Interim Results for Six Months Ended 30 June 2026

30 September 2026

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Spectra Systems Corporation

Interim Results for the Six Months Ended 30 June 2026

Spectra Systems Corporation ("Spectra Systems" or the "Company"), a leader in machine-readable high speed banknote authentication, security printing, brand protection technologies and gaming security software, announces its unaudited interim results for the six months ended 30 June 2026

Financial highlights:

1 Before stock compensation expense and excludes non-controlling interest

2 Before amortization and stock compensation expense and excludes non-controlling interest

3 Does not include $1,439k (2025: $5,000k) of restricted cash (central bank customer) and investments. Cash at 30 June 2026 is stated before payment of the $6,586k dividend on 17 July 2026

Operational highlights:

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

"In the first half of 2026 we launched numerous new initiatives, executed, and successfully achieved key milestones, and completed the final phase of revenue recognition on the $39.6M sensor production contract with our customer. In addition, our Security Transactions business continued to prove that it has returned to profitability with a significant H1 contribution to our profits.

The H1 2026 numbers are overshadowed by the H1 2025 numbers which reflected the execution of a sensor contract which the Company has historically received every 6-8 years beginning with development and transitioning into production. This sensor was the 3rd generation of sensor technology with the same customer, and we are confident that there will be a 4th generation sensor development and production downstream.

The cash from this contract continues to arrive as production milestones are achieved and sensors are delivered, with $11.4M billed and collected in the first half, supporting unrestricted cash of $14,893k on 30 June 2026 before the payment of our significantly increased dividend in July. As a result, of the outlier H1 2025 numbers, the consolidated group revenue of $21,620k and adjusted PBTA of $4,138k are significantly below the exceptional first half of 2025. It is important to note that the cyclical back-end of the year loaded profile of the security printing group (CSP), although producing a loss in H1 which suppressed profits, has a fully loaded order book which is expected to result in a small full year profit in that operation.

The H1 period resulted in a key achievement towards our goal to become a supplier of polymer banknote substrates to both fulfill an existing market need and position us to integrate our covert machine-readable taggants into the polymer itself. This continued and unrelenting effort has recently culminated in our full qualification by one of the four central banks we are actively engaged with, making us eligible to participate in future tenders and opening the door of credibility to other central banks.”

Spectra Systems Corporation

Dr. Nabil Lawandy, Chief Executive Officer

Tel: +1 (0)401 274 4700

Zeus (Nominated Adviser and Joint Broker)

James Joyce / Andrew de Andrade (Investment Banking)

Tel: +44 (0)20 3829 5000

Allenby Capital Limited (Joint Broker)

Nick Naylor / James Reeve (Corporate Finance)

Amrit Nahal (Sales and Corporate Broking)

Tel: +44 (0)20 3328 5665

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

Chief Executive Officer's statement

Introduction

Revenue for the first half was $21,620k (2025: $34,965k), a decrease of 38.2% from H1 2025 which was dominated by the sensor production contract with our customer reaching full revenue recognition during that period. Other factors that affected our revenues in H1 came primarily from the security printing group which had delays in sales of product, which have strongly recovered in the first part of H2, and a drop in optical materials sales. Revenue on the sensor production contract was $9,891k (2025: $11,278k), and a further $620k was recognized on completion of the pre-production development contract with the same customer.

Gross profit was $10,633k (2025: $19,922k), with gross margin of 49.2% (2025: 57.0%). Adjusted EBITDA (before stock compensation expense and excluding non-controlling interest) decreased 68.7% to a fully consolidated $4,932k (2025: $15,764k) and adjusted PBTA decreased 71.2% to $4,138k (2025: $14,347k). In addition to the reversible losses from the security printing group, we mounted an accelerated effort to deliver software capability on time to our sensor client.. We spent approximately $0.5M on contract employees in H1 to ensure the timely delivery of this capability. Net income attributable to the Company including all of these factors was $2,905k (2025: $10,064k), or US 6.0 cents per basic share (2025: US 21 cents).

Having used cash in operations of $548k (2025: $670k), cash at the end of the period amounted to $14,893k (2025: $2,556k), excluding $1,439k of restricted cash and investments (2025: $5,000k). Operating cash flow in the period included $11.4M collected from our sensor customer, offset principally by the payment of income taxes on the record 2025 profits, reflected in a reduction of $3,186k in accrued expenses and taxes payable, and a reduction of $1,359k in deferred revenue. The annual dividend of $0.136 per share (2025: $0.116), totaling $6,586k, was declared on 30 March 2026 and paid to shareholders on 17 July 2026, after the period end. It is included in current liabilities on 30 June 2026.

