UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended March 31, 2009 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file Number 1-08964
 Halifax Corporation of Virginia
  Virginia
    
    54-0829246(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification No.)5250 Cherokee Avenue, Alexandria, VA
    
    22312(Address of principal executive offices)
    
    (Zip Code)
 703) 658-2400
  Title of each class
    
    Name of each exchange on which registeredCommon Stock ($.24 par value)
    
    American Stock Exchange
 None
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ
  Class
    
    Outstanding as of June 22, 2009Common
    
    3,175,206




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PagePART 1Item 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    4Item 1B.
    
    Unresolved Staff Comments
    
    
    10Item 2.
    
    Properties
    
    
    10Item 3.
    
    Legal Proceedings
    
    
    11Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    11Item 4A.
    
    Executive Officers of the Registrant
    
    
    12PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    13Item 6
    
    Selected Financial Data
    
    
    13Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    13Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 8.
    
    Financial Statements and Supplementary Data
    
    
    25Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    43Item 9(T).
    
    Controls and Procedures
    
    
    43Item 9B.
    
    Other Information
    
    
    45PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    46Item 11.
    
    Executive Compensation
    
    
    46Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    46Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    47Item 14.
    
    Principal Accounting Fees and Services
    
    
    47PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    48Signatures
    
    
    51




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PART I
 Forward- Looking Statements
    
 Item 1. Business
 Our Business
   
    
    Alexandria, Virginia;
    
    Harrisburg, Pennsylvania;
    
    Richmond, Virginia;
    
    Charleston, South Carolina;
    
    Seattle, Washington; and
    
    Ft. Worth, Texas.
 1




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
    
    Enterprise Logistics Solutions  logistics and supply chain solutions; from front-office
customer interaction to back-office reverse logistics.
    
    High Availability Enterprise Maintenance Services  7 days a week, 24 hours a day, 365 days
a year, multi-vendor support for nationwide customers with demanding service level
requirements.
    
    Technology Deployment and Integration Services  nationwide deployment and integration
support services.
 Enterprise Logistics Solutions
  High Availability Enterprise Maintenance Services
    Technology Deployment and Integration Services
   2




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
    
    Reduce our clients total cost of ownership;
    
    Improve service levels and response times;
    
    Reduce the administrative costs for procurement;
    
    Increase user productivity through decreased downtime;
    
    Amortize costs across thousands of users;
    
    Focus IT staff on core responsibilities;
    
    Eliminate the time and expense of storage, sale, and disposal of surplus equipment;
    
    Simplify accounting with one report, one invoice, and one charge per user; and
    
    Create a single source of accountability for all PC desktop hardware, software, and services.
 Types of Customers
  Years Ended March 31,(Amounts in thousands)
    
    2009
    
    
    2008State/Municipal Government
    
    $
    4,075
    
    
    
    12
    %
    
    $
    5,275
    
    
    
    12
    %Commercial
    
    
    29,875
    
    
    
    88
    %
    
    
    38,041
    
    
    
    87
    %Federal Government
    
    
    98
    
    
    
    
    %
    
    
    557
    
    
    
    1
    %Total
    
    $
    34,048
    
    
    
    100
    %
    
    $
    43,873
    
    
    
    100
    %
  Types of Contracts
     3




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Backlog
  Sales and Marketing
   Competition
   Personnel
  
 Item 1A Risk Factors
 Investing in our common stock involves risks. You should carefully consider all of the information
contained in this Annual Report on Form 10-K and, in particular, the risks described below.
Additional risks and uncertainties not presently known to us or those we currently deem immaterial
may impair our business operations in the future. If any of the following risks actually occur,
our business, financial condition or results of operations could be materially harmed and you may
lose part or all of your investment.
 If we fail to meet our financial and other covenants under our loan agreement with our lender,
absent a waiver, we will be in default of the loan agreement and Sonabank can take actions that
would adversely affect our business.
 4




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Our revenues are derived from a few major customers, the loss of any of which could cause our
results of operations to be adversely affected.
  If we experience a decline in cash flow, our ability to operate could be adversely affected.
  Uncertain economic conditions may affect the demand for our services which may materially
adversely affect our results of operations, prospects and stock price.
  5




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We operate in a highly competitive market. If we are unable to offer competitive products and
services, our business may be adversely affected.
    Our revenues and results of operations may vary period to period, which may cause the common stock
price to fluctuate.
  
    
    changes in economic conditions;
    
    disruptions or downturns in general economic activity;
    
    competitive pricing pressure;
    
    lengthening sales cycles;
    
    obsolescence of technology;
    
    increases in prices of components used to support our enterprise maintenance
solutions;
    
    loss of material contracts; and
    
    the success of our business strategy in providing improved operating results.
   6




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If we are unable to generate sufficient revenues, we may have to further down size.
  If we are unable to retain and attract highly qualified personnel to fulfill our contract
obligations, our business may be harmed.
  We are subject to risks related to fluctuations in interest rates.
  We incur significant costs in connection with the start-up of new contracts before receiving
related revenues, which could result in cash shortfalls and fluctuations in quarterly results from
period to period.
  
    
    could increase our vulnerability to general adverse economic and industry
conditions;
    
    would require us to dedicate a substantial portion of our cash flow from
operations to service payments on our indebtedness; reducing the availability of
our cash flow to fund future capital expenditures, working capital, execution of
our growth strategy, research and development costs and other general corporate
requirements;
    
    could limit our flexibility in planning for, or reacting to, changes in our
business and industry, which may place us at a competitive disadvantage compared
with competitors; and
    
    could limit our ability to borrow additional funds, even when necessary to
maintain adequate liquidity.
  7




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Some of our contracts contain fixed-price provisions that could result in decreased profits if we
fail to accurately estimate our costs.
  If we are unable to effectively and efficiently manage our costs, our results of operations may be
adversely affected.
  
    
    our ability to complete these on-going efforts,
    
    our ability to generate the level of savings we expect and/or that are necessary to
enable us to effectively compete,
    
    decrease in employee personnel, and
    
    the performance of other parties under arrangements on which we rely to support parts
or components.
 If we fail to maintain an effective system of internal control over financial reporting, we may be
unable to accurately report our financial results, comply with the reporting requirements under the
Exchange Act or prevent fraud. As a result, current and potential stockholders may lose confidence
in our financial reporting, which could harm our business, the trading price of our common stock,
our ability to retain our current customers or obtain new customers and we could be subject to
regulatory scrutiny.
    8




