UNITED STATES

                        SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)
     [X]     QUARTERLY  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE
             SECURITIES  EXCHANGE  ACT  OF  1934

          FOR  THE  QUARTERLY  PERIOD  ENDED:  March  31,  2004

          OR

     [  ]    TRANSITION  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE
             SECURITIES  EXCHANGE  ACT  OF  1934

              For the transition period from ________ to __________


                  Commission file number ______________________


                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                     ---------------------------------------
                      (Exact name of small business issuer
                          as specified in its charter)


            DELAWARE                                            80-0025175
 ------------------------------                            --------------------
  (State  or  other  jurisdiction                              (IRS  Employer
of  incorporation or organization)                           Identification No.)


                               91 HILL AVENUE NW,
                        FORT WALTON BEACH, FLORIDA 32548
                    (Address of principal executive offices)
                                   (Zip Code)


                    Issuer's telephone number (850) 796-0909


Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.
Yes  [X]    No  [  ]

As  of  May  21,  2004  there  were 40,029,300 shares of the registrant's common
stock,  par  value  $0.0001,  issued  and  outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one):
Yes  [  ]    No  [X]


<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 MARCH 31, 2004 QUARTERLY REPORT ON FORM 10-QSB

<TABLE>
<CAPTION>
                                  TABLE OF CONTENTS

<S>      <C>                                                                       <C>
         Special Note Regarding Forward Looking Statements                          3

                         PART I - FINANCIAL INFORMATION

Item 1   Financial Statements (unaudited)

         Consolidated Balance Sheet as of March 31, 2004(unaudited)                 4

         Consolidated Statements of Operations for the three months
         ended March 31, 2004 and 2003 (unaudited)                                  5

         Consolidated  Statement  of  Stockholders'  Equity  for  the  three
         months  ended  March  31,  2004  (unaudited)                               6

         Consolidated Statements of Cash Flows for the three months
         ended March 31, 2004 and 2003 (unaudited)                                  7

         Notes to Consolidated Financial Statements (unaudited)                     8

Item 2   Management's Discussion and Analysis or Plan of Operations                19

Item 3   Controls and Procedure                                                    23

                          PART II - OTHER INFORMATION

Item 1   Legal Proceedings                                                         24

Item 2   Changes in Securities                                                     25

Item 3   Defaults  Upon  Senior  Securities                                        26

Item 4   Submission of Matters to a Vote of Security Holders                       26

Item 5   Other Information                                                         26

Item 6   Exhibits and Reports on Form 8-K                                          27
</TABLE>


                                        2
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     To  the  extent  that the information presented in this Quarterly Report on
Form  10-QSB  for  the  quarter  ended  March  31,  2004,  discusses  financial
projections,  information  or  expectations  about  our  products or markets, or
otherwise  makes  statements  about  future  events,  such  statements  are
forward-looking.  We  are making these forward-looking statements in reliance on
the  safe  harbor  provisions of the Private Securities Litigation Reform Act of
1995.  Although  we  believe  that  the  expectations  reflected  in  these
forward-looking  statements  are  based  on  reasonable assumptions, there are a
number  of  risks  and  uncertainties  that could cause actual results to differ
materially  from such forward-looking statements.  These risks and uncertainties
are  described,  among  other  places in this Quarterly Report, in "Management's
Discussion  and  Analysis  or  Plan  of  Operations."

     In  addition,  we  disclaim  any  obligations to update any forward-looking
statements  to  reflect events or circumstances after the date of this Quarterly
Report.  When  considering  such  forward-looking statements, you should keep in
mind  the  risks  referenced  above  and the other cautionary statements in this
Quarterly  Report


                                        3
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                           Consolidated Balance Sheet
                                 March 31, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
<S>                                                                <C>
                                     ASSETS
                                     ------

Current assets:
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . .  $  1,402,237
  Receivables, net. . . . . . . . . . . . . . . . . . . . . . . .     2,114,878
  Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .       244,916
  Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . .       126,554
                                                                   -------------

  Total current assets. . . . . . . . . . . . . . . . . . . . . .     3,888,585
                                                                   -------------

Property, plant, and equipment, net . . . . . . . . . . . . . . .     1,979,344
Deferred tax asset. . . . . . . . . . . . . . . . . . . . . . . .        40,034
Cash surrender value of life insurance. . . . . . . . . . . . . .        38,665
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . .        13,802
                                                                   -------------

Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . .  $  5,960,430
                                                                   =============


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

Current liabilities:
  Accounts payable. . . . . . . . . . . . . . . . . . . . . . . .  $  1,110,586
  Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . .       931,940
  Contract deposits . . . . . . . . . . . . . . . . . . . . . . .        58,306
  Current portion of long-term debt . . . . . . . . . . . . . . .       200,511
  Due to related parties. . . . . . . . . . . . . . . . . . . . .       379,238
                                                                   -------------

  Total current liabilities . . . . . . . . . . . . . . . . . . .     2,680,581
                                                                   -------------

Long-term liabilities:
  Long-term debt, less current portion. . . . . . . . . . . . . .     1,711,617
                                                                   -------------

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . .     4,392,198
                                                                   -------------

Commitments and contingencies (Note 12)

Stockholders' equity:
  Preferred stock, $0.0001 par value; 20,000,000 authorized,
    none issued . . . . . . . . . . . . . . . . . . . . . . . . .             -
  Common stock, $0.0001 par value; 80,000,000 shares authorized,
    21,651,000 issued and outstanding . . . . . . . . . . . . . .         2,165
  Additional paid-in capital. . . . . . . . . . . . . . . . . . .    16,117,184
  Accumulated deficit . . . . . . . . . . . . . . . . . . . . . .   (14,551,117)
                                                                   -------------

Total stockholders' equity. . . . . . . . . . . . . . . . . . . .     1,568,232
                                                                   -------------

Total liabilities and stockholders' equity. . . . . . . . . . . .  $  5,960,430
                                                                   =============

</TABLE>



    See accompanying notes to the consolidated financial statements.


