                     LEASED    LEASE EXPIR-             LOAN
         LOCATION              FEET                  USE               OR OWNED   ATION DATE             MATURITY
---------------------------  ----------   --------------------------  ----------  ------------  ---------------------------
                                                                     
91 Hill Avenue, . . . . . .   47,200      Engineering, manufacturing    Owned          N/A      $1,560,000 owed as of September
Fort Walton Beach, Florida                 and research and                                     1, 2003. Mortgage due Oct.
32549                                      development, and                                     1, 2004.
                                           administrative office

321 Bream Avenue, Unit 604
Fort Walton Beach, Florida .   1,089      Condominium                   Owned          N/A      $190,000 owed as of June 30,
32548                                                                                           2003.  Mortgage due December
                                                                                                27, 2004.

755 Lovejoy Road. . . . . .   10,000      Precision machine shop        Leased    Leased, month
Fort Walton Beach, Florida .              metal fabrication                       to month  for
32548                                                                             $1,802 per month.



PART I - ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  presents  information known to us, as of the date of
this  prospectus  relating  to  the  beneficial  ownership  of  common stock by:

     -    each  person  who  is  known by us to be the beneficial holder of more
          than  5%  of  our  outstanding  common  stock;
     -    each  of  our  named  executive  officers  and  directors;  and
     -    our  directors  and  executive  officers  as  a  group.

     We  believe  that  all  persons  named  in  the  table have sole voting and
investment  power  with respect to all shares beneficially owned by them, except
as noted.  Unless otherwise indicated, the address of each stockholder listed in
the  table is care of Spectrum Sciences & Software Holdings Corporation, 91 Hill
Avenue  NW,  Fort  Walton  Beach,  Florida  32548.

     Percentage  ownership  in the following table is based on 18,844,000 shares
of  common  stock  outstanding  as  of the date of this prospectus.  A person is
deemed  to  be  the  beneficial owner of securities that can be acquired by that
person  within  60  days  from  the date of this prospectus upon the exercise of
options, warrants or convertible securities.  Each beneficial owner's percentage
ownership  is  determined by dividing the number of shares beneficially owned by
that  person  by the base number of outstanding shares, increased to reflect the
shares  underlying options, warrants or other convertible securities included in
that  person's  holdings,  but  not  those  underlying  shares held by any other
person.

                                                                   PERCENTAGE OF
                                               NUMBER OF               SHARES
                                                 SHARES             BENEFICIALLY
               NAME OF BENEFICIAL OWNER     BENEFICIALLY OWNED         OWNED
               ------------------------     ------------------     -------------
               Donal R. Myrick                  2,500,000               13.3%
               All directors and officers       2,500,000               13.3%

               Crystal Overseas Trading, Inc.   1,200,000                6.4%
               (1)
               Shirley  House-50  Shirley
               Street,  PO  Box  N-7755,
               Nassau,  Bahamas


                                       20


               Private Investment Company       1,250,000               6.6%
               Ltd., (2)
               Gretton  House-Duke  Street
               PO  Box  65
               Grand Turk, Turk & Caicos
               Islands, British West Indies

               Seloz Gestion & Finance SA (3)   1,250,000               6.6%
               1  Rue  Hugo-de-Senger
               1211  Geneva  4
               Switzerland

(1)  the  beneficial  owner and control person of Crystal Overseas Trading, Inc.
     is  Daniele  Cimmino.

(2)  the  beneficial owner and control person of Private Investment Company Ltd.
Is  the  estate  of  Martin  Christen.

(3)  the  beneficial  owner and control person of Seloz Gestion & Finance SA Is
Rene  Belser.

PART  I  - ITEM 5.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

     The names of our executive officers and directors, their ages as of June 3,
2003,  and  the  positions  currently  held  by  each  are  as  follows:

NAME                        AGE     POSITION
----                        ---     --------
Donal  R. Myrick             64     Chief Executive Officer, Chairman of the
                                    Board of  Directors
Donald  L.  Garrison         56     Vice  President,  Chief  Operating Officer
William  H.  Ham,  Jr.       55     Vice  President
Nancy  Chadderdon  Gontarek  48     Chief  Financial  Officer
Harold  Dwain  Brannon       42     Director
Dyron  M.  Watford           27     Director

BIOGRAPHIES  OF  EXECUTIVE  OFFICERS

     DONAL  R.  MYRICK.  Mr.  Myrick,  our  CEO  and  Chairman  of  the Board of
Directors,  founded  Spectrum  Sciences & Software, Inc. in 1982, Mr. Myrick has
been  the  chief executive officer of Spectrum since 1982.   Mr. Myrick has over
30  years of relevant technical and managerial experience in military operations
research,  hazard  analysis,  range  planning,  range  safety,  weapon  systems
analysis,  weapon  performance  and  analysis,  threat  definition,  engagement
analysis,  and  the  development  and  application  of  large  scale  computer
simulations.  In his professional career, Mr. Myrick has participated in a broad
range  of  major  programs  ranging  from  the  XB-70  Project (while a research
engineer  at  North American Aviation from 1963 to 1965), the Saturn, Apollo and
Skylab  and  Lunar Landing projects (while a research engineer at Teledyne-Brown
Engineering Company from 1965 to 1974), and to the design and operation of major
national  training  ranges,  to  numerous weapon systems design, development and
test  programs.  In  the  past  few years, Mr. Myrick led a team of analysts and
programmers  in  a  successful  multi-year  program to develop hazard assessment
methodologies  and  supporting  data bases which have become the core of the Air
Force  Range  Planning  Program.  Mr. Myrick is also the sole shareholder of the
following  three  inactive  non  publicly  reporting  companies:  Spectrum
Manufacturing,  Inc;  Spectrum  Equipment  and  Transport  Company;  and  Apogee
Financial,  Inc.  Mr.  Myrick  earned a B.S. degree in Mathematics in 1960 and a
M.S.  degree in Mathematics in 1962, both from Texas Technological College.  Mr.
Myrick  also  taught  mathematics  at  Texas Technological College (from 1960 to
1963),  has  published many technical articles, and has presented papers at both
national  and  international  forums.  Mr.  Myrick  has  signed  a  three  year
employment  agreement  to  serve  as president of Spectrum that will take effect
upon  Spectrum  becoming  a  publicly  reporting  company under the 1934 Act, as


                                       21


amended  (which  is 60 days after the date this registration statement was first
filed with the U.S. Securities and Exchange Commission) or upon the first day of
trading  for  Spectrum  on  the  Over  the Counter Bulletin Board (the "OTCBB").

     DONALD  L.  GARRISON.  Mr. Garrison has been the Chief Operating Officer of
Spectrum  Sciences  & Software, Inc. since November 2002.  From 1986 to 2002 Mr.
Garrison  was  the  Vice  President  of  Spectrum Sciences & Software, Inc.  Mr.
Garrison  earned  a B.S. degree in Electrical Engineering from the United States
Air Force Academy in 1969, and he earned a M.S. degree in Electrical Engineering
from  Oklahoma  State  University  in  1976.

     WILLIAM H. HAM, JR.  Mr. Ham has been the Vice President in charge of Range
Systems  Operations and Maintenance for Spectrum Sciences & Software, Inc. since
August,  1999.  Mr.  Ham  is  responsible for all contracts including personnel,
budgeting,  performance  contracts,  sub  contracts and proposals.  From 1991 to
1999 Mr. Ham was a senior scientist with Spectrum Sciences & Software, Inc.  Mr.
Ham  earned  a  B.S. degree in Electrical Engineering from the United States Air
Force  Academy  in  1970.  He earned a Certificate in Airspace Planning from the
Federal  Aviation  Administration  in  1978.

     NANCY  CHADDERDON  GONTAREK.  Ms.  Gontarek  has  been  the Chief Financial
Officer  of  Spectrum  Sciences  &  Software,  Inc.  since November, 2002.  From
November,  2000  to  November  2002, Ms. Gontarek was the controller of Spectrum
Sciences  &  Software,  Inc.  From 1995 to 2000, Ms. Gontarek was the controller
for  Nugget Oil, Inc. located in Crestview, Florida.  Ms. Gontarek earned a B.A.
degree  from  State University of New York at Fredonia, New York, and she earned
an  M.B.A.  from  George  Washington  University  in  Washington,  DC  in  1982.

     HAROLD  DWAIN  BRANNON.  Mr.  Brannon has been a director since July, 2002.
From 1998 to the present Mr. Brannon has been the president and owner of Brannon
Capital,  a  consulting  firm.  From  2000  to  the present Mr. Brannon has been
president  of  LiquidGolf, an online golf equipment retailer.  From 1996 to 1998
Mr.  Brannon  was a salesman for MarketShare, Inc., an advertising company.  Mr.
Brannon  earned  an  A.A. degree in Marketing and Merchandising from Spartanburg
Methodist  College  in  1981.

     DYRON M. WATFORD.  Mr. Watford has been a director since July 2002.   Since
January  2002,  Mr.  Watford  has  been the founder and a director and principal
accounting  officer  of Universal Tanning Ventures, Inc.  Universal Tanning owns
and  operates  a  single  indoor tanning salon business.  Universal Tanning is a
publicly  reporting  company.  Since  May  2001,  Mr.  Watford has been the sole
officer  and  director of Frontier Educational Systems, Inc., of which he is the
founder  and  sole  stockholder.  Frontier  Educational Systems is a development
stage  company that intends to provide online tutoring services to the secondary
educational market.  Since August 2000, Mr. Watford has served as the president,
sole  stockholder  and  director  of  Sirus  Capital Corp., a consulting company
providing  financial  services  to  existing  and  emerging  private  and public
companies.  From  December  1998  to August 2000, Mr. Watford was an auditor for
Arthur  Andersen,  LLP.  From  1997 to 1998, Mr. Watford worked at the Certified
Public  Accounting  firm  of DeArrigoitia & Company as a staff accountant.   Mr.
Watford earned a B.S. degree in Accounting from Florida Southern College in 1997
and  an  M.B.A.  from  the  University of Central Florida in December 1998.  Mr.
Watford  is  a  certified  public  accountant.

DIRECTORS'  COMPENSATION

     Currently  there  is  no  compensation package for our board.  We expect to
create  a  compensation package for our board members during the next 12 months.

     Further,  Mr.  Brannon  received  no  compensation  in 2002 pursuant to his
consulting agreement with the Company.  However, Mr. Brannon was paid $25,000 in
December  2001  for  corporate  counseling  services.

     We  currently  do  not  have  any  employee stock option or other incentive
plans.

BOARD  OF  DIRECTORS  AND  COMMITTEES

     The  directors  are  elected to one-year terms.  Each director holds office
until  the expiration of the director's term, until the director's successor has
been  duly  elected  and  qualified  or  until  the  earlier  of such director's


                                       22


resignation, removal or death.  Our board of directors does not have an audit or
any  other  committee.

PART  I  -  ITEM  6.  EXECUTIVE  COMPENSATION

     The  following  table sets forth the cash and non-cash compensation paid or
incurred on our behalf to our chief executive officer and each of the four other
most  highly  compensated  employee  executive  officers, or the named executive
officers,  that  earned  more  than  $50,000 during the last three fiscal years:



                      SUMMARY COMPENSATION TABLE

                                               Annual Compensation
                                          ----------------------------
                               Fiscal                 Other Annual
Name and Principal Position     Year      Salary ($)  Compensation ($)
                                ----      ----------  ----------------
                                            
Donal R. Myrick, CEO, Chairman
 of the Board of Directors * .  2002      99,996                 0
                                2001      91,998                 0
                                2000      36,005                 0

Donald L. Garrison, COO. . . .  2002      82,014                 0
                                2001      82,014                 0
                                2000      82,014                 0

William H. Ham, Jr., VP. . . .  2002      60,984                 0
                                2001      71,701                 0
                                2000      72,080                 0

Nancy Chadderdon Gontarek, CFO  2002      65,000                 0
                                2001      65,000                 0
                                2000       4,865                 0


*  Mr. Myrick has signed a three year employment agreement to serve as president
of  Spectrum  that  will take effect upon Spectrum becoming a publicly reporting
company  under  the  1934  Act, as amended (which is 60 days after the date this
registration  statement  was  first  filed with the U.S. Securities and Exchange
Commission)  or  upon  the  first  day  of  trading for Spectrum on the Over the
Counter  Bulletin  Board  (the  "OTCBB").  Mr. Myrick's compensation pursuant to
this  employment  agreement  will  be  $10,000  per  month.

STOCK  OPTION  GRANTS

     There  were no individual grants of stock options to any Executive Officers
during  the  fiscal  years  ended  December  31,  2002,  2001  or  2000.


                                       23

PART  I  -  ITEM  7.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Donal  R.  Myrick  is  the  sole  shareholder  of two corporations that are
without  operations,  Spectrum  Manufacturing,  Inc.  and  Spectrum  Equipment &
Transport  Co.  Spectrum Manufacturing, Inc. is a co-defendant in the lawsuit by
the  Trident  Company  against  Spectrum  Sciences  &  Software,  Inc.

     On  December 28, 2001, the Company entered into a consulting agreement with
Harold  Dwain  Brannon,  one  of  the Company's directors. Mr. Brannon agreed to
provide corporate counseling services for an initial term of one year and for an
initial  fee  of  $25,000,  plus  expenses.

     On  June  20, 2002, the Company was advanced $500,000 from Brannon Capital,
Inc.  The  repayment  of  this  advance  was  due December 20, 2002. The Company
currently owes $427,500, which is due by November 30, 2003. The beneficial owner
of  Brannon  Capital,  Inc.  is Harold Dwain Brannon, a director of the Company.

     Kay  Dean  Ham, the wife of our vice president William H. Ham, has made two
short  term  unsecured  loans  to  Spectrum Sciences & Software, Inc.  A loan of
$75,000  was made on March 12, 2002.  This loan was repaid with interest paid of
$750.  A  Loan  of $65,000 was made on July 19, 2002.  This loan was repaid with
interest  paid  of  $925.

     Donal R. Myrick, our president and CEO loaned Spectrum Sciences & Software,
Inc.  $20,000 in October, 2002.  This advance was made as convertible promissory
note  due  on  June  30,  2003,  bearing 6% interest per year.  This loan can be
converted  into  common  stock  at  a  price  of  $1.00.

     On March 3, 2003, we issued 100,000 shares of our common stock (taking into
account the forward two for one split on April 9, 2003) to Jackson Steinem, Inc.
for  consulting  services  related  to the filing of our registration statement.
The  beneficial  owner  of  Jackson  Steinem,  Inc.  is  Adam  S.  Gottbetter of
Gottbetter  &  Partners, LLP, our legal counsel.  This stock issuance was valued
at  $5,000  or  $.05  per  share.

                   PART I - ITEM 8.  DESCRIPTION OF SECURITIES

DESCRIPTION  OF  SECURITIES

     Our  authorized  capital  stock  currently consists of 80,000,000 shares of
Common  Stock,  par  value $0.0001 per share, and 20,000,000 shares of preferred
stock,  par  value $0.0001 per share, the rights and preferences of which may be
established  from  time to time by our Board of Directors.  There are 18,844,000
shares  of  our  common  stock  issued and outstanding, and no other securities,
including  without  limitation  any  preferred  stock,  convertible  securities,
options,  warrants,  promissory  notes  or  debentures  outstanding.
The  description of our securities contained herein is a summary only and may be
exclusive  of  certain  information  that  may  be  important  to you.  For more
complete  information,  you should read our Certificate of Incorporation and its
restatements,  together  with  our  corporate  bylaws.

