** **

** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

** **

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** **

**FORM 10-Q/A**

**Amendment No. 2**

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| x | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|---|---------------------------------------------------------------------------------------------------------|

** **

**FORTHE QUARTER ENDED March 31, 2006.**

 
| o | **TRANSITION REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|---|----------------------------------------------------------------------------------------------------------|

** **

**COMMISSION FILE NUMBER: 0-51552**

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**FEDERALSERVICES ACQUISITION CORPORATION**

(Exactname of registrant as specified in its charter)

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| **Delaware**                                                     | **11-3747850**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) | (I.R.S. Employer  Identification No.) |

 

**900Third Avenue, 33****rd FloorNew York, New York, 10022-4775**

(Address of principal executive office)

 

**(646) 403-9765**

(Registrant’s telephone number, including areacode)

** **

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Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months and (2) has been subject to suchfiling requirements for the past 90 days.   Yes  x    No  o

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer or a non-accelerated filer. See definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  o   Accelerated Filer  o      Non-accelerated Filer  x

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes  x    No  o

The number of shares of the issuer’s Common Stock,$0.0001 par value, outstanding as of April 30, 2006 was 26,250,000.

 

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**FEDERAL SERVICES ACQUISITION CORPORATION**

**Table of Contents**

**ExplanatoryNote:**

This Quarterly Report on Form 10-Q/A is being filed asAmendment No. 2 to our Quarterly Report on Form 10-Q, which was originallyfiled with the Securities and Exchange Commission on May 15, 2006 andsubsequently amended on September 29, 2006. Amendment No. 1 was filed to restate our financial statements for thequarter ended March 31, 2006 to reflect non-operating gains and losses relatedto the classification and accounting for the warrants to purchase common stockassociated with the units sold in our initial public offering.

This Amendment No. 2 does not amend the financial dataas reflected in Amendment No. 1, but does conform certain disclosures in NoteC[2] to the financial statements with disclosures that will be reflected in thedefinitive proxy statement for our special meeting of stockholders at which ourproposed acquisition of Advanced Technology Systems, Inc., among otherproposals, will be voted upon.

This Amendment No. 2 amends only certain informationin Part I – Item 1, Financial Statements, as a result of the amendmentsdescribed above.

In addition, we are also including currently datedSarbanes-Oxley Act Section 302 and Section 906 certifications of the Chief ExecutiveOfficer and Chief Financial Officer that are attached to this Form 10-Q/A asExhibits 31.1, 31.2, and 32.1.

For the convenience of the reader, this Form 10-Q/Asets forth the entire Form 10-Q which was prepared and relates to the Companyas of March 31, 2006.  However, this Form10-Q/A only amends the Item described above to conform the disclosures referredto above to those to be included in our definitive proxy statement.  Accordingly, except for the foregoing amendedinformation and the amendments reflected in Amendment No. 1, this Form 10-Q/Acontinues to speak as of May 15, 2006 (the original filing date of the March31, 2006 Form 10-Q), and does not reflect events occurring after the filing ofour March 31, 2006 Form 10-Q and does not modify or update those disclosuresaffected by subsequent events. Forward-looking statements made, and risk factors described, in theMarch 31, 2006 Form 10-Q have not been revised to reflect events, results ordevelopments that have become known to us after the date of the original filing(other than the restatements included in Amendment No. 1), and suchforward-looking statements should be read in their historical context.  Unless otherwise stated, the information inthis Form 10-Q/A is unchanged and reflects the disclosures made at the time ofthe original filing as previously amended.

2

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** **

**Table of Contents**

**TABLE OF CONTENTS**
|                                            | ** **                                                                                                                                                                                                                | ** ** | ** ** |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
| **PART I—FINANCIAL INFORMATION** |                                                                                                                                                                                                                      |       |
| ** **                                 | ** **                                                                                                                                                                                                                |       |       |
| **Item 1.**                                | **Financial Statements**                                                                                                                                                                                                  |       |       |
|                                       | Condensed  Balance Sheets as of March 31, 2006 (unaudited) and as of  December 31, 2005                                                                                                                         |       |       |
|                                       | Condensed Statements of Operations (unaudited) for the  three months ended March 31, 2006 and the period from April 12,  2005 (date of inception) through March 31, 2006                                   |       |       |
|                                       | Condensed Statements of Changes in Stockholders’  Equity for the period from April 12, 2005 (date of inception) through  December 31, 2005 and (unaudited) for the three months ended  March 31, 2006 |       |       |
|                                       | Condensed Statements of Cash Flows (unaudited) for the  three months ended March 31, 2006 and the period from April 12,  2005 (date of inception) through March 31, 2006                                   |       |       |
|                                       | Notes to Unaudited Financial Statements                                                                                                                                                                                   |       |       |
|                                       |                                                                                                                                                                                                                      |       |       |
| **Item 2.**                           | **Management’s Discussion and Analysis of Financial  Condition and Results of Operation**                                                                                                                            |       |       |
| **Item 3.**                           | **Quantitative and Qualitative Disclosures about Market  Risk**                                                                                                                                                           |       |       |
| **Item 4.**                           | **Controls and Procedures**                                                                                                                                                                                               |       |       |
|                                       |                                                                                                                                                                                                                      |       |       |
| **PART II—OTHER  INFORMATION**   |                                                                                                                                                                                                                      |       |
|                                       |                                                                                                                                                                                                                      |       |       |
| **Item 1.**                           | **Legal  Proceedings**                                                                                                                                                                                                    |       |       |
| **Item  1A.**                              | **Risk  Factors**                                                                                                                                                                                                         | ** ** |       |
| **Item 2.**                           | **Unregistered Sales of Equity Securities and Use of  Proceeds**                                                                                                                                                          |       |       |
| **Item 3.**                           | **Defaults upon Senior Securities**                                                                                                                                                                                       |       |       |
| **Item 4.**                                | **Submission of Matters to Vote by Securities Holders**                                                                                                                                                                   | ** ** |       |
| **Item 5.**                           | **Other  Information**                                                                                                                                                                                                    |       |       |
| **Item 6.**                           | **Exhibits**                                                                                                                                                                                                              |       |       |
|                                       |                                                                                                                                                                                                                      |       |       |
| **SIGNATURES**                             |                                                                                                                                                                                                                      |       |       |

 

3

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**Federal Services AcquisitionCorporation**(a development stage company)**Condensed Balance Sheets**

|                                                                                                                                                                              | ** ** | **March 31, 2006  (Unaudited)** | ** **  | **December 31, 2005** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------|-------------|---------------------------------|------------|
| ** **                                                                                                                                                                   | ** ** | ****                                      | ** **  | **(See Note I)**                | ** ** |
| **ASSETS**                                                                                                                                                                   | ** ** | ** **                                | ** **  | ** **                      | ** ** |
| Current assets:                                                                                                                                                              |       |                                      |        |                            |       |
| Cash and cash equivalents                                                                                                                                                    |       | $                                         | 1,666,725   |                            | $          | 1,855,394 |   |
| Prepaid expenses                                                                                                                                                             |       | 46,808                                    |        | 72,122                          |       |
| Total current assets                                                                                                                                                         |       | 1,713,533                                 |        | 1,927,516                       |       |
| Short-term investments held in Trust Account  (including interest receivable of $59,921 and $39,444, respectively) (fair  value $118,280,141 and $117,709,036, respectively) |       | 118,280,141                               |        | 117,709,036                     |       |
| Cash and cash equivalents held in trust fund                                                                                                                                 |       | 452,086                                   |        | 281,348                         |       |
| Deferred income tax benefit                                                                                                                                                  |       | 296,387                                   |        | 34,629                          |       |
| Total assets                                                                                                                                                                 |       | $                                         | 120,742,147 |                            | $          | 119,952,529 |   |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                               | ** ** | ** **                                | ** **  | ** **                      | ** ** |
| Current liabilities:                                                                                                                                                         |       |                                      |        |                            |       |
| Accrued expenses                                                                                                                                                             |       | $                                         | 425,519     |                            | $          | 34,289 |   |
| Income tax payable—current                                                                                                                                              |       | 427,111                                   |        | 356,000                         |       |
| Deferred income tax                                                                                                                                                          |       | 27,036                                    |        | 15,714                          |       |
| Warrant liabilities                                                                                                                                                          |       | 30,660,000                                |        | 19,740,000                      |       |
| Total current liabilities                                                                                                                                                    |       | 31,539,666                                |        | 20,146,003                      |       |
| Common Stock,  subject to possible redemption 4,197,900 shares                                                                                                               |       | 23,424,282                                |        | 23,424,282                      |       |
| Interest income  attributable to common stock subject to possible redemption (net of taxes of  $170,135 and $64,000, respectively)                                           |       | 227,089                                   |        | 97,996                          |       |
| Total common stock, subject to possible redemption                                                                                                                           |       | 23,651,371                                |        | 23,522,278                      |       |
| COMMITMENTS AND  CONTINGENCIES (Note J)                                                                                                                                      | ** ** | ** **                                | ** **  | ** **                      | ** ** |
| STOCKHOLDERS’  EQUITY:                                                                                                                                                  | ** ** | ** **                                | ** **  | ** **                      | ** ** |
| Preferred  stock—$.0001 par value; 1,000,000 shares authorized; 0 issued and outstanding                                                                                |       |                                      |        |                            |       |
| Common stock—$.0001 par value, 100,000,000 shares  authorized; 26,250,000 issued and outstanding (which includes 4,197,900  shares subject to possible redemption)      |       | 2,625                                     |        | 2,625                           |       |
| Additional paid-in capital                                                                                                                                                   |       | 81,467,698                                |        | 81,467,698                      |       |
| Deficit accumulated during the development stage                                                                                                                             |       | (15,919,213                               | )           | (5,186,075                      | )          |
| Total stockholders’ equity                                                                                                                                              |       | 65,551,110                                |        | 76,284,248                      |       |
|                                                                                                                                                                         |       | $                                         | 120,742,147 |                            | $          | 119,952,529 |   |

 

See notesto condensed financial statements

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** **

**Federal Services AcquisitionCorporation**(a development stage company)**Condensed Statements of Operations(Unaudited)**
| ** **                                                                                                                         | ** ** | **For the Three  Months ended  March 31,  2006** | ** **  | **For the period  from  April 12, 2005  (date of inception)  through  March 31, 2006** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------|-------------|--------------------------------------------------------------------------------------------------------------------------------|------------|
| Expenses:                                                                                                                          |       |                                                                 |        |                                                                                                                           |       |
| Operating costs                                                                                                                    |       | $                                                                    | 610,197     |                                                                                                                           | $          | 743,358 |   |
| Other income (loss):                                                                                                               |       |                                                                 |        |                                                                                                                           |       |
| Bank interest                                                                                                                      |       | 12,984                                                               |        | 21,767                                                                                                                         |       |
| Interest on cash and short term investments held in  trust                                                                         |       | 1,176,728                                                            |        | 1,987,112                                                                                                                      |       |
| Loss on warrant liabilities                                                                                                        |       | (10,920,000                                                          | )           | (16,380,000                                                                                                                    | )          |
| Total other income (loss)                                                                                                          |       | (9,730,288                                                           | )           | (14,371,121                                                                                                                    | )          |
| **Loss before  provision for income taxes**                                                                                        |       | (10,340,485                                                          | )           | (15,114,479                                                                                                                    | )          |
| Provision for income  taxes:                                                                                                       |       |                                                                 |        |                                                                                                                           |       |
| Current                                                                                                                            |       | (513,996                                                             | )           | (846,996                                                                                                                       | )          |
| Deferred                                                                                                                           |       | 250,436                                                              |        | 269,351                                                                                                                        |       |
| **Net loss**                                                                                                                       |       | (10,604,045                                                          | )           | (15,692,124                                                                                                                    | )          |
| Interest income  attributable to common stock subject to possible redemption (net of taxes of  $106,135 and $170,135 respectively) |       | (129,093                                                             | )           | (227,089                                                                                                                       | )          |
| Net loss allocable  to common stockholders not subject to possible redemption                                                      |       | $                                                                    | (10,733,138 | )                                                                                                                              | $          | (15,919,213 | ) |
| Weighted average number  of shares outstanding                                                                                     |       |                                                                 |        |                                                                                                                           |       |
| —basic and diluted                                                                                                            |       | 26,250,000                                                           |        |                                                                                                                           |       |
| Net loss per share                                                                                                                 |       |                                                                 |        |                                                                                                                           |       |
| —basic and diluted                                                                                                            |       | $                                                                    | (0.40       | )                                                                                                                              |       |   |
| Weighted average number  of shares outstanding exclusive of shares subject to possible redemption                                  |       |                                                                 |        |                                                                                                                           |       |
| —basic and diluted                                                                                                            |       | 22,052,100                                                           |        |                                                                                                                           |       |
| Net loss per share not  subject to possible redemption                                                                             |       |                                                                 |        |                                                                                                                           |       |
| —basic and diluted                                                                                                            |       | $                                                                    | (0.49       | )                                                                                                                              |       |   |

See notesto condensed financial statements.