Total operating expenses were $7,093k (2025: $5,845k). Research and development expenses decreased 2.2% to $1,183k, general and administrative expenses increased 18.8% to $4,901k and selling and marketing expenses increased 9.0% to $557k. With the completion of the materials order for our government customer, we produced 10,000 lbs of material with 77% of the material sold in H1 and the rest in inventory

Spectra Systems had $1,969k of debt at 30 June 2026, a 39.5% reduction from 31 December 2025 ($3,256k) and a 47.0% reduction from 30 June 2025 ($3,718k), following repayments in the period.

Review of Operations

Authentication and Security Printing Business

The Authentication Systems business generated revenue of $13,860k (2025: $23,582k) and Adjusted EBITDA of $5,421k (2025: $14,277k).

Revenue on the sensor production contract with our central bank customer was $9,891k in H1 2026 (H1 2025: $11,278k). With cumulative revenue of $40,083k, the production contract, including the related statement of work on preparing for sensor parts obsolescence was fully recognized by 30 June 2026. Cumulative billings on the contract were $27,978k at 30 June 2026, and the balance of $12,105k, included in unbilled receivables, will be billed as the remaining milestones are achieved and sensors are delivered to specific currency processing sites. One of the non-essential features of the sensor capability related to a remote service feature was not performing at the levels specified by the contract and rather than pay a fixed fee of $1.265M back to the customer, we spent approximately $1.5M in high-cost software engineering contractors to resolve the issue in H1 and maintain our strong relationship with our most valued customer. The pre-production development contract was completed in the period with the final milestone of $620k recognized. The sensor maintenance contract executed in 2025, worth approximately $6.7M from 2026 to 2030, contributed maintenance revenue in the period. The two additional sensor orders of $1.3M received in May and $1.4M confirmed in July, will be delivered between Q3 2026 and Q2 2027.

Revenue from the quality control reader contract with a government customer was $1,471k in the period, representing the design stage milestones, with the installation stage expected to follow in 2027. Our optical materials business segment had lower sales with an expected recovery to a full year revenue decrease of approximately $90k. Additional revenue of $440k was received from the sale of covert materials to De La Rue with a total to date of $569k.

The security printing group generated revenue of $6,163k (2025: $9,293k) and an EBITDA loss of $(1,180k) (2025: EBITDA of $426k) which, after depreciation and amortization, resulted in a net loss of $(2,054k) (2025: net loss of $(847k)).

The security printing arm executed contract with HMRC for the UK vaping duty stamp scheme in February 2026. CSP led the contract bid with SICPA SA and is responsible for the production and supply of stamps, with high level forensic authentication features and associated devices provided by Spectra from Rhode Island. The total estimated contract value is $43.8Mover five years, with an option for an additional year. Transitional stamps became available for purchase from April 2026, the scheme becomes mandatory on 1 October 2026, and full enforcement begins on 1 April 2027. The combination of stamp production ahead of later than expected orders and a delivery delay of paper for other security printing work, together resulted in most of the group’s loss in H1. These losses are expected to be reversed in the second half and result in a small estimated total year profit by the end of H2. In addition, following contract commencement and continued engagement with industry participants and other stakeholders, the security printing group has received orders over the past two months that are significantly higher than originally anticipated for the ramp up phase. Based on the current production volumes, the Company has therefore increased its internal forecast for tax stamp volumes in 2027. The restructuring of the security printing group continued in the first half with the first phase, in the UK facility, has been completed. The second phase of restructuring for profitability is underway in France.

In addition, the concerted effort in H1 to convert postage stamp organizations to hybrid bar coded stamps with higher margins results in the beginning of H2 with PostNL placing their first barcoded stamp order and Swiss Post confirming the conversion of their stamp program to hybrid stamps, resulting in an increase in revenue over the five-year contract of approximately 40%

The gaming security software side of the Company's business, the Secure Transactions Group, generated revenue of $1,597k (H1 2025: $2,089k) and Adjusted EBITDA of $691k (H1 2025: $1,062k). Although this may imply a decreasing trend, taken in the context of last year’s revenue being driven by a specific industry event, this profit is based on normal operating environment which clearly shows that the group is establishing a track record of profit stability.

On the polymer banknote side of the integrated business, we delivered a 10,000-sheet sample of our substrate to one of the central banks we are engaged with and were delighted to receive a full qualification of our Fusion product. We are optimistic that this could lead to a substantial order in H2 for the purpose of validating our large-scale production capabilities that would result in a transformative level of penetration in this market. With this important milestone, we have invested further in automated inspection systems to allow us to produce multi-billion banknote quantities in our Wolverhampton facility.

In addition, we have taken steps to solidify our biaxially oriented polypropylene (BOPP) supply chain and have validated a second supplier of BOPP. To further differentiate ourselves from the other suppliers, we continue to have discussions with a longtime, UK -based partner of CSP as a potential acquisition.