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We have received a deficiency notice from the American Stock Exchange, or AMEX, and if we are
unable to satisfy AMEX that we will regain compliance with its continued listing criteria, our
common stock may be delisted from AMEX, which could adversely affect investor perception and may
result in institutional and other investors refraining from purchasing our common stock which would
adversely affect your ability and our ability to sell our common stock.
      9




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We do not expect to pay dividends on our common stock.
  Shareholders of our common stock may face a lack of liquidity.
    Provisions in our corporate charter documents could delay or prevent a change in control.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
   10




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   %OF
    
    
    %OFVOTING
    
    
    OUTSTANDINGNOMINEE
    
    FOR
    
    
    WITHHELD
    
    
    SHARES
    
    
    SHARESJOHN H. GROVER
    
    
    2,333,460
    
    
    
    314,659
    
    
    
    88.12
    %
    
    
    73.49
    %JOHN M. TOUPS
    
    
    2,332,984
    
    
    
    315,135
    
    
    
    88.11
    %
    
    
    73.48
    %DANIEL R. YOUNG
    
    
    2,332,984
    
    
    
    315,135
    
    
    
    88.11
    %
    
    
    73.48
    %THOMAS L. HEWITT
    
    
    2,332,984
    
    
    
    315,135
    
    
    
    88.11
    %
    
    
    73.48
    %ARCH C. SCURLOCK, JR.
    
    
    2,333,460
    
    
    
    314,659
    
    
    
    88.11
    %
    
    
    73.48
    %CHARLES L. MCNEW
    
    
    2,645,793
    
    
    
    2,323
    
    
    
    99.91
    %
    
    
    83.33
    %
  11




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Item 4A Executive Officers of the Registrant
      12




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    Fiscal Year 2009
    
    Fiscal Year 2008Fiscal Quarter
    
    High
    
    Low
    
    High
    LowApril - June
    
    $
    1.70
    
    
    $
    .16
    
    
    $
    3.64
    
    
    $
    2.56July - Sept.
    
    
    .90
    
    
    
    .50
    
    
    
    3.05
    
    
    
    1.53Oct. - Dec.
    
    
    .75
    
    
    
    .37
    
    
    
    3.50
    
    
    
    1.55Jan. - March
    
    
    .62
    
    
    
    .27
    
    
    
    2.80
    
    
    
    1.00
    
 Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    13




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14




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Consolidated Results of Operations
  Years ended March 31(Amounts in thousands except share data)
    
    2009
    
    
    2008
    
    
    Change
    
    
    %Results of OperationsRevenues
    
    $
    34,048
    
    
    $
    43,873
    
    
    $
    (9,825
    )
    
    
    (22
    )%Costs of revenues
    
    
    28,568
    
    
    
    40,259
    
    
    
    (11,691
    )
    
    
    (29
    )%Percent of revenues
    
    
    84
    %
    
    
    92
    %Gross Margin
    
    
    5,480
    
    
    
    3,614
    
    
    
    1,866
    
    
    
    52
    %Percent of revenues
    
    
    16
    %
    
    
    2
    %Selling and marketing expense
    
    
    810
    
    
    
    904
    
    
    
    (94
    )
    
    
    (10
    )%Percent of revenues
    
    
    2
    %
    
    
    2
    %General and administrative expense
    
    
    3,420
    
    
    
    3,690
    
    
    
    (270
    )
    
    
    (7
    )%Percent of revenues
    
    
    10
    %
    
    
    8
    %Acquisition costs
    
    
    
    
    
    
    458
    
    
    
    (458
    )
    
    
    N/MSettlement costs
    
    
    
    
    
    
    410
    
    
    
    (410
    )
    
    
    N/MTotal operating costs and expenses
    
    
    4,230
    
    
    
    5,462
    
    
    
    (1.232
    )
    
    
    (23
    )%Percent of revenues
    
    
    12
    %
    
    
    12
    %Operating income (loss)
    
    
    1,250
    
    
    
    (1,848
    )
    
    
    3,098
    
    
    
    245
    %Percent of revenues
    
    
    4
    %
    
    
    -2
    %Interest expense
    
    
    337
    
    
    
    654
    
    
    
    (317
    )
    
    
    (48
    )%Other income
    
    
    (28
    )
    
    
    (31
    )
    
    
    3
    
    
    
    N/MIncome (loss) before taxes
    
    
    941
    
    
    
    (2,471
    )
    
    
    3,412
    
    
    
    363
    %Income tax expense (benefit)
    
    
    38
    
    
    
    (18
    )
    
    
    56
    
    
    
    147
    %Net income (loss)
    
    $
    903
    
    
    $
    (2,453
    )
    
    $
    3,356
    
    
    
    372
    %Income (loss) per share  Basic
    
    $
    .28
    
    
    $
    (.77
    )Income (loss) per share  Diluted
    
    $
    .28
    
    
    $
    (.77
    )
 
 N/M = not meaningful 15




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Revenues
   March 31,(Amounts in thousands)
    
    2009
    
    
    2008
    
    
    Change
    
    
    %Revenues:Services
    
    $
    32,732
    
    
    $
    41,534
    
    
    $
    (8,802
    )
    
    
    (21
    )%Product held for resale
    
    
    1,316
    
    
    
    2,339
    
    
    
    (1,023
    )
    
    
    (44
    )%Total revenues
    
    $
    34,048
    
    
    $
    43,873
    
    
    $
    (9,825
    )
    
    
    (22
    )%
  Cost of revenues
     16




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March 31(Amounts in thousands)
    
    2009
    
    
    2008
    
    
    Change
    
    
    %Services
delivery and support
    
    $
    23,895
    
    
    $
    32,472
    
    
    $
    (8,577
    )
    
    
    (27
    )%Product held for resale
    
    
    1,219
    
    
    
    2,148
    
    
    
    (929
    )
    
    
    (43
    )%Total direct costs
    
    
    25,114
    
    
    
    34,620
    
    
    
    (9,506
    )
    
    
    (28
    )%Indirect costs
    
    
    3,454
    
    
    