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**Federal Services Acquisition Corporation**(a development stage company)****

**Condensed Statements of Changes inStockholders’ EquityFor the period from April 12, 2005 (date of inception) through March 31,2006**

 
| ** **                                                                                                                                                       | ** ** | **Common Stock** | ** ** | **Additional  Paid-In** | ** ** | **Deficit  accumulated  during  development** | ** ** | ** **  | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|-----------------------------------------------|------------|-------------|------------|
| ** **                                                                                                                                                       | ** ** | **Shares**            | ** ** | **Amount**              | ** ** | **Capital**                                   | ** ** | **stage**   | ** ** | **Total** | ** ** |
| **Balance—April 12, 2005  (date of inception)**                                                                                                        |       |                  |       |                    |       |                                          |       |        |       |   |   |
| Initial capital  from founding stockholders                                                                                                                      |       | 5,250,000             |       | $                       | 525        |                                          | $          | 5,475       |       | $ | — |   | $ | 6,000 |   |
| Sale of  21,000,000 units (including 4,197,900 shares of common stock subject to  possible redemption), net of underwriters’ discount and offering expenses |       | 21,000,000            |       | 2,100                   |       | 119,166,505                                   |       | —      |       | 119,168,605 |   |
| Reclassification  of proceeds allocated to warrants—derivatives liability                                                                                   |       | —                |       | —                  |       | (14,280,000                                   | )          | —      |       | (14,280,000 | ) |
| Reclassification  of 4,197,900 shares of common stock being subject to possible redemption                                                                       |       | —                |       | —                  |       | (23,424,282                                   | )          | —      |       | (23,424,282 | ) |
| Accretion of trust  fund relating to common stock subject to possible redemption                                                                                 |       | —                |       | —                  |       | —                                        |       | (97,996     | )          | (97,996 | ) |
| Net loss for the  period                                                                                                                                         |       | —                |       | —                  |       | —                                        |       | (5,088,079  | )          | (5,088,079 | ) |
| **Balance—December 31,  2005**                                                                                                                         |       | 26,250,000            |       | 2,625                   |       | 81,467,698                                    |       | (5,186,075  | )          | 76,284,248 |   |
| Accretion of  trust fund relating to common stock subject to possible redemption                                                                                 |       | —                |       | —                  |       | —                                        |       | (129,093    | )          | (129,093 | ) |
| Net loss for the  period                                                                                                                                         |       | —                |       | —                  |       | —                                        |       | (10,604,045 | )          | (10,604,045 | ) |
| **Balance—March 31, 2006  (Unaudited)**                                                                                                                |       | 26,250,000            |       | $                       | 2,625      |                                          | $          | 81,467,698  |       | $ | (15,919,213 | ) | $ | 65,551,110 |   |

See notesto condensed financial statements

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**FederalServices Acquisition Corporation**(a development stage company)**Condensed Statements of Cash Flows**

**(Unaudited)**
| ** **                                                                                                                         | ** ** | **For the Three  Months ended  March 31,  2006**                                                                                          | ** **  | **For the period from  April 12, 2005 (date  of inception)  through March 31,  2006** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Cash flows from operating activities:**                                                                      |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Net loss                                                                                                                      |       | $                                                                                                                                                             | (10,604,045 | )                                                                                                                                  | $          | (15,692,124 | ) |
| Adjustments to reconcile net loss to net cash  provided by operating activities: |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Deferred income tax                                                                                                      |       | (250,436)                                                                                                                                                     |        | (269,351)                                                                                                                          |       |
| Loss on warrant liabilities                                                                                                        |       | 10,920,000                                                                                                                                                    |        | 16,380,000                                                                                                                         |       |
| Changes in:                                                                                                                        |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Interest receivable                                                                                                                |       | (20,477                                                                                                                                                       | )           | (59,921                                                                                                                            | )          |
| Prepaid expenses                                                                                                                   |       | 25,314                                                                                                                                                        |        | (46,808                                                                                                                            | )          |
| Accrued expenses                                                                                                                   |       | 391,230                                                                                                                                                       |        | 425,519                                                                                                                            |       |
| Income taxes payable—current                                                                                                  |       | 71,111                                                                                                                                                        |        | 427,111                                                                                                                            |       |
|                                                                                                                               |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Net cash provided by operating activities                                                                                          |       | 532,697                                                                                                                                                       |        | 1,164,426                                                                                                                          |       |
| ** **                                                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| **Cash flows from investing  activities:**                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Purchase of U.S. government securities held in Trust  fund                                                                         |       | (118,220,220                                                                                                                                                  | )           | (353,068,878                                                                                                                       | )          |
| Maturities of U.S. government securities held in  Trust fund                                                                       |       | 117,669,592                                                                                                                                                   |        | 234,848,658                                                                                                                        |       |
| Cash held in Trust Fund                                                                                                            |       | (170,738                                                                                                                                                      | )           | (452,086                                                                                                                           | )          |
|                                                                                                                               |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Net cash used in investing activities                                                                                              |       | (721,366                                                                                                                                                      | )           | (118,672,306                                                                                                                       | )          |
| ** **                                                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| **Cash flows from financing  activities:**                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Proceeds from public offering, net of expenses                                                                                     |       | —                                                                                                                                                        |        | 119,168,605                                                                                                                        |       |
| Proceeds from notes payable to stockholders                                                                                        |       | —                                                                                                                                                        |        | 154,000                                                                                                                            |       |
| Repayment of notes to stockholders                                                                                                 |       | —                                                                                                                                                        |        | (154,000                                                                                                                           | )          |
| Proceeds from sale of common stock to founders                                                                                     |       | —                                                                                                                                                        |        | 6,000                                                                                                                              |       |
|                                                                                                                               |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Net cash provided by financing activities                                                                                          |       | —                                                                                                                                                        |        | 119,174,605                                                                                                                        |       |
| ** **                                                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| **Net  (decrease) increase in cash and cash equivalents**                                                                          |       | (188,669                                                                                                                                                      | )           | 1,666,725                                                                                                                          |       |
| Cash and cash  equivalents—beginning of period                                                                                |       | 1,855,394                                                                                                                                                     |        | —                                                                                                                             |       |
|                                                                                                                               |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Cash and cash  equivalents—end of period                                                                                      |       | $                                                                                                                                                             | 1,666,725   |                                                                                                                               | $          | 1,666,725 |   |
| ** **                                                                                                                         |       |                                                                                                                                                          |        |                                                                                                                               |       |
| **Supplemental Disclosure:**                                                                                                       |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Cash paid during the  period for:                                                                                                  |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Income taxes                                                                                                                       |       | $                                                                                                                                                             | 442,885     |                                                                                                                               | $          | 442,885 |   |
| Non-cash activities:                                                                                                               |       |                                                                                                                                                          |        |                                                                                                                               |       |
| Reclassification of common stock subject to possible  redemption                                                                   |       | $                                                                                                                                                             | —      |                                                                                                                               | $          | 23,424,282 |   |
| Accretion of trust fund relating to common stock  subject to possible redemption                                    |       |                  129,093                                                      |        |                  227,089                           |       |
| Warrant  obligation in connection with sale of units in offering                                                                   |       |                           — |        |             14,280,000                                                      |       |

See notesto condensed financial statements.

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**FEDERAL SERVICES ACQUISITION CORPORATION(a development stage company)**

**Notes to Condensed FinancialStatementsMarch 31, 2006**

**NOTE A[1]—BASIS OF PRESENTATION**

In theopinion of management, the accompanying unaudited condensed financialstatements contain all adjustments necessary to present fairly the financialposition of Federal Services Acquisition Corporation (the “Company”) and itsresults of operations and cash flows for the interim period presented. Suchfinancial statements have been condensed in accordance with the applicableregulations of the Securities and Exchange Commission and, therefore, do notinclude all disclosures required by accounting principles generally accepted inthe United States of America. These financial statements should be read inconjunction with Federal Services Acquisition Corporation’s audited financialstatements for the period from April 12, 2005 (Date of Inception) to December 31,2005 included on Form 10-K/A filed on September 29, 2006. Theresults of the Company’s operations for the interim period are not necessarilyindicative of the operating results for the full year.

**[2]   Prior restatement of initially issued financialstatements:**In September 2006,the Company previously concludedthat it was necessary to restate its annual financial statements for the periodended December 31, 2005 and for the interim periods ended March 31,2006 and June 30, 2006 to reflect non-operating gains and losses relatedto the classification of and accounting for the warrants to purchase commonstock associated with the units sold at the initial public offering of theCompany. The Company had initally classified the value ofthese warrants to purchase common stock, when applicable, as equity. Afterfurther review in connection with the preparation of Amendment No. 2 to theProxy Statement related to the acquisition contemplated by the Stock PurchaseAgreement dated April 19, 2006 by and among the Company, AdvancedTechnology Systems, Inc., a Virginia corporation (“ATS”) and shareholders ofATS, the Company had determined that theseinstruments should have been classified as liabilities and, therefore, the fairvalue of each instrument must be recorded as a liability on the Company’sbalance sheet. Changes in the fair values of these instruments resulted in adjustments to the amount ofthe recorded liabilities, and the corresponding gain or loss was recorded in the Company’sstatement of operations. At the date of the conversion of each warrant orportion thereof (or exercise of the warrants or portion thereof, as the casemay be), the corresponding liability will be reclassified as equity. See Note Ifor the restatement and reclassifications.

**NOTE B—ORGANIZATION AND BUSINESS OPERATIONS**

TheCompany was incorporated in Delaware on April 12, 2005. The Company wasformed to serve as a vehicle for the acquisition of an operating business in thefederal services and defense industries through a merger, capital stockexchange, asset acquisition, stock purchase or other similar businesscombination. The Company has neither engaged in any operations nor generatedrevenue to date. The Company is considered to be in the development stage andis subject to the risks associated with activities of development stagecompanies.

Theregistration statement for the Company’s initial public offering (“Offering”)was declared effective on October 19, 2005. The Company consummated theoffering on October 25, 2005 and received net proceeds of $119,169,000.The Company’s management has broad discretion with respect to the specificapplication of the net proceeds of the Offering, although substantially all ofthe net proceeds of the Offering are intended to be generally applied towardconsummating a business combination with (or acquisition of) an operatingbusiness in the federal services and defense industries (“Business Combination”).Nonetheless, there is no assurance that the Company will be able tosuccessfully effect a Business Combination. As of March 31, 2006, anamount of $118,732,227 including interest receivable of $59,921 of the netproceeds is being held in a trust account (“Trust Account”) and is invested inU.S. government securities, and cash or cash equivalents until the earlier of (i) theconsummation of its first Business Combination or (ii) the distribution ofthe Trust Account to the Company’s public stockholders. The remaining proceedsmay be used to pay for business, legal and accounting due diligence onprospective acquisitions and continuing general and administrative expenses.The Company, after signing a definitive agreement for the acquisition of atarget business, will submit such transaction for stockholder approval. In theevent that public stockholders of 20% or more of the outstanding stock(excluding, for this purpose, those shares of common stock issued prior to theOffering) vote against the Business Combination and exercise their conversionrights, the Business Combination will not be consummated.

In the event that the Company does not consummate aBusiness Combination within 18 months from the date of the consummation ofthe Offering, or 24 months from the consummation of the Offering ifcertain extension criteria have been satisfied (the “Acquisition Period”), theproceeds held in the Trust Account will be distributed to the Company’s publicstockholders, excluding the Founders (defined in the following sentence) to theextent of their stock acquired prior to the Offering. However, the persons whowere stockholders prior to the Offering (the “Founders”) will participate inany liquidation distribution with respect to any shares of the common stockacquired in connection with or following the Offering. In the event of suchdistribution, it is likely that the per share value of the residual assetsremaining available for distribution (including Trust Account assets) will beless than the initial public offering price per unit in the Offering (assumingno value is attributed to the Warrants contained in the Units offered in theOffering as discussed in Note D).