Our smartphone technology, although stalled by unforeseen complications with our partner at the time and followed by delays by the target customer, has nonetheless made significant technological advancements on the printing side of the technology. During H1 and into H2, we have worked closely with ROTOFLEX AG, a Swiss based supplier of high-quality security inks to develop an ink which is targeted to UV-flexographic printing, which is more ubiquitous in the tax stamp industry, our primary target market.

Strategy and Prospects

The Company's strategy for increasing revenue and earnings has three initiatives:

Focus security printing customer base on polymer substrate production and tax, revenue, and hybrid stamps.,

Our newest in-house developed and validated product is UberDullTM , a patent pending product which can disruptively alter the security printing industry by changing the economics of UV-dull security substrates.

On selling more products to existing customers, examples include:

The partnering strategy approach includes:

Re-alignment of the security printing group customer base:

Prospects

Our prospects for the future are comprised of several opportunities across all our operating groups. The prospects are best segmented into near term, 2026-2028 and longer term, 2029–2031-time frames. As would be expected, there is more visibility and confidence in the shorter time frame estimates.

The shorter-term prospects include significant sales of our red phosphor, a development contract for a tobacco device, 40%-50% higher sales of HMRC products, and a White Paper study for our sensor customer.

We also expect to have further Fusion substrate sales in 2026, an order from a central bank with which we have been qualified, and the possibility of an order  for first billion notes for India conversion to polymer with our partner in India, UFlex Ltd.

Longer term prospects include covert materials sales relating to a joint effort with Security Papers in the UK for an upcoming ECB tender, , sales relating to smartphone authentication of tax stamps, authentication inks for a tobacco device,

Outside Service Providers

Nabil M. Lawandy

Chief Executive Officer

30 September 2026

Consolidated statements of income for the half year ended 30 June 2026

All of the Group's operations are continuing.

Consolidated statements of comprehensive income for the half year ended 30 June 2026

Consolidated balance sheets as of 30 June 2026

Amounts are rounded independently to the nearest thousand

Consolidated statements of cash flows for the half year ended 30 June 2026

Amounts are rounded independently to the nearest thousand

Notes to financial information

1. Basis of preparation

This report was approved by the Directors on 29 September 2026.

This financial information has been prepared using the recognition and measurement principles of US Generally Accepted Accounting Principles (GAAP). The Group has not elected to apply IAS 34 Interim Financial Reporting.

The principal accounting policies used in preparing the interim results are those the Company expects to apply in its financial statements for the year ending 31 December 2026 and are unchanged from those disclosed in the Company's Annual Report for the year ended 31 December 2025.

The results for the half year are unaudited. The financial information for the year ended 31 December 2025 does not constitute the full statutory accounts for that period. The Annual Report and financial statements for the year ended 31 December 2025 have been filed with the Registrar of Companies. The Independent Auditors' Report on the financial statements for the year ended 31 December 2025 was unmodified and did not draw attention to any matters by way of emphasis.

2. Earnings per share

The calculation of basic earnings per share is based on the net income attributable to Spectra Systems Corporation divided by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by considering the dilutive impact of common stock equivalents under the treasury stock method as if they were converted into common stock as of the beginning of the period or as of the date of grant, if later. Excluded from the calculation of diluted earnings per common share for the six months ended 30 June 2026 were 582,000 shares related to stock options (six months ended 30 June 2025: 132,000; year ended 31 December 2025: 132,000) because their exercise prices would render them anti-dilutive. The following table shows the calculation of basic and diluted earnings per common share.

3. Dividend

On 30 March 2026 the Board declared an annual dividend of $0.136 per share, paid on 17 July 2026 to shareholders of record on 3 July 2026 (ex-dividend date 2 July 2026). The dividend of $6,586k was recognized as a liability at 30 June 2026.

4. French reorganization

The Company's security printing business is carried on through Cartor Holdings Limited and its subsidiaries: Cartor Security Printers Limited in the United Kingdom, Cartor Security Printing SAS in France, and the French branch of Cartor Security Print Group Limited. The Board approved a reorganization of the security printing business in 2025. The United Kingdom phase was completed in the first half of 2026 and the French phase efforts are continuing.

At 30 June 2026 the French operations continued to trade. Accordingly, no restructuring costs, termination benefits, or write down of the French assets are recognized in these interim financial statements. The French operations are included in these interim financial statements at revenue of $3,963k and a loss of $404k for the six months, with net liabilities of $23k before intra-group balances. Amounts owed by the French company to other Cartor companies of EUR 1,055k and amounts owed to it of EUR 302k are eliminated on consolidation

.

5. Reclassification

Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

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

Appendix - Reconciliation of Non-GAAP measures

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