    5,639
    
    
    
    (2,185
    )
    
    
    (38
    )%Cost of revenues
    
    $
    28,568
    
    
    $
    40,259
    
    
    $
    (11,691
    )
    
    
    (29
    )%
    Gross Margin
   Selling and Marketing Expenses
  General and Administrative Expenses
  17




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Operating income (loss)
  Interest Expense
  Income Tax Expense (Benefit)
    Litigation settlement and acquisition costs
   Net income (loss)
   Depreciation and Amortization
  18




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Liquidity and Capital Resources
            19




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2009
    
    
    2008(Amounts in thousands)Liquidity and Capital ResourcesCash balance at March 31
    
    $
    484
    
    
    $
    232Working capital (deficit) at March 31
    
    $
    795
    
    
    $
    (510
    )Net cash provided by operating activities
    
    $
    2,875
    
    
    $
    1,781Net cash (used in) provided by investing activities
    
    $
    (369
    )
    
    $
    295Net cash used in financing activities
    
    $
    (2,254
    )
    
    $
    (2,922
    )
   20




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Textron Financial Agreement
  Off Balance Sheet Arrangements
  Application of Critical Accounting Estimates
  Revenue Recognition
   21




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Inventory Valuation Reserves
  Allowance for Doubtful Accounts
  Goodwill and Other Intangible Assets
    Property and Equipment
  22




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Income Taxes and Valuation Allowance
  Results of Operations and Forward Looking Statements
  Recent Accounting Pronouncements
    23




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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    Total Debt(Amounts in thousands)Long-term debt (including current maturities)Loan agreement with Textron Financial with a floor of 5% and
the prime rate plus 2.75%, paid in full on June 15, 2009. The
interest rate was 7.75% at March 31, 2009.
    
    $
    2,545Total variable rate debt
    
    
    2,5458% subordinated notes from affiliate due July 1, 2010.
    
    
    1,000Equipment under a capital lease, 10.74% interest, 24 month term
    
    
    242Equipment under a capital lease, 14.4% interest, 36 month term
    
    
    75Equipment under a capital lease, 9.3% interest, 48 month term
    
    
    78Equipment under a capital lease, 8% interest, 60 month term
    
    
    77Total fixed rate debt
    
    
    1,472Total debt
    
    $
    4,017
  24




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Item 8. Financial Statements and Supplementary Data
  
     
 25




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HALIFAX CORPORATION OF VIRGINIA   FOR THE YEARS ENDED MARCH 31, 2009 AND 2008
 
 Year ended March 31,(Amounts in thousands except share and per share data)
    
    2009
    
    
    2008Revenues
    
    $
    34,048
    
    
    $
    43,873Cost of revenues
    
    
    28,568
    
    
    
    40,259Gross margin
    
    
    5,480
    
    
    
    3,614Operating costs and expensesSelling and marketing expense
    
    
    810
    
    
    
    904General and administrative expense
    
    
    3,420
    
    
    
    3,690Acquisition costs
    
    
    
    
    
    
    458Settlement costs
    
    
    
    
    
    
    410Total operating costs and expenses
    
    
    4,230
    
    
    
    5,462Operating income (loss)
    
    
    1,250
    
    
    
    (1,848
    )Other expense (income)Interest expense
    
    
    337
    
    
    
    654Other income
    
    
    (28
    )
    
    
    (31
    )Income (loss) before income taxes
    
    
    941
    
    
    
    (2,471
    )Income tax expense (benefit)
    
    
    38
    
    
    
    (18
    )Net income (loss)
    
    $
    903
    
    
    $
    (2,453
    )Net income (loss) per share  Basic
    
    $
    .28
    
    
    $
    (.77
    )Net income (loss) per share Diluted
    
    $
    .28
    
    
    $
    (.77
    )Weighted average number of common shares outstanding
 Basic
    
    
    3,175,206
    
    
    
    3,175,206Weighted average number of common shares outstanding
 Diluted*
    
    
    3,179,799
    
    
    
    3,175,206
 
 *
    
    No effect is given to dilutive securities for loss periods.  26




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HALIFAX CORPORATION OF VIRGINIA  CONSOLIDATED BALANCE SHEETS  MARCH 31, 2009 AND 2008
 March 31,(Amounts in thousands except share and per share data)
    
    2009
    
    
    2008ASSETSCURRENT ASSETSCash
    
    $
    484
    
    
    $
    232Restricted cash
    
    
    282
    
    
    
    Accounts receivable, net
    
    
    6,794
    
    
    
    10,206Inventory, net
    
    
    2,588
    
    
    
    3,240Prepaid expenses and other current assets
    
    
    208
    
    
    
    220TOTAL CURRENT ASSETS
    
    
    10,356
    
    
    
    13,898PROPERTY AND EQUIPMENT, net
    
    
    727
    
    
    
    1,001GOODWILL
    
    
    2,918
    
    
    
    2,918OTHER INTANGIBLE ASSETS, net
    
    
    374
    
    
    
    662OTHER ASSETS
    
    
    56
    
    
    
    111TOTAL ASSETS
    
    $
    14,431
    
    
    $
    18,590LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    2,254
    
    
    $
    2,807Accrued expenses
    
    
    2,292
    
    
    
    2,473Deferred maintenance revenues
    
    
    2,072
    
    
    
    4,309Current portion of long-term debt
    
    
    331
    
    
    
    276Bank debt
    
    
    2,545
    
    
    
    4,448Auxiliary line of credit
    
    
    
    
    
    
    60Income taxes payable
    
    
    67
    
    
    
    35TOTAL CURRENT LIABILITIES
    
    
    9,561
    
    
    
    14,408SUBORDINATED DEBT  AFFILIATE
    
    
    1,000
    
    
    
    1,000OTHER LONG-TERM DEBT
    
    
    141
    
    
    
    325DEFERRED INCOME
    
    
    40
    
    
    
    99TOTAL LIABILITIES
    
    
    10,742
    
    
    
    15,832COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITYPreferred stock, no par value, Authorized 1,500,000, Issued 0 shares
    
    
    
    
    
    
    Common stock, $.24 par value, Authorized 6,000,000 shares,
Issued 3,431,890 shares,
Outstanding 3,175,206 shares
    
    
    828
    
    
    