                                        4
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                      Consolidated Statements of Operations
               For the three months ended March 31, 2004 and 2003
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      2004           2003
                                                  -------------  ------------
<S>                                               <C>            <C>
Revenues . . . . . . . . . . . . . . . . . . . .  $  3,596,578   $ 3,273,029

Cost of revenues . . . . . . . . . . . . . . . .    (3,274,381)   (3,090,799)
                                                  -------------  ------------

Gross profit . . . . . . . . . . . . . . . . . .       322,197       182,230

Operating expenses . . . . . . . . . . . . . . .   (13,951,585)     (124,932)
                                                  -------------  ------------

Income (loss) from operations. . . . . . . . . .   (13,629,388)       57,298

Other income (expense):
  Building rent. . . . . . . . . . . . . . . . .        49,560        45,351
  Interest income. . . . . . . . . . . . . . . .           365           199
  Other income . . . . . . . . . . . . . . . . .         1,985         4,802
  Interest expense . . . . . . . . . . . . . . .       (63,851)      (66,752)
  Other expense. . . . . . . . . . . . . . . . .        (1,010)       (6,249)
                                                  -------------  ------------

  Total other income (expense) . . . . . . . . .       (12,951)      (22,649)

Income (loss) before provision for income taxes.   (13,642,339)       34,649

Income tax benefit . . . . . . . . . . . . . . .        61,330             -
                                                  -------------  ------------

Net income (loss). . . . . . . . . . . . . . . .  $(13,581,009)  $    34,649
                                                  =============  ============

Weighted average common shares outstanding:
  Basic and diluted. . . . . . . . . . . . . . .    19,316,934    16,276,222
                                                  =============  ============

Earnings (loss) per share:
  Basic and diluted. . . . . . . . . . . . . . .  $      (0.70)  $         -
                                                  =============  ============
</TABLE>

    See accompanying notes to the consolidated financial statements.


                                        5
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Consolidated Statement of Stockholders' Equity
                    For the three months ended March 31, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                Common Stock
                             -------------------    Additional       Accumulated
                               Shares    Amount   paid-in capital      deficit         Total
                             ----------  -------  ----------------  -------------  -------------
<S>                          <C>         <C>      <C>               <C>            <C>
Balances at January 1, 2004  18,851,000  $ 1,885  $         79,426  $   (970,108)  $   (888,797)

Stock options issued
  for consulting services .           -        -        11,418,038             -     11,418,038

Exercise of stock options .   2,800,000      280         4,619,720             -      4,620,000

Net loss. . . . . . . . . .           -        -                 -   (13,581,009)   (13,581,009)
                             ----------  -------  ----------------  -------------  -------------

Balances at March 31, 2004.  21,651,000  $ 2,165  $     16,117,184  $(14,551,117)  $  1,568,232
                             ==========  =======  ================  =============  =============
</TABLE>

    See accompanying notes to the consolidated financial statements.


                                        6
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                      Consolidated Statements of Cash Flows
               For the three months ended March 31, 2004 and 2003
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            2004          2003
                                                                        -------------  ----------
<S>                                                                     <C>            <C>
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . .  $(13,581,009)  $  34,649
  Adjustments to reconcile net income (loss) to net cash used in
    operating activities:
    Issuance of stock options to related party for
         consulting services . . . . . . . . . . . . . . . . . . . . .    11,418,038           -
    Investor relations expenses paid by a related party. . . . . . . .     2,065,000           -
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . .        32,327      38,082
    Accrued interest payable due to related parties. . . . . . . . . .         7,792           -
    Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . .       (28,594)          -
    Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .           445         445
  (Increase) decrease in:
    Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . .      (386,994)    (77,004)
    Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . .      (122,524)     66,309
    Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . .      (107,831)    (75,358)
    Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .             -       1,000
  Increase (decrease) in:
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .      (160,273)    (62,103)
    Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . .       373,359    (111,792)
    Contract deposits. . . . . . . . . . . . . . . . . . . . . . . . .         8,306      (2,077)
    Deferred revenues. . . . . . . . . . . . . . . . . . . . . . . . .       (36,966)          -
                                                                        -------------  ----------

      Net cash used in operating activities. . . . . . . . . . . . . .      (518,924)   (187,849)
                                                                        -------------  ----------

Cash flows from investing activities:
  Purchase of property and equipment . . . . . . . . . . . . . . . . .        (7,817)    (30,204)
                                                                        -------------  ----------

      Net cash used in investing activities. . . . . . . . . . . . . .        (7,817)    (30,204)
                                                                        -------------  ----------

Cash flows from financing activities:
  Payments on notes payable. . . . . . . . . . . . . . . . . . . . . .      (544,171)    (41,996)
  Net repayments on bank line of credit. . . . . . . . . . . . . . . .             -    (108,596)
  Repayment of short-term debt . . . . . . . . . . . . . . . . . . . .      (307,726)          -
  Advances from related party. . . . . . . . . . . . . . . . . . . . .       598,916     163,392
  Repayments of advances from a related party. . . . . . . . . . . . .             -    (200,061)
  Proceeds from the exercise of stock options. . . . . . . . . . . . .     1,485,000           -
                                                                        -------------  ----------
      Net cash provided by (used in) financing activities. . . . . . .     1,232,019    (187,261)
                                                                        -------------  ----------

Net increase (decrease) in cash and cash equivalents . . . . . . . . .       705,278    (405,314)

Cash and cash equivalents, beginning of  period. . . . . . . . . . . .       696,959     633,909
                                                                        -------------  ----------

Cash and cash equivalents, end of  period. . . . . . . . . . . . . . .  $  1,402,237   $ 228,595
                                                                        =============  ==========

Supplemental disclosures of cash flow information:
    Cash paid during the period for:
    Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     66,919   $  73,512
                                                                        =============  ==========

Supplemental schedule of non-cash financing and investing activities:
  Reduction in due to related party in lieu of cash payment for
     exercise of stock options . . . . . . . . . . . . . . . . . . . .  $  3,135,000   $       -
                                                                        =============  ==========

  Reclasification of short-term debt to accrued expenses . . . . . . .  $     17,635   $       -
                                                                        =============  ==========
</TABLE>

    See accompanying notes to the consolidated financial statements.


                                        7
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

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.

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  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.

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").

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.  On November 4, 2003, the
Company's  registration  statement  for  the public trading of its shares became
effective.

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 three months ended March 31, 2004 and 2003, 99%
of  the  Company's  revenues  were  derived  from  contracts  with  the  DOD.

(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


                                        8
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

established  when necessary to reduce deferred tax assets to the amount expected
to  be  realized.

The  Company  currently  has  a net operating loss carryforward of approximately
$10,900,000,  which  would  equate  to  a  deferred  tax  asset of approximately
$3,700,000  at  March  31,  2004.  The Company has not recorded that federal tax
benefit  in  the  accompanying financial statements, as management does not have
sufficient  information  to  estimate  when  or  if the Company will realize the
future  tax  benefit.

(C)     EARNINGS  (LOSS)  PER  SHARE

The  Company  utilizes  Financial Accounting Standards Board (FASB) Statement of
Financial Accounting Standards No. 128, "Earnings Per Share", which requires the
presentation  of  basic and diluted earnings (loss) per share on the face of the
statement  of  operations.  Basic  earnings  (loss)  per  share  is  computed by
dividing  the  net income (loss) by the weighted average number of common shares
outstanding  for  the  period.  Diluted net income (loss) per share reflects the
potential  dilution  that  could  occur  if  stock  options  were  exercised.