 

8

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Publicstockholders owning less than 20% of the shares sold in the Offering who voteagainst a Business Combination and exercise their conversion rights will beentitled to convert their stock into a pro rata share of the Trust Account,including any interest earned on their portion of the Trust Account (net oftaxes payable), if the Business Combination is approved and consummated. TheFounders cannot convert their stock into a pro rata share of the Trust Accountunder these circumstances, because they have agreed to vote their stock inaccordance with the majority of the shares of common stock voted by the publicstockholders. Public stockholders who convert their stock will retain anywarrants they hold.

The Founders will be entitled to registration rightspursuant to an agreement signed as a part of the Offering. The holders of themajority of these shares are entitled to make up to two demands that theCompany register these shares. The holders of the majority of these shares canelect to exercise these registration rights at any time after the date on whichtheir shares of common stock are released from escrow (see below). In addition,these stockholders have certain “piggy-back” registration rights onregistration statements filed subsequent to such date. The Company will bearthe expenses incurred in connection with the filing of any such registrationstatement.

Upon consummation of the Offering, the Founders placedthe shares they owned into an escrow account. These shares will not betransferable during the escrow period and will not be released from escrowuntil the earliest of:

·                           threeyears following the date of the Offering;

·                           liquidation;and

·                           theconsummation of a liquidation, merger, stock exchange or other similartransaction which results in all of the stockholders having the right toexchange their shares of common stock for cash, securities or other propertysubsequent to the Company consummating a Business Combination with a targetbusiness.

Duringthe escrow period, the holders of these shares will not be able to sell ortransfer their securities except to their spouses and children or trustsestablished for their benefit, but will retain all other rights asstockholders, including, without limitation, the right to vote their shares ofcommon stock and the right to receive cash dividends, if declared. If dividendsare declared and payable in shares of common stock, such dividends will also beplaced in escrow. If the Company is unable to effect a Business Combination andliquidates, none of the Founders will receive any portion of the liquidationproceeds with respect to common stock owned by them.

**NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**[1]    Cashand cash equivalents:**

The Companyconsiders all highly liquid investments with original maturities of threemonths or less to be cash equivalents. The Company had cash deposits in excessof the federally insured limits at March 31, 2006.

**[2]   Accountingfor Warrants and Derivative Instruments AsRestated:**

OnOctober 25, 2005, the Company consummated its initial public offering of21,000,000 units. Each unit consists of one share of common stock and tworedeemable common stock purchase warrants. Each warrant entitles the holder topurchase from the Company one share of its common stock at an exercise price of$5.00.

Emerging Issues Task Force 00-19, or EITF 00-19,“Accounting for Derivative Financial Instruments Indexed to and PotentiallySettled in, a Company’s Own Stock,” provides criteria for determining whetherfreestanding contracts that are settled in a company’s own stock, includingcommon stock warrants, should be designated as either an equity instrument, anasset or as a liability under SFAS No. 133. Under the provisions of EITF 00-19,a contract designated as an asset or a liability must be carried at fair valueon a company’s balance sheet, with any changes in fair value recorded in acompany’s results of operations. A contract classified as an equity instrumentis included within equity, and no fair value adjustments are required fromperiod to period. In accordance with EITF 00-19, the warrants to purchasecommon stock included in the units sold in the Company’s initial publicoffering are separately accounted for as liabilities. 

The agreement related to the Company’s warrants sold in the offering provides for the Company to register and maintainthe registration of the shares underlying the warrants and does not specify apenalty in the absence of the Company’s ability to deliver registered shares toholders upon exercise of the warrants. Further, the warrant agreement does not specifythat the Company cannot be obligated to net cash settle theinstrument. Paragraph 14 of EITF 00-19states that if the contract allows the company to net-share or physicallysettle the contract only by delivering registered shares, it is assumed thatthe company will be required to net-cash settle the contract, and as a resultliability classification will be required. Paragraph 17 of EITF 00-19 states that if the contract requires physicalor net-share settlement by delivery of registered shares and does not specifyany circumstances under which net-cash settlement is permitted or required, andthe contract does not specify how the contract would be settled in the eventthat the company is unable to deliver registered shares, then net cashsettlement is assumed if the company is unable to deliver registered shares(because it is unlikely that nonperformance would be an acceptablealternative).  Under EITF 00-19,registration of the common stock underlying the warrants is not within theCompany’s control and, as a result, the Company must assume that it could berequired to settle the securities on a net-cash basis, thereby necessitatingthe treatment of the potential settlement obligation as a liability. The fairvalue of these securities is presented on the Company’s balance sheet as“warrant liabilities,” and the unrealized changes in the values of thesederivatives are shown in the Company’s statement of operations as “Gain (loss)on warrant liability.”

Fair values for traded securities and derivativesare based on quoted market prices.  Wheremarket prices are not readily available, as in the case of the Company’swarrants as of the date of issuance, fair values are determined using methodsrequiring judgment and estimates. Utilizing such methods, the fair value of the warrant liability atOctober 20, 2005 (the date of issuance) was determined to be $0.34 perwarrant.  At the date of issuance, theCompany allocated the unit price between the share of common stock and thewarrants issued based upon relative fair value determined, among other things,by reference to the underlying cash held in the trust fund.  The warrants included in the units sold inthe Company’s initial public offering began to be publicly traded on the Overthe Counter Bulletin Board on December 5, 2005, and consequently the fair valueof the warrants is reflected as the market price of a warrant at each periodend. To the extent that the market prices of the Company’s warrants increase ordecrease, the Company’s derivative liabilities will also increase or decreasewith a corresponding impact on its statement of operations.

**[3]   Lossper common share:**

Basic loss pershare is based on the weighted average number of common shares outstandingduring the period. The per share effect of potential common shares issuable uponthe exercise of warrants, aggregating 42,000,000 shares, have not been includedbecause the effect would be anti-dilutive.

9

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**[4]    Useof estimates:**

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the amounts in the financial statementsand accompanying notes. Actual results could differ from those estimates.

**[5]     Fair value of financial instruments:**

Thecarrying amounts of the Company’s financial assets, including cash and cashequivalents and short term investments, approximate fair value because of theirshort term maturities.

**[6]    Incometaxes:**

Deferredincome taxes are provided for the differences between the bases of assets andliabilities for financial reporting and income tax purposes. Deferred taxassets and liabilities are measured using tax rates in effect for the year inwhich those temporary differences are expected to be recovered or settled. Avaluation allowance is established when necessary to reduce deferred tax assetsto the amount expected to be realized.

**NOTE D—INITIAL PUBLIC OFFERING**

On October 25,2005, the Company sold 21,000,000 Units (“Units”). Each Unit consisted of oneshare of the Company’s common stock, $.0001 par value, and two warrants (“Warrants”).Each Warrant entitles the holder to purchase from the Company one share ofcommon stock at an exercise price of $5.00. Each Warrant is exercisable on thelater of (a) the completion of a Business Combination or (b) October 19,2006 and expires October 19, 2009, or earlier upon redemption. TheWarrants are redeemable at a price of $.01 per Warrant upon 30 days noticeafter the Warrants become exercisable, only in the event that the last saleprice of the common stock is at least $8.50 per share for any 20 trading dayswithin a 30 trading day period ending on the third day prior to the date onwhich notice of redemption is given.

Inconnection with the Offering, the Company paid CRT Capital Group LLC anunderwriter’s discount of 5% of the gross proceeds of the Offering.

**NOTE E—INVESTMENTS HELD IN TRUST**

Themanagement of the Company intends to hold till maturity the investments held inthe Trust Account, which consist principally of short-term Treasury Bills. Thesebills are purchased at a discount and the Company accretes interest incomewhich is equivalent to the difference between the purchase price and the marketprice.

**NOTE F—INCOME TAXES**

Theprovision for income taxes for the three months ending March 31, 2006consists of the following:

 
| Current                |   |     |    |
|------------------------|--------|----------|---------|
| Federal                |   | $        | 322,062 |   |
| State and local        |   | 191,934  |    |
| Deferred tax (benefit) |   |     |    |
| Federal                |   | (159,297 | )       |
| State and local        |   | (91,139  | )       |
| Total                  |   | $        | 263,560 |   |

 

10

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Provisionshave been made for deferred taxes based on differences between the tax basis ofassets and liabilities using currently enacted rates and regulations.

Deferredtax assets and liabilities at March 31, 2006 and December 31, 2005consist of the following:
| ** **                                                 | ** ** | **As of   March 31,  2006** | ** ** | **As of   December 31,  2005** | ** ** |
|------------------------------------------------------------|------------|--------------------------------------------|------------|-----------------------------------------------|------------|
| Deferred tax  assets — start up costs                 |       | $                                          | 296,387    |                                          | $          | 34,629 |   |
| Deferred tax  liability — accrued interest receivable |       | (27,036                                    | )          | (15,714                                       | )          |
| Net deferred tax  benefit                                  |       | $                                          | 269,351    |                                          | $          | 18,915 |   |

 

TheCompany has recorded a deferred tax asset. Realization is dependent onacquiring an operating company and the ability to use the deferred tax expensesto offset operating income. Although realization is not assured, managementbelieves it is more likely than not that all of the deferred tax will berealized through future taxable income.

**NOTE G—NOTES PAYABLE TO STOCKHOLDERS**

TheCompany issued two $77,000 non-interest bearing unsecured promissory notes totwo of the Founders of the Company on April 18, 2005.  The notes wererepaid in the accordance with their terms on October 25, 2005 from theproceeds of the Offering.

**NOTE H—RELATED PARTY TRANSACTION**

The Companyhas agreed to pay CM Equity Management, L.P., a company where certain of theFounders serve in executive capacities, an administrative fee of $7,500 permonth for office space and general and administrative services from October 19,2005 through the effective date of the acquisition of a target business. Forthe three months ending March 31, 2006, the amount paid to this entity was$22,500. For the period from inception to March 31, 2006, the amount paidto this entity was $40,645.

Two ofthe Founders have agreed with the Company and the underwriters that if theCompany liquidates prior to the consummation of a Business Combination, theymay be personally liable to ensure that the proceeds of the Trust Account arenot reduced by the claims of vendors or others entities that are owed money bythe Company for services rendered or products sold to the Company or the claimsof prospective target businesses.

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**NOTE I—Prior restatement and reclassificationsof initially issued financialstatements**

The accompanying financial statements for the threemonths ended March 31, 2006 were previously restated to effectthe changes described in Notes A(2) and C(3). The impact of the adjustmentsrelated to the classification of and accounting for the warrants for the periodfrom inception to March 31, 2006 and for the three months endedMarch 31, 2006 is summarized below.