    828Additional paid-in capital
    
    
    9,103
    
    
    
    9,075Accumulated deficit
    
    
    (6,030
    )
    
    
    (6,933
    )Less treasury stock at cost  256,684 shares
    
    
    (212
    )
    
    
    (212
    )TOTAL STOCKHOLDERS EQUITY
    
    
    3,689
    
    
    
    2,758TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    14,431
    
    
    $
    18,590
  27




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HALIFAX CORPORATION OF VIRGINIA   FOR THE YEARS ENDED MARCH 31, 2009 AND 2008
 Year ended March 31,(Amounts in thousands)
    
    2009
    
    
    2008Cash flows from operating activities:Net income (loss)
    
    $
    903
    
    
    $
    (2,453
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation and amortization
    
    
    811
    
    
    
    887Equity based compensation
    
    
    28
    
    
    
    28Changes in operating assets and liabilities:Accounts receivable
    
    
    3,412
    
    
    
    1,139Inventory
    
    
    652
    
    
    
    1,706Prepaid expenses and other current assets
    
    
    55
    
    
    
    364Other assets
    
    
    12
    
    
    
    10Accounts payable, accrued expenses and
other current liabilities
    
    
    (734
    )
    
    
    (1,095
    )Deferred maintenance revenues
    
    
    (2,237
    )
    
    
    1,251Deferred income
    
    
    (59
    )
    
    
    (60
    )Income taxes payable
    
    
    32
    
    
    
    4Net cash provided by operating activities
    
    
    2,875
    
    
    
    1,781Cash flows from investing activities:Purchase of property and equipment
    
    
    (87
    )
    
    
    (378
    )Net (increase) decrease in restricted cash
    
    
    (282
    )
    
    
    673Net cash (used in) provided by investing activities
    
    
    (369
    )
    
    
    295Cash flows from financing activities:Proceeds from debt borrowings
    
    
    32,343
    
    
    
    41,141Repayments of debt borrowings
    
    
    (34,246
    )
    
    
    (43,573
    )Repayments of borrowings under auxiliary line of credit
    
    
    (60
    )
    
    
    (940
    )Proceeds from capital lease obligations and long-term debt
    
    
    
    
    
    
    500Repayment of capital lease obligations and long-term debt
    
    
    (291
    )
    
    
    (50
    )Net cash used in financing activities
    
    
    (2,254
    )
    
    
    (2,922
    )Net increase (decrease) in cash
    
    
    252
    
    
    
    (846
    )Cash at beginning of year
    
    
    232
    
    
    
    1,078Cash at end of year
    
    $
    484
    
    
    $
    232
  28




---



##### 



HALIFAX CORPORATION OF VIRGINIA   FOR THE YEARS ENDED MARCH 31, 2009 AND 2008
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    Treasury StockShares
    
    
    ParValue
    
    
    Capital
    
    
    Deficit
    
    
    Shares
    
    
    Cost
    
    
    TotalMarch 31, 2007
    
    
    3,431,890
    
    
    $
    828
    
    
    $
    9,047
    
    
    $
    (4,460
    )
    
    
    256,684
    
    
    $
    (212
    )
    
    $
    5,203Equity based compensation
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Adjustment to initially
adopt FIN No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (20
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,453
    )
    
    
    
    
    
    
    
    
    
    
    (2,453
    )March 31, 2008
    
    
    3,431,890
    
    
    
    828
    
    
    
    9,075
    
    
    
    (6,933
    )
    
    
    256,684
    
    
    
    (212
    )
    
    
    2,758Equity based compensation
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    903
    
    
    
    
    
    
    
    
    
    
    
    903March 31, 2009
    
    
    3,431,890
    
    
    $
    828
    
    
    $
    9,103
    
    
    $
    (6,030
    )
    
    
    256,684
    
    
    $
    (212
    )
    
    $
    3,689
  29




---



##### 



HALIFAX CORPORATION OF VIRGINIA   FOR THE YEARS ENDED MARCH 31, 2009 AND 2008
  Business Activity
 Principles of Consolidation
 Segment Reporting
 Use of Estimates
 Accounts Receivable
  Inventory
  30




---



##### 



Property and Equipment
 Machinery and equipment
    
    3-10 yearsFurniture and fixtures
    
    5 yearsBuilding improvements
    
    5-10 yearsVehicles
    
    4 years
  Long-Lived Assets
 Goodwill and Intangible Assets st
    31




---



##### 



Accounts Payable
 Deferred Maintenance Revenues
 Revenue Recognition
  Income Taxes
 Stock-Based Compensation
 32




---



##### 



Acquisition Costs
 Earnings (Loss) Per Common Share
 Concentration of Risk
  Risks and Uncertainties
 Fair Value of Financial Instruments
  33




---



##### 



Recent Pronouncements
   Reclassifications
  March 31,(Amounts in thousands)
    
    2009
    
    
    2008Trade accounts receivable consist of:Amounts billed
    
    $
    6,732
    
    
    $
    10,283Amounts unbilled
    
    
    239
    
    
    
    73Total
    
    
    6,971
    
    
    
    10,356Allowance for doubtful accounts
    
    
    (177
    )
    
    
    (150
    )Total
    
    $
    6,794
    
    
    $
    10,206
 34




---



##### 



March 31,(Amounts in thousands)
    
    2009
    
    
    2008Property and equipment consists of:Machinery and equipment
    
    $
    3,815
    
    
    $
    3,566Furniture and fixtures
    
    
    235
    
    
    
    235Building improvements
    
    
    323
    
    
    
    323Vehicles
    
    
    162
    
    
    
    162Total
    
    
    4,535
    
    
    
    4,286Accumulated depreciation
    
    
    (3,808
    )
    
    
    (3,285
    )Total
    
    $
    727
    
    
    $
    1,001
    EstimatedAmortization
    
    
    2009
    
    
    2008period
    
    
    Gross
    
    
    Accumulated
    
    
    Net
    
    
    Gross
    
    
    Accumulated
    
    
    Net(Amounts in thousands):
    
    (in months)
    
    
    Assets
    
    
    Amortization
    
    
    Assets
    
    
    Assets
    
    
    Amortization
    
    
    AssetsClient master contracts
    
    
    60-90
    
    
    $
    1,675
    
    
    
