As filed with the Securities and Exchange Commission on September 18, 1998.
Registration No. 333-22087
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-3
TO FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GRC International, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
95-2131929
--------------------------------------
(I.R.S. Employee Identification Number)
1900 Gallows Road, Vienna, VA 22182 (703) 506-5000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
<PAGE>
Thomas E. McCabe
Senior Vice President, General Counsel and Secretary
GRC International, Inc.
1900 Gallows Road
(703) 506-5000
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. ( )
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. (x)
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( )
-----
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. ( )
-----
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ( )
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . 3
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
DEBT AND EQUITY FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE>
SUBJECT TO COMPLETION,
SEPTEMBER 18, 1998
PROSPECTUS
4,987,234 SHARES
GRC INTERNATIONAL, INC.
COMMON STOCK
This Prospectus covers the offering for resale from time to time of up
to 4,987,234 shares (the "Shares") of common stock, par value $.10 per share
(the "Common Stock"), of GRC International, Inc., a Delaware corporation (the
"Company"), by Cripple Creek Securities, LLC, a Delaware limited liability
company ("CCS"), BelleRock Capital, LLC, a Delaware limited liability company
("BRC"), and Andrew Kaplan, an individual ("Kaplan" and, together with CCS and
BRC, the "Selling Stockholders"). The Company may, and in certain instances
shall, issue Shares from time to time to CCS pursuant to the terms of the
Structured Equity Line (as defined herein) and to the Selling Stockholders upon
exercise of the Warrants (as defined herein). See "DEBT AND EQUITY FINANCING."
The Company will receive no part of the proceeds of sales made hereunder, but
the Company will receive proceeds upon the issuance of Shares to the Selling
Stockholders pursuant to the Structured Equity Line and the Warrants. All
expenses of registration incurred in connection with this public offering are
being borne by the Company. None of the Shares have been registered prior to the
filing of the Registration Statement of which this Prospectus is part.
The Common Stock is quoted on the New York Stock Exchange and the
Pacific Stock Exchange under the symbol "GRH." On September 14, 1998, the last
reported sale price of the Common Stock was $4 7/8.
The Selling Stockholders, acting as principal for their own accounts,
directly, through agents designated from time to time, or through brokers,
dealers, agents or underwriters also to be designated, may sell all or a portion
of the Shares that may be offered hereby in routine brokerage transactions on
the New York Stock Exchange, the Pacific Stock Exchange or otherwise at prices
and terms prevailing at the time of the sale. The Selling Stockholders also may
make private sales directly or through brokers or may make sales pursuant to
Rule 144 of the Securities Act of 1933, as amended (the "Securities Act") . The
Selling Stockholders may pay customary brokerage fees, commissions and expenses.
The aggregate proceeds to the Selling Stockholders from the sale of the Shares
that may be offered hereby by the Selling Stockholders will be the purchase
price of such shares less commissions, if any. The Company has agreed to
indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act of 1933. See "PLAN OF DISTRIBUTION."
<PAGE>
The Selling Stockholders and any brokers, dealers, agents or
underwriters that participate with the Selling Stockholders in the distribution
of the Shares may be deemed to be underwriters within the meaning of the
Securities Act, in which event any commissions received by such brokers,
dealers, agents or underwriters and any profit on the resale of the Shares may
be deemed to be underwriting discounts under the Securities Act. See "PLAN OF
DISTRIBUTION."
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED
UNDER "RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING STOCKHOLDERS OR THEIR RESPECTIVE AGENTS. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION
IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
SOLICITATION.
The date of this Prospectus is September 18, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661. Copies of all or part of such
materials may also be obtained at prescribed rates from the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, the Commission maintains a
Web site at http://www.sec.gov that contains reports, proxy statements and other
information. Such materials also can be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
The Company has filed with the Commission a registration statement
(which term shall encompass any amendments thereto) on Form S-3 under the
Securities Act with respect to the securities offered hereby (the "Registration
Statement"). This Prospectus, which constitutes part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are contained in exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered by
this Prospectus, reference is made to the Registration Statement, including the
exhibits thereto, and the financial statements and notes thereto filed or
incorporated by reference as a part thereof, which are on file at the offices of
the Commission and may be obtained upon payment of the fee prescribed by the
Commission, or may be examined without charge at the offices of the Commission.
The Registration Statement and the exhibits thereto filed by the Company with
the Commission may be inspected and copied at the locations described above.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act (Commission File No. 1-7517) are incorporated
herein by reference:
(a) the Company's annual report on Form 10-K for the fiscal year
ended June 30, 1998,
(b) the Company's current report on Form 8-K dated August 7,
1998, and
(c) the description of the Company's capital stock contained in
the Company's registration statement pursuant to Section 12(g) of the Exchange
Act on Form 8-A, filed on August 19, 1981 and amended on February 6, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the filing of a post-effective amendment that indicates the termination of
this offering shall be deemed to be incorporated in this Prospectus by reference
and to be a part hereof from the date of filing of such documents.