**Statement ofOperations**
| ** **                                                                                              | ** ** | **For the period from April 12, 2005  (date of inception) through March 31, 2006** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                              | ** ** | **As Initially   Reported**                                                                                                               | ** ** | **Adjustment** | ** ** | **As Previously Restated** | ** ** |
| Operating costs                                                                                         |       | $                                                                                                                                              | (743,358   | ) | $ | — |   | $ | (743,358 | ) |
| Interest income                                                                                         |       | 2,008,879                                                                                                                                      |       | — |   | 2,008,879 |   |
| Loss on warrant  liabilities                                                                            |       | —                                                                                                                                         |       | (16,380,000 | ) | (16,380,000 | ) |
| Income (loss)  before provision for taxes                                                               |       | 1,265,521                                                                                                                                      |       | (16,380,000 | ) | (15,114,479 | ) |
| Provision for  income taxes                                                                             |       |                                                                                                                                           |       |   |   |   |   |
| —current                                                                                           |       | (846,996                                                                                                                                       | )          | — |   | (846,996 | ) |
| —deferred                                                                                          |       | 269,351                                                                                                                                        |       | — |   | 269,351 |   |
| Net income  (loss)                                                                                      |       |            687,876                                                                           |       | (16,380,000 | ) | (15,692,124 | ) |
| Interest income  attributable to common stock subject to possible conversion (net of taxes of  $170,135 |       | (227,089                                                                                                                                       | )          | — |   | (227,089 | ) |
| Net income  (loss) allocable to common stockholders not subject to possible conversion                  |       | $                                                                                                                                              | 460,787    |   | $ | (16,380,000 | ) | $ | (15,919,213 | ) |
|                                                                                                    |       |                                                                                                                                           |       |   |   |   |   |

 
| ** **                                                                                               | ** ** | **For the three months ended March 31, 2006** | ** ** |
|----------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| ** **                                                                                               | ** ** | **As Initially   Reported**                                            | ** ** | **Adjustment** | ** ** | **As Previously  Restated** | ** ** |
| Operating costs                                                                                          |       | $                                                                                | (610,197   | ) | $ | — |   | $ | (610,197 | ) |
| Interest income                                                                                          |       | 1,189,712                                                                        |       | — |   | 1,189,712 |   |
| Loss on warrant  liabilities                                                                             |       | —                                                                           |       | (10,920,000 | ) | (10,920,000 | ) |
| Income (loss)  before provision for taxes                                                                |       | 579,515                                                                          |       | (10,920,000 | ) | (10,340,485 | ) |
| Provision for  income taxes                                                                              |       |                                                                             |       |   |   |   |   |
| —current                                                                                            |       | (513,996                                                                         | )          | — |   | (513,996 | ) |
| —deferred                                                                                           |       | 250,436                                                                          |       | — |   | 250,436 |   |
| Net income  (loss)                                                                                       |       | 315,955                                                                          |       | (10,920,000 | ) | (10,604,045 | ) |
| Interest income  attributable to common stock subject to possible conversion (net of taxes of  $106,135) |       | (129,093                                                                         | )          | — |   | (129,093 | ) |
| Net income  (loss) allocable to common stockholders not subject to possible conversion                   |       | $                                                                                | 186,862    |   | $ | (10,920,000 | ) | $ | (10,733,138 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Weighted average  number of shares outstanding                                                           |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | 26,250,000                                                                       |       |   |   | 26,250,000 |   |
| —diluted                                                                                            |       | 30,343,863                                                                       |       |   |   | 26,250,000 |   |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Net income  (loss) per share                                                                             |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | $                                                                                | 0.01       |   |   |   | $ | (0.40 | ) |
| —diluted                                                                                            |       | $                                                                                | 0.01       |   |   |   | $ | (0.40 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Weighted average  number of shares outstanding exclusive of shares subject to possible  redemption       |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | 22,052,100                                                                       |       |   |   | 22,052,100 |   |
| —diluted                                                                                            |       | 26,145,963                                                                       |       |   |   | 22,052,100 |   |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Net income  (loss) per share not subject to possible redemption                                          |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | $                                                                                | 0.01       |   |   |   | $ | (0.49 | ) |
| —diluted                                                                                            |       | $                                                                                | 0.01       |   |   |   | $ | (0.49 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |

 

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**Balance SheetImpact**

The following table sets forth the effects for therestatement adjustment on the Company’s balance sheet as of March 31,2006:
| ** **                                                                                                                                                                        | ** ** | **March 31, 2006**    | ** **  | ** **     | ** ** | **March 31, 2006**     | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|-------------|----------------|------------|----------------------------------|------------|
| ** **                                                                                                                                                                        | ** ** | **As Initially  Reported** | ** **  | **Adjustment** | ** ** | **As Previously  Restated** | ** ** |
| ASSETS                                                                                                                                                                            |       |                            |        |           |       |                             |       |
| Current assets:                                                                                                                                                                   |       |                            |        |           |       |                             |       |
| Cash and cash equivalents                                                                                                                                                         |       | $                               | 1,666,725   |           | $          | —                           |       | $ | 1,666,725 |   |
| Prepaid expenses                                                                                                                                                                  |       | 46,808                          |        | —         |       | 46,808                           |       |
| Total current assets                                                                                                                                                              |       | 1,713,533                       |        | —         |       | 1,713,533                        |       |
| Short-term investments held in Trust Account  (including interest receivable of $59,921) (fair value $118,280,141)                                                                |       | 118,280,141                     |        | —         |       | 118,280,141                      |       |
| Cash and cash equivalents held in trust                                                                                                                                           |       | 452,086                         |        | —         |       | 452,086                          |       |
| Deferred income  tax benefit                                                                                                                                                      |       | 296,387                         |        | —         |       | 296,387                          |       |
| Total assets                                                                                                                                                                      |       | $                               | 120,742,147 |           | $          | —                           |       | $ | 120,742,147 |   |
|                                                                                                                                                                              |       |                            |        |           |       |                             |       |
| LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                                                                                        |       |                            |        |           |       |                             |       |
| Current liabilities:                                                                                                                                                              |       |                            |        |           |       |                             |       |
| Accrued expenses                                                                                                                                                                  |       | $                               | 425,519     |           | $          | —                           |       | $ | 425,519 |   |
| Income tax payable-current                                                                                                                                                        |       | 427,111                         |        | —         |       | 427,111                          |       |
| Deferred income tax                                                                                                                                                               |       | 27,036                          |        | —         |       | 27,036                           |       |
| Warrant liabilities                                                                                                                                                               |       | —                          |        | 30,660,000     |       | 30,660,000                       |       |
| Total current liabilities                                                                                                                                                         |       | 879,666                         |        | 30,660,000     |       | 31,539,666                       |       |
|                                                                                                                                                                              |       |                            |        |           |       |                             |       |
| Common stock, subject to possible redemption  4,197,900 shares                                                                                                               |       | 23,424,282                      |        | —         |       | 23,424,282                       |       |
| Interest income attributable to common stock subject  to possible redemption (net of taxes of $170,135)                                                                           |       | 227,089                         |        | —         |       | 227,089                          |       |
| Total common stock,  subject to possible redemption                                                                                                                               |       | 23,651,371                      |        | —         |       | 23,651,371                       |       |
|                                                                                                                                                                              |       |                            |        |           |       |                             |       |
| COMMITMENTS AND  CONTINGENCIES STOCKHOLDERS’ EQUITY:                                                                                                                         |       |                            |        |           |       |                             |       |
| Preferred stock—$.0001 par value; 1,000,000 shares  authorized; 0 issued and outstanding                                                                                     |       |                            |        |           |       |                             |       |
| Common stock—$.0001 par  value; 100,000,000 shares authorized; 26,250,000 issued and outstanding  (which includes 4,197,900 shares subject to possible redemption) |       | 2,625                           |        | —         |       | 2,625                            |       |
| Additional paid-in  capital                                                                                                                                                       |       | 95,747,698                      |        | (14,280,000    | )          | 81,467,698                       |       |
| Earnings (deficit)  accumulated during the development stage                                                                                                                      |       | 460,787                         |        | (16,380,000    | )          | (15,919,213                      | )          |
| Total stockholders’  equity                                                                                                                                                  |       | 96,211,110                      |        | (30,660,000    | )          | 65,551,110                       |       |
| Total liabilities and stockholders’ equity                                                                                                                                   |       | $                               | 120,742,147 |           | $          | —                           |       | $ | 120,742,147 |   |

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**NOTE J—COMMITMENTS**

TheCompany has a commitment to pay to CRT Capital Group LLC a 2% fee of the grossoffering proceeds, or $2,520,000, payable upon the Company’s consummation of aBusiness Combination.

TheCompany has engaged CRT Capital Group LLC, the underwriter, on a non-exclusivebasis, as their agent for the solicitation of the exercise of the warrants. TheCompany has agreed to pay CRT Capital Group LLC a commission equal to 2% of theexercise price for each warrant exercised more than one year from October 19,2005 if the exercise was solicited by CRT Capital Group LLC.

**NOTE K—COMMON STOCK RESERVED FOR ISSUANCE**

At March 31,2006, 42,000,000 shares of common stock were reserved for issuance uponexercise of redeemable warrants.

**NOTE L—FOUNDERS**

One or more of theFounders agreed with the Company that during the 40 trading day periodbeginning 60 days after the end of the “restricted period” underRegulation M, they collectively would spend up to $2,000,000 to purchasewarrants in the public marketplace at prices not to exceed $.65 per warrant.They have further agreed that any warrants purchased by them or theiraffiliates or designees would not be sold or transferred until the completionof a Business Combination. As of March 31, 2006, 3,699,528 warrants havebeen purchased by the Founders.

**NOTE M—SUBSEQUENT EVENTS**

On April 19,2006, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”)with Advanced Technology Systems, Inc. (“ATS”), the holders of all of theoutstanding shares of ATS, and Claude Rumsey, as shareholders’ representative,pursuant to which the Company will acquire (the “Acquisition”) all of theissued and outstanding shares of ATS and, indirectly through ATS, all of theoutstanding shares of ATS’ wholly owned subsidiaries.

ATSprovides systems integration and application development, IT infrastructuremanagement and strategic IT consulting services to U.S. federal governmentagencies. As part of its complete systems life-cycle approach, ATS offersits clients an integrated full-service IT infrastructure outsourcing solutionthat allows an agency to focus on its core mission while reducing costs andmaintaining system uptime.

The Company will purchaseall of the outstanding capital stock of ATS for up to $124 million. Thepurchase price will be comprised of $84 million in cash and $1 million in stockat closing and up to $39 million in aggregate additional cash payments over atwo-year period upon ATS’ achievement of specified targets for adjustedearnings before interest, taxes, depreciation and amortization following theclosing. The Acquisition is expected to be consummated during the summer of2006, after the required approval by our stockholders and the fulfillment ofcertain other conditions as disclosed in the Stock Purchase Agreement.

 

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**Item 2. Management’s Discussion andAnalysis of Financial Condition and Results of Operations.**

***FORWARD-LOOKINGSTATEMENTS***

*This Quarterly Report on Form 10-Q/Aand the documents incorporated by reference into the Quarterly Report on Form 10-Q/Ainclude forward-looking statements within the meaning of Section 27A ofthe Securities Act of 1933 and Section 21E of the Securities Exchange Actof 1934. These forward-looking statements can be identified by the use offorward-looking terminology, including the words “believes,” “estimates,” “anticipates,”“expects,” “intends,” “may,” “will” or “should,” or, in each case, theirnegative or other variations or comparable terminology. Such statementsinclude, but are not limited to, any statements relating to our ability toconsummate any acquisition or other business combination and any otherstatements that are not historical facts. These statements are based onmanagement’s current expectations, but actual results may differ materially dueto various factors, including, but not limited to:*

·                  *our being a development stage company with nooperating history;*

·                  *our dependence on key personnel, some of whom may ormay not join us following a business combination;*

·                  *risks that the acquisition of ATS or another businesscombination may not be completed due to failure of the conditions to closing ofthe acquisition being satisfied or other factors;*

·                  *our personnel allocating their time to otherbusinesses and potentially having conflicts of interest with our business;*

·                  *our potentially being unable to obtain additionalfinancing to complete a business combination;*

·                  *the ownership of our securities being concentrated;*

·                  *risks associated with the federal services industry;*

·                  *risks associated with the defense industry; and*

·                  *those other risks and uncertainties detailed in theCompany’s filings with the Securities and Exchange Commission.*

*By their nature, forward-lookingstatements involve risks and uncertainties because they relate to events anddepend on circumstances that may or may not occur in the future. We caution youthat forward-looking statements are not guarantees of future performance andthat our actual results of operations, financial condition and liquidity, anddevelopments in the industry in which we operate, may differ materially fromthose made in or suggested by the forward-looking statements contained in thisQuarterly Report on Form 10-Q/A. In addition, even if our results ofoperations, financial condition and liquidity, and developments in the industryin which we operate, are consistent with the forward-looking statementscontained in this Quarterly Report on Form 10-Q/A, those results ordevelopments may not be indicative of results or developments in subsequentperiods.*

*These forward-looking statements aresubject to numerous risks, uncertainties and assumptions about us. Theforward-looking events we discuss in this Quarterly Report on Form 10-Q/Aspeak only as of the date of such statement and might not occur in light ofthese risks, uncertainties and assumptions. We undertake no obligation anddisclaim any obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise.*

*Unless otherwise provided in thisQuarterly Report on Form 10-Q/A, references to “the Company,” “theRegistrant,” “we,” “us” and “our” refer to Federal Services AcquisitionCorporation.*

**MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

We are a “blank check” company organized under thelaws of the State of Delaware on April 12, 2005 and were formed for thepurpose of acquiring, through a merger, capital stock exchange, assetacquisition, stock purchase or other similar business combination, an operatingbusiness in the federal

15

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services and defense industries. We intend to use thetrust account funds, together with any additional financing arrangements thatwe undertake, to effect a business combination.