    (1,301
    )
    
    
    374
    
    
    $
    1,675
    
    
    $
    (1,013
    )
    
    $
    662Backlog
    
    
    48
    
    
    
    96
    
    
    
    (96
    )
    
    
    
    
    
    
    96
    
    
    
    (96
    )
    
    
    Subcontractor provider
network
    
    
    36
    
    
    
    64
    
    
    
    (64
    )
    
    
    
    
    
    
    64
    
    
    
    (64
    )
    
    
    Non compete
    
    
    24-36
    
    
    
    109
    
    
    
    (109
    )
    
    
    
    
    
    
    109
    
    
    
    (109
    )
    
    
    $
    1,944
    
    
    $
    (1,570
    )
    
    $
    374
    
    
    $
    1,944
    
    
    $
    (1,282
    )
    
    $
    662
  (Amounts in thousands):Fiscal Year ending March 31,2010
    
    $
    2162011
    
    
    1252012
    
    
    33Total
    
    $
    374
 35




---



##### 



March 31,(Amounts in thousands)Bank debt consists of:
    
    2009
    
    
    2008Credit facility with Textron Financial Corporation dated July
7, 2008, as amended, maturing July 7, 2011 with a maximum
borrowing limit of $4.0 million. Amounts available under this
credit facility are determined by applying stated percentages
to the Companys eligible receivables and inventory. At March
31, 2009, $1.5 million was available to the Company under the
terms of the credit facility. The credit facility bears
interest at the prime rate (as quoted in The Wall Street
Journal) plus 2.75% with a prime rate floor of 5.0%. The
interest rate at March 31, 2009 was 7.75%. On June 15, 2009, ,
the Company terminated this credit facility and paid in full
amounts outstanding under this credit facility by utilizing
funds from the credit facility with Sonabank.
    
    $
    2,545
    
    
    $
    Credit facility with Provident Bank dated July 6, 2006, as
amended, maturing June 30, 2008 with a maximum borrowing limit
of $6.0 million. Amounts available under this credit facility
were determined by applying stated percentages to the Companys
eligible receivables and inventory. At March 31, 2008, $1.5
million was available to the Company under the terms of the
credit facility. The credit facility bore interest at the
banks prime rate plus 2%. The interest rate at March 31, 2008
was 7.5%. Simultaneous with the execution of the credit
facility with Textron Financial Corporation dated July 7, 2008,
the Company terminated this credit facility and paid in full
amounts outstanding under this credit facility by utilizing
funds from the credit facility with Textron Financial
Corporation.
    
    
    
    
    
    
    4,448Auxiliary line of credit with Provident Bank, bearing interest
at 8.5% paid in full on April 30, 2008.
    
    
    
    
    
    
    60Subtotal  bank debt
    
    
    2,545
    
    
    
    4,508Subordinated note with an affiliate (see Note 11) dated
November 2, 1998. Principal due on July 1, 2010. Interest
accrues annually at 8%.
    
    
    500
    
    
    
    500Subordinated note with an affiliate (see Note 11) dated
November 5, 1998. Principal due on July 1, 2010. Interest
accrues annually at 8%.
    
    
    500
    
    
    
    500Subtotal  subordinated debt  affiliates
    
    
    1,000
    
    
    
    1,000Equipment under a capital lease, 7.94% interest, 60 month term
    
    
    77
    
    
    
    120Equipment under a capital lease, 9.3% interest, 48 month term
    
    
    78
    
    
    Equipment under a capital lease, 14.4% interest, 36 month term
    
    
    75
    
    

    Equipment under a capital lease, 10.74% interest, 24 month term
    
    
    242
    
    
    
    481Subtotal  capital leases
    
    
    472
    
    
    
    601Total debt
    
    
    4,017
    
    
    
    6,109Less current maturities
    
    
    2,876
    
    
    
    4,784Total long-term debt
    
    $
    1,141
    
    
    $
    1,325
  36




---



##### 



37




---



##### 



(Amounts in thousands)
    
    TotalYear ending March 31,2010
    
    $
    2,9032011
    
    
    1,1022012
    
    
    492013
    
    
    13Total payments
    
    
    4,067Less amounts representing interest on capital leases
    
    
    (50
    )Total principal payments
    
    $
    4,017
   March 31,(Amounts in thousands)
    
    2009
    
    
    2008Accrued lease payments
    
    $
    832
    
    
    $
    1,221Accrued vacation
    
    
    21
    
    
    
    75Accrued payroll
    
    
    357
    
    
    
    362Payroll taxes accrued and withheld
    
    
    143
    
    
    
    159Interest
    
    
    325
    
    
    
    249Other accrued expenses
    
    
    614
    
    
    
    407$
    2,292
    
    
    $
    2,473
      38




---



##### 



WeightedAverageNumber of
    
    
    Exercise Price2005 Plan
    
    Shares
    
    
    Per ShareOutstanding at March 31, 2007
    
    
    97,300
    
    
    $
    3.11Forfeited/Expired
    
    
    (6,500
    )
    
    
    3.00Outstanding at March 31, 2008
    
    
    90,800
    
    
    
    3.12Issued
    
    
    24,000
    
    
    
    0.49Forfeited/Expired
    
    
    (1,600
    )
    
    
    3.00Outstanding at March 31, 2009
    
    
    113,200
    
    
    $
    2.57
 WeightedAverageNumber of
    
    
    Exercise Price1994 Plan and 1997 Plan
    
    Shares
    
    
    Per ShareOutstanding at March 31, 2007
    
    
    399,417
    
    
    $
    5.17Forfeited/Expired
    
    
    (40,750
    )
    
    
    7.89Outstanding at March 31, 2008
    
    
    358,667
    
    
    
    4.86Forfeited/Expired
    
    
    (17,310
    )
    
    
    6.96Outstanding at March 31, 2009
    
    
    341,357
    
    
    $
    4.76
 39




---



##### 



Options OutstandingWeighted Average
    
    
    Options Outstanding
    
    
    
    
    
    
    Options ExercisableRange of
    
    
    Options
    
    
    Remaining
    
    
    Weighted Average
    
    
    Options
    
    
    Weighted AverageExercise Prices
    
    
    Outstanding
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise price$
    3.40
    
    
    