                                  COMMON STOCK

     Holders of our common stock are entitled to one vote for each share held on
all  matters  submitted  to  a  vote  of stockholders and do not have cumulative
voting  rights.  Accordingly,  holders of a majority of the shares of our common
stock  entitled  to  vote  in  any  election  of  directors may elect all of the
directors  standing  for election. Subject to preferences that may be applicable
to  any shares of preferred stock outstanding at the time, holders of our common
stock are entitled to receive dividends ratably, if any, as may be declared from
time  to time by our board of directors out of funds legally available therefor.

     Upon  our liquidation, dissolution or winding up, the holders of our common
stock  are  entitled  to  receive  ratably,  our  net assets available after the
payment  of:


                                       24


     a.   all  secured  liabilities, including any then outstanding secured debt
          securities  which  we  may  have  issued  as  of  such  time;

     b.   all  unsecured  liabilities,  including any then unsecured outstanding
          secured  debt securities which we may have issued as of such time; and

     c.   all  liquidation  preferences on any then outstanding preferred stock.

     Holders of our common stock have no preemptive, subscription, redemption or
conversion  rights,  and  there  are  no  redemption  or sinking fund provisions
applicable  to  the  common  stock.  The  rights,  preferences and privileges of
holders  of  common  stock are subject to, and may be adversely affected by, the
rights  of  the  holders of shares of any series of preferred stock which we may
designate  and  issue  in  the  future.

                                 PREFERRED STOCK

     Our board of directors is authorized, without further stockholder approval,
to issue up to 20,000,000 shares of preferred stock in one or more series and to
fix  the  rights,  preferences,  privileges  and  restrictions  of these shares,
including dividend rights, conversion rights, voting rights, terms of redemption
and  liquidation  preferences,  and to fix the number of shares constituting any
series  and  the  designations  of  these  series.  These shares may have rights
senior to our common stock.  The issuance of preferred stock may have the effect
of  delaying or preventing a change in control of us.  The issuance of preferred
stock  could  decrease  the  amount  of  earnings  and  assets  available  for
distribution to the holders of common stock or could adversely affect the rights
and  powers,  including  voting  rights, of the holders of our common stock.  At
present,  we  have  no  plans  to  issue  any  shares  of  our  preferred stock.

                           DELAWARE ANTI-TAKEOVER LAW

     If we close an initial public offering of our securities, and become listed
on  a  national  stock  exchange  or  the NASDAQ Stock Market or have a class of
voting  stock  held by more than 2000 record holders, we will be governed by the
provisions  of  Section  203  of  the  General  Corporation  Law of Delaware. In
general,  such  law  prohibits  a Delaware public corporation from engaging in a
"business  combination"  with  an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder,  unless  it  is  approved  in  a  prescribed  manner.

     As  a  result  of  Section  203 of the General Corporation Law of Delaware,
potential  acquirers  may  be  discouraged from attempting to effect acquisition
transactions  with  us,  thereby possibly depriving holders of our securities of
certain  opportunities  to  sell  or  otherwise  dispose  of  such securities at
above-market  prices  pursuant  to  such  transactions.

DIVIDENDS

     We  have  not  declared  any dividends since inception, and have no present
intention  of paying any cash dividends on our shares in the foreseeable future.
The  payment of dividends, if any, in the future, rests within the discretion of
our  board  of directors and will depend, among other things, upon our earnings,
our  capital requirements and our financial condition, as well as other relevant
facts.

TRANSFER  AGENT  AND  REGISTRAR

     The  transfer agent for our common stock is Signature Stock Transfer, Inc.,
14675  Midway  Road,  Suite  121  Addison, TX  75001 and its telephone number is
(972)  788-4193.


                                       25


   PART II - ITEM 1.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our  common  stock  has  traded  on  the  Electronic  Pink  Sheets  as  a
non-reporting  company  since  2000 under the symbol SIVY, until April 2003 when
the  symbol  was  changed  to  SPSC.  Trading  volume  has  historically  been
negligible.  The high and low bid prices at the close of each fiscal quarter for
the  past  13  quarters  are  as  follows:



                                                         BID
                                                         ---
                                                     HIGH   LOW
                                                     -----  ----
                                                    
September 30, 2000 . . . . . . . . . . . . . . . .    .375   .375
December 31, 2000. . . . . . . . . . . . . . . . .   4.75    .375

March 31, 2001 . . . . . . . . . . . . . . . . . .   1.125   .55
June 30, 2001. . . . . . . . . . . . . . . . . . .   3.00    .375
September 30, 2001 . . . . . . . . . . . . . . . .    .51    .25
December 31, 2001. . . . . . . . . . . . . . . . .    .25    .15

March 31, 2002 . . . . . . . . . . . . . . . . . .    .15    .15
June 30, 2002. . . . . . . . . . . . . . . . . . .    .15    .15
September 30, 2002 . . . . . . . . . . . . . . . .   1.50    .15
December 31, 2002. . . . . . . . . . . . . . . . .   2.00   1.30

March 31, 2003 . . . . . . . . . . . . . . . . . .   2.10   1.30
June 30, 2003. . . . . . . . . . . . . . . . . . .   2.22   1.14
September 30, 2003 . . . . . . . . . . . . . . . .   1.85   1.40


Source:  Pink  Sheets,  LLC

     These quotations represent prices between dealers and do not include retail
markup,  markdown, or commission.  They do not represent actual transactions and
have  not  been  adjusted  for stock dividends or splits.  Further these trading
records  are  for  Silva  Bay  International,  Inc.  and  predate  Silva  Bay
International,  Inc.  acquiring  Spectrum  Sciences  &  Software,  Inc.

     As  of  October 1, 2003, there were approximately 36 shareholders of record
of  the  Company's common stock. On April 9, 2003, the Company effectuated a two
for  one  forward  split  of  its  common  stock.

     The Company has not paid any cash dividends for the past three fiscal years
or  during  the interim period presented and has no intention to pay a dividend.


                      PART II - ITEM 2.  LEGAL PROCEEDINGS

     On January 13, 2003, The Trident Company obtained a default judgment in the
District  Court  of  Tulsa  County,  State  of  Oklahoma, Case No. CJ-2003-1787,
against  Spectrum  Sciences & Software, Inc. and Spectrum Manufacturing, Inc. in
the  amount  of  approximately  $143,000.

     On  April  21,  2003, the United States Internal Revenue Service obtained a
lien  against  any  and  all  of  Spectrum's  assets  in the amount $173,041.01.
Spectrum  has  entered  into  a  payment  arrangement  with  the  IRS.

     We  currently  have  a  debt  to  Washington  Group  International, Inc. of
approximately  $176,000,  and this debt may be reduced a confession of judgment.
We  are  attempting  resolve  this  debt.


                                       26

     In  December,  2002,  three  Spectrum  employees  each filed complaints for
violation  of civil rights, discrimination, harassment, hostile work environment
and  retaliation  in the United States District Court, District of Arizona.  The
Case  numbers  for  these complaints are: CIV '02 2621 PHX MHM; CIV '02 2619 PHX
DKD;  and CIV '02 2620 PHX FJM.  In January, 2003, Spectrum filed answers to all
three  complaints,  denying all allegations of wrongdoing.  All three plaintiffs
are  claiming  "undue stress and anxiety" from Spectrum's actions. There were no
damage  amounts  specified in any of the actions.  The plaintiffs are requesting
the  following:

     A.   Compensatory damages, plus special incidental damages in such a sum as
          may  be  proven  at  trial;
     B.   For  punitive  damages  in  such  a  sum  as  may  be proven at trial;
     C.   For  cost  for  the  suit;
     D.   For  attorney's  fees;  and
     E.   For  other  such  relief  as  the  Court  deems  just  and  proper.

     Spectrum  does  not  know  what  the  outcome  of  this litigation will be.

     On  or  about  May  28, 2003, Business & Commercial Brokerage, Inc. filed a
complaint against Spectrum Sciences & Software, Inc. (a Florida Corporation) and
Donal  R.  Myrick  (Case  No.  2003  CA  001093) in the Circuit Court in and for
Escambia  County,  Florida.  The  complaint  is  based upon an alleged breach of
contract  related  to  the  sale  of  any  and all assets of Spectrum Sciences &
Software,  Inc.  The  plaintiff Business & Commercial Brokerage, Inc. is seeking
damages  in  the  form  of  a  sales commission, additional unspecified damages,
interests,  court  costs  and attorney fees. Spectrum has answered the complaint
with  an  affirmative  defense that Business & Commercial Brokerage, Inc. is not
owed  any  commission  or  any  other  damages.  Spectrum does not know what the
outcome  of  this  litigation  will  be.

     Spectrum  is  not  aware  of  any  other  pending or threatened litigation.

        PART II - ITEM 3.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     The  auditor  for  the  Company  prior  to the April 2, 2003 acquisition of
Spectrum Sciences & Software, Inc. was Richard M. Prinzi, Jr., CPA.  The auditor
of  the  acquired company, Spectrum Sciences & Software, Inc., is Tedder, James,
Worden  & Associates, P.A.  Going forward after the merger of April 3, 2003, the
Company's  auditor  will  be  Tedder,  James,  Worden  &  Associates,  P.A.

     The  prior  auditor Richard M. Prinzi, Jr. was dismissed. The prior auditor
Richard M. Prinzi, Jr.'s report did not contain an adverse opinion or disclaimer
of  opinion,  nor  was  it modified as to uncertainty, audit scope or accounting
principals.  There  were  no  disagreements  with  the  prior auditor Richard M.
Prinzi,  Jr.  The  decision  to  change accountants was approved be the board of
directors.

           PART II - ITEM 4.  RECENT SALES OF UNREGISTERED SECURITIES

     Donal R. Myrick, our president and CEO loaned Spectrum Sciences & Software,
Inc.  $20,000 in October, 2002.  This advance was made as convertible promissory
note  due  on  June  30,  2003,  bearing 6% interest per year.  This loan can be
converted  into  common  stock  at  a  price of $1.00 per share.  The securities
transaction  was  a  private  transaction  (there  was  no general solicitation)
without  registration in reliance on the exemptions provided by Section 4(2) and
Rule  506  of  Regulation  D  of  the  Securities  Act of 1933, as amended.  The
underlying  shares  received  by  the  purchaser  were  restricted  shares.

     On March 3, 2003, the Company issued 100,000 shares of common stock (taking
into  account  the  forward two for one stock split of April 9, 2003) to Jackson
Steinem,  Inc. for consulting services related to the filing of our registration
statement.  The  beneficial owner of Jackson Steinem, Inc. is Adam S. Gottbetter
of Gottbetter & Partners, LLP, our legal counsel. This stock issuance was valued
at  $5,000  or  $.05 per share. The sale was a private transaction (there was no
general solicitation) without registration in reliance on the exemption provided
by  Rule  701  of the Securities Act of 1933, as amended. The purchaser received
restricted  shares.


                                       27


          On  April 2, 2003, the Company issued 2,500,000 shares of common stock
(taking  into  account  the forward two for one stock split of April 9, 2003) to
Donal  R. Myrick, our president and CEO, in exchange for Mr. Myrick's 600 shares
of  Spectrum  Sciences  &  Software,  Inc.,  which  were  all  of the issued and
outstanding  shares  of Spectrum Sciences & Software, Inc.  This transaction was
part  of  the merger in which the Company acquired all of the assets of Spectrum
Sciences  & Software, Inc.  The securities transaction was a private transaction
(there  was  no  general  solicitation)  without registration in reliance on the
exemptions  provided  by  Section  4(2)  and  Rule  506  of  Regulation D of the
Securities  Act  of 1933, as amended.  The purchaser received restricted shares.

     Note, on April 9, 2003, the Company effectuated a two for one forward split
of  its  common  stock.


          PART II - ITEM 5.  INDEMNIFICATION OF OFFICERS AND DIRECTORS

     Our amended and restated certificate of incorporation provides that none of
our directors shall be liable to us or our stockholders for monetary damages for
any  breach  of  fiduciary  duty  as  a director, except to the extent otherwise
required  by  the  Delaware  General Corporation Law, or the DGCL. The effect of
this  provision  is  to  eliminate  our rights, and our stockholders' rights, to
recover  monetary  damages  against a director for breach of a fiduciary duty of
care as a director. This provision does not limit or eliminate our right, or the
right  of any stockholder, to seek non-monetary relief, such as an injunction or
rescission  in  the event of a breach of a director's duty of care. In addition,
our amended and restated certificate of incorporation provides that, if the DGCL
is  amended  to authorize the further elimination or limitation of the liability
of  a  director,  then  the  liability  of  the directors shall be eliminated or
limited  to  the  fullest  extent  permitted  by  the DGCL, as so amended. These
provisions  will  not  alter  the  liability of directors under federal or state
securities  laws.  Our  amended  and  restated certificate of incorporation also
includes provisions for the indemnification of our directors and officers to the
fullest  extent  permitted  by  Section 145 of the DGCL. We have entered into an
indemnification  agreement  with  each of our directors which requires us, among
other  things,  to indemnify them against certain liabilities which may arise by
reason  of  his  status or service as a director (other than liabilities arising
from  willful  misconduct  of  a  culpable  nature).  We also intend to maintain
director  and  officer  liability  insurance,  if available on reasonable terms.

                                       28

                                       INDEX TO FINANCIAL STATEMENTS

                                SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.




SPECTRUM SCIENCES & SOFTWARE, INC.
                                                                                                       
     Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1
     Balance Sheets as of December 31, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2
     Statements of Operations for the years ended December 31, 2002 and 2001 . . . . . . . . . . . . . .  F-3
     Statements of Shareholders' Deficit for the years ended December 31, 2002 and 2001. . . . . . . . .  F-4
     Statements of Cash Flows for the years ended December 31, 2002 and 2001 . . . . . . . . . . . . . .  F-5
     Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

SILVA BAY INTERNATIONAL, INC.
     Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-26
     Balance Sheet as of December 31, 2002 and 2001. . . . . . . . . . . . . . . . . . . . . . . . . . .  F-27
     Statement of Operations for the years ended December 31, 2002 and 2001 and from inception on
          on August 28, 1998 to December 31, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-28
     Statements of Stockholders' Deficit for the years ended December 31, 2002 and 2001. . . . . . . . .  F-29
     Statements of Cash Flows for the years ended December 31, 2002 and 2001 and from inception on
          on August 28, 1998 to December 31, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-30
     Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-31

SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
     Consolidated  Balance  Sheet  as  of  June  30,  2003 (unaudited) . . . . . . . . . . . . . . . . .  F-32
     Consolidated  Statements  of Operations for the three months and six months
          ended  June  30,  2003  and  2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-33
     Consolidated  Statements  of  Cash  Flows for the six months ended June 30,
          2003  and  2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-34
     Notes  to  Consolidated  Financial  Statements. . . . . . . . . . . . . . . . . . . . . . . . . . .  F-35

SPECTRUM  SCIENCES  &  SOFTWARE  HOLDINGS  CORP.  UNAUDITED  PRO  FORMA
COMBINED  FINANCIAL  STATEMENTS

     Introduction to Unaudited Pro Forma Combined Financial Statements . . . . . . . . . . . . . . . . .  F-43
     Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2002 . . . . .  F-44
     Notes to the Pro Forma Combined Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .  F-43



                                       29

                    TEDDER, JAMES, WORDEN & ASSOCIATES, P.A.
                Certified Public Accountants & Business Advisors
           An Independently Owned Member of the RSM McGladrey Network

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


To  the  Board  of  Directors  of
     Spectrum  Sciences  &  Software,  Inc.