We have neither engaged in any operations norgenerated any revenues nor incurred any debt or expenses during the periodended March 31, 2006, other than in connection with our public offeringand, thereafter, certain legal and other expenses related to pursuingacquisitions of target businesses. Our entire activity since inception has beento prepare for and consummate our initial public offering and to identify andinvestigate target businesses for a business combination.

Our net proceeds from the sale of our units, afterdeducting offering expenses of approximately $531,000 and underwritingdiscounts of $6,300,000, were approximately $119,169,000. Of this amount,$117,180,000, was placed in trust and the remaining $1,989,000 was not placedin trust. We will use substantially all of the net proceeds of our offering toacquire a target business, including identifying and evaluating prospectiveacquisition candidates, selecting the target business, and structuring,negotiating and consummating the business combination. To the extent that ourcapital stock is used in whole or in part as consideration to effect a businesscombination, the proceeds held in the trust account as well as any other netproceeds not expended will be used to finance the operations of the targetbusiness. We believe that the funds available to us outside of the trust accountwill be sufficient to allow us to operate for at least the next 24 months,assuming that a business combination is not consummated during that time. Forthe three months ended March 31, 2006, we have incurred the followingexpenses:

·                  $478,823 for legal,accounting, travel and other expenses attendant to the due diligenceinvestigations, structuring, and negotiating of a business combination;

·                  $22,500 foradministrative services and support ($7,500 per month);

·                  $42,140 ofexpenses for legal and accounting fees relating to our SEC reportingobligations;

·                  $30,060 forfranchise and capital taxes;

·                  $20,959 fordirector and officer liability insurance premiums; and

·                  $15,715 formiscellaneous expenses and reserves.

For the three months ended March 31, 2006, wehave earned interest from the proceeds held in the trust account in the amountof $1,176,728 (including accrued interest of $59,921). For the three monthsended March 31, 2006, we have earned interest from the funds not placed inthe trust account of $12,984.

As described below, as a result of recording thechange in the fair value of warrant liability, the Company has reported a netloss for the period ended March 31, 2006.

We do not believe we will need to raise additionalfunds in order to meet the expenditures required for operating our business. However,we may need to raise additional funds through a private offering of debt orequity securities if such funds are required to consummate a businesscombination that is presented to us. We would only consummate such afundraising simultaneously with the consummation of a business combination.

On October 25, 2005, we used $154,000 of ourgeneral working capital to repay the notes payable to our initial stockholders,Mr. Jacks and Mr. Schulte. The loans were repaid in full, withoutinterest, and cancelled.

On October 25, 2005, we used $85,000 of ourgeneral working capital to pay premiums associated with our directors andofficers’ liability insurance. As of March 31, 2006, $46,808 of thisamount represents the prepaid portion for the cost of such insurance through October 19,2006.

We have agreed to pay, through the date of ouracquisition of a target business, CM Equity Management, L.P., an affiliate of Messrs. Jacksand Schulte, $7,500 per month for office space and certain office andsecretarial services.

As of March 31, 2006, $118,732,227, includinginterest receivable of $59,921, was held in trust and we had $1,666,725 of theavailable funds remaining and available to us for our activities in connectionwith

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identifyingand conducting due diligence of a suitable business combination, and forgeneral corporate matters.

**Critical Accounting Policies**

The preparation of financial statements and relateddisclosures in conformity with generally accepted accounting principles in theUnited States requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities, disclosure of contingent assetsand liabilities at the date of the financial statements, and revenues andexpenses during the periods reported. Actual results could materially differfrom those estimates. We have determined that we currently are not subject toany critical accounting policies.

**Prior Restatementof Financial Statements**

We had previously restated our annualfinancial statements for the period ended December 31, 2005 and for theinterim periods ended March 31, 2006 and June 30, 2006 to reflectnon-operating gains and loses related to the classification of and accountingfor the warrants to purchase common stock associated with the units sold at theinitial public offering of the Company. The Company had initially classified the value ofthese warrants to purchase common stock, when applicable, as equity. Afterfurther review in connection with the preparation of Amendment No. 2 tothe Proxy Statement related to the acquisition contemplated by the Stock PurchaseAgreement dated April 19, 2006 by and among the Company, AdvancedTechnology Systems, Inc., a Virginia corporation (“ATS”) and shareholders ofATS, the Company had determined that theseinstruments should have been classified as liabilities and, therefore, the fairvalue of each instrument must be recorded as a liability on the Company’sbalance sheet. Changes in the fair values of these instruments resulted in adjustments to the amount ofthe recorded liabilities and the corresponding gain or loss was recorded in the Company’sstatement of operations. At the date of the conversion of each warrants orportion thereof (or exercise of the warrants or portion thereof, as the casemay be), the corresponding liability will be reclassified as equity.

The accompanying financial statements for the threemonths ended March 31, 2006 were restated to effect the changesdescribed above. The impact of the adjustments related to the classification ofand accounting for the warrants for the period from inception to March 312006 and for the three months ended March 31, 2006 are summarized below.See Notes A(2), C(2), C(3) and I to our Financial Statements for an explanationof these restatements. The following table shows the net impact of therestatements on our net income.

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**Statement ofOperations**
| ** **                                                                                              | ** ** | **For the period from April 12, 2005  (date of inception) through March 31, 2006** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                              | ** ** | **As Initially  Reported**                                                                                                                | ** ** | **Adjustment** | ** ** | **As Previously  Restated** | ** ** |
| Operating costs                                                                                         |       | $                                                                                                                                              | (743,358   | ) | $ | — |   | $ | (743,358 | ) |
| Interest income                                                                                         |       | 2,008,879                                                                                                                                      |       | — |   | 2,008,879 |   |
| Loss on warrant  liabilities                                                                            |       | —                                                                                                                                         |       | (16,380,000 | ) | (16,380,000 | ) |
| Income (loss)  before provision for taxes                                                               |       | 1,265,521                                                                                                                                      |       | (16,380,000 | ) | (15,114,479 | ) |
| Provision for  income taxes                                                                             |       |                                                                                                                                           |       |   |   |   |   |
| —current                                                                                           |       | (846,996                                                                                                                                       | )          | — |   | (846,996 | ) |
| —deferred                                                                                          |       | 269,351                                                                                                                                        |       | — |   | 269,351 |   |
| Net income  (loss)                                                                                      |       | 687,876                                                                                                                                        |       | (16,380,000 | ) | (15,692,124 | ) |
| Interest income  attributable to common stock subject to possible conversion (net of taxes of  $170,135 |       | (227,089                                                                                                                                       | )          | — |   | (227,089 | ) |
| Net income  (loss) allocable to common stockholders not subject to possible conversion                  |       | $                                                                                                                                              | 460,787    |   | $ | (16,380,000 | ) | $ | (15,919,213 | ) |
|                                                                                                    |       |                                                                                                                                           |       |   |   |   |   |

 
| ** **                                                                                               | ** ** | **For the three months ended March 31, 2006** | ** ** |
|----------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| ** **                                                                                               | ** ** | **As Initially  Reported**                                                  | ** ** | **Adjustment** | ** ** | **As Previously  Restated** | ** ** |
| Operating costs                                                                                          |       | $                                                                                | (610,197   | ) | $ | — |   | $ | (610,197 | ) |
| Interest income                                                                                          |       | 1,189,712                                                                        |       | — |   | 1,189,712 |   |
| Loss on warrant  liabilities                                                                             |       | —                                                                           |       | (10,920,000 | ) | (10,920,000 | ) |
| Income (loss)  before provision for taxes                                                                |       | 579,515                                                                          |       | (10,920,000 | ) | (10,340,485 | ) |
| Provision for  income taxes                                                                              |       |                                                                             |       |   |   |   |   |
| —current                                                                                            |       | (513,996                                                                         | )          | — |   | (513,996 | ) |
| —deferred                                                                                           |       | 250,436                                                                          |       | — |   | 250,436 |   |
| Net income  (loss)                                                                                       |       |            315,955             |       |      (10,920,000 | ) | (10,604,045 | ) |
| Interest income  attributable to common stock subject to possible conversion (net of taxes of  $106,135) |       | (129,093                                                                         | )          | — |   | (129,093 | ) |
| Net income  (loss) allocable to common stockholders not subject to possible conversion                   |       | $                                                                                | 186,862    |   | $ | (10,920,000 | ) | $ | (10,733,138 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Weighted average  number of shares outstanding                                                           |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | 26,250,000                                                                       |       |   |   | 26,250,000 |   |
| —diluted                                                                                            |       | 30,343,863                                                                       |       |   |   | 26,250,000 |   |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Net income  (loss) per share                                                                             |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | $                                                                                | 0.01       |   |   |   | $ | (0.40 | ) |
| —diluted                                                                                            |       | $                                                                                | 0.01       |   |   |   | $ | (0.40 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Weighted average  number of shares outstanding exclusive of shares subject to possible  redemption       |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | 22,052,100                                                                       |       |   |   | 22,052,100 |   |
| —diluted                                                                                            |       | 26,145,963                                                                       |       |   |   | 22,052,100 |   |
|                                                                                                     |       |                                                                             |       |   |   |   |   |
| Net income  (loss) per share not subject to possible redemption                                          |       |                                                                             |       |   |   |   |   |
| —basic                                                                                              |       | $                                                                                | 0.01       |   |   |   | $ | (0.49 | ) |
| —diluted                                                                                            |       | $                                                                                | 0.01       |   |   |   | $ | (0.49 | ) |
|                                                                                                     |       |                                                                             |       |   |   |   |   |

 

As a result ofrecording the change in the fair value of warrant liability, the Company hasreported a net loss for the period ended March 31, 2006 compared to netincome as previously reported. Therefore, the per share effect of potentialcommon shares issuable upon the exercise of warrants, aggregating 42,000,000shares, have not been included in diluted loss per share as the effect is anti-dilutive.

 

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**Balance SheetImpact**
| ** **                                                                                                                                                                        | ** ** | **March 31, 2006**    | ** **  | ** **     | ** ** | **March 31, 2006**   | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|-------------|----------------|------------|--------------------------------|------------|
| ** **                                                                                                                                                                        | ** ** | **As Initially  Reported** | ** **  | **Adjustment** | ** ** | **As PreviouslyRestated** | ** ** |
| ASSETS                                                                                                                                                                            |       |                            |        |           |       |                           |       |
| Current assets:                                                                                                                                                                   |       |                            |        |           |       |                           |       |
| Cash and cash equivalents                                                                                                                                                         |       | $                               | 1,666,725   |           | $          | —                         |       | $ | 1,666,725 |   |
| Prepaid expenses                                                                                                                                                                  |       | 46,808                          |        | —         |       | 46,808                         |       |
| Total current assets                                                                                                                                                              |       | 1,713,533                       |        | —         |       | 1,713,533                      |       |
| Short-term investments held in Trust Account  (including interest receivable of $59,921) (fair value $118,280,141)                                                                |       | 118,280,141                     |        | —         |       | 118,280,141                    |       |
| Cash and cash equivalents held in trust                                                                                                                                           |       | 452,086                         |        | —         |       | 452,086                        |       |
| Deferred income  tax benefit                                                                                                                                                      |       | 296,387                         |        | —         |       | 296,387                        |       |
| Total assets                                                                                                                                                                      |       | $                               | 120,742,147 |           | $          | —                         |       | $ | 120,742,147 |   |
|                                                                                                                                                                              |       |                            |        |           |       |                           |       |
| LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                                                                                        |       |                            |        |           |       |                           |       |
| Current liabilities:                                                                                                                                                              |       |                            |        |           |       |                           |       |
| Accrued expenses                                                                                                                                                                  |       | $                               | 425,519     |           | $          | —                         |       | $ | 425,519 |   |
| Income tax payable-current                                                                                                                                                        |       | 427,111                         |        | —         |       | 427,111                        |       |
| Deferred income tax                                                                                                                                                               |       | 27,036                          |        | —         |       | 27,036                         |       |
| Warrant liabilities                                                                                                                                                               |       | —                          |        | 30,660,000     |       | 30,660,000                     |       |
| Total current liabilities                                                                                                                                                         |       | 879,666                         |        | 30,660,000     |       | 31,539,666                     |       |
|                                                                                                                                                                              |       |                            |        |           |       |                           |       |
| Common Stock, subject to possible redemption  4,197,900 shares                                                                                                               |       | 23,424,282                      |        | —         |       | 23,424,282                     |       |
| Interest income attributable to common stock subject  to possible redemption (net of taxes of $170,135)                                                                           |       | 227,089                         |        | —         |       | 227,089                        |       |
| Total common stock,  subject to possible redemption                                                                                                                               |       | 23,651,371                      |        | —         |       | 23,651,371                     |       |
|                                                                                                                                                                              |       |                            |        |           |       |                           |       |
| COMMITMENTS AND  CONTINGENCIES STOCKHOLDERS’ EQUITY:                                                                                                                         |       |                            |        |           |       |                           |       |
| Preferred stock—$.0001 par value; 1,000,000 shares  authorized; 0 issued and outstanding                                                                                     |       |                            |        |           |       |                           |       |
| Common stock—$.0001 par  value; 100,000,000 shares authorized; 26,250,000 issued and outstanding  (which includes 4,197,900 shares subject to possible redemption) |       | 2,625                           |        | —         |       | 2,625                          |       |
| Additional paid-in  capital                                                                                                                                                       |       | 95,747,698                      |        | (14,280,000    | )          | 81,467,698                     |       |
| Earnings (deficit)  accumulated during the development stage                                                                                                                      |       | 460,787                         |        | (16,380,000    | )          | (15,919,213                    | )          |
| Total stockholders’  equity                                                                                                                                                  |       | 96,211,110                      |        | (30,660,000    | )          | 65,551,110                     |       |
| Total liabilities and stockholders’ equity                                                                                                                                   |       | $                               | 120,742,147 |           | $          | —                         |       | $ | 120,742,147 |   |