Any statements contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge to each person to whom this
Prospectus has been delivered, a copy of any or all of the documents referred to
above that have been or may be incorporated by reference herein other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference therein). Requests for such copies should be directed to GRC
International, Inc., 1900 Gallows Road, Vienna, VA 22182, Attention: Thomas E.
McCabe, Senior Vice President, General Counsel and Secretary. Telephone requests
may be directed to (703) 506-5000.
<PAGE>
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS
OF THE COMPANY, INCLUDING, WITHOUT LIMITATION, STATEMENTS HEREIN UNDER "THE
COMPANY" AND "RISK FACTORS" AND STATEMENTS IN THE COMPANY'S ANNUAL AND QUARTERLY
REPORTS UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS." THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS
AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS WILL BE
REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FACTORS DISCUSSED HEREIN UNDER "RISK FACTORS."
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective investors in evaluating an
investment in the shares of Common Stock offered in this Prospectus.
HIGH DEBT LEVEL
As of June 30, 1998, the Company had outstanding total long-term debt
of $24.3 million, of which $975,000 was classified as current, including a $4.8
million term loan (the "Term Loan"), $18.5 million drawn from a $22 million
revolving line of credit (the "Revolving Credit"), and a $961,000 equipment
lease financing (the "Equipment Lease"). The Term Loan will come due on
September 1, 2000 unless extended, while the Revolving Credit extends to January
2000, with the bank required to provide 15 months prior written notice to
terminate (absent any defaults under the credit agreement). The Equipment Lease
is expected to be fully retired by the end of fiscal 1999.
The current level and terms of indebtedness: (i) will require the
Company to dedicate a significant portion of its available net earnings from
operations to payment of interest and principal on the indebtedness; (ii) could
limit the Company's flexibility in reacting to business developments and changes
in industry and economic conditions generally; (iii) could limit the Company's
ability to obtain additional financing in the future for working capital,
capital expenditures, research and development, acquisitions and general
corporate purposes; and (iv) could place the Company at a competitive
disadvantage inasmuch as many of its competitors are not comparably indebted.
The Company anticipates reducing its indebtedness with cash flow from
operations. Any growth in operations, however, could actually reduce cash flow
in the short term because of the time lag between when the Company renders
services and when
<PAGE>
the Company's principal customer, DoD, pays for those services. Furthermore,
there can be no assurance of continued growth in the Company's business, which
is subject to additional risks. See "-- Dependence on Significant Customer," "--
Dependence on Significant Contracts," "--Contract Profit Exposure," "--Audits,"
"-- Potential Suspension and Debarment," "--Rapid Technological Change,"
"-Competition" and "-- Dependence on Professional Staff and Key Personnel."
The Company also may be able to reduce its indebtedness by raising
additional capital through the Structured Equity Line. Conditions to the sale of
Common Stock under the Structured Equity Line include (i) continued
effectiveness of a registration statement under the Securities Act for the
resale by CCS of the shares of Common Stock to be sold to CCS, (ii) CCS and its
affiliates not beneficially owning more than 4.9% of the Company's Common Stock,
(iii) listing of the Company's Common Stock on the NYSE or AMEX or trading of
the Company's Common Stock on the NASDAQ NMS and (iv) the price of the Common
Stock being at least $4.00 per share, the value of open market trading of the
Common Stock being at least $500,000 per day, and the amount of Common Stock
sold to CCS in any three month period not exceeding 8% of the average daily
value of open market trading of the Common Stock on its principal market
multiplied by the number of trading days in that period. Based on recent prices
and trading volume for the Common Stock, there is a substantial risk that the
Company may not be able to sell as much as $3 million in Common Stock to CCS in
each three month period, and there is a risk that in at least some quarters the
Company may not be able to sell any Common Stock at all. In addition, the
Company's ability to raise capital through the Structured Equity Line is subject
to the performance of CCS under the Structured Equity Line, and nonperformance
by CCS would leave the Company unable to raise capital under the Structured
Equity Line. See "DEBT AND EQUITY FINANCING."
STOCK PRICE VOLATILITY; SHARES ELIGIBLE FOR FUTURE SALE
The price of the Company's Common Stock has been volatile. For the
twelve months ended September 14, 1998, the price of the Common Stock ranged
from $11 3/8 to $4 11/16, and closed at $4 7/8. The price of the Common Stock
could be subject to additional significant fluctuations in response to, among
other things, variations in the Company's operating results, introduction of new
services or technologies by the Company or its competitors, changes in other
conditions or trends in the Company's industries, changes in security analysts'
estimates of the Company's or its competitors' or industries' future
performance, general market conditions and the described herein under "RISK
FACTORS." General market price declines or market volatility in the future, or
future declines or volatility in the prices of stock for companies in the
Company's industries, also could affect the price of the Common Stock.