    27,800
    
    
    6.4 years
    
    $
    3.40
    
    
    
    27,800
    
    
    $
    3.403.00
    
    
    
    61,400
    
    
    7.3 years
    
    
    3.00
    
    
    
    24,560
    
    
    
    3.00.32-.66
    
    
    
    24,000
    
    
    9.7 years
    
    
    0.49
    
    
    
    
    
    
    
    $
    .32-3.40
    
    
    
    113,200
    
    
    
    
    
    
    $
    2.56
    
    
    
    52,360
    
    
    $
    3.21
  Options OutstandingWeighted Average
    
    
    Options Outstanding
    
    
    
    
    
    
    Options ExercisableRange of
    
    
    Options
    
    
    Remaining
    
    
    Weighted Average
    
    
    Options
    
    
    Weighted AverageExercise Prices
    
    
    Outstanding
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise price5.57-7.56
    
    
    
    72,000
    
    
    .63 years
    
    
    6.14
    
    
    
    72,000
    
    
    
    6.145.38-7.06
    
    
    
    64,000
    
    
    1.17 years
    
    
    5.81
    
    
    
    64,000
    
    
    
    5.811.80-4.05
    
    
    
    70,000
    
    
    2.83 years
    
    
    3.51
    
    
    
    70,000
    
    
    
    3.513.10-5.00
    
    
    
    45,667
    
    
    3.73 years
    
    
    3.51
    
    
    
    45,667
    
    
    
    63.514.11-5.70
    
    
    
    13,000
    
    
    4.31 years
    
    
    4.11
    
    
    
    13,000
    
    
    
    4.114.45-5.02
    
    
    
    76,690
    
    
    5.20 years
    
    
    4.57
    
    
    
    76,444
    
    
    
    4.57$
    1.80-$7.56
    
    
    
    341,357
    
    
    
    
    
    
    $
    4.76
    
    
    
    341,111
    
    
    $
    4.76
       (Amounts in thousands)
    
    2009
    
    
    2008Current expense (benefit):Federal
    
    $
    18
    
    
    $
    State
    
    
    20
    
    
    
    (18
    )Total current:
    
    
    38
    
    
    
    (18
    )Deferred expense (benefit):Federal
    
    
    
    
    
    
    State
    
    
    
    
    
    
    Total deferred:
    
    
    
    
    
    
    Income tax expense (benefit)
    
    $
    38
    
    
    $
    (18
    )
  40




---



##### 



(Amounts in thousands)
    
    2009
    
    
    2008Deferred tax assets:Accounts receivable reserves
    
    $
    68
    
    
    $
    57Inventory reserve
    
    
    397
    
    
    
    479Inventory capitalization
    
    
    52
    
    
    
    62Depreciation and amortization
    
    
    57
    
    
    
    85Accrued compensation, vacation and other
    
    
    124
    
    
    
    49Abandonment of space
    
    
    
    
    
    
    15AMT credit carryforwards
    
    
    590
    
    
    
    227Net operating loss carryforward
    
    
    1,670
    
    
    
    1,989Deferred gain on building sale
    
    
    15
    
    
    
    382,973
    
    
    
    3,001Deferred tax liabilities:
    
    
    
    
    
    
    2,973
    
    
    
    3,001Valuation allowance
    
    
    (2,973
    )
    
    
    (3,001
    )Net deferred tax asset
    
    $
    
    
    
    $
    
     2009
    
    
    2008Provision
(benefit) for income taxes
    
    
    34.0
    %
    
    
    (34.0
    )%Increase
(reduction) in taxes resulting from:State taxes, net of federal benefit
    
    
    6.3
    
    
    
    (4.0
    )Permanent items
    
    
    10.2
    
    
    
    4.0Change in
tax rates
    
    
    (3.0
    )
    
    
    Other
    
    
    (2.0
    )
    
    
    2.7Change in valuation allowance for deferred tax assets
    
    
    (41.5
    )
    
    
    30.6Total
    
    
    4.0
    %
    
    
    (.7
    )%
   41




---



##### 



(Amounts in thousands)Year ending March 31,2010
    
    $
    6832011
    
    
    422012
    
    
    20Total minimum lease payments
    
    $
    745
       (Amounts in thousands)
    
    2009
    
    
    2008Supplemental disclosures of cash flow information
Interest paid
    
    $
    260
    
    
    $
    599Income taxes paid
    
    $
    30
    
    
    $
    12Supplemental disclosure of non-cash investing and financing
activities:Purchase of property and equipment under capital leases
    
    $
    162
    
    
    $
    
 42




---



##### 



(Amounts in thousands except per share data)
    
    2009
    
    
    2008Numerator for net loss per share:Net income (loss) as reported
    
    $
    903
    
    
    $
    (2,453
    )Denominator:Weighted-average shares outstanding  basic
    
    
    3,175,206
    
    
    
    3,175,206Net income (loss) per share  basic
    
    $
    .28
    
    
    $
    (.77
    )Weighted-average shares outstanding  diluted

    
    
    3,179,766
    
    
    
    3,175,206Net income (loss) per share   diluted
    
    $
    .28
    
    
    $
    (.77
    )
     
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9T. Controls and Procedures
 (a) Managements Report on Internal Control over Financial Reporting
   43




---



##### 



44




---



##### 



Item 9B. Other Information
  45




---



##### 



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
   Code of Conduct and Ethics
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  Equity Compensation Plans Information
  (c)Number ofsecurities(a)
    
    
    
    
    
    
    remaining availableNumber of
    
    
    
    
    
    
    for future issuancesecurities to be
    
    
    (b)
    
    
    under equityissued upon
    
    
    Weighted-average
    
    
    compensation planexercise of
    
    
    exercise price of
    
    
    (excludingoutstanding
    
    
    outstanding
    
    
    securitiesoptions, warrants
    
    
    options, warrants
    
    
    reflected in columnPlan Category
    
    and rights
    
    
    and rights
    
    
    (a))Equity compensation
plans approved by
security holders
(1)
    
    
    454,557
    
    
    $
    4.21
    
    
    
    146,800Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    454,557
    
    
    $
    4.21
    
    
    
    146,800
 
 (1)
    