The  Company's  common  stock equivalents consist of consultant stock options to
purchase common stock. As of March 31, 2004, stock options to purchase 6,200,000
shares of the Company's common stock at an exercise price of the lesser of $1.65
per  share or the fair market value at the time of exercise were not included in
the  computation  of  diluted earning per share for the three months ended March
31, 2004 because the effect of their exercise would have been anti-dilutive. The
Company  had  no  common  stock  equivalents  as  of  March  31,  2003.

The weighted average number of common shares outstanding for computing basic and
diluted  earnings (loss) per share for the three months ended March 31, 2004 and
2003  was  19,316,934  and  16,276,222,  respectively.

2.     BASIS  OF  PRESENTATION

The  accompanying  unaudited  consolidated  financial  statements  for the three
months  ended  March  31,  2004  and  2003 have been prepared in accordance with
accounting  principles  generally  accepted  in the United States of America for
interim  financial  information and pursuant to the rules and regulations of the
U.S.  Securities  and Exchange Commission for Form 10-QSB.  Accordingly, they do
not  include all the information and footnotes required by accounting principles
generally  accepted  in  the  United  States  of  America for complete financial
statements.  In  the  opinion  of  management,  the  accompanying  unaudited
consolidated  financial  statements  contain all adjustments, consisting only of
normal  recurring  accruals, considered necessary for a fair presentation of the
Company's  financial  position,  results  of  operations, and cash flows for the
periods  presented.

The  results of operations for the interim periods ended March 31, 2004 and 2003
are  not necessarily indicative of the results to be expected for the full year.
These  interim  consolidated  financial statements should be read in conjunction
with  the  December 31, 2003 consolidated financial statements and related notes
included  in  the  Company's  Annual  Report  on  Form 10-KSB for the year ended
December  31,  2003.


                                        9
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

3.     ACQUISITION  OF  SPECTRUM  SCIENCES  &  SOFTWARE,  INC.:

On  April  3,  2003, Spectrum Sciences & Software Holdings Corp. (formerly Silva
Bay International, Inc.) entered into an amended and restated agreement and plan
of  merger  with  Spectrum Sciences & Software, Inc., pursuant to which Spectrum
Sciences  &  Software, Inc. became Spectrum Sciences & Software Holdings Corp.'s
wholly  owned  subsidiary.  As  part  of this agreement, 2,500,000 shares of the
Company's common stock was issued to the sole stockholder of Spectrum Sciences &
Software,  Inc.,  which  was  Donal  Myrick.

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  (a  reverse  acquisition).

The  financial  statements  of  the  Company prior to April 3, 2003 are those of
Spectrum  Sciences  &  Software,  Inc.  The results of operation of the acquired
business  have  been  included  in  the  accompanying  consolidated  financial
statements  from  the  date  of  acquisition.

4.  RECEIVABLES:

Receivables,  which  are  primarily  comprised of amounts due to the Company for
work  performed  on contracts directly related to the U.S. Department of Defense
and  through  U.S. Department of Defense contractors, consisted of the following
at  March  31,  2004:

Contracts - billed        $    1,851,541
Contracts - unbilled             263,337
                          --------------
  Total receivables       $    2,114,878
                          ==============


                                       10
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

5.     INVENTORIES:

Inventories are valued at the lower of cost or market.  Cost is determined using
the  first-in,  first-out  method.  The major components of inventories at March
31,  2004  are  summarized  as  follows:

     Raw  materials,  net  of  reserve              $   92,217
     Work in progress                                  151,699
     Finished  goods                                     1,000
                                                    ----------
        Total  inventories                          $  244,916
                                                    ==========

6.  PROPERTY  AND  EQUIPMENT:

A  summary  of  property  and  equipment  at  March  31,  2004  is  as  follows:

     Land                                         $    175,000
     Buildings and improvements                      1,565,301
     Manufacturing and other equipment                 737,912
     Investment property                               220,900
     Computer equipment                                140,350
     Software                                           60,353
     Vehicles                                           34,890
     Furniture and fixtures                             28,721
     Construction in progress                           38,714
                                                  -------------
     Total                                           3,002,141
     Accumulated depreciation                       (1,022,797)
                                                  -------------
     Property and equipment, net                  $  1,979,344
                                                  =============

7.  ACCRUED  EXPENSES:

The  major  components  of  accrued expenses at March 31, 2004 are summarized as
follows:

     Accrued payroll, payroll taxes and
       related benefits                           $    776,872
     Accrued vacation and sick leave                   121,662
     Accrued interest payable                           12,579
     Accrued property taxes                              8,165
     Other                                              12,662
                                                  -------------

     Total accrued expenses                       $    931,940
                                                  =============

The  major  components  of the accrued salaries and related benefits is $102,740
owed  to Gila Bend employees for wage rates which were recalculated based on job
conformity  required  by  the Department of Labor in 2003, and wage increases of
$365,094  for  the  Service  Contract  Act  employees.


                                       11
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

8.     LONG  TERM  DEBT

Long-term  debt  consisted  of  the  following:

<TABLE>
<CAPTION>
                                                                                  March 31, 2004
                                                                                  --------------
<S>                                                                               <C>
Priority  loans  payable  to  a  bank,  due  in  monthly installments of $50,000
including interest at prime plus 2.00% (6.00% at March 31, 2004).  Final payment
due  April 1, 2005. Cross-collateralized with non-priority real estate loans and
personal  guarantee  of  the  former  Company  President, held by the same bank.
Collateral includes two real estate mortgages, security agreement, assignment of             (1)
contracts  and  assignment  of  rents  and  leases.                               $      90,549

Non-priority  loan  payable  to  a bank, due in monthly installments of $14,870,
including  interest  at  8.50%. Final balloon payment of $1,473,662 due April 1,
2005,  collateralized  by  real  estate  and  a personal guarantee of the former
Company  President.  Cross-collateralized  with  priority  loans.                     1,526,018

Non-priority  loan  payable  to  a  bank, due in monthly installments of $1,588,
including  interest  at  8.75%.  Final  balloon payment of $186,457 due April 1,
2005,  collateralized  by  a  condominium and a personal guarantee of the former
Company  President.  Cross-collateralized  with  priority  loans.                       189,123

Non-priority  loan  payable  to  a  bank, due in monthly installments of $4,347,
including  interest  at  prime  +  .25% (4.25% at March 31, 2004). Final balloon
payment of $49,661 due April 1, 2005, collateralized by equipment and inventory.             (2)
Cross-collateralized  with  priority  loans.                                             96,548

                                                                                             (1)
Other                                                                                     9,890
                                                                                  --------------
                                                                                      1,912,128
Less  current  portion                                                                 (200,511)
                                                                                  --------------

 Total  long-term  debt                                                           $   1,711,617
                                                                                  ==============
</TABLE>
(1)     Final  payment  was  made  on  April  5,  2004.

(2)     Final  payment  was  made  on  May  5,  2004.