** **

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**Recent Developments**

On April 19, 2006, we entered into a StockPurchase Agreement (the “Stock Purchase Agreement”) with Advanced TechnologySystems, Inc. (“ATS”), the holders of all of the outstanding shares ofATS, and Claude Rumsey, as shareholders’ representative, pursuant to which wewill acquire (the “Acquisition”) all of the issued and outstanding shares ofATS and, indirectly through ATS, all of the outstanding shares of ATS’ whollyowned subsidiaries.

ATS provides systems integration and applicationdevelopment, IT infrastructure management and strategic IT consulting servicesto U.S. federal government agencies. As part of its complete systemslife-cycle approach, ATS offers its clients an integrated full-service ITinfrastructure outsourcing solution that allows an agency to focus on its coremission while reducing costs and maintaining system uptime.

Our Vice Chairman, Dr. Edward H. Bersoff, willbecome Chairman, President and Chief Executive Officer of the Company and ATSupon consummation of the Acquisition. ATS’ Senior Vice President and ChiefOperating Officer, Leon Perry, will continue as Senior Vice President and ChiefOperating Officer of ATS after the transaction closes. On May 3, 2006, ourBoard of Directors voted to appoint Joseph A. Saponaro and Edward J. Smith toour Board of Directors, to serve until their respective successors are dulyelected and qualified. We plan to identify additional senior officers anddirectors prior to the closing of the Acquisition.

The Acquisition is expected to be consummated duringthe summer of 2006, after the required approval by our stockholders and thefulfillment of certain other conditions. For additional information on theAcquisition, please see our Current Report on Form 8-K filed withthe Securities and Exchange Commission on April 20, 2006.

**Item 3. Quantitative and QualitativeDisclosures about Market Risk.**

Market risk is the sensitivity of income to changes ininterest rates, foreign exchanges, commodity prices, equity prices, and othermarket-driven rates or prices. We are not presently engaged in, and if asuitable business target is not identified by us prior to the prescribed liquidationof the trust account, we may not engage in, any substantive commercial business.Accordingly, the risks associated with foreign exchange rates, commodityprices, and equity prices are not significant. The available funds which arenot immediately required to pay our expenses have been invested only in UnitedStates “government securities,” defined as any Treasury Bill issued by theUnited States having a maturity of one hundred and eighty days or less. Givenour limited risk in our exposure to U.S. Treasury Bills, we do not view theinterest rate risk to be significant. We do not enter into derivatives or otherfinancial instruments for trading or speculative purposes.

**Item 4. Controls and Procedures.**

Our management carried out an evaluation, with theparticipation of our Chief Executive Officer (principal executive officer) andour Chief Financial Officer (principal financial officer) of the effectivenessof our disclosure controls and procedures (as defined in Rule 13a-15(e) or15d — 15(e) of the Securities Exchange Act of 1934, as amended) as of March 31,2006. Based upon that evaluation, our Chief Executive Officer and ChiefFinancial Officer have concluded that our disclosure controls and procedureswere effective to ensure that information required to be disclosed by us inreports that we file or submit under the Securities Exchange Act of 1934, asamended, is recorded, processed, summarized and reported, within the timeperiods specified in the rules and forms of the Securities and ExchangeCommission.

There has not been any change in our internal controlover financial reporting (as defined in Rule 13a-15(f) or 15d —15(f) of the Securities Exchange Act of 1934, as amended) in connectionwith the evaluation required by Rule 13a-15(d) under the ExchangeAct that occurred during the quarter ended March 31, 2006, that hasmaterially affected, or is reasonably likely to materially affect, our internalcontrol over financial reporting.

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PART II — OTHERINFORMATION

**Item 1. Legal Proceedings.**

Not applicable.

**Item 1.A. Risk Factors.**

In addition to the risk factors contained in ourAnnual Report on Form 10-K/A for the fiscal year ended December 31,2005, filed with the Securities and Exchange Commission on September     ,2006, you should consider the following risk factors relating to the businessof ATS:

**Risks associated with theacquisition of ATS**

***We may not be able to consummate the acquisition, or anotherbusiness combination, within the required time frame, in which case, we wouldbe forced to liquidate.***

We must complete abusiness combination with a fair market value of at least 80% of our net assetsat the time of acquisition by April 25, 2007 (or by October 25, 2007if a letter of intent, agreement in principle or a definitive agreement hasbeen executed by April 25, 2007 and the business combination relativethereto has not been consummated by such date). If we fail to consummate theacquisition within the required time frame, we will be forced to liquidate ourassets.

***If weare forced to liquidate before a business combination, our public stockholderswill receive less than $6.00 per share upon distribution of the trust account,and our warrants will expire worthless.***

If we are unableto complete the acquisition or another business combination and are forced toliquidate our assets, the per share liquidation value will be less than $6.00because of the expenses related to our initial public offering, our general andadministrative expenses and the costs of performing due diligence for theacquisition, negotiating the Stock Purchase Agreement and otherwise seeking abusiness combination. Furthermore, the warrants will expire worthless if weliquidate before the completion of a business combination.

***Certain of our key personnel may join us following theacquisition and may be unfamiliar with the requirements of operating a publiccompany, which may adversely affect our operations, including significantlyreducing our revenues and net income, if any.***

Our ability tosuccessfully effect the acquisition of ATS will be completely dependent uponthe efforts of our key personnel. Upon the completion of the acquisition, ourcurrent Chairman and Chief Executive Officer, Joel R. Jacks, and our currentPresident, Treasurer and Secretary, Peter M. Schulte, will resign as officersbut will remain members of our board of directors. Dr. Edward H. Bersoffwill become our Chairman, President and Chief Executive Officer and Leon C.Perry, the Senior Vice President and Chief Operating Officer of ATS willcontinue in that role. Dr. Bersoff has significant public companyexperience. The

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members of the managementof ATS who will remain with us following the closing of the acquisition do nothave such experience and are unfamiliar with the requirements of operating apublic company under U.S. securities laws, which could cause us to expend timeand resources helping them become familiar with such laws. This could beexpensive and time-consuming and could lead to various regulatory issues thatmay adversely affect our operations, including significantly reducing ourrevenues and net income, if any.

***Weexpect to incur significant costs associated with the acquisition, whether ornot the acquisition is completed, which costs will significantly reduce theamount of cash available to be used to consummate a business combination.***

We expect to incursignificant costs associated with the acquisition, whether or not theacquisition is completed. By incurring these costs, we will significantlyreduce the amount of cash available to be used for consummating a businesscombination.

***As aresult of the acquisition, our stockholders will be solely dependent on asingle business.***

As a result of theacquisition, our stockholders will be solely dependent upon the performance ofATS and its business. ATS will remain subject to a number of risks that relategenerally to the federal services industry and other risks. See “Risks Relatedto our Business and Operations Following the Acquisition.”

***If the acquisition’s benefits do not meet theexpectations of financial or industry analysts, the market price of our commonstock may decline.***

The market price of our common stock may decline as a result of theacquisition if:

·                  we do not achieve the perceived benefits of the acquisition as rapidlyas, or to the extent anticipated by, financial or industry analysts; or

·                  the effect of the acquisition on our financial results is not consistentwith the expectations of financial or industry analysts.

Accordingly,investors may experience a loss as a result of a decreasing stock price and wemay not be able to raise future capital, if necessary, in the equity markets.

***Our directors may havecertain conflicts in determining to recommend the acquisition of ATS sincecertain of their interests, and certain interests of their affiliates andassociates, are different from, or in addition to, your interests as astockholder.***

Members of our board of directors have interests in and arising from theacquisition of ATS that are different from, or in addition to, your interestsas a stockholder which could result in a real or perceived conflict of interest.These interests include the fact that certain of the shares of common stockowned by them, or their affiliates and associates, would become worthless ifthe acquisition is not approved and we otherwise fail to consummate a businesscombination prior to our liquidation date. Such shares, as of March 31,2006, had a market value of approximately $30,187,500. Similarly, the warrantsowned by such directors, affiliates and associates to purchase 3,699,528 sharesof common stock would expire worthless. If the acquisition is approved, Mr. Jacksand Mr. Schulte will continue to serve as members of our board ofdirectors after the acquisition, and will be compensated for such services. Furthermore,Dr. Bersoff, who currently serves as our Vice Chairman, will become ourChairman, President and Chief Executive Officer, and be compensated in suchcapacity.

***Members of our board of directors may haveconflicts of interest that could hinder our ability to make acquisitions.***

One of our growth strategies following completionof the acquisition of ATS will be to make selective acquisitions ofcomplementary businesses. Two of our directors, Messrs. Jacks and Schulte,are

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principals of CM Equity Partners, a sponsor of private equity funds. Someof these funds are focused on investments in, among other things, businesses inthe federal services sector.  It ispossible that CM Equity Partners and related funds could be interested inacquiring businesses that we would also be interested in, and that theserelationships could hinder our ability to carry out our acquisition strategy.

***Weplan to issue shares of our common stock to complete the acquisition of ATS,which will reduce the equity interest of our stockholders.***

Our Amended andRestated Certificate of Incorporation authorizes the issuance of up to 100.0million shares of common stock, par value $.0001 per share, and 1.0 millionshares of preferred stock, par value $.0001 per share. We currently have 31,750,000authorized but unissued shares of our common stock available for issuance(after appropriate reservation for the issuance of shares upon full exercise ofour outstanding warrants) and all of the 1.0 million shares of preferred stockavailable for issuance. As set forth in the Stock Purchase Agreement, certainATS shareholders have elected to receive a portion of the purchase price forthe acquisition in shares of our common stock. Such shareholders will receivean aggregate of 173,913 shares of our common stock on the closing date. Theissuance of such shares will reduce the equity interest of our stockholders ona pro rata basis.

***If our initial stockholders and certain ATSshareholders exercise their registration rights, it may have an adverse effecton the market price of our common stock.***

Our initial stockholders are entitled to demand that we register theresale of their shares of common stock in certain circumstances. If our initialstockholders exercise their registration rights with respect to all of theirshares of common stock, then there will be an additional 5,250,000 shares ofcommon stock eligible for trading in the public market. We have also grantedregistration rights to those shareholders of ATS who will receive 173,913shares of our common stock upon closing of the acquisition pursuant to thestock purchase agreement. The presence of this additional number of shares ofcommon stock eligible for trading in the public market may have an adverseeffect on the market price of our common stock.