We  have audited the accompanying balance sheet of Spectrum Sciences & Software,
Inc.  (the  "Company")  as  of  December 31, 2002, and the related statements of
operations,  shareholder's  deficit, and cash flows for the years ended December
31,  2002  and  2001.  These  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects, the financial position of Spectrum Sciences & Software,
Inc.  as  of  December  31, 2002, and the results of its operations and its cash
flows  for  the  years  ended  December  31,  2002  and  2001 in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 2 to the
financial  statements, the Company has incurred recurring losses from operations
and  has  a  net capital deficiency.  These factors, and the need for additional
financing in order for the Company to meet its business plans, raise substantial
doubt  about  its  ability  to repay outstanding notes payable and continue as a
going concern.  Management's plans in regard to these matters are also discussed
in  Note  2.  The financial statements do not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.

As  discussed in Note 1 (h) to the financial statements, the Company changed its
method  of  accounting  for  goodwill  of  January  1,  2002  as required by the
provisions  of Statement of Financial Accounting Standards No. 142, Goodwill and
Other  Intangible  Assets.

/s/  TEDDER,  JAMES,  WORDEN  &  ASSOCIATES,  P.A.

Orlando,  Florida
May  9,  2003


                                      F-1

                       SPECTRUM SCIENCES & SOFTWARE, INC.

                                  BALANCE SHEET

                                December 31, 2002




                                ASSETS
                                -------
                                                      
Current assets:
  Cash and cash equivalents . . . . . . . . . . . . . .  $   633,909
  Receivables . . . . . . . . . . . . . . . . . . . . .    2,084,789
  Inventories . . . . . . . . . . . . . . . . . . . . .      291,344
  Prepaid expenses. . . . . . . . . . . . . . . . . . .        8,993
                                                         ------------

    Total current assets. . . . . . . . . . . . . . . .    3,019,035

  Property, plant, and equipment, net . . . . . . . . .    2,071,948
  Cash surrender value of life insurance. . . . . . . .       19,701
  Other assets. . . . . . . . . . . . . . . . . . . . .       17,024
                                                         ------------

    Total assets. . . . . . . . . . . . . . . . . . . .  $ 5,127,708
                                                         ============

                 LIABILITIES AND SHAREHOLDER'S DEFICIT
                 -------------------------------------

Current liabilities:
  Accounts payable. . . . . . . . . . . . . . . . . . .  $ 1,413,229
  Accrued expenses. . . . . . . . . . . . . . . . . . .      940,406
  Contract deposits . . . . . . . . . . . . . . . . . .      173,936
  Bank lines of credit. . . . . . . . . . . . . . . . .    1,201,111
  Current portion of long-term debt . . . . . . . . . .    1,975,591
  Due to related parties (Note 9) . . . . . . . . . . .      568,870
                                                         ------------

    Total current liabilities . . . . . . . . . . . . .    6,273,143

  Long-term debt, less current portion. . . . . . . . .       30,122
                                                         ------------

    Total liabilities . . . . . . . . . . . . . . . . .    6,303,265

Commitments and contingencies (Note 16)

Shareholder's deficit:
  Common stock, $1 par value; 1,000 shares authorized;
    600 shares issued and outstanding . . . . . . . . .          600
  Accumulated deficit . . . . . . . . . . . . . . . . .   (1,176,157)
                                                         ------------

    Total shareholder's deficit . . . . . . . . . . . .   (1,175,557)
                                                         ------------

    Total liabilities and shareholder's deficit . . . .  $ 5,127,708
                                                         ============



See  the  accompanying  notes  to  the  financial  statements.

                                      F-2

                       SPECTRUM SCIENCES & SOFTWARE, INC.

                            STATEMENTS OF OPERATIONS

                 For the years ended December 31, 2002 and 2001




                                                        2002           2001
                                                    -------------  ------------
                                                             
Revenues . . . . . . . . . . . . . . . . . . . . .  $ 12,261,630    11,873,525

Cost of revenues . . . . . . . . . . . . . . . . .   (11,875,499)  (11,033,382)
                                                    -------------  ------------

    Gross profit . . . . . . . . . . . . . . . . .       386,131       840,143

Operating expenses . . . . . . . . . . . . . . . .      (464,987)     (428,541)
                                                    -------------  ------------

    Income (loss) from operations. . . . . . . . .       (78,856)      411,602

Non-operating expense, net . . . . . . . . . . . .       (33,554)     (179,187)
                                                    -------------  ------------

    Income (loss) from continuing operations . . .      (112,410)      232,415

Discontinued operations:
  Loss on disposal of yacht manufacturing segment.      (407,250)            -
                                                    -------------  ------------

    Income (loss) before cumulative effect of
      accounting change. . . . . . . . . . . . . .      (519,660)      232,415

  Cumulative effect of accounting change for
    SFAS No. 142 . . . . . . . . . . . . . . . . .       (91,022)            -
                                                    -------------  ------------

    Net income (loss). . . . . . . . . . . . . . .  $   (610,682)      232,415
                                                    =============  ============

Weighted average shares outstanding:

  Basic and diluted. . . . . . . . . . . . . . . .           600           600
                                                    =============  ============

Earnings (loss) per share:
  Basic and diluted. . . . . . . . . . . . . . . .  $  (1,017.80)       387.36
                                                    =============  ============


See  the  accompanying  notes  to  the  financial  statements.


                                      F-3

                                     SPECTRUM SCIENCES & SOFTWARE, INC.

                                    STATEMENTS OF SHAREHOLDER'S DEFICIT

                              For the years ended December 31, 2002 and 2001




                                                               COMMON STOCK
                                                        --------------------------  ACCUMULATED
                                                           SHARES        AMOUNT       DEFICIT       TOTAL
                                                        ------------  ------------  -----------  -----------
                                                                                     
Balances at December 31, 2000, as previously reported.           600  $        600    (705,825)    (705,225)

Restatement (Note 12). . . . . . . . . . . . . . . . .             -             -     (92,065)     (92,065)
                                                        ------------  ------------  -----------  -----------

Balances at December 31, 2000, as restated . . . . . .           600           600    (797,890)    (797,290)

Net income . . . . . . . . . . . . . . . . . . . . . .             -             -     232,415      232,415
                                                        ------------  ------------  -----------  -----------

Balances at December 30, 2001. . . . . . . . . . . . .           600           600    (565,475)    (564,875)

Net loss . . . . . . . . . . . . . . . . . . . . . . .             -             -    (610,682)    (610,682)
                                                        ------------  ------------  -----------  -----------

Balances at December 31, 2002. . . . . . . . . . . . .           600  $        600  (1,176,157)  (1,175,557)
                                                        ============  ============  ===========  ===========


See  the  accompanying  notes  to  the  financial  statements.


                                      F-4

                       SPECTRUM SCIENCES & SOFTWARE, INC.

                            STATEMENTS OF CASH FLOWS

                 For the years ended December 31, 2002 and 2001



                                                                   2002        2001
                                                               ------------  ---------
                                                                       
Cash flows from operating activities:
  Net income (loss) . . . . . . . . . . . . . . . . . . . . .  $  (610,682)   232,415
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
    Write-down of obsolete inventory. . . . . . . . . . . . .      289,652          -
    Depreciation. . . . . . . . . . . . . . . . . . . . . . .      148,899    182,764
    Restatement (Note 12) . . . . . . . . . . . . . . . . . .       92,065          -
    Cumulative effect of accounting change. . . . . . . . . .       91,022          -
    Decrease in cash surrender value of life insurance. . . .        5,059        376
    Amortization. . . . . . . . . . . . . . . . . . . . . . .            -     14,340
    Loss on disposal of equipment . . . . . . . . . . . . . .            -     11,271
    Discontinued operations:
      Provision for doubtful accounts . . . . . . . . . . . .       34,978          -
      Gain on extinguishment of debt. . . . . . . . . . . . .      (36,726)         -
    (Increase) decrease in assets:
      Receivables . . . . . . . . . . . . . . . . . . . . . .       27,579    419,048
      Inventories . . . . . . . . . . . . . . . . . . . . . .      472,989   (454,526)
      Prepaid expenses. . . . . . . . . . . . . . . . . . . .       (8,993)         -
      Other assets. . . . . . . . . . . . . . . . . . . . . .         (723)     5,620
    Increase (decrease) in liabilities:
      Accounts payable. . . . . . . . . . . . . . . . . . . .      204,999    301,489
      Accrued expenses. . . . . . . . . . . . . . . . . . . .      332,434   (100,669)
      Contract deposits . . . . . . . . . . . . . . . . . . .     (114,349)   288,285
      Due to the Department of Defense. . . . . . . . . . . .            -   (640,392)
                                                               ------------  ---------

        Net cash provided by continuing operations. . . . . .      928,203    260,021
        Net cash used in discontinued operations. . . . . . .      (33,146)         -
                                                               ------------  ---------

        Net cash provided by operating activities . . . . . .      895,057    260,021

Cash flows from investing activities:
  Purchase of property and equipment. . . . . . . . . . . . .      (13,570)  (106,036)
  Proceeds from sale of discontinued operations . . . . . . .      360,000          -
                                                               ------------  ---------

        Net cash provided by (used in) investing activities .      346,430   (106,036)

Cash flows from financing activities:
  Net repayments on bank lines of credit. . . . . . . . . . .   (1,069,437)  (162,377)
  Proceeds from notes payable . . . . . . . . . . . . . . . .       75,000     13,343
  Payments on notes payable . . . . . . . . . . . . . . . . .     (146,962)  (295,239)
  Advances from related parties . . . . . . . . . . . . . . .      641,370    250,903
  Repayments of advances from related parties . . . . . . . .     (322,073)    (1,330)
                                                               ------------  ---------

        Net cash used in financing activities . . . . . . . .     (822,102)  (194,700)
                                                               ------------  ---------

        Net increase (decrease) in cash and cash equivalents.      419,385    (40,715)

Cash and cash equivalents - beginning of year . . . . . . . .      214,524    255,239
                                                               ------------  ---------

Cash and cash equivalents - end of year . . . . . . . . . . .  $   633,909    214,524
                                                               ============  =========

Supplemental disclosures of cash flow information:
  Cash paid during the year for:
    Interest. . . . . . . . . . . . . . . . . . . . . . . . .  $   300,693    350,391
                                                               ============  =========


See  the  accompanying  notes  to  the  financial  statements.


                                      F-5

                       SPECTRUM SCIENCES & SOFTWARE, INC.

                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2002 and 2001

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

(A)     ORGANIZATION  AND  NATURE  OF  BUSINESS

     Spectrum Sciences & Software, Inc. (the "Company") was incorporated in the
State  of  Florida  on  October  8,  1982.  Headquartered  in Fort Walton Beach,
Florida,  the  Company  has  three  reportable  segments  - management services,
manufacturing,  and engineering and information technology services.  Management
services  include  providing engineering, technical, and operational services in
the  area  of  defense  range  management  specializing  in  bombing and gunnery
training range operation and maintenance.  Manufacturing operations includes the
design and construction of munitions ground support equipment and containers for
the  shipping and storage of munitions and equipment.  The Company's engineering
and  information technology services segment consists of the sale of engineering
and information technology services developed to assist in hazard management and
weapons  impact  analysis.

     The  Company's  contracts  are  primarily  fixed  price contracts with the
United  States Department of Defense (DOD).  The Company currently has contracts
in  Florida  and Arizona.     During the years ended December 31, 2002 and 2001,
99%  of  the  Company's  revenues  were  derived  from  contracts  with the DOD.

(B)     REVENUE  AND  COST  RECOGNITION

     The  Company's  principal source of revenue is derived from contracts from
the  United  States  Department  of  Defense  (DOD)  and  other  governmental
contractors.  Revenues and costs of revenues earned are recognized for its three
segments  as  described  below.  Management's  revenue  recognition  policies,
including  methods and criteria used for determining extent of completion on its
contracts,  are  described  below.

Management  Services

     The Company recognizes income on its management service contracts over the
life  of  the  contract  as  delivery  of  services occur.  All related costs to
perform  the  services,  which consist primarily of labor costs, including those
subcontracted  to  other  parties,  are also recorded as the costs are incurred.

     Manufacturing

     The  Company  recognizes  revenue  on  long-term fixed price manufacturing
contracts  on a percentage of completion method of accounting based on the ratio
of costs incurred to the estimated total costs upon completion. Criteria used in
determining  substantial  completion  for  its  manufacturing  contracts include
compliance  with  performance specifications and customer acceptance.  Materials
purchased  in  advance  of  the start of the labor process are held as inventory
until  the  manufacturing  process  begins.


                                      F-6


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(B)     REVENUE  AND  COST  RECOGNITION,  CONTINUED

     Engineering  and  Information  Technology  Services  (Computer  Software)

     Management  recognizes  revenue  under  certain  long-term  fixed  price
contracts  that  require  product deliveries based on a percentage of completion
method  using  units  of  delivery  as  the  measurement  basis  for  efforts
accomplished.  Products  include  engineering  studies,  computer simulation and
modeling  programs and other technical services and programs that are related to
range planning methodology.  Criteria used in determining substantial completion
on  contracts  for the Engineering and Information Technology Services contracts
include  compliance  with  performance  specifications.

     Management  believes the above methods and criteria are the best available
measures  of progress for such contracts.  Because of the inherent uncertainties
in  estimating  costs  and revenues, it is at least reasonably possible that the
estimates  used  will  change  within  the  near  term.

     Revenue  from  claims  is  recognized when realization is probable and the
amount  can  be reliably estimated.  When realization is probable but the amount
cannot  be  reliably  estimated,  revenue  is  recognized to the extent of costs
incurred,  or  revenue  is  recognized when the amounts are received or awarded.

     Costs  of  revenues  earned  include  all  direct  costs  (labor,  travel,
relocations,  materials,  subcontracts,  and  other),  and  those indirect costs
allocable  to  a  contract.  Allocations  of  indirect  costs  are  based on the
relative amounts of direct labor. Provisions for estimated losses on uncompleted
contracts  are  made in the period in which such losses are determined.  Changes
in job performance, job conditions, and estimated profitability, including those
arising  from  contract  penalty  provisions, and final contract settlements may
result  in  revisions  to  costs  and income and are recognized in the period in
which  the  revenues  are  determined.

(C)     CASH  AND  CASH  EQUIVALENTS

     The  Company  considers  cash on hand, deposits in banks, and money market
accounts  to  be  cash  and  cash  equivalents.