    The Company has three equity compensation plans, the 1994 Key Employee Stock Option Plan, the
1997 Non-Employee Directors Stock Option Plan and 2005 Stock Option and Stock Incentive Plan. 46




---



##### 



The 2005 Stock Option and Stock Incentive Plan has a maximum of 260,000 shares of Common
Stock that are available for issuance. As of March 31, 2009, there were options to purchase
113,200 shares of common stock outstanding and no shares of Common Stock issued pursuant to
restricted stock awards.The 1994 Key Employee Stock Option Plan has a maximum of 400,000 shares of Common Stock
available for issuance. As of March 31, 2009, there were options to purchase 277,000 shares
of the Companys Common Stock outstanding. No additional options may be granted under the
1994 Key Employee Stock Option Plan. The Non-Employee Directors Stock Option Plan has a
maximum of 100,000 options available for issuance. As of March 31, 2009, there were options
to purchase 64,357 shares of the Companys Common Stock outstanding. No additional options
may be granted under the Non-Employee Directors Stock Option Plan. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accounting Fees and Services
  47




---



##### 



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
  1.
    
    Consolidated Financial Statements
 
    
    Report of Independent Registered Accounting Firm
    
    Consolidated Statements of Operations for the years ended March 31, 2009 and 2008
    
    Consolidated Balance Sheets as of March 31, 2009 and 2008
    
    Consolidated Statements of Cash Flows for the years ended March 31, 2009 and 2008
    
    Consolidated Statements of Changes in Stockholders Equity for the years ended March 31, 2009 and 2008
    
    Notes to Consolidated Financial Statements
  3.
    
    Exhibits2.3
    
    Asset Purchase Agreement by and among Halifax Corporation, Indus Acquisition, LLC and Indus
Corporation dated as of June 30, 2005. (Schedules and exhibits are omitted pursuant to
Regulation S-K, Item 601(b)(2); Halifax agrees to furnish supplementally a copy of such
schedules and/or exhibits to the Securities and Exchange Commission upon request).
(Incorporated by reference to Exhibit 2.4 to form 10-K for the year ended March 31, 2005.)3.1
    
    Articles of Incorporation, as amended. ( Incorporated by reference from Exhibit 31.1 to the
Form 10-K for the year ended March 31, 2008.)3.2
    
    By-laws, as amended (Incorporated by reference to Exhibit 3.2 to Form 10-K for the year ended
March 31, 2004.)4.1
    
    Research Industries Incorporated Promissory Note dated November 2, 1998. (Incorporated by
reference to Exhibit 4.13 to Form 10-K for the year ended March 31, 2002.)4.2
    
    Research Industries Incorporated Promissory Note dated November 5, 1998. (Incorporated by
reference to Exhibit 4.13 to Form 10-K for the year ended March 31, 2002.)4.3
    
    Form of 5% note issued to Microserv Shareholders (Incorporated by Reference to Exhibit 99.6
to Form 8-K dated August 29, 2003.)10.1
    
    1994 Key Employee Stock Option Plan. (Incorporated by reference to Exhibit 10.3 to Form 10-K
for the
year ended March 31, 1995).10.2
    
    Charles L. McNew Executive Severance Agreement dated May 8, 2000. (Incorporated by reference
to Exhibit 10.7 to Form 10-K for the year ended March 31, 2000.)10.3
    
    Charles L. McNew Executive Severance Agreement, dated March 31, 2001. (Incorporated by
reference to Exhibit 10.8 to Form 10-K for the year ended March 31, 2001.)10.31
    
    Joseph Sciacca,Executive Severance Agreement, dated May 13, 2009. (Incorporated by reference
to Form 8-K dated May 13, 2009.)10.4
    
    Severance Agreement of Joseph Sciacca, dated May 10, 2000. (Incorporated by reference to
Exhibit 10.9 to Form 10-Q for the quarter ended September 30, 2001.)10.5
    
    Charles L. McNew Executive Severance Agreement, dated March 31, 2003. (Incorporated by
reference to Exhibit 10.5 to the Companys Annual Report on Form 10-K for the fiscal year
ended March 31, 2007.)
 48




---



##### 



10.6
    
    Non-Employee Director Stock Option Plan dated September 19, 1997. (Incorporated by reference
to Exhibit 10.13 to Form 10-K for the year ended March 31, 2002.)10.7
    
    Severance Agreement of Hugh Foley, dated January 17, 2003. (Incorporated by reference to
Exhibit 10.14 to Form 10-K for the year ended March 31, 2003.)10.8
    
    Registration Rights and First Offer Agreement dated August 29, 2003. (Incorporated by
reference to Exhibit 99.2 to Form 8-K dated August 29, 2003.)10.9
    
    Employee Severance and Restricted Covenant Agreement with Jonathan Scott, dated August 29,
2003. (Incorporated by reference to Exhibit 99.4 to Form 8-K dated August 29, 2003.)10.10
    
    Voting Agreement, dated August 29, 2003 between Microserv, Inc. and certain shareholders of
Halifax Corporation. (Incorporated by reference to Exhibit 99.5 to Form 8-K dated August 29, 2003.)10.11
    
    Amended and Restated Banking Agreement by and between the Company, Halifax Engineering,
Inc., Microserv LLC, and Halifax AlphaNational Acquisition, Inc and Provident Bank dated
November 8, 2004. (Incorporated by reference to Exhibit 10.1 to Form 10-Q for quarter ended
September 30, 2004.)10.12
    
    Registration Rights Agreement among the Company and L. L. Whiteside, Charles A. Harper,
Morris Horn and Dan Lane dated September 30, 2004. (Incorporated by reference to Exhibit 10.2
to Form 10-Q for quarter ended September 30, 2004.)10.13
    
    Employee Severance and Restrictive Covenant Agreement between the Company and L.L. Whiteside
dated September 30, 2004. (Incorporated by reference to Exhibit 10.3 to Form 10-Q for quarter
ended September 30, 2004.)10.14
    
    Summary Term Sheet of Director Fees and Officer Compensation.10.15
    
    2005 Stock Option and Stock Incentive Plan. (Incorporated by reference to Appendix A to the
definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission
on July 29, 2005.)10.16
    
    Modification to Contract VA-844 between the Commonwealth of Virginia and Halifax
Corporation. (Incorporated by reference to Exhibit 10.18 to Form 10-Q for the Quarter ended
September 30, 2005.)10.17
    