                                       12
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

9.     DUE  TO  RELATED  PARTIES  AND  RELATED  PARTY  TRANSACTIONS:

<TABLE>
<CAPTION>
<S>                                                                               <C>
$52,000  due  to  the  spouse  of the President of the Company including accrued
interest  of $500. Interest at 12% per annum. The payable is due upon demand, is
unsecured,  and  was  paid  in  full  on  April  7,  2004.                         $     52,500

$326,738  due  to  a  stockholder of the Company. Represents net amount due as a
result  of  the stockholder paying certain investor relations expenses on behalf
of the Company. This payable does not bear interest, is payable upon demand, and
is  unsecured.                                                                          326,738
                                                                                  --------------
                                                                                     $  379,238
                                                                                  ==============
</TABLE>

The  Company  was  provided  management  consulting services by Endeavor Capital
Group,  LLC,  which  is  owned  by  Robert  Genovese.  The terms of the original
consulting  agreement  between  Endeavor Capital Group, LLC and the Company were
from  March  1,  2003  to  March  1, 2004. Consulting fees of $4,000 a month for
January  and  February,  2004 and expenses of $15,106 are reported as consulting
fees  in  the  accompanying  financial  statements.

On  March 11, 2004, the Company entered into a new consulting agreement with Mr.
Genovese.  The  term of the agreement is for a one year period, and Mr. Genovese
is  tasked  with  bringing  to  the  Company's  attention  potential  or  actual
opportunities  which meet its business objectives or logical extensions thereof,
alert  the  Company  to  new  or emerging high potential forms of production and
distribution,  comment  on  corporate  development, identify respective suitable
merger  or  acquisition  candidates  and  related  due  diligence and other such
planning  and  development  services  as  shall  be  requested  by  the Company.

Mr.  Genovese  received 9,000,000 stock options of the Company's common stock at
an  exercise  price  of equal to the lesser of $1.65 or the fair market value at
the  time  of  exercise  as  a  result  of  the  execution  of the agreement. In
accordance  with  FASB  Statement  of  Financial  Accounting  Standards No. 123,
"Accounting  for  Stock-based Compensation", the Company has recorded consulting
expense  of $11,418,038 based on the fair value of the stock options at the date
of  grant  using  the  Black-Scholes pricing model in the accompanying financial
statements.

Mr.  Genovese  exercised  2,800,000  of  the options during the first quarter of
2004.  The  Company  received $1,485,000 of cash from Mr. Genovese and converted
outstanding  debt  of  $3,135,000  owed to Mr. Genovese and related companies in
lieu  of  cash  for  exercise  of  these  options.

The  Company  owed  Mr.  Genovese  $792,030  at  December 31, 2003. Mr. Genovese
advanced  the Company $598,916 during the first quarter of 2004 to pay operating
expenses, and the Company had accrued interest of $7,792 on two interest-bearing
notes.  In  addition,  Mr. Genovese paid for certain investor relations expenses
totaling  $2,065,000  during the first quarter of 2004 on behalf of the Company.
Mr.  Genovese  debt  totaled $3,461,738 prior to the conversion of $3,135,000 of
this  debt.  At  March  31,  2004,  the  Company  owed Mr. Genovese $326,738 for
investor  relations  expenses  that had not been converted by option exercise at
the  end  of  the  first  quarter.


                                       13
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

10.  STOCK  OPTION  PLAN:

On  March  11,  2004  the  board  of  directors  approved  and  adopted  a  2004
Non-Statutory  Stock  Option  Plan  for 10,000,000 common stock to be granted to
employees,  non-employee  Directors, consultants and advisors.  Vesting and term
of all options is determined by the Board of Directors and may vary by optionee;
however,  the  term  may  be  no  longer  than  10 years from the date of grant.

At  March  31,  2004,  9,000,000  options  had  been  granted  to a non-employee
stockholder  who provides consulting services to the Company.  FASB Statement of
Financial  Accounting  Standards  No.  123,  "Accounting  for  Stock-based
Compensation",  requires  these  options  be valued at fair value at the date of
grant.  The fair value of these options was estimated at the date of grant using
the  Black-Scholes  option  pricing  model  with  the following weighted-average
assumptions:  risk-free  interest  rate  of  1%;  no dividend yields; volatility
factors  of  the  expected  market  price  of  our  common stock of 0.62; and an
expected  life  of  the options of 2 years. This generates a fair value of $1.27
per  option  at  the  date  of  grant,  which  was  March 11, 2004. As a result,
$11,418,038 of consulting expense and additional paid-in capital was recorded at
the  date  of  grant.

At  March  31,2004,  9,000,000  options  had been granted and 2,800,000 had been
exercised  at  a  strike  price  of  $1.65  per  option.


                                       14
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

11.     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 its products and services with an
allocation  of  indirect  costs.  The  Company  has  three  operating segments -
management  services, manufacturing, and engineering and information technology.
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 segment consists of the sale of
computer  software  developed  to assist in hazard management and weapons impact
analysis.

The following is a summary of certain financial information related to the three
segments  during  the  three  months  ended  March  31,  2004  and  2003:

<TABLE>
<CAPTION>
                                                       Three months ended March 31
                                                            2004          2003
                                                        -------------  -----------
<S>                                                     <C>            <C>
Total revenues by segment
  Management Services. . . . . . . . . . . . . . . . .  $  2,641,031   $2,293,100
  Engineering and Information Technology . . . . . . .       320,090      329,353
  Manufacturing. . . . . . . . . . . . . . . . . . . .       635,457      650,576
                                                        -------------  -----------
    Total revenues by segment. . . . . . . . . . . . .  $  3,596,578   $3,273,029
                                                        =============  ===========

Operating profit (loss) by segment
  Management Services. . . . . . . . . . . . . . . . .  $     17,546   $   63,391
  Engineering and Information Technology . . . . . . .       151,792       80,532
  Manufacturing. . . . . . . . . . . . . . . . . . . .       152,859       38,307
  Operating expenses . . . . . . . . . . . . . . . . .   (13,951,585)    (124,932)
  Interest income (expense) net. . . . . . . . . . . .       (63,486)     (66,553)
  Other income (expense), net. . . . . . . . . . . . .        50,535       43,904
                                                        -------------  -----------
  Net income (loss) before income tax benefit. .. . . .  (13,642,339)      34,649
  Income tax benefit . . . . . . . . . . . . . . . . .        61,330            -
                                                        -------------  -----------
    Net income (loss). . . . . . . . . . . . . . . . .  $(13,581,009)  $   34,649
                                                        =============  ===========
</TABLE>

During  the  three  months  ended  March 31, 2004 and 2003, all of the Company's
revenue  was  generated  in the United States of America (USA).  As of March 31,
2004,  all  of  the  Company's  long-lived  assets  are  located  in  the  USA.