                                      F-7


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(D)     ALLOWANCES

          The  Company  provides  appropriate  provisions  for  uncollectible
accounts  and  credit for returns based upon factors surrounding the credit risk
and  activity  of  specific  customers.  Ninety-nine  percent  of  the Company's
revenue  and related accounts receivable are derived from contracts with the DOD
which  minimizes the risk of uncollectibility.  In the opinion of management, no
provisions  are  deemed  necessary  for  uncollectible  accounts  or returns for
credits  at  December  31,  2002.  If  a  customer  account  becomes  considered
uncollectible,  it  will  be  written  off  at  that  time.

     Certain  commercial accounts receivable were written off during the fiscal
year  ended  December 31, 2002 related to the acquisition of Ver-Val Enterprises
(see  Note  1(h)).  Bad  debt  expense  of  approximately $3,900 and $43,600 was
recognized  as  an  operating  expense  in the accompanying financial statements
during  the  years  ended December 31, 2002 and 2001, respectively.     In 2002,
the long-term receivables were written off and an additional $34,978 was charged
to  the loss from discontinued operations, which is described further in Note 11
to  the  financial  statements.

(E)     USE  OF  ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  reported  amounts of revenues and expenses
during  the reporting period.  Accordingly, results could differ materially from
those  estimates.

(F)     INVENTORIES

     Inventories  are  stated at the lower of cost or market, determined by the
average cost method.  Inventories are reviewed periodically and items considered
to  be  slow-moving,  excess and/or obsolete are written down to their estimated
net  realizable  value.  During  2002, inventories were reduced by approximately
$289,700  due  to  obsolescence.

(G)     PROPERTY,  PLANT,  AND  EQUIPMENT

     Property,  plant,  and  equipment  are  carried  at  cost less accumulated
depreciation.  Depreciation  is  computed  using  accelerated  methods  over the
estimated  useful  lives of the related assets.  Routine maintenance and repairs
are  charged  to  expense  as incurred.  Major replacements and improvements are
capitalized.  When  assets are sold or retired, the related cost and accumulated
depreciation are removed from the accounts and gains or losses from dispositions
are  credited  or  charged  to  income.


                                      F-8


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(H)     GOODWILL

     Goodwill  represents  the excess of the purchase price over the fair value
of  net  assets  acquired.  During  the  fourth  quarter  of  1999,  the Company
purchased certain assets and assumed certain liabilities of Ver-Val Enterprises,
Inc. ("Ver-Val").  The Company allocated $113,777 to goodwill.  Amortization was
computed  on  a  straight-line basis over the estimated useful life of 10 years.
Amortization  expense  was  $11,377  in  2001  and  accumulated amortization was
$22,755  at  December  31,  2001.

     Effective  January  1,  2002,  the  Company adopted the provisions of FASB
Statement  No.  142,  Goodwill  and  Other  Intangibles  ("SFAS  No. 142").  The
adoption  of  SFAS No. 142 required an initial impairment assessment involving a
comparison  of  the  fair value of goodwill to its current carrying value.  Upon
adoption,  the  Company  recorded a loss as a cumulative effect of an accounting
change  of  $91,022  related  to  goodwill  in the manufacturing segment.  Prior
periods  have  not  been  restated  for  the  adoption  of  SFAS  No.  142.

(I)     IMPAIRMENT  OF  LONG-LIVED  ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED
OF

The  Company's  long-lived  assets  and  certain  identifiable  intangibles  are
reviewed  for  impairment  whenever  events or changes in circumstances indicate
that  the carrying amount of an asset may not be recoverable.  Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an  asset  to  future net cash flows (undiscounted and without interest charges)
expected  to  be  generated  by  the asset.  If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying  amount  of the assets exceeds the fair value of the assets.  Assets to
be  disposed  of  are reported at the lower of the carrying amount or fair value
less  costs  to  sell.

(J)     INCOME  TAXES

     The  Company  has elected to be taxed under the provisions of Subchapter S
of  the  Internal Revenue Code.  Under these provisions, the shareholder reports
his proportionate share of the Company's income or loss on his individual income
tax  return.  Therefore,  no  provision or liability for federal or state income
taxes  has  been  included  in  the  accompanying  financial  statements.


                                      F-9


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(K)     CONTRACT  DEPOSITS

     The Company has received advance deposits for contracts to be performed in
2003.  These  advance  deposits  are recorded as current liabilities at December
31,  2002 in the accompanying balance sheet until such time as the required work
is  performed  and  then  these  amounts  are  recorded  as  revenue.

(L)     EARNINGS  (LOSS)  PER  SHARE

Basic  earnings (loss) per share ("EPS") is calculated by dividing net income by
the  weighted-average  number  of common shares outstanding during the reporting
period.  Diluted  EPS  is computed in a manner consistent with that of basic EPS
while giving effect to the potential dilution that could occur if options and/or
warrants  to  issue  common  stock  were  exercised.

(M)     RESEARCH  AND  DEVELOPMENT  COSTS

Research  and  development  costs  are  expensed  as  incurred.  Research  and
development  costs  incurred  during 2002 and 2001 totaled approximately $22,300
and  $45,000,  respectively,  and  are  included  in  operating  expenses in the
accompanying  statements  of  operations.

(N)     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The carrying amount of cash, receivables, accounts payable, and accrued expenses
approximates fair value because of the short maturity of those instruments.  The
fair  value  of  the  bank  lines  of  credit  and  notes payable are assumed to
approximate  the  recorded  value  because  there  have not been any significant
changes  in  specific  circumstances  since  the notes and lines were originally
recorded.

(O)     CONCENTRATIONS  OF  CREDIT  RISK

Financial  instruments,  which potentially subject the Company to concentrations
of credit risk, consist principally of cash and receivables.  The Company places
its  cash  with  high  credit  quality financial institutions.  At various times
throughout  2002  and at December 31, 2002, cash balances held at some financial
institutions  were  in  excess  of  federally  insured  limits.

Receivables  are  from  the  DOD  and/or  through  DOD  prime contractors, which
minimizes  the  Company's  credit  risk.  The Company generally does not require
collateral  or  other  security  to  support  customer  receivables.


                                      F-10


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(P)     RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  August  2001,  the  FASB  issued  SFAS  No. 143, "Accounting for Asset
Retirement  Obligations."  SFAS  No.  143  addresses  financial  accounting  and
reporting  for obligations associated with the retirement of tangible long-lived
assets  and  the associated asset retirement costs.  SFAS No. 143 applies to (a)
all  entities  and  (b)  legal  obligations  associated  with  the retirement of
long-lived  assets  that  result from the acquisition, construction, development
and/or the normal operation of long-lived assets, except for certain obligations
of  lessees.  SFAS  No.  143  is  effective  for financial statements issued for
fiscal  years  beginning  after June 15, 2002.  The Company does not believe the
adoption  of SFAS No. 143 will have a material impact on it's financial position
or  results  of  operations.

Also  in  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting for the
Impairment  or  Disposal of Long-Lived Assets," which established one accounting
model  to  be  used for long-lived assets to be disposed of by sale and broadens
the  presentation  of  discontinued  operations  to  include  more  disposal
transactions.  SFAS  No.  144  supersedes  SFAS  No.  121,  "Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and
the  accounting  and  reporting provisions of APB Opinion No. 30, "Reporting the
Results  of  Operations-Reporting  the  Effects  of  Disposal  of a Segment of a
Business,  and  Extraordinary,  Unusual  and  Infrequently  Occurring Events and
Transactions" for the disposal of a segment of a business (as previously defined
in  that Opinion).  SFAS No. 144 also amends ARB No. 51, "Consolidated Financial
Statements,"  to  eliminate  the  exception to consolidation of a subsidiary for
which  control  is  likely  to be temporary.  The provisions of SFAS No. 144 are
effective  for  financial  statements  issued  for  fiscal years beginning after
December 15, 2001, with early application encouraged.  Upon adoption of SFAS No.
144,  the Company recorded a loss on disposal of its yacht manufacturing segment
of  $407,250  in  the  accompanying  statements  of  operations.

     In  April  2002,  the  FASB  issued  SFAS  No.  145,  "Rescission  of FASB
Statements  No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections,"  which  rescinds  SFAS  No.  4,  "Reporting  Gains and Losses from
Extinguishment  of  Debt"  and  an amendment of that Statement, and SFAS No. 64,
"Extinguishments  of  Debt Made to Satisfy Sinking-Fund Requirements."  SFAS No.
145  also  rescinds  SFAS  No.  44,  "Accounting for Intangible Assets for Motor
Carriers."  SFAS  No.  145  amends  SFAS  No.  13,  "Accounting  for Leases," to
eliminate  an  inconsistency  between the required accounting for sale-leaseback
transactions  and  the  required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions.  SFAS No.
145  also  amends  other  existing  authoritative pronouncements to make various
technical  corrections,  clarify meanings, or describe their applicability under
changed  conditions.  SFAS No. 145 is effective for fiscal years beginning after
May  15,  2002.


                                      F-11


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(P)     RECENT  ACCOUNTING  PRONOUNCEMENTS,  CONTINUED

The  Company  does  not expect the adoption of SFAS No. 145 will have a material
impact  on  its  results  of  operations  or  financial  position.

In  June  2002,  the  FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit or Disposal Activities," which addresses significant issues regarding
the  recognition,  measurement,  and reporting of costs associated with exit and
disposal  activities, including restructuring activities.  SFAS No. 146 requires
that  costs  associated with exit or disposal activities be recognized when they
are  incurred  rather  than  at  the date of a commitment to an exit or disposal
plan.  SFAS  No.  146 is effective for all exit or disposal activities initiated
after December 31, 2002.  The Company has implemented SFAS No. 146 in connection
with  its  discontinued  operations  (see  Note  11).


(2)     BASIS  OF  PRESENTATION  AND  GOING  CONCERN

The  Company's financial statements have been prepared assuming the Company will
continue as a going concern.  The Company has experienced losses from operations
and  has  an  accumulated  deficit  of  $1,176,157  as  of  December  31,  2002.
Additionally, the Company has negative working capital of $3,254,108 at December
31,  2002.  These deficits and the dependence of the Company to find alternative
financing arrangements to repay its debt owed to its lender are conditions which
could  affect  the  Company's  ability  to  continue  as  a  going  concern.

The Company's plans to deal with this uncertainty include reducing expenditures,
continuing  to request forbearance from creditors and raising additional capital
or  entering  into  a  strategic arrangement with a third party. There can be no
assurance  that management's plans to reduce expenditures, gain cooperation from
creditors,  raise capital or enter into a strategic arrangement can be realized.
No  adjustment  has  been  made  in the accompanying financial statements to the
amounts  and  classification of assets and liabilities which could result should
the  Company  be  unable  to  continue  as  a  going  concern.


                                      F-12


(3)     RECEIVABLES

     Receivables  are,  primarily  comprised  of amounts due to the Company for
work  performed  on  contracts directly related to the DOD and through DOD prime
contractors,  consisted  of  the  following  at  December  31,  2002:

     Contracts  -  billed                          $  1,546,705
     Contracts  -  unbilled                             537,630
                                                   ------------
     Net  trade  receivables                          2,084,335
     Employee  advances  and  notes  receivable             454
                                                   ------------
          Total                                    $  2,084,789
                                                   ============
     Unbilled  receivables  represent  recoverable costs and estimated earnings
and  consist  principally  of  contract  revenue  which  has been recognized for
accounting  purposes but is not yet billable to the customer.  Substantially all
of  these  amounts  will  be  billed  in  the  following  year.

Substantially  all  of the receivables at December 31, 2002 are due from the DOD
or  through  DOD  prime  contractors.


(4)     INVENTORIES

     Inventories  of the Company at December 31, 2002 consists of the following
components:

     Raw  materials                    $  170,344
     Finished  goods                      121,000
                                       ----------
                                       $  291,344
                                       ==========

RAW  MATERIALS

Raw materials consists of sheet metal, various product spare parts, hardware and
other  miscellaneous  materials.


                                      F-13

(4)     INVENTORIES,  CONTINUED

FINISHED  GOODS
Finished  goods  consist  of substantially complete products available for sale.
The  composition  is  as  follows:

                                 QUANTITY
                                 NUMBER OF
          ITEM                     ITEMS            2002 COST
          -----                  ---------          ----------

Munitions  trailers                    7           $    1,000
B5  A  maintenance  stands           137               20,000
Munitions  assembly  conveyor          2              100,000
                                                   ----------
                                                   $  121,000
                                                   ==========

During  2002,  the  Company  determined  that  the  munitions  trailers  and B5A
maintenance  stands  with  a  carrying value of $182,452 were impaired and wrote
them  down  by  $161,452  to  their estimated fair value.  Management determined
impairment  had  occurred  due  to  anticipated  significant  costs  to make the
finished  goods  marketable.


(5)     PROPERTY,  PLANT,  AND  EQUIPMENT

A  summary  of  property  and  equipment  at  December  31, 2002 is as follows:



                                       RANGE OF
                                     LIVE IN YEARS
                                    ---------------
                                               
Land . . . . . . . . . . . . . . .               -   $  175,000
Buildings and improvements . . . .         15 - 39    1,565,301
Manufacturing and other equipment.           3 - 7      775,016
Investment property. . . . . . . .              39      220,900
Computer equipment . . . . . . . .               3      102,507
Software . . . . . . . . . . . . .           3 - 5       54,616
Vehicles . . . . . . . . . . . . .           5 - 7       48,288
Furniture and fixtures . . . . . .           5 - 7       24,206
Construction in progress . . . . .               -       38,714
                                                     -----------
          Total. . . . . . . . . .                    3,004,548
Less accumulated depreciation. . .                     (932,600)
                                                      ----------

Net property, plant, and equipment                   $2,071,948
                                                     ===========



                                      F-14

Depreciation  expense  totaled  $148,899  and  $182,764  during  the years ended
December  31,  2002  and  2001,  respectively.


(6)     ACCRUED  EXPENSES

Accrued  expenses  at  December  31,  2002  consisted  of  the  following:

     Accrued  payroll  and  related  benefits             $  454,249
     Payroll  related  taxes                                 302,289
     Accrued  vacation  and  sick                            128,775
     Accrued  interest  payable                               29,120
     Accrued  property  taxes                                 25,973
                                                          ----------
          Total  accrued  expenses                        $  940,406
                                                          ==========

(7)     BANK  LINES  OF  CREDIT

The  following  is  a summary of the bank lines of credit at December 31, 2002:



AVAILABLE      INTEREST      CURRENT
  CREDIT        TERMS         RATE     COLLATERAL   DUE
----------  --------------  --------  -----------  --------
                                              

 1,000,000      Prime + 2%     6.25%      (1)      09/28/01   $  529,555
 1,000,000      Prime + 2%     6.25%      (1)      09/28/01      443,486
   100,000      Prime + 2%     6.25%      (2)      03/08/02       99,549
   145,000      Prime + 2%     6.25%      (3)      02/08/01      128,521
                                                                --------
                                                              $1,201,111
                                                              ===========


(1)     Assignment  of  Government  contracts  and personal guarantee of Company
President.
(2)     Personal  guarantee  of  Company  President.
(3)     Cross  collateralized  with  real  estate loan and personal guarantee of
Company  President.