The Company's agreements with the Selling Stockholders and with Halifax
Fund, L.P., a Cayman Islands exempted limited partnership ("Halifax"), may also
have an effect on the price of the Company's Common Stock. Under the Company's
agreements with CCS, the Company may issue up to $18,000,000 of Common Stock CCS
at a price that is equal to 94% of the lowest reported sale price during the
three days immediately
<PAGE>
preceding the notice of purchase to the Selling Stockholder. The Company also
has issued warrants to the Selling Stockholders to purchase 125,000 shares of
Common Stock at $8.47 per share and may issue a warrant to CCS to purchase
75,000 shares at 140% of a future market price. The Company also has issued a
warrant to Halifax to purchase 320,000 shares of Common Stock at a price of
$8.47 per share. See "DEBT AND EQUITY FINANCING" and "SELLING STOCKHOLDERS." The
resale by the Selling Stockholders and Halifax of the Company's Common Stock
that they acquire could depress the market price of the Company's Common Stock.
Moreover, the terms of the Structured Equity Line provide that the
Company has the right to require CCS to purchase up to $3 million of the Common
Stock in any of the three month periods during its term, subject to certain
limitations. Although the terms of the Structured Equity Line provide that CCS
and its affiliates are not required to purchase Common Stock in an amount such
that they would beneficially own more than 4.9% of the Common Stock outstanding,
CCS also has covenanted and agreed to use its reasonable best efforts to sell
shares of Common Stock to the extent required so that CCS can continue to
purchase Common Stock notwithstanding this limitation. Accordingly, CCS may be
required to purchase Common Stock from the Company in a manner that would
require it, in order to stay under the 4.9% beneficial ownership limitation and
comply with its obligations to the Company, to sell shares without regard to any
adverse effects on price and other market factors associated with the Common
Stock. See "DEBT AND EQUITY FINANCING" and "SELLING STOCKHOLDERS."
DEPENDENCE ON GOVERNMENT CONTRACTS
The Company derives substantially all of its business from service
contracts and subcontracts with DoD and its instrumentalities. Typically, such
contracts have an initial term of one year combined with two, three or four
one-year renewal periods exercisable at the government's discretion. DoD and its
instrumentalities are not obligated to exercise the options to renew. At the
time of completion, a contract in its entirety may be "recompeted" against all
interested third-party providers, and awards are subject to protest by
disappointed bidders. Federal law permits DoD to terminate a contract at any
time if such termination is deemed to be in DoD's best interest. DoD's failure
to renew, or termination of any significant portion of, the Company's contracts
could have an adverse effect on the Company.
Continuation and renewal of existing contracts with the DoD, and
acquisition of additional contracts from DoD, is contingent upon, among other
things, the availability of funding for DoD. The current world political
situation and domestic political pressure to reduce the federal budget deficit
have reduced, and may continue to reduce, DoD's budget, which could have an
adverse effect on the Company's earnings.
The adoption of new or modified procurement regulations also could have
an adverse effect on the Company and its cost of competing for and performing
government contracts.
<PAGE>
DEPENDENCE ON SIGNIFICANT CONTRACTS
Although professional services contracts at fiscal year-end 1998, 1997
and 1996 have numbered 156, 144 and 149, respectively, the loss of one or more
contracts may have a substantial adverse impact on the Company's revenues and
profitability if the particular contract is large in relation to the rest. There
also can be no assurance that the Company will win any follow-on contracts.
CONTRACT PROFIT EXPOSURE
The Company provides services to the government through three types of
contracts: fixed-price, time-and-materials and cost-reimbursement. The Company
assumes financial risk on fixed-price contracts (approximately 5% of the
Company's government contract revenues in fiscal year 1998) and time-and-
material contracts (approximately 46% of the Company's government contract
revenues in fiscal year 1998) because the Company assumes the risk of performing
those contracts at the stipulated prices or negotiated hourly rates. The failure
to estimate ultimate costs accurately or to control costs during performance of
the work could result in losses or smaller than anticipated profits. The balance
of the Company's government contract revenue in fiscal year 1998 (approximately
49%) was derived from cost-reimbursement contracts. To the extent that the
actual costs incurred in performing a cost-reimbursement contract are within the
contract ceiling and allowable under the terms of the contract and applicable
regulations, the Company is entitled to reimbursement of its costs plus a
stipulated profit. However, if the Company's costs exceed the ceiling or are not
allowable under the terms of the contract or applicable regulations, any excess
would be subject to adjustment and repayment upon audit by the government.
AUDITS
Government contract payments received by the Company for allowable
direct and indirect costs are subject to adjustment and repayment after audit if
the payments exceed allowable costs as defined in such government contracts.
Audits have been completed and final adjustments agreed upon for all of the
Company's incurred contract costs through the end of fiscal year 1988. Audits
have been completed on certain other incurred contract costs through the end of
fiscal year 1991. Additional audits are either completed (in some cases through
fiscal year 1995) or in progress for fiscal years subsequent to fiscal year
1991.
POTENTIAL SUSPENSION AND DEBARMENT
The Company is subject to federal regulations under which its right to
receive future awards of new government contracts, or extensions of existing
government contracts, may be unilaterally suspended or barred should the Company
be convicted of a crime or be indicted based on allegations of violation of
certain specific federal statutes or other activities. Suspensions, even if
temporary, can result in the loss of valuable contract awards for which the
Company otherwise would be eligible. The initiation of
<PAGE>
suspension or debarment hearings against the Company could have an adverse
effect on the Company.