                                       15
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

12.  COMMITMENTS  AND  CONTINGENCIES:

IRS  Tax  Lien
--------------
On  March  17,  2004, the Company made its final payment to the IRS and received
its  release  of  lien  of  March  19,  2004.

Legal  Matters
--------------
In  December  2002,  three  Spectrum  Sciences and Software, Inc. 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  are  no  damage  amounts  specified  in  any of the
actions.  The  plaintiffs  are  requesting  the following: Compensatory damages,
plus  special  incidental  damages  in  such  a  sum  as may be proven at trial;
punitive damages in such a sum as may be proven at trial; for cost for the suit;
for  attorney's  fees;  and  for  other  such relief as the Court deems just and
proper.  The  Company  intends to vigorously defend its position.  As of May 13,
2004,  the  cases have progressed through the establishment of a case management
plan  with the courts and a consolidation of all the cases into a single action.
Plaintiff  and  Defendant  Depositions  were  taken  and additional discovery is
ongoing.  The  Company  currently  does  not  know  what  the  outcome  of  this
litigation  will  be.

In  April  1,  2004, the Company paid the final payment of $10,000 to Business &
Commercial  Brokerage  Inc.  and  obtained  a  signed  release acknowledging the
receipt  of all sums for full compromise settlement against the previously filed
suit. On April 7, 2004, a Notice of Voluntary Dismissal was filed in the Circuit
Court  for  Escambia  County  Florida.

Letter  of  Intent  to  Acquire  Inland  Fabricators
----------------------------------------------------
On March 31, 2004, the Company signed a Letter of Intent (LOI) to acquire all of
the  issued  and  outstanding  membership  interests  (the  "Members") of Inland
Fabricators,  LLC,  a  Limited  Liability  Company  organized  under the laws of
Louisiana ("IFAB"), or its nominees or assignees, or acquire IFAB by merger with
a  subsidiary  of  Acquiror.  The  LOI  is  not  binding, and the transaction is
subject  to  the execution of a definitive acquisition agreement by both parties
and  is  further  described  in  Part  II,  Item  1  of  this  filing.

Pursuant  to  the  LOI, if the acquisition goes forward, the Company is to issue
shares  of  its common stock to the Members in consideration for their interests
in  IFAB.  The Company will place 4,000,000 shares of common stock in escrow and
the  shares  will  be  released  from escrow in amounts and from time to time as
based  on  an  agreed  formula.

On  May  6,  2004,  the Company provided guarantees in the amount of $500,000 to
secure an Irrevocable Letter of Credit ("LOC") in favor of a major international
construction  firm.  The  LOC  provided  the necessary performance guarantee for
IFAB  under a previously negotiated Purchase Order with that major international
construction  firm.

On  May 6, 2004, a creditors group consisting of Modern Valve, Inc., Thomas Pipe
&  Steel,  L.L.C.,  Radnor  Alloys, Inc., Portable Machine Works, Inc., Analytic
Stress  Relieving, Inc. and Custom Blast Services, Inc. filed suit no. 519924 in
the 19th Judicial District court, Parish of East Baton Rouge, State of Louisiana
against  various  individuals and Members of IFAB.  Spectrum Sciences & Software
Holdings  Corporation was not named as a party to the suit, however, mention was
made  of  Spectrum's  LOI for a purchase of Inland Fabricators, L.L.C.  The suit
alleges  among  other  issues  that  IFAB  as  successor to Thomas Inland Marine
L.L.C.,  Pipeworks,  Inc., Pipeworks Reserve, Inc., and Pipeworks Venezuela owes
certain  sums  to  the  Creditor  Group  based on debt incurred by Thomas Inland
Marine  and  Pipeworks  et  al.  Due  diligence  is  continuing  on  the planned
Spectrum/IFAB  merger.  The  potential  outcome  of  the  Creditors suit and its
impact  on  the  potential  merger  is  undetermined  at  this  time.


                                       16
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

13.  SUBSEQUENT  EVENTS:

On  April 16, 2004, the Board of Directors amended and restated the stock option
plan  to  increase  the  number  of  shares  from  10,000,000  to  30,000,000.

On  April  16,  2004, the Company and Robert Genovese amended and restated their
March  11,  2004  consulting  agreement  (the  "Amended Agreement"). The Amended
Agreement  extended the term of the contract for an additional year to April 19,
2006  and  added an exclusivity provision. As part of the Amended Agreement, Mr.
Genovese  was issued options to acquire an additional 9,000,000 shares of common
stock  at  an exercise price of the greater of $1.95 or 60% of the closing price
on the day preceding notice to exercise. In addition, Mr. Genovese was issued an
option  to  acquire 5,000,000 shares of the Company's common stock at the lesser
of $1.65 or the fair market value of the shares at the time of the exercise as a
result  of  his  role  in  the  IFAB  transaction.

On  April  20,  2004,  the  Company  awarded  677,500  stock  options to certain
employees,  officers  and  directors  for  services  rendered.

On  April  28,  2004,  the  Company  was informed that the SEC was conducting an
informal  inquiry  into  the  Company as further described in Part II, Item 5 of
this  filing.

In  light  of  this  inquiry  and pending further review, the Company's Board of
Directors  elected  to  suspend  the  current  consulting  agreement between the
Company  and  Robert  Genovese.

As  of  May  21,  2004, Mr. Genovese and related companies had submitted expense
reimbursement  claims in addition to those reflected on the Interim Consolidated
Financial  Statements  as  of  March  31,  2004  of  $900,000  under the Amended
Agreement.  The  Company  is  reviewing  the  validity  of  those  claims.

Between  March  31, 2004 and May 21, 2004, Mr. Genovese has exercised 18,378,300
options.  Of these options, 11,200,000 were exercised at a strike price of $1.65
per  option, and 7,178,300 were exercised at a strike price of $1.95 per option.
Total  proceeds payable to the Company relating to the exercise of these options
were $32,477,685. The Company received $29,232,685 of cash from Mr. Genovese. In
addition, Mr. Genovese and his related companies cancelled expense reimbursement
claims of $1,100,000 in lieu of cash for exercise of these options. As a result,
the  Company  believes  that  Mr.  Genovese  and  his  related companies have no
outstanding  reimbursement  claims  as  of  May  21,  2004.

Between  January 1, 2004 and May 21, 2004, Mr. Genovese has exercised 21,178,300
options.  Of these options, 14,000,000 were exercised at a strike price of $1.65
per  option, and 7,178,300 were exercised at a strike price of $1.95 per option.
Total  proceeds payable to the Company relating to the exercise of these options
were $37,097,685. The Company received $30,717,685 of cash from Mr. Genovese and
Mr.  Genovese  and  related  companies cancelled expense reimbursement claims of
$4,035,000  in  lieu  of  cash  for  exercise  of  these  options.