     At  December  31,  2002,  all of the bank lines of credit were due and had
been  extended  to  January  15, 2003.  The Company has negotiated an additional
extension  and modification of the loans as further described in Notes 16 and 17
to  the  financial  statements.


                                      F-15

(8)     LONG-TERM  DEBT

     Long-term  debt  at  December  31,  2002  consisted  of  the  following:

Note  payable  to  a  bank,  due  in  monthly installments of
$14,870, including interest  at  8.50%.  Final  balloon
payment of $1,501,039 due October 1, 2004, collateralized  by
real  estate  and  a  personal  guarantee  of  the  Company
President.                                                         $  1,581,419

Note  payable  to  a  bank,  due  in  monthly  installments
of $1,588, including interest  at  8.75%.  Final  balloon
payment of $188,822 due December 27, 2004, collateralized  by
a  condominium  and  a  personal  guarantee  of  the Company
President.                                                              193,473

Note  payable  to  a  bank,  due  in  monthly  installments
of $4,347, including interest at prime + .25% (4.50% at
December 31, 2002).  Final payment due August 13,  2006,
collateralized  by  equipment  and inventory.                           163,356

Note  payable to a financial corporation, due in monthly
installments of $2,655, including  interest  at 22%.
Final payment due January 10, 2005, collateralized by
certain  equipment  of  the  Company and a personal
guarantee of the Company President.                                      52,465

Note  payable  to  an  individual,  principal  and  interest
due  in  monthly installments  of  $1,000,  including
interest at 8.0% commencing on February 1, 2001.  In  April
2003 the Company reached an agreement with the debtor allowing
them  to  settle  the  outstanding  debt  on  this  note with
a $15,000 lump sum payment.                                              15,000
                                                                   ------------
                                                                      2,005,713
Less  current  portion                                               (1,975,591)
                                                                   ------------
Total  long-term  debt                                             $     30,122
                                                                   ============

                                      F-16

(8)     LONG-TERM  DEBT,  CONTINUED

     The  original  maturities  of  the  debt  are  due  as  follows:

YEAR  ENDING  DECEMBER  31,
----------------------------

            2003                           $    166,732
            2004                              1,739,873
            2005                                 73,940
            2006                                 10,361
            2007                                 11,221
            Thereafter                            3,586
                                           ------------
                                           $  2,005,713
                                           ============

     On  June  13, 2002, the Company was considered in default on all debt with
its  primary  lender  (the "lender") due to cross collateralization of all loans
and lines of credit.  As such, the outstanding balance of all long-term debt due
to  that  lender at December 31, 2002, has been included in current liabilities.
The revised maturities of the debt based on the event of default are as follows:

YEAR  ENDING  DECEMBER  31,
---------------------------

            2003                           $  1,975,591
            2004                                 27,515
            2005                                  2,607
                                           ------------
                                           $  2,005,713


(9)     RELATED  PARTY  PAYABLES  AND  TRANSACTIONS

Related  party  payables  consist  of  the  following  as of December 31, 2002:

Cash  advances  made  to  the Company; non-interest
 bearing, payable upon demand                                         $  544,329

Legal  fees  paid by a shareholder of the Company,
 non-interest bearing, payable upon  demand                               12,947

Management  consulting  fees  to  a  shareholder
 of  the  Company, non-interest bearing,  payable
 upon  demand                                                             11,594
                                                                      ----------
                                                                      $  568,870
                                                                      ==========

                                      F-17


(9)     RELATED  PARTY  PAYABLES  AND  TRANSACTIONS,  CONTINUED

During  2002,  cash  advances  totaling $616,829 were provided to the Company by
individuals who were either officers, directors, or material participants in the
transaction  described  in  Note  17.  The  Company  repaid  $72,500 of the cash
advances  in  the  fourth  quarter  of  2002.  No  interest was paid on the cash
advances.

The  Company  was  provided  management  consulting  services  by  one  of  the
shareholders  during 2002.  Expenses of $11,594 are reported in the accompanying
financial  statements  for  the  year  ended  December  31,  2002.

In November of 2001, the Company's shareholder personally entered into a 20-year
mortgage  agreement  with  a  financial  institution.  The financial institution
loaned  the  shareholder  $250,903.  The  shareholder  then  loaned  the  entire
proceeds  to  the  Company.  The  Company  was  directly making the monthly note
payments  of  $2,097,  including  interest  at 7.99%.  The final payment was due
November  16,  2021.  The  mortgage  was  secured by the 43-foot fishing vessel,
which  was  titled  in  the  Company's name.  In the second quarter of 2002, the
Company  decided  to exit the yacht construction segment of its business because
it  felt  it could not be competitive in this specialized market.  In the fourth
quarter  of  2002,  the  fishing  vessel  was  sold  and  the  amount due to the
shareholder  was  paid  in  full.


(10)     NON-OPERATING  INCOME  (EXPENSE)

Non-operating  income  (expense)  consisted  of  the  following:




                                     YEARS ENDED DECEMBER 31,
                                    --------------------------
                                        2002           2001
                                    -----------     ----------
                                                          
Income:
 Building rent (Note 16(a)). . . .  $  181,556        181,771
 Legal settlement (Note 14). . . .     175,000              -
 Interest. . . . . . . . . . . . .       3,285         11,125
 Other . . . . . . . . . . . . . .       6,034          7,070
                                    -----------     ----------
 Total income. . . . . . . . . . .     365,875        199,966
                                    ===========     ==========
Expense:
 Interest. . . . . . . . . . . . .    (306,582)      (339,439)
 Penalties (Note 16(b)). . . . . .     (78,086)        (9,166)
 Other . . . . . . . . . . . . . .     (14,761)       (30,548)
                                    -----------     ----------
 Total expense . . . . . . . . . .    (399,429)      (379,153)
                                    -----------     ----------
 Total non-operating expense, net.  $  (33,554)      (179,187)
                                    ===========     ==========



                                      F-18

(11)     LOSS  ON  DISCONTINUED  OPERATIONS

In  connection  with the acquisition of Ver-Val during 1999, the Company decided
to  enter the yacht construction industry.  A 43-foot Express fishing vessel was
purchased  in  2000  and completed in 2001, and consisted of a molded fiberglass
sport  fisherman  with  a  tuna  tower  and  twin  diesel  engine propulsion.

In  the  second  quarter  of  2002,  the  Company  decided  to  exit  the  yacht
construction segment of its business because it felt it could not be competitive
in this specialized market.  In the fourth quarter of 2002, the Company sold the
43-foot  fishing vessel held in inventory for $400,000.  The loss on disposal of
the  yacht  construction  segment  consists  of  the  following  components:

     Loss on disposal of fishing vessel including sales commission    $(367,926)
     Carrying costs including rent, interest, utilities and bad debts   (76,050)
     Gain on extinguishment of debt                                      36,726
                                                                      ----------
          Total loss on discontinued operations                       $(407,250)
                                                                      ==========

(12)     PRIOR  PERIOD  ADJUSTMENT

     The  accompanying  financial  statements  for  2001  have been restated to
reflect  an  adjustment  to  equity as of January 1, 2001 for a correction of an
error  made  on  the  calculation of the Company's payroll tax liability for the
third  quarter  of  2000.  Due to the error, payroll tax expense and the related
liability  were  understated  in  the  amount  of  $92,065.


(13)     EMPLOYEE  BENEFIT  PLANS

The  Company  has  established a defined contribution profit sharing plan (401k)
available  to  all  employees  of  the  Company who have completed six months of
service  and  are  age  twenty  (20)  or  older.  Eligible employees may defer a
portion  of  their  annual salary based on yearly Internal Revenue Service (IRS)
guidelines.

The Company has the option to contribute to the profit sharing plan on an annual
basis.  No  contributions  were  made  to  the profit sharing plan for the years
ended  December  31,  2002  and  2001.


                                      F-19

(14)     NON-RECURRING  ITEMS

As a result of the Ver-Val acquisition, the Company established an allowance for
doubtful  accounts  and  recognized  bad  debt  expense  of  $30,000 during 2001
relating  to  long-term notes receivable from two employees of the Company.  The
Company  wrote  off the balance of the notes receivable in 2002 and the bad debt
expense  is  included  in  the loss from discontinued operations as discussed in
Note  11  to  the  financial  statements.

The  Company  received  $175,000  in  2002 from an out of court legal settlement
related  to  an  employee  theft  which  occurred prior to January 1, 2001.  The
amount  is  included  in  non-operating  income  in  the  accompanying financial
statements  (see  Note  10).


(15)     SEGMENT  INFORMATION

Segment  information  has been presented on a basis consistent with how business
activities  are  reported internally to management.  Management solely evaluates
operating  profit  by segment by direct costs of manufacturing its products with
an  allocation  of  indirect  costs.  The Company has three operating segments -
management  services,  manufacturing, and engineering and information technology
services.  Management  services  include  providing  engineering, technical, and
operational  services  in  the  area of defense range management specializing in
bombing  and  gunnery  training  range operation and maintenance.  Manufacturing
operations  include  the  design  and  construction  of munitions ground support
equipment  and  containers  for  the  shipping  and  storage  of  munitions  and
equipment.  The  Company's  engineering  and  information  technology  services
segment  consists of the sale of engineering and information technology services
developed  to  assist  in  hazard  management  and weapons impact analysis.  The
"Other"  category  includes  revenues  and  expenses  related  to  the Company's
discontinued  yacht  construction  segment  during  2001  (see  Note  11).  The
significant  accounting policies of the operating segments are the same as those
described  in  Note  1.

     The following is a summary of certain financial information related to the
Company's  operating  segments:



                                                  YEARS ENDED DECEMBER 31,
                                                     2002         2001
                                                  ----------  ------------
                                                       
Total revenues by segment
Management services . . . . . . . . . . . . . .  $ 8,761,280   8,238,647
Manufacturing . . . . . . . . . . . . . . . . .    2,405,517   2,617,917
Engineering and information technology services    1,094,833   1,016,961
                                                 -----------  ----------
 Total revenues by segment. . . . . . . . . . .  $12,261,630  11,873,525
                                                 ===========  ==========



                                      F-20


(15)     SEGMENT  INFORMATION,  CONTINUED


                                                  YEARS ENDED DECEMBER 31,
                                                     2002         2001
                                                  ----------  ------------
                                                         
Operating profit (loss) by segment
Management services. . . . . . . . . . . . . . .  $   79,684     416,610
Manufacturing. . . . . . . . . . . . . . . . . .    (219,143)     10,819
Engineering and information technology services.     525,590     490,990
Other. . . . . . . . . . . . . . . . . . . . . .           -     (78,276)
Operating expenses . . . . . . . . . . . . . . .    (464,987)   (428,541)
Interest income (expense), net . . . . . . . . .    (303,297)   (328,314)
Other income (expense), net. . . . . . . . . . .     269,743     149,127
Discontinued operations. . . . . . . . . . . . .    (407,250)          -
Cumulative effect of SFAS No. 142. . . . . . . .     (91,022)          -
                                                  ----------  ------------
 Net income (loss) . . . . . . . . . . . . . . .  $ (610,682)    232,415
                                                  ==========  ============
Identifiable assets
Management services. . . . . . . . . . . . . . .  $1,066,693   1,558,330
Manufacturing. . . . . . . . . . . . . . . . . .   1,168,048   2,146,792
Engineering and information technology services.     386,099     131,441
                                                  ----------  ------------
 Total identifiable assets . . . . . . . . . . .   2,620,840   3,836,563
Corporate and other assets . . . . . . . . . . .   2,506,868   2,286,578
                                                  ----------  ------------
 Total assets. . . . . . . . . . . . . . . . . .  $5,127,708   6,123,141
                                                  ==========  ============
Depreciation by segment
Management services. . . . . . . . . . . . . . .  $    2,262       1,389
Manufacturing. . . . . . . . . . . . . . . . . .      97,487     132,147
Engineering and information technology services.       2,684           -
Other. . . . . . . . . . . . . . . . . . . . . .      46,466      49,228
                                                  ----------  ------------
 Total depreciation. . . . . . . . . . . . . . .  $  148,899     182,764
                                                  ==========  ============
Capital expenditures by segment
Manufacturing. . . . . . . . . . . . . . . . . .  $        -      79,368
Engineering and information technology services.      11,070       4,376
Other. . . . . . . . . . . . . . . . . . . . . .       2,500      22,292
                                                  ----------  ------------
 Total capital expenditures. . . . . . . . . . .  $   13,570     106,036
                                                  ==========  ============



                                      F-21

(15)     SEGMENT  INFORMATION,  CONTINUED

As  of  December  31,  2002  and  2001,  all of the Company's revenues have been
generated  in the United States of America.  As of December 31, 2002, all of the
Company's  long-lived  assets  are  located  in the United States of America.


(16)     COMMITMENTS  AND  CONTINGENCIES

(A)     OPERATING  LEASES

(i)     Lessee
        -------

The Company leases a facility for manufacturing under a month-to-month operating
lease.  Total  rent expense incurred under this operating lease during the years
ended  December  31, 2002 and 2001 totaled $20,400 and $25,643, respectively.

The  Company  also  leased a facility for use by the yacht construction segment.
Total rent expense incurred under this lease during the years ended December 31,
2002  and  2001  was  approximately  $55,000.

(ii)     Lessor
         -------

     During  the  years  ended  December 31, 2002 and 2001, the Company was the
lessor  in  an  operating  lease  of office space.  The lessee is a governmental
contractor  who  rented  space  in the Company's office building.  The operating
lease  expires in September 2003.  Rental income during the years ended December
31,  2002  and  2001  totaled  $181,556  and  $181,771,  respectively.

Minimum  lease  payments  to  be  received  for  the  next year are as follows:

                       2003                 $  136,050
                                            ==========


                                      F-22

                       SPECTRUM SCIENCES & SOFTWARE, INC.

                          NOTES TO FINANCIAL STATEMENTS



(16)     COMMITMENTS  AND  CONTINGENCIES,  CONTINUED

(B)     IRS  TAX  LIEN

     At  December 31, 2002, the Company had outstanding payroll tax liabilities
(including  penalties  and  interest)  relating  to  the  third  quarter of 2000
totaling  $162,680  included  in  accrued expenses in the accompanying financial
statements.  Subsequent  to  December 31, 2002, a lien was filed by the Internal
Revenue Service (IRS) with respect to the amount owed as described in Note 17 to
the  financial  statements.

(C)     FORBEARANCE  AGREEMENTS

     On  February  28,  2002,  the Company entered into a Forbearance Agreement
with its primary lender (the "lender").  The Company at this date was in default
under terms and conditions relating to the bank lines of credit with the lender.
The  lender  agreed  to  forbear  taking certain actions as to these outstanding
loans and obligations owed by the Company to the lender from that date until May
16,  2002.  The  forbearance was to allow the Company to refinance the debt owed
to  the  lender with another institution.  As part of the Forbearance Agreement,
the lender and the Company expressly agreed that all outstanding debt due to the
lender  by  the  Company  is  cross-defaulted  with  one  another.