    Solutions Engagement Agreement between International Business Machines Corporation and
Halifax Corporation dated as of March 18, 2002. (Incorporated by reference to Exhibit 10 to
the form 10-Q for the quarter ended December 31, 2005.10.18
    
    Amendment to 8% Promissory Notes dated October 8, 1998, October 13, 1998, November 2, 1998
and November 5, 2005 held by Nancy M. Scurlock. (Incorporated by reference to Exhibit 4.10 to
Form 10-K for the year ended March 31, 2005.)10.19
    
    Amendment to 8% Promissory Notes dated October 8, 1998, October 13, 1998, November 2, 1998
and November 5, 2005 held by The Arch C. Scurlock Childrens Trust, dated December 9, 2003.
(Incorporated by reference to Exhibit 4.11 to Form 10-K for the year ended March 31, 2005.)10.20
    
    Amendment to 8% Promissory Notes dated October 8, 1998, October 13, 1998, November 2, 1998
and November 5, 2005 held by Nancy M. Scurlock, dated June 29, 2007. (Incorporated by
reference to Exhibit 10.4 to Form 8-K, filed on July 3, 2007)10.21
    
    Amendment to 8% Promissory Notes dated October 8, 1998, October 13, 1998, November 2, 1998
and November 5, 2005 held by The Arch C. Scurlock Childrens Trust, dated June 29, 2007.
(Incorporated by reference to Exhibit 10.3 to Form 8-K, dated July 3, 2007)10.22
    
    Fourth Amended and Restated Loan and Security Agreement dated as of 29th day
of June, 2006 by and between Halifax Corporation, Halifax Engineering, Inc., Microserv LLC
and Halifax AlphaNational Acquisition, Inc. and Provident Bank and related documents.
(Incorporated by reference to Exhibit 10.1 to Form 8-K, dated July 3, 2007)
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10.23
    
    Letter Agreement, dated June 28, 2007, by and among the Company, Halifax Engineering, Inc.,
Microserv LLC, Halifax AlphaNational Acquisition, Inc. and Provident Bank. (incorporated by
reference to Exhibit 10.2
to the Companys Current Report on Form 8-K filed on July 3, 2007)10.24
    
    First Amendment and Waiver dated November 13, 2007 (incorporated by reference to exhibit 10
to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)10.25
    
    Second Amendment and Waiver dated as of January 31, 2008 among Halifax Corporation of
Virginia, Halifax Engineering, Inc., Microserv LLC, Halifax Alphanational Acquisition, Inc.
and Provident Bank (incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed on February 8, 2008)10.26
    
    Promissory Note (Auxiliary Revolver Facility) dated January 31, 2008 (incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on February 8,
2008)10.27
    
    Promissory Note (Revolving Line of Credit) dated January 31, 2008 (incorporated by reference
to Exhibit 10.28 to the Companys Current Report on Form 8-K filed on February 8, 2008)10.28
    
    Settlement Agreement and Release dated February 4, 2008 by and among Halifax Corporation of
Virginia, INDUS Corporation and INDUS Secure Network Solutions, LLC (incorporated by reference
to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on February 8, 2008)10.29
    
    Third Amendment and Waiver dated as of April 30, 2008 among Halifax Corporation of Virginia,
Halifax Engineering, Inc., Microserv LLC, Halifax Alphanational Acquisition, Inc. and
Provident Bank (incorporated by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on May 6, 2008)10.30
    
    Third Amendment and Waiver dated as of April 30, 2008 among Halifax Corporation of Virginia,
Halifax Engineering, Inc., Microserv LLC, Halifax Alphanational Acquisition, Inc. and
Provident Bank. (incorporated by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on May 6, 2008)10.31
    
    Loan and Security Agreement with Textron Financial Corporation (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on July 9, 2008)10.32
    
    Amended and Restated Severance Arrangement between Halifax Corporation of Virginia and
Joseph Sciacca dated as of May 13, 2009. (incorporated by reference to Exhibit 10.01 to the
Companys Current Report on Form 8-K filed on May 13, 2009)10.33
    
    Business Loan Agreement and Commercial Security Agreement by and between Halifax Corporation
of Virgina with Sonabank, NA. (incorporated by reference to Exhibit 10.1 And 10.2 of the Form
8K dated June 15, 2009.10.34
    
    Extension of Scurlock notes to July 15, 2010.21.1
    
    Subsidiaries of the registrant.23.1
    
    Independent Registered Public Accounting Firm Consent31.1
    
    Certification of Charles L. McNew, Principal Executive Officer, of Halifax Corporation dated
June 30, 2009.31.2
    
    Certification of Joseph Sciacca, Principal Financial Officer, of Halifax Corporation dated June 30, 2009.32.1
    
    Certification of Charles L. McNew, Principal Executive Officer, of Halifax Corporation dated
June 30, 2009 pursuant to 18US.C. Section 1350.32.2
    
    Certification of Joseph Sciacca, Principal Financial Officer, of Halifax Corporation dated
June 30, 2009
pursuant to 18 U.S.C. Section 1350.
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SIGNATURES
   By
    /s/ Charles L. McNewCharles L. McNewPresident and Chief Executive Officer
    
    Date: 6/30/09  Signature
    
    Title
    
    Date/s/ Charles L. McNew

Charles L. McNew
    
    President and Chief
Executive Officer and Director,
(Principal Executive Officer)
    
    6/30/09/s/ Joseph Sciacca

Joseph Sciacca
    
    Vice President, Finance, and
Chief Financial Officer,
(Principal Financial
Accounting Officer)
    
    6/30/09/s/ John H. Grover

John H. Grover
    
    Chairman of the
Board of Directors
    
    6/30/09/s/ Thomas L. Hewitt

Thomas L. Hewitt
    
    Director
    
    6/30/09/s/ John M. Toups

John M. Toups
    
    Director
    
    6/30/09/s/ Daniel R. Young

Daniel R. Young
    
    Director
    
    6/30/09/s/ Arch C. Scurlock, Jr.

Arch C. Scurlock, Jr.
    
    Director
    
    6/30/09/s/  Donald M. Ervine

Donald M. Ervine
    
    Director
    
    6/30/09
 51