                                       17
<PAGE>

                   SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP.
                 Notes to the Consolidated Financial Statements
                   Three months ended March 31, 2004 and 2003
                                   (Unaudited)

As  of  May  21, 2004, the Company has not received payment from Genovese in the
amount  of  $1,815,000  with  respect  to  an exercise of 1,100,000 options at a
strike  price  of $1.65 per share on or about April 15, 2004. Additionally, with
respect to exercise of 1,100,000 options on or about April 26, 2004, the Company
received  payment  based  on  a  strike price of $1.65 per share rather than the
$1.95  per  share  as  provided  for  in the Amended Agreement. As a result, Mr.
Genovese  owes the Company an additional $330,000 with respect to that exercise.
Under  the  terms of the relevant option agreements and assuming the validity of
cancelled  claims,  total payment owed to the Company from Mr. Genovese relating
to  these  option  exercises  is  $2,145,000.


                                       18
<PAGE>

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

The  Company's discussion and analysis of its financial condition and results of
operations are based upon its Consolidated Financial Statements, which have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America.  The  preparation  of financial statements requires
management  to  make 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
consolidated  financial statements with respect to the approximately $10,900,000
net  operating loss carryforward for federal income tax purposes as of March 31,
2004.  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 2003 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


                                       19
<PAGE>

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.

You  should  read  the following discussion and analysis in conjunction with the
unaudited  financial  statements  (and  notes  thereto)  and  other  financial
information  of  our  company  appearing  elsewhere  in  this  report.

CONSOLIDATED  OVERVIEW:

<TABLE>
<CAPTION>
                     For the three months ended March 31
                  ----------------------------------------
                           2004               2003
                  -------------------  -------------------
<S>               <C>          <C>     <C>          <C>
Revenues. . .     $ 3,596,578  100.0%  $ 3,273,000  100.0%
Cost of revenues    3,274,381   91.0%    3,091,000   94.4%
                  -----------  ------  -----------  ------

Gross Profit.     $   322,197    9.0%  $   182,000    5.6%
                  ===========  ======  ===========  ======
</TABLE>

Overall,  revenues  for  the  three-months ended March 31, 2004 increased by 10%
compared  to the same period in 2003 due to increased marketing activity and the
Management  Services  segment's  growth of 15%.  Gross profit as a percentage of
sales  was  9%  for  the  3-month period ended March 31, 2004.  The increases in
revenue  are  primarily  due  to  scheduled increases in reimbursable labor cost
under  the  Service  Contract  Act  in  the  management  services  division  and
additional  company-wide  cost  controls  put  in  place.

MANAGEMENT  SERVICES

<TABLE>
<CAPTION>
                      For the three months ended March 31
                   -----------------------------------------
                            2004               2003
                  --------------------  --------------------
<S>               <C>           <C>     <C>           <C>
Revenues. . .     $  2,641,031  100.0%  $  2,293,000  100.0%
Cost of revenues     2,623,485   99.3%     2,230,000   97.3%
                  ------------  ------  ------------  ------

Gross Profit.     $     17,546     .7%  $     63,000    2.7%
                  ============  ======  ============  ======
</TABLE>

Revenues  in the Management Services segment increased approximately 15% for the
three-month  period  ended  March  31,  2004 compared to 2003.  The increases in
revenue  and  expenses  are  primarily  due  to  the  scheduled  increases  in
reimbursable labor cost under the Service Contract Act and collective bargaining
agreement  for Spectrum's largest subcontractor, Washington Group International.


                                       20
<PAGE>

ENGINEERING  AND  INFORMATION  TECHNOLOGY  SERVICES

<TABLE>
<CAPTION>
                  For the three months ended March 31
                  -----------------------------------
                        2004              2003
                  ----------------  -----------------
<S>               <C>       <C>     <C>        <C>
Revenues. . . .   $320,090  100.0%  $ 329,000  100.0%
Cost of revenues   168,298   52.6%    248,000   75.4%
                  --------  ------  ---------  ------

Gross Profit. .   $151,792   47.4%  $  81,000   24.6%
                  ========  ======  =========  ======
</TABLE>

Revenues  in  the  Engineering  and  Information  Technology  Services  segment
decreased  2.8%  for  the  period  ended  March 31, 2004 as compared to the same
period  in 2003. This slight decrease in revenues resulted from planned internal
suspension  of  production  schedules due to staff travel overseas undertaken to
client  sites and scheduled completion of backlog software development tasks for
the  Safe-Range  program.

Gross profit as a percent of sales was 47.4%, an increase of 87%.  This increase
in  gross  profit  was  due  to reductions of management salary costs due to the
departure  of  Donald Garrison, Vice President, and additional cost controls put
in  place  during  the first quarter of 2004 as compared to the first quarter of
2003.

MANUFACTURING  SEGMENT

<TABLE>
<CAPTION>
                  For the three months ended March 31,
                  ----------------------------------
                        2004              2003
                  ----------------  ----------------
<S>               <C>       <C>     <C>       <C>
Revenues. . .     $635,457  100.0%  $651,000  100.0%
Cost of revenues   482,598   75.9%   613,000   94.2%
                  --------  ------  --------  ------

Gross Profit.     $152,859   24.1%  $ 38,000    5.8%
                  ========  ======  ========  ======
</TABLE>

Revenues  in  the  Manufacturing segment decreased 2% for the three-month period
ended  March  31,  2004  as  compared  to  the  same  period  in  2003.

Gross  profit  improved  significantly  to  24.1%  due  to  the  streamlining in
manufacturing  processes  brought  about  by  the  Company obtaining longer term
contracts, which led to cost efficiencies in both overhead labor, purchasing and
production.


                                       21
<PAGE>

OPERATING  EXPENSES

                                  Three months      Three months
                                     ended             ended
                                March  31,  2004  March  31,  2003  Increase
                                ----------------  ----------------  --------
Selling, general and
    administrative  expenses        $ 13,951,585        $  124,900    11070%

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES  -  Selling,  general  and
administrative  ("SG&A")  expenses  increased  11070% for the three-month period
ended  March  31,  2004  as  compared  to  the  same  period  in  2003.

During  the  quarter  ended  March  31, 2004, there was $11,418,038 recorded for
stock-based  consulting  compensation.  The  impact  caused  an  expense  to the
Company. However, the grant of the options to Mr. Robert Genovese also increased
additional  paid-in  capital  by  $11,418,038. In addition, the Company recorded
approximately $2,065,000 of investor relations expenses during the first quarter
of  2004.  These  expenses  relate to the implementation of the initial investor
awareness/relations  services  such  as  broker/analyst  meetings,  contracts,
mailings  to brokers and analysts, investment advisors and individual investors.

The  wholly-owned  subsidiary,  Spectrum  Sciences  &  Software,  Inc.  also had
increased  legal  and  accounting  costs  of  $162,720.  This  is  due  to costs
associated  with  the  filings  with  the  Securities  and  Exchange Commission.