     On  June 13, 2002, the Company entered a second Forbearance Agreement with
the  lender.  The  lender at that date, considered the Company in default of all
debt  under  the terms of the First Forbearance Agreement and under the terms of
the  loans  and  loan  documents.  The  lender  agreed to forbear taking certain
action  as  to all outstanding loans and obligations owned by the Company to the
lender  until  September 30, 2002.  The Company agreed to make periodic payments
to the lender totaling $500,000 in installments through September 25, 2002.  The
Company also agreed to make arrangements to close a factoring transaction with a
substitute  lender  no earlier than September 25 and no later than September 30,
2002.  From  that  closing,  the  Company will make an additional payment to the
lender  of  $2,000,000.  The Company also agreed by September 30, 2002, to repay
all  obligations  including all interest, attorney's fees and cost of collection
to  the  lender.

     On  October  31, 2002, the Company entered into an extension of the Second
Forbearance  Agreement  with  the  lender.  The Company agreed to pay $87,000 on
December  31, 2002 and January 2, 2003, on the outstanding priority loans (lines
of credit) and to pay all other debt according to the payment schedule.  The new
maturity  date  for  the  priority  loans  was  extended  to  January  15, 2003.


                                      F-23


(16)     COMMITMENTS  AND  CONTINGENCIES,  CONTINUED

(D)     LEGAL  MATTERS

On  or about December 9, 2002, the Trident Company ("Trident") brought a lawsuit
against  the  Company  in  the  State  Court  in  Tulsa County, Oklahoma for the
nonpayment  of  metals  purchased  by  the  Company.  Trident  secured a default
judgment  against  the  Company  in the amount of $139,020, plus interest in the
amount  of  $1,780,  and  attorneys' fees in the amount of $2,500 for a total of
$143,300.  On  or  about February 19, 2003, Trident commenced to domesticate the
Oklahoma  Judgment  in the State Court in Escambia County, Florida.  On or about
March  18,  2003,  Trident  filed  a  Petition  to  Vacate  Default Judgment and
Supporting  Brief  in  the  District  Court  in  and  for Tulsa County, State of
Oklahoma.  On  or  about March 20, 2003, the Company filed a Petition Contesting
Validity  of  Foreign  Judgment and Motion for Stay in the Domestication Action.
On  or  about April 9, 2003, Trident served a Notice of Taking Deposition in the
Oklahoma  Petition  to  Vacate  proceedings.

The Parties desire to resolve this matter and these pending cases amicably under
the following terms and conditions:  the Company has paid Trident $25,804 on May
2,  2003.  The Company agrees to pay Trident $23,709 on or before June 15, 2003,
which  includes accumulated legal fees and interest.  From July 15, 2003 through
May  15,  2004,  the Company agrees to pay Trident $8,883.  This will completely
settle  this  debt.  Final  settlement  documents  have  not  been  executed.


(17)     SUBSEQUENT  EVENTS

On  January  20,  2003,  the  IRS placed a lien in favor of the United States of
America on all property and rights to the property for unpaid payroll taxes from
the third quarter of 2000.  On April 21, 2003, the IRS filed a Notice of Levy to
collect  the unpaid amount of $173,041.  On April 24, 2003, the Company remitted
$25,000 to the IRS and a Release of Levy/Release of Property from Levy was filed
by the IRS.  In addition, the Company submitted a proposal to the IRS to satisfy
the  remainder of the unpaid payroll tax liability.  The proposal is as follows:
Beginning in May 2003, and carrying on through August 2003, the Company proposed
a  payment  to  the IRS of $5,000 per month to be made no later than the 10th of
each month for a total of an additional $20,000.  Starting in September 2003 and
continuing  until  the  final debt is settled, the Company proposed a payment of
$10,000  per  month  to  be  paid  no  later  than  the  10th  of  each  month.


                                      F-24


(17)     SUBSEQUENT  EVENTS,  CONTINUED

On  January  31,  2003,  the Company signed an extension and modification of the
loan  agreement.  The  Company  was  in  default under all of the priority loans
(lines of credit) at this date.  The maturity date of each of the priority loans
was  extended to July 25, 2003.  The Company agreed to make lump sum payments of
$60,000  on  February  25, 2003 through July 25, 2003 ($300,000) on the priority
loans.  During  the  period  of  the  agreement  the Company also agreed to make
regularly  scheduled  payments  on  all  other loans to the lender.  The Company
agreed they shall not, without consent of the lender, merge the Company or cause
any  change in control of more than 25% of the common stock of the Company.  The
Company  is  currently  negotiating  an  additional  extension.

On  April 1, 2003, the Company negotiated a debt restructuring agreement related
to  a  note  payable  for a facility it previously leased in connection with its
yacht  construction  segment.  The agreement calls for total payments of $15,000
to  the  individual of which, $7,500 was paid on the date of the agreement.  The
remaining  $7,500  is  due  on  or  before  April 30, 2003.  The note balance at
December  31,  2002  was  $51,726, which resulted in a gain on extinguishment of
debt  of  $36,726  which  is  reported  in  discontinued  operations.

In  April  2003, Silva Bay International, Inc. acquired all of the assets of the
Company  and  assumed  certain  liabilities  in  exchange  for  the  issuance of
2,500,000 shares of it's common stock.  For accounting purposes, the transaction
will  be accounted for as a recapitalization if the Company expects to expand on
these  initial operations by acquiring industry related entities in an effort to
be  a  profitable,  technology  driven  defense  contractor, but also expects to
reduce  costs  through economies of scales.  The assets acquired and liabilities
assumed  will  be  recorded  at  carryover  basis.


                                      F-25


                             RICHARD M. PRINZI, JR.
                          CERTIFIED PUBLIC ACCOUNTANT
                                8403 7TH AVENUE
                               BROOKLYN, NY 11228
                              PHONE (718) 748-2300


INDEPENDENT  ACCOUNTANT'S  AUDIT  REPORT
-----------------------------------------

To  the  Board  of  directors  of  Silva  Bay  International,  Inc.:

I  have audited the accompanying Balance Sheets of Silva Bay International, Inc.
(A  Development  Stage  Company) as of December 31, 2002 & 2001, and the related
Statements  of Operations, Change in Stockholders' Equity and Cash Flows for the
years  then  ended and from August 26, 1998 (date of inception) through December
31,  2002.  These  financial  statements are the responsibility of the Company's
management.  My  responsibility  is  to  express  an  opinion on these financial
statements  based  on  my  audit.

I conducted my audit in accordance with auditing standards generally accepted in
the  United  States  of America. Those standards require that I plan and perform
the  audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and disclosures in the financial statements. An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  management,  as  well  as  evaluating the overall financial
statement  presentation. I believe that my audit provides a reasonable basis for
my  opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial position of Silva Bay International, Inc. (A
Development  Stage  Company)  as of December 31, 2002 & 2001, and the results of
its  operations and cash flows for the years then ended and from August 26, 1998
(date  of  inception)  through  December  31, 2002 in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America.

The  accompanying  financial  statements have been prepared assuming the Company
will  continue  as  a  going  concern.  As discussed in note #3 to the financial
statements,  the  Company  has  no  operations  and has no established source of
revenue. Also, the Company has incurred recurring losses from operations and has
a net capital deficiency. These factors and the need for additional financing in
order  for the Company to meet its business plans, raise substantial doubt about
its  ability  to  continue  as  a going concern. Management's plans in regard to
these  matters  are  also  described in note #3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/  Richard  Prinzi,  Jr.

Brooklyn,  NY
May  20,  2003

                                      F-26

                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001



                                                             2002        2001
                                                          ----------  ----------
ASSETS
------
                                                                
Current assets:
  Cash . . . . . . . . . . . . . . . . . . . . . . . . .  $   8,877   $  30,012
  Cash Held in Escrow. . . . . . . . . . . . . . . . . .          -     100,000
  Organizational Costs . . . . . . . . . . . . . . . . .        350         350
  Accumulated Amortization - Organization Costs. . . . .       (350)       (350)
                                                          ----------  ----------

    Total Current Assets . . . . . . . . . . . . . . . .      8,877     130,012
                                                          ----------  ----------

    Total Assets . . . . . . . . . . . . . . . . . . . .  $   8,877   $ 130,012
                                                          ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Long Term Liabilities:
  Due to Shareholder . . . . . . . . . . . . . . . . . .  $ 135,000   $ 135,000
  Accrued Interest . . . . . . . . . . . . . . . . . . .     16,686       8,100
                                                          ----------  ----------

    Total Long Term Liabilities. . . . . . . . . . . . .    151,686     143,100
                                                          ----------  ----------

Stockholders' Equity
  Common stock, $.0001 Par Value, 80,000,000 Shares
    Authorized, 16,244,000 Shares Issued and Outstanding
                                                              1,624       1,624
  Additional paid-in capital . . . . . . . . . . . . . .     87,826      87,826
  Deficit Accumulated During The Development Stage . . .   (232,259)   (102,538)
                                                          ----------  ----------

    Total Stockholders' Equity . . . . . . . . . . . . .   (142,809)    (13,088)
                                                          ----------  ----------

    Total liabilities and stockholders' equity . . . . .  $   8,877   $ 130,012
                                                          ==========  ==========



               See accompanying notes to the financial statements.

                                      F-27

                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS




                                      YEAR ENDED      YEAR ENDED       AUGUST 26, 1998
                                     DECEMBER 31,    DECEMBER 31,    (DATE OF INCEPTION)
                                         2002            2001        TO DECEMBER 31, 2002
                                    --------------   ------------    --------------------
                                                           
Income:
  Interest Income. . . . . . . . .  $           -   $           -   $                   -
                                    --------------   ------------    --------------------
Expenses:
  Legal & Professional . . . . . .        119,909          51,388                 204,932
  Interest Expense . . . . . . . .          8,586           8,100                  16,686
  Stock Transfer Fees. . . . . . .            908             357                   2,616
  Office . . . . . . . . . . . . .            192             230                   7,471
  Amortization . . . . . . . . . .              -             245                     350
  Bank Charges . . . . . . . . . .            125             155                     360
  Taxes. . . . . . . . . . . . . .              -             770                     770
                                    --------------   ------------    --------------------

    Total Expenses . . . . . . . .        129,720          61,245                 233,184
                                    --------------   ------------    --------------------

Net Deficit. . . . . . . . . . . .  $    (129,720)  $     (61,245)  $            (232,259)
                                    ==============   ============    ====================

Net Deficit Per Common Share -
  Basic And Diluted. . . . . . . .  $       (0.01)  $       (0.00)  $               (0.02)
                                    ==============   ============    ====================

Weighted Average Common Shares
  Outstanding - Basic And Dilutive     16,244,000      16,244,000              15,153,000
                                    ==============   ============    ====================



               See accompanying notes to the financial statements.

                                      F-28

                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



                                                                                   DEFICIT
                                            COMMON STOCK          ADDITIONAL     ACCUMULATED
                                     -------------------------     PAID-IN        DURING THE
                                        SHARES      PAR VALUE      CAPITAL     DEVELOPMENT STAGE     TOTAL
                                     ------------  ------------  -----------  -------------------  ----------
                                                                                    
Balances, January 1, 2001 . . . . .    16,244,000  $      1,624  $    87,826  $          (41,293)  $  48,157

Net Deficit For The Year Ended 2001             -             -            -             (61,245)    (61,245)
                                     ------------  ------------  -----------  -------------------  ----------

Balances, December 31, 2001 . . . .    16,244,000  $      1,624  $    87,826  $         (102,538)  $ (13,088)

Net Deficit For the Year Ended 2002             -             -            -            (129,720)   (129,720)
                                     ------------  ------------  -----------  -------------------  ----------

Balances, December 31, 2002 . . . .    16,244,000  $      1,624  $    87,826  $         (232,259)  $(142,809)
                                     ============  ============  ===========  ===================  ==========



               See accompanying notes to the financial statements.


                                      F-29

                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS



                                             YEAR ENDED      YEAR ENDED       AUGUST 26, 1998
                                            DECEMBER 31,    DECEMBER 31,    (DATE OF INCEPTION)
                                                2002            2001        TO DECEMBER 31, 2002
                                           --------------   ------------    --------------------
                                                                  
Cash Flows Provided By (Used In):
  Operating Activities:
    Net Deficit . . . . . . . . . . . . .  $    (129,720)  $     (61,245)  $            (232,259)
  Amortization. . . . . . . . . . . . . .              -             245                     350
  Adjustment To Reconcile Net Loss To Net
  Cash Used in Operating Activities:
  Accrued Interest. . . . . . . . . . . .          8,586           8,100                  16,686
  Organization Costs. . . . . . . . . . .           (350)

Net Cash Provided By (Used In):
  Operating Activities. . . . . . . . . .       (121,135)        (52,900)               (215,573)

Cash Flows Provided By (Used In):
  Investing Activities: . . . . . . . . .  $           -   $           -   $                   -
                                           --------------   ------------    --------------------

Cash Flows Provided By (Used In):
  Financing Activities:
  Issuance of Common Stock. . . . . . . .              -               -                  89,450
  Proceeds from a stockholder loan. . . .              -         135,000                 135,000
                                           --------------   ------------    --------------------

Cash Flows Provided By (Used In):
  Financing Activities: . . . . . . . . .              -         135,000                 224,450
                                           --------------   ------------    --------------------

Net Increase (Decrease) In Cash . . . . .       (121,135)         82,100                   8,877

Cash, Beginning of Period . . . . . . . .        130,012          47,912                       -
                                           --------------   ------------    --------------------

Cash, End of Period . . . . . . . . . . .  $       8,877   $     130,012   $               8,877
                                           ==============   ============    ====================



               See accompanying notes to the financial statements.


                                      F-30

                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS


NOTE  1     HISTORY  AND  ORGANIZATION  OF  THE  COMPANY
-------

Silva  Bay International, Inc. (A Development Stage Company) ("The Company") was
incorporated  on  August  26, 1998, under the laws of the State of Delaware. The
Company  has no operations and in accordance with SFAS #7 is considered to be in
the  development  stage.

The  Company  had  adopted a fiscal year end of July 31 at inception; however in
March  2000  the  Company  changed  its  year  end  to  December  31.

NOTE  2     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-------

CASH  &  CASH  EQUIVALENTS
--------------------------

For  the  purpose  of  the statement of cash flows, cash equivalents include all
highly  liquid  investments,  with  a  maturity  of  three  months  or  less.

BASIS  OF  FINANCIAL  STATEMENTS
--------------------------------

These  financial  statements  are prepared on the accrual basis of accounting in
conformity  with  generally  accepted  accounting  principles.

INCOME  TAXES
-------------

Income  taxes  are  accounted  for  in  accordance  with  Statement of Financial
Accounting  Standards  No.109, "Accounting for Income Taxes". Under this method,
deferred  income taxes are determined based on differences between the tax basis
of  assets  and  liabilities  and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be in effect
when  the  differences  are  expected  to  reverse.  Valuation  allowances  are
established,  when  necessary,  to  reduce  deferred  tax  assets  to the amount
expected  to  be  realized.  No  provision  for  income taxes is included in the
statement  due  to its immaterial amount, net of the allowance account, based on
the  likelihood  of  the  Company  to  utilize  the  loss  carry-forward.