**Risks Related to Our Business andOperations Following the Acquisition**

***The loss or impairment of ATS’ relationship with the U.S.government and its agencies could adversely affect ATS business.***

ATS derivedapproximately 90% of its total revenue in fiscal 2005 from contracts with theU.S. government and government sponsored entities. ATS expects that U.S.government contracts will continue to be a significant source of revenue forthe foreseeable future. If ATS or any of its partners was suspended orprohibited from contracting with the U.S. government generally or any agency orrelated entity, if ATS’ reputation or relationship with government agencies wasimpaired, or if the U.S. government or any agency or related entity ceaseddoing business with them or significantly decreased the amount of business itdoes with them, ATS’ business, prospects, financial condition and operatingresults could be significantly impaired.

***Changes by the U.S.government in its spending priorities may cause a reduction in the demand forthe products or services that we may ultimately offer, which could adverselyaffect our business.***

Changes in theU.S. government budgetary priorities could directly affect ATS’ financialperformance. Government expenditures tend to fluctuate based on a variety ofpolitical, economic and social factors. A significant decline in governmentexpenditures, or a shift of expenditures away from programs ATS supports, or achange in U.S. government contracting policies causing its agencies to reducetheir expenditures under contracts, to exercise their right to terminatecontracts at any time without penalty, not to exercise options to renewcontracts or to delay or not enter into new contracts, could adversely affectATS’ business, prospects, financial condition or operating results.

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***ATS is required to comply with complex procurement laws andregulations, and the cost of compliance with these laws and regulations andpenalties and sanctions for any non-compliance could adversely affect ATS’business.***

ATS is required tocomply with laws and regulations relating to the administration and performanceof U.S. government contracts, which affect how ATS does business with itscustomers and imposes added costs on its business. If a government review orinvestigation uncovers improper or illegal activities, ATS may be subject tocivil and criminal penalties and administrative sanctions, includingtermination of contracts, forfeiture of profits, suspension of payments, finesand suspension or debarment from doing business with U.S. government agencies,any of which could materially adversely affect ATS’ business, prospects,financial condition or operating results.

***The U.S. governmentmay reform its procurement or other practices in a manner adverse to ATS.***

Because ATSderives a significant portion of its revenues from contracts with the U.S.government or its agencies, we believe that the success and development of ATS’business will depend on its continued successful participation in federalcontracting programs. The U.S. government may reform its procurement practicesor adopt new contracting rules and regulations, including cost-accountingstandards, that could be costly to satisfy or that could impair ATS’ ability toobtain new contracts. It also could adopt new contracting methods to GeneralServices Administration, or GSA, or other government-wide contracts, or adoptnew standards for contract awards intended to achieve certain socio-economic orother policy objectives, such as establishing new set-aside programs for smallor minority-owned businesses. In addition, the U.S. government may facerestrictions from new legislation or regulations, as well as pressure fromgovernment employees and their unions, on the nature and amount of services theU.S. government may obtain from private contractors. These changes could impairATS’ ability to obtain new contracts. Any new contracting methods could becostly or administratively difficult for ATS to implement and, as a result,could harm its operating results.

***Government contracts are usually awarded through acompetitive bidding process that entails risks not present in othercircumstances.***

A significantportion of ATS’ contracts and task orders with the U.S. government are awardedthrough a competitive bidding process. ATS expects that much of the business itwill seek in the foreseeable future will continue to be awarded throughcompetitive bidding. Budgetary pressures and changes in the procurement processhave caused many government clients to increasingly purchase goods and servicesthrough indefinite delivery/indefinite quantity, or ID/IQ, contracts,  GSA schedule contracts and othergovernment-wide acquisition contracts, or GWAC. These contracts, some of whichare awarded to multiple contractors, have increased competition and pricingpressure, requiring ATS to make sustained post-award efforts to realize revenueunder each such contract. Competitive bidding presents a number of risks,including without limitation:

·                  theneed to bid on programs in advance of the completion of their design, which mayresult in unforeseen technological difficulties and cost overruns;

·                  thesubstantial cost and managerial time and effort that ATS may spend to preparebids and proposals for contracts that may not be awarded to ATS;

·                  theneed to accurately estimate the resources and cost structure that will berequired to service any contract ATS is awarded; and

·                  theexpense and delay that may arise if ATS’ or its partners’ competitors protestor challenge contract awards made to ATS or its partners pursuant tocompetitive bidding, and the risk that any such protest or challenge couldresult in the resubmission of bids on modified specifications, or intermination, reduction or modification of the awarded contract.

If ATS is unableto consistently win new contract awards over any extended period, ATS’ businessand prospects will be adversely affected and that could cause ATS’ actualresults to be adversely affected. In addition, upon the expiration of acontract, if the client requires further services of the type provided by thecontract, there is frequently a competitive rebidding process. There can be noassurance

24

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that we will win anyparticular bid, or that we will be able to replace business lost uponexpiration or completion of a contract, and the termination or non-renewal ofany of our significant contracts could cause our actual results could beadversely affected.

***Restrictionson or other changes to the U.S. government’s use of service contracts may harmATS’ operating results.***

ATS derives asignificant amount of its revenue from service contracts with the U.S.government. The U.S. government may face restrictions from new legislation,regulations or government union pressures, on the nature and amount of servicesthe government may obtain from private contractors. Any reduction in thegovernment’s use of private contractors to provide federal services wouldadversely impact ATS’ business.

***ATS’ contracts with the U.S. government and its agencies aresubject to audits and cost adjustments.***

U.S. governmentagencies, including the Defense Contract Audit Agency, or the DCAA, routinelyaudit and investigate government contracts and government contractors’administrative processes and systems. These agencies review ATS’ performance oncontracts, pricing practices, cost structure and compliance with applicablelaws, regulations and standards. They also review ATS’ compliance withgovernment regulations and policies and the adequacy of ATS’ internal controlsystems and policies, including ATS’ purchasing, property, estimating,compensation and management information systems. Any costs found to beimproperly allocated to a specific contract will not be reimbursed, and anysuch costs already reimbursed must be refunded. Moreover, if any of theadministrative processes and systems is found not to comply with requirements,ATS may be subjected to increased government scrutiny and approval that coulddelay or otherwise adversely affect ATS’ ability to compete for or performcontracts. Therefore, an unfavorable outcome to an audit by the DCAA or anothergovernment agency could cause actual results to be adversely affected anddiffer materially from those anticipated. If a government investigationuncovers improper or illegal activities, ATS may be subject to civil andcriminal penalties and administrative sanctions, including termination ofcontracts, forfeitures of profits, suspension of payments, fines and suspensionor debarment from doing business with the U.S. government. In addition, ATS couldsuffer serious reputational harm if allegations of impropriety were madeagainst ATS. Each of these results could cause actual results being adverselyaffected.

***A portion of ATS’ business depends upon obtaining andmaintaining required security clearances, and its failure to do so could resultin termination of certain of its contracts or cause it to be unable to bid orrebid on certain contracts.***

Some U.S.government contracts require ATS’ employees to maintain various levels ofsecurity clearances, and ATS may be required to maintain certain facilitysecurity clearances complying with U.S. government requirements. Obtaining andmaintaining security clearances for employees involves a lengthy process, andit is difficult to identify, recruit and retain employees who already holdsecurity clearances. If ATS’ employees are unable to obtain or retain securityclearances or if such employees who hold security clearances terminate theiremployment with ATS, the customer whose work requires cleared employees couldterminate the contract or decide not to renew it upon its expiration. Inaddition, ATS expects that some of the contracts on which it will bid willrequire it to demonstrate its ability to obtain facility security clearancesand perform work with employees who hold specified types of security clearances.To the extent ATS is not able to obtain facility security clearances or engageemployees with the required security clearances for a particular contract, itmay not be able to bid on or win new contracts, or effectively re-bid onexpiring contracts which could adversely affect ATS’ business.

***ATS may not receive the fullamounts authorized under the contracts included in its backlog, which couldreduce its revenue in future periods.***

ATS’ backlogconsists of funded backlog, which is based on amounts actually obligated by aclient for payment of goods and services, and unfunded backlog, which is basedupon management’s estimate of the future potential of our existing contractsand task orders, including options, to generate

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revenue. ATS’ unfundedbacklog may not result in actual revenue in any particular period, or at all,which could cause ATS’ actual results to differ materially from thoseanticipated.

***Without additional Congressionalappropriations, some of the contracts included in ATS’ backlog will remainunfunded which could significantly harm ATS’ prospects.***

Although many ofATS’ U.S. government contracts require performance over a period of years,Congress often appropriates funds for these contracts for only one year at atime. As a result, ATS’ contracts typically are only partially funded at anypoint during their term, and all or some of the work intended to be performedunder the contracts will remain unfunded pending subsequent Congressionalappropriations and the obligation of additional funds to the contract by theprocuring agency. Nevertheless, ATS estimates its share of the contract values,including values based on the assumed exercise of options relating to thesecontracts, in calculating the amount of its backlog. Because ATS may notreceive the full amount it expects under a contract, ATS’ estimate of itsbacklog may be inaccurate.

***Loss of ATS’ GSA contracts orGWACs would impair ATS’ ability to attract new business.***

ATS is a primecontractor under several GSA contracts, Blanket Purchase Agreements, and GWACschedule contracts. ATS’ ability to continue to provide services under thesecontracts will continue to be important to ATS’ business because of themultiple opportunities for new engagements each contract provides. If ATS wereto lose its position as prime contractor on one or more of these contracts, ATScould lose substantial revenues and our operating results could be adverselyaffected. GSA contracts and other GWACs typically have an initial term of up tofive years, with multiple options exercisable at the government client’sdiscretion to extend the contract for one or more years. There can be noassurances that government clients will continue to exercise the optionsremaining on ATS’ current contracts, nor can ATS be assured that future clientswill exercise options on any contracts ATS may receive in the future.

***U.S. government contracts often contain provisions that areunfavorable, which could adversely affect ATS’ business.***

U.S. governmentcontracts contain provisions and are subject to laws and regulations that givethe U.S. government rights and remedies not typically found in commercialcontracts, including without limitation, allowing the U.S. government to:

·                  terminateexisting contracts for convenience, as well as for default;

·                  establishlimitations on future services that can be offered to prospective clients basedon conflict of interest regulations;

·                  reduceor modify contracts or subcontracts;

·                  cancelmulti-year contracts and related orders if funds for contract performance forany subsequent year become unavailable;

·                  declineto exercise an option to renew a multi-year contract;

·                  claimintellectual property rights in products provided by ATS; and

·                  suspendor bar ATS from doing business with the federal government or with agovernmental agency.

***The markets ATS competes in arehighly competitive, and many of the companies ATS competes against havesubstantially greater resources.***

The markets inwhich ATS operates include a large number of participants and are highlycompetitive. Many of ATS’ competitors may compete more effectively than ATS canbecause they are larger, better financed and better known companies than ATS. Inorder to stay competitive in our industry, ATS must also keep pace withchanging technologies and client preferences. If ATS is unable to differentiateour services from those of our competitors, ATS’ revenue may be adverselyaffected. In addition, ATS’ competitors have established relationships amongthemselves or with third parties to

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increase their ability toaddress client needs. As a result, new competitors or alliances amongcompetitors may emerge and compete more effectively than ATS can. There is alsoa significant industry trend towards consolidation, which may result in theemergence of companies who are better able to compete against ATS. The resultsof these competitive pressures could cause ATS’ business to be adverselyaffected.

***ATS’ failure to attract andretain qualified employees, including its senior management team, may adverselyaffect its business.***

ATS’ continuedsuccess depends to a substantial degree on its ability to recruit and retainthe technically skilled personnel it needs to serve its clients effectively. ATS’business involves the development of tailored solutions for its clients, aprocess that relies heavily upon the expertise and services of employees. Accordingly,ATS’ employees are its most valuable resource. Competition for skilledpersonnel in the information technology services industry is intense, andtechnology service companies often experience high attrition among theirskilled employees. There is a shortage of people capable of filling thesepositions and they are likely to remain a limited resource for the foreseeablefuture. Recruiting and training these personnel requires substantial resources.ATS’ failure to attract and retain technical personnel could increase its costsof performing its contractual obligations, reduce its ability to efficientlysatisfy its clients’ needs, limit its ability to win new business and constrainits future growth.