These  types  of  expenses were not present in the quarter ended March 31, 2003.


                                       22
<PAGE>

OTHER  INCOME  AND  EXPENSES

INTEREST  INCOME AND EXPENSE, NET - Net interest expense was $63,486 and $66,553
for  the  three-month  period  ended  March 31, 2004 and 2003, respectively. The
reduction  of  $3,067  is  due  to  the  decrease  of  principal  balances  due.

OTHER INCOME AND EXPENSE, NET - Net other income was $50,535 and $43,904 for the
three-month period ended March 31, 2004 and 2003, respectively.  The increase of
$6,631 is attributed primarily to the increase in monthly rental income from L-3
Communications which was $15,117 per month in 2003 to $16,520 per month in 2004.

CAPITAL RESOURCES AND  LIQUIDITY

Cash  and  cash equivalents increased $705,278 as of March 31, 2004, as compared
to  December  31,  2003.  At  March  31,  2004,  cash  and  equivalents  totaled
$1,402,237, as compared with $696,959 at December 31, 2003.  As of May 18, 2004,
the  Company  had  $28,848,525  in  a  money  market  account as a result of the
exercise  of  stock  options.

At  March  31,  2004,  working  capital  was $1,208,004, as compared to negative
working  capital  of  <$1,182,912>  at  December  31,  2003.

At March 31, 2004, the current ratio was 1.45, as compared to a ratio of 0.69 at
December  31,  2003.


ITEM  3.     CONTROLS  AND  PROCEDURES

The  effectiveness of our or any system of disclosure controls and procedures is
subject to certain limitations, including the exercise of judgment in designing,
implementing and evaluating the controls and procedures, the assumptions used in
identifying  the  likelihood  of  future  events, and the inability to eliminate
misconduct  completely.  As  a  result,  there  can  be  no  assurance  that our
disclosure  controls  and  procedures will prevent all errors or fraud or ensure
that  all material information will be made known to appropriate management in a
timely  fashion.  By  their nature, our or any system of disclosure controls and
procedures  can provide only reasonable assurance regarding management's control
objectives.

Our  current  principal  executive  officer  and  principal  financial  officer
evaluated  the effectiveness of the Company's disclosure controls and procedures
(as  defined  in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended) as of March 31, 2004, the end of the period covered by this
report.  Based  on this evaluation, subject to limitations identified below, the
Company's  current  principal  executive officer and principal financial officer
concluded that the Company's controls and procedures (as referenced in paragraph
4(c)  of their certifications filed as exhibits hereto) were generally effective
in  providing reasonable assurance that the information required to be disclosed
in this report has been recorded, processed, summarized and reported as of March
31,  2004.  During  the three month period ended March 31, 2004, the Company has
not  made  any  change  in  its  internal  controls over financial reporting (as
referenced  in  paragraph 4(d) of their certifications filed as exhibits hereto)


                                       23
<PAGE>

that  has materially affected, or are reasonably likely to materially affect the
Company's  internal  control  over  financial  reporting.

As disclosed in substance in the Company's FORM 10-KSB filed with the Securities
and  Exchange  Commission  on  March  14, 2004, the Company historically has not
employed  certain  controls and procedures other public companies use to provide
assurance  as  to disclosure.  For example, the Company does not have a standing
audit  committee  of the Board of Directors or a financial expert serving on the
Board  of  Directors  or  employed  as  an  officer who meets the criteria for a
financial  expert  under  Item 401(e) of Regulation S-B.  In addition, there has
been  substantial  turnover  in  our  senior  management and Board of Directors.

In  response  to  the  SEC  inquiry  discussed  in  Note  13 to the Consolidated
Financial  Statements  and  Item  5  of  Part II of this report, the Company has
retained  counsel to represent the Company in the SEC inquiry.  Through counsel,
the  Company  is  reviewing transactions and other matters that appear to be the
subject  of the SEC inquiry and is unable to predict at this time the outcome of
its  review  or the SEC inquiry or the potential impact on the assessment of the
adequacy  of  our  internal  controls  and  procedures.


                                       24
<PAGE>

                           PART II - OTHER INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS

Trident  Metals
---------------

As of March 31, 2004, the balance of the debt to The Trident Company is $17,635.
All  funds  due  to  The Trident Company were paid in full on April 6, 2004. The
subsequent  Dismissal  with Prejudice was filed with the District Court of Tulsa
County,  State  of  Oklahoma  on  April  29,  2004.

Harassment  Suit
----------------
In  December  2002,  three  Spectrum  Sciences and Software, Inc. 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  are  no  damage  amounts  specified  in  any of the
actions.  The  plaintiffs  are  requesting  the following: Compensatory damages,
plus  special  incidental  damages  in  such  a  sum  as may be proven at trial;
punitive damages in such a sum as may be proven at trial; for cost for the suit;
for  attorney's  fees;  and  for  other  such relief as the Court deems just and
proper.  The  Company  intends  to  vigorously  defend  its  position.

As  of  May  13,  2004, the cases have progressed through the establishment of a
case management plan with the courts and a consolidation of all the cases into a
single  action.  Plaintiff  and  Defendant Depositions were taken and additional
discovery  is  ongoing.  Spectrum  does  not  know  what  the  outcome  of  this
litigation  will  be.

Inland  Fabricators
-------------------

On  March  31, 2004, Spectrum Sciences & Software Holdings Corp. (the "Company")
signed  a  Letter  of  Intent (LOI) to acquire all of the issued and outstanding
membership  interests  (the  "Members")  of  Inland  Fabricators, LLC, a Limited
Liability  Company  organized  under  the  laws  of  Louisiana  ("IFAB"), or its
nominees  or assignees, or acquire IFAB by merger with a subsidiary of Acquiror.
The  LOI  is  not  binding, and the transaction is subject to the execution of a
definitive  acquisition  agreement  by  both  parties.

Pursuant  to  the  LOI, if the acquisition goes forward, the Company is to issue
shares  of  its common stock to the Members in consideration for their interests


                                       25
<PAGE>

in  IFAB.  The Company will place 4,000,000 shares of common stock in escrow and
the  shares  will  be  released  from escrow in amounts and from time to time as
based  on  an  agreed  formula.

On  May  6,  2004,  the Company provided guarantees in the amount of $500,000 to
secure an Irrevocable Letter of Credit ("LOC") in favor of a major international
construction  firm.  The  LOC  provided  the necessary performance guarantee for
IFAB  under a previously negotiated Purchase Order with that major international
construction  firm.