UTILIZATION  OF  ESTIMATES
--------------------------

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.


                                      F-31


                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS


NOTE  2     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-------

NET  INCOME  PER  COMMON  SHARE
-------------------------------

Net  income  (loss)  per  common share is computed based on the weighted average
number
of common shares outstanding and common stock equivalents, if not anti-dilutive.
The
Company  has  not  issued  any  potentially  dilutive  common  shares.

REVENUE  AND  COST  RECOGNITION
-------------------------------

The Company has no current source of revenue, therefore, the Company has not yet
adopted  any  policy  regarding  the  recognition  of  revenue  or  cost.


NOTE  3     GOING  CONCERN
-------

The  Company's  financial  statements  are prepared using the generally accepted
accounting  principles  acceptable  to  a  going concern, which contemplates the
realization  of  assets  and  liquidation of liabilities in the normal course of
business.  However,  the  Company  has  no  current  source  of revenue. Without
realization  of  additional  capital,  it  would  be unlikely for the Company to
continue  as a going concern. It is management's plan to seek additional capital
through  a  merger  with  an  existing  company.

The  Company's  activities  to  date have been supported by equity financing. As
indicated  in  the accompanying balance sheet, at December 31, 2002, the Company
had $8,877 in cash and $151,686 in liabilities. For the years ended December 31,
2002  and  December 31, 2001, the Company had losses from operations of $129,720
and  $61,245,  respectively.  The  Company  is  in  need of immediate additional
financing or a strategic arrangement in order to continue its planned activities
for  the  remainder  of  the  current  fiscal year. These factors, among others,
indicate  that  the  Company  may  be  unable  to continue operations as a going
concern.

The  Company plans to deal with these uncertainties by reducing expenditures and
raising additional capital or entering into a strategic arrangement with a third
party. There can be no assurance that management's plans to reduce expenditures,
raise  capital  or  enter  into  a  strategic  arrangement  can  be realized. No
adjustment has been made in the accompanying financial statements to the amounts
and  classification  of  assets  and  liabilities  which could result should the
Company  be  unable  to  continue  as  a  going  concern.


                                      F-32


                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS


NOTE  4     RELATED  PARTY  TRANSACTIONS
-------

The  Company  neither  owns  nor  leases  any  real or personal property. Office
services are provided without charge by a director. Such costs are immaterial to
the  financial statements and, accordingly, have not been reflected therein. The
officers  and  directors  of  the  Company  are  involved  in  other  business
opportunities.  If  a  specific  business  opportunity  becomes  available, such
persons  may  face  a  conflict in selecting between the Company and their other
business  interests.  The Company has not formulated a policy for the resolution
of  such  conflicts.

The  Company  was  provided  management  consulting  services  by  one  of  the
shareholders  during  2002. Expenses of $24,000 are reported in the accompanying
financial  statements  as  legal  &  professional  fees.

In February of 2001 a cash advance totaling $135,000 was provided to the Company
by  one  of  its shareholders for operating purposes. The loan's repayment terms
including  interest  of  6%  per  year is to be determined solely by the Company
based on its ability to make payments. The Company, at this time, has no ability
or  plan to repay the loan and interest, Therefore, the entire loan and Interest
amounts have been classified as long term. For the years ended December 31, 2002
and  December 31, 2001, interest of $8,586 and $8,100 was accrued, respectively.

NOTE  5     WARRANTS  AND  OPTIONS
-------

There  are  no  warrants  or options outstanding to acquire additional shares of
common  or  preferred  stock.


NOTE  6     STOCKHOLDERS'  EQUITY
-------

On  August 26, 1998, the Company issued 1,000,000 shares of its $.0001 par value
common  stock  for  cash  of  $2,250  to  a  director  of  the  Company.

On  December 10, 1998, the Company completed a private offering that was offered
without  registration  under the Securities Act of 1933, as amended ("The Act"),
in  reliance  upon the exemption from registration afforded by sections 4(2) and
3(b)  of the Securities Act and regulation D promulgated thereunder. The Company
sold  122,000  shares  of  common stock at a price of $.10 per share for a total
amount  raised  of  $12,200.

On  July  31,  2000,  the  Company completed a private offering that was offered
without  registration  under the Securities Act of 1933, as amended ("The Act"),
in  reliance  upon the exemption from registration afforded by sections 4(2) and
3(b)  of the Securities Act and regulation D promulgated thereunder. The Company
sold  7,000,000  shares of common stock at a price of $.02 per share for a total
amount raised of $140,000. After expenses of $65,000, the Company received a net
amount  of  $75,000.


                                      F-33


                          SILVA BAY INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS


NOTE  6     STOCKHOLDERS'  EQUITY  (CONTINUED)
-------

In  April 2003, the Company authorized a 2 for 1 split of its common stock.  The
financial  statements  have  been  retroactively  restated to reflect the split.

NOTE  7     SUBSEQUENT  EVENTS:
-------

In  April 2003, the Company acquired substantially all of the assets of Spectrum
Sciences  &  Software, Inc. ("Spectrum"), a company whose assets were being used
to  operate as a defense contractor, and assumed certain liabilities in exchange
for  the  issuance  of  2,500,000 share of our common stock. Spectrum expects to
expand  on these initial operations by acquiring industry related entities in an
effort  to  be  a  profitable,  technology  driven  defense contractor, but also
expects  to reduce costs through economies of scales. Operating results with the
asset acquisition have been included since that date. The acquisition of ATI was
accounted  for  in  accordance  with Statement of Financial Accounting Standards
("SFAS")  No.  141  "Business  Combinations"  ("SFAS  141"),  which requires all
business  combinations  initiated  after June 30, 2001 to be accounted for under
the  purchase  method. The assets acquired and liabilities assumed were recorded
at  estimated  fair values as determined by our management, based on information
available  and  on  assumptions  as  to  future  operations.

                                      F-34

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                           CONSOLIDATED BALANCE SHEET



ASSETS                                                     June 30, 2003
------                                                     -------------
                                                            (unaudited)
                                                       
Current assets:
  Cash and cash equivalents. . . . . . . . . . . . . . .  $      264,832
  Receivables. . . . . . . . . . . . . . . . . . . . . .       1,812,319
  Inventories. . . . . . . . . . . . . . . . . . . . . .         228,772
  Prepaid expenses . . . . . . . . . . . . . . . . . . .          76,520
                                                          ---------------

    Total current assets . . . . . . . . . . . . . . . .       2,382,443

  Property, plant and equipment, net . . . . . . . . . .       2,053,630

  Cash surrender value of life insurance . . . . . . . .          19,701
  Other assets . . . . . . . . . . . . . . . . . . . . .          15,134
                                                          ---------------

    Total assets . . . . . . . . . . . . . . . . . . . .  $    4,470,908
                                                          ===============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:
  Accounts payable . . . . . . . . . . . . . . . . . . .  $    1,074,439
  Accrued expenses . . . . . . . . . . . . . . . . . . .         760,284
  Contract deposits. . . . . . . . . . . . . . . . . . .         143,148
  Bank lines of credit . . . . . . . . . . . . . . . . .         929,100
  Current portion of long-term debt. . . . . . . . . . .       2,004,762
  Due to related parties . . . . . . . . . . . . . . . .         709,542
                                                          ---------------

    Total current liabilities. . . . . . . . . . . . . .       5,621,275
                                                          ---------------

  Long-term debt, less current portion . . . . . . . . .          17,430

    Total liabilities. . . . . . . . . . . . . . . . . .       5,638,705
                                                          ---------------

Commitments and contingencies

Stockholders' deficit:
  Common stock, $.0001 par value, 80,000,000 shares
    authorized, 18,844,000 shares issued and outstanding           1,884
  Accumulated deficit. . . . . . . . . . . . . . . . . .      (1,169,681)
                                                          ---------------

    Total stockholders' deficit. . . . . . . . . . . . .      (1,167,797)
                                                          ---------------

    Total liabilities and stockholders' deficit. . . . .  $    4,470,908
                                                          ===============



        See accompanying notes to the consolidated financial statements.


                                      F-35

                                    SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.

                                       CONSOLIDATED STATEMENTS OF OPERATIONS



                                                            Three months ended June 30,     Six months ended June 30,
                                                         -----------------------------  -----------------------------
                                                                 2003             2002           2003          2002
                                                              (unaudited)     (unaudited)     (unaudited)  (unaudited)
                                                               ------------  ------------  ------------  ------------

                                                                                             
REVENUES EARNED . . . . . . . . . . . . . . . . . . . . . . .  $ 3,443,361   $ 2,799,236   $ 6,716,390   $ 5,621,764

COST OF REVENUES EARNED . . . . . . . . . . . . . . . . . . .    3,011,137     2,775,233     6,053,574     5,462,003
                                                               ------------  ------------  ------------  ------------

Gross profit. . . . . . . . . . . . . . . . . . . . . . . . .      432,224        24,003       662,816       159,761
                                                               ------------

OPERATING EXPENSES. . . . . . . . . . . . . . . . . . . . . .      275,170       149,490       439,640       290,990
IMPAIRMENT LOSS . . . . . . . . . . . . . . . . . . . . . . .      145,974             -       145,974             -
                                                               ------------  ------------  ------------  ------------
                                                                   421,144       149,490       585,614       290,990

Income (loss) from operations . . . . . . . . . . . . . . . .       11,080      (125,487)       77,202      (131,229)

OTHER INCOME AND EXPENSE. . . . . . . . . . . . . . . . . . .      (41,667)      (48,465)      (77,607)      (96,696)

LOSS FROM CONTINUING OPERATIONS
                                                                   (30.587)     (173,952)         (405)     (227,925)

DISCONTINUED OPERATIONS:
  Loss on disposal of yacht manufacturing segment
                                                                         -      (407,250)            -      (407,250)
                                                               ------------  ------------  ------------  ------------

  Income (loss) before cumulative effect of accounting change
                                                                         -      (581,202)            -      (635,175)
                                                               ------------  ------------  ------------  ------------

  Cumulative effect of accounting change for SFAS No. 142
                                                                         -             -             -       (91,022)

NET LOSS. . . . . . . . . . . . . . . . . . . . . . . . . . .  $   (30,587)  $  (581,202)  $      (405)  $  (726,197)
                                                               ============  ============  ============  ============

Weighted average shares outstanding:
  Basic and diluted . . . . . . . . . . . . . . . . . . . . .   18,788,444    16,244,000    17,532,333    16,244,000
                                                               ============  ============  ============  ============

Earnings (loss) per share:
  Basic and diluted . . . . . . . . . . . . . . . . . . . . .  $      0.00   $     (0.04)  $      0.00   $     (0.04)
                                                               ============  ============  ============  ============



        See accompanying notes to the consolidated financial statements.

                                      F-36


                                SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                    SIX MONTHS ENDED JUNE 30,
                                                                                    -------------------------
                                                                                       2003         2002
                                                                                   (unaudited)   (unaudited)
                                                                                           
Cash flows from operating activities:
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      (405)  $  (726,197)

  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Impairment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      145,974             -
    Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       38,713        65,116
    Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          890             -
    Cumulative effect of accounting change. . . . . . . . . . . . . . . . . . . .            -        91,022
    (Increase) decrease in assets:
      Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      272,470       121,268
      Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       62,572       345,913
      Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (67,527)      (24,370)
    Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,000         2,734
    Increase (decrease) in liabilities:
      Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (338,790)      216,940
      Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (180,122)     (219,533)
      Contract deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (30,788)      (97,892)
                                                                                   ------------  ------------
        Net cash used in operating activities . . . . . . . . . . . . . . . . . .      (96,013)     (224,998)
                                                                                   ------------  ------------

Cash flows from investing activities:
        Proceeds from sale of property and equipment. . . . . . . . . . . . . . .            -        12,858
  Purchase of property and equipment. . . . . . . . . . . . . . . . . . . . . . .      (20,395)            -
                                                                                   ------------  ------------
        Net cash provided by (used in) investing activities . . . . . . . . . . .      (20,395)       12,858
                                                                                   ------------  ------------

Cash flows from financing activities:
  Net repayments on bank lines of credit. . . . . . . . . . . . . . . . . . . . .     (272,011)            -
  Proceeds from notes payable . . . . . . . . . . . . . . . . . . . . . . . . . .       16,479       114,215
  Advances from related parties . . . . . . . . . . . . . . . . . . . . . . . . .        2,863             -
  Repayments of advances from related parties . . . . . . . . . . . . . . . . . .            -             -
                                                                                   ------------  ------------
        Net cash provided by (used in) financing activities . . . . . . . . . . .     (252,669)      114,215
                                                                                   ------------  ------------

Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . .     (369,077)      (97,925)
                                                                                   ------------  ------------

Cash and cash equivalents - beginning of period . . . . . . . . . . . . . . . . .      633,909       344,537
                                                                                   ------------  ------------

Cash and cash equivalents - end of period . . . . . . . . . . . . . . . . . . . .      264,832       246,612
                                                                                   ============  ============

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
  Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   149,393   $   196,011
                                                                                   ============  ============

Non-cash investing activities:
  Assumption of liabilities in connection with the acquisition of
       Spectrum Sciences & Software, Inc. (see Note 3). . . . . . . . . . . . . .  $   153,960             -
                                                                                   ============  ============


See  accompanying  notes  to  the  consolidated  financial  statements.


                                      F-37

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                  June 30, 2003

 (1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
      (A)     ORGANIZATION  AND  NATURE  OF  BUSINESS

Silva  Bay  International,  Inc., a Delaware corporation, was formed in 1998 for
the  purpose  of  locating and recovering rare and valuable aircraft.  Silva Bay
International,  Inc.  had no operations and no revenue from inception in 1998 to
the  time  of  the  acquisition  of Spectrum Sciences & Software, Inc. in April,
2003.

On  April  2,  2003,  Silva Bay International, Inc. acquired Spectrum Sciences &
Software, Inc., a Florida corporation, in exchange for the issuance of 2,500,000
shares  of common stock (taking into account the forward two for one stock split
of  April  9, 2003) (see Note 3).  Spectrum Sciences & Software, Inc. is now the
wholly  owned  subsidiary  of  Silva  Bay  International, Inc. (now collectively
referred  to  as  the  "Company").

Spectrum  Sciences  & Software, Inc. was incorporated in the State of Florida on
October  8,  1982.  Headquartered in Fort Walton Beach, Florida, the Company has
three  reportable segments - management services, manufacturing, and engineering
and  information  technology  services.  Management  services  include providing
engineering,  technical,  and  operational services in the area of defense range
management  specializing  in  bombing  and  gunnery training range operation and
maintenance.  Manufacturing  operations  includes the design and construction of
munitions  ground  support equipment and containers for the shipping and storage
of munitions and equipment. The Company's engineering and information technology
services  segment  consists of the sale of computer software developed to assist
in  hazard  management  and  weapons  impact  analysis.

The  Company's  contracts  are  primarily  fixed price contracts with the United
States  Department  of  Defense  (DOD).  The  Company currently has contracts in
Florida  and  Arizona. During the years ended December 31, 2002 and 2001, 99% of
the  Company's  revenues  were  derived  from  contracts  with  the  DOD.