YEAR 2000 RISKS
Many currently installed computer systems will not properly recognize
date sensitive information when the year changes to 2000, and thus could
generate erroneous data or even fail. The Company has formed a task force to
minimize the disruptions to its business that could result from year 2000
problems and to minimize other liabilities it might incur in connection
therewith. The Company also has initiated communications with third parties
whose computer systems' functionality could affect the Company. While these
efforts are still ongoing, and no final assessment of the Company's year 2000
issues has been made, the Company currently does not expect these costs to have
a material adverse effect on the Company's overall results of operations or cash
flows. There can be no assurance, however, that the Company will be able to
resolve all year 2000 issues in a timely fashion or that the ultimate cost to
identify and implement solutions to all year 2000 problems will not be material
to the Company.
TECHNOLOGICAL CHANGE AND PROPRIETARY INFORMATION
The Company's business is dependent on its technical and organizational
knowledge, practices and procedures, and its future success is based, in part,
on its ability to keep up to date with new technological breakthroughs and
incorporate such changes in its products and services. There can be no assurance
that the Company will be successful in developing and marketing in a timely
manner new products and services that respond to technological advances by
others, or that the Company's products and services will adequately and
competitively address the needs of the changing marketplace.
COMPETITION
The markets that the Company services are highly competitive and likely
to become more so with the expected continuing decline of government defense
expenditures. Some of the Company's competitors are large, diversified firms
with substantially greater financial resources, lower debt levels and larger
technical staffs than the Company has available to it. Government agencies also
compete with the Company because they can utilize their internal resources to
perform certain types of services that the Company might otherwise perform.
DEPENDENCE ON PROFESSIONAL STAFF
To service its contracts, the Company must recruit and retain key
technical personnel, such as operations research and software engineers,
computer programmers, and other skilled scientists and engineers. Competition
for such personnel is intense, and the Company often must comply with provisions
in government contracts that require employment of persons with specified levels
of education, work experience and security clearances. At June 30, 1998, the
Company had openings for approximately 175
<PAGE>
professional services positions. An inability to fill a substantial portion of
these current openings could have an adverse impact on the Company's revenue
growth and profitability.
POTENTIAL ISSUANCE OF PREFERRED STOCK
The Company's Board of Directors has the authority, without any further
vote by the Company's stockholders, to issue up to 300,000 shares of Preferred
Stock in one or more series and to determine the designations, powers,
preferences and relative, participating, optional or other rights thereof,
including without limitation, the dividend rate (and whether dividends are
cumulative), conversion rights, voting rights, rights and terms of redemption,
redemption price and liquidation preference. Although the Company has no current
plans to issue any shares of Preferred Stock, the rights of the holders of
Common Stock would be subject to, and may be adversely affected by, the rights
of the holders of any Preferred Stock that may be issued in the future. Issuance
of Preferred Stock could have the effect of delaying, deterring or preventing a
change in control of the Company, including the imposition of various procedural
and other requirements that could make it more difficult for holders of Common
Stock to effect certain corporate actions, including the ability to replace
incumbent directors and to accomplish transactions opposed by the incumbent
Board of Directors.
THE COMPANY
The Company provides knowledge-based professional services and
high-quality technology-based product solutions to government and commercial
customers. The Company was organized in California in 1961 and has been a
Delaware corporation since 1974. The Company's principal executive offices are
located at 1900 Gallows Road, Vienna, Virginia 22182, and its telephone number
is (703) 506-5000. For further information about the business and operations of
the Company, reference is made to the Company's reports incorporated herein by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 30,000,000 shares of
Common Stock, $.10 par value per share, and 300,000 shares of undesignated
Preferred Stock, $1.00 par value per share. As of July 31, 1998, 10,213,482
shares of Common Stock were issued and outstanding, and no shares of Preferred
Stock were designated or issued. For further information about the Company's
capital stock, reference is made to the Company's reports incorporated herein by
reference. See "DESCRIPTION OF CAPITAL STOCK."
<PAGE>
DEBT AND EQUITY FINANCING
The Company entered into financing agreements with CCS and another
investor in January 1997 in order to raise additional capital to continue its
operations. The Company sought to raise additional capital because, since 1993,
the Company had invested its free cash flow and incurred substantial debt to
finance the development of products for its telecommunications business units
but had not realized the revenues that it had anticipated from these business
units. Before entering into the financing agreements, the Company sought the
advice of a financial advisor with respect to a full range of financial and
strategic options. In particular, the advisor, on the Company's behalf, sought
strategic partnerships, distributorship, licensing agreements and other
transactions. Among the goals of any such transaction was to find a corporate
partner that could provide additional capital and financial resources to assist
the Company in continuing to develop its telecommunications business units. By
January 1997, these efforts had not been successful, and the Company believed
that obtaining near-term commitments for additional capital was in its best
interest. The Company also considered, as alternatives to the financing
agreements, other debt and equity financings, but concluded that such financings
were not likely to be available within an acceptable time frame and/or on
acceptable terms. Thus, the financing agreements provided what the Company
believed were terms for additional capital in the needed time frame that were in
the best interest of the Company.