On  May 6, 2004, a creditors group consisting of Modern Valve, Inc., Thomas Pipe
&  Steel,  L.L.C.,  Radnor  Alloys, Inc., Portable Machine Works, Inc., Analytic
Stress  Relieving, Inc. and Custom Blast Services, Inc. filed suit no. 519924 in
the 19th Judicial District court, Parish of East Baton Rouge, State of Louisiana
against  various  individuals and Members of IFAB.  Spectrum Sciences & Software
Holdings  Corporation was not named as a party to the suit, however, mention was
made  of  Spectrum's  LOI for a purchase of Inland Fabricators, L.L.C.  The suit
alleges  amongst  other  issues  that  IFAB as successor to Thomas Inland Marine
L.L.C.,  Pipeworks,  Inc., Pipeworks Reserve, Inc., and Pipeworks Venezuela owes
certain  sums  to  the  Creditor  Group  based on debt incurred by Thomas Inland
Marine  and  Pipeworks  et  al.  Due  diligence  is  continuing  on  the planned
Spectrum/IFAB  merger.  The  potential  outcome  of  the  Creditors suit and its
impact  on  the  potential  merger  is  undetermined  at  this  time.

Business  &  Commercial  Brokerage  Inc.  Settlement
----------------------------------------------------

In  April  1,  2004, the Company paid the final payment of $10,000 to Business &
Commercial  Brokerage  Inc.  and  obtained  a  signed  release acknowledging the
receipt  of all sums for full compromise settlement against the previously filed
suit. On April 7, 2004, a Notice of Voluntary Dismissal was filed in the Circuit
Court  for  Escambia  County  Florida.

Loan  Modification  and  Extension  Agreement  Debt  Repayment
--------------------------------------------------------------

All  unsecured debt to SouthTrust Bank has been paid, leaving only the mortgages
for  the  91  Hill Ave. headquarters building, and the corporate condominium.  A
payment  of  $371,250 was made to SouthTrust on March 31, 2004, which was 25% of
the  first  cash  exercise  of  options  by Robert Genovese, ($1,485,000 X .25%=
$371,250).  This  25%  was  required  in  the  SouthTrust  Loan Modification and
Extension  Agreements. A payment of $190,628 was made to SouthTrust on April 15,
2004,  which  paid  all  other  unsecured  debt  with  SouthTrust  Bank.

IRS  Tax  Lien
--------------
On  March  17,  2004, the company made its final payment to the IRS and received
its  release  of  lien  on  March  19,  2004.


ITEM  2.     CHANGES  IN  SECURITIES

Exercise  of  Options  by  Mr.  Robert Genovese
-----------------------------------------------

Mr. Robert Genovese was awarded options to purchase 9,000,000 shares of Spectrum
stock  on  March  11, 2004.  As of March 31, 2004, Mr. Genovese filed Notices of
Exercise for 2,800,000 options.  Those shares had an exercise price of $1.65 per
option.  The  first  exercise  was  on  March  12, 2004 for 900,000 shares.  Mr.
Genovese elected to convert debt in lieu of cash for approximately $1,485,000 as
payment  for  these options.  This first exercise completely eliminated all past


                                       26
<PAGE>

non-investor  relations debt to Mr. Genovese.  The second Notice of Exercise was
on  March  15, 2004 for 900,000 shares.  The Company received $1,485,000 in cash
from  Mr.  Genovese for those shares.  On March 19, 2004, Mr. Genovese presented
the company with a Notice of Exercise for 1,000,000 shares.  This third exercise
of shares was paid for by a second debt conversion of $1,650,000 by Mr. Genovese
for  his  company Endeavor Capital.  This $1,650,000 in debt to Endeavor Capital
Corp. is debt directly related to all invoices presented to Spectrum by Endeavor
Capital  Corp.  for  its  work  performed  in the area of investor relations and
publicity.


ITEM  3.     DEFAULTS  IN  SENIOR  SECURITIES

Not  applicable.


ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

Not  applicable.


ITEM  5.     OTHER  INFORMATION

By  letter  dated April 28, 2004, the Company was informed that the Staff of the
Securities  and  Exchange  Commission's  (SEC),  Division  of  Enforcement  is
conducting  an  informal  inquiry  into  the  Company.  In conjunction with that
inquiry,  the  SEC's  Staff  has  requested  the  Company to voluntarily provide
certain  documents  and  information  related  to,  among  other  things:

-    the  Company's  relationship  with  Robert Genovese, Endeavor Capital Group
     Ltd.  and  B.G. Capital Group Ltd., including transactions in the Company's
     securities  and  options  therefor;
-    the  Company's  press  releases, public announcements and other promotional
     activities;
-    the  resignation  of  Donal  Myrick  in  March  2004;  and
-    the  listing  of  the Company's securities for trading on any foreign stock
     exchanges.

The  Company  is  cooperating  fully  with  the  SEC  inquiry.

In  light  of  this  inquiry  and pending further review, the Company's Board of
Directors  elected  to  suspend  the  current  consulting  agreement between the
Company  and  Robert  Genovese.


                                       27
<PAGE>

ITEM  6.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

a)     Exhibits:

10.1  Stock  Option  Agreement  dated  April  20,  2004  by and between Spectrum
Sciences  &  Software  Holdings  Corp.  and  Robert  Genovese.

10.2  Stock  Option  Agreement  dated  April  20,  2004  by and between Spectrum
Sciences  &  Software  Holdings  Corp.  and  Robert  Genovese.

b)     Reports  on  Form  8-K:

(i)  The  Company filed a report on Form 8-K on January 21, 2004 with the United
     States Securities and Exchange Commission. This report covered Items 5 & 7.

(ii) The  Company filed a report on Form 8-K on January 26, 2004 with the United
     States Securities and Exchange Commission. This report covered Items 5 & 7.

(iii)  The  Company  filed  a  report  on Form 8-K on February 11, 2004 with the
     United States Securities and Exchange Commission. This report covered Items
     5  &  7.

(iv) The  Company  filed  a report on Form 8-K on March 12, 2004 with the United
     States Securities and Exchange Commission. This report covered Items 5 & 7.

(v)  The  Company  filed  a report on Form 8-K on March 30, 2004 with the United
     States Securities and Exchange Commission. This report covered Items 6 & 7.


                                       28
<PAGE>

                                   SIGNATURES


Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on this 24th day of
May  2004.


                                      SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP


                                             /s/ William H. Ham
                                        By:  -----------------------------------
                                             William H. Ham, President and Chief
                                             Executive Officer


The  undersigned,  the Chief Financial Officer of the Registrant, certifies that
this  report complies with all of the requirements of section 13(a) and 15(d) of
the  Exchange  Act and the information contained in this report fairly presents,
in  all  material respects, the financial condition and results of operations of
the  Registrant.

                                                         Date:  May  24,  2004

                                                         /s/ Nancy  C.  Gontarek
                                                         -----------------------
                                                         Nancy  C.  Gontarek,
                                                         Chief Financial Officer


                                       29
<PAGE>