On  April  8,  2003,  Silva Bay International, Inc. changed its name to Spectrum
Sciences  & Software Holdings Corp.  On April 9, 2003, the Company effectuated a
two  for  one  forward  split  of  its  common  stock.


                                      F-38


                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.

                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED

(B)     INCOME  TAXES

The  Company accounts for income taxes utilizing the asset and liability method.
This  approach  requires  the recognition of deferred tax assets and liabilities
for  the  expected future tax consequences attributable to temporary differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities  and  their  respective  tax bases and operating loss and tax credit
carryforwards.  Deferred  tax  assets and liabilities are measured using enacted
tax  rates  expected  to  apply  to  taxable  income in the years in which those
temporary  differences  are  expected to be recovered or settled.  The effect on
deferred  tax  assets  and liabilities of a change in tax rates is recognized in
income  in  the  period that includes the enacted date. Valuation allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to  be  realized.

(C)     EARNINGS  PER  SHARE

The  Company  utilizes  Financial  Accounting Standards Board Statement No. 128,
"Earnings  Per Share."  Statement No. 128 requires the presentation of basic and
diluted  loss  per  share  on  the  face  of  the  statement  of  operations.

Basic  earnings  (loss) per share has been calculated using the weighted average
number  of  common shares outstanding during the period.  In calculating diluted
earnings  (loss) per share, the Company had no common stock equivalent shares as
of  June  30,  2003  and  2002.  However,  if  the Company had such common stock
equivalents,  they  would be considered anti-dilutive due to there being losses,
and  therefore would not be included in the diluted loss per share calculations.


                                      F-39


                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.

                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)


(2)     BASIS  OF  PRESENTATION  AND  GOING  CONCERN

The  unaudited  consolidated  financial  statements  included  herein  have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission  (the  "SEC")  and in accordance with
accounting  principles  generally  accepted  in the United States of America for
interim  financial  reporting.  Certain information and note disclosure normally
included  in  financial  statements  prepared  in  accordance  with  accounting
principles  generally accepted in the United States of America have been omitted
pursuant  to  such rules and regulations, although the Company believes that the
disclosures  are  adequate  to  make  the  information presented not misleading.

It  is suggested that these financial statements be read in conjunction with the
consolidated  financial statements and the notes thereto included herein for the
year  ended  December  31,  2002. In the opinion of the Company, all adjustments
(solely  of  a  normal  recurring  nature)  necessary  to  present  fairly  the
consolidated  financial  position of Spectrum Sciences & Software Holdings Corp.
and  its subsidiary as of June 30, 2003, and the results of their operations and
cash  flows for the three and six months ended June 30, 2003 and 2002, have been
included  in  the  unaudited  consolidated  financial statements. The results of
operations  for  such  interim  periods  are  not  necessarily indicative of the
results  for  the  entire  year.

The  Company's financial statements have been prepared assuming the Company will
continue    as  a  going  concern.  The  Company  has  experienced  losses  from
operations  and  has  an  accumulated deficit of $1,169,681 as of June 30, 2003.
Additionally, the Company has negative working capital of $3,238,832 at June 30,
2003.  These  deficits  and  the  dependence  of the Company to find alternative
financing arrangements to repay its debt owed to its lender are conditions which
could  affect  the  Company's  ability  to  continue  as  a  going  concern.

The Company's plans to deal with this uncertainty include reducing expenditures,
continuing  to request forbearance from creditors and raising additional capital
or  entering  into  a  strategic arrangement with a third party. There can be no
assurance  that management's plans to reduce expenditures, gain cooperation from
creditors,  raise capital or enter into a strategic arrangement can be realized.
No  adjustment  has  been  made  in the accompanying financial statements to the
amounts  and  classification of assets and liabilities which could result should
the  Company  be  unable  to  continue  as  a  going  concern.

(3)     ACQUISITION  OF  SPECTRUM  SCIENCES  &  SOFTWARE,  INC.

On  April  3,  2003, Spectrum Sciences & Software Holdings Corp. (formerly Silva
Bay  International,  Inc.)  entered into an asset purchase agreement to purchase
all  of  the  assets  and  assume  all of the liabilities of Spectrum Sciences &
Software,  Inc.  in  exchange for the issuance of 2,500,000 shares of our common
stock.  As  a result of the acquisition, Spectrum Sciences & Software, Inc. will
have access to additional capital markets as a registered reporting company with
the  SEC.

The  acquisition  was  accounted  for  under  the purchase method of accounting;
accordingly,  the purchase price has been allocated to reflect the fair value of
assets  and  liabilities  acquired  at  the  date  of  acquisition.  Due  to the
composition  of  the majority of the governing body and senior management of the
Company  being the same as Spectrum Sciences & Software, Inc. prior to the April
3,  2003  acquisition,  Spectrum Sciences & Software, Inc. has been deemed to be
the  accounting  acquirer.

The  following table summarizes the estimated fair values of the assets acquired
and  liabilities  assumed  at  the  date  of  acquisition:


                                      F-40


                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.

                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)


(3)     ACQUISITION  OF  SPECTRUM  SCIENCES  &  SOFTWARE,  INC.,  CONTINUED




     AT APRIL 3, 2003
     ----------------
                         
     Current assets . . . . . .  $   7,986
     Goodwill . . . . . . . . .    145,974

      Total assets acquired . .    153,960

     Current liabilities. . . .   (153,960)

      Total liabilities assumed   (153,960)

      Net . . . . . . . . . . .  $       -


The  results  of  operations  of the acquired business have been included in the
accompanying  consolidated  financial  statements  from the date of acquisition.

As  of  the date of the acquisition, management has determined that the goodwill
has  no  value;  therefore,  an impairment charge of $145,974 has been recorded.

(4)     SEGMENT  INFORMATION

Segment  information  has been presented on a basis consistent with how business
activities  are  reported  internally to management. Management solely evaluates
operating  profit  by segment by direct costs of manufacturing its products with
an  allocation  of  indirect  costs.  The Company has three operating segments -
management  services,  manufacturing, and engineering and information technology
services.  Management  services  include  providing  engineering, technical, and
operational  services  in  the  area of defense range management specializing in
bombing  and  gunnery  training  range  operation and maintenance. Manufacturing
operations  include  the  design  and  construction  of munitions ground support
equipment  and  containers  for  the  shipping  and  storage  of  munitions  and
equipment. The Company's engineering and information technology services segment
consists  of  the  sale  of  computer  software  developed  to  assist in hazard
management  and  weapons impact analysis. The significant accounting policies of
the  operating  segments  are  the  same  as  those  described  in  Note  1.

The  following  is  a  summary  of  certain financial information related to the
Company's  operating  segments:




                                                  THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
                                                  --------------------------- -------------------------
                                                      2003          2002          2003         2002
                                                  (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
                                                  -----------   ------------- -----------   -----------
                                                                                
Total revenues by segment
Management Services. . . . . . . . . . . . . . .  $  2,344,517  $  2,163,564  $  4,637,617  $4,311,928
Manufacturing. . . . . . . . . . . . . . . . . .       664,216       453,537     1,314,792     858,864
Engineering and information technology services
                                                       434,628       182,135       763,981     450,972
                                                  -----------   ------------- -----------   -----------

  Total revenues by segment. . . . . . . . . . .  $  3,443,361  $  2,799,236  $  6,716,390  $5,621,764
                                                  ============  ============= ============  ===========




                                      F-41

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.

                          NOTES TO FINANCIAL STATEMENTS


(4)    SEGMENT  INFORMATION,  CONTINUED



                                                         THREE  MONTHS  ENDED            SIX MONTHS ENDED
                                                                JUNE 30,                     JUNE 30,
                                                  --------------------------------  -------------------------
                                                         2003             2002          2003         2002
                                                  -----------------   ------------  -----------  ------------
                                                     (UNAUDITED)       (UNAUDITED)  (UNAUDITED)   (UNAUDITED)
                                                  -----------------   ------------  -----------  ------------
                                                                                      
Operating profit (loss) by segment
Management Services. . . . . . . . . . . . . . .  $         90,360    $      (577)  $  172,388    $   (4,150)
Manufacturing. . . . . . . . . . . . . . . . . .           118,572        (39,122)     175,248        32,487
Engineering and information technology services
                                                           223,292         63,702      315,180       196,398
Operating expenses . . . . . . . . . . . . . . .          (275,170)      (149,490)    (439,640)     (290,990)
Impairment Loss. . . . . . . . . . . . . . . . .          (145,974)             -     (145,974)            -
Interest income (expense), net . . . . . . . . .           (80,313)       (75,857)    (149,145)     (167,755)
Other income (expense), net. . . . . . . . . . .            38,646         27,392       71,538        71,059
Discontinued operations. . . . . . . . . . . . .                 -       (407,250)           -      (407,250)
Cumulative effect of SFAS No. 142. . . . . . . .                 -             -             -       (91,022)
                                                  -----------------   ------------  -----------  ------------

  Net income (loss). . . . . . . . . . . . . . .  $        (30,587)   $  (581,202)  $     (405)   $ (726,197)
                                                  =================   ============  ===========  ============



(5)     SUBSEQUENT  EVENT

On August 26, 2003, the Company signed an extension and modification of the loan
agreement.  The Company was in default under all of the priority loans (lines of
credit)  at  this  date. The balance of the priority loans at August 26, 2003 is
$874,000.   The  maturity  date  of  each  of the priority loans was extended to
September  25,  2003. The Company agreed to make lump sum payments of $60,000 on
September  25,  2003  ($120,000) on the priority loans. During the period of the
agreement  the  Company  also agreed to make regularly scheduled payments on all
other loans to the lender. The Company agreed they shall not, without consent of
the lender, merge the Company or cause any change in control of more than 25% of
the  common  stock  of  the  Company.


                                      F-42

        INTRODUCTION TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
        -----------------------------------------------------------------


The  unaudited  pro  forma  financial  statements  combine  i)  the  historical
statements  of operations of Silva Bay International, Inc. and Spectrum Sciences
and Software, Inc. for the year ended December 31, 2002 as if the reverse merger
was consummated on January 1, 2002. The pro forma information is not necessarily
indicative  of either the results which would have actually been reported if the
reverse  merger  had been consummated on January 1, 2002 or results which may be
reported  in  the  future.

These  Unaudited  Pro  Forma  Financial Statements should be read in conjunction
with  the  historical  consolidated  financial  statements  of  Silva  Bay
International,  Inc.  and  the  financial  statements  of  Spectrum  Sciences  &
Software,  Inc.  included  elsewhere  in  this  registration  statement.


                                      F-43


                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
              UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2002




                                               SILVA BAY          SPECTRUM        PRO FORMA
                                             INTERNATIONAL,      SCIENCES &       COMBINED
                                                  INC.         SOFTWARE, INC.    AS ADJUSTED
                                              (SUCCESSOR)        YEAR ENDED
                                             (PREDECESSOR)
                                            ----------------  ----------------  -------------
                                                                                   
Revenues . . . . . . . . . . . . . . . . .  $             -   $    12,261,630   $ 12,261,630
Cost of revenues . . . . . . . . . . . . .                -       (11,875,499)   (11,875,499)
    Gross profit . . . . . . . . . . . . .                -           386,131        386,131
                                            ----------------  ----------------  -------------

Operating expenses . . . . . . . . . . . .         (129,720)         (464,987)      (594,707)

    Loss from operations . . . . . . . . .         (129,720)          (78,856)      (208,576)

Non-operating income (expense), net. . . .                -           (33,554)       (33,554)

    Net loss from continuing operations. .  $      (129,720)  $      (112,410)  $   (242,130)

Weighted average common shares outstanding
Basic and diluted. . . . . . . . . . . . .       16,244,000               600     18,744,000   (a)
                                            ================  ================  =============

Earnings per share:
  Basic and diluted. . . . . . . . . . . .  $         (0.01)  $       (187.35)  $      (0.01)
                                            ================  ================  =============


See accompanying notes to unaudited pro forma consolidated financial statements.


                                      F-44


                    NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
                              FINANCIAL STATEMENTS

                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2002



Offering  Adjustments

Statement  of  operations  adjustments:

(a)     Reflects  the  issuance  of  2,500,000  shares  of common stock to Donal
Myrick  for  the  purchase  of  Spectrum  Sciences & Software, Inc., a Florida S
Corporation.


                                      F-45




Exhibit
Number    Description
      

   3.1    Certificate of Incorporation, filed August 28, 1998*
   3.2    Certificate of Amendment of Certificate of Incorporation, filed April 8, 2003*
   3.3    Certificate of Renewal and Revival, filed March 24, 2003*
   3.4    Omitted
   3.5    Certificate of Merger filed with the Delaware Secretary of State*
   3.6    Articles of Merger filed with the Florida Secretary of State*
   3.7    Bylaws of Silva Bay International, Inc., dated August 26, 1998*
   3.8    Amended And Restated Bylaws of Silva Bay International, Inc., dated March 24, 2003*
   4.1    Specimen Certificate of Common Stock*
  10.1    Agreement and Plan of Merger among Silva Bay International, Inc., SSS Acquisition
          Company and Spectrum Sciences & Software, Inc., dated April 2, 2003**
  10.2    Employment Agreement with Donal R. Myrick*
  10.3    Consulting Agreement with Dwain Brannon, dated December 28, 2001*
  10.4    IRS Levy Letter, dated April 24, 2003**
  10.5    Promissory Note to Washington Group International, Inc.**
  10.6    Stipulation Agreement with Trident**
  10.7    IRS Levy Letter, dated September 5, 2003
  10.8    Four Renewal Revolving Promissory Notes with SouthTrust Bank, and Forbearance
          Agreement dated February 28, 2002
  10.9    Extension and Modification of Loans, with SouthTrust Bank, dated January 31, 2003
  10.10   Amendment to Extension and Modification of Loans, with SouthTrust Bank, dated August 26,
          2003
  10.11   Second Amendment to Extension and Modification of Loans, with SouthTrust Bank, dated
          September 10, 2003
  16.1    Letter of Agreement from former accountant Richard M. Prinzi, Jr.
  21.1    List of Subsidiaries*
  23.1    Accountant's Consent, Tedder, James, Worden & Associates, P.A.
  23.2    Accountant's Consent, Richard M. Prinzi, Jr., Certified Public Accountant


*    Previously  filed in registration statement on Form 10-SB File No. 1-31710,
     filed  with  the  Securities  and  Exchange  Commission  on  June 10, 2003.

**   Previously  filed in registration statement on Form 10-SB File No. 1-31710,
     filed  with  the  Securities  and  Exchange  Commission on August 11, 2003.


                                       30


                                   SIGNATURES

     In  accordance  with Section 12 of the Exchange Act of 1934, the registrant
caused  this  registration  statement  to  be  signed  on  its  behalf  by  the
undersigned,  thereunto  duly  authorized  this 1st day  of  October,  2003.

                              Spectrum  Sciences  &  Software  Holdings  Corp.

                              By:  /s/ Donal R. Myrick
                                   --------------------------
                                   Donal  R.  Myrick
                                   President

                                       31