Science Dynamics Issues Letter to Shareholders
Wednesday January 18, 9:28 am ET

Company Expects to be EBITDA Positive in Q1 '06, Contract Backlog More Than $14M

PENNSAUKEN, N.J., Jan. 18 /PRNewswire-FirstCall/ -- Science Dynamics Corporation
(OTC Bulletin Board: SIDY - News), a provider of advanced technological
solutions to the Department of Defense, key government agencies and commercial
markets, issued the following letter from CEO Paul Burgess:

To Our Shareholders and Investors,

I am pleased to report that we made progress on a number of key initiatives in
2005. As we look forward, we have every reason to believe 2006 will be
significantly stronger in terms of strengthening our company financially and
positioning us for future success.

The past year was critical in making the transition from an inmate telephony
company to an organization providing advanced technological solutions to
government and commercial markets. Acquiring Systems Management Engineering,
Inc. (SMEI) early in the year was instrumental in enabling us to significantly
expand our proprietary technology and technical expertise in telecommunications
and information technology. We have completely and successfully integrated SMEI
and Science Dynamics (SciDyn) operations. We're already realizing SG&A synergies
between the two organizations and anticipate further benefits throughout the new
year. Most importantly, the acquisition enabled us to leverage the capabilities
of both companies in product development and customer reach, which, combined
with the cost efficiencies, moves us closer to profitability.

I expect SciDyn to be EBITDA positive in Q1 of 2006. We have increased our
contractual engagements with the federal government from task-based contracts to
multi-year contracts. Our contract backlog has increased to over $14 million.
We've made significant progress in strengthening the balance sheet and intend to
continue our refinancing efforts. We're also looking to access capital that
minimizes shareholder dilution and can be managed with an eye on the company's
cash flow.

November in particular was a significant month for Science Dynamics. We
successfully renegotiated the terms of an outstanding secured convertible term
note and realized significant savings. In addition to deferring over $420,000 in
past due principal payments, we were also able to waive almost $260,000 in
interest owed and eliminate $600,000 in potential damages. That same month we
also established a line of credit with Presidential Financial to provide us with
working capital as needed to grow the software solutions business. These efforts
combined give us additional financial resources and flexibility to help expand
our service. While we don't have our 2005 year-end financial results yet, we
were encouraged by the $1,119,135 in revenues we realized in Q3 of 2005, an 86%
increase over the previous year. Revenues for the nine months ended September
30, 2005 of $3,248,699 represented an 87% increase in the comparable period in
2004. I believe this top-line growth underscores the success of our acquisition
strategy and highlights the positive contribution made by SMEI. Our priorities
in 2006 are to further ramp up sales, integrate accretive acquisitions and
improve the bottom line.

We also intend to increase our visibility this year, both on Wall Street and
within the federal software solutions space. Our team is driven to increase
shareholder value through organic growth and acquisitions throughout the year.
With regards to our acquisition strategy, we will continue to pursue profitable
companies with proprietary products and services we can sell to our existing
customers and which have synergies with our existing business.

I am encouraged that the stock recently traded at significantly higher volumes.
As our company's financial position continues to improve, we expect the market
valuation to match the improved results. I may take advantage of recent prices
to buy shares in the open market.

As always, I appreciate the support of our long-term shareholders, directors and
employees. I will continue to work hard throughout the new year to increase our
company's value.




            Paul Burgess
            CEO and President

About Science Dynamics Corporation

Headquartered in Pennsauken, N.J., Science Dynamics Corporation is a provider of
advanced technological solutions to the Department of Defense, key government
agencies and commercial markets. The company has nearly 25 years of experience
in designing, deploying and managing highly secure advanced software and
telecommunications solutions for federal government departments, agencies and
mid- to large-sized enterprises. Science Dynamics Corporation's
telecommunications solutions are installed in over 30,000 ports throughout 18
countries worldwide. For more information, visit http://www.scidyn.com . About
Systems Management Engineering, Inc.

Science Dynamics owns 82% of SMEI. SMEI has developed advanced data management
applications, Internet server technology and information systems that it markets
to both public and private sectors. SMEI's product, Aquifer, helps its customers
reduce development time for projects, manage the deployment of applications
across the Internet to desktops around the world and implement military-grade
security on all systems where the applications are deployed. For more
information about SMEI, visit http://www.sysmanagement.com . An investment
profile about Science Dynamics may be found at
http://www.hawkassociates.com/sciencedynamics/profile.htm.

For investor relations information regarding Science Dynamics, contact Frank
Hawkins or Julie Marshall, Hawk Associates, at (305) 451-1888, e-mail:
info@hawkassociates.com . An online investor relations kit including press
releases, current price quotes, stock charts and other valuable information for
investors may be found at http://www.hawkassociates.com and
http://www.americanmicrocaps.com.

Forward-Looking Statements: Certain statements made in this press release by
Science Dynamics Corporation are forward-looking statements. Although such
statements are based on current expectations, they are subject to a number of
future uncertainties and risks, and actual results may differ materially. The
uncertainties and risks include, but are not limited to, the acquisition by
Science Dynamics Corporation of Systems Management Engineering, Inc. and the
successful operation of Systems Management Engineering, Inc. post-acquisition,
additional potential acquisitions of Science Dynamics Corporation and the
ability of Science Dynamics Corporation to effectively execute its business plan
and develop a successful business. Any forward-looking statements are made
pursuant to the Private Securities Litigation Reform Act of 1995 and, as such,
speak only as of the date made. Statements made in this document that are not
purely historical are forward-looking statements, including any statements as to
beliefs, plans, expectations, anticipations or intentions regarding the future.
Science Dynamics Corporation assumes no obligation to update information
concerning the forward-looking statements contained herein.

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Source: Science Dynamics Corporation