STRUCTURED EQUITY LINE
The Company and CCS entered into a Structured Equity Line Flexible
Financing Agreement, dated as of January 21, 1997 and amended and restated as of
August 26, 1998 (the "Structured Equity Line"), and a related Registration
Rights Agreement, dated as of January 30, 1997 (the "Registration Rights
Agreement), whereby the Company agreed to file under the Securities Act a
registration statement of which this Prospectus is a part (the "Registration
Statement").
Pursuant to the terms of the Structured Equity Line, as amended, CCS is
required to purchase shares of Common Stock over a period of 36 months (subject
to adjustment upon the occurrence of certain events) beginning on October 1,
1998, for an aggregate purchase price of up to $18 million. The Company may
terminate the Structured Equity Line on April 1, 1999, provided that CCS has, as
of such date, purchased shares of Common Stock for an aggregate purchase price
of at least $5 million. If the Company issues less than $5 million of its Common
Stock under the Structured Equity Line, it must pay CCS up to $300,000.
Under the terms of the Structured Equity Line, during each three month
period, the Company, subject to the satisfaction of certain conditions, can
require CCS to purchase shares of Common Stock for an aggregate purchase price
of at least $1.5 million and up to $3 million. At the beginning of each
three-month period, the Company is required to notify CCS of the aggregate
purchase price of shares of Common Stock, if any, required to be purchased by
CCS during such three-month period. CCS will select
<PAGE>
and notify the Company of the date on which the purchase of shares of Common
Stock from the Company shall close within each such three-month period following
notification by the Company, and of the purchase of additional shares of Common
Stock during such period if the aggregate purchase price of the shares of Common
Stock to be acquired pursuant to the Company's notification is less than $3
million. The purchase price per share to be paid by CCS for shares Common Stock
acquired under the Structured Equity Line is equal to 94% of the lowest reported
sale price during the three trading days immediately preceding the notice of
purchase by CCS.
CCS's obligation to purchase shares of Common Stock under the
Structured Equity Line is subject to various conditions, including, without
limitation: (i) effectiveness of the Registration Statement under the Securities
Act with respect to the Shares; (ii) the price of the Common Stock being at
least $4.00 per share; (iii) reported trading volume of the Common Stock in its
principal trading market multiplied by the weighted average trading price (by
trading volume) of the Common Stock ("the value of open market trading") being
during a period of 20 trading days prior to the commencement of each three-month
period of at least $500,000 per day in any three month period in which the
Company requires CCS to purchase shares of Common Stock for an aggregate
purchase price in excess of $1.5 million; (iv) the lesser of the amount of
Common Stock sold to CCS in any three month period not exceeding 8% of the
average daily value of open market trading of the Common Stock on its principal
market multiplied by the number of trading days in that period and the
immediately preceding three month period; (v) listing of the Company's Common
Stock on the New York Stock Exchange ("NYSE") or American Stock Exchange
("AMEX") or trading of the Company's Common Stock on the NASDAQ National Market
System ("NASDAQ NMS"); and (vi) the percentage of the Company's Common Stock
beneficially owned by CCS and its affiliates not being more than 4.9% of the
outstanding Common Stock on each closing date for the purchase of shares of
Common Stock in accordance with the terms of the Structured Equity Line.
As consideration for entering into the Structured Equity Line, CCS
received a seven year warrant to purchase 125,000 shares of the Company's Common
Stock at an exercise price equal to $8.47 per share (the "Warrant"). The Warrant
has been reissued to provide that CCS may purchase 91,688 shares, BRC may
purchase 23,125 shares, and Kaplan may purchase 10,187 shares. The Warrant is
not exercisable for 18 months from the date of issuance, but will become
immediately exercisable if the Company declares a material dividend or
distribution (other than in Shares of Common Stock), sells substantially all of
its assets, or enters into a merger, consolidation or other similar transaction,
or there is a termination of the Structured Equity Line in accordance with its
terms, and in such event the exercise price will be the lesser of (i) $8.47 or
(ii) 80% of the "Transaction Value." "Transaction Value" is defined in the
Warrant to mean, in the case of a merger, acquisition, sale of Common Stock,
sale of assets or similar transaction, the fair market value of the
consideration to be received per share of Common Stock, as evidenced by the
average of the closing sale price for the Common Stock during the 10 trading
days following the announcement of such definitive agreement, and in the case of
<PAGE>
a material special dividend or distribution, the fair market value of such
dividend or distribution.
If the Company elects to issue Common Stock under the Structured Equity
Line for an aggregate purchase price of more than $5 million or to extend the
term thereof beyond April 1, 1999, the Company will issue an additional seven
year warrant for the purchase of 75,000 shares of the Company's Common Stock
(the "Additional Warrant" and, together with the Warrant, the "Warrants") at an
exercise price equal to 140% of the closing sale price of the Common Stock at
the time of the issuance of the Additional Warrant. The Additional Warrant will
be exercisable at the same time as the Warrant, or upon issuance if the Warrant
is exercised prior to the issuance of such Additional Warrant, and would contain
provisions similar to those in the Warrant.
