UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 28, 2006
HALIFAX CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 1-08964 54-0829246
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
5250 Cherokee Avenue, Alexandria, Virginia 22312
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code:(703)658-2400
N/A
Former name, former address, and former fiscal year, if changed since
last report
Check the appropriate box below if the Form 8-K filing is intended to
satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act(17 CFR 240.13e-4(c))
FOREWARD-LOOKING STATEMENTS
Certain statements in this Currant Report on Form 8-K constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. While forward-looking
statements sometimes are presented with numerical specificity, they are
based on various assumptions made by management regarding future events
over which we have little or no control. Forward-looking statements
may be identified by words including "anticipate," "believe,"
"estimate," "expect" and similar expressions. We caution readers that
forward-looking statements, including without limitation, those
relating to future business prospects, revenues, working capital,
liquidity, and income, are subject to certain risks and uncertainties
that would cause actual results to differ materially from those
indicated in the forward-looking statements. Factors that could cause
actual results to differ from forward-looking statements include the
concentration of our revenues, risks involved in contracting with our
customers, including difficulties to accurately estimate costs when
bidding on a contract and the occurrence of start-up costs prior to
receiving revenues and contract with fixed price provisions, government
contracting risks, potential conflicts of interest, difficulties we may
have in attracting and retaining management, professional and
administrative staff, fluctuation in quarterly results, risks related
to acquisitions and acquisition strategy, continued favorable banking
relationships, the availability of capital to finance operations and
ability to make payments on outstanding indebtedness, weakened economic
conditions, acts of terrorism, risks related to competition and our
ability to continue to perform efficiently on contracts, and other
risks and factors identified from time to time in the reports we file
with the Securities and Exchange Commission ("SEC"), including our
Annual Report on Form 10-K. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or projected.
Forward-looking statements are intended to apply only at the time they
are made. Moreover, whether or not stated in connection with a forward-
looking statement, the Company undertakes no obligation to correct or
update a forward-looking statement should we later become aware that it
is not likely to be achieved. If the Company were to update or correct
a forward-looking statement, you should not conclude that the Company
will make additional updates or correction thereafter.
ITEM 8.01 OTHER EVENTS
On June 30, 2005, we simultaneously entered into and closed on an asset
purchase agreement (the "Agreement") with INDUS Corporation ("Indus"),
pursuant to which we sold substantially all of the assets and certain
liabilities of our secure network business. The purchase price was
approximately $12.5 million, subject to adjustments as provided in the
Agreement, based on the net assets of the business on the closing
date. The Agreement also provided that $3.0 million of the purchase
price was held in escrow (the "Escrow"). The terms of the Agreement,
including the Escrow, are as set forth in the Form 8-K filed with the
SEC on July 1, 2005, as amended on Form 8-K/A, on July 7, 2005.
Pursuant to the Escrow, on July 8, 2005, we received $1,000,000 and
January 26, 2006, we received $1,375,000. On or about December 31,
2006, an additional $625,000 from escrow, which was being held as
security for our indemnification obligations under the Agreement, was
to be disbursed to us. However, on December 28, 2006, we received a
Notice of Claim from Indus, pursuant to which Indus alleged various
breaches of certain representations and warranties in the Agreement by
us. Indus takes the position that these alleged breaches entitle Indus
to indemnification. As a result, Indus further takes the position
that the entire amount remaining in Escrow which totaled $625,000, plus
interest, should be disbursed to Indus. We delivered a Response Notice
to the escrow agent and Indus and disputed the claims of Indus set
forth in its Notice of Claim.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HALIFAX CORPORATION
Date: January 5, 2007 By: /s/Joseph Sciacca
Joseph Sciacca
Vice President, Finance & CFO