***ATS is dependent upon key personnel whose loss mayhave an adverse impact on ATS’ business.***

ATS depends on the expertise, experience and continued services of itssenior management employees, especially Mr. Perry, its Senior VicePresident and Chief Operating Officer. Mr. Perry has acquired specializedknowledge and skills with respect to ATS and its operations and most decisionsconcerning the business of ATS will be made or significantly influenced by him.The loss of Mr. Perry or other senior management employees of ATS, or aninability to attract or retain other key individuals, could materiallyadversely affect ATS’ business. If Mr. Perry or other senior managementwere to leave ATS following the acquisition, ATS could face substantialdifficulty in hiring qualified successors and could experience a loss inproductivity while any successor obtains the necessary training and experience.ATS will seek to compensate and incentivize key executives, as well as otheremployees, through competitive salaries and bonus plans, but there can be noassurance that these programs will allow ATS to retain key employees or hirenew key employees

***If ATS is unable to fund its capital expenditures,ATS may not be able to continue to develop new offerings andservices,which would have a material adverse effect on its business.***

In order to fund ATS capital expenditures, we may be required to incurborrowings or raise capital through the sale of debt or equity securities. Ourability to access the capital markets for future offerings may be limited byour and ATS’ financial condition at the time of any such offering as well as byadverse market conditions resulting from, among other things, general economic conditionsand contingencies and uncertainties that are beyond our or ATS’ control. Ourfailure to obtain the funds for necessary future capital expenditures wouldlimit ATS’ ability to****develop newofferings and services and could have a material adverse effect on ourbusiness, results of operations and financial condition.

***Future acquisitions by us or ATS would subject usand ATS to additional business, operating and industry risks, the impact ofwhich cannot presently be evaluated, and could adversely impact our or ATS’capital structure.***

We plan to pursue other acquisition opportunities following the closingof the ATS acquisition in an effort to take advantage of the platform we expectATS to constitute. Although we are not presently committed to any additionalacquisitions, we are currently actively pursuing one or more potentialacquisition opportunities. Following the acquisition of ATS, we will not belimited to any particular industry or type of business that we may acquire. Accordingly,there is no current basis for you to evaluate the possible merits or risks ofthe particular business or assets that we may acquire, or of the industry inwhich such business operates. In addition, the financing of any acquisitioncompleted by us after the ATS

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acquisitioncould adversely impact our capital structure as any such financing would likelyinclude the issuance of additional equity securities and/or the borrowing ofadditional funds.

***ATS may be unableto protect or enforce its intellectual property rights.***

The protection ofATS’ trade secrets, proprietary know-how, technological innovations, otherproprietary information and other intellectual property protections in the U.S.and other countries may be critical to our success. ATS may rely on acombination of copyright, trademark, trade secret laws and contractualrestrictions to protect any proprietary technology or other rights ATS may haveor may acquire. Despite ATS’ efforts, it may not be able to preventmisappropriation of those proprietary rights or deter independent developmentof technologies that compete with ATS. Litigation may be necessary in thefuture to enforce ATS’ intellectual property rights, to protect ATS’ tradesecrets, or to determine the validity and scope of the proprietary rights ofothers. It is also possible that third parties may claim ATS has infringedtheir patent, trademark, copyright or other proprietary rights. Claims orlitigation, with or without merit, could result in substantial costs anddiversions of resources, either of which could have a material adverse effecton ATS’ competitive position and business.

***ATS may be harmed by intellectual property infringementclaims.***

ATS may become subject toclaims from our employees and third parties who assert that intellectualproperty that ATS uses in delivering services and business solutions to itsclients infringe upon intellectual property rights of such employees or thirdparties. ATS’ employees develop much of the intellectual property that it usesto provide its services and business solutions to its clients, but ATS alsolicenses technology from other vendors. If ATS’ vendors, its employees, orthird parties assert claims that ATS or its clients are infringing on theirintellectual property, ATS could incur substantial costs to defend those claims.In addition, if any of these infringement claims is ultimately successful, ATScould be required to:

·                  cease sellingand using products and services that incorporate the challenged intellectualproperty;

·                  obtain a licenseor additional licenses from its vendors or other third parties; and

·                  redesign itsproducts and services that rely on the challenged intellectual property.

Any of theseoutcomes could further adversely affect ATS’ operating results.

***ATS’ quarterly revenue and operatingresults could be volatile.***

ATS’ quarterlyrevenue and operating results may fluctuate significantly and unpredictably inthe future. In particular, if the U.S. government does not adopt, or delaysadoption of, a budget for each fiscal year beginning on October 1 or failsto pass a continuing resolution, federal agencies may be forced to suspend itscontracts and delay the award of new and follow-on contracts and orders due toa lack of funding. Further, the rate at which the U.S. government procurestechnology may be negatively affected following changes in presidentialadministrations and senior government officials. Therefore, period-to-periodcomparisons of ATS’ operating results may not be a good indication of ATS’future performance. ATS’ quarterly operating results may not meet theexpectations of securities analysts or investors, which in turn may have anadverse affect on the market price of our common stock.

Further factorsthat may affect ATS’ operating results include, but are not limited to, thoselisted in this “Risk Factors” section and:

·                  fluctuations inrevenue earned on contracts;

·                  commencement,completion, and termination of contracts during any particular quarter;

·                  variablepurchasing patterns under GSA Schedule contracts, and agency-specific ID/IQ

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contracts;

·                  additions anddepartures of key personnel;

·                  changes in ATS’staff utilization rates;

·                  timing ofsignificant costs, investments and/or receipt of incentive fees;

·                  strategicdecisions by ATS and its competitors, such as acquisitions, divestitures,spin-offs, joint ventures, strategic investments, and changes in businessstrategy;

·                  contract mix andthe extent of use of subcontractors;

·                  changes inpolicy and budgetary measures that adversely affect government contracts; and

·                  any seasonalityof ATS’ business.

Reductions inrevenue in a particular quarter could lead to lower profitability in thatquarter because a relatively large amount of ATS’ expenses are fixed in theshort-term. ATS may incur significant operating expenses during the start-upand early stages of large contracts and may not receive corresponding paymentsor revenue in that same quarter. ATS may also incur significant orunanticipated expenses or both when contracts expire, are terminated, or arenot renewed. In addition, payments due to ATS from government agencies anddepartments may be delayed due to billing cycles, as a result of failures ofgovernmental budgets to gain Congressional and administration approval in atimely manner, and for other reasons.

***If subcontractorson ATS’ prime contracts are able to secure positions as prime contractors, ATSmay lose revenue.***

For each of thepast several years, as the GSA Schedule contracts have increasingly been usedas contract vehicles, ATS has received substantial revenue from governmentclients relating to work performed by other firms acting as subcontractors toATS. In some cases, companies that have not held GSA Schedule contracts haveapproached ATS in its capacity as a prime contractor, seeking to performservices as ATS’ subcontractor for a government client. Some of the providersthat are currently acting as subcontractors to ATS may in the future securepositions as prime contractors upon renewal of a GSA Schedule contract. If oneor more of its current subcontractors is awarded prime contractor status in thefuture, it could reduce or eliminate ATS’ revenue for the work they wereperforming as subcontractors to it. Revenue derived from work performed by ATS’subcontractors for fiscal year 2004 and fiscal year 2005 represented 21% and28% of ATS’ gross revenue, respectively.

***If ATS’ subcontractors fail to performtheir contractual obligations, its performance as a prime contractor and itsability to obtain future business could be materially and adversely impacted.***

ATS’ performanceof government contracts may involve the issuance of subcontracts to othercompanies upon which it relies to perform all or a portion of the work ATS isobligated to deliver to its clients. A failure by one or more of ATS’subcontractors to satisfactorily deliver on a timely basis the agreed-uponsupplies and/or perform the agreed-upon services may materially and adverselyaffect its ability to perform its obligations as a prime contractor.

In extreme cases,a subcontractor’s performance deficiency could result in the governmentterminating ATS’ contract for default. A default termination could expose ATSto liability for excess costs of reprocurement by the government and have amaterial adverse effect on ATS’ ability to compete for future contracts andtask orders.

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***ATS sometimesincurs costs before a contract is executed or appropriately modified. To theextent a suitable contract or modification is not later signed and these costsare not reimbursed, its revenues and profits will be reduced.***

When circumstanceswarrant, ATS sometimes incur expenses and performs work without a signedcontract or appropriate modification to an existing contract to cover suchexpenses or work. When ATS does so, it is working “at-risk,” and there is achance that the subsequent contract or modification will not ensue, or if itdoes, that it will not allow ATS to be paid for the expenses already incurredor work already performed or both. In such cases, ATS has generally beensuccessful in obtaining the required contract or modification, but any failureto do so in the future could adversely affect operating results.

***If ATS is unable to manage ATS’growth, ATS’ business may be adversely affected.***

Sustaining ATS’growth may place significant demands on ATS’ management, as well as on ATS’administrative, operational and financial resources.  If ATS sustains significant growth, ATS mustimprove its operational, financial and management information systems andexpand, motivate and manage its workforce. If ATS is unable to do so, or if newsystems that ATS implements to assist in managing any future growth do notproduce the expected benefits, ATS’ business, prospects, financial condition oroperating results could be adversely affected.

**Item 2. Unregistered Sales of EquitySecurities and Use of Proceeds.**

Not applicable.

**Item 3. Defaults Upon SeniorSecurities.**

**               **Not applicable.

**Item 4. Submission of Matters to aVote of Security Holders.**

**               **Not applicable.

**Item 5. Other Information.**

**               **Not applicable.

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**Item 6. Exhibits.**
| 3.1    | Amended and Restated Certificate of Incorporation  (incorporated by reference to exhibit of same number in our Annual Report on  Form 10-K filed with the Securities and Exchange Commission on  March 31, 2006)                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2    | By-laws (incorporated by reference to exhibit of  same number in our Annual Report on Form 10-K filed with the  Securities and Exchange Commission on March 31, 2006)                                                                                                                                                                                                                                                                                                            |
| 4.1    | Specimen Unit Certificate (incorporated by reference  to exhibit of same number in our Annual Report on Form 10-K filed  with the Securities and Exchange Commission on March 31, 2006)                                                                                                                                                                                                                                                                                          |
| 4.2    | Specimen Common Stock Certificate (incorporated by  reference to exhibit of same number in our Annual Report on Form 10-K  filed with the Securities and Exchange Commission on March 31, 2006)                                                                                                                                                                                                                                                                                  |
| 4.3    | Specimen Warrant Certificate (incorporated by  reference to exhibit of same number in our Annual Report on Form 10-K  filed with the Securities and Exchange Commission on March 31, 2006)                                                                                                                                                                                                                                                                                       |
| 4.4    | Warrant Agreement between Continental Stock  Transfer & Trust Company and the Company (incorporated by  reference to exhibit of same number in our Annual Report on Form 10-K  filed with the Securities and Exchange Commission on March 31, 2006)                                                                                                                                                                                                           |
| 10.10  | Stock Purchase Agreement dated April 19, 2006,  by and between Federal Services Acquisition Corporation, Advanced Technology  Systems, Inc., the holders of all the outstanding shares of Advanced  Technology Systems, Inc. and Claude Rumsey, as shareholders’  representative (incorporated by reference to Exhibit 10.10 to the  registrant’s Current Report on Form 8-K filed with the Securities  and Exchange Commission on April 20, 2006) |
| 31.1   | Certification of Principal Executive Officer  pursuant to Rule 13a-14(a)/15(d)-19(a) of the  Securities Exchange Act of 1934, as amended                                                                                                                                                                                                                                                                                                                                         |
| 31.2   | Certification of Principal Financial Officer  pursuant to Rule 13a-14(a)/15(d)-19(a) of the  Securities Exchange Act of 1934, as amended                                                                                                                                                                                                                                                                                                                                         |
| 32.1   | Certification of Principal Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                               |
| 32.2   | Certification of Principal Financial Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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##### **SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, the Registrant has duly caused the reportto be signed on its behalf by the undersigned, thereunto duly authorized.
|   | Federal Services Acquisition Corporation |
|--------|------------------------------------------|
|   |                                     |   |
|   | By:                                      | /s/ Joel R. Jacks |
|   |                                     | Chairman of the Board and |
|   |                                     | Chief Executive Officer |
|   |                                     |   |
|   | By:                                      | /s/ Peter M. Schulte |
|   |                                     | President and |
|   |                                     | Chief Financial Officer |

 

Date: December 5, 2006

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