Under the Structured Equity Line and the related Registration Rights
Agreement, the Company agreed to file under the Securities Act a registration
statement, of which this Prospectus is a part, for the resale of the shares of
the Company's Common Stock to be issued under the Structured Equity Line, the
Warrant and the Additional Warrant.
CONVERTIBLE DEBENTURE
The Company also entered into a Convertible Securities Subscription
Agreement, dated as of January 21, 1997 (the "Subscription Agreement"), with
Halifax Fund, L.P., a Cayman Islands exempted limited partnership ("Halifax").
The investment manager for Halifax is The Palladin Group, L.P., which is an
affiliate of the managing member of CCS. Pursuant to the Subscription Agreement,
Halifax purchased a $4 million aggregate principal amount 5% Convertible
Debenture due January 30, 2000 (the "Debenture"). The Debenture was convertible,
at Halifax's option 60 days after January 30, 1997 at any time and from time to
time, into the Company's Common Stock at the lesser of (i) $11 per share,
subject to adjustment under certain circumstances, or (ii) 94% of the lowest
reported sale price during the three trading days immediately preceding the date
of conversion. The Debenture has been fully converted into 804,322 shares of the
Company's Common Stock.
As consideration for entering into the Subscription Agreement, the
Company issued to Halifax a seven year warrant, which, subject to certain
exceptions, was not exercisable until July 30, 1998, to purchase 320,000 shares
of the Company's Common Stock at a price of $8.47 per share (the "Debenture
Warrant"). If the Company (i) sells all or substantially all of its assets, (ii)
enters into a merger, consolidation, reorganization or other similar transaction
that results in the shareholders of the Company owning in the aggregate less
than 50% of the common equity and having less than 50% of the voting power of
the surviving entity, or (iii) fixes a record date for the declaration of a
material special distribution or dividend, then the Debenture Warrant becomes
immediately exercisable at a price equal to the lesser of (i) $8.47 per share or
(ii) 80% of the "Transaction Value" per share ("Transaction Value" has the same
meaning as set forth above).
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the resale by the
Selling Stockholders of the Shares of Common Stock offered by this Prospectus.
The Company will receive proceeds from the original issuance of the Shares to
the Selling Stockholders under the Structured Equity Line, the Warrant and the
Additional Warrant. There can be no assurance that the Company will issue any
Shares or receive any proceeds, and under the terms of the Structured Equity
Line, it is possible that the Company will receive no proceeds at all. See "DEBT
AND EQUITY FINANCING." The Company could receive, before expenses, up to
$18,000,000 under the Structured Equity Line and up to $1,058,750 under the
Warrant. Under the Additional Warrant, the amount of gross proceeds received
will depend on the exercise price of the Additional Warrant, which is specified
in the Structured Equity Line as 140% of the closing sale price of the Common
Stock on the date of issuance of the Additional Warrant. Thus, if, for example,
the closing sale price on the date of issuance were $10, the gross proceeds from
the Additional Warrant, assuming full exercise, would be $1,050,000 (i.e. 140% x
$10 x 75,000 shares). The actual amount of proceeds from the Structured Equity
Line, the Warrant and the Additional Warrant, if any, will depend upon the
market price of the Common Stock, whether the Selling Stockholders elect to
exercise the Warrant and the Additional Warrant, if any, whether CCS elects to
purchase Common Stock as permitted under the terms of the Structured Equity
Line, and whether the Company elects to require CCS to purchase Common Stock as
permitted under the terms of the Structured Equity Line. For a description of
the terms of the Structured Equity Line, the Warrant and the Additional Warrant,
see "DEBT AND EQUITY FINANCING."
The Company expects that any net proceeds from the Structured Equity
Line, the Warrant and the Additional Warrant will be used to reduce the amount
of outstanding indebtedness under the Revolving Credit, which provides working
capital for the Company. Depending upon the amount and terms of the Company's
indebtedness at the time the Company receives proceeds from the Structured
Equity Line, the Warrant and the Additional Warrant, if any, the Company also
might use the proceeds to repay other indebtedness or for general corporate
purposes to satisfy operating cash flow requirements.
SELLING STOCKHOLDERS
The Selling Stockholders are Cripple Creek Securities, LLC, a Delaware
limited liability company, and BelleRock Capital, LLC, a Delaware limited
liability company. The Selling Stockholders have not had a material relationship
with the Company within the past three years, other than as a result of entering
into the Structured Equity Line and related agreements. An affiliate of CCS's
managing member, The Palladin Group, L.P., a Delaware limited partnership
("Palladin"), is the investment manager for Halifax, which entered into a
Subscription Agreement and related agreements with the Company. See "DEBT AND
EQUITY FINANCING." One of the Company's directors was a special
<PAGE>
limited partner of Palladin until June 30, 1997. The same individual is a
general partner of Ramius Capital Group, L.P., which was an affiliate of
Palladin until June 30, 1997. As of the date hereof, the Selling Stockholders
own no shares of the Company's Common Stock and are offering herein for resale
all of the shares of the Company's Common Stock that they may acquire under the
Structured Equity Line, the Warrant and the Additional Warrant. As of the date
hereof, Halifax owns no shares of the Company's Common Stock and has registered
the resale of all of the shares that it may acquire upon the exercise of the
Debenture Warrant in a separate registration statement filed with the Securities
and Exchange Commission.
PLAN OF DISTRIBUTION
The Selling Stockholders, acting as principals for their own account,
directly, through agents designated from time to time, or through brokers,
dealers, agents or underwriters also to be designated, may sell all or a portion
of the Shares from time to time on terms to be determined at the time of sale.
The Selling Stockholders may from time to time sell all or a portion of the
Shares in routine brokerage transactions on the New York Stock Exchange, the
Pacific Stock Exchange or otherwise at the prices and terms prevailing at the
time of the sale. The Selling Stockholders also may make private resales
directly or through brokers or may make resales pursuant to Rule 144 under the
Securities Act. The Selling Stockholders may pay customary brokerage fees,
commissions and expenses.
To the extent required pursuant to Rule 424 under the Securities Act, a
Prospectus Supplement will be filed with the Securities and Exchange Commission
with respect to a particular offering setting forth the terms of any offering,
including the name or names of any underwriters or agents, if any, any
underwriting discounts and other items constituting underwriters' compensation,
the offering price and any discounts or concessions allowed or reallowed or paid
to dealers. Any offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in a sale, shares of Common Stock will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The shares may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of shares to be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters, will be set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the Shares
will be subject to conditions precedent and the underwriters will be obligated
to purchase all of the shares if any are purchased.
<PAGE>
If dealers are utilized in the sale of shares of Common Stock in
respect of which this Prospectus is delivered, the Selling Stockholders will
sell such shares to the dealers as principals. The dealers may then resell such
shares to the public at varying prices to be determined by such dealers at the
time of resale. The names of the dealers and the terms of the transaction will
be set forth in a Prospectus Supplement relating thereto.
If an agent is used, the agent will be named, and the terms of the
agency and any commissions will be set forth in a Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
Shares may be sold directly by the Selling Stockholders to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales, including the terms of any bidding or auction process, will
be described in the Prospectus Supplement relating thereto.
Agents, dealers and underwriters may be entitled under agreements
entered into with the Selling Stockholders to indemnification against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, dealers or underwriters
may be required to make in respect thereof. Agents, dealers and underwriters may
be customers of, engage in transactions with, or perform services for the
Company or the Selling Stockholders in the ordinary course of business.
The Company will bear all costs and expenses of the registration of the
Shares under the Securities Act and certain state securities laws. The Selling
Stockholders will pay any transaction costs associated with effecting any sales
that occur.
The Selling Stockholders are not restricted as to the price or prices
at which they may resell Shares acquired upon the conversion of the Debentures
or the exercise of the Warrants. Such resales may have an adverse effect on the
market price of the Common Stock. Moreover, the Selling Stockholders are not
restricted as to the number of Shares that may be sold at any one time, and it
is possible that a significant number of Shares could be sold at the same time,
which also may have an adverse effect on the market price of the Common Stock.
The Selling Stockholders also may distribute shares pursuant to delivery in any
short sales it may make.
CCS may be deemed to be an underwriter within the meaning of the
Securities Act. Under the terms of the Structured Equity Line, CCS purchases
shares at a price equal to 94% of the lowest reported sale price during the
three trading days immediately preceding the notice of purchase by CCS. CCS has
received the Warrant and may receive the Additional Warrant. In addition, if the
Company issues less than $5 million of Common Stock under the Structured Equity
Line, it must pay CCS up to $300,000. The Company also has agreed to pay certain
legal fees and due diligence expenses CCS. See "DEBT AND EQUITY FINANCING -
STRUCTURED EQUITY LINE."
<PAGE>
The Company has agreed to indemnify the Selling Stockholders against
certain civil liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Thomas E. McCabe, the Company's Senior Vice President, General Counsel
and Secretary, has rendered an opinion to the effect that the Common Stock
offered by this Prospectus is duly authorized, validly issued, fully paid and
non-assessable.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended June 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC registration $ 6,423
Legal fees and expenses 30,000*
Accounting fees and expenses 12,000*
Miscellaneous 5,000*
Total $ 53,423*
*Estimates
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law provides, in substance, that
Delaware corporations shall have the power, under specified circumstances, to
indemnify their directors, officers, employees and agents in connection with
actions or suits by or in the right of the corporation, by reason of the fact
that they were or are such directors, officers, employees and agents, against
expenses (including attorneys' fees) and, in the case of actions, suits or
proceedings brought by third parties, against judgment, fines and amounts paid
in settlement actually and reasonably incurred in any such action, suit or
proceeding.
The Company's Certificate of Incorporation provides that a director
shall not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director except for liability (i) for
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. The Company's Bylaws also provide
that the Company may indemnify its directors, officers and legal representatives
to the fullest extent permitted by Delaware law against all awards and expenses
(including attorneys' fees).
The Company has purchased an insurance policy that purports to insure
its officers and directors against certain liabilities incurred by them in the
discharge of their functions as officers and directors.
<PAGE>
ITEM 16. EXHIBITS.
Exhibit No. Description
- ---------- -----------
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.1 to the Company's Annual Report on Form
10-K for the year ended June 30, 1994).
4.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1995).
4.3++ Structured Equity Line Flexible Financing Agreement, dated as of
January 21, 1997 and amended and restated as of August 26, 1998,
between the Company and Cripple Creek Securities, LLC
(incorporated by reference to Exhibit 10.34 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1998).
4.4 125,000 Share Common Stock Purchase Warrant issued by the Company
to Cripple Creek Securities, LLC (incorporated by reference to
Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1996).
4.5 Registration Rights Agreement, dated as of January 30, 1997,
between the Company and Cripple Creek Securities, LLC
(incorporated by reference to Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31,
1996).
5.1+ Opinion of Thomas E. McCabe.
23.1 Consent of Deloitte & Touche LLP.
23.2+ Consent of Thomas E. McCabe.
24.1+ Power of Attorney.
+ Previously filed.
++ Exhibits A and B to Exhibit 4.3 are incorporated herein as Exhibits 4.4
and 4.5.
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represents a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from the registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to
<PAGE>
the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this post-effective
amendment to this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the County of Fairfax, Commonwealth
of Virginia, on September 18, 1998.
GRC INTERNATIONAL, INC.
By: /s/ Thomas E. McCabe
---------------------------------
Thomas E. McCabe
Senior Vice President,
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to this registration statement has been signed by the
following persons in the capacities and on the dates indicated below:
Signature Title Date
- ----------- ----- -----
/s/ Gary L. Denman *
- ----------------------------- President September 18, 1998
Gary L. Denman and Chief Executive
Officer (Principal
Executive Officer)
/s/ Timothy C. Halsey
- ----------------------------- Controller, Acting Chief- September 18, 1998
Timothy C. Halsey Financial Officer and
Acting Chief Accounting
Officer
(Principal Financial and
Accounting Officer)
/s/ Joseph R. Wright, Jr. *
- ---------------------------- Chairman and Director September 18, 1998
Joseph R. Wright, Jr.
/s/ Peter A. Cohen *
- --------------------------- Vice Chairman September 18, 1998
Peter A. Cohen and Director
<PAGE>
/s/ H. Furlong Baldwin *
- --------------------------- Director September 18, 1998
H. Furlong Baldwin
/s/ Frank J.A. Cilluffo *
- --------------------------- Director September 18, 1998
Frank J.A. Cilluffo
/s/ Leslie B. Disharoon *
- --------------------------- Director September 18, 1998
Leslie B. Disharoon
/s/ Charles H.P. Duell *
- --------------------------- Director September 18, 1998
Charles H.P. Duell
/s/ Edward C. Meyer *
- --------------------------- Director September 18, 1998
Edward C. Meyer
/s/ George R. Packard *
- --------------------------- Director September 18, 1998
George R. Packard
/s/ Herbert Rabin *
- --------------------------- Director September 18, 1998
Herbert Rabin
/s/ Jim Roth *
- --------------------------- Director September 18, 1998
Jim Roth
/s/ E. Kirby Warren *
- --------------------------- Director September 18, 1998
E. Kirby Warren
* /s/ Thomas E. McCabe
- ------------------------------
Thomas E. McCabe
Power of Attorney
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ------------- --------------
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.1 to the Company's Annual Report on Form
10-K for the year ended June 30, 1994).
4.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1995).
4.3++ Structured Equity Line Flexible Financing Agreement, dated as of
January 21, 1997 and amended and restated as of August 26, 1998,
between the Company and Cripple Creek Securities, LLC
(incorporated by reference to Exhibit 10.34 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1998).
4.4 125,000 Share Common Stock Purchase Warrant issued by the Company
to Cripple Creek Securities, LLC (incorporated by reference to
Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1996).
4.5 Registration Rights Agreement, dated as of January 30, 1997,
between the Company and Cripple Creek Securities, LLC
(incorporated by reference to Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31,
1996).
5.1+ Opinion of Thomas E. McCabe.
23.1 Consent of Deloitte & Touche LLP.
23.2+ Consent of Thomas E. McCabe .
24.1+ Power of Attorney.
+ Previously filed.
++ Exhibits A and B to Exhibit 4.3 are incorporated herein as Exhibits 4.4
and 4.5.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement No. 333-22087 of GRC International,
Inc. of our report dated July 28, 1998, appearing in the Annual Report on Form
10-K of GRC International, Inc. for the year ended June 30, 1998, and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
such Registration Statement.
DELOITTE & TOUCHE LLP
McLean, Virginia
September 